Exhibit 10.11

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of May 24, 2013
(the “Effective Date”) between SILICON VALLEY BANK, a California corporation
with a loan production office located at 275 Grove Street, Suite 2-200, Newton,
Massachusetts 02466 (“Bank”), and BLUEPRINT MEDICINES CORPORATION, a Delaware
corporation (“Borrower”), provides the terms on which Bank shall lend to
Borrower and Borrower shall repay Bank. The parties agree as follows:

 

1.

ACCOUNTING AND OTHER TERMS

 

Accounting terms not defined in this Agreement shall be construed following
GAAP. Calculations and determinations must be made following GAAP. 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

 

2.1Promise to Pay. Borrower hereby 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.

 

2.1.1Term Loan.

 

(a) Availability. Subject to the terms and conditions of this Agreement, during
Draw Period A, Bank shall make advances (each, a “Term Loan A Advance” and
collectively, “Term Loan A Advances”) available to Borrower in an aggregate
amount of up to Three Million Dollars ($3,000,000.00), provided however that the
initial Term Loan A Advance shall be made on the Effective Date in an amount of
at least One Million Dollars ($1,000,000.00). Subject to the terms and
conditions of this Agreement, during Draw Period B, Bank shall make advances
(each, a “Term Loan B Advance” and collectively, “Term Loan B Advances”)
available to Borrower in an aggregate amount of up to One Million Dollars
($1,000,000.00). Subject to the terms and conditions of this Agreement, during
Draw Period C, Bank shall make advances (each, a “Term Loan C Advance” and
collectively, “Term Loan C Advances”) available to Borrower in an aggregate
amount of up to One Million Dollars ($1,000,000.00). The Term Loan A Advances,
Term Loan B Advances, and Term Loan B Advances are hereinafter referred to
singly as a “Term Loan Advance” and collectively as the “Term Loan Advances.”
After repayment, no Term Loan Advance may be reborrowed.

 

(b) Interest Period. Commencing on the first Payment Date of the month following
the month in which the Funding Date for the applicable Term Loan Advance occurs,
and continuing on each Payment Date thereafter, Borrower shall make monthly
payments of interest, in arrears, on the outstanding principal amount of each
Term Loan Advance at the rate set forth in Section 2.2(a).

 

(c) Repayment. Commencing on April 1, 2014, and continuing on the Payment Date
of each month thereafter, Borrower shall repay each Term Loan Advance in
(i) thirty-six (36) equal installments of principal, plus (ii) monthly payments
of accrued interest at the rate set forth in Section 2.2(a). All outstanding
principal and accrued and unpaid interest with respect to the Term Loan
Advances, and all other outstanding Obligations with respect to the Term Loan
Advances, are due and payable in full on the Term Loan Maturity Date.

 

(d) Mandatory Prepayment Upon an Acceleration. If a Term Loan Advance is
accelerated by Bank in accordance with Section 9.1 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, (ii) the applicable Prepayment Premium, (iii) the Final
Payment, plus (iv) all other sums, if any, that shall have become due and
payable under the Loan Documents, including interest at the Default Rate with
respect to any past due amounts.

 

(e) Permitted Prepayment of Loans. Borrower shall have the option to prepay all,
but not less than all, of the Term Loan Advances advanced by Bank under this
Agreement, provided Borrower (i) provides

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written notice to Bank of its election to prepay the Term Loan Advances at least
five (5) days prior to such prepayment, and (ii) pays, on the date of such
prepayment (A) all outstanding principal plus accrued and unpaid interest,
(B) the applicable Prepayment Premium, (C) the Final Payment, plus (D) all other
sums, if any, that shall have become due and payable under the Loan Documents,
including interest at the Default Rate with respect to any past due amounts.

 

2.2Payment of Interest on the Credit Extensions.

 

(a) Interest Rate. Subject to Section 2.2(b), the principal amount outstanding
for each Term Loan Advance shall accrue interest at a fixed per annum rate equal
to two percent (2.0%) above the Prime Rate, which interest shall be determined
by Bank on the Funding Date of the applicable Term Loan Advance and shall be
payable monthly in accordance with Section 2.2(c) 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 five percent (5.0%) above the rate that is otherwise applicable thereto (the
“Default Rate”) unless Bank otherwise elects from time to time in its sole
discretion to impose a smaller increase. 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 2.2(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) Payment; Interest Computation. Interest is payable monthly on the Payment
Date 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
1:00 p.m. Eastern 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.

 

2.3Fees. Borrower shall pay to Bank:

 

(a) Commitment Fee. A fully earned, non-refundable commitment fee of Twenty-Five
Thousand Dollars ($25,000.000) on the Effective Date;

 

(b) Final Payment. The Final Payment, when due hereunder;

 

(c) Prepayment Premium. The Prepayment Premium, when due hereunder;

 

(d) Bank Expenses. All Bank Expenses (including reasonable documented 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).

 

(e) 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 2.3 pursuant
to the terms of Section 2.4(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 2.3.

 

2.4Payments; 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
1:00 p.m. Eastern time on the date when due. Payments of principal and/or
interest received after 1:00 p.m. Eastern 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

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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 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.

 

3.CONDITIONS OF LOANS

 

3.1Conditions 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 original signatures to the Loan Documents;

 

(b) duly executed original signatures to the Control Agreement(s);

 

(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) duly executed original signatures to the completed Borrowing Resolutions for
Borrower;

 

(e) 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 either constitute Permitted Liens or have been or, in connection with
the initial Credit Extension, will be terminated or released;

 

(f) the Perfection Certificate of Borrower, together with the duly executed
original signature thereto;

 

(g) evidence satisfactory to Bank that the insurance policies and endorsements
required by Section 6.5 hereof are in full force and effect, together with
appropriate evidence showing lender loss payable and/or additional insured
clauses or endorsements in favor of Bank; and

 

(h) payment of the fees and Bank Expenses then due as specified in Section 2.3
hereof.

 

3.2Conditions 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) except as otherwise provided in Section 3.4, timely receipt of an executed
Payment/Advance Form;

 

(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

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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 when due, or any
material adverse deviation by Borrower from the most recent business plan of
Borrower presented to and accepted by Bank.

 

3.3Covenant to Deliver. 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.

 

3.4Procedures for Borrowing. Subject to the prior satisfaction of all other
applicable conditions to the making of a Credit Extension set forth in this
Agreement, to obtain a Credit Extension, Borrower shall notify Bank (which
notice shall be irrevocable) by electronic mail, facsimile, or telephone by
1:00 p.m. Eastern time one (1) Business Day before the proposed Funding Date of
the Credit Extension. Together with any such electronic or facsimile
notification, Borrower shall deliver to Bank by electronic mail or facsimile a
completed Payment/Advance Form executed by a Responsible Officer or his or her
designee. Bank may rely on any telephone notice given by a person whom Bank
believes is a Responsible Officer or designee. Bank shall credit the Credit
Extension to the Designated Deposit Account. Bank may make Credit Extension
under this Agreement based on instructions from a Responsible Officer or his or
her designee or without instructions if the Credit Extensions are necessary to
meet Obligations which have become due.

 

4.CREATION OF SECURITY INTEREST

 

4.1Grant 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 are permitted pursuant to the terms of this Agreement to
have superior priority to Bank’s Lien in 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. 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.

 

4.2Priority 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

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Collateral (subject only to Permitted Liens that are permitted pursuant to the
terms of this Agreement to have superior priority to Bank’s Lien under this
Agreement). If Borrower shall acquire a commercial tort claim, 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.

 

4.3Authorization 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.
Such financing statements may indicate the Collateral as “all assets of the
Debtor” or words of similar effect, or as being of an equal or lesser scope, or
with greater detail, all in Bank’s discretion.

 

5.REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants as follows:

 

5.1Due 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”. Borrower represents and warrants to Bank that (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 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). If Borrower is not now a Registered Organization but later
becomes one, Borrower shall promptly notify Bank of such occurrence and provide
Bank with Borrower’s organizational identification number.

 

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 (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.

 

5.2Collateral. 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, pursuant to the term of Section 6.6(b). The Accounts
are bona fide, existing obligations of the Account Debtors.

 

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The Collateral is not in the possession of any third party bailee (such as a
warehouse) except as otherwise provided in the Perfection Certificate. None of
the components of the Collateral (other than mobile equipment such as laptop
computers and personal digital assistants with aggregate value not at any time
exceeding One Hundred Thousand Dollars ($100,000.00) in the aggregate in the
possession of Borrower’s employees or agents) 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
and strategic partners in the ordinary course of business, (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. 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, Borrower is not a party to, nor
is it bound by, any Restricted License.

 

5.3Litigation. 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, One
Hundred Thousand Dollars ($100,000.00).

 

5.4Financial 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. 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.

 

5.5Solvency. 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.

 

5.6Regulatory 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 Government Authorities that are necessary to continue their respective
businesses as currently conducted.

 

5.7Subsidiaries; Investments. Borrower does not own any stock, partnership, or
other ownership interest or other equity securities except for Permitted
Investments.

 

5.8Tax 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,

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assessments, deposits and contributions do not, individually or in the
aggregate, exceed Five Thousand Dollars ($5,000.00).

 

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. 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.

 

5.9Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions as
working capital and to fund its general business requirements and not for
personal, family, household or agricultural purposes.

 

5.10Full Disclosure. No written representation, warranty or other statement of
Borrower in any certificate or written statement given to Bank in connection
with the Loan Documents or the transactions contemplated thereby, 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, 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, in light of
the circumstances in which they were made, not misleading (it being recognized
by Bank that the projections 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).

 

5.11Definition 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:

 

6.1Government Compliance.

 

(a) Maintain its and (except as permitted by Section 7.3) 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 all of its property. Borrower shall
promptly provide copies of any such obtained Governmental Approvals to Bank.

 

6.2Financial 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 consolidated
balance sheet and income statement covering Borrower’s consolidated operations
for such month certified by a Responsible Officer and in a form acceptable to
Bank (the “Monthly Financial Statements”);

 

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(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 setting forth such other
information as Bank may reasonably request;

 

(c) Board-Approved Projections. As soon as available, but no later than sixty
(60) days after the last day of Borrower’s fiscal year, and contemporaneously
with any updates or changes thereto, Board-approved projections as to the then
current fiscal year in a form acceptable to Bank;

 

(d) Annual Audited Financial Statements. As soon as available, but no later than
one hundred eighty (180) days after the last day of Borrower’s fiscal year,
audited consolidated financial statements prepared under GAAP, consistently
applied, together with an unqualified opinion on the financial statements from
an independent certified public accounting firm reasonably acceptable to Bank;

 

(e) Other Statements. Within five (5) days of delivery, copies of all
statements, reports and notices made available to Borrower’s security holders or
to any holders of Subordinated Debt;

 

(f) SEC Filings. In the event that Borrower becomes 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 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 may be. Documents required to be
delivered pursuant to the terms hereof (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; provided,
however, Borrower shall promptly notify Bank in writing (which may be by
electronic mail) of the posting of any such documents;

 

(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
result in damages or costs to Borrower or any of its Subsidiaries of,
individually or in the aggregate, One Hundred Thousand Dollars ($100,000.00) or
more; and

 

(h) Other Financial Information. Other financial information reasonably
requested by Bank.

 

6.3Inventory; 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 One Hundred Thousand Dollars
($100,000.00).

 

6.4Taxes; 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 for deferred payment of any taxes contested pursuant to the
terms of 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.

 

6.5Insurance.

 

(a) Keep its business and the Collateral insured for risks and in amounts
standard for companies in Borrower’s industry and location 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. All property policies shall have a
lender’s loss payable endorsement showing Bank as 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.

 

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(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, (a) 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 One Hundred Thousand Dollars ($100,000.00) with respect to any loss, but
not exceeding Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate
for all losses under all casualty policies in any one year, toward the
replacement or repair of destroyed or damaged property; provided that any such
replaced or repaired property (i) shall be of equal or like value as the
replaced or repaired Collateral and (ii) shall be deemed Collateral in which
Bank has been granted a first priority security interest, and (b) 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.

 

(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 6.5 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 6.5 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 6.5, and take any action under the policies Bank deems prudent.

 

6.6Operating Accounts.

 

(a) Maintain all of its and all of its Subsidiaries’ operating, depository and
securities accounts with Bank and Bank’s Affiliates.

 

(b) 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.

 

6.7Protection of Intellectual Property Rights.

 

(a) (i) Protect, defend and maintain the validity and enforceability of its
Intellectual Property; (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 to be abandoned,
forfeited or dedicated to the public without Bank’s written consent.

 

(b) Provide written notice to Bank within ten (10) 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 steps as Bank
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.

 

6.8Litigation 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.

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 6.9Access to Collateral; Books and Records. Allow Bank, or its agents, at
reasonable times, on one (1) Business Day’s notice (provided no notice is
required if an Event of Default has occurred and is continuing), to inspect the
Collateral and audit and copy Borrower’s Books. Such inspections or audits shall
be conducted no more often than once every twelve (12) months unless an Event of
Default has occurred and is continuing in which case such inspections and audits
shall occur as often as Bank shall determine is necessary. The foregoing
inspections and audits shall be at Borrower’s expense.

 

6.10Further 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
that could reasonably be expected to have a material 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:

 

7.1Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of
(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, obsolete, or surplus
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
permitted under Section 7.2 of this Agreement; (e) consisting of Borrower’s use
or transfer of money or Cash Equivalents in the ordinary course of its business
for the payment of ordinary course business expenses in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents; and
(f) of non-exclusive licenses, partnerships, strategic collaborations and joint
ventures for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business.

 

7.2Changes in Business, Management, Ownership, 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; (b) liquidate or dissolve; or (c) (i) fail to
provide notice to Bank of any Key Person departing from or ceasing to be
employed by Borrower within five (5) days after his or her departure from
Borrower; or (ii) enter into any transaction or series of related transactions
in which the stockholders of Borrower who were not stockholders immediately
prior to the first such transaction own more than forty percent (40%) of the
voting stock of Borrower immediately after giving effect to such transaction or
related series of such transactions (other than by the sale of Borrower’s equity
securities in a public offering or to venture capital or private equity
investors so long as Borrower identifies to Bank the venture capital or private
equity 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).

 

Borrower shall not, without at least thirty (30) days prior written notice to
Bank: (1) add any new offices or business locations, including warehouses
(unless each such new office or business location contains less than Twenty Five
Thousand Dollars ($25,000.00) 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 ($50,000.00) 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 deliver any portion of the Collateral valued, individually or in the
aggregate, in excess of Fifty Thousand Dollars ($50,000.00) 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 first receive the written consent of Bank, and
such bailee shall execute and deliver a bailee agreement in form and substance
satisfactory to Bank.

 

7.3Mergers 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

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the capital stock or property of another Person (including, without limitation,
by the formation of any Subsidiary). A Subsidiary may merge or consolidate into
another Subsidiary or into Borrower.

 

7.4Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or
permit any Subsidiary to do so, other than Permitted Indebtedness.

 

7.5Encumbrance. 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, 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, except as is otherwise permitted in Section 7.1 hereof
and the definition of “Permitted Liens” herein.

 

7.6Maintenance of Collateral Accounts. Maintain any Collateral Account except
pursuant to the terms of Section 6.6(b) hereof.

 

7.7Distributions; Investments. (a) Pay any dividends or make any distribution or
payment or redeem, retire or purchase any capital stock provided that
(i) Borrower may convert any of its convertible securities into other securities
pursuant to the terms of such convertible securities or otherwise in exchange
thereof, (ii) Borrower may pay dividends solely in common stock; and
(iii) Borrower may 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 such repurchase and would not exist after giving effect to
such repurchase, provided that the aggregate amount of all such repurchases does
not exceed One Hundred Thousand Dollars ($100,000.00) per fiscal year; 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.

 

7.8Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower, except for
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.

 

7.9Subordinated 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) 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.

 

7.10Compliance. 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 (a) meet the minimum funding requirements of ERISA, (b) prevent
a Reportable Event or Prohibited Transaction, as defined in ERISA, from
occurring, or (c) comply with the Federal Fair Labor Standards Act, the failure
of any of the conditions described in clauses (a) through (c) which could
reasonably be expected to have a material adverse effect on Borrower’s business;
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.

 

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8.EVENTS OF DEFAULT

 

Any one of the following shall constitute an event of default (an “Event of
Default”) under this Agreement:

 

8.1Payment 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);

 

8.2Covenant Default.

 

(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.4,
6.5, 6.6, or 6.7(b), 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 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 or any other covenants set
forth in clause (a) above;

 

8.3Material Adverse Change. A Material Adverse Change occurs;

 

8.4Attachment; 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;

 

8.5Insolvency. (a) Borrower is unable to pay its debts (including trade debts)
as they become due or otherwise becomes insolvent; (b) Borrower begins an
Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower
and is not dismissed or stayed within forty-five (45) 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);

 

8.6Other 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 One
Hundred Thousand Dollars ($100,000.00); or (b) any breach or default by
Borrower, the result of which could have a material adverse effect on Borrower’s
business;

 

8.7Judgments; 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 One Hundred Thousand Dollars ($100,000.00) (not covered
by independent third-party insurance as to which liability has been accepted by
such

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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);

 

8.8Misrepresentations. 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;

 

8.9Subordinated Debt. Any document, instrument, or agreement evidencing 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

 

8.10Governmental 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 in
clause (a) above, and such decision or such revocation, rescission, suspension,
modification or non-renewal (i) cause, 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 affect the status of
or legal qualifications of Borrower or any of its Subsidiaries to hold any
Governmental Approval in any other jurisdiction.

 

9.BANK’S RIGHTS AND REMEDIES

 

9.1Rights 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 to the extent not prohibited by applicable law:

 

(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;

 

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(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 at any location that is reasonably convenient to Bank and Borrower.
Bank may peaceably 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 by Borrower, 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) any 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, 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;

 

(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).

 

9.2Power 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: (a) endorse Borrower’s name on any checks or other
forms of payment or security; (b) sign Borrower’s name on any invoice or bill of
lading for any Account or drafts against Account Debtors; (c) settle and adjust
disputes and claims about the Accounts directly with Account Debtors, for
amounts and on terms Bank determines reasonable; (d) make, settle, and adjust
all claims under Borrower’s insurance policies; (e) 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 (f) 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 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 have been fully repaid and performed and
Bank’s obligation to provide Credit Extensions terminates.

 

9.3Protective Payments. If Borrower fails to obtain the insurance called for by
Section 6.5 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.

 

9.4Application 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

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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.

 

9.5Bank’s Liability for Collateral. So long as Bank complies with applicable law
and 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.

 

9.6No 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.

 

9.7Demand 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.

 

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:

Blueprint Medicines Corporation

 

215 First Street

 

Cambridge, Massachusetts 02142

 

Attn: Christine Bellon

 

Fax:

 

 

Email:

cbellon@blueprintmedicines.com

 

 

with a copy to:

Goodwin Procter LLP

 

53 State Street

 

Boston, Massachusetts 02109

 

Attn:

Mark D. Smith

 

Fax:

(617) 523-1231

 

Email:

marksmith@goodwinprocter.com

 

 

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If to Bank:

Silicon Valley Bank

 

275 Grove Street, Suite 2-200

 

Newton, Massachusetts 02466

 

Attn:

Ms. Christina Zorzi

 

Fax:

 

 

Email:

czorzi@svb.com

 

 

with a copy to:

Riemer & Braunstein LLP

 

Three Center Plaza

 

Boston, Massachusetts 02108

 

Attn:

David A. Ephraim, Esquire

 

Fax:

(617) 692-3455

 

Email:

DEphraim@riemerlaw.com

 

11.CHOICE OF LAW, VENUE, AND JURY TRIAL WAIVER

 

Massachusetts 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 Boston, Massachusetts; 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.

 

This Section 11 shall survive the termination of this Agreement.

 

12.GENERAL PROVISIONS

 

12.1Termination Prior to Term Loan Maturity Date; Survival. All covenants,
representations and warranties made in this Agreement 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) 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, effective three (3) Business Days after written
notice of termination is given to Bank. Those obligations that are expressly
specified in this Agreement as surviving this Agreement’s termination shall
continue to survive notwithstanding this Agreement’s termination.

 

12.2Successors 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

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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).

 

12.3Indemnification. 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 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.

 

12.4Time of Essence. Time is of the essence for the performance of all
Obligations in this Agreement.

 

12.5Severability of Provisions. Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.

 

12.6Correction of Loan Documents. Bank may correct patent errors and fill in any
blanks in the Loan Documents consistent with the agreement of the parties.

 

12.7Amendments 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.

 

12.8Counterparts. 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.

 

12.9Confidentiality. 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”); (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 provision); (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.

 

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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 termination of this Agreement.

 

12.10Right of Set Off. Borrower hereby grants to Bank, a lien, security interest
and right of set off 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 Bank
subsidiary) 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 set off the same or any part thereof and apply the same to any Obligations
of Borrower then due 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.

 

12.11Electronic 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.

 

12.12Captions. The headings used in this Agreement are for convenience only and
shall not affect the interpretation of this Agreement.

 

12.13Construction 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.

 

12.14Relationship. 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.

 

12.15Third 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.

 

13.DEFINITIONS

 

13.1Definitions. 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 any “account” as 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 Borrower.

 

“Account Debtor” is any “account debtor” as defined in the Code with such
additions to such term as may hereafter be made.

 

“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
Person’s senior executive officers, directors, partners and, for any Person that
is a limited liability company, that Person’s managers and members.

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“Agreement” is defined in the preamble hereof.

 

“Authorized Signer” is any individual listed in Borrower’s Borrowing Resolution
who is authorized to execute the Loan Documents, including 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 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, and if any determination of a “Business Day” shall relate to an FX
Contract, the term “Business Day” shall mean a day on which dealings are carried
on in the country of settlement of the Foreign Currency.

 

“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
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; and (d) money market
funds at least ninety-five per cent. (95%) of the assets of which constitute
Cash Equivalents of the kinds described in clauses (a) through (c) of this
definition.

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“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 Commonwealth of Massachusetts; 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 Commonwealth
of Massachusetts, 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 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 2.2(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 multicurrency account denominated in
Dollars, account number xxxxxx0777 maintained by Borrower with Bank.

 

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“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.

 

“Draw Period A” is the period of time from the Effective Date through the
earlier to occur of (a) September 30, 2013 or (b) an Event of Default.

 

“Draw Period B” is the period of time from the occurrence of the Equity Event
through the earlier to occur of (a) December 31, 2013 or (b) an Event of
Default.

 

“Draw Period C” is the period of time from the occurrence of the Milestone Event
through the earlier to occur of (a) December 31, 2013 or (b) an Event of
Default.

 

“Effective Date” is defined in the preamble hereof.

 

“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.

 

“Equity Event” means confirmation by Bank that Borrower has received, after the
Effective Date, but on or prior to December 31, 2013, unrestricted and
unencumbered net cash proceeds in an amount of at least Five Million Dollars
($5,000,000.00) from the issuance and sale by Borrower of its equity securities
in connection with Borrower’s Series A financing round, with investors
acceptable to Bank.”

 

“ERISA” is the Employee Retirement Income Security Act of 1974, and its
regulations.

 

“Event of Default” is defined in Section 8.

 

“Exchange Act” is the Securities Exchange Act of 1934, as amended.

 

“Final Payment” is, for each Term Loan Advance, a payment (in addition to and
not a substitution for the regular monthly payments of principal plus accrued
interest) equal to the original principal amount of such Term Loan Advance
extended by Bank multiplied by the Final Payment Percentage, due on the earliest
to occur of (a) the Term Loan Maturity Date, (b) the acceleration of any Term
Loan Advance by Bank in accordance with Section 9.1 following the occurrence and
during the continuance of an Event of Default, or (c) the prepayment of a Term
Loan Advance pursuant to Section 2.1.1(d) or 2.1.1(e).

 

“Final Payment Percentage” is, for each Term Loan Advance, four percent (4.0%).

 

“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

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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.

 

“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,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.

 

“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, 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.

 

“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.

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“Key Person” is each of Borrower’s (a) Chief Executive Officer, who is Alexis
Borisy as of the Effective Date, and (b) Chief Scientific Officer, who is
Christoph Lengauer 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.

 

“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, the Perfection Certificate, any Bank Services Agreement, any
subordination agreement, any note, or notes or guaranties executed by Borrower,
and any other present or future agreement by Borrower with or for the benefit of
Bank in connection with this Agreement or Bank Services, 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.

 

“Milestone Event” means the delivery by Borrower to Bank, after the Effective
Date, but on or prior to December 31, 2013, of evidence acceptable to Bank in
Bank’s sole discretion that Borrower has achieved in vivo efficacy on one of its
two current lead programs.

 

“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 Premium, 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, any 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 attached hereto as Exhibit C.

 

“Payment Date” is the first (1st) Business 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 and shown on the Perfection
Certificate;

 

(c) Subordinated Debt;

23

--------------------------------------------------------------------------------

 

 

(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; and

 

(g) extensions, refinancings, modifications, amendments and restatements of any
items of Permitted Indebtedness (a) through (f) 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 and 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 in which Bank has a first
priority perfected security interest;

 

(e) Investments accepted in connection with Transfers permitted by Section 7.1;

 

(f) 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 Borrower’s Board of Directors;

 

(g) 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; and

 

(h) 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 (h) shall not
apply to Investments of Borrower in any Subsidiary.

 

“Permitted Liens” are:

 

(a) Liens existing on the Effective Date and shown on the Perfection Certificate
or arising under this Agreement and 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 its 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 or capital leases (i) on Equipment acquired or held by
Borrower incurred for financing the acquisition of the Equipment securing no
more than One Hundred Thousand Dollars ($100,000.00) in the aggregate amount
outstanding, or (ii) existing on Equipment when acquired, if the Lien is
confined to the property and improvements and the proceeds of the Equipment;

24

--------------------------------------------------------------------------------

 

 

(d) 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;

 

(e) 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 ($50,000.00) 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;

 

(f) 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);

 

(g) non-exclusive license of Intellectual Property granted to third parties in
the ordinary course of business; and

 

(h) Liens arising from attachments or judgments, orders, or decrees in
circumstances not constituting an Event of Default under Sections 8.4 and 8.7.

 

“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 Premium” shall be an additional fee payable to Bank in amount equal
to:

 

(a) for a prepayment made on or prior to the first (1st) anniversary of the
Funding Date for such Term Loan Advance, two percent (2.0%) of the then
outstanding principal amount of such Term Loan Advance as of the date
immediately and prior to such prepayment;

 

(b) for a prepayment made after the first (1st) anniversary of the Funding Date
for such Term Loan Advance, but on or prior to the second (2nd) anniversary of
the Funding Date for such Term Loan Advance, one percent (1.0%) of the then
outstanding principal amount of such Term Loan Advance as of the date
immediately and prior to such prepayment; and

 

(c) for a prepayment made after the second (2nd) anniversary of the Funding Date
for such Term Loan Advance, zero percent (0.0%) of the then outstanding
principal amount of such Term Loan Advance as of the date immediately and prior
to such prepayment.

 

“Prime Rate” is the greater of (a) three and one quarter of one percent (3.25%),
or (b) 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 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).

 

“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.

 

25

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“Responsible Officer” is any of the Chief Executive Officer, President, Chief
Financial Officer and Controller of Borrower.

 

“Restricted License” is any material license or other agreement with respect to
which Borrower is the licensee (a) that prohibits or otherwise restricts
Borrower from granting a security interest in Borrower’s interest in such
license or agreement or any other property, or (b) for which a default under or
termination of could interfere with the 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 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 2.1.1(a).

 

“Term Loan A Advance” and “Term Loan A Advances” are each defined in
Section 2.1.1(a).

 

“Term Loan B Advance” and “Term Loan B Advances” are each defined in
Section 2.1.1(a).

 

“Term Loan C Advance” and “Term Loan C Advances” are each defined in
Section 2.1.1(a).

 

“Term Loan Maturity Date” is March 1, 2017.

 

“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.

 

“Transfer” is defined in Section 7.1.

 

“Warrant” is that certain Warrant to Purchase Stock dated as of the Effective
Date executed by Borrower in favor of Bank.

 

[Signature page follows.]

 

 

26

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as a sealed instrument under the laws of the Commonwealth of Massachusetts as of
the Effective Date.

 

 

 

 

BORROWER:

 

 

 

BLUEPRINT MEDICINES CORPORATION

 

 

 

By

/s/ Alexis Borisy

 

Name:

Alexis Borisy

 

Title:

President and Interim Chief Executive Officer

 

 

 

BANK:

 

 

 

SILICON VALLEY BANK

 

 

 

By

/s/ Christine M. Zorzi

 

Name:

Christine M. Zorzi

 

Title:

VP

 

 

 

 

 

Signature Page to 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 as provided below), commercial
tort claims, documents, instruments (including any promissory notes), chattel
paper (whether tangible or electronic), cash, deposit accounts, certificates of
deposit, 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 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.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

COMPLIANCE CERTIFICATE

 

 

 

 

 

 

TO:

SILICON VALLEY BANK

 

Date:

 

FROM:

BLUEPRINT MEDICINES CORPORATION

 

 

 

 

The undersigned authorized officer of Blueprint Medicines Corporation
(“Borrower”) certifies that under the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the “Agreement”):

 

(1) Borrower is in 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 5.8 of the Agreement; and (5) no
Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Bank.

 

Attached are the required documents supporting the certification. The
undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. 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 Compliance Certificate

 

Monthly within 30 days

 

 ☐ Yes  ☐ No

Annual financial statement (CPA Audited)

 

FYE within 180 days

 

☐ Yes  ☐ No

10-Q, 10-K and 8-K

 

Within 5 days after filing with SEC

 

☐ Yes  ☐ No

Board-approved projections

 

FYE within 60 days

 

☐ Yes  ☐ No

 

Other Matters

 

 

 

 

Have there been any amendments of or other changes to the capitalization table
of Borrower and to the Operating Documents of Borrower or any of its
Subsidiaries? If yes, provide copies of any such amendments or changes with this
Compliance Certificate.

 

☐ Yes  ☐ No

 

 

 

--------------------------------------------------------------------------------

 

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

 

BLUEPRINT MEDICINES CORPORATION

BANK USE ONLY

 

 

By:

 

 

Received by:

 

Name:

 

 

 

AUTHORIZED SIGNER

Title:

 

 

Date:

 

 

 

 

 

 

 

Verified:

 

 

 

AUTHORIZED SIGNER

 

Date:

 

 

 

 

 

Compliance Status

☐ Yes  ☐ No

 

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT C— LOAN PAYMENT/ADVANCE REQUEST FORM

 

DEADLINE FOR SAME DAY PROCESSING IS 1PM EASTERN TIME

 

Fax To:

Date:

 

 

LOAN PAYMENT:

BLUEPRINT MEDICINES CORPORATION

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 Advance $

 

 

 

All Borrower’s representations and warranties in the 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 1:00 p.m., Eastern Time

 

 

 

 

 

 

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 #:

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

FIRST AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

This First Amendment to Loan and Security Agreement (this “Amendment”) is
entered into this 21st day of January, 2014, by and between SILICON VALLEY BANK,
a California corporation (“Bank”) and BLUEPRINT MEDICINES CORPORATION, a
Delaware corporation (“Borrower”) whose address is 215 First Street, Cambridge,
Massachusetts 02142.

 

RECITALS

 

A.Bank and Borrower have entered into that certain Loan and Security Agreement
dated as of May 24, 2013 (as the same may from time to time be further amended,
modified, supplemented or restated, the “Loan Agreement”).

 

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

 

C.Borrower has requested that Bank amend the Loan Agreement to make certain
revisions to the Loan Agreement as more fully set forth herein.

 

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

 

AGREEMENT

 

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

 

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

 

2.Amendments to Loan Agreement.

 

2.1Section 2.1.1(c) (Repayment). The first sentence of Section 2.1.1(c) is
amended in its entirety and replaced with the following:

 

“Commencing on the applicable Amortization Date, and continuing on the Payment
Date of each month thereafter, Borrower shall repay each Term Loan Advance in
(i) thirty-six (36) equal installments of principal, plus (ii) monthly payments
of accrued interest at the rate set forth in Section 2.2(a).”

 

2.2Section 13 (Definitions). The following terms and their respective
definitions set forth in Section 13.1 are amended in their entirety and replaced
with the following:

 

“ “Draw Period B” is the period of time from the occurrence of the Equity Event
through the earlier to occur of (a) June 30, 2014 or (b) an Event of Default.”

 

“ “Draw Period C” is the period of time from the occurrence of the Milestone
Event through the earlier to occur of (a) June 30, 2014 or (b) an Event of
Default.”

 

2.3Section 13 (Definitions). The Loan Agreement shall be amended by inserting
the following new definition to appear alphabetically in Section 13.1 thereof

 

1

--------------------------------------------------------------------------------

 

“ “Amortization Date” is (a) with respect to any Term Loan A Advance, April 1,
2014, and (b) with respect to any Term Loan B Advance or Term Loan C Advance,
January 1, 2015.”

 

3.Limitation of Amendments.

 

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

 

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

 

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

 

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

 

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

 

4.3The organizational documents of Borrower delivered to Bank on the Effective
Date remain true, accurate and complete and have not been amended, supplemented
or restated and are and continue to be in full force and effect, except as set
forth on Schedule 1 attached hereto;

 

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

 

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

 

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

 

4.7This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of
general application and equitable principles relating to or affecting creditors’
rights.

 

5.Ratification of Perfection Certificate. Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and disclosures contained in a certain
Perfection Certificate dated as of May 24, 2013 between Borrower and Bank, and
acknowledges, confirms and agrees the disclosures and information Borrower
provided to Bank in said Perfection Certificate have not changed, as of the date
hereof, except as set forth on Schedule 2 attached hereto.

 

2

--------------------------------------------------------------------------------

 

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

 

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

 

8.Effectiveness. This Amendment shall be deemed upon (a) the due execution and
delivery to Bank of this Amendment by each party hereto, and (b) Borrower’s
payment of Bank’s legal fees and expenses incurred in connection with this
Amendment.

 

[Signature page follows.]

 

3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts and delivered as of the date first written above.

 

BANK

BORROWER

 

 

SILICON VALLEY BANK

BLUEPRINT MEDICINES CORPORATION

 

 

 

 

By:

/s/ Christine M. Zorzi

 

By:

/s/ Alexis Borisy

Name:

Christine M. Zorzi

 

Name:

Alexis Borisy

Title:

Vice President

 

Title:

Interim President & CEO

 

 

 

 

 

4

--------------------------------------------------------------------------------

 

Schedule 1

 

Restated Certificate of Incorporation.

Amended and Restated Investor Rights Agreement.

Series B Convertible Preferred Stock Purchase Agreement and Disclosure
Schedules.

Amended and Restated Stockholders Agreement.

 

 

1

--------------------------------------------------------------------------------

 

SCHEDULE 2

 

Updates to the Perfection Certificate

 

 

2

--------------------------------------------------------------------------------

 

SECOND AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

This Second Amendment to Loan and Security Agreement (this “Amendment”) is
entered into this 27th day of June, 2014, by and between SILICON VALLEY BANK, a
California corporation (“Bank”) and BLUEPRINT MEDICINES CORPORATION, a Delaware
corporation (“Borrower”) whose address is 215 First Street, Cambridge,
Massachusetts 02142.

 

RECITALS

 

A.Bank and Borrower have entered into that certain Loan and Security Agreement
dated as of May 24, 2013, as amended by a certain First Amendment to Loan and
Security Agreement dated as of January 21, 2014 (as the same may from time to
time be further amended, modified, supplemented or restated, the “Loan
Agreement”).

 

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

 

C.Borrower has requested that Bank amend the Loan Agreement to make certain
revisions to the Loan Agreement as more fully set forth herein.

 

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

 

AGREEMENT

 

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

 

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

 

2.Amendments to Loan Agreement.

 

2.1Section 13 (Definitions). The following term and its respective definition
set forth in Section 13.1 is amended in its entirety and replaced with the
following:

 

“ “Term Loan Maturity Date” is (a) with respect to any Term Loan A Advance,
March 1, 2017, and (b) with respect to any Term Loan B Advance or Term Loan C
Advance, December 1, 2017.”

 

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

 

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

 

5.Effectiveness. This Amendment shall be deemed upon the due execution and
delivery to Bank of this Amendment by each party hereto.

 

[Signature page follows.]

3

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts and delivered as of the date first written above.

 

BANK

BORROWER

 

 

SILICON VALLEY BANK

BLUEPRINT MEDICINES CORPORATION

 

 

By:

/s/ Christine M. Zorzi

 

By:

/s/ Kim Drapkin

 

 

 

 

 

Name:

Christine M. Zorzi

 

Name:

Kim Drapkin

 

 

 

 

 

Title:

Vice President

 

Title:

CFO & Treasurer

 

 

 

 

4

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THIRD AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

 

This Third Amendment to Loan and Security Agreement (this “Amendment”) is
entered into this 4th day of November, 2014, by and between SILICON VALLEY BANK,
a California corporation (“Bank”) and BLUEPRINT MEDICINES CORPORATION, a
Delaware corporation (“Borrower”) whose address is 215 First Street, Cambridge,
Massachusetts 02142.

 

RECITALS

 

A.Bank and Borrower have entered into that certain Loan and Security Agreement
dated as of May 24,2013, as amended by a certain First Amendment to Loan and
Security Agreement dated as of January 21,2014 (the “First Amendment”), and as
amended by a certain Second Amendment to Loan and Security Agreement dated
June 27, 2014 (as the same may from time to time be further amended, modified,
supplemented or restated, the “Loan Agreement”).

 

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

 

C.Borrower has requested that Bank amend the Loan Agreement to make certain
revisions to the Loan Agreement as more fully set forth herein.

 

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

 

AGREEMENT

 

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

 

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

 

2. Amendments to Loan Agreement.

 

2.1.  Section 2.1.2 (2014 Term Loan). The Loan Agreement shall be amended by
inserting the following new provision to appear as Section 2.1.2 (2014 Term
Loan) thereof:

 

“2.1.2 2014 Term Loan.

 

(a) Availability. Subject to the terms and conditions of this Agreement, Bank
shall make one advance (the “2014 Term Loan Advance”) available to Borrower in
an amount of up to Five Million Dollars ($5,000,000.00) on the 2014 Effective
Date. After repayment, the 2014 Term Loan Advance may not be reborrowed.

 

(b) Interest Period. Commencing on the first Payment Date of the month following
the month in which the Funding Date of the 2014 Term Loan Advance occurs, and
continuing on each Payment Date thereafter, Borrower shall make monthly payments
of interest, in arrears, on the outstanding principal amount of the 2014 Term
Loan Advance at the rate set forth in Section 2.2(a).

 

(c) Repayment. Commencing on December 1, 2015, and continuing on the Payment
Date of each month thereafter, Borrower shall repay the 2014 Term Loan Advance
in (i) thirty-six (36) equal installments of principal, plus (ii) monthly
payments of accrued interest at the rate set

1

--------------------------------------------------------------------------------

 

 

forth in Section 2.2(a). All outstanding principal and accrued and unpaid
interest with respect to the 2014 Term Loan Advance, and all other outstanding
Obligations with respect to the 2014 Term Loan Advance, is due and payable in
full on the 2014 Term Loan Maturity Date.

 

(d) Mandatory Prepayment Upon an Acceleration. If the 2014 Term Loan Advance is
accelerated by Bank in accordance with Section 9.1 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, (ii) the applicable Prepayment Premium, (iii) the Final
Payment, plus (iv) all other sums, if any, that shall have become due and
payable under the Loan Documents, including interest at the Default Rate with
respect to any past due amounts.

 

(e) Permitted Prepayment of the 2014 Term Loan. Borrower shall have the option
to prepay all, but not less than all, of the Term Loan Advances advanced by Bank
under this Agreement, provided Borrower (i) provides written notice to Bank of
its election to prepay the 2014 Term Loan Advance at least five (5) days prior
to such prepayment, and (ii) pays, on the date of such prepayment (A) all
outstanding principal plus accrued and unpaid interest, (B) the applicable
Prepayment Premium, (C) the Final Payment, plus (D) all other sums, if any, that
shall have become due and payable under the Loan Documents, including interest
al the Default Rate with respect to any past due amounts.”

 

2.2. Section 2.2(a) (Interest Rate). Section 2.2(a) is amended in its entirety
and replaced with the following:

 

“ (a)Interest Rate. Subject to Section 2.2(b), the principal amount outstanding
for each Term Loan Advance and the 2014 Term Loan Advance shall accrue interest
at a fixed per annum rate equal to two percent (2.0%) above the Prime Rate,
which interest shall be determined by Bank on the Funding Date of the applicable
Term Loan Advance and the 2014 Term Loan Advance and shall, in all cases, be
payable monthly in accordance with Section 2.2(c) below.”

 

2.3. Section 8.11 (2014 Equity Event). The Loan Agreement shall be amended by
inserting the following new provision to appear as Section 8.11 (2014 Equity
Event) thereof:

 

“8.112014 Equity Event. The failure of the 2014 Equity Event to occur on or
before December 31, 2014.”

 

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

 

“ “Credit Extension” is any Term Loan Advance, 2014 Term Loan Advance, or any
other extension of credit by Bank for Borrower’s benefit.”

 

“ “Final Payment” is:

 

(a) for each Term Loan Advance, a payment (in addition to and not a substitution
for the regular monthly payments of principal plus accrued interest) equal to
the original principal amount of such Term Loan Advance extended by Bank
multiplied by the Final Payment Percentage, due on the earliest to occur of
(a) the Term Loan Maturity Date, (b) the acceleration of any Term Loan Advance
by Bank in accordance with Section 9.1 following the occurrence and during the
continuance of an Event of Default, or (c) the prepayment of a Term Loan Advance
pursuant to Section 2.1.1(d) or 2.1.1(e), and

 

(c) for the 2014 Term Loan Advance, a payment (in addition to and not a
substitution for the regular monthly payments of principal plus accrued
interest) equal to the original principal amount of the 2014 Term Loan Advance
extended by Bank multiplied by the

2

--------------------------------------------------------------------------------

 

Final Payment Percentage, due on the earliest to occur of (a) the 2014 Term Loan
Maturity Date, (b) the acceleration of the 2014 Term Loan Advance by Bank in
accordance with Section 9.1 following the occurrence and during the continuance
of an Event of Default, or (c) the prepayment of the 2014 Term Loan Advance
pursuant to Section 2.1.2(d) or 2.1.2(e).”

 

“Final Payment Percentage” is, for each Term Loan Advance and the 2014 Term Loan
Advance, four percent (4.0%).”

 

“ “Prepayment Premium” shall be an additional fee payable to Bank in amount
equal to for:

 

(a) Term Loan Advances

 

(i) for a prepayment made on or prior to the first (1st) anniversary of the
Funding Date for such Term Loan Advance, two percent (2.0%) of the then
outstanding principal amount of such Term Loan Advance as of the date
immediately and prior to such prepayment;

 

(ii) for a prepayment made after the first (1st) anniversary of the Funding Date
for such Term Loan Advance, but on or prior to the second (2nd) anniversary of
the Funding Date for such Term Loan Advance, one percent (1.0%) of the then
outstanding principal amount of such Term Loan Advance as of the date
immediately and prior to such prepayment; and

 

(iii) for a prepayment made after the second (2nd) anniversary of the Funding
Date for such Term Loan Advance, zero percent (0.0%) of the then outstanding
principal amount of such Term Loan Advance as of the date immediately and prior
to such prepayment; and

 

(b) 2014 Term Loan Advance

 

(i) for a prepayment made on or prior to the first (1st) anniversary of the
Funding Date of the 2014 Term Loan Advance, two percent (2.0%) of the then
outstanding principal amount of the 2014 Term Loan Advance as of the date
immediately and prior to such prepayment;

 

(ii) for a prepayment made after the first (1st) anniversary of the Funding Date
of the 2014 Term Loan Advance, but on or prior to the second (2nd) anniversary
of the Funding Date for the 2014 Term Loan Advance, one percent (1.0%) of the
then outstanding principal amount of the 2014 Term Loan Advance as of the date
immediately and prior to such prepayment; and

 

(iii) for a prepayment made after the second (2nd) anniversary of the Funding
Date of the 2014 Term Loan Advance, zero percent (0.0%) of the then outstanding
principal amount of the 2014 Term Loan Advance as of the date immediately and
prior to such prepayment.”

 

“  “Warrant” means collectively, that certain (a) Warrant to Purchase Stock
dated as of the Effective Date executed by Borrower in favor of Bank, and
(b) Warrant to Purchase Stock dated as of the 2014 Effective Date executed by
Borrower in favor of Bank, each as may be amended, modified, supplemented or
restated.”

 

2.5          Section 13 (Definitions). The following new terms and their
respective definitions are inserted to appear alphabetically in Section 13.1:

 

“ “2014 Effective Date” means November 4, 2014.”

 

3

--------------------------------------------------------------------------------

 

“ “2014 Equity Event” means confirmation by Bank that Borrower has received,
after the 2014 Effective Date, but on or prior to December 31, 2014,
unrestricted and unencumbered net cash proceeds in an amount of at least Thirty
Million Dollars ($30,000,000.00) from the issuance and sale by Borrower of its
equity securities, with investors acceptable to Bank.”

 

“ “2014 Term Loan Advance” is defined in Section 2.1.2(a) hereof.”

 

“ “2014 Term Loan Maturity Date” is November 1, 2018.”

 

2.6          Exhibit B (Compliance Certificate). The Compliance Certificate is
amended in its entirety and replaced with the Compliance Certificate attached as
Schedule 1 hereto.

 

3. Limitation of Amendments.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4.7. This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as such enforceability

4

--------------------------------------------------------------------------------

 

may be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium or other similar laws of general application and by general equitable
principles.

 

5. Updated Perfection Certificate. Borrower has delivered an updated Perfection
Certificate in connection with this Loan Modification Agreement dated as of
            , 2014 (the “Updated Perfection Certificate”), which Updated
Perfection Certificate shall supersede in all respects that certain Perfection
Certificate dated as of May 24, 2013. Borrower agrees that all references in the
Loan Agreement to “Perfection Certificate” shall hereinafter be deemed to be a
reference to the Updated Perfection Certificate.

 

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

 

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

 

8. Effectiveness. This Amendment shall be deemed upon (a) the due execution and
delivery to Bank of this Amendment by each party hereto, and (b) Borrower’s
payment of Bank’s legal fees and expenses incurred in connection with this
Amendment.

 

[Signature page follows.]

 

 

 

5

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts and delivered as of the date first written above.

 

BANK

BORROWER

 

 

SILICON VALLEY BANK

BLUEPRINT MEDICINES CORPORATION

 

 

 

 

By:

/s/ Matthew Griffiths

 

By:

/s/ Jeffrey Albers

Name:

Matthew Griffiths

 

Name:

Jeffrey Albers

Title:

Vice President

 

Title:

CEO

 

 

 

Signature Page to Third Amendment to Loan and Security Agreement

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

EXHIBIT B

 

COMPLIANCE CERTIFICATE

 

TO:

SILICON VALLEY BANK Date:

Date:

 

FROM:

BLUEPRINT MEDICINES CORPORATION

 

 

The undersigned authorized officer of Blueprint Medicines Corporation
(“Borrower”) certifies that under the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the “Agreement”):

 

(1)Borrower is in 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 5.8 of the Agreement; and (5) no
Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Bank.

 

Attached are the required documents supporting the certification. The
undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. 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 Compliance Certificate

 

Monthly within 30 days

 

☐ Yes  ☐ No

Annual financial statement (CPA Audited)

 

FYE within 180 days

 

☐ Yes  ☐ No

10-Q, 10-Kand 8-K

 

Within 5 days after filing with SEC

 

☐ Yes  ☐ No

Board-approved projections

 

FYE within 60 days

 

☐ Yes  ☐ No

2014 Equity Event

 

$30M in equity, after 2014 Effective

 

☐ Yes  ☐ No

 

 

Dale, on or before 12/31/14

 

 

 

 

Other Matters

 

 

 

 

 

 

Have there been any amendments of or other changes to the capitalization table
of Borrower and to the Operating Documents of Borrower or any of its
Subsidiaries? If yes, provide copies of any such amendments or changes with this
Compliance Certificate.

 

☐ Yes

 

☐ No

 

 

 

--------------------------------------------------------------------------------

 

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

 

BLUEPRINT MEDICINES CORPORATION

BANK USE ONLY

 

 

 

By:

 

 

Received by:

 

Name:

 

 

 

Authorized Signer

Title:

 

 

Date:

 

 

 

 

 

Verified:

 

 

 

Authorized Signer

 

 

 

 

Date:

 

 

 

 

Compliance Status:

☐ Yes         ☐ No

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 2

 

Updates to the Perfection Certificate

 

 

 

--------------------------------------------------------------------------------

 

 

 

CONSENT AND FOURTH Amendment

to

Loan and security agreement

 

This Consent and Fourth Amendment to Loan and Security Agreement
(this “Amendment”) is entered into this 22nd day of December, 2015, by and
between SILICON VALLEY BANK, a California corporation with a loan production
office located at 275 Grove Street, Suite 2-200, Newton, Massachusetts 02466
(“Bank”), and BLUEPRINT MEDICINES CORPORATION, a Delaware corporation with
offices located at 38 Sidney Street, Suite 200, Cambridge, Massachusetts 02139
(“Borrower”).

Recitals

A.Bank and Borrower have entered into that certain Loan and Security Agreement
dated as of May 24, 2013, as amended by a certain First Amendment to Loan and
Security Agreement dated as of January 21, 2014, as amended by a certain Second
Amendment to Loan and Security Agreement dated June 27, 2014, and as further
amended by a certain Third Amendment to Loan and Security Agreement dated as of
November 4, 2014 (as the same may from time to time be amended, modified,
supplemented or restated, the “Loan Agreement”). 

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

C.Borrower has requested that Bank amend the Loan Agreement to make certain
revisions to the Loan Agreement as more fully set forth herein.

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

Agreement

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

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

2. Amendments to Loan Agreement.

2.1 Section 6.6 (Operating Accounts).  Section 6.6(a) is amended in its entirety
and replaced with the following:

“(a)Maintain all of its and all of its Subsidiaries’ (excluding Securities
Corp.) operating, depository and securities accounts with Bank and Bank’s
Affiliates, provided, further, Borrower (individually and not on a consolidated
basis) shall at all times have on deposit in operating, depository and
securities accounts maintained with Bank or Bank’s Affiliates, cash in an amount
equal to or greater than one hundred five percent (105.0%) of the
then-outstanding Obligations of Borrower to Bank.  Bank may restrict withdrawals
or transfers by or on behalf of Borrower that would violate this Section 6.6(a),
regardless of whether an Event of Default exists at such time.”

2.2 Section 7.7 (Distributions; Investments).  Section 7.7(b) is amended in its
entirety and replaced with the following:

1

--------------------------------------------------------------------------------

 

 

 

“(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 (other than Securities Corp.) to do so.”

2.3 Section 13.1 (Definitions).  The definition of Permitted Investments as set
forth in Section 13.1 of the Loan Agreement is amended by (i) deleting “and” at
the end of subsection (g), (ii) deleting “.” at the end of subsection (h) and
inserting “; and”, and (iii) inserting the following new subsection to appear as
subsection (i) thereof:

“(i)cash Investments by Borrower in Securities Corp.; provided that no Event of
Default has occurred and is continuing or would result from such Investment.”

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

“ “Collateral Account” is any Deposit Account, Securities Account, or Commodity
Account of Borrower.”

“ “Loan Documents” are, collectively, this Agreement and any schedules,
exhibits, certificates, notices, and any other documents related to this
Agreement, the Warrant, the Perfection Certificate, the Stock Pledge Agreement,
any Bank Services Agreement, any subordination agreement, any note, or notes or
guaranties executed by Borrower, and any other present or future agreement by
Borrower with or for the benefit of Bank in connection with this Agreement or
Bank Services, all as amended, restated, or otherwise modified.”

2.5 Section 13  (Definitions).  The following new terms and their definitions
are inserted to appear alphabetically in Section 13.1:

“ “Stock Pledge Agreement” means that certain Stock Pledge Agreement executed by
Borrower in favor of Bank dated as of December 21, 2015, as may be amended,
modified, supplemented or restated from time to time.”

“ “Securities Corp.” is Blueprint Medicines Security Corporation, a corporation
organized under the laws of the Commonwealth of Massachusetts and a Subsidiary
of Borrower.”

3. Limitation of Amendments.

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

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

4. Consent.  Borrower has notified Bank that Borrower intends to create the
Securities Corp. (the “Subsidiary Formation”).  Borrower has requested that Bank
consent to the Subsidiary Formation.  Bank hereby consents to the Subsidiary
Formation and agrees that the Subsidiary Formation shall not, in and of itself,
constitute an “Event of Default” under Section 7.3 (relative to mergers or
acquisitions), Section 7.7 (relative to distributions and Investments), or
Section 7.8 (relative to transactions with Affiliates) of the Loan
Agreement.  Borrower hereby acknowledges and agrees that nothing in this Section
or anywhere in this Amendment shall be deemed or otherwise construed as a waiver
by Bank of any of its rights and remedies pursuant to the Loan Documents,
applicable law or

2

--------------------------------------------------------------------------------

 

 

 

otherwise.

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

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

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

5.3 The organizational documents of Borrower delivered to Bank on the Effective
Date remain true, accurate and complete and have not been amended, supplemented
or restated and are and continue to be in full force and effect except as set
forth on Exhibit A attached hereto;

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

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

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

5.7 This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of
general application and by general equitable principles.

6. Updated Perfection Certificate.  Borrower has delivered an updated Perfection
Certificate in connection with this Amendment, dated as of the date hereof (the
“Updated Perfection Certificate”), which Updated Perfection Certificate shall
supersede in all respects that certain Perfection Certificate, dated as of
November 4, 2014.  Borrower and Bank agree that all references in the Loan
Agreement to the “Perfection Certificate” shall hereinafter be deemed to be a
reference to the Updated Perfection Certificate.

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

8. Counterparts.  This Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.  Counterparts may be delivered via facsimile,
electronic mail (including pdf) or other transmission method and any counterpart
so delivered shall be deemed to have been duly and validly delivered and be
valid and effective for all purposes.

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9. Effectiveness.  This Amendment shall be deemed effective upon (a) the due
execution and delivery to Bank of this Amendment by each party hereto and
(b) Borrower’s payment of Bank’s legal fees and expenses incurred in connection
with this Amendment.

[Signature page follows.]

 

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In Witness Whereof, the parties hereto have caused this Amendment to be duly
executed and delivered as a sealed instrument under the laws of the Commonwealth
of Massachusetts as of the date first written above.

 

BANK

BORROWER

 

 

SILICON VALLEY BANK

BLUEPRINT MEDICINES CORPORATION

 

 

 

 

By:

/s/ Ryan Roller

 

By:

/s/ Jeffrey W. Albers

Name:

Ryan Roller

 

Name:

Jeffrey W. Albers

Title:

Vice President

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit A

 

Fifth Amended and Restated Certificate of Incorporation, dated May 6, 2015

 

Amended and Restated Bylaws, effective May 6, 2015

 

 

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