Exhibit 10.1

Execution Version

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT is made and dated as of March 20, 2019 and is
entered into by and among CONSTELLATION PHARMACEUTICALS, INC., a Delaware
corporation, together with its Subsidiaries that deliver a Joinder Agreement
pursuant to Section 7.13 of this Agreement (hereinafter collectively referred to
as, the “Borrower”), the several banks and other financial institutions or
entities from time to time parties to this Agreement (collectively, referred to
as “Lender”) and HERCULES CAPITAL, INC., a Maryland corporation, in its capacity
as administrative agent and collateral agent for itself and the Lender (in such
capacity, the “Agent”).

RECITALS

A.    Borrower has requested Lender to make available to Borrower a loan in an
aggregate principal amount of up to Forty Million Dollars ($40,000,000) (the
“Term Loan”); and

B.    Lender is willing to make the Term Loan on the terms and conditions set
forth in this Agreement.

AGREEMENT

NOW, THEREFORE, Borrower, Agent and Lender agree as follows:

SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION

1.1    Unless otherwise defined herein, the following capitalized terms shall
have the following meanings:

“Account Control Agreement(s)” means any agreement entered into by and among the
Agent, Borrower and a third party Bank or other institution (including a
Securities Intermediary) in which Borrower maintains a Deposit Account or an
account holding Investment Property and which perfects Agent’s first priority
security interest in the subject account or accounts.

“ACH Authorization” means the ACH Debit Authorization Agreement in substantially
the form of Exhibit I, which account numbers shall be redacted for security
purposes if and when filed publicly by the Borrower.

“Advance(s)” means a Term Loan Advance.

“Advance Date” means the funding date of any Advance.

“Advance Request” means a request for an Advance submitted by Borrower to Agent
in substantially the form of Exhibit A, on which request account numbers shall
be redacted for security purposes if and when filed publicly by the Borrower.

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“Affiliate” means (a) any Person that directly or indirectly controls, is
controlled by, or is under common control with the Person in question, (b) any
Person directly or indirectly owning, controlling or holding with power to vote
twenty percent (20%) or more of the outstanding voting securities of another
Person, or (c) any Person twenty percent (20%) or more of whose outstanding
voting securities are directly or indirectly owned, controlled or held by
another Person with power to vote such securities. As used in the definition of
“Affiliate,” the term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.

“Agent” has the meaning given to it in the preamble to this Agreement.

“Agreement” means this Loan and Security Agreement, as amended from time to
time.

“Amortization Date” means May 1, 2021.

“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any
jurisdiction applicable to Borrower or any of its Affiliates from time to time
concerning or relating to bribery or corruption, including without limitation
the United States Foreign Corrupt Practices Act of 1977, as amended, the UK
Bribery Act 2010 and other similar legislation in any other jurisdictions.

“Anti-Terrorism Laws” means any laws, rules, regulations or orders relating to
terrorism or money laundering, including without limitation Executive Order
No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws
comprising or implementing the Bank Secrecy Act, and the laws administered by
OFAC.

“Assignee” has the meaning given to it in Section 11.13.

“Blocked Person” means any Person: (a) listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224, (b) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224, (c) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person
that commits, threatens or conspires to commit or supports “terrorism” as
defined in Executive Order No. 13224, or (e) a Person that is named a “specially
designated national” or “blocked person” on the most current list published by
OFAC or other similar list.

“Borrower Products” means all products, software, service offerings, technical
data or technology currently being designed, manufactured or sold by Borrower or
which Borrower intends to sell, license, or distribute in the future including
any products or service offerings under development, collectively, together with
all products, software, service offerings, technical data or technology that
have been sold, licensed or distributed by Borrower since its incorporation.

 

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“Business Day” means any day other than Saturday, Sunday and any other day on
which banking institutions in the State of New York are closed for business.

“Cash” means all cash, cash equivalents and liquid funds.

“Cash Interest Reduction Amount” has the meaning set forth in
Section 2.2(c)(iii).

“Change in Control” means any reorganization, recapitalization, consolidation or
merger (or similar transaction or series of related transactions) of Borrower,
sale or exchange of outstanding shares (or similar transaction or series of
related transactions) of Borrower in which the holders of Borrower’s outstanding
shares immediately before consummation of such transaction or series of related
transactions do not, immediately after consummation of such transaction or
series of related transactions, retain shares representing more than fifty
percent (50%) of the voting power of the surviving entity of such transaction or
series of related transactions (or the parent of such surviving entity if such
surviving entity is wholly owned by such parent), in each case without regard to
whether Borrower is the surviving entity.

“Claims” has the meaning given to it in Section 11.10.

“Closing Date” means the date of this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means the property described in Section 3.

“Compliance Certificate” means a Compliance Certificate substantially in the
form of Exhibit F hereto.

“Confidential Information” has the meaning given to it in Section 11.12.

“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (i) any
Indebtedness, lease, dividend, letter of credit or other obligation of another
Person, including any such obligation directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable;
(ii) any obligations with respect to undrawn letters of credit, corporate credit
cards or merchant services issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term “Contingent Obligation” shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.

 

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“Copyright License” means any written agreement granting any right to use any
Copyright or Copyright registration, now owned or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest.

“Copyrights” means all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States of America, any State thereof, or of
any other country.

“Deposit Accounts” means any “deposit accounts,” as such term is defined in the
UCC, and includes any checking account, savings account, or certificate of
deposit.

“Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary.

“Due Diligence Fee” means $35,000, which fee has been paid to Lender as of the
Closing Date, and shall be deemed fully earned and non-refundable on the Closing
Date regardless of the early termination of this Agreement.

“End of Term Charge” means any end of term charge payable pursuant to
Section 2.6.

“Equity Interests” means, with respect to any Person, the capital stock,
partnership or limited liability company interest, or other equity securities or
equity ownership interests of such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.

“Event of Default” has the meaning given to it in Section 9.

“Excluded Account” means the following accounts which are disclosed in writing
to Agent on the Closing Date or the next Compliance Certificate required to be
delivered pursuant to Section 7.1(d) hereof for any such accounts opened on or
after the Closing Date: (i) accounts used solely to fund payroll or employee
benefits, provided that the aggregate funds in such accounts shall not exceed
the amount to be paid in the ordinary course of business in the then-next
payroll cycle, (ii) withholding tax, benefits, trust, escrow, or fiduciary
accounts, (iii) accounts pledged to the extent permitted pursuant to clause
(xiv) of the definition of Permitted Liens, (iv) zero balance accounts,
(v) accounts held by the MSC Subsidiary and (vi) other Accounts that have an
aggregate balance not to exceed Fifty Thousand Dollars ($50,000.00) for all such
Accounts at any time.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a

 

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Loan or Term Commitment pursuant to a law in effect on the date on which
(i) such Lender acquires such interest in the Loan or Term Commitment or
(ii) such Lender changes its lending office, except in each case to the extent
that, pursuant to Section 2.9, amounts with respect to such Taxes were payable
either to such Lender’s assignor immediately before such Lender became a party
hereto or to such Lender immediately before it changed its lending office,
(c) Taxes attributable to such Recipient’s failure to comply with Section 2.9(g)
and (d) any withholding Taxes imposed under FATCA.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement, treaty or convention among governmental authorities and implementing
such Sections of the Code.

“Financial Statements” has the meaning given to it in Section 7.1.

“Foreign Lender” means any Lender that is not a U.S. Person.

“Foreign Subsidiary” means any Subsidiary other than a Subsidiary organized
under the laws of any state within the United States of America.

“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time.

“Indebtedness” means all of the following: (a) all indebtedness for borrowed
money or the deferred purchase price of property or services (excluding trade
credit entered into in the ordinary course of business due within one hundred
eighty (180) days), including reimbursement and other obligations with respect
to surety bonds and letters of credit, (b) all obligations evidenced by notes,
bonds, debentures or similar instruments, (c) all capital lease obligations,
(d) equity securities of any Person subject to repurchase or redemption other
than at the sole option of such Person, (e) “earnouts”, purchase price
adjustments, profit sharing arrangements, deferred purchase money amounts and
similar payment obligations or continuing obligations of any nature arising out
of purchase and sale contracts, in each case to the extent not paid when due,
and (f) all Contingent Obligations.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document and (b) to the extent not otherwise described
in clause (a), Other Taxes.

“Initial Facility Charge” means Two Hundred Fifty-Five Thousand Dollars
($255,000).

“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 similar relief.

 

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“Intellectual Property” means all of Borrower’s Copyrights; Trademarks; Patents;
Licenses; trade secrets and inventions; mask works; Borrower’s applications
therefor and reissues, extensions, or renewals thereof; and Borrower’s goodwill
associated with any of the foregoing, together with Borrower’s rights to sue for
past, present and future infringement of Intellectual Property and the goodwill
associated therewith.

“Investment” means any beneficial ownership (including stock, partnership or
limited liability company interests) of or in any Person, or any loan, advance
or capital contribution to any Person or the acquisition of all, or
substantially all, of the assets of another Person, other than strategic
alliances that could not result in the formation, whether intentional or not, of
any legal entity or other Person under applicable law.

“IRS” means the United States Internal Revenue Service.

“Joinder Agreements” means for each Subsidiary, a completed and executed Joinder
Agreement in substantially the form attached hereto as Exhibit G.

“Lender” has the meaning given to it in the preamble to this Agreement.

“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for
security, security interest, encumbrance, levy, lien or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
against any property, any conditional sale or other title retention agreement,
and any lease in the nature of a security interest.

“Loan” means the Advances made under this Agreement.

“Loan Documents” means this Agreement, the Notes (if any), the ACH
Authorization, the Account Control Agreements, the Joinder Agreements, all UCC
Financing Statements, the Pledge Agreement and any other documents executed in
connection with the Secured Obligations or the transactions contemplated hereby,
as the same may from time to time be amended, modified, supplemented or
restated.

“Material Adverse Effect” means a material adverse effect upon: (i) the
business, operations, properties, assets or financial condition of Borrower and
its Subsidiaries taken as a whole; or (ii) the ability of Borrower to perform or
pay the Secured Obligations in accordance with the terms of the Loan Documents,
or the ability of Agent or Lender to enforce any of its rights or remedies with
respect to the Secured Obligations; or (iii) the Collateral or Agent’s Liens on
the Collateral or the priority of such Liens.

“Maximum Rate” shall have the meaning assigned to such term in Section 2.3.

 

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“Maximum Term Loan Amount” means Forty Million and No/100 Dollars ($40,000,000).

“MSC Investment Conditions” means that Borrower maintains Unrestricted Cash in
an amount equal to or greater than the lesser of (i) the aggregate outstanding
Secured Obligations or (ii) 100% of the consolidated Cash of Borrower and its
Subsidiaries.

“MSC Subsidiary” means a wholly-owned Subsidiary incorporated in the
Commonwealth of Massachusetts or the State of Delaware for the purpose of
holding Investments as a Massachusetts security corporation under 830 CMR
63.38B.1 of the Massachusetts tax code and applicable regulations (as the same
may be amended, modified or replaced from time to time).

“Non-Disclosure Agreement” means that certain Confidential Disclosure Agreement
by and between Constellation Pharmaceuticals, Inc. and Hercules Capital, Inc.
dated as of November 20, 2018.

“Note(s)” means a Term Note.

“OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.

“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment.

“Patent License” means any written agreement granting any right with respect to
any invention on which a Patent is in existence or a Patent application is
pending, in which agreement Borrower now holds or hereafter acquires any
interest.

“Patents” means all letters patent of, or rights corresponding thereto, in the
United States of America or in any other country, all registrations and
recordings thereof, and all applications for letters patent of, or rights
corresponding thereto, in the United States of America or any other country.

 

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“Performance Milestone” means satisfaction of each of the following events:
(a) no default or Event of Default shall have occurred and be continuing; and
(b) Borrower shall have received after the Closing Date and on or prior to
March 31, 2020, an amount equal to at least Fifty Million Dollars ($50,000,000)
in unrestricted (including, not subject to any redemption, clawback, escrow or
similar encumbrance or restriction other than in the case the Permitted
Convertible Debt Financing) net cash proceeds from one or more bona fide equity
financings, Subordinated Indebtedness (which, for the avoidance of doubt, may
include the net proceeds received from any Permitted Convertible Debt Financing)
and/or upfront or other milestone proceeds from business development
transactions permitted under this Agreement, in each case subject to
verification by Agent (including supporting documentation reasonably requested
by Agent).

“Permitted Convertible Debt Financing” means issuance by Borrower of convertible
notes in an aggregate principal amount of not more than Two Hundred Fifty
Million Dollars ($250,000,000); provided that for so long as any portion of the
Secured Obligations remain outstanding such convertible notes shall (a) have a
scheduled maturity date no earlier than one hundred eighty (180) days after the
Term Loan Maturity Date, (b) be unsecured, (c) not be guaranteed by any
Subsidiary of Borrower, (d) contain usual and customary subordination terms for
underwritten offerings of senior subordinated convertible notes and (e) shall
specifically designate this Agreement and all Secured Obligations as “designated
senior indebtedness” or similar term so that the foregoing subordination terms
referred to in clause (d) of this definition specifically refer to such notes as
being subordinated to the Secured Obligations pursuant to such subordination
terms.

“Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Lender
or Agent arising under this Agreement or any other Loan Document;
(ii) Indebtedness existing on the Closing Date which is disclosed in Schedule
1A; (iii) Indebtedness of up to $500,000 outstanding at any time secured by a
Lien described in clause (vii) of the defined term “Permitted Liens,” provided
such Indebtedness does not exceed the cost (including any customary fees or
other charges) of the Equipment financed with such Indebtedness;
(iv) Indebtedness to trade creditors incurred in the ordinary course of
business, including Indebtedness incurred in the ordinary course of business
with corporate credit cards; (v) Indebtedness that also constitutes a Permitted
Investment; (vi) Subordinated Indebtedness; (vii) reimbursement obligations in
connection with letters of credit and cash management services (including credit
cards, debit cards and similar instruments) that are secured by Cash and issued
on behalf of the Borrower or a Subsidiary thereof and Cash deposits in
connection with real estate leases in the ordinary course of business,
collectively in an aggregate amount not to exceed $2,000,000 at any time
outstanding, (viii) other Indebtedness in an amount not to exceed $250,000 at
any time outstanding, of which an amount not to exceed $50,000 may be secured by
Liens permitted under clause (xvii) of the definition of “Permitted Liens”, (ix)
intercompany Indebtedness as long as each of the Subsidiary obligor and the
Subsidiary obligee under such Indebtedness is a Subsidiary that has executed a
Joinder Agreement,(x) guarantees of any items of Permitted Indebtedness;
(xi) Permitted Convertible Debt Financing, (xii) Indebtedness arising in respect
of endorsements of instruments or other payment items for deposit in the
ordinary course of business, (xiii) Indebtedness owed to any Person providing
property, casualty or liability insurance to either Borrower or any Subsidiary,
so long as (i) such Indebtedness shall not be in

 

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excess of the amount of the unpaid cost of, and shall be incurred only to defer
the cost of, unpaid premiums for such insurance for the annual period in which
such Indebtedness is incurred, (xiv) Indebtedness of either Borrower and its
respective Subsidiaries arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business; provided that such Indebtedness is
extinguished within five (5) Business Days after receipt of notice of its
incurrence, (xv) Indebtedness under or in respect of surety bonds, appeal bonds,
performance and return-of-money bonds, workers’ compensation claims,
self-insurance obligations or bankers’ acceptances incurred in the ordinary
course of business in connection with bids, leases and similar commercial
contracts, (xvi) Indebtedness representing deferred compensation, severance,
pension and health and welfare retirement benefits or the equivalent thereof to
current and former employees of either Borrower or its Subsidiaries incurred in
the ordinary course of business or in connection with Permitted Investments, not
to exceed $500,000 in the aggregate in any fiscal year and (xvii) extensions,
refinancings and renewals of any items of Permitted Indebtedness, provided that
the principal amount is not increased (except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing) or the terms modified to impose
materially more burdensome terms upon any Borrower or its Subsidiary, as the
case may be.

“Permitted Investment” means: (i) Investments (including Subsidiaries) existing
on the Closing Date which are disclosed in Schedule 1B or Schedule 5.14, as
applicable; (ii) (a) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency or any State thereof
maturing within one year from the date of acquisition thereof, (b) commercial
paper maturing no more than two years from the date of creation thereof and at
the time of the Investment having a rating of at least A-2 or P-2 from either
Standard & Poor’s Corporation or Moody’s Investors Service, (c) certificates of
deposit issued by any bank with assets of at least $500,000,000 maturing no more
than two years from the date of investment therein, (d) money market accounts,
and (e) such other Investments as are described in the investment guidelines
approved by Borrower’s board of directors and delivered to Agent prior to the
Closing Date or with such changes made after the Closing Date and approved by
Agent in writing; (iii) repurchases of stock from former employees, directors,
or consultants of Borrower under the terms of applicable repurchase agreements
at the original issuance price of such securities in an aggregate amount not to
exceed $250,000 in any fiscal year, provided that no Event of Default has
occurred, is continuing or would exist after giving effect to the repurchases;
(iv) Investments accepted in connection with Permitted Transfers;
(v) 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 Borrower’s business; (vi) 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 subparagraph (vi) shall not apply to
Investments of Borrower in any Subsidiary; (vii) Investments consisting of loans
not involving the net transfer on a substantially contemporaneous basis of cash
proceeds to employees, officers or directors relating to the purchase of capital
stock of Borrower pursuant to employee stock purchase plans or other similar
agreements approved by Borrower’s board of directors; (viii) Investments
consisting of travel advances, employee relocation loans and other employee
loans and advances in the ordinary course of business, not to exceed $250,000 in
any

 

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fiscal year; (ix) Investments in newly-formed Domestic Subsidiaries, provided
that each such Subsidiary enters into a Joinder Agreement promptly after its
formation by Borrower and execute such other documents as shall be reasonably
requested by Agent within the time frame set forth in Section 7.13; (x)
Investments in Foreign Subsidiaries approved in advance in writing by Agent;
(xi) joint ventures or strategic alliances in the ordinary course of Borrower’s
business consisting of the exclusive or nonexclusive licensing of technology, or
the development of technology or the providing of technical support or similar
activities, provided that any such licensing of Borrower’s technology is a
Permitted Transfer hereunder; provided further that the aggregate cash
Investments by Borrower in joint ventures and strategic alliances that result in
the formation, whether intentional or not, of any legal entity or other Person
under applicable law, do not exceed $1,000,000 in the aggregate in any fiscal
year; (xii) the in-licensing of Intellectual Property in the ordinary course of
business; provided that the payments made by Borrower and its Subsidiaries shall
not exceed $2,000,000 in the aggregate for all such licenses in any fiscal year;
(xiii) Investments consisting of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business; (xiv) Investments in the MSC Subsidiary, so long as an Event of
Default does not exist at the time of such Investment and would not exist after
giving effect to such Investment and provided that Borrower is, at all times, in
compliance with the MSC Investment Conditions and (xv) additional Investments
that do not exceed $250,000 in the aggregate.

“Permitted Liens” means any and all of the following: (i) Liens in favor of
Agent or Lender; (ii) Liens existing on the Closing Date which are disclosed in
Schedule 1C; (iii) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings; provided, that Borrower maintains adequate reserves
therefor in accordance with GAAP; (iv) Liens securing claims or demands of
materialmen, artisans, mechanics, carriers, warehousemen, landlords and other
like Persons arising in the ordinary course of Borrower’s business and imposed
without action of such parties; provided, that the payment thereof is not yet
required; (v) Liens arising from judgments, decrees or attachments in
circumstances which do not constitute an Event of Default hereunder; (vi) the
following deposits (including by way of deposits to secure letters of credit
issued to secure the same), to the extent made in the ordinary course of
business: deposits under worker’s compensation, unemployment insurance, social
security and other similar laws, or to secure the performance of bids, tenders
or contracts (other than for the repayment of borrowed money) or to secure
indemnity, performance or other similar bonds for the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to
secure statutory obligations (other than Liens arising under ERISA or
environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds; (vii) Liens on Equipment or other capital
assets, or software or other intellectual property constituting purchase money
Liens and Liens in connection with capital leases securing Indebtedness
permitted in clause (iii) of “Permitted Indebtedness”; (viii) Liens incurred in
connection with Subordinated Indebtedness; (ix) leasehold interests in leases or
subleases, licenses or sublicenses granted in the ordinary course of business
and not interfering in any material respect with the business of the licensor;
(x) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of custom duties that are promptly paid on or before the date
they become due or being contested in good faith by appropriate proceedings;
provided, that the Borrower maintain adequate reserves therefor in accordance
with GAAP; (xi) Liens on insurance proceeds securing the payment of financed

 

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insurance premiums that are promptly paid on or before the date they become due
(provided that such Liens extend only to such insurance proceeds and not to any
other property or assets); (xii) statutory, common law and contractual rights of
set-off and other similar rights as to deposits of cash and securities in favor
of banks, other depository institutions and brokerage firms; (xiii) easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business so long as they do
not materially impair the value or marketability of the related property;
(xiv) Liens on Cash securing obligations permitted under clause (vii) of the
definition of Permitted Indebtedness; (xv) [Reserved], (xvi) precautionary
filings in connection with operating leases in the Equipment that is the subject
of such leases; provided that such Liens and collateral descriptions in such
precautionary filings be limited to such specific operating leases and not all
assets or substantially all assets of the Borrower or any Subsidiary,
(xvii) additional Liens securing obligations not in excess of $50,000 at any
time outstanding; provided that such Liens and collateral descriptions in any
filings be limited to specific assets and not all assets or substantially all
assets of the Borrower or any Subsidiary, and (xviii) Liens incurred in
connection with the extension, renewal or refinancing of the Indebtedness
secured by Liens of the type described in clauses (i) through (xiv) above;
provided, that any extension, renewal or replacement Lien shall be limited to
the property encumbered by the existing Lien and the principal amount of the
Indebtedness being extended, renewed, refinanced, modified, amended, restated or
amended and restated (as may have been reduced by any payment thereon) does not
increase.

“Permitted Transfers” means (i) sales of Inventory in the ordinary course of
business, (ii) non-exclusive licenses, sublicenses and similar arrangements for
the use of Intellectual Property of Borrower or Borrower Products and related
assets in the ordinary course of business, (iii) exclusive licenses, sublicenses
and similar arrangements for the use of Intellectual Property of Borrower or
Borrower Products and related assets in the ordinary course of business that may
be exclusive in respects other than territory, and that may be exclusive as to
territory only as to discreet geographical areas outside of the United States of
America, (iv) exclusive licenses, sublicenses and similar arrangements in the
ordinary course of business for the use of Intellectual Property of Borrower or
Borrower Products and related assets that is exclusive as to territory inside
the United States of America, provided that each such license (a) is for a
specific disease indication and/or a specific drug target, and (b) constitutes
an arms-length transaction, the terms of which, on their face, do not provide
for a sale or assignment by Borrower of any Intellectual Property,
(v) dispositions of worn-out, obsolete or surplus Equipment at fair market value
in the ordinary course of business, (vi) transfers by and among Borrower and any
Subsidiary that has executed a Joinder Agreement, (vii) the use or transfer of
cash or cash equivalents in a manner that is not prohibited by the terms of this
Agreement or the other Loan Documents and in the ordinary course of business,
(viii) transfers consisting of Permitted Liens or Permitted Investments,
(ix) subleases of real property in the ordinary course of business and (x) other
transfers of assets having a fair market value of not more than $250,000 in the
aggregate in any fiscal year.

“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, other entity or government.

 

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“PIK Deferral Period” has the meaning set forth in 2.2(c)(iii).

“Pledge Agreement” means the Pledge Agreement dated as of the Closing Date
between Borrower and Agent, as the same may from time to time be amended,
restated, modified or otherwise supplemented.

“Prepayment Charge” shall have the meaning assigned to such term in Section 2.5.

“Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents,
Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter
of credit, and Letter of Credit Rights, and (ii) all customer lists, software,
and business records related thereto.

“Recipient” means (a) the Agent, or (b) any Lender.

“Required Lenders” means at any time, the holders of more than 50% of the sum of
the aggregate unpaid principal amount of the Term Loans then outstanding.

“Sanctioned Country” shall mean, at any time, a country or territory which is
the subject or target of any Sanctions.

“Sanctioned Person” shall mean, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S. Department of
State, or by the United Nations Security Council, the European Union or any EU
member state, (b) any Person operating, organized or resident in a Sanctioned
Country or (c) any Person controlled by any such Person.

“Sanctions” shall mean economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the European Union or Her Majesty’s Treasury of the
United Kingdom.

“SBA” shall have the meaning assigned to such term in Section 7.16.

“SBA Funding Date” means each date on which each of the following has occurred
(i) a Lender which is an SBIC funds any portion of the Term Loans, (ii) prior
written notice of the same has been provided to Borrower and (iii) a completed
Addendum 1 to this agreement has been delivered by Borrower to Agent, which
shall occur promptly (but in any event within three (3) Business Days) after the
notice provided in clause (ii) above.

“SBIC” shall have the meaning assigned to such term in Section 7.16.

“SBIC Act” shall have the meaning assigned to such term in Section 7.16.

“SEC” means the Securities and Exchange Commission.

 

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“Secured Obligations” means Borrower’s obligations under this Agreement and any
Loan Document, including any obligation to pay any amount now owing or later
arising.

“Securities Act” means the Securities Act of 1933, as amended.

“Subordinated Indebtedness” means Indebtedness subordinated to the Secured
Obligations in amounts and on terms and conditions satisfactory to Agent in its
sole discretion and subject to a subordination agreement in form and substance
satisfactory to Agent in its sole discretion.

“Subsidiary” means an entity, whether corporate, partnership, limited liability
company, joint venture or otherwise, in which Borrower owns or controls 50% or
more of the outstanding voting securities, including each entity listed on
Schedule 1 hereto.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any governmental authority, including any interest, additions to tax
or penalties applicable thereto.

“Term Commitment” means as to any Lender, the obligation of such Lender, if any,
to make a Term Loan Advance to the Borrower in a principal amount not to exceed
the amount set forth under the heading “Term Commitment” opposite such Lender’s
name on Schedule 1.1.

“Term Loan Advance” means each Tranche 1 Advance, Tranche 2 Advance, Tranche 3
Advance, Tranche 4 Advance and any other Term Loan funds advanced under this
Agreement.

“Term Loan Cash Interest Rate” means, for any day a per annum rate of interest
equal to the greater of (i) the “prime rate” as reported in The Wall Street
Journal plus 2.55%, and (ii) 8.55%; provided that the Term Loan Cash Interest
Rate may be reduced from time to time in accordance with Section 2.2(c)(iii).

“Term Loan Maturity Date” means April 1, 2023.

“Term Loan PIK Interest” has the meaning set forth in Section 2.2(c)(ii).

“Term Loan PIK Interest Rate” means, for any day a per annum rate of interest
equal to the Cash Interest Reduction Amount, multiplied by 1.2.

“Term Note” means a Promissory Note in substantially the form of Exhibit B.

“Trademark License” means any written agreement granting any right to use any
Trademark or Trademark registration, now owned or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest.

“Trademarks” means all trademarks (registered, common law or otherwise) and any
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States of America, any State thereof or any other
country or any political subdivision thereof.

 

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“Tranche 1 Advance” shall have the meaning assigned to such term in
Section 2.2(a)(i).

“Tranche 2 Advance” shall have the meaning assigned to such term in
Section 2.2(a)(ii).

“Tranche 3 Advance” shall have the meaning assigned to such term in
Section 2.2(a)(iii).

“Tranche 3 Facility Charge” means 0.85% of the Tranche 3 Advance, which is
payable to Lender in accordance with Section 4.2(d).

“Tranche 4 Advance” shall have the meaning assigned to such term in
Section 2.2(a)(iv).

“Tranche 4 Facility Charge” means 0.85% of the Tranche 4 Advance, which is
payable to Lender in accordance with Section 4.2(e).

“Transfusion Independent” means absence of red blood cell transfusions and
hemoglobin levels at or above 8g/dL in the prior 12 weeks.

“UCC” means the Uniform Commercial Code as the same is, from time to time, in
effect in the State of New York; provided, 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, Agent’s Lien on any Collateral is
governed by the Uniform Commercial Code as the same is, from time to time, in
effect in a jurisdiction other than the State of New York, then the term “UCC”
shall mean the Uniform Commercial Code as in effect, from time to time, in such
other jurisdiction solely for purposes of the provisions thereof relating to
such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.

“Unrestricted Cash” means unrestricted Cash held by Borrower in account(s)
subject to an Account Control Agreement in favor of Agent.

“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.

“Withholding Agent” means the Borrower and the Agent.

Unless otherwise specified, all references in this Agreement or any Annex or
Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule”
shall refer to the corresponding Section, subsection, Exhibit, Annex, or
Schedule in or to this Agreement. Unless otherwise specifically provided herein,
any accounting term used in this Agreement or the other Loan Documents shall
have the meaning customarily given such term in accordance with GAAP, and all
financial computations hereunder shall be computed in accordance with GAAP,
consistently applied. If at any time any change in GAAP would affect the
computation of any

 

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requirement set forth in any Loan Document, and either the Borrower or the
Required Lenders shall so request, the Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (A) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (B) the Borrower shall provide to the Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP. Unless otherwise defined herein or in the other Loan
Documents, terms that are used herein or in the other Loan Documents and defined
in the UCC shall have the meanings given to them in the UCC. For all purposes
under the Loan Documents, in connection with any division or plan of division
under Delaware law (or any comparable event under a different jurisdiction’s
laws): (a) if any asset, right, obligation or liability of any Person becomes
the asset, right, obligation or liability of a different Person, then it shall
be deemed to have been transferred from the original Person to the subsequent
Person and (b) if any new Person comes into existence, such new Person shall be
deemed to have been organized on the first date of its existence by the holders
of its Equity Interests at such time.

SECTION 2. THE LOAN

2.1    [Reserved].

2.2    Term Loan.

(a)    Advances.

(i)    Tranche 1 Advance. Subject to the terms and conditions of this Agreement,
each Lender shall severally (and not jointly) make in an amount not to exceed
its respective Term Commitment, and Borrower agrees to draw, a Term Loan Advance
of Twenty Million Dollars ($20,000,000) on the Closing Date (the “Tranche 1
Advance”).

(ii)    Tranche 2 Advance. Subject to the terms and conditions of this
Agreement, beginning on June 30, 2019 and continuing through September 30, 2019,
Borrower may request and each Lender shall severally (and not jointly) make in
an amount not to exceed its respective Term Commitment an additional Term Loan
Advance in an aggregate principal amount of up to Ten Million Dollars
($10,000,000) (the “Tranche 2 Advance”).

(iii)    Tranche 3 Advance. Subject to the terms and conditions of this
Agreement, beginning on the date Borrower achieves the Performance Milestone and
continuing through March 31, 2020, Borrower may request and each Lender shall
severally (and not jointly) make in an amount not to exceed its respective Term
Commitment an additional Term Loan Advance in an aggregate principal amount of
up to Five Million Dollars ($5,000,000) (the “Tranche 3 Advance”).

 

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(iv)    Tranche 4 Advance. Subject to the terms and conditions of this
Agreement, and conditioned on approval by Lenders’ investment committee in its
sole discretion, on or before March 31, 2020, Borrower may request and Lender
shall severally (and not jointly) make in an amount not to exceed its respective
Term Commitment an additional Term Loan Advance in an aggregate principal amount
of up to Five Million Dollars ($5,000,000) (the “Tranche 4 Advance”).

(v)    In each case, Term Loan Advances must be in minimum increments of Five
Million Dollars ($5,000,000). The aggregate outstanding Term Loan Advances may
be up to the Maximum Term Loan Amount.

(b)     Advance Request. To obtain a Term Loan Advance, Borrower shall complete,
sign and deliver an Advance Request (at least three (3) Business Days before the
Advance Date other than the Closing Date, which shall be at least one
(1) Business Day, or, in each case, such shorter period of time as Agent may
approve in its sole discretion) to Agent. Lender shall fund the Term Loan
Advance in the manner requested by the Advance Request provided that each of the
conditions precedent to such Term Loan Advance is satisfied as of the requested
Advance Date.

(c)    Interest.

(i)    Term Loan Cash Interest Rate. The principal balance (including, for the
avoidance of doubt, any amount equal to the Term Loan PIK Interest added to
principal pursuant to Section 2.2(c)(ii)) of each Term Loan Advance shall bear
interest thereon from such Advance Date at the Term Loan Cash Interest Rate (as
may be reduced for a given period in an amount equal to the applicable Cash
Interest Reduction Amount pursuant to Section 2.2(c)(iii)) based on a year
consisting of 360 days, with interest computed daily based on the actual number
of days elapsed.

(ii)    Term Loan PIK Interest Rate. In addition to interest accrued pursuant to
the Term Loan Cash Interest Rate, the principal balance of each Term Loan
Advance shall bear interest thereon during any PIK Deferral Period at the Term
Loan PIK Interest Rate based on a year consisting of 360 days, with interest
computed daily based on the actual number of days elapsed (the “Term Loan PIK
Interest”), which amount shall be added to the outstanding principal balance and
so capitalized so as to increase the outstanding principal balance of the Term
Loan Advances on each payment date for such Advance, and which amount shall be
payable when the principal amount of the applicable Advance is payable in
accordance with Section 2.2(d).

(iii)    Borrower may elect, by prior written notice to Agent either: (a) prior
to an Advance Date, or (b) at least five (5) Business Days prior to the first
Business Day of a month (or such shorter period as Agent may allow in its sole
discretion), to reduce the then effective per annum Term Loan Cash Interest Rate
applicable to the Term Loan Advances, by up to 1.00% (the amount of such
reduction, the “Cash Interest Reduction Amount”) for a period specified in such

 

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notice, provided that such period shall begin on the first Business Day of the
next month and shall end on the last day of the third month or any subsequent
month thereafter (the “PIK Deferral Period”), provided that after the expiration
of the PIK Deferral Period, the reduction to the rate of interest shall cease to
apply. If during a PIK Deferral Period, Borrower desires to terminate the PIK
Deferral Period prior to the previously requested end date of the PIK Deferral
Period, Borrower may by written notice to Agent at least five Business Days
prior to the previously scheduled end date of the PIK Deferral Period (or such
shorter period as Agent may allow in its sole discretion), elect an earlier end
date (which must be the last day of a month that is no earlier than the last day
of the third month after the commencement of the PIK Deferral Period). If during
a PIK Deferral Period, Borrower desires to change the Cash Interest Reduction
Amount, Borrower may by written notice to Agent at least five Business Days
prior to the first Business Day of the month when such change is to take effect
(or such shorter period as Agent may allow in its sole discretion), elect a
different Cash Interest Reduction Amount, provided that the Cash Interest
Reduction Amount shall not be changed more frequently than once during any
consecutive three month period.

(d)    Payment. Borrower will pay accrued but unpaid interest on each Term Loan
Advance on the first Business Day of each month, beginning the month after the
Advance Date continuing until the Amortization Date. Borrower shall repay the
principal balance of the Term Loan Advance that is outstanding on the day
immediately preceding the Amortization Date, in equal monthly installments of
principal and interest (mortgage style) beginning on the Amortization Date and
continuing on the first Business Day of each month thereafter until the Secured
Obligations (other than inchoate indemnity obligations) are repaid, provided
that if the Term Loan Cash Interest Rate is adjusted in accordance with its
terms, or the Amortization Date or the Term Loan Maturity Date is extended, or a
PIK Deferral Period becomes effective, the amount of each subsequent monthly
installment shall be recalculated so that the remaining payments shall be equal
monthly installments of principal and interest (mortgage style) beginning on the
first Business Day of the month following such recalculation and continuing on
the first Business Day of each month thereafter until the Secured Obligations
(other than inchoate indemnity obligations) are repaid in full. The entire
principal balance of the Term Loan Advance and all accrued but unpaid interest
hereunder, shall be due and payable on the Term Loan Maturity Date. Borrower
shall make all payments under this Agreement without setoff, recoupment or
deduction and regardless of any counterclaim or defense. Lender will initiate
debit entries to the Borrower’s account as authorized on the ACH Authorization
(i) on each payment date of all periodic obligations payable to Lender with
respect to the Term Loan Advance and (ii) reasonable and documented
out-of-pocket legal fees and costs incurred by Agent or Lender in connection
with Section 11.11 of this Agreement; provided that, with respect to clause
(i) above, in the event that Lender or Agent provides written notice to Borrower
that Lender will not initiate a debit entry to Borrower’s account for a certain
amount of the periodic obligations due on a specific payment date, Borrower
shall pay to Lender such amount of periodic obligations in full in immediately
available funds on such payment date; provided, further, that, with respect to
clause (i) above, if Lender or Agent informs Borrower that Lender will not
initiate a debit

 

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entry as described above later than the date that is three (3) Business Days
prior to the relevant payment date, Borrower shall pay to Lender such amount of
periodic obligations in full in immediately available funds on the date that is
three (3) Business Days after the date on which Lender or Agent notifies
Borrower thereof; provided, further, that, with respect to clause (ii) above, in
the event that Lender or Agent provides written notice to Borrower that Lender
will not initiate a debit entry to a Borrower’s account for specified
out-of-pocket legal fees and costs incurred by Agent or Lender, Borrower shall
pay to Lender such amount in full in immediately available funds within three
(3) Business Days.

2.3    Maximum Interest. Notwithstanding any provision in this Agreement or any
other Loan Document, it is the parties’ intent not to contract for, charge or
receive interest at a rate that is greater than the maximum rate permissible by
law that a court of competent jurisdiction shall deem applicable hereto (which
under the laws of the State of New York shall be deemed to be the laws relating
to permissible rates of interest on commercial loans) (the “Maximum Rate”). If a
court of competent jurisdiction shall finally determine that Borrower has
actually paid to Lender an amount of interest in excess of the amount that would
have been payable if all of the Secured Obligations had at all times borne
interest at the Maximum Rate, then such excess interest actually paid by
Borrower shall be applied as follows: first, to the payment of the Secured
Obligations consisting of the outstanding principal; second, after all principal
is repaid, to the payment of Lender’s accrued interest, costs, expenses,
professional fees and any other Secured Obligations; and third, after all
Secured Obligations are repaid, the excess (if any) shall be refunded to
Borrower.

2.4    Default Interest. In the event any payment is not paid on the scheduled
payment date, subject to any applicable grace periods as set forth in
Section 9.1, an amount equal to four percent (4%) of the past due amount shall
be payable on demand. In addition, upon the occurrence and during the
continuation of an Event of Default hereunder, at the election of the Agent, all
Secured Obligations, including principal, interest, compounded interest, and
professional fees, shall bear interest at a rate per annum equal to the rate set
forth in Section 2.2(c), plus four percent (4%) per annum. In the event any
interest is not paid when due hereunder, delinquent interest shall be added to
principal and shall bear interest on interest, compounded at the rate set forth
in Section 2.2(c) or Section 2.4, as applicable.

2.5    Prepayment. At its option, Borrower may at any time prepay all or a
portion of the outstanding Advances by paying the entire principal balance (or
such portion thereof), all accrued and unpaid interest thereon, together with a
prepayment charge equal to the following percentage of the Advance amount being
prepaid: with respect to each Advance, if such Advance amounts are prepaid in
any of the first twelve (12) months following the Advance Date of such Advance,
2.00%; after twelve (12) months but prior to twenty four (24) months, 1.00%; and
thereafter, 0.50% (each, a “Prepayment Charge”). Borrower agrees that the
Prepayment Charge is a reasonable calculation of Lender’s lost profits in view
of the difficulties and impracticality of determining actual damages resulting
from an early repayment of the Advances.

 

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Borrower shall prepay the outstanding amount of all principal and accrued
interest through the prepayment date and the Prepayment Charge upon the
occurrence of a Change in Control. Notwithstanding the foregoing, Agent and
Lender agree to waive the Prepayment Charge if Agent, Lender or one of their
respective Affiliates (in their sole and absolute discretion) agree in writing
to refinance the Advances prior to the Term Loan Maturity Date. Any amounts paid
under this Section shall be applied by Agent to the then unpaid amount of any
Secured Obligations (including principal and interest) in such order and
priority as Agent may choose in its sole discretion. Notwithstanding anything to
the contrary contained in this Agreement, Borrower may rescind any notice of
prepayment if such prepayment would have resulted from a refinancing of all or a
portion of the Term Loan Advances or a transaction resulting in a Change of
Control, which refinancing or transaction shall not be consummated or shall
otherwise be delayed.

2.6    End of Term Charge. On the earliest to occur of (i) the Term Loan
Maturity Date, (ii) the date that Borrower prepays the outstanding Secured
Obligations (other than any inchoate indemnity obligations and any other
obligations which, by their terms, are to survive the termination of this
Agreement) in full, or (iii) the date that the Secured Obligations become due
and payable, Borrower shall pay Lender a charge equal to 6.35% of the aggregate
Term Loan Advances. Notwithstanding the required payment date of such charge, it
shall be deemed earned by Lender as of the Closing Date.

2.7    Notes. If so requested by Lender by written notice to Borrower, then
Borrower shall execute and deliver to Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of Lender pursuant to
Section 11.13) (promptly after the Borrower’s receipt of such notice) a Note or
Notes to evidence Lender’s Loans.

2.8    Pro Rata Treatment. Each payment (including prepayment) hereunder and any
reduction of the Term Loans shall be made pro rata according to the Term
Commitments of the relevant Lender.

2.9    Taxes.

(a)    Defined Terms. For purposes of this Section, the term “applicable law”
includes FATCA.

(b)    Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant governmental authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the Borrower shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section) the applicable Recipient receives
an amount equal to the sum it would have received had no such deduction or
withholding been made.

 

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(c)    Payment of Other Taxes by Borrower. The Borrower shall timely pay to the
relevant governmental authority in accordance with applicable law, or at the
option of the Agent timely reimburse it for the payment of, any Other Taxes.

(d)    Indemnification by Borrower. The Borrower shall indemnify each Recipient,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to
amounts payable under this Section) payable or paid by such Recipient or
required to be withheld or deducted from a payment to such Recipient and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant governmental authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender (with a copy to the Agent),
or by the Agent on its own behalf or on behalf of a Lender, shall be conclusive
absent manifest error.

(e)    Indemnification by the Lenders. Each Lender shall severally indemnify the
Agent, within 10 days after written demand therefor, for (i) any Indemnified
Taxes attributable to such Lender (but only to the extent that the Borrower has
not already indemnified the Agent for such Indemnified Taxes and without
limiting the obligation of the Borrower to do so), and (ii) any Excluded Taxes
attributable to such Lender, in each case, that are payable or paid by the Agent
in connection with any Loan Document, and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Taxes were correctly or
legally imposed or asserted by the relevant governmental authority. A reasonably
detailed certificate as to the amount of such payment or liability delivered to
any Lender by the Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Agent to set off and apply any and all amounts at any time
owing to such Lender under any Loan Document or otherwise payable by the Agent
to the Lender from any other source against any amount due to the Agent under
this paragraph (e).

(f)    Evidence of Payments. As soon as practicable after any payment of Taxes
by the Borrower to a governmental authority pursuant to this Section, the
Borrower shall deliver to the Agent the original or a certified copy of a
receipt issued by such governmental authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.

(g)    Status of Lenders.

(i)    Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Agent, at the time or times reasonably requested
by the Borrower or the Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Agent as will permit such payments
to be made without withholding or at a reduced rate of

 

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withholding. In addition, any Lender, if reasonably requested by the Borrower or
the Agent, shall deliver such other documentation prescribed by applicable law
or reasonably requested by the Borrower or the Agent as will enable the Borrower
or the Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements. Notwithstanding anything to
the contrary in the preceding two sentences, the completion, execution and
submission of such documentation (other than such documentation set forth in
paragraphs (g)(ii)(1), (ii)(2) and (iv) of this Section) shall not be required
if in the Lender’s reasonable judgment such completion, execution or submission
would subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

(ii)    Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person,

 

  1.

any Lender that is a U.S. Person shall deliver to the Borrower and the Agent on
or about the date on which such Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or
the Agent), executed copies of IRS Form W-9 certifying that such Lender is
exempt from U.S. federal backup withholding Tax;

 

  2.

any Foreign Lender shall, to the extent it is legally entitled to do so, deliver
to the Borrower and the Agent (in such number of copies as shall be requested by
the recipient) on or about the date on which such Foreign Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), whichever of the following is
applicable:

A.    in the case of a Foreign Lender claiming the benefits of an income Tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form
W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such Tax treaty and
(y) with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction
of, U.S. federal withholding Tax pursuant to the “business profits” or “other
income” article of such Tax treaty;

B.    executed copies of IRS Form W-8ECI;

C.    in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit K-1 to the

 

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effect that such Foreign Lender is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower
within the meaning of Section 871(h)(3)(B) of the Code, or a “controlled foreign
corporation” related to the Borrower as described in Section 881(c)(3)(C) of the
Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form
W-8BEN or IRS Form W-8BEN-E; or

D.    to the extent a Foreign Lender is not the beneficial owner, executed
copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS
Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of
Exhibit K-2 or Exhibit K-3, IRS Form W-9, and/or other certification documents
from each beneficial owner, as applicable; provided that if the Foreign Lender
is a partnership and one or more direct or indirect partners of such Foreign
Lender are claiming the portfolio interest exemption, such Foreign Lender may
provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit
K-4 on behalf of each such direct and indirect partner;

(iii)    any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or about the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), executed copies of any other
form prescribed by applicable law as a basis for claiming exemption from or a
reduction in U.S. federal withholding Tax, duly completed, together with such
supplementary documentation as may be prescribed by applicable law to permit the
Borrower or the Agent to determine the withholding or deduction required to be
made; and

(iv)    if a payment made to a Lender under any Loan Document would be subject
to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Agent at the time or times prescribed by
law and at such time or times reasonably requested by the Borrower or the Agent
such documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or the Agent as may be necessary for the
Borrower and the Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount, if any, to deduct and withhold from such
payment. Solely for purposes of this clause (iv), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

 

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(h)    Each Lender agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall
update such form or certification or promptly notify the Borrower and the Agent
in writing of its legal inability to do so.

(i)    Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section (including by the
payment of additional amounts pursuant to this Section), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant governmental authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (i) (plus any
penalties, interest or other charges imposed by the relevant governmental
authority) in the event that such indemnified party is required to repay such
refund to such governmental authority. Notwithstanding anything to the contrary
in this paragraph (i), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (i) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

2.10    Borrower agrees that any Prepayment Charge and any End of Term Charge
payable in accordance with the terms hereof shall be presumed to be the
liquidated damages sustained by each Lender as the result of the early
termination, and Borrower agrees that it is reasonable under the circumstances
currently existing and existing as of the Closing Date. The Prepayment Charge
and the End of Term Charge shall also be payable in accordance with the terms
hereof in the event the Secured Obligations (and/or this Agreement) are
satisfied or released by foreclosure (whether by power of judicial proceeding),
deed in lieu of foreclosure, or by any other means. Borrower expressly waives
(to the fullest extent it may lawfully do so) the provisions of any present or
future statute or law that prohibits or may prohibit the collection of the
foregoing Prepayment Charge and End of Term Charge in connection with any such
acceleration. Borrower agrees (to the fullest extent that each may lawfully do
so): (a) each of the Prepayment Charge and the End of Term Charge is reasonable
and is the product of an arm’s length transaction between sophisticated business
people, ably represented by counsel; (b) each of the Prepayment Charge and the
End of Term Charge shall be payable in accordance with the terms hereof
notwithstanding the then prevailing market rates at the time payment is made;
(c) there has been a course of conduct between the Lenders and Borrower giving
specific consideration in this transaction for such agreement to pay the
Prepayment Charge and the End of Term Charge as a charge (and not interest) in
the event of

 

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prepayment or acceleration; (d) Borrower shall be estopped from claiming
differently than as agreed to in this paragraph. Borrower expressly acknowledges
that their agreement to pay each of the Prepayment Charge and the End of Term
Charge to the Lenders as herein described was on the Closing Date and continues
to be a material inducement to the Lenders to provide the Term Loans.

SECTION 3. SECURITY INTEREST

3.1    As security for the prompt and complete payment when due (whether on the
payment dates or otherwise) of all the Secured Obligations, Borrower grants to
Agent a security interest in all of Borrower’s right, title, and interest in, to
and under all of Borrower’s personal property and other assets including without
limitation the following (except as set forth herein) whether now owned or
hereafter acquired (collectively, the “Collateral”): (a) Receivables;
(b) Equipment; (c) Fixtures; (d) General Intangibles (other than Intellectual
Property); (e) Inventory; (f) Investment Property; (g) Deposit Accounts;
(h) Cash; (i) Goods; and all other tangible and intangible personal property of
Borrower whether now or hereafter owned or existing, leased, consigned by or to,
or acquired by, Borrower and wherever located, and any of Borrower’s property in
the possession or under the control of Agent; and, to the extent not otherwise
included, all Proceeds of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and products of each of
the foregoing; provided, however, that the Collateral shall include all Accounts
and General Intangibles that consist of rights to payment and proceeds from the
sale, licensing or disposition of all or any part, or rights in, the
Intellectual Property (the “Rights to Payment”).

3.2    Notwithstanding the broad grant of the security interest set forth in
Section 3.1, above, the Collateral shall not include: (a) non-assignable
licenses or contracts, which by their terms require the consent of the licensor
thereof or another party (but only to the extent such prohibition on transfer is
enforceable under applicable law, including, without limitation, Sections 9406,
9407 and 9408 of the UCC), (b) any Excluded Account, (c) any interest of
Borrower as a lessee under an Equipment lease or other capital assets
constituting purchase money Liens to the extent permitted pursuant to clause
(vii) of the definition of Permitted Liens if Borrower is prohibited by the
terms of such lease from granting a security interest in such lease or under
which such an assignment or Lien would cause a default to occur under such
lease; provided, however, that upon termination or cessation of such
prohibition, such interest shall immediately become Collateral without any
action by Borrower, Agent or Lenders, (d) any Intellectual Property and (e) any
particular asset if the pledge thereof or the security interest therein is
prohibited or restricted by applicable law, rule or regulation (including any
requirement to obtain the consent of any governmental authority, regulatory
authority or third party), provided that the foregoing exclusion of this clause
(e) shall in no way be construed (1) to apply to the extent that any described
prohibition or restriction is unenforceable under Section 9-406, 9-407, 9-408,
or 9-409 of the UCC or other applicable law or (2) to apply to the extent that
any consent or waiver has been obtained, or is hereafter obtained, that would
permit the Agent’s security interest or Lien notwithstanding the prohibition or
restriction on the pledge of such asset.

 

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3.3    At such time as the Secured Obligations (other than inchoate indemnity
obligations) are paid in full in cash, Agent’s Lien on the Collateral shall be
released and all rights therein shall revert to Borrower, and, at Borrower’s
sole cost and expense, Agent agrees to execute such documents and take such
other steps as are reasonably necessary for Borrower to accomplish the
foregoing, all at Borrower’s sole cost and expense.

SECTION 4. CONDITIONS PRECEDENT TO LOAN

The obligations of Lender to make the Loan hereunder are subject to the
satisfaction by Borrower of the following conditions:

4.1    Initial Advance. On or prior to the Closing Date, Borrower shall have
delivered to Agent the following:

(a)    executed copies of the Loan Documents, Account Control Agreements, all
other documents and instruments reasonably required by Agent to effectuate the
transactions contemplated hereby or to create and perfect the Liens of Agent
with respect to all Collateral, in all cases in form and substance reasonably
acceptable to Agent;

(b)    a legal opinion of Borrower’s counsel, in form and substance reasonably
acceptable to Agent;

(c)    certified copy of resolutions of Borrower’s board of directors evidencing
approval of the Loan and other transactions evidenced by the Loan Documents;

(d)    certified copies of the Certificate of Incorporation and the Bylaws, as
amended through the Closing Date, of Borrower;

(e)    a certificate of good standing for Borrower from its state of
incorporation and similar certificates from all other jurisdictions in which it
does business and where the failure to be qualified could have a Material
Adverse Effect;

(f)    payment of the Initial Facility Charge and reimbursement of Agent’s and
Lender’s current reasonable and documented out-of-pocket expenses reimbursable
pursuant to this Agreement, which amounts may be deducted from the initial
Advance;

(g)    all certificates of insurance required hereunder;

(h)    payment of the Due Diligence Fee; and

(i)    such other documents as Agent may reasonably request.

4.2    All Advances. On each Advance Date:

(a)    Agent shall have received an Advance Request for the relevant Advance as
required by Section 2.2(b), each duly executed by a duly authorized officer of
Borrower.

 

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(b)    The representations and warranties set forth in this Agreement shall be
true and correct in all material respects on and as of the Advance Date with the
same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.

(c)    with respect to the Tranche 3 Advance, Borrower shall have paid the
applicable Tranche 3 Facility Charge.

(d)    with respect to the Tranche 4 Advance, Borrower shall have paid the
applicable Tranche 4 Facility Charge.

(e)    Each Advance Request shall be deemed to constitute a representation and
warranty by Borrower on the relevant Advance Date as to the matters specified in
paragraph (b) of this Section 4.2 and Section 4.3 and as to the matters set
forth in the Advance Request.

4.3    No Default. As of the Closing Date and each Advance Date, (i) no fact or
condition exists that could (or could, with the passage of time, the giving of
notice, or both) constitute an Event of Default and (ii) no event that has had
or could reasonably be expected to have a Material Adverse Effect has occurred
and is continuing.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWER

Borrower represents and warrants that:

5.1    Corporate Status. Borrower is a corporation duly organized, legally
existing and in good standing under the laws of the State of Delaware, and is
duly qualified as a foreign corporation in all jurisdictions in which the nature
of its business or location of its properties require such qualifications and
where the failure to be qualified could reasonably be expected to have a
Material Adverse Effect. Borrower’s present name, former names (if any),
locations, place of formation, Tax identification number, organizational
identification number and other information are correctly set forth in Exhibit
C, as may be updated by Borrower in a written notice (including any Compliance
Certificate) provided to Agent after the Closing Date.

5.2    Collateral. Borrower owns the Collateral and the Intellectual Property
owned by it free of all Liens, except for Permitted Liens. Borrower has the
power and authority to grant to Agent a Lien in the Collateral as security for
the Secured Obligations.

5.3    Consents. Borrower’s execution, delivery and performance of this
Agreement and all other Loan Documents (i) have been duly authorized by all
necessary corporate action of Borrower, (ii) will not result in the creation or
imposition of any Lien upon the Collateral, other than Permitted Liens and the
Liens created by this Agreement and the other Loan Documents, (iii) do not
violate any provisions of Borrower’s Certificate or Articles of Incorporation
(as applicable), bylaws, or any, law, regulation, order, injunction, judgment,
decree or writ to which Borrower is subject and (iv) except as

 

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described on Schedule 5.3, do not violate any material contract or agreement or
require the consent or approval of any other Person pursuant to a material
contract or agreement or applicable law which has not already been obtained. The
individual or individuals executing the Loan Documents are duly authorized to do
so.

5.4    Material Adverse Effect. No event that has had or could reasonably be
expected to have a Material Adverse Effect has occurred and is continuing.
Borrower is not aware of any event likely to occur that would reasonably be
expected to result in a Material Adverse Effect.

5.5    Actions Before Governmental Authorities. There are no actions, suits or
proceedings at law or in equity or by or before any governmental authority now
pending or, to the knowledge of Borrower, threatened against or affecting
Borrower or its property, that is reasonably expected to result in a Material
Adverse Effect.

5.6    Laws.

(a)    Neither Borrower nor any of its Subsidiaries is in violation of any law,
rule or regulation, or in default with respect to any judgment, writ, injunction
or decree of any governmental authority, where such violation or default would
reasonably be expected to result in a Material Adverse Effect. Borrower is not
in default in any manner under any provision of any agreement or instrument
evidencing Indebtedness in excess of $500,000, or any other agreement to which
it is a party or by which it is bound which default would reasonably be expected
to result in a Material Adverse Effect.

(b)    Neither Borrower nor any of its Subsidiaries is an “investment company”
or a company “controlled” by an “investment company” under the Investment
Company Act of 1940, as amended. Neither Borrower nor any of its Subsidiaries is
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 and each of its Subsidiaries has complied in all material respects with
the Federal Fair Labor Standards Act. No Borrower nor any of its Subsidiaries is
a “holding company” or an “affiliate” of a “holding company” or a “subsidiary
company” of a “holding company” as each term is defined and used in the Public
Utility Holding Company Act of 2005. Neither Borrower’s nor any of its
Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary
or, to Borrower’s knowledge, by previous Persons, in disposing, producing,
storing, treating, or transporting any hazardous substance other than in
material compliance with applicable laws. Borrower and each of its Subsidiaries
has obtained all required consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all Governmental
Authorities, except where the failure to do so would not reasonably be expected
to result in a Material Adverse Effect.

(c)    None of Borrower, any of its Subsidiaries, or to Borrower’s knowledge any
of Borrower’s or its Subsidiaries’ Affiliates or to Borrower’s knowledge any of
their respective agents acting or benefiting in any capacity in connection with
the transactions contemplated by this Agreement is (i) in violation of any
Anti-Terrorism Law, (ii) engaging in or conspiring to engage in any transaction
that evades or avoids, or has the

 

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purpose of evading or avoiding or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. None of
Borrower, its Subsidiaries, or to the knowledge of Borrower, any of its
Affiliates or agents, acting or benefiting in any capacity in connection with
the transactions contemplated by this Agreement, (x) conducts any business or
engages in making or receiving any contribution of funds, goods or services to
or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages
in any transaction relating to, any property or interest in property blocked
pursuant to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law. None of the funds to be provided under this Agreement will
be used, directly or indirectly, (a) for any activities in violation of any
applicable anti-money laundering, economic sanctions and anti-bribery laws and
regulations laws and regulations or (b) for any payment to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.

5.7    Information Correct and Current. No written information, report, Advance
Request, financial statement, exhibit or schedule furnished (other than
financial or business projections or other information of a forward-looking
nature), by or on behalf of Borrower to Agent in connection with any Loan
Document or included therein or delivered pursuant thereto contained, or, when
taken as a whole, contains or will contain any material misstatement of fact or,
when taken together with all other such information or documents, omitted, omits
or will omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were, are or will be
made, not materially misleading at the time such statement was made or deemed
made. Additionally, any and all financial or business projections provided by
Borrower to Agent, whether prior to or after the Closing Date, shall be
(i) provided in good faith and based on the most current data and information
available to Borrower, and (ii) the most current of such projections provided to
Borrower’s Board of Directors (it being understood that such projections are
subject to significant uncertainties and contingencies, many of which are beyond
the control of Borrower, that no assurance is given that any particular
projections will be realized, and that actual results may differ).

5.8    Tax Matters. Except as described on Schedule 5.8 and except those Taxes
being contested in good faith with adequate reserves under GAAP, (a) Borrower
and its Subsidiaries have filed all material federal, state and local Tax
returns that they are required to file, (b) Borrower and its Subsidiaries have
duly paid or fully reserved for all Taxes or installments thereof (including any
interest or penalties) as and when due, which have or may become due pursuant to
such returns, and (c) Borrower and its Subsidiaries have paid or fully reserved
for any Tax assessment received by any of them or the three (3) years preceding
the Closing Date, if any (including any Taxes being contested in good faith and
by appropriate proceedings), in each case with respect to clauses (b) and (c),
other than with respect to Taxes that do not exceed Twenty-Five Thousand Dollars
($25,000) in the aggregate.

 

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5.9    Intellectual Property Claims. Except for Permitted Liens, Borrower is the
sole owner of, or otherwise have the right to use, the Intellectual Property
owned by Borrower and material to Borrower’s business. Except as described on
Schedule 5.9, (i) to Borrower’s knowledge, each of the material Copyrights,
Trademarks and issued Patents is valid and enforceable, (ii) no material part of
the Intellectual Property owned by Borrower has been judged by a decision of a
court of competent jurisdiction, invalid or unenforceable, in whole or in part,
and (iii) no claim has been made to Borrower in writing that any material
Intellectual Property of Borrower violates the rights of any third party except
to the extent such claim would not reasonably be expected to have a Material
Adverse Effect. Exhibit D contains a true, correct and complete list of
Borrower’s registered Patents, registered Trademarks, registered Copyrights, if
any, together with application or registration numbers, as applicable, owned by
Borrower or any Subsidiary, and agreements under which Borrower licenses
Intellectual Property from third parties that is material to the Borrower’s
business (other than shrink-wrap software licenses), in each case as of the
Closing Date. Borrower is not in breach of, nor has Borrower failed to perform
any obligations under, any of the foregoing contracts, licenses or agreements
and, to Borrower’s knowledge, no third party to any such contract, license or
agreement is in breach thereof or has failed to perform any obligations
thereunder, in each case, except where such breach or failure to perform would
not reasonably be expected to have a Material Adverse Effect.

5.10    Intellectual Property. Except as described on Schedule 5.10, Borrower
has all material rights with respect to Intellectual Property necessary or
material in the operation or conduct of Borrower’s business as currently
conducted and proposed to be conducted by Borrower. Without limiting the
generality of the foregoing, and in the case of Licenses, except for
restrictions that are unenforceable under Division 9 of the UCC, Borrower has
the right, to the extent required to operate Borrower’s business, to freely
transfer, license or assign Borrower’s owned Intellectual Property necessary or
material in the operation or conduct of Borrower’s business as currently
conducted and proposed to be conducted by Borrower, without condition,
restriction or payment of any kind (other than license payments in the ordinary
course of business) to any third party, and Borrower owns or has the right to
use, pursuant to valid licenses, all software development tools, library
functions, compilers and all other third-party software and other items that are
material to Borrower’s business and used in the design, development, promotion,
sale, license, manufacture, import, export, use or distribution of Borrower
Products that are material to the Borrower’s business except customary covenants
in inbound license agreements and equipment leases where Borrower is the
licensee or lessee.

5.11    Borrower Products. Except as described on Schedule 5.11, no material
Intellectual Property owned by Borrower or Borrower Product has been or is
subject to any actual proceeding (including any proceeding in the United States
Patent and Trademark Office or any corresponding foreign office or agency) or
outstanding decree, order, judgment, settlement agreement or stipulation that
restricts in any material respect Borrower’s use, transfer or licensing thereof
or that may affect the validity, use or enforceability thereof. To the
Borrower’s knowledge, there is no decree, order, judgment, agreement,
stipulation, arbitral award or other provision entered into in connection with

 

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any litigation or proceeding that obligates Borrower to grant licenses or
ownership interest in any future material Intellectual Property related to the
operation or conduct of the business of Borrower or Borrower Products. Borrower
has not received any written notice or claim or, to the knowledge of Borrower,
oral notice or claim, challenging or questioning Borrower’s ownership in any
material Intellectual Property (or written notice of any claim challenging or
questioning the ownership in any licensed Intellectual Property of the owner
thereof) or suggesting that any third party (other than the licensor or co-owner
with Borrower) has any claim of legal or beneficial ownership with respect
thereto. To the Borrower’s knowledge, neither Borrower’s use of its material
Intellectual Property nor the production and sale of Borrower Products infringes
in any material respect the Intellectual Property or other rights of others.

5.12    Financial Accounts. Exhibit E, as may be updated by the Borrower in a
written notice or Compliance Certificate provided to Agent after the Closing
Date, is a true, correct and complete list of (a) all banks and other financial
institutions at which Borrower or any Subsidiary maintains Deposit Accounts and
(b) all institutions at which Borrower or any Subsidiary maintains an account
holding Investment Property, and such exhibit correctly identifies the name,
address and telephone number of each bank or other institution, the name in
which the account is held, a description of the purpose of the account, and the
complete account number therefor.

5.13    Employee Loans. Except as permitted by Section 7.6, Borrower has no
outstanding loans to any employee, officer or director of Borrower nor has
Borrower guaranteed the payment of any loan made to an employee, officer or
director of Borrower by a third party.

5.14    Capitalization and Subsidiaries. Borrower’s authorized, issued and
outstanding shares as of December 31, 2018 is set forth on Schedule 5.14 annexed
hereto. Borrower does not own any stock, partnership interest or other
securities of any Person, except for Permitted Investments. Attached as Schedule
5.14, as may be updated by Borrower in a written notice provided after the
Closing Date, is a true, correct and complete list of each Subsidiary.

SECTION 6. INSURANCE; INDEMNIFICATION

6.1    Coverage. Borrower shall cause to be carried and maintained commercial
general liability insurance, on an occurrence form, against risks customarily
insured against in Borrower’s line of business. Such risks shall include the
risks of bodily injury, including death, property damage, personal injury,
advertising injury, and contractual liability per the terms of the
indemnification agreement found in Section 6.3. Borrower must maintain a minimum
of $2,000,000 of commercial general liability insurance for each occurrence.
Borrower has and agrees to maintain a minimum of $2,000,000 of directors’ and
officers’ insurance for each occurrence and $5,000,000 in the aggregate. So long
as there are any Secured Obligations outstanding, Borrower shall also cause to
be carried and maintained insurance upon the Collateral, insuring against all
risks of physical loss or damage howsoever caused, in an amount not less than
the full replacement cost of the Collateral, provided that such insurance may be
subject to standard exceptions and deductibles.

 

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6.2    Certificates. Borrower shall deliver to Agent on or prior to the Closing
Date certificates of insurance that evidence Borrower’s compliance with its
insurance obligations in Section 6.1 and the obligations contained in this
Section 6.2. Borrower’s insurance certificate shall state Agent (shown as
“Hercules Capital, Inc., as Agent”) is an additional insured for commercial
general liability, a loss payee for all risk property damage insurance, subject
to the insurer’s approval, and a loss payee for property insurance and
additional insured for liability insurance for any future insurance that
Borrower may acquire from such insurer. Attached to the certificates of
insurance will be additional insured endorsements for liability and lender’s
loss payable endorsements for all risk property damage insurance within the time
frame set forth in Section 7.19(a). All certificates of insurance will provide
for a minimum of thirty (30) days advance written notice to Agent of
cancellation (other than cancellation for non-payment of premiums, for which ten
(10) days’ advance written notice shall be sufficient). Borrower shall give
prompt notice to Agent of any other change to such insurance policies materially
adverse to Agent’s interests. Any failure of Agent to scrutinize such insurance
certificates for compliance is not a waiver of any of Agent’s rights, all of
which are reserved. Borrower shall provide Agent with copies of each insurance
policy included on the insurance certificates on the Closing Date within the
time frame set forth in Section 7.19(a), and upon entering or amending any
insurance policy required hereunder, Borrower shall promptly notify Agent
thereof, and upon Agent’s request, provide Agent with copies of such policies
and shall promptly deliver to Agent updated insurance certificates with respect
to such policies.

6.3    Indemnity. Borrower agrees to indemnify and hold Agent, Lender and their
officers, directors, employees, agents, in-house attorneys, representatives and
shareholders (each, an “Indemnified Person”) harmless from and against any and
all claims, costs, expenses, damages and liabilities (including such claims,
costs, expenses, damages and liabilities based on liability in tort, including
strict liability in tort), including reasonable attorneys’ fees and
disbursements and other costs of investigation or defense (including those
incurred upon any appeal) (collectively, “Liabilities”), that may be instituted
or asserted against or incurred by such Indemnified Person as the result of
credit having been extended, suspended or terminated under this Agreement and
the other Loan Documents or the administration of such credit, or in connection
with or arising out of the transactions contemplated hereunder and thereunder,
or any actions or failures to act in connection therewith, or arising out of the
disposition or utilization of the Collateral, excluding in all cases Liabilities
to the extent resulting directly from any Indemnified Person’s gross negligence
or willful misconduct. This Section 6.3 shall survive the repayment of
indebtedness under, and otherwise shall survive the expiration or other
termination of, the Agreement. In no event shall any Indemnified Person be
liable on any theory of liability for any special, indirect, consequential or
punitive damages (including any loss of profits, business or anticipated
savings). This Section shall not apply with respect to Taxes other than any
Taxes that represent losses, claims, damages or liabilities arising from any
non-Tax claim.

 

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SECTION 7. COVENANTS OF BORROWER

Borrower agrees as follows:

7.1    Financial Reports. Borrower shall furnish to Agent the financial
statements and reports listed hereinafter (the “Financial Statements”):

(a)    as soon as practicable (and in any event within 30 days) after the end of
each calendar month, unaudited interim and year-to-date financial statements as
of the end of such month (prepared on a consolidated and consolidating basis, if
available), including balance sheet and related statements of income and cash
flows accompanied by a report detailing any material contingencies (including
the commencement of any material litigation by or against Borrower) or any other
occurrence that could reasonably be expected to have a Material Adverse Effect,
all certified by Borrower’s Chief Executive Officer or Chief Financial Officer
to the effect that they have been prepared in accordance with GAAP, except
(i) for the absence of footnotes, (ii) that they are subject to normal year-end
adjustments, and (iii) they do not contain certain non-cash items that are
customarily included in quarterly and annual financial statements;

(b)    as soon as practicable (and in any event within 45 days) after the end of
each calendar quarter (other than the fourth quarter of each fiscal year),
unaudited interim and year-to-date financial statements as of the end of such
calendar quarter (prepared on a consolidated and consolidating basis, if
available), including balance sheet and related statements of income and cash
flows accompanied by a report detailing any material contingencies (including
the commencement of any material litigation by or against Borrower) or any other
occurrence that could reasonably be expected to have a Material Adverse Effect,
certified by Borrower’s Chief Executive Officer or Chief Financial Officer to
the effect that they have been prepared in accordance with GAAP, except (i) for
the absence of footnotes, and (ii) that they are subject to normal year-end
adjustments;

(c)    as soon as practicable (and in any event within ninety (90) days) after
the end of each fiscal year, unqualified (other than going concern
qualifications with respect to the maturity of any outstanding Term Loan Advance
or Permitted Convertible Debt Financing) audited financial statements as of the
end of such year (prepared on a consolidated and consolidating basis, if
available), including balance sheet and related statements of income and cash
flows, and setting forth in comparative form the corresponding figures for the
preceding fiscal year, certified by Ernst & Young or another firm of independent
certified public accountants selected by Borrower and reasonably acceptable to
Agent, accompanied by any management report from such accountants;

(d)    concurrently with the delivery of each of the Financial Statements, a
Compliance Certificate;

(e)    as soon as practicable (and in any event within 30 days) after the end of
each month, a report showing agings of accounts receivable and accounts payable;

 

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(f)    promptly after the sending or filing thereof, as the case may be, copies
of any proxy statements, financial statements or reports that Borrower has made
available to holders of its preferred stock and copies of any regular, periodic
and special reports or registration statements that Borrower files with the
Securities and Exchange Commission or any governmental authority that may be
substituted therefor, or any national securities exchange;

(g)    [Reserved];

(h)    financial and business projections within thirty (30) days following
their approval by Borrower’s board of directors, and in any event, within 60
days after the end of Borrower’s fiscal year, as well as budgets, operating
plans and other financial information reasonably requested by Agent; and

(i)    prompt notice if Borrower or any Subsidiary has knowledge that Borrower,
or any Subsidiary or Affiliate of Borrower, is listed on the OFAC Lists or
(a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or
(d) is arraigned and held over on charges involving money laundering.

Borrower shall not make any change in its (a) accounting policies or reporting
practices unless required by a change in GAAP or (b) fiscal years or fiscal
quarters. The fiscal year of Borrower shall end on December 31.

The executed Compliance Certificate and all Financial Statements required to be
delivered pursuant to clauses (a), (b) and (c) shall be sent via e-mail to Agent
at financialstatements@herculestech.com with a copy to mdutra@htgc.com,
bjadot@htgc.com, and legal@herculestech.com; provided, that if e-mail is not
available or sending such Financial Statements via e-mail is not possible, they
shall be faxed to Agent at: (650) 473-9194, attention Account Manager:
Constellation Pharmaceuticals, Inc.

Notwithstanding the foregoing or anything else to the contrary in this
Agreement, documents required to be delivered under Sections 7.1(a), (b), (c) or
(f) (to the extent any such documents are included in materials otherwise filed
with the SEC or posted on the Borrower’s website) shall be deemed to have been
delivered on the date on which Borrower emails a link thereto to Agent; provided
that Borrower shall directly provide Agent all Financial Statements required to
be delivered pursuant to Section 7.1(b) and (c) hereunder.

7.2    Inspections; Access to Management. Borrower shall permit any
representative that Agent or Lender authorizes, including its attorneys and
accountants, to inspect the Collateral and examine and make copies and abstracts
of the books of account and records of Borrower at reasonable times and upon
reasonable notice during normal business hours; provided, however, that so long
as no Event of Default has occurred and is continuing, such examinations shall
be limited to no more often than once per fiscal year. In addition, any such
representative shall have the right at reasonable times and intervals to meet
with management and officers of Borrower to discuss such books of account and
records. In addition, Agent or Lender shall be entitled at reasonable times and
intervals to consult with and advise the management and officers of Borrower
concerning significant business issues affecting Borrower. Such consultations
shall not unreasonably interfere

 

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with Borrower’s business operations and management and officers of Borrower
shall not be bound to accept any such advisement. The parties intend that the
rights granted Agent and Lender shall constitute “management rights” within the
meaning of 29 C.F.R. Section 2510.3-101(d)(3)(ii), but that any advice,
recommendations or participation by Agent or Lender with respect to any business
issues shall not be deemed to give Agent or Lender, nor be deemed an exercise by
Agent or Lender of, control over Borrower’s management or policies.

7.3    Further Assurances. Borrower shall from time to time execute, deliver and
file, alone or with Agent, any financing statements, security agreements,
collateral assignments, notices, control agreements, or other documents to
perfect or give the highest priority to Agent’s Lien on the Collateral (subject
to Permitted Liens). Borrower shall from time to time procure any instruments or
documents as may be reasonably requested by Agent, and take all further action
that may be necessary, or that Agent may reasonably request, to perfect and
protect the Liens granted hereby and thereby. In addition, and for such purposes
only, Borrower hereby authorizes Agent to execute and deliver on behalf of
Borrower and to file such financing statements (including in accordance with
Section 9-504 of the UCC), collateral assignments, notices, control agreements,
security agreements and other documents without the signature of Borrower either
in Agent’s name or in the name of Agent as agent and attorney-in-fact for
Borrower. Borrower shall protect and defend Borrower’s title to the Collateral
and Agent’s Lien thereon against all Persons claiming any interest adverse to
Borrower or Agent other than Permitted Liens.

7.4    Indebtedness. Borrower shall not create, incur, assume, guarantee or be
or remain liable with respect to any Indebtedness, or permit any Subsidiary so
to do, other than Permitted Indebtedness, or prepay any Indebtedness or take any
actions which impose on Borrower an obligation to prepay any Indebtedness,
except for (a) the exchange or conversion of Indebtedness into equity securities
and the payment of cash in lieu of fractional shares in connection with such
exchange or conversion, (b) purchase money Indebtedness, (c) prepayment of
intercompany Permitted Indebtedness (i) owed by Borrower to any Subsidiary that
has executed a Joinder Agreement or by any Subsidiary that has executed a
Joinder Agreement to Borrower, or (ii) if such Subsidiary is not a Borrower,
intercompany Indebtedness owed by such Subsidiary to either Borrower or another
Subsidiary that is not a Borrower, (d) obligations providing for the payment in
full of the Secured Obligations (other than any inchoate indemnity obligations
and any other obligations which, by their terms, are to survive the termination
of this Agreement), (e) prepayments of such Indebtedness to the extent permitted
by any subordination agreement applicable thereto, (f) prepayments in connection
with refinancings of such Indebtedness, provided that the principal amount is
not increased (except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in connection
with such refinancing) or (g) as otherwise permitted hereunder or approved in
writing by Agent.

7.5    Collateral; Negative Pledge. Borrower shall at all times keep the
Collateral, the Intellectual Property and all other property and assets used in
Borrower’s business or in which Borrower now or hereafter holds any interest
free and clear from any legal process

 

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or Liens whatsoever (except for Permitted Liens), and shall give Agent prompt
written notice of any legal process affecting the Collateral, the Intellectual
Property, such other property and assets, or any Liens thereon, provided
however, that the Collateral and such other property and assets may be subject
to Permitted Liens except that there shall be no Liens whatsoever on
Intellectual Property. Borrower shall not agree with any Person other than Agent
or Lender not to encumber its property except (i) in connection with Permitted
Liens, (ii) customary restrictions on the assignment of leases, licenses and
other agreements, and (iii) in connection with Permitted Transfers (provided
that this clause (iii) shall not be construed to permit Borrower to agree with
any Person (other than Agent or Lender) to grant a security interest on
Borrower’s property in connection with a Permitted Transfer). Borrower shall not
enter into or suffer to exist or become effective any agreement that prohibits
or limits the ability of Borrower to create, incur, assume or suffer to exist
any Lien upon any of its Intellectual Property, whether now owned or hereafter
acquired, to secure its obligations under the Loan Documents to which it is a
party, in each case other than (a) this Agreement and the other Loan Documents,
(b) any agreements governing any purchase money Liens or capital lease
obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby), (c) in
connection with Permitted Liens, Permitted Indebtedness and Permitted Transfers,
and (d) customary restrictions on the assignment of leases, licenses and other
agreements. Borrower shall cause its Subsidiaries to protect and defend such
Subsidiary’s title to its assets from and against all Persons claiming any
interest adverse to such Subsidiary, and Borrower shall cause its Subsidiaries
at all times to keep such Subsidiary’s property and assets free and clear from
any Liens whatsoever (except for Permitted Liens) and shall give Agent prompt
written notice of any legal process adversely affecting such Subsidiary’s
assets.

7.6    Investments. Borrower shall not directly or indirectly acquire or own, or
make any Investment in or to any Person, or permit any of its Subsidiaries so to
do, other than Permitted Investments.

7.7    Distributions. Borrower shall not, and shall not allow any Subsidiary to,
(a) repurchase or redeem any class of stock or other Equity Interest other than
pursuant to employee, director or consultant repurchase plans or other similar
agreements, provided, however, in each case the repurchase or redemption price
does not exceed the original consideration paid for such stock or Equity
Interest or (b) declare or pay any cash dividend or make a cash distribution on
any class of stock or other Equity Interest, except that a Subsidiary may pay
dividends or make distributions to Borrower, waive, release or forgive any
Indebtedness owed by any employees, officers or directors in excess of $250,000
in the aggregate.

7.8    Transfers. Except for Permitted Transfers, Borrower shall not, and shall
not allow any Subsidiary to, voluntarily or involuntarily transfer, sell, lease,
license, lend or in any other manner convey any equitable, beneficial or legal
interest in any material portion of its assets.

 

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7.9    Mergers or Acquisitions. Borrower shall not merge or consolidate, or
permit any of its Subsidiaries to merge or consolidate, with or into any other
business organization (other than mergers or consolidations of (a) a Subsidiary
which is not a Borrower into another Subsidiary or into Borrower or (b) a
Borrower into another Borrower), or acquire, or permit any of its Subsidiaries
to acquire, in each case including for the avoidance of doubt through a merger,
purchase, in-licensing arrangement or any similar transaction, all or
substantially all of the capital stock or all or substantially all of the
property of another Person.

7.10    Taxes. Borrower and its Subsidiaries shall file all income and other
material tax returns that it is required to file and pay when due all income and
other material Taxes now or hereafter imposed or assessed against Borrower or
any Subsidiary or the Collateral or upon Borrower’s ownership, possession, use,
operation or disposition thereof or upon Borrower’s rents, receipts or earnings
arising therefrom any Borrower’s rents, receipts or earnings arising therefrom.
Borrower and its Subsidiaries shall file on or before the due date therefor all
material federal and state Tax returns required to be filed by them or in
respect of the Collateral. Notwithstanding the foregoing, Borrower may contest,
in good faith and by appropriate proceedings, taxes for which Borrower maintains
adequate reserves therefor in accordance with GAAP.

7.11    Corporate Changes; Change of Control; Relocations of Collateral.

(a)    Neither Borrower nor any Subsidiary shall change its corporate name,
legal form or jurisdiction of formation without twenty (20) days’ prior written
notice to Agent. Neither Borrower nor any Subsidiary shall relocate its chief
executive office or its principal place of business unless: (i) it has provided
prior written notice to Agent; and (ii) such relocation shall be within the
continental United States of America.

(b)    Neither Borrower nor any Subsidiary shall suffer a Change in Control.

(c)    Neither Borrower nor any Subsidiary shall relocate any item of Collateral
(other than (A) sales of Inventory in the ordinary course of business,
(B) relocations of Borrower Products contract manufacturing organizations,
distribution service firms, contract research organizations, clinical sites,
clinical investigators and other institutions necessary for the conducts of
clinical studies, in each case, in the ordinary course of business, (C) in
connection with Permitted Transfers, (D) relocations of works-in-progress, raw
materials or otherwise in the supply chain for commercial manufacturing or sale
of Borrower Products, (E) relocations of Equipment for repair or having an
aggregate value of up to $250,000 in any fiscal year, and (F) relocations of
Collateral from a location described on Exhibit C to another location described
on Exhibit C) unless (i) it has provided prompt written notice to Agent,
(ii) such relocation is within the continental United States of America or
replaces a location in another country described on Exhibit C or is otherwise
approved in writing by Agent and, (iii) if such relocation is to a third party
bailee located in the United States and the Collateral has a book value in
excess of $250,000, it has used commercially reasonable efforts to deliver a
bailee agreement in form and substance reasonably acceptable to Agent.

 

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7.12    Deposit Accounts. Other than Excluded Accounts, neither Borrower nor any
Subsidiary shall maintain any Deposit Accounts, or accounts holding Investment
Property, except with respect to which Agent has an Account Control Agreement.

7.13    Subsidiary Formation. Borrower shall notify Agent of each Subsidiary
formed subsequent to the Closing Date and, within 15 days of formation (or such
longer period as Agent may allow), shall (a) cause any such Subsidiary (other
than any MSC Subsidiary) to execute and deliver to Agent a Joinder Agreement and
any other documents and filings requested by Agent pursuant to Section 7.3 and
(b) execute and deliver to Agent an amendment to the Pledge Agreement and any
other documentation requested by Agent to evidence a pledge of 100% of the
Equity Interests of such Subsidiary (including, for the avoidance of doubt, any
MSC Subsidiary).

7.14    MSC Investment Conditions. At any time that the MSC Subsidiary has any
assets or liabilities, Borrower shall satisfy the MSC Investment Conditions at
all times.

7.15    Notification of Event of Default. Borrower shall notify Agent
immediately of the occurrence of any Event of Default.

7.16    SBIC. One or more affiliates of Agent have received a license from the
U.S. Small Business Administration (“SBA”) to extend loans as a small business
investment company (“SBIC”) pursuant to the Small Business Investment Act of
1958, as amended, and the associated regulations (collectively, the “SBIC Act”).
Portions of the loan to Borrower may be made by a Lender that is an SBIC on any
SBA Funding Date. Addendum 1 to this Agreement outlines various responsibilities
of Agent, each Lender and Borrower associated with a loan made by a SBIC.
Addendum 1 shall be completed by Borrower on or before each SBA Funding Date and
delivered to Agent, and shall thereupon be automatically incorporated in this
Agreement without any further action of the parties hereto, and Agent, each
Lender and Borrower agree to the terms of such Addendum 1.

7.17    Use of Proceeds. Borrower agrees that the proceeds of the Loans shall be
used solely to pay related fees and expenses in connection with this Agreement
and for working capital and general corporate purposes. The proceeds of the
Loans will not be used in violation of Anti-Corruption Laws or applicable
Sanctions.

7.18    [Reserved].

7.19    Post-Closing Obligations. Notwithstanding any provision herein or in any
other Loan Document to the contrary, to the extent not actually delivered on or
prior to the Closing Date, Borrower shall:

(a)    Within 45 days of the Closing Date, deliver to Agent all insurance
endorsements and copies of each insurance policy required hereunder which shall
be in form and substance reasonably satisfactory to Agent in its reasonable
discretion; and

 

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(b)    Within 60 days of the Closing Date (or such later date as Agent may agree
to in its sole discretion), use commercially reasonable efforts to deliver to
Agent, a fully-executed landlord waiver, in form and substance reasonably
satisfactory to Agent, for Borrower’s location at: 215 First Street, Suite 200,
Cambridge, Massachusetts 02142.

7.20    Compliance with Laws.

(a)    Borrower shall maintain, and shall cause its Subsidiaries to maintain,
compliance in with all applicable laws, rules or regulations (including any law,
rule or regulation with respect to the making or brokering of loans or financial
accommodations), except where the failure to do so would not reasonably be
expected to result in a Material Adverse Effect, and shall, or cause its
Subsidiaries to, obtain and maintain all required governmental authorizations,
approvals, licenses, franchises, permits or registrations, except where the
failure to do so would not reasonably be expected to result in a Material
Adverse Effect.

(b)    Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or
any of its Subsidiaries permit any Affiliate under Borrower’s direct or indirect
control to, directly or indirectly, knowingly enter into any documents,
instruments, agreements or contracts with any Person listed on the OFAC Lists.
Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of
its Subsidiaries, permit any Affiliate under Borrower’s direct or indirect
control to, directly or indirectly, (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including, without limitation,
the making or receiving of any contribution of funds, goods or services to or
for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224 or any similar executive order or other
Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224 or other
Anti-Terrorism Law.

(c)    Borrower has implemented and maintains in effect policies and procedures
designed to ensure compliance by the Borrower, its Subsidiaries and their
respective directors, officers, employees and agents with Anti-Corruption Laws
and applicable Sanctions, and Borrower, its Subsidiaries and their respective
officers and employees and to the knowledge of Borrower its directors and
agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in
all material respects.

(d)    None of Borrower, any of its Subsidiaries or any of their respective
directors, officers or employees, or to the knowledge of Borrower, any agent for
Borrower or its Subsidiaries that will act in any capacity in connection with or
benefit from the credit facility established hereby, is a Sanctioned Person. No
Loan, use of proceeds or other transaction contemplated by this Agreement will
violate Anti-Corruption Laws or applicable Sanctions.

7.21    Transactions with Affiliates. Borrower shall not and shall not permit
any Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction of any

 

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kind with any Affiliate of Borrower or such Subsidiary (other than transactions
constituting a Permitted Investment, Permitted Indebtedness, a Permitted
Transfer or a transaction permitted by Sections 7.7 or 7.9) on terms that are
less favorable to Borrower or such Subsidiary, as the case may be, than those
that might be obtained in an arm’s length transaction from a Person who is not
an Affiliate of Borrower or such Subsidiary.

SECTION 8. [RESERVED].

SECTION 9. EVENTS OF DEFAULT

The occurrence of any one or more of the following events shall be an Event of
Default:

9.1    Payments. Borrower fails to (i) pay any principal, interest, fees or
other scheduled amount due under this Agreement or any of the other Loan
Documents on the due date; provided, however, that an Event of Default shall not
occur on account of a failure to pay due solely to an administrative or
operational error of Agent or Lender or Borrower’s bank if Borrower had the
funds to make the payment when due and makes the payment within three
(3) Business Days following Borrower’s knowledge of such failure to pay, or
(ii) fails to pay any non-scheduled amounts within five (5) days after demand by
Lender; or

9.2    Covenants. Borrower breaches or defaults in the performance of any
covenant or Secured Obligation under this Agreement, or any of the other Loan
Documents, and (a) with respect to a default under any covenant under this
Agreement (other than under Sections 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14,
7.15, 7.16, 7.17, 7.19 and 7.20), and any other Loan Document, such default
continues for more than ten (10) Business Days after the earlier of the date on
which (i) Agent or Lender has given notice of such default to Borrower and
(ii) Borrower has actual knowledge of such default or (b) with respect to a
default under any of Sections 6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.15, 7.16,
7.17, 7.19 and 7.20 the occurrence of such default; or

9.3    Material Adverse Effect. A circumstance has occurred that could
reasonably be expected to have a Material Adverse Effect; provided that solely
for purposes of this Section 9.3, the occurrence of any of the following, in and
of itself, shall not constitute a Material Adverse Effect: (a) adverse results
or delays in any nonclinical or clinical trial, including without limitation,
the failure to demonstrate the desired safety or efficacy of any drug or
companion diagnostic; or (b) the denial, delay or limitation of approval of, or
taking of any other regulatory action by, the United States Food and Drug
Administration or any other governmental entity with respect to any drug or
companion diagnostic; or

9.4    Representations. Any representation or warranty made by Borrower in any
Loan Document shall have been false or misleading in any material respect when
made or when deemed made; or

9.5    Insolvency. Borrower (A) (i) shall make an assignment for the benefit of
creditors; or (ii) shall be unable to pay its debts as they become due, or be
unable to pay

 

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the Secured Obligations under the Loan Documents, or shall become insolvent; or
(iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any
petition, answer, or document seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation pertinent to such
circumstances; or (v) shall seek or consent to or acquiesce in the appointment
of any trustee, receiver, or liquidator of Borrower or of all or any substantial
part (i.e., 33-1/3% or more) of the assets or property of Borrower; or
(vi) shall cease operations of its business as its business has normally been
conducted for a period of more than three (3) consecutive Business Days, or
terminate substantially all of its employees; or (vii) Borrower or its directors
or majority shareholders shall take any action initiating any of the foregoing
actions described in clauses (i) through (vi); or (B) either (i) forty-five
(45) days shall have expired after the commencement of an involuntary action
against Borrower seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, without such action being dismissed or all orders or
proceedings thereunder affecting the operations or the business of Borrower
being stayed; or (ii) a stay of any such order or proceedings shall thereafter
be set aside and the action setting it aside shall not be timely appealed; or
(iii) Borrower shall file any answer admitting or not contesting the material
allegations of a petition filed against Borrower in any such proceedings; or
(iv) the court in which such proceedings are pending shall enter a decree or
order granting the relief sought in any such proceedings; or (v) forty-five
(45) days shall have expired after the appointment, without the consent or
acquiescence of Borrower, of any trustee, receiver or liquidator of Borrower or
of all or any substantial part of the properties of Borrower without such
appointment being vacated; or

9.6    Attachments; Judgments. Any portion of Borrower’s assets with a fair
market value, individually or in the aggregate, of at least $500,000, is
attached or seized, or a levy is filed against any such assets, or a judgment or
judgments is/are entered for the payment of money (not covered by independent
third party insurance as to which liability has not been rejected by such
insurance carrier), individually or in the aggregate, of at least $500,000 and
shall remain unsatisfied, unvacated, or unstayed for a period of ten (10) days
after the entry thereof (provided that no Advances will be made prior to the
satisfaction, vacation, or stay of such judgment, order, or decree), or Borrower
is enjoined or in any way prevented by court order from conducting any material
part of its business; or

9.7    Other Obligations. The occurrence of any default under any agreement or
obligation of Borrower involving any Indebtedness in excess of $500,000
resulting in a right by such third party or parties, whether or not exercised,
to accelerate the maturity of such Indebtedness.

SECTION 10. REMEDIES

10.1    General. Upon and during the continuance of any one or more Events of
Default, (i) Agent may, and at the direction of the Required Lenders, shall
accelerate and demand payment of all or any part of the Secured Obligations
together with a Prepayment

 

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Charge and declare them to be immediately due and payable (provided, that upon
the occurrence of an Event of Default of the type described in Section 9.5, all
of the Secured Obligations (including, without limitation, the Prepayment Charge
and the End of Term Charge) shall automatically be accelerated and made due and
payable, in each case without any further notice or act), (ii) Agent may, at its
option, sign and file in Borrower’s name any and all collateral assignments,
notices, control agreements, security agreements and other documents it deems
necessary or appropriate to perfect or protect the repayment of the Secured
Obligations, and in furtherance thereof, Borrower hereby grants Agent an
irrevocable power of attorney coupled with an interest, and (iii) Agent may
notify any of Borrower’s account debtors to make payment directly to Agent,
compromise the amount of any such account on Borrower’s behalf and endorse
Agent’s name without recourse on any such payment for deposit directly to
Agent’s account. Upon and during the continuance of any one or more Events of
Default, Agent may, and at the direction of the Required Lenders shall, exercise
all rights and remedies with respect to the Collateral under the Loan Documents
or otherwise available to it under the UCC and other applicable law, including
the right to release, hold, sell, lease, liquidate, collect, realize upon, or
otherwise dispose of all or any part of the Collateral and the right to occupy,
utilize, process and commingle the Collateral. All Agent’s rights and remedies
shall be cumulative and not exclusive.

10.2    Collection; Foreclosure. Upon the occurrence and during the continuance
of any Event of Default, Agent may, and at the direction of the Required Lenders
shall, at any time or from time to time, apply, collect, liquidate, sell in one
or more sales, lease or otherwise dispose of, any or all of the Collateral, in
its then condition or following any commercially reasonable preparation or
processing, in such order as Agent may elect. Any such sale may be made either
at public or private sale at its place of business or elsewhere. Borrower agrees
that any such public or private sale may occur upon ten (10) calendar days’
prior written notice to Borrower. Agent may require Borrower to assemble the
Collateral and make it available to Agent at a place designated by Agent that is
reasonably convenient to Agent and Borrower. The proceeds of any sale,
disposition or other realization upon all or any part of the Collateral shall be
applied by Agent in the following order of priorities:

First, to Agent and Lender in an amount sufficient to pay in full Agent’s and
Lender’s reasonable costs and professionals’ and advisors’ fees and expenses as
described in Section 11.11;

Second, to Lender in an amount equal to the then unpaid amount of the Secured
Obligations (including principal, interest, and the Default Rate interest), in
such order and priority as Agent may choose in its sole discretion; and

Finally, after the full and final payment in Cash of all of the Secured
Obligations (other than inchoate obligations), to any creditor holding a junior
Lien on the Collateral, or to Borrower or its representatives or as a court of
competent jurisdiction may direct.

Agent shall be deemed to have acted reasonably in the custody, preservation and
disposition of any of the Collateral if it complies with the obligations of a
secured party under the UCC.

 

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10.3    No Waiver. Agent shall be under no obligation to marshal any of the
Collateral for the benefit of Borrower or any other Person, and Borrower
expressly waives all rights, if any, to require Agent to marshal any Collateral.

10.4    Cumulative Remedies. The rights, powers and remedies of Agent hereunder
shall be in addition to all rights, powers and remedies given by statute or rule
of law and are cumulative. The exercise of any one or more of the rights, powers
and remedies provided herein shall not be construed as a waiver of or election
of remedies with respect to any other rights, powers and remedies of Agent.

SECTION 11. MISCELLANEOUS

11.1    Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective only to the extent and duration of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

11.2    Notice. Except as otherwise provided herein, any notice, demand,
request, consent, approval, declaration, service of process or other
communication (including the delivery of Financial Statements) that is required,
contemplated, or permitted under the Loan Documents or with respect to the
subject matter hereof shall be in writing, and shall be deemed to have been
validly served, given, delivered, and received upon the earlier of: (i) the day
of transmission by electronic mail or hand delivery or delivery by an overnight
express service or overnight mail delivery service; or (ii) the third calendar
day after deposit in the United States of America mails, with proper first class
postage prepaid, in each case addressed to the party to be notified as follows:

(a)    If to Agent:

HERCULES CAPITAL, INC.

Legal Department

Attention: Chief Legal Officer and Michael Dutra and Bryan Jadot

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

email: legal@herculestech.com; mdutra@htgc.com; bjadot@htgc.com

Telephone: 650-289-3060

(b)    If to Lender:

HERCULES CAPITAL, INC.

Legal Department

Attention: Chief Legal Officer and Michael Dutra and Bryan Jadot

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

email: legal@herculestech.com; mdutra@htgc.com; bjadot@htgc.com

Telephone: 650-289-3060

 

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(c)    If to Borrower:

CONSTELLATION PHARMACEUTICALS, INC.

Attention: Karen H. Valentine, Chief Legal Officer & General Counsel

215 First Street, Suite 200 Cambridge, MA 02142

email: Karen.Valentine@constellationpharma.com

Telephone: 617-714-0538

with a copy to:

Wilmer Cutler Pickering Hale and Dorr LLP

Attention: Chalyse Robinson

1225 Seventeenth St., Suite 2600

Denver, CO 80202 USA

email: Chalyse.Robinson@wilmerhale.com

Telephone: 720-598-3442

or to such other address as each party may designate for itself by like notice.

11.3    Entire Agreement; Amendments.

(a)    This Agreement and the other Loan Documents constitute the entire
agreement and understanding of the parties hereto in respect of the subject
matter hereof and thereof, and supersede and replace in their entirety any prior
proposals, term sheets, non-disclosure or confidentiality agreements, letters,
negotiations or other documents or agreements, whether written or oral, with
respect to the subject matter hereof or thereof (including without limitation
Agent’s revised proposal letter dated February 10, 2019 and the Non-Disclosure
Agreement).

(b)    Neither this Agreement, any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 11.3(b). The Required Lenders and Borrower party to
the relevant Loan Document may, or, with the written consent of the Required
Lenders, the Agent and the Borrower party to the relevant Loan Document may,
from time to time, (i) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Borrower hereunder or thereunder or
(ii) waive, on such terms and conditions as the Required Lenders or the Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Loan Documents or any default or Event of Default
and its consequences; provided, however, that no such waiver and no such

 

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amendment, supplement or modification shall (A) forgive the principal amount or
extend the final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Term Loan, reduce the stated
rate of any interest or fee payable hereunder (other than a waiver of default
interest pursuant to Section 2.4 hereof) or extend the scheduled date of any
payment thereof, in each case without the written consent of each Lender
directly affected thereby; (B) eliminate or reduce the voting rights of any
Lender under this Section 11.3(b) without the written consent of such Lender;
(C) reduce any percentage specified in the definition of Required Lenders,
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release all or
substantially all of the Collateral or release a Borrower from its obligations
under the Loan Documents, in each case without the written consent of all
Lenders; or (D) amend, modify or waive any provision of Section 11.17 without
the written consent of the Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each Lender and shall be
binding upon Borrower, the Lender, the Agent and all future holders of the
Loans.

11.4    No Strict Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.

11.5    No Waiver. The powers conferred upon Agent and Lender by this Agreement
are solely to protect its rights hereunder and under the other Loan Documents
and its interest in the Collateral and shall not impose any duty upon Agent or
Lender to exercise any such powers. No omission or delay by Agent or Lender at
any time to enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by Borrower at
any time designated, shall be a waiver of any such right or remedy to which
Agent or Lender is entitled, nor shall it in any way affect the right of Agent
or Lender to enforce such provisions thereafter.

11.6    Survival. All agreements, representations and warranties contained in
this Agreement and the other Loan Documents or in any document delivered
pursuant hereto or thereto shall be for the benefit of Agent and Lender and
shall survive the execution and delivery of this Agreement. Sections 2.9, 6.3
and 11.17(b) shall survive the termination of this Agreement. Each party’s
obligations under Section 2.9 shall survive the resignation or replacement of
the Agent or any assignment of rights by, or the replacement of, a Lender, the
termination of the Term Commitment and the repayment, satisfaction or discharge
of all obligations under any Loan Document.

11.7    Successors and Assigns. The provisions of this Agreement and the other
Loan Documents shall inure to the benefit of and be binding on Borrower and its
permitted assigns (if any). Borrower shall not assign its obligations under this
Agreement or any of the other Loan Documents without Agent’s express prior
written consent, and any such attempted assignment shall be void and of no
effect. Agent and Lender may

 

44

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assign, transfer, or endorse its rights hereunder and under the other Loan
Documents without prior notice to Borrower, and all of such rights shall inure
to the benefit of Agent’s and Lender’s successors and assigns; provided that as
long as no Event of Default has occurred and is continuing, neither Agent nor
any Lender may assign, transfer or endorse its rights hereunder or under the
Loan Documents to any party that is a direct competitor of Borrower (as
reasonably determined by Agent), it being acknowledged that in all cases, any
transfer to an Affiliate of any Lender or Agent shall be allowed.
Notwithstanding the foregoing, (x) in connection with any assignment by a Lender
as a result of a forced divestiture at the request of any regulatory agency, the
restrictions set forth herein shall not apply and Agent and Lender may assign,
transfer or indorse its rights hereunder and under the other Loan Documents to
any Person or party and (y) in connection with a Lender’s own financing or
securitization transactions, the restrictions set forth herein shall not apply
and Agent and Lender may assign, transfer or indorse its rights hereunder and
under the other Loan Documents to any Person or party providing such financing
or formed to undertake such securitization transaction and any transferee of
such Person or party upon the occurrence of a default, event of default or
similar occurrence with respect to such financing or securitization transaction;
provided that no such sale, transfer, pledge or assignment under this clause
(y) shall release such Lender from any of its obligations hereunder or
substitute any such Person or party for such Lender as a party hereto until
Agent shall have received and accepted an effective assignment agreement from
such Person or party in form satisfactory to Agent executed, delivered and fully
completed by the applicable parties thereto, and shall have received such other
information regarding such assignee as Agent reasonably shall require. The
Agent, acting solely for this purpose as an agent of Borrower, shall maintain a
register for the recordation of the names and addresses of the Lenders and
principal amounts (and state interest) of the Term Loans owing to each Lender
pursuant to the terms hereof from time to time. The register shall be available
for inspection by Borrower, from time to time upon reasonable prior notice.

11.8    Governing Law. This Agreement and the other Loan Documents have been
negotiated and delivered to Agent and Lender in the State of New York. This
Agreement and the other Loan Documents shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.

11.9    CONSENT TO JURISDICTION AND VENUE. ALL JUDICIAL PROCEEDINGS ARISING IN
OR UNDER OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN ANY STATE COURT LOCATED IN THE STATE OF NEW YORK SITTING IN NEW YORK
COUNTY, AND IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND ANY APPELLATE COURTS FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK COURT OR, TO THE

 

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FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A NON-APPEALABLE FINAL JUDGMENT IN ANY SUCH ACTION,
LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST BORROWER OR ANY
OTHER LOAN PARTY OR ITS OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.
BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN THIS SECTION 11.9. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT. SERVICE OF PROCESS ON ANY PARTY HERETO IN ANY ACTION ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE EFFECTIVE IF GIVEN IN ACCORDANCE WITH THE
REQUIREMENTS FOR NOTICE SET FORTH IN SECTION 11.2, AND SHALL BE DEEMED EFFECTIVE
AND RECEIVED AS SET FORTH IN SECTION 11.2. NOTHING HEREIN SHALL AFFECT THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

11.10    Mutual Waiver of Jury Trial. Because disputes arising in connection
with complex financial transactions are most quickly and economically resolved
by an experienced and expert Person and the parties wish applicable state and
federal laws to apply (rather than arbitration rules), the parties desire that
their disputes be resolved by a judge applying such applicable laws. EACH OF
BORROWER, AGENT AND LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY
JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM
OR ANY OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER AGAINST AGENT,
LENDER OR THEIR RESPECTIVE ASSIGNEE OR BY AGENT, LENDER OR THEIR RESPECTIVE
ASSIGNEE AGAINST BORROWER. This waiver extends to all such Claims, including
Claims that involve Persons other than Agent, Borrower and Lender; Claims that
arise out of or are in any way connected to the relationship among Borrower,
Agent and Lender; and any Claims for damages, breach of contract, tort, specific
performance, or any equitable or legal relief of any kind, arising out of this
Agreement, any other Loan Document.

11.11    Professional Fees. Borrower promises to pay Agent’s and Lender’s
reasonable and documented fees and expenses necessary to finalize the loan

 

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documentation, including but not limited to reasonable and documented
out-of-pocket attorneys’ fees, UCC searches, filing costs, and other
miscellaneous expenses. In addition, Borrower promises to pay any and all
reasonable and documented out-of-pocket attorneys’ and other professionals’ fees
and expenses incurred by Agent and Lender after the Closing Date in connection
with or related to: (a) the Loan; (b) the administration, collection, or
enforcement of the Loan; (c) the amendment or modification of the Loan
Documents; (d) any waiver, consent, release, or termination under the Loan
Documents; (e) the protection, preservation, audit, field exam, sale, lease,
liquidation, or disposition of Collateral or the exercise of remedies with
respect to the Collateral; (f) any legal, litigation, administrative,
arbitration, or out of court proceeding in connection with or related to
Borrower or the Collateral, and any appeal or review thereof; and (g) any
bankruptcy, restructuring, reorganization, assignment for the benefit of
creditors, workout, foreclosure, or other action related to Borrower, the
Collateral, the Loan Documents, including representing Agent or Lender in any
adversary proceeding or contested matter commenced or continued by or on behalf
of Borrower’s estate, and any appeal or review thereof.

11.12    Confidentiality. Agent and Lender acknowledge that certain items of
Collateral and information provided to Agent and Lender by Borrower are
confidential and proprietary information of Borrower, if and to the extent such
information either (x) is marked as confidential by Borrower at the time of
disclosure, or (y) should reasonably be understood to be confidential (the
“Confidential Information”). Accordingly, Agent and Lender agree that any
Confidential Information it may obtain in the course of acquiring,
administering, or perfecting Agent’s security interest in the Collateral or
otherwise in the negotiation, execution and administration of this Agreement and
the other Loan Documents and the transactions contemplated thereby shall not be
disclosed to any other Person or entity in any manner whatsoever, in whole or in
part, without the prior written consent of Borrower, except that Agent and
Lender may disclose any such information: (a) to its own directors, officers,
employees, accountants, counsel and other professional advisors and to its
Affiliates if Agent or Lender in their reasonable discretion determines that any
such party should have access to such information in connection with such
party’s responsibilities in connection with the Loan or this Agreement and,
provided that such recipient of such Confidential Information either (i) agrees
to be bound by the confidentiality provisions of this paragraph or (ii) is
otherwise subject to confidentiality restrictions that reasonably protect
against the disclosure of Confidential Information; (b) if such information is
generally available to the public without any disclosure by Agent or Lender that
would otherwise breach this Section; (c) if required or appropriate in any
report, statement or testimony submitted to any governmental authority having or
claiming to have jurisdiction over Agent or Lender; (d) if required or
appropriate in response to any summons or subpoena or in connection with any
litigation, to the extent permitted or deemed advisable by Agent’s or Lender’s
counsel; (e) to comply with any legal requirement or law applicable to Agent or
Lender; (f) to the extent reasonably necessary in connection with the exercise
of any right or remedy under any Loan Document, including Agent’s sale, lease,
or other disposition of Collateral during the continuation of an Event of
Default; (g) to any participant or assignee of Agent or Lender or any
prospective participant or assignee; provided, that such participant or assignee
or prospective

 

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participant or assignee agrees in writing to be bound by this Section prior to
disclosure; or (h) otherwise with the prior written consent of Borrower;
provided, that any disclosure made in violation of this Agreement shall not
affect the obligations of Borrower or any of its Affiliates or any guarantor
under this Agreement or the other Loan Documents. Agent’s and Lender’s
obligations under this Section 11.12 shall supersede all of their respective
obligations under the Non-Disclosure Agreement.

11.13     Assignment of Rights. Borrower acknowledges and understands that Agent
or Lender may, in accordance with Section 11.7, sell and assign all or part of
its interest hereunder and under the Loan Documents to any Person or entity (an
“Assignee”). After such assignment the term “Agent” or “Lender” as used in the
Loan Documents shall mean and include such Assignee, and such Assignee shall be
vested with all rights, powers and remedies of Agent and Lender hereunder with
respect to the interest so assigned; but with respect to any such interest not
so transferred, Agent and Lender shall retain all rights, powers and remedies
hereby given. No such assignment by Agent or Lender shall relieve Borrower of
any of its obligations hereunder. Lender agrees that in the event of any
transfer by it of the Note(s)(if any), it will endorse thereon a notation as to
the portion of the principal of the Note(s), which shall have been paid at the
time of such transfer and as to the date to which interest shall have been last
paid thereon.

11.14    Revival of Secured Obligations. This Agreement and the Loan Documents
shall remain in full force and effect and continue to be effective if any
petition is filed by or against Borrower for liquidation or reorganization, if
Borrower becomes insolvent or makes an assignment for the benefit of creditors,
if a receiver or trustee is appointed for all or any significant part of
Borrower’s assets, or if any payment or transfer of Collateral is recovered from
Agent or Lender. The Loan Documents and the Secured Obligations and Collateral
security shall continue to be effective, or shall be revived or reinstated, as
the case may be, if at any time payment and performance of the Secured
Obligations or any transfer of Collateral to Agent, or any part thereof is
rescinded, avoided or avoidable, reduced in amount, or must otherwise be
restored or returned by, or is recovered from, Agent, Lender or by any obligee
of the Secured Obligations, whether as a “voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment, performance, or transfer
of Collateral had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, avoided, avoidable, restored, returned, or
recovered, the Loan Documents and the Secured Obligations shall be deemed,
without any further action or documentation, to have been revived and reinstated
except to the extent of the full, final, and indefeasible payment to Agent or
Lender in Cash.

11.15    Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.

11.16    No Third Party Beneficiaries. No provisions of the Loan Documents are
intended, nor will be interpreted, to provide or create any third-party
beneficiary rights or any other rights of any kind in any Person other than
Agent, Lender and Borrower unless specifically provided otherwise herein, and,
except as otherwise so provided, all provisions of the Loan Documents will be
personal and solely among Agent, the Lender and the Borrower.

 

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11.17    Agency.

(a)    Lender hereby irrevocably appoints Hercules Capital, Inc. to act on its
behalf as the Agent hereunder and under the other Loan Documents and authorizes
the Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto.

(b)    Lender agrees to indemnify the Agent in its capacity as such (to the
extent not reimbursed by Borrower and without limiting the obligation of
Borrower to do so), according to its respective Term Commitment percentages
(based upon the total outstanding Term Loan Commitments) in effect on the date
on which indemnification is sought under this Section 11.17, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing.

(c)    Agent in Its Individual Capacity. The Person serving as the Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the Agent and
the term “Lender” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include each such Person serving as Agent hereunder
in its individual capacity.

(d)    Exculpatory Provisions. The Agent shall have no duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Agent shall not:

 

  (i)

be subject to any fiduciary or other implied duties, regardless of whether any
default or any Event of Default has occurred and is continuing;

 

  (ii)

have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Agent is required to exercise as directed
in writing by the Lender, provided that the Agent shall not be required to take
any action that, in its opinion or the opinion of its counsel, may expose the
Agent to liability or that is contrary to any Loan Document or applicable law;
and

 

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  (iii)

except as expressly set forth herein and in the other Loan Documents, have any
duty to disclose, and the Agent shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Affiliates that is
communicated to or obtained by any Person serving as the Agent or any of its
Affiliates in any capacity.

(e)    The Agent shall not be liable for any action taken or not taken by it
(i) with the consent or at the request of the Lender or as the Agent shall
believe in good faith shall be necessary, under the circumstances or (ii) in the
absence of its own gross negligence or willful misconduct.

(f)    The Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Section 4 or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the Agent.

(g)    Reliance by Agent. Agent may rely, and shall be fully protected in
acting, or refraining to act, upon, any resolution, statement, certificate,
instrument, opinion, report, notice, request, consent, order, bond or other
paper or document that it has no reason to believe to be other than genuine and
to have been signed or presented by the proper party or parties or, in the case
of cables, telecopies and telexes, to have been sent by the proper party or
parties. In the absence of its gross negligence or willful misconduct, Agent may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to Agent
and conforming to the requirements of the Loan Agreement or any of the other
Loan Documents. Agent may consult with counsel, and any opinion or legal advice
of such counsel shall be full and complete authorization and protection in
respect of any action taken, not taken or suffered by Agent hereunder or under
any Loan Documents in accordance therewith. Agent shall have the right at any
time to seek instructions concerning the administration of the Collateral from
any court of competent jurisdiction. Agent shall not be under any obligation to
exercise any of the rights or powers granted to Agent by this Agreement, the
Loan Agreement and the other Loan Documents at the request or direction of
Lenders unless Agent shall have been provided by Lender with adequate security
and indemnity against the costs, expenses and liabilities that may be incurred
by it in compliance with such request or direction.

11.18    Publicity. None of the parties hereto nor any of its respective member
businesses and Affiliates shall, without the other parties’ prior written
consent (which shall not be unreasonably withheld or delayed), publicize or use
(a) the other party’s name (including a brief description of the relationship
among the parties hereto), logo or

 

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hyperlink to such other parties’ web site, separately or together, in written
and oral presentations, advertising, promotional and marketing materials, client
lists, public relations materials or on its web site (together, the “ Publicity
Materials”); (b) the names of officers of such other parties in the Publicity
Materials; and (c) such other parties’ name, trademarks, servicemarks in any
news or press release concerning such party; provided however, notwithstanding
anything to the contrary herein, no such consent shall be required (i) to the
extent necessary to comply with the requests of any regulators, legal
requirements or laws applicable to such party, pursuant to any listing agreement
with any national securities exchange (so long as such party provides prior
notice to the other party hereto to the extent reasonably practicable, provided,
that all parties acknowledge and agree and no prior notice is required for
Borrower to describe this Agreement and the transactions hereunder in their
filings with the SEC) and (ii) to comply with Section 11.12.

(SIGNATURES TO FOLLOW)

 

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IN WITNESS WHEREOF, Borrower, Agent and Lender have duly executed and delivered
this Loan and Security Agreement as of the day and year first above written.

 

BORROWER: CONSTELLATION PHARMACEUTICALS, INC. Signature:   /s/ Emma Reeve
Print Name:   Emma Reeve Title:   Chief Financial Officer

 

[Signature Page to Loan and Security Agreement]

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

AGENT: HERCULES CAPITAL, INC. Signature:   /s/ Jennifer Choe Print Name:  
Jennifer Choe Title:   Assistant General Counsel LENDER: HERCULES CAPITAL, INC.
Signature:   /s/ Jennifer Choe Print Name:   Jennifer Choe Title:   Assistant
General Counsel

 

[Signature Page to Loan and Security Agreement]

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Table of Addenda, Exhibits and Schedules

 

Addendum 1:    SBA Provisions Exhibit A:    Advance Request    Attachment to
Advance Request Exhibit B:    Term Note Exhibit C:    Name, Locations, and Other
Information for Borrower Exhibit D:    Borrower’s Patents, Trademarks,
Copyrights and Licenses Exhibit E:    Borrower’s Deposit Accounts and Investment
Accounts Exhibit F:    Compliance Certificate Exhibit G:    Joinder Agreement
Exhibit I:    ACH Debit Authorization Agreement Schedule 1    Subsidiaries
Schedule 1.1    Commitments Schedule 1A    Existing Permitted Indebtedness
Schedule 1B    Existing Permitted Investments Schedule 1C    Existing Permitted
Liens Schedule 5.3    Consents, Etc. Schedule 5.8    Tax Matters Schedule 5.9   
Intellectual Property Claims Schedule 5.10    Intellectual Property Schedule
5.11    Borrower Products Schedule 5.14    Capitalization

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

ADDENDUM 1 to LOAN AND SECURITY AGREEMENT

(a)    Borrower’s Business. For purposes of this Addendum 1, Borrower shall be
deemed to include its “affiliates” as defined in Title 13 Code of Federal
Regulations Section 121.103. Borrower represents and warrants to Agent and
Lender as of each SBA Funding Date and covenants to Agent and Lender for a
period of one year after each SBA Funding Date or for such longer period as set
forth below, with respect to subsections 2, 3, 4, 5, 6 and 7 below, as follows:

 

  1.

Size Status. Borrower’s primary NAICS code is              and has less than
            _ employees in the aggregate;

 

  2.

No Relender. Borrower’s primary business activity does not involve, directly or
indirectly, providing funds to others, purchasing debt obligations, factoring,
or long-term leasing of equipment with no provision for maintenance or repair;

 

  3.

No Passive Business. Borrower is engaged in a regular and continuous business
operation (excluding the mere receipt of payments such as dividends, rents,
lease payments, or royalties). Borrower’s employees are carrying on the majority
of day to day operations. Borrower will not pass through substantially all of
the proceeds of the Loan to another entity;

 

  4.

No Real Estate Business. Borrower is not classified under North American
Industry Classification System (NAICS) codes 531110 (lessors of residential
buildings and dwellings), 531120 (lessors of nonresidential buildings except
miniwarehouses), 531190 (lessors of other real estate property), 237210 (land
subdivision), or 236117 (new housing for-sale builders). Borrower is not
classified under NAICS codes 236118 (residential remodelers), 236210 (industrial
building construction), or 236220 (commercial and institutional building
construction), if Borrower is primarily engaged in construction or renovation of
properties on its own account rather than as a hired contractor. Borrower is not
classified under NAICS codes 531210 (offices of real estate agents and brokers),
531311 (residential property managers), 531312 (nonresidential property
managers), 531320 (offices of real estate appraisers), or 531390 (other
activities related to real estate), unless it derives at least 80 percent of its
revenue from non-Affiliate sources. The proceeds of the Loan will not be used to
acquire or refinance real property unless Borrower (x) is acquiring an existing
property and will use at least 51 percent of the usable square footage for its
business purposes; (y) is building or renovating a building and will use at
least 67 percent of the usable square footage for its business purposes; or
(z) occupies the subject property and uses at least 67 percent of the usable
square footage for its business purposes.

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

  5.

No Project Finance. Borrower’s assets are not intended to be reduced or
consumed, generally without replacement, as the life of its business progresses,
and the nature of Borrower’s business does not require that a stream of cash
payments be made to the business’s financing sources, on a basis associated with
the continuing sale of assets (e.g., real estate development projects and oil
and gas wells). The primary purpose of the Loan is not to fund production of a
single item or defined limited number of items, generally over a defined
production period, where such production will constitute the majority of the
activities of Borrower (e.g., motion pictures and electric generating plants).

 

  6.

No Farm Land Purchases. Borrower will not use the proceeds of the Loan to
acquire farm land which is or is intended to be used for agricultural or
forestry purposes, such as the production of food, fiber, or wood, or is so
taxed or zoned.

 

  7.

No Foreign Investment. The proceeds of the Loan will not be used substantially
for a foreign operation. Borrower will not have, on or within one year after
each SBA Funding Date and each other Loan provided by a Lender that is an SBIC
more than 49 percent of its employees or tangible assets located outside the
United States of America.

(b)    Small Business Administration Documentation. Agent and Lender acknowledge
that Borrower completed, executed and delivered to Agent prior to each SBA
Funding Date SBA Forms 480, 652 and 1031 (Parts A and B) together with a
business plan showing Borrower’s financial projections (including balance sheets
and income and cash flows statements) for the period described therein and a
written statement (whether included in the purchase agreement or pursuant to a
separate statement) from Agent regarding its intended use of proceeds from the
sale of securities to Lender (the “Use of Proceeds Statement”). Borrower
represents and warrants to Agent and Lender that the information regarding
Borrower and its affiliates set forth in the SBA Form 480, Form 652 and
Form 1031 and the Use of Proceeds Statement delivered as of each SBA Funding
Date is accurate and complete.

(c)    Inspection. The following covenants contained in this Section (c) are
intended to supplement and not to restrict the related provisions of the Loan
Documents. Subject to the preceding sentence, Borrower will permit, for so long
as Lender holds any debt or equity securities of Borrower, Agent, Lender or
their representative, at Agent’s or Lenders’ expense, and examiners of the SBA
to visit and inspect the properties and assets of Borrower, to examine its books
of account and records, and to discuss Borrower’s affairs, finances and accounts
with Borrower’s officers, senior management and accountants, all at such
reasonable times as may be requested by Agent or Lender or the SBA.

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

(d)    Annual Assessment. Upon request of Agent or Lender, promptly after the
end of each calendar year (but in any event prior to February 28 of each year)
and at such other times as may be reasonably requested by Agent or Lender,
Borrower will deliver to Agent a written assessment of the economic impact of
Lender’s investment in Borrower, specifying the full-time equivalent jobs
created or retained in connection with the investment, the impact of the
investment on the businesses of Borrower in terms of expanded revenue and taxes,
other economic benefits resulting from the investment (such as technology
development or commercialization, minority business development, or expansion of
exports) and such other information as may be required regarding Borrower in
connection with the filing of Lender’s SBA Form 468. Lender will assist Borrower
with preparing such assessment. In addition to any other rights granted
hereunder, Borrower will grant Agent and Lender and the SBA access to Borrower’s
books and records for the purpose of verifying the use of such
proceeds. Borrower also will furnish or cause to be furnished to Agent and
Lender such other information regarding the business, affairs and condition of
Borrower as Agent or Lender may from time to time reasonably request, and such
information shall be certified by the President, Chief Executive Officer or
Chief Financial Officer of Borrower to the extent requested by Agent or Lender
for compliance with the SBIC Act.

(e)    Use of Proceeds. Borrower will use the proceeds from the Loan only for
purposes set forth in Section 7.17. Borrower will deliver to Agent from time to
time promptly following Agent’s request, a written report, certified as correct
by Borrower’s Chief Financial Officer, verifying the purposes and amounts for
which proceeds from the Loan have been disbursed. Borrower will supply to Agent
such additional information and documents as Agent reasonably requests with
respect to its use of proceeds and will, to the extent required by Section 7.2,
permit Agent and Lender and the SBA to have access to any and all Borrower
records and information and personnel as Agent deems necessary to verify how
such proceeds have been or are being used, and to assure that the proceeds have
been used for the purposes specified in Section 7.17.

(f)    Activities and Proceeds. Neither Borrower nor any of its affiliates (if
any) will engage in any activities or use directly or indirectly the proceeds
from the Loan for any purpose for which a small business investment company is
prohibited from providing funds by the SBIC Act, including 13 C.F.R.
§107.720. Without obtaining the prior written approval of Agent, Borrower will
not change within 1 year of the SBA Funding Date, Borrower’s current business
activity to a business activity which a licensee under the SBIC Act is
prohibited from providing funds by the SBIC Act.

(g)    [Reserved].

(h)    Compliance and Resolution. Borrower agrees that a failure to comply with
Borrower’s obligations under this Addendum, or any other set of facts or
circumstances where it has been asserted by any governmental regulatory agency
(or Agent or Lender believes that there is a substantial risk of such assertion)
that Agent, Lender and their

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

affiliates are not entitled to hold, or exercise any significant right with
respect to, any securities issued to Lender by Borrower, will constitute a
breach of the obligations of Borrower under the financing agreements among
Borrower, Agent and Lender. In the event of (i) a failure to comply with
Borrower’s obligations under this Addendum; or (ii) an assertion by any
governmental regulatory agency (or Agent or Lender believes that there is a
substantial risk of such assertion) of a failure to comply with Borrower’s
obligations under this Addendum, then (i) Agent, Lender and Borrower will meet
and resolve any such issue in good faith to the satisfaction of Borrower, Agent,
Lender, and any governmental regulatory agency, and (ii) upon request of Lender
or Agent, Borrower will cooperate and assist with any assignment of the
financing agreements among Hercules Technology III, L.P. and Hercules Capital,
Inc.

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

EXHIBIT A

ADVANCE REQUEST

 

To:    Agent:                        Date:                                     ,
20[    ]

Hercules Capital, Inc. (the “Agent”)

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

email: legal@herculestech.com

Attn:

Constellation Pharmaceuticals, Inc., a Delaware corporation (“Borrower”) hereby
requests from Hercules Capital, Inc. (“Lender”) an Advance in the amount of
                     Dollars ($                    ) on                     ,
             (the “Advance Date”) pursuant to the Loan and Security Agreement
among Borrower, Agent and Lender (the “Agreement”). Capitalized words and other
terms used but not otherwise defined herein are used with the same meanings as
defined in the Agreement.

Please:

 

  (a)

Issue a check payable to Borrower                     

or

 

  (b)

Wire Funds to Borrower’s account                     [LAST 3 DIGITS]

 

Bank:                                         Address:   
                                                                             ABA
Number:                                         Account Number:   
                                     Account Name:   
                                     Contact Person:   
                                     Phone Number To Verify Wire Info:   
                                     Email address:   
                                    

Borrower represents that the conditions precedent to the Advance set forth in
the Agreement shall be satisfied upon the making of such Advance, including but
not limited to: (i) that no event that has had or could reasonably be expected
to have a Material Adverse Effect has occurred and is continuing; (ii) that the
representations and warranties set forth in the Agreement are and shall be true
and correct in all material respects on and as of the Advance Date with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date; and
(iii) that as of the Advance Date, no fact or condition exists that could (or
could, with the passage of time, the giving of

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

notice, or both) constitute an Event of Default under the Loan Documents.
Borrower understands and acknowledges that Agent has the right to review the
financial information supporting this representation and, based upon such review
in its sole discretion, Lender may decline to fund the requested Advance.

Borrower hereby represents that Borrower’s corporate status and chief executive
office have not changed since the date of the Agreement (except as otherwise
disclosed to Agent) or, if the Attachment to this Advance Request is completed,
are as set forth in the Attachment to this Advance Request.

Borrower agrees to notify Agent promptly before the funding of the Loan if any
of the matters which have been represented above shall not be true and correct
on the Advance Date and if Agent has received no such notice before the Advance
Date then the statements set forth above shall be deemed to have been made and
shall be deemed to be true and correct as of the Advance Date.

Executed as of [                    ], 20[    ].

 

BORROWER:

CONSTELLATION

PHARMACEUTICALS, INC.

SIGNATURE:    

TITLE:    

PRINT NAME:    

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

ATTACHMENT TO ADVANCE REQUEST

Borrower hereby represents and warrants to Agent that Borrower’s current name
and organizational status is as follows:

 

Name:    Constellation Pharmaceuticals, Inc. Type of organization:   
Corporation State of organization:    Delaware Organization file number:   
4488983

Borrower hereby represents and warrants to Agent that its current chief
executive office is as follows: 215 First Street, Suite 200, Cambridge, MA 02142

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

EXHIBIT B

SECURED TERM PROMISSORY NOTE

[THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). PURSUANT TO
TREASURY REGULATION SECTION 1.1275-3, FOR INFORMATION REGARDING THE ISSUE PRICE,
AMOUNT OF OID, ISSUE DATE, AND YIELD TO MATURITY, PLEASE CONTACT KAREN H.
VALENTINE, CHIEF LEGAL OFFICE & GENERAL COUNSEL, 215 FIRST STREET, SUITE 200
CAMBRIDGE, MA 02142.]

 

$[        ],000,000    Advance Date:                      , 20[    ]    Maturity
Date:                      , 20[    ]

FOR VALUE RECEIVED, Constellation Pharmaceuticals, Inc., a Delaware corporation
(“Borrower”) hereby promises to pay to Hercules Capital, Inc., a Maryland
corporation or its registered assigns (the “Lender”) at 400 Hamilton Avenue,
Suite 310, Palo Alto, CA 94301 or such other place of payment as the Lender may
specify from time to time in writing, in lawful money of the United States of
America, the principal amount of [        ] Million Dollars
($[        ],000,000) or such other principal amount as Lender has advanced to
Borrower, together with interest at a rate as set forth in Section 2.2(c) of the
Loan Agreement based upon a year consisting of 360 days, with interest computed
daily based on the actual number of days in each month.

This Secured Term Promissory Note (this “Promissory Note”) is the Note referred
to in, and is executed and delivered in connection with, that certain Loan and
Security Agreement dated March 20, 2019, by and among Borrower, Hercules
Capital, Inc., a Maryland corporation (the “Agent”) and the several banks and
other financial institutions or entities from time to time party thereto as
lender (as the same may from time to time be amended, modified or supplemented
in accordance with its terms, the “Loan Agreement”), and is entitled to the
benefit and security of the Loan Agreement and the other Loan Documents (as
defined in the Loan Agreement), to which reference is made for a statement of
all of the terms and conditions thereof. All payments shall be made in
accordance with the Loan Agreement. All terms defined in the Loan Agreement
shall have the same definitions when used herein, unless otherwise defined
herein. An Event of Default under the Loan Agreement shall constitute a default
under this Promissory Note.

Borrower waives presentment and demand for payment, notice of dishonor, protest
and notice of protest under the UCC or any applicable law. Borrower agrees to
make all payments under this Promissory Note without setoff, recoupment or
deduction and regardless of any counterclaim or defense. This Promissory Note
has been negotiated and delivered to Lender in the State of New York. This
Promissory Note shall be governed by and construed and enforced in accordance
with, the laws of the State of New York, excluding any conflicts of law rules or
principles that would cause the application of the laws of any other
jurisdiction.

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

BORROWER:

CONSTELLATION

PHARMACEUTICALS, INC.

SIGNATURE:    

TITLE:    

PRINT NAME:    

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

EXHIBIT C

NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER

1. Borrower represents and warrants to Agent that Borrower’s current name and
organizational status as of the Closing Date is as follows:

 

Name:    Constellation Pharmaceuticals, Inc. Type of organization:   
Corporation State of organization:    Delaware Organization file number:   
4488983

2. Borrower represents and warrants to Agent that for five (5) years prior to
the Closing Date, Borrower did not do business under any other name or
organization or form except the following:

Name: Constellation Pharmaceuticals, Inc.

Used during dates of:

Type of Organization:

State of organization:

Organization file Number:

Borrower’s fiscal year ends on December 31

Borrower’s federal employer tax identification number is:                     

3. Borrower represents and warrants to Agent that its chief executive office is
located at                     .

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

EXHIBIT D

BORROWER’S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES

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

EXHIBIT E

BORROWER’S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS

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

EXHIBIT F

COMPLIANCE CERTIFICATE

Hercules Capital, Inc. (as “Agent”)

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Reference is made to that certain Loan and Security Agreement dated as of
March 20, 2019 and the Loan Documents (as defined therein) entered into in
connection with such Loan and Security Agreement all as may be amended from time
to time (hereinafter referred to collectively as the “Loan Agreement”) by and
among Hercules Capital, Inc. (the “Agent”), the several banks and other
financial institutions or entities from time to time party thereto
(collectively, the “Lender”) and Hercules Capital, Inc., as agent for the Lender
(the “Agent”) and Constellation Pharmaceuticals, Inc., a Delaware corporation,
as Borrower. All capitalized terms not defined herein shall have the same
meaning as defined in the Loan Agreement.

The undersigned is an Officer of the Company, knowledgeable of all Company
financial matters, and is authorized to provide certification of information
regarding the Company; hereby certifies, in such capacity and not in his/her
individual capacity, that as of the date hereof, that in accordance with the
terms and conditions of the Loan Agreement, the Company is in compliance for the
period ending                      of all covenants, conditions and terms in the
Loan Agreement (after giving effect to any materiality qualifiers or grace
periods therein) and hereby reaffirms that all representations and warranties
set forth in the Loan Agreement are true and correct in all material respects
(or if qualified by materiality in all respects) on and as of the date of this
Compliance Certificate with the same effect as though made on and as of such
date, except to the extent such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall have
been true and correct in all material respects (or, if qualified by materiality,
in all respects) as of such earlier date. Attached are the required documents
supporting the above certification. The undersigned further certifies that these
are prepared in accordance with GAAP (except for the absence of footnotes with
respect to unaudited financial statement and subject to normal year-end
adjustments) and are consistent from one period to the next except as explained
below.

 

REPORTING REQUIREMENT    REQUIRED    CHECK IF ATTACHED Interim Financial
Statements    Monthly within 30 days    Interim Financial Statements   
Quarterly within 45 days    Audited Financial Statements    FYE within 90 days
  

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

The undersigned hereby also confirms the below disclosed accounts represent all
depository accounts and securities accounts presently open in the name of
Borrower or its Subsidiary/Affiliate, as applicable.

 

          Depository
AC #      Financial
Institution      Account Type
(Depository /
Securities)      Last Month
Ending
Account
Balance      Purpose of
Account  

BORROWER Name/Address:

      1                                                             
                                                                              
   2                   3                   4                   5               
   6                   7               

BORROWER SUBSIDIARY / AFFILIATE COMPANY Name/Address

      1                   2                   3                   4            
      5                   6                   7               

Were any accounts above opened since the last Compliance Certificate? Yes
         / No         

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

Very Truly Yours,

 

CONSTELLATION PHARMACEUTICALS, INC.

By:     Name:     Its:    

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

EXHIBIT G

FORM OF JOINDER AGREEMENT

This Joinder Agreement (the “Joinder Agreement”) is made and dated as of
[                    ], 20[    ], and is entered into by and between
                    ., a                      corporation (“Subsidiary”), and
HERCULES CAPITAL, INC., a Maryland corporation (as “Agent”).

RECITALS

A. Subsidiary’s Affiliate, [                    ] (“Company”) [has
entered/desires to enter] into that certain Loan and Security Agreement dated as
of March 20, 2019, with the several banks and other financial institutions or
entities from time to time party thereto as lender (collectively, the “Lender”)
and the Agent, as such agreement may be amended (the “Loan Agreement”), together
with the other agreements executed and delivered in connection therewith;

B. Subsidiary acknowledges and agrees that it will benefit both directly and
indirectly from Company’s execution of the Loan Agreement and the other
agreements executed and delivered in connection therewith;

AGREEMENT

NOW THEREFORE, Subsidiary and Agent agree as follows:

 

1.

The recitals set forth above are incorporated into and made part of this Joinder
Agreement. Capitalized terms not defined herein shall have the meaning provided
in the Loan Agreement.

 

2.

By signing this Joinder Agreement, Subsidiary shall be bound by the terms and
conditions of the Loan Agreement the same as if it were the Borrower (as defined
in the Loan Agreement) under the Loan Agreement, mutatis mutandis, provided
however, that (a) with respect to (i) Section 5.1 of the Loan Agreement,
Subsidiary represents that it is an entity duly organized, legally existing and
in good standing under the laws of [                    ], (b) neither Agent nor
Lender shall have any duties, responsibilities or obligations to Subsidiary
arising under or related to the Loan Agreement or the other Loan Documents,
(c) that if Subsidiary is covered by Company’s insurance, Subsidiary shall not
be required to maintain separate insurance or comply with the provisions of
Sections 6.1 and 6.2 of the Loan Agreement, and (d) that as long as Company
satisfies the requirements of Section 7.1 of the Loan Agreement, Subsidiary
shall not have to provide Agent separate Financial Statements. To the extent
that Agent or Lender has any duties, responsibilities or obligations arising
under or related to the Loan Agreement or the other Loan Documents, those
duties, responsibilities or obligations shall flow only to Company and not to
Subsidiary or any other Person or entity. By way of example (and not an
exclusive list): (i) Agent’s providing notice to Company in accordance with the
Loan Agreement or as otherwise agreed among Company, Agent and Lender shall be
deemed provided to Subsidiary; (ii) a Lender’s providing an Advance to Company
shall be deemed an Advance to Subsidiary; and (iii) Subsidiary shall have no
right to request an Advance or make any other demand on Lender.

 

3.

Presuming the Subsidiary’s equity securities are currently uncertificated,
Subsidiary agrees not to certificate its equity securities without Agent’s prior
written consent, which consent may be conditioned on the delivery of such equity
securities to Agent in order to perfect Agent’s security interest in such equity
securities.

 

4.

Subsidiary acknowledges that it benefits, both directly and indirectly, from the
Loan Agreement, and hereby waives, for itself and on behalf on any and all
successors in interest (including without limitation any assignee for the
benefit of creditors, receiver, bankruptcy trustee or itself as
debtor-in-possession

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

  under any bankruptcy proceeding) to the fullest extent provided by law, any
and all claims, rights or defenses to the enforcement of this Joinder Agreement
on the basis that (a) it failed to receive adequate consideration for the
execution and delivery of this Joinder Agreement or (b) its obligations under
this Joinder Agreement are avoidable as a fraudulent conveyance.

 

5.

As security for the prompt, complete and indefeasible payment when due (whether
on the payment dates or otherwise) of all the Secured Obligations, Subsidiary
grants to Agent a security interest in all of Subsidiary’s right, title, and
interest in and to the Collateral.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

[SIGNATURE PAGE TO JOINDER AGREEMENT]

SUBSIDIARY:

                                         .

By:

Name:

Title:

Address:

Telephone:                     

email:                     

AGENT:

HERCULES CAPITAL, INC.

By:                                         

Name:                                         

Title:                                         

Address:

400 Hamilton Ave., Suite 310

Palo Alto, CA 94301

email: legal@herculestech.com

Telephone: 650-289-3060

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

EXHIBIT H

[Reserved]

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

EXHIBIT I

ACH DEBIT AUTHORIZATION AGREEMENT

Hercules Capital, Inc.

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

Re: Loan and Security Agreement dated as of March 20, 2019 (the “Agreement”) by
and among Constellation Pharmaceuticals, Inc., a Delaware corporation (the
“Borrower”) and Hercules Capital, Inc., as agent (“Company”) and the lenders
party thereto (collectively, the “Lender”)

In connection with the above referenced Agreement, the Borrower hereby
authorizes the Company to initiate debit entries for (i) the periodic payments
due under the Agreement and (ii) reasonable and documented out-of-pocket legal
fees and costs incurred by Agent or Lender pursuant to Section 11.11 of the
Agreement to the Borrower’s account indicated below. The Borrower authorizes the
depository institution named below to debit to such account.

[IF FILED PUBLICLY, ACCOUNT INFO REDACTED FOR SECURITY PURPOSES]

 

DEPOSITORY NAME    BRANCH CITY    STATE AND ZIP CODE TRANSIT/ABA NUMBER   
ACCOUNT NUMBER

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

This authority will remain in full force and effect so long as any amounts are
due under the Agreement.

 

CONSTELLATION PHARMACEUTICALS, INC. By:     Name:     Title:    

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

EXHIBIT J

[Reserved]

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

EXHIBIT K-1

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to Loan and Security Agreement dated as of March 20,
2019 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and among Constellation Pharmaceuticals, Inc., a Delaware
corporation (hereinafter referred to as the “Borrower”), the several banks and
other financial institutions or entities from time to time parties to the Loan
Agreement (collectively, referred to as “Lender”), and HERCULES CAPITAL, INC., a
Maryland corporation, in its capacity as administrative agent and collateral
agent for itself and the Lender (in such capacity, the “Agent”).

Pursuant to the provisions of Section 2.9 of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it
is providing this certificate, (ii) it is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (iii) it is not a “ten percent shareholder” of
the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it
is not a “controlled foreign corporation” related to the Borrower as described
in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Agent and the Borrower with a certificate of
its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing
this certificate, the undersigned agrees that (1) if the information provided in
this certificate changes, the undersigned shall promptly so inform the Borrower
and the Agent, and (2) the undersigned shall have at all times furnished the
Borrower and the Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

Date:                      , 20           [NAME OF LENDER]     By:         Name:
        Title:    

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EXHIBIT K-2

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to Loan and Security Agreement dated as of March 20,
2019 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and among Constellation Pharmaceuticals, Inc., a Delaware
corporation (hereinafter referred to as the “Borrower”), the several banks and
other financial institutions or entities from time to time parties to the Loan
Agreement (collectively, referred to as “Lender”), and HERCULES CAPITAL, INC., a
Maryland corporation, in its capacity as administrative agent and collateral
agent for itself and the Lender (in such capacity, the “Agent”).

Pursuant to the provisions of Section 2.9 of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
participation in respect of which it is providing this certificate, (ii) it is
not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is
not a “ten percent shareholder” of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign
corporation” related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing
this certificate, the undersigned agrees that (1) if the information provided in
this certificate changes, the undersigned shall promptly so inform such Lender
in writing, and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

Date:                      , 20         [NAME OF PARTICIPANT]     By:        
Name:         Title:    

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EXHIBIT K-3

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to Loan and Security Agreement dated as of March 20,
2019 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and among Constellation Pharmaceuticals, Inc., a Delaware
corporation (hereinafter referred to as the “Borrower”), the several banks and
other financial institutions or entities from time to time parties to the Loan
Agreement (collectively, referred to as “Lender”), and HERCULES CAPITAL, INC., a
Maryland corporation, in its capacity as administrative agent and collateral
agent for itself and the Lender (in such capacity, the “Agent”).

Pursuant to the provisions of Section 2.9 of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the participation in
respect of which it is providing this certificate, (ii) its direct or indirect
partners/members are the sole beneficial owners of such participation,
(iii) with respect such participation, neither the undersigned nor any of its
direct or indirect partners/members is a “bank” extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a “ten percent shareholder” of the Borrower
within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its
direct or indirect partners/members is a “controlled foreign corporation”
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form
W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS
Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided in this certificate
changes, the undersigned shall promptly so inform such Lender and (2) the
undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

Date:                      , 20         [NAME OF PARTICIPANT]     By:        
Name:         Title:    

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EXHIBIT K-4

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to Loan and Security Agreement dated as of March 20,
2019 (as amended, supplemented or otherwise modified from time to time, the
“Loan Agreement”) by and among Constellation Pharmaceuticals, Inc., a Delaware
corporation (hereinafter referred to as the “Borrower”), the several banks and
other financial institutions or entities from time to time parties to the Loan
Agreement (collectively, referred to as “Lender”), and HERCULES CAPITAL, INC., a
Maryland corporation, in its capacity as administrative agent and collateral
agent for itself and the Lender (in such capacity, the “Agent”).

Pursuant to the provisions of Section 2.9 of the Loan Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as
any Note(s) evidencing such Loan(s)) in respect of which it is providing this
certificate, (ii) its direct or indirect partners/members are the sole
beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Loan
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a “bank” extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a “ten percent shareholder” of the Borrower
within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its
direct or indirect partners/members is a “controlled foreign corporation”
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Agent and the Borrower with IRS Form W- 8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form
W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS
Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption. By executing this certificate, the
undersigned agrees that (1) if the information provided in this certificate
changes, the undersigned shall promptly so inform the Borrower and the Agent,
and (2) the undersigned shall have at all times furnished the Borrower and the
Agent with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

Date:                      , 20         [NAME OF LENDER]     By:         Name:  
      Title:    

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SCHEDULE 1.1

COMMITMENTS

 

LENDER

  

TRANCHE

  

TERM COMMITMENT

Hercules Capital, Inc.    Tranche 1    $20,000,000 Hercules Capital, Inc.   
Tranche 2    $10,000,000 Hercules Capital, Inc.    Tranche 3    $5,000,000
Hercules Capital, Inc.    Tranche 4*    $5,000,000* TOTAL COMMITMENTS      
$40,000,000*

 

*

Funding of Tranche 4 is subject to approval by Lender’s investment committee in
its sole discretion.