Document:

Exhibit 10.4

 

INVESTOR RIGHTS AGREEMENT

(AMENDED AND RESTATED AS OF DECEMBER 22, 2011)

 

This Amended and Restated Investor Rights Agreement (this “Agreement”) is made as of December 22, 2011 by and among Acceleron Pharma Inc., a Delaware corporation (the “Corporation”) and the parties listed on Exhibit A hereto (the “Investors”).

 

WHEREAS, the Corporation and certain of the Investors (the “Existing Investors”) are parties to that certain Amended and Restated Investor Rights Agreement dated as of June 10, 2010 (the “Prior Agreement”).

 

WHEREAS, the Existing Investors executing signature pages hereto hold at least two-thirds in voting power of the outstanding shares of Preferred Stock (as such capitalized term is defined in the Prior Agreement) and Common Stock issued upon conversion of Preferred Stock and therefore may validly join with the Corporation to amend the terms of the Prior Agreement pursuant to Section 8.2 thereof.

 

WHEREAS, in connection with the sale by the Corporation of Series F Convertible Preferred Stock to certain of the Investors as of the date hereof, the Existing Investors and the Corporation desire to amend and restate the Prior Agreement as provided herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, the parties hereby agree as follows:

 

SECTION 1.  Definitions.  As used herein, the following terms not otherwise defined herein shall have the following meanings:

 

(a)         “Affiliate” of any person shall mean any general or limited partner of any such person that is a partnership, member of any such person that is a limited liability company or any person or entity that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such person, including any person or entity having the same investment manager or general partner as such person.

 

(b)         “Certificate of Incorporation” shall mean the Corporation’s Certificate of Incorporation, as it may be amended from time to time.

 

(c)         “Common Stock” shall mean the Common Stock, $.001 par value per share, of the Corporation.

 

(d)         “Common Stock Director” shall have the meaning set forth in the Voting Agreement.

 

(e)         “Designated Board Observer” shall mean any representative designated by Celgene or Alkermes, as applicable, to attend the meetings of the Corporation’s Board of Directors in a nonvoting capacity pursuant to Section 4.14.

 

 

(f)          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(g)         “Founder” shall mean John Knopf.

 

(h)         “GAAP” shall mean United States generally accepted accounting principles.

 

(i)          “Intellectual Property Rights” shall mean all patents, trademarks, service marks, trade names, copyrights, inventions, trade secrets, know-how, proprietary processes and formulae, applications for patents, trademarks, service marks and copyrights, and other industrial and intellectual property rights.

 

(j)          “Majority Directors Vote” shall mean the affirmative vote of the Board of Directors of the Corporation which includes the affirmative vote of a majority of the Preferred Stock Directors then in office.

 

(k)         “Option Plan” shall mean the Corporation’s (a) 2003 Stock Option and Restricted Stock Plan or (b) any other stock or employee, consultant or director compensation arrangement (including but not limited to individual option agreements and restricted stock agreements) approved by a Majority Directors Vote.

 

(l)          “Originally Purchased Shares” shall mean the total number of shares of Preferred Stock purchased by the Investors at one or more closings under their respective Preferred Stock purchase agreements (or the Common Stock issuable upon conversion of such Preferred Stock).

 

(m)        “Outside Director” shall mean any director of the Corporation that is not an employee of the Corporation.

 

(n)         “Preferred Stock” shall mean the Corporation’s Series A Convertible Preferred Stock, par value $.001 per share, the Corporation’s Series B Convertible Preferred Stock, par value $.001 per share, the Corporation’s Series C Convertible Preferred Stock, par value $.001 per share, the Corporation’s Series C-1 Convertible Preferred Stock, par value $.001 per share, the Corporation’s Series D Convertible Preferred Stock, par value $.001 per share, the Corporation’s Series D-1 Convertible Preferred Stock, par value $.001 per share, the Corporation’s Series E Convertible Preferred Stock, par value $.001 per share, and the Corporation’s Series F Convertible Preferred Stock, par value $.001 per share.

 

(o)         “Preferred Stock Directors” shall mean the directors of the Corporation elected solely by the holders of Preferred Stock under the Certificate of Incorporation.

 

(p)         “Qualified Public Offering” shall mean a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act covering the offer and sale of Common Stock for the account of the Corporation that results in an automatic conversion of all outstanding shares of Preferred Stock.

 

(q)         “Securities Act” shall mean the Securities Act of 1933, as amended.

 

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(r)          “Subsidiary” shall mean any corporation, association, trust, partnership, limited liability company, limited liability partnership, joint venture or other entity, a majority of the outstanding equity interest of which is owned, directly or indirectly, by the Corporation.

 

(s)          “Voting Agreement” means the Amended and Restated Voting Agreement, dated the date hereof, by and among the Corporation, the other parties hereto and certain other parties.

 

SECTION 2.  Management of the Corporation.  Subject to the limitations set forth in Section 2.4, the Corporation covenants with the Investors as follows:

 

2.1          Access to Records; Inspection.  The Corporation agrees to afford to the Investors and their respective employees, counsel and other authorized representatives, as well as to the Preferred Stock Directors, upon reasonable prior request, free and full access, during normal business hours, (i) to examine all books and records and (ii) at the Investors’ expense, to visit and inspect any of the properties of the Corporation and to meet and discuss the affairs, finances and accounts of the Corporation with all officers of the Corporation and those other employees of the Corporation having responsibility for financial or accounting matters generally, for any reasonable purpose whatsoever; provided, however, that the Corporation shall not be obligated pursuant to this Section 2.1 to provide access to any information if the Corporation believes, upon advice of counsel, that such exclusion is reasonably necessary to preserve the attorney-client privilege; provided further that

 

(a)         Celgene Corporation (“Celgene”) and its respective employees, counsel and other authorized representatives shall have no such right or access with respect to clause (ii) above;

 

(b)         Celgene and its respective employees, counsel and other authorized representatives shall not be entitled to access any of the books and records of the Corporation to the extent the information contained in such books and records would be permitted to be withheld from Celgene’s Board Observer pursuant to Section 4.14, in which case Celgene shall have the right, not more than once in any twelve month period, upon reasonable prior request, to cause a third party reasonably acceptable to the Corporation to examine such withholdable information under an agreement of confidentiality prohibiting the disclosure of any such withholdable information to Celgene and its respective employees, counsel and other authorized representatives;

 

(c)         Alkermes, Inc. (the “Series D-1 Investor”) and its respective employees, counsel and other authorized representatives shall have no such right or access with respect to clause (ii) above; and

 

(d)         the Series D-1 Investor and its respective employees, counsel and other authorized representatives shall not be entitled to access any of the books and records of the Corporation to the extent (A) that the Corporation believes, upon advice of counsel, that such exclusion is reasonably necessary to preserve the attorney-client privilege or (B) the Board of Directors of the Corporation determines in good faith that any of the following circumstances apply:  (i) the information contained in such books and records contains highly confidential

 

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proprietary information of the Corporation; (ii) the information contained in such books and records relates to the Corporation’s relationship with the Series D-1 Investor or any of its Affiliates; (iii) the Corporation and the Series D-1 Investor have conflicting interests relating to the information contained in such books and records; or (iv) access of the Series D-1 Investor to the information contained in such books and records would (x) violate the Corporation’s obligations with respect to confidential proprietary information of third parties, (y) adversely affect the ability of the Corporation to successfully negotiate any ongoing or potential business transactions or relationships, or (z) adversely affect the competitive position of the Corporation or its business, in which case (B) above, the Series D-1 Investor shall have the right, not more than once in any twelve month period, upon reasonable prior request, to cause a third party reasonably acceptable to the Corporation to examine such withholdable information under an agreement of confidentiality prohibiting the disclosure of any such withholdable information to such Series D-1 Investor and its respective employees, counsel and other authorized representatives.

 

2.2          Financial Reports.  The Corporation agrees to furnish each of the Investors with the following:

 

2.2.1       Monthly Summaries.  Within 30 days after the end of each month, a financial summary of the revenues, expenses and cash flows of the Corporation for such month, together with a statement of cash balance and headcount as of the end of such month.

 

2.2.2       Quarterly Reports.  Within 45 days after the end of each fiscal quarter, an unaudited consolidated financial report of the Corporation, which report shall be prepared in accordance with (GAAP) (except that it may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto which may be required in accordance with GAAP) and be certified by either the Chief Executive Officer or the Chief Financial Officer of the Corporation to have been so prepared, and which shall include the following:

 

(a)         an income statement for such quarter, together with a cumulative income statement from the first day of the then-current fiscal year to the last day of such quarter;

 

(b)         a balance sheet as of the last day of such quarter;

 

(c)         a statement of cash flows for such quarter; and

 

(d)         a comparison between the actual figures for such quarter, the comparable figures for the prior year (if any) and the comparable figures included in the Budget (as defined below) for such quarter, with an explanation of any material differences between them.

 

2.2.3       Annual Reports.  As soon as reasonably practicable after the end of each fiscal year of the Corporation, preliminary financial statements of the Corporation, and promptly after the Corporation’s Board of Directors receives audited financial statements, such audited financial statements of the Corporation, which preliminary and audited financial statements shall (a) include an income statement for such fiscal year, a balance sheet as of the last day thereof, and statements of stockholders’ equity and cash flows for such fiscal year, and (b) each be prepared in accordance with GAAP.  The audited financial statements shall be certified by independent certified public accountants of recognized international standing reasonably

 

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satisfactory to the Investors and shall be accompanied by such accountants’ annual management letter.

 

2.2.4       Consolidated Financial Statements.  If for any period the Corporation shall have any subsidiary whose accounts are consolidated with those of the Corporation, then in respect of such period the financial statements delivered pursuant to the foregoing Sections 2.2.2 and 2.2.3 shall be the consolidated and consolidating financial statements of the Corporation and all such consolidated subsidiaries.

 

2.2.5       Other Reports and Information.  Promptly upon becoming available, copies of all financial statements, reports, notices, press releases, proxy statements and other documents sent by the Corporation to its stockholders or released to the public.

 

2.3          Budgets and Operating Plans.  At least 30 days prior to the beginning of each fiscal year of the Corporation, the Corporation shall prepare and submit a monthly operating plan of the Corporation for such fiscal year (the “Budget”) to the Board of Directors of the Corporation and the Investors.  The Budget shall be accepted as the Budget for such fiscal year when it has been approved by the Board of Directors of the Corporation.  The Budget shall be reviewed by the Corporation periodically and all changes therein and all material deviations therefrom which are proposed to be made by the Corporation shall be resubmitted to its Board of Directors and the Investors in advance and shall be accepted when approved by, and the Corporation shall not make any such changes or material deviations to or from the Budget without such prior approval of, the Board of Directors of the Corporation.  The Budget shall include an income statement, balance sheet and cash flow information.

 

2.4          Limitations on Rights of Investors Under Section 2.  So long as at least ten percent (10%) of an Investor’s Originally Purchased Shares are outstanding (including in such number shares of Common Stock issuable, directly or indirectly, upon conversion of the Preferred Stock, and provided further that such minimum numbers of shares to be appropriately adjusted to take account of any stock split, stock dividend, combination of shares or the like), the Corporation shall provide the information and access required by Sections 2.1 through 2.3 to such Investor.

 

2.5          Assignability of Rights of Investors Under Section 2.  The rights of any Investor under this Section 2 may be assigned, in whole or in part, (i) to any partner, member, stockholder or Affiliate of such Investor or (ii) to any assignee of such Investor who acquires at least twenty percent (20%) of the Originally Purchased Shares purchased by such Investor (including in such number shares of Common Stock issuable, directly or indirectly, upon conversion of the Preferred Stock).

 

SECTION 3.  Right of First Refusal.

 

3.1          The Corporation hereby grants to each Investor and any permitted assignee of an Investor described in Section 3.9 (each, a “Right Holder”) the right of first refusal to purchase pro rata all (or any part) of any New Securities (as defined below) that the Corporation may, from time to time, propose to sell or issue (the “Basic Amount”).  Each such Right Holder’s pro rata share, for purposes of this right of first refusal, is the ratio of (i) the number of shares of

 

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Common Stock then held of record by, or issuable on conversion of the shares of Preferred Stock then held of record by, such Right Holder to (ii) the sum of the total number of shares of Common Stock issued and outstanding plus the total number of shares of Common Stock issuable upon conversion of the shares of Preferred Stock outstanding at such time.

 

3.2          “New Securities” shall mean any equity securities of the Corporation, whether now authorized or not, and rights, options, or warrants to purchase said equity securities, and securities of any type whatsoever that are, or may become, convertible into said equity securities; provided, that “New Securities” does not include (i) securities offered to the public pursuant to a Qualified Public Offering; (ii) shares of Common Stock issued or issuable to employees, consultants or directors of the Corporation pursuant to an Option Plan (including shares issued or issuable upon exercise of options already granted); (iii) securities issued in connection with any stock split or stock dividend by the Corporation; (iv) shares of Preferred Stock sold to the Investors pursuant to the Series F Convertible Preferred Stock Purchase Agreement, dated the date hereof; (v) shares of Common Stock issued upon conversion of the Preferred Stock; (vi) securities issued in consideration for the acquisition or licensing of technology or a corporate partnership transaction, if approved by a Majority Directors Vote; (vii) securities issued in equipment leasing or other debt financing transactions, if approved by a Majority Directors Vote; or (viii) securities with respect to which the holders of at least two-thirds in voting power of the then outstanding shares of Preferred Stock and Common Stock held by Right Holders have determined by written instrument to not be deemed to be New Securities hereunder.

 

3.3          The Corporation shall not issue, sell or exchange, agree to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange any New Securities unless the Corporation shall deliver to each Right Holder a written notice of any proposed or intended issuance, sale or exchange of New Securities (the “Offer”), which Offer shall (i) identify and describe the New Securities, (ii) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the New Securities to be issued, sold or exchanged, (iii) identify the persons or entities, if known, to which or with which the New Securities are to be offered, issued, sold or exchanged, (iv) notify such Right Holder of any mandatory conversion of such Right Holder’s shares of Preferred Stock that would result from such Right Holder’s failure to purchase its Basic Amount and (v) offer to issue and sell to or exchange with such Right Holder (A) such Right Holder’s Basic Amount, and (B) any additional portion of the New Securities required to be offered to Right Holders hereunder as such Right Holder shall indicate it will purchase or acquire should the other Right Holders subscribe for less than their Basic Amounts (the “Undersubscription Amount”).  Each Right Holder shall have the right, for a period of 30 days following delivery of the Offer, to purchase or acquire, at a price and upon the other terms specified in the Offer, the number or amount of New Securities described above.  The Offer by its terms shall remain open and irrevocable for such 30-day period; provided, that the Corporation may withdraw its offer to issue any New Securities to a third party which withdrawal shall have the effect of terminating the Offer.

 

3.4          To accept an Offer, in whole or in part, a Right Holder must deliver a written notice to the Corporation prior to the end of the 30-day period of the Offer, setting forth the portion of the Right Holder’s Basic Amount that such Right Holder elects to purchase and, if such Right Holder shall elect to purchase all of its Basic Amount, the Undersubscription Amount (if any) that such Right Holder elects to purchase (the “Notice of Acceptance”).  If the Basic

 

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Amounts subscribed for by all Right Holders are less than the Basic Amounts to which all Right Holders are entitled, then each Right Holder who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amount subscribed for, the Undersubscription Amount it has subscribed for; provided, that should the Undersubscription Amounts subscribed for exceed the difference between the Basic Amounts to which all Right Holders are entitled and the Basic Amounts subscribed for (the “Available Undersubscription Amount”), each Right Holder who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Undersubscription Amount subscribed for by such Right Holder bears to the total Undersubscription Amounts subscribed for by all Right Holders, subject to rounding by the Board of Directors to the extent it reasonably deems necessary.

 

3.5          The Corporation shall have 90 days from the expiration of the period set forth in Section 3.3 above to issue, sell or exchange all or any part of such New Securities as to which a Notice of Acceptance has not been given by the Right Holders (the “Refused Securities”), but only to the offerees or purchasers (if identified) and only upon terms and conditions (including, without limitation, unit prices and interest rates) which are described in the Offer.

 

3.6          In the event the Corporation shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 3.5 above), then each Right Holder may, at its sole option and in its sole discretion, reduce the number or amount of the New Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the New Securities that the Right Holder elected to purchase pursuant to Section 3.4 above multiplied by a fraction, (i) the numerator of which shall be the number or amount of New Securities the Corporation actually proposes to issue, sell or exchange (including New Securities to be issued or sold to Right Holders pursuant to Section 3.4 above prior to such reduction) and (ii) the denominator of which shall be the amount of all New Securities that the Corporation initially proposed to offer, sell or exchange as described in the Offer.  In the event that any Right Holder so elects to reduce the number or amount of New Securities specified in its Notice of Acceptance, the Corporation may not issue, sell or exchange more than the reduced number or amount of the New Securities unless and until such securities have again been offered to the Right Holders in accordance with Section 3.3 above.

 

3.7          Upon the closing of the issuance, sale or exchange of all or less than all the Refused Securities, the Right Holders shall acquire from the Corporation, and the Corporation shall issue to the Right Holders, the number or amount of New Securities specified in the Notices of Acceptance, as reduced pursuant to Section 3.6 above if the Right Holders have so elected, upon the terms and conditions specified in the Offer.  The purchase by the Right Holders of any New Securities is subject in all cases to the preparation, execution and delivery by the Corporation and the Right Holders of a purchase agreement relating to such New Securities and other documents consistent with the terms of the Offer reasonably satisfactory in form and substance to the Right Holders and the Corporation and their respective counsel.

 

3.8          Any New Securities not acquired by the Right Holders or other persons in accordance with Section 3.5 above may not be issued, sold or exchanged until they are again offered to the Right Holders under the procedures specified in this Agreement.

 

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3.9          This right of first refusal may be assigned, in whole or in part, (i) to any partner, member, stockholder (other than a stockholder of an Investor whose shares are publicly traded) or Affiliate of any Investor or its permitted assignees or (ii) to any assignee of any Investor or its permitted assignees who acquires not less than 250,000 shares of Preferred Stock (or Common Stock issued upon conversion of the Preferred Stock) as appropriately adjusted to take account of any stock split, stock dividend, combination of shares, or the like.

 

3.10        This right of first refusal shall terminate upon the earlier of: (i) when less than fifteen percent (15%) of the Originally Purchased Shares remain outstanding; or (ii) upon the closing of a Qualified Public Offering pursuant to Section 6 below.

 

SECTION 4.  Covenants.  The Corporation covenants with the Investors as follows:

 

4.1          Keeping of Records and Books of Account.  The Corporation shall keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, reflecting all financial transactions of the Corporation and in which, for each fiscal year, all proper reserves for depreciation, depletion, obsolescence, amortization, taxes, bad debts and other purposes in connection with its business shall be made.

 

4.2          Insurance.  The Corporation shall do or cause to be done all things necessary to preserve and maintain in full force and effect fire, casualty and comprehensive general liability and other liability insurance policies, with extended coverage, on the properties, assets, business and personnel of the Corporation, in amounts deemed adequate by the Corporation and in accordance with the standards of the industry in which the Corporation operates.

 

4.3          Maintenance of Corporate Existence, etc.  The Corporation will do or cause to be done all reasonable things necessary to preserve and keep in full force and effect the existence and all of the rights (charter and statutory) of the Corporation, subject in all cases to the exercise by the directors of the Corporation of their fiduciary obligations.  The Corporation shall comply in all material respects with the provisions of its Certificate of Incorporation and By-laws.

 

4.4          Maintenance of Facilities.  The Corporation will maintain and keep in good condition all facilities owned or leased in the conduct of its business and will make all necessary repairs, renewals, replacements, betterments and improvements thereof, so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, that nothing in this Section shall prevent the Corporation from discontinuing the lease or maintenance of any such facilities if such discontinuance is, in the good faith judgment of the Chief Executive Officer or the Board of Directors of the Corporation, desirable in the conduct of the business of the Corporation and would not have a material adverse effect on the Corporation.

 

4.5          Payment of Taxes.  The Corporation will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all material taxes, assessments and governmental charges levied or imposed upon the Corporation or upon the income, profits or properties of the Corporation; and (b) all material liabilities of the Corporation; provided, that the Corporation shall not be required to pay or discharge or cause to be paid or discharged any such tax assessment, liability, or charge, whose amount, applicability or validity is being contested in

 

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good faith by appropriate proceedings if adequate reserves therefor have been established in accordance with GAAP.

 

4.6          Compliance with Applicable Laws.  The Corporation shall conduct its business in compliance in all material respects with all laws and valid requirements of governmental authorities applicable to the conduct of its business or to its properties or assets.

 

4.7          Employee Agreements.  The Corporation shall cause each person who becomes a consultant or employee of the Corporation subsequent to the date hereof, and who shall have or be proposed to have access to confidential or proprietary information of the Corporation, upon the commencement of such person’s employment by the Corporation, to execute the Corporation’s standard form of employee confidentiality and proprietary information agreement, a copy of which is attached hereto as Exhibit 4.7, or such other form as may be approved by a Majority Directors Vote; provided, that in the case of a key employee of the Corporation (as determined by the Board of Directors of the Corporation), such agreement shall include non-competition and non-solicitation provisions for a period of 12 months and provisions relating to the assignment of intellectual property developed by such key employee, all such provisions to be in form and substance satisfactory to a majority of the Board of Directors of the Corporation, which majority shall include a majority of the Preferred Stock Directors then in office.  The Corporation shall use its best efforts to enforce each such agreement, unless the Board of Directors of the Corporation shall determine otherwise.

 

4.8          Notice of Litigation and Defaults.  Promptly after the occurrence thereof, the Corporation shall (a) notify each Investor of the initiation of any action, suit, proceeding, or governmental inquiry against the Corporation involving a claim for more than $25,000 or for injunctive relief; and (b) notify the Board of Directors of any default by the Corporation under any agreement for borrowed money in excess of $50,000 or any other material agreement of any kind.  In each case such notice shall be delivered together with a reasonably detailed description of the action taken or proposed to be taken by the Corporation with respect thereto.

 

4.9          Securities Matters.  The Corporation shall comply in all material respects with all filings required under the Securities Act, the Exchange Act, and any applicable securities laws of any state or other jurisdiction.

 

4.10        Rule 144A.  The Corporation shall, upon written request of any Investor, provide to such Investor and to any prospective qualified institutional buyer (as defined in Rule 144A promulgated under the Securities Act) designated by such Investor, such financial and other information as such Investor may determine to be necessary to permit compliance with the requirements of Rule 144A in connection with any resale of the Preferred Stock.

 

4.11        Directors and Officers Insurance.  The Corporation shall maintain insurance covering (a) directors and officers of the Corporation, and (b) to the extent that the same may be obtained without undue cost and expense, the Founder, in each case that is satisfactory to the holders of a majority in interest of the Preferred Stock.

 

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4.12                        Management Rights Letter.  The Corporation shall execute and deliver to each Investor who is or becomes subject to the venture capital operating company requirements of ERISA a Management Rights Letter in the form of the attached Exhibit 4.12.

 

4.13                        Committees.

 

4.13.1              Compensation Committee.  The Corporation shall maintain a Compensation Committee of its Board of Directors (the “Compensation Committee”), which shall consist of the Series B Preferred Stock Director (as such term is defined in the Certificate of Incorporation), one Series A Preferred Director (as such term is defined in the Certificate of Incorporation), and one independent, non-executive director.  The Board of Directors of the Corporation shall delegate to the Compensation Committee authority over all forms of compensation to be provided to the executive officers, employees and directors of the Corporation and its subsidiaries, including all bonus, stock and other equity compensation, and authority to act as administrator for the Corporation’s stock plans.

 

4.13.2              Nominating and Governance Committee.  The Corporation shall maintain a 3-member Nominating and Governance Committee of the Board of Directors, all of which members shall be non-executive directors, to advise the Board of Directors with respect to those steps the Board of Directors should consider to adjust the size and membership of the Board of Directors so that it is optimized to provide guidance to management of the Corporation and to serve the interests of the Corporation’s stockholders as the Corporation continues to advance its product development programs and evaluates a potential public offering of its stock.  The Series B Preferred Stock Director (as such term is defined in the Certificate of Incorporation) shall be appointed to such Nominating and Governance Committee.

 

4.14                        Observer Rights.  So long as Applied Genomic Technology Capital Fund, L.P., together with its Affiliates (“Flagship”), owns at least 1,000,000 shares of Preferred Stock, or Common Stock issued upon conversion thereof, (such minimum number of shares to be appropriately adjusted to take account of any stock split, stock dividend, combination of shares or the like), the Corporation shall allow one representative designated by Flagship to attend all meetings of the Corporation’s Board of Directors in a nonvoting capacity.  So long as Venrock Partners, L.P., together with its Affiliates (“Venrock”), owns at least 1,000,000 shares of Preferred Stock, or Common Stock issued upon conversion thereof, (such minimum number of shares to be appropriately adjusted to take account of any stock split, stock dividend, combination of shares or the like), the Corporation shall allow one representative designated by Venrock to attend all meetings of the Corporation’s Board of Directors in a nonvoting capacity.  So long as OrbiMed Advisors, LLC, together with its Affiliates (“OrbiMed”), owns at least 1,000,000 shares of Preferred Stock, or Common Stock issued upon conversion thereof, (such minimum number of shares to be appropriately adjusted to take account of any stock split, stock dividend, combination of shares or the like), the Corporation shall allow one representative designated by OrbiMed to attend all meetings of the Corporation’s Board of Directors in a nonvoting capacity.  So long as Bessemer Venture Partners, together with its Affiliates (“Bessemer”), owns at least 750,000 shares of Preferred Stock, or Common Stock issued upon conversion thereof, (such minimum number of shares to be appropriately adjusted to take account of any stock split, stock dividend, combination of shares or the like), the Corporation shall allow one representative designated by Bessemer to attend all meetings of the

 

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Corporation’s Board of Directors in a nonvoting capacity.  So long as QVT Fund LP, together with its Affiliates (“QVT”), owns at least 750,000 shares of Preferred Stock, or Common Stock issued upon conversion thereof, (such minimum number of shares to be appropriately adjusted to take account of any stock split, stock dividend, combination of shares or the like), the Corporation shall allow one representative designated by QVT to attend all meetings of the Corporation’s Board of Directors in a nonvoting capacity.  So long as MPM BioEquities Master Fund LP, together with its Affiliates (“MPM”), owns at least 1,000,000 shares of Preferred Stock, or Common Stock issued upon conversion thereof, (such minimum number of shares to be appropriately adjusted to take account of any stock split, stock dividend, combination of shares or the like), the Corporation shall allow one representative designated by MPM to attend all meetings of the Corporation’s Board of Directors in a nonvoting capacity.  So long as (i) Celgene, together with its Affiliates, owns at least 1,000,000 shares of Preferred Stock, or Common Stock issued upon conversion thereof, (such minimum number of shares to be appropriately adjusted to take account of any stock split, stock dividend, combination of shares or the like) and (ii) no officer or other employee of Celgene is otherwise a member of the Corporation’s Board of Directors, the Corporation shall allow one representative designated by Celgene to attend all meetings of the Corporation’s Board of Directors in a nonvoting capacity.  So long as (i) Alkermes, Inc., together with its Affiliates (“Alkermes”), owns at least 1,000,000 shares of Preferred Stock, or Common Stock issued upon conversion thereof, (such minimum number of shares to be appropriately adjusted to take account of any stock split, stock dividend, combination of shares or the like) and (ii) no officer or other employee of Alkermes is otherwise a member of the Corporation’s Board of Directors, the Corporation shall allow one representative designated by Alkermes to attend all meetings of the Corporation’s Board of Directors in a nonvoting capacity.  In connection therewith, the Corporation shall give each such representative copies of all notices, consents, minutes and other materials, financial or otherwise, which the Corporation provides to its Board of Directors; provided, however, that if such representative does not, before attending any board meetings, execute and deliver to the Corporation a confidentiality agreement substantially in the form attached hereto as Exhibit 4.14 (or in the case of Alkermes’s Designated Board Observer, a confidentiality agreement substantially in the form of the Confidential Disclosure Agreement between the Corporation and Alkermes, dated December 3, 2009), such representative may be excluded from access to any material or meeting or portion thereof if the Board of Directors of the Corporation determines in good faith that such exclusion is reasonably necessary to protect highly confidential proprietary information of the Corporation or confidential proprietary information of third parties that the Corporation is required to hold in confidence, or for other similar reasons.  Any such representative may also be excluded from access to any material or meeting or portion thereof if the Corporation believes, upon advice of counsel, that such exclusion is reasonably necessary to preserve the attorney-client privilege.  Notwithstanding the foregoing, any Designated Board Observer may be excluded from access to any material or meeting or portion thereof if the Board of Directors of the Corporation determines in good faith that any of the following circumstances apply:  (a) such material or meeting or portion thereof contains highly confidential proprietary information of the Corporation;  (b) the subject of the material or meeting or portion thereof relates to the Corporation’s relationship with the party that has designated such Designated Board Observer or any of such party’s Affiliates;  (c) the Corporation and the party that has designated the Designated Board Observer have conflicting interests relating to any matters scheduled to be discussed or presented at such meeting; or (d) access of the Designated Board

 

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Observer to such material or meeting or portion thereof would (i) violate the Corporation’s obligations with respect to confidential proprietary information of third parties, (ii) adversely affect the ability of the Corporation to successfully negotiate any ongoing or potential business transactions or relationships, or (iii) adversely affect the competitive position of the Corporation or its business.

 

4.15                        Board Meetings and Expenses of Directors and Board Observers.  The Corporation agrees to hold a meeting of its Board of Directors at such intervals as shall be determined by the Board of Directors.  The Corporation shall promptly reimburse in full each director of the Corporation who is not an employee of the Corporation and each Board observer designated pursuant to Section 4.14 for all of his or her reasonable out-of-pocket fees and expenses incurred by reason of serving as a director of the Corporation or in connection with the business of the Corporation, including but not limited to expenses incurred in attending each meeting of the Board of Directors of the Corporation or any committee thereof.

 

4.16                        Vesting of Equity Incentives.  Grants of stock options and shares of restricted stock to employees shall, except as otherwise approved by the Compensation Committee, vest at the rate of 25% per year (in an annual increment for the first year and quarterly thereafter over the subsequent thirty-six months) commencing with the start date of employment.  Unless otherwise determined by the Compensation Committee, each grant of restricted stock of the Corporation shall provide that, upon termination of the restricted stock holder’s employment, the Corporation shall have the right to repurchase shares then unvested at the original purchase price paid by the holder thereof.

 

SECTION 5.  Actions Subject to Approval of Board of Directors.  The Corporation covenants with the Investors that in addition to any other vote required by law or the Corporation’s Certificate of Incorporation or By-Laws, unless approved by a Majority Directors Vote, the Corporation shall not, and the Corporation shall not permit any Subsidiary to:

 

5.1                               establish or increase the compensation of any executive officer without the approval of the Compensation Committee;

 

5.2                               grant or issue any stock, stock option or other equity incentive to any officer or employee or director of, or consultant or other service provider to, the Corporation or any Subsidiary without the approval of the Compensation Committee;

 

5.3                               make, or permit any Subsidiary to make, any loan or advance to, or own any stock or other securities of, any other corporation, partnership, or other entity;

 

5.4                               enter into or be a party to any transaction with any director, officer or employee of the Corporation or any Subsidiary or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person, except for transactions contemplated by this Agreement, the Amended and Restated Right of First Refusal and Co-Sale or Amended and Restated Registration Rights Agreement of even date herewith by and among the Corporation and the other parties thereto or the Series F Convertible Preferred Stock Purchase Agreement, dated the date hereof, or made in the ordinary course of business and pursuant to reasonable

 

12

 

requirements of the Corporation’s or such Subsidiary’s business and upon fair and reasonable terms that are approved by a Majority Directors Vote;

 

5.5                               directly or indirectly guarantee or otherwise in any way become liable with respect to the obligations or liabilities of any person or entity, except by endorsement of instruments or items of payment for deposit to the general account of the Corporation or the Subsidiary taking such action; or

 

5.6                               make any investment, through the direct or indirect holding of securities or otherwise, other than investments in prime commercial paper, money market funds, certificates of deposit in any United States bank having a net worth in excess of $100,000,000 or obligations issued or guaranteed by the United States of America, in each case having a maturity not in excess of two years.

 

SECTION 6.  Limitation On Rights of Investors.  Section 2 through Section 5 of this Agreement shall terminate and be of no further effect immediately prior to the closing of a Qualified Public Offering.

 

SECTION 7.  Notices.  All notices, requests, consents and other communications hereunder (“Notices”) to any party shall be contained in a written instrument addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by the addressee to the addressor listing all parties and shall be deemed given (a) when delivered in person or duly sent by fax showing confirmation of receipt, (b) three days after being sent by first class mail postage prepaid (other than in the case of Notices to or from any non-U.S. resident) or (c) two days after being sent by DHL, Federal Express or other recognized express international courier service:

 

(a)                           if to the Corporation, to:

 

Acceleron Pharma Inc.

128 Sidney Street

Cambridge, MA 02139

 

with a copy to:

 

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199-3600

Attn: Marc Rubenstein

Fax: (617) 951-7050

 

(b)                           if to the Investors, to their respective addresses set forth on Exhibit A of this Agreement.

 

13

 

SECTION 8.  Miscellaneous.

 

8.1                               Entire Agreement.  This Agreement states the entire agreement of the parties concerning the subject matter hereof, and supersedes all prior agreements, written or oral, between or among them concerning such subject matter.

 

8.2                               Amendments; Waivers.  This Agreement may be amended, and compliance with any provision of this Agreement may be omitted or waived, only by the written agreement of the Corporation and Investors holding at least two-thirds in voting power of the then outstanding shares of Preferred Stock, and Common Stock issued upon conversion of Preferred Stock, held by Investors; provided, however, that no rights of an Investor hereunder shall, without its consent, be adversely affected by any such amendment or waiver in any manner in which the rights of other Investors hereunder are not likewise adversely affected; provided, further, that no rights of an Investor under Section 4.14 shall, without its consent, be adversely affected by any such amendment or waiver.  Any amendment or waiver with respect to the right of first refusal contained in Section 3 shall require the written agreement of Right Holders holding at least two-thirds in voting power of the then outstanding shares of Preferred Stock and Common Stock held by Right Holders.

 

8.3                               Confidentiality.  Each Investor agrees to use the same degree of care as such Investor uses to protect its own confidential information, but in no event less than a commercially reasonable degree of care, to keep confidential and to not use for any purpose other than such Investor’s own internal use to monitor its investment in the Corporation, any information furnished to such Investor pursuant to such Investor’s rights under this Agreement or any other Transaction Document (as such term is defined in the Series F Convertible Preferred Stock Purchase Agreement, dated the date of this Agreement), provided that the Corporation identifies such information as being confidential or proprietary (so long as such information is not in the public domain).  Notwithstanding the foregoing, such Investor may disclose such proprietary or confidential information (i) to any partner, subsidiary, parent or employee of such Investor, or if such Investor is an investment fund, to the management company of such Investor, as long as such partner, subsidiary, parent, employee or management company is advised of and has agreed in writing to be bound by the confidentiality provisions of this Section 8.3 or other restrictions at least as stringent as this Section 8.3; (ii) at such time as it enters the public domain through no fault of such Investor; (iii) that is communicated to it free of any obligation of confidentiality; (iv) that is developed by such Investor or its agents independently of and without reference to any confidential information communicated by the Corporation, as shown by written documents and other competent written evidence;  (v) as required by applicable law, provided that such Investor promptly notifies the Corporation of such required disclosure and takes reasonable steps to minimize the extent of any such required disclosure; or (vi) solely with respect to disclosures by Investors that are investment funds, and which disclosures consist solely of summary financial and business milestone information of the type typically communicated to investors in a venture capital fund, to any affiliated venture capital funds or prospective investors of the Investor as long as such affiliated venture capital fund or prospective investor is advised of and has agreed in writing to be bound by the confidentiality provisions of this Section 8.3 or other restrictions at least as stringent as this Section 8.3.  This Section 8.3 supersedes any confidentiality restrictions of Celgene under the Amended and Restated Confidentiality Agreement by and between Celgene and the Corporation dated January 27, 2009 and the Mutual Confidentiality Agreement by and between Celgene and the Corporation dated January 23, 2009.  Other than as described in the preceding sentence, nothing contained herein is

 

14

 

intended to limit Celgene’s right to use and disclose any confidential or proprietary information of the Corporation to the extent the use and disclosure of such confidential or proprietary information is contemplated by the terms of any agreements by and between Celgene and the Corporation that were entered into prior to, and that are in effect on, the date hereof.

 

8.4                               Governing Law.  This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the Commonwealth of Massachusetts, without regard to its principles of conflicts of laws.

 

8.5                               Counterparts.  This Agreement may be executed in any number of counterparts, each such counterpart shall be deemed to be an original instrument, and all such counterparts together shall constitute but one agreement.  Any such counterpart may contain one or more signature pages.  This agreement may be executed by facsimile signatures.

 

[Remainder of page intentionally left blank.]

 

15

 

IN WITNESS WHEREOF, the parties have executed this Amended and Restated Investor Rights Agreement as a contract under seal as of the date first written above.

 

	
 
    	
ACCELERON PHARMA INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   John Knopf
    
	
 
    	
John   Knopf, Chief Executive Officer
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

	
 
    	
POLARIS   VENTURE PARTNERS IV, L.P.
    
	
 
    	
 
    
	
 
    	
BY:   POLARIS VENTURE MANAGEMENT CO. IV, L.L.C.
    
	
 
    	
ITS GENERAL PARTNER
    
	
 
    	
 
    
	
 
    	
POLARIS   VENTURE PARTNERS
    
	
 
    	
ENTREPRENEURS’   FUND IV, L.P.
    
	
 
    	
 
    
	
 
    	
BY:   POLARIS VENTURE MANAGEMENT CO. IV L.L.C.
    
	
 
    	
ITS GENERAL PARTNER
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   William E. Bilodeau
    
	
 
    	
William   E. Bilodeau
    
	
 
    	
Attorney-in-fact
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

	
 
    	
VENROCK   PARTNERS, L.P.,
    
	
 
    	
 
    
	
 
    	
by   its General Partner, Venrock Partners
    
	
 
    	
Management,   LLC
    
	
 
    	
 
    
	
 
    	
VENROCK   ASSOCIATES IV, L.P.,
    
	
 
    	
 
    
	
 
    	
by   its General Partner, Venrock Management IV, LLC
    
	
 
    	
 
    
	
 
    	
VENROCK   ENTREPRENEURS FUND IV, L.P.,
    
	
 
    	
 
    
	
 
    	
by   its General Partner, VEF Management IV, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Authorized Signatory
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

	
ADVANCED   TECHNOLOGY VENTURES VII, L.P.
    	
ADVANCED   TECHNOLOGY VENTURES VII(C), L.P.
    
	
By:
    	
ATV   Associates VII, L.L.C.
    	
By:
    	
ATV   Associates VII, L.L.C.
    
	
 
    	
Its General Partner
    	
 
    	
Its   General Partner
    
	
 
    	
 
    
	
By:
    	
/s/   Jean George
    	
 
    	
By:
    	
/s/   Jean George
    
	
Name: Jean George
    	
Name:   Jean George
    
	
Title:   Managing Director
    	
Title:   Managing Director
    
	
 
    	
 
    
	
ADVANCED   TECHNOLOGY VENTURES VI, L.P.
    	
ATV   ALLIANCE 2003, L.P.
    
	
By:
    	
ATV   Associates VI, L.L.C.
    	
By:
    	
ATV   Alliance Associates, L.L.C.
    
	
 
    	
Its   General Partner
    	
 
    	
Its   General Partner
    
	
 
    	
 
    
	
By:
    	
/s/   Jean George
    	
 
    	
By:
    	
/s/   Jean George
    
	
Name: Jean George
    	
Name:   Jean George
    
	
Title:   Managing Director
    	
Title:   Managing Director
    
	
 
    	
 
    
	
ADVANCED   TECHNOLOGY VENTURES VII(B), L.P.
    	
ATV   ENTREPRENEURS VI, L.P.
    
	
By:
    	
ATV   Associates VII, L.L.C.
    	
By:
    	
ATV   Associates VI, L.L.C.
    
	
 
    	
Its   General Partner
    	
 
    	
Its   General Partner
    
	
 
    	
 
    
	
By:
    	
/s/   Jean George
    	
 
    	
By:
    	
/s/   Jean George
    
	
Name:   Jean George
    	
Name:   Jean George
    
	
Title:   Managing Director
    	
Title:   Managing Director
    
	
 
    	
 
    
	
ATV   ENTREPRENEURS VII, L.P.
    	
 
    
	
By:
    	
ATV   Associates VII, L.L.C.
    	
 
    
	
 
    	
Its   General Partner
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Jean George
    	
 
    	
 
    
	
Name:   Jean George
    	
 
    
	
Title:   Managing Director
    	
 
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

 

	
 
    	
CELGENE   CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Perry Karsen
    
	
 
    	
Name:
    	
Perry   Karsen
    
	
 
    	
Title:
    	
Chief   Operating Officer
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

	
ORBIMED   PRIVATE INVESTMENTS II, LP
    	
ORBIMED   PRIVATE INVESTMENTS II (QP), LP
    
	
By:
    	
Orbimed   Capital GP II LLC
    	
By:
    	
Orbimed   Capital GP II LLC
    
	
 
    	
its   General Partner
    	
 
    	
its   General Partner
    
	
 
    	
 
    
	
By:
    	
/s/   Carl Gordon
    	
 
    	
By:
    	
/s/   Carl Gordon
    
	
Name:   Carl Gordon
    	
Name:   Carl Gordon
    
	
Title:   Member
    	
Title:   Member
    
	
 
    	
 
    
	
ORBIMED   PRIVATE INVESTMENTS II, LP
    	
 
    
	
By:
    	
Orbimed   Capital GP II LLC
    	
 
    
	
 
    	
its   General Partner
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Carl Gordon
    	
 
    	
 
    
	
Name:   Carl Gordon
    	
 
    
	
Title:   Member
    	
 
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

	
 
    	
APPLIED   GENOMIC TECHNOLOGY CAPITAL FUND, L.P.; AGTC ADVISORS FUND, L.P.
    
	
 
    	
 
    
	
 
    	
Each   by: AGTC Partners, L.P., its General Partner
    
	
 
    	
 
    
	
 
    	
By:   NewcoGen Group Inc., its General Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Noubar B Afeyan
    
	
 
    	
Name:
    	
Noubar   B Afeyan
    
	
 
    	
Title:
    	
President
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

 

	
 
    	
BESSEMER   VENTURE PARTNERS VII L.P.,
    
	
 
    	
BESSEMER   VENTURE PARTNERS VII INSTITUTIONAL L.P.
    
	
 
    	
 
    
	
 
    	
By:   Deer VII & Co. L.P., their General Partner
    
	
 
    	
By:   Deer VII & Co. Ltd., its General Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   J. Edmund Colloton
    
	
 
    	
Name:
    	
J.   Edmund Colloton
    
	
 
    	
Title:
    	
Director
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

	
 
    	
ALKERMES, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Landine
    
	
 
    	
Name:
    	
Michael   Landine
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

	
SUTTER   HILL VENTURES, A CALIFORNIA LIMITED PARTNERSHIP
    	
 
    	
DAVID   L. ANDERSON, TRUSTEE OF THE ANDERSON LIVING TRUST U/A/D 1/22/98
    
	
By:
    	
Sutter   Hill Ventures, L.L.C.
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
 
    	
its   General Partner
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
 
    	
 
    	
David   L. Anderson, Trustee
    
	
By:
    	
/s/   Jeffrey W. Bird
    	
 
    	
 
    
	
Name:   Jeffrey W. Bird
    	
 
    	
 
    
	
Title:   Managing Director
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ANVEST,   L.P.
   By Robert Yin Under Power of Attorney
    	
 
    	
G.   LEONARD BAKER, JR. AND MARY ANNE BAKER, CO-TRUSTEES OF THE BAKER REVOCABLE   TRUST U/A/D 2/3/03
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
David   L. Anderson, Trustee of The Anderson Living 
    	
 
    	
 
    
	
Trust U/A/D 1/22/98, General Partner
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
 
    	
 
    	
G.   Leonard Baker, Jr., Trustee
    
	
 
    	
 
    	
 
    
	
SAUNDERS   HOLDINGS, L.P.
    	
 
    	
YOVEST,   L.P.
    
	
By   Robert Yin Under Power of Attorney
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
G.   Leonard Baker, Jr., Trustee of the Baker Revocable Trust U/A/D 2/3/03,   General Partner
    	
 
    	
William   H. Younger, Jr., Trustee of The William H. Younger, Jr. Revocable   Trust U/A/D 8/5/09, General Partner
    
	
 
    	
 
    	
 
    
	
WILLIAM   H. YOUNGER, JR. TRUSTEE, THE WILLIAM H. YOUNGER, JR. REVOCABLE TRUST U/A/D   8/5/2009
    	
 
    	
DAVID   E. SWEET AND ROBIN T. SWEET, AS TRUSTEES OF THE DAVID AND ROBIN SWEET LIVING   TRUST, DATED 7/6/04
    
	
By   Robert Yin Under Power of Attorney
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
William   H. Younger, Jr., Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ROOSTER   PARTNERS, LP
   By Robert Yin Under Power of Attorney
    	
 
    	
GREGORY   P. SANDS AND SARAH J.D. SANDS AS TRUSTEES OF GREGORY P. AND SARAH J.D. SANDS   TRUST AGREEMENT DATED 2/24/99
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
Tench   Coxe, Trustee of The Coxe Revocable Trust U/A/D 
    	
 
    	
 
    
	
4/23/98, General Partner
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
 
    	
 
    	
Gregory   P. Sands, Trustee
    
	
 
    	
 
    	
 
    
	
JAMES   C. GAITHER, TRUSTEE OF THE GAITHER 
    	
 
    	
TALLACK   PARTNERS, L.P.
    

 

Signature Page to Investor Rights Agreement

 

 

	
REVOCABLE   TRUST U/A/D 9/28/2000
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
By   Robert Yin Under Power of Attorney
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
James   C. Gaither, Trustee of The Gaither Revocable
    
	
James   C. Gaither, Trustee
    	
 
    	
Trust   U/A/D 9/28/2000, General Partner
    
	
 
    	
 
    	
 
    
	
By   Robert Yin Under Power of Attorney
    	
 
    	
RONALD   D. BERNAL AND PAMELA M. BERNAL AS TRUSTEES OF THE BERNAL FAMILY TRUST U/D/T   11/3/1995
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
James C. Gaither
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
 
    	
 
    	
 
    
	
JAMES   N. WHITE AND PATRICIA A. O’BRIEN AS TRUSTEES OF THE WHITE FAMILY TRUST U/A/D   4/3/97
    	
 
    	
JEFFREY   W. BIRD AND CHRISTINA R. BIRD AS TRUSTEES OF JEFFREY W. AND CHRISTINA R. BIRD   TRUST AGREEMENT DATED 10/31/00
    
	
By   Robert Yin Under Power of Attorney
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
James   N. White, Trustee
    	
 
    	
Jeffrey   W. Bird, Trustee
    
	
 
    	
 
    	
 
    
	
ANDREW   T. SHEEHAN AND NICOLE J. SHEEHAN AS TRUSTEES OF SHEEHAN 2003 TRUST
   By Robert Yin Under Power of Attorney
    	
 
    	
MICHAEL   L. SPEISER AND MARY ELIZABETH SPEISER, CO TRUSTEES OF SPEISER TRUST AGREEMENT   DATED 7/19/06
    
	
 
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
 
    
	
Andrew T. Sheehan, Trustee
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
 
    	
 
    	
Michael   L. Speiser, Trustee
    
	
 
    	
 
    	
 
    
	
MICHAEL   L. NAAR AND DIANE J. NAAR AS TRUSTEES OF NAAR FAMILY TRUST U/A/D 12.22.94
    	
 
    	
PATRICK   ANDREW CHEN AND YU-YING CHIU CHEN AS TRUSTEES OF PATRICK AND YING CHEN 2001   LIVING TRUST DATED 3/17/01
    
	
By   Robert Yin Under Power of Attorney
    	
 
    	
By   Robert Yin Under Power of Attorney
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
By:
    	
/s/   Robert Yin
    
	
 
    	
 
    	
 
    
	
TENCH   COXE AND SIMONE OTUS COXE, CO-TRUSTEES OF THE COXE REVOCABLE TRUST U/A/D   4/23/98
    	
 
    	
 
    
	
By   Robert Yin Under Power of Attorney
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Robert Yin
    	
 
    	
 
    
	
Tench   Coxe, Trustee
    	
 
    	
 
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

 

	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Sheryl W. Casella
    	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Sheryl W. Hossack
    
	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Gregory P. Sands
    	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Tench Coxe
    
	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Ronald D. Bernal
    	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Lynne M. Brown (Rollover)
    
	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO David E. Sweet
    	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO William H. Younger, Jr.
    
	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO David E. Sweet (Rollover)
    	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Robert Yin
    
	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Lynne B. Graw
    	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO David L. Anderson
    
	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Lynne B. Graw (Rollover)
    	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Andrew T. Sheehan
    
	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Diane J. Narr
    	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Yu-Ying Chen
    
	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Patricia Tom (Post)
    	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Patricia Tom (Pre)
    
	
Wells   Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Patricia Tom (Rollover)
    	
Wells   Fargo Bank, N.A. FBO James N. White Roth IRA
    
	
Wells   Fargo Bank, N.A. FBO Jeffrey W. Bird Roth IRA
    	
Wells   Fargo Bank, N.A. FBO Gregory P. Sands Roth IRA
    
	
Wells   Fargo Bank, N.A. FBO David E. Sweet Roth IRA
    	
 
    

 

 

	
By:
    	
/s/ Thomas M. Thurston
    	
 
    
	
Name: Thomas M. Thurston
    	
 
    
	
Title: Vice President
    	
 
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

	
QVT   FUND LP,
    	
 
    	
QUINTESSENCE   FUND LP
    
	
 
    	
 
    	
 
    
	
BY:   ITS GENERAL PARTNER, QVT ASSOCIATES GP LLC
    	
 
    	
BY:   ITS GENERAL PARTNER, QVT ASSOCIATES GP LLC
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Keith S. Manchester
    	
 
    	
By:
    	
/s/   Keith S. Manchester
    
	
Name:
    	
Keith   S. Manchester
    	
 
    	
Name:
    	
Keith   S. Manchester
    
	
Title:
    	
Portfolio   Manager
    	
 
    	
Title:
    	
Portfolio   Manager
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

	
AVALON   VENTURES VI, LP
    	
 
    	
AVALON   VENTURES VI, GP FUND, LLC
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Douglas Downs
    	
 
    	
By:
    	
/s/   Douglas Downs
    
	
Name:
    	
Douglas   Downs
    	
 
    	
Name:
    	
Douglas   Downs
    
	
Title:
    	
Authorized   Signer & CFO
    	
 
    	
Title:
    	
Authorized   Signer & CFO
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

 

	
 
    	
MIDCAP   FINANCIAL, LLLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Luis Viera
    
	
 
    	
Name:
    	
Luis   Viera
    
	
 
    	
Title:   
    	
Managing   Director
    

 

Signature Page to Investor Rights Agreement

 

 

ACCELERON PHARMA INC.

 

Investor Rights Agreement

 

Investor Signature Page

 

By executing this page in the space provided, the undersigned investor hereby agrees (i) that it is an “Investor” as defined in the Amended and Restated Investor Rights Agreement dated as of December 22, 2011 among Acceleron Pharma Inc. (the “Corporation”) and certain of its shareholders (the “Investor Rights Agreement”), (ii) that it is a party to the Investor Rights Agreement for all purposes and (iii) that it is bound by all terms and conditions of the Investor Rights Agreement.

 

EXECUTED this 22nd day of December, 2011.

 

 

	
 
    	
HERCULES   TECHNOLOGY II, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   K. Nicholas Martitsch
    
	
 
    	
Name:
    	
K.   Nicholas Martitsch
    
	
 
    	
Title:   
    	
Associate   General Counsel
    

 

Signature Page to Investor Rights Agreement

 

 

Exhibit A

 

Investors

 

	
Investor
    	
 
    	
Address
    
	
Bessemer Venture Partners VII L.P.
    	
 
    	
c/o Bessemer Venture   Partners

1865 Palmer Avenue,   Suite 104

Larchmont, NY 10538
    
	
Bessemer Venture Partners VII Institutional L.P.
    	
 
    	
c/o Bessemer Venture   Partners

1865 Palmer Avenue,   Suite 104

Larchmont, NY 10538
    
	
Polaris Venture Partners IV, L.P.
    	
 
    	
1000 Winter Street, Suite 3350

Waltham, MA 02451
    
	
Polaris Venture Partners   Entrepreneurs’ Fund IV, L.P.
    	
 
    	
1000 Winter Street, Suite 3350

Waltham, MA 02451
    
	
OrbiMed Private Investments II LP
    	
 
    	
OrbiMed Advisors, LLC

Attn: Carl Gordon
   767 Third Avenue
   30th Floor
   New York, NY  10017
    
	
OrbiMed Private Investments II (QP), LP
    	
 
    	
OrbiMed Advisors, LLC

Attn: Carl Gordon
   767 Third Avenue
   30th Floor
   New York, NY  10017
    
	
UBS Juniper Crossover Fund, LLC
    	
 
    	
OrbiMed Advisors, LLC

Attn: Carl Gordon
   767 Third Avenue
   30th Floor
   New York, NY  10017
    
	
Advanced Technology Ventures VII, LP
    	
 
    	
500 Boylston Street,   Suite 1380

Boston, MA 02116
    
	
Advanced Technology Ventures VII (B), LP
    	
 
    	
500 Boylston Street,   Suite 1380

Boston, MA 02116
    
	
Advanced Technology Ventures VII (C), LP
    	
 
    	
500 Boylston Street,   Suite 1380

Boston, MA 02116
    
	
ATV Entrepreneurs VII, LP
    	
 
    	
500 Boylston Street,   Suite 1380

Boston, MA 02116
    
	
Advanced Technology Ventures VI, LP
    	
 
    	
500 Boylston Street,   Suite 1380

Boston, MA 02116
    
	
ATV Entrepreneurs VI, LP
    	
 
    	
500 Boylston Street,   Suite 1380

Boston, MA 02116
    
	
Applied Genomic Technology Capital Fund, L.P.
    	
 
    	
One Memorial Drive, 7th Floor

Cambridge, MA 02142
    
	
AGTC Advisors Fund, L.P.
    	
 
    	
One Memorial Drive, 7th Floor

Cambridge, MA 02142
    
	
Venrock Partners, L.P.
    	
 
    	
530 Fifth Avenue, 22nd Floor

New York, NY 10036
    
	
Venrock Associates IV, L.P.
    	
 
    	
530 Fifth Avenue, 22nd Floor

New York, NY 10036
    

 

32

 

	
Venrock Entrepreneurs Fund   IV, L.P.
    	
 
    	
530 Fifth Avenue, 22nd Floor

New York, NY 10036
    
	
Sutter Hill Ventures, A California Limited Partnership
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
David L. Anderson, Trustee of The Anderson Living Trust U/A/D 1/22/98
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Anvest, L.P.
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
G. Leonard Baker, Jr. and Mary Anne Baker,  Co-Trustees of The Baker Revocable Trust   U/A/D 2/3/03
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Saunders Holdings, L.P.
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Yovest, L.P.
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Rooster Partners, LP
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Gregory P. Sands and Sarah J.D. Sands as Trustees of Gregory P. and   Sarah J.D. Sands Trust Agreement Dated 2/24/99
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
James C. Gaither
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
James C. Gaither, Trustee of The Gaither Revocable Trust U/A/D   9/28/2000
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Tallack Partners, L.P.
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
James N. White and Patricia A. O’Brien as Trustees of The White   Family Trust U/A/D 4/3/97
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Jeffrey W. Bird and Christina R. Bird as Trustees of Jeffrey W. and   Christina R. Bird Trust Agreement Dated 10/31/00
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Ronald D. Bernal and Pamela M. Bernal as Trustees of The Bernal   Family Trust U/D/T 11/3/1995
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Andrew T. Sheehan and Nicole J. Sheehan as Trustees of Sheehan 2003   Trust
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Michael I. Naar and Diane J. Naar as Trustees of Naar Family Trust   U/A/D 12.22.94
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    

 

33

 

	
Patrick Andrew Chen and Yu-Ying Chiu Chen as Trustees of Patrick and   Ying Chen 2001 Living Trust Dated 3/17/01
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Tench Coxe and Simone Otus Coxe, Co-Trustees of The Coxe Revocable   Trust U/A/D 4/23/98
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA  94304-1005
    
	
William H. Younger, Jr. Trustee, The William H.   Younger, Jr., Revocable Trust U/A/D 8/5/2009
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Michael L. Speiser and Mary Elizabeth Speiser, Co-Trustees of Speiser   Trust Agreement Dated 7/19/06
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA  94304-1005
    
	
David E. Sweet and Robin T. Sweet, as Trustees of the David and Robin   Sweet Living Trust, dated 7/6/04
    	
 
    	
755 Page Mill Road, Suite A-200

Palo Alto, CA 94304-1005
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Sherryl W.   Casella
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Tench Coxe
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO David L.   Anderson
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO William H.   Younger, Jr.
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Andrew T.   Sheehan
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO David E. Sweet
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Lynne B. Graw
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Diane J. Naar
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    

 

34

 

	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Yu-Ying Chen
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Patricia Tom   (Pre)
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Patricia Tom   (Post)
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Robert Yin
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Ronald D.   Bernal
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Sherryl W.   Hossack
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Lynne M. Brown
    	
 
    	
Attention: Tom Thurston

600 California Street, 12th Floor

MAC A0193-120

San Francisco, CA  94108
    
	
Wells Fargo Bank N.A. FBO James N. White Roth IRA
    	
 
    	
Wells Fargo Trust Operations - CHOPS

NW 7595

Account # 23883800

P.O. Box 1450

Minneapolis, MN 55485-759
    
	
Wells Fargo Bank N.A. FBO Jeffrey W. Bird Roth IRA
    	
 
    	
Wells Fargo Trust Operations - CHOPS

NW 7595

Account # 23883700

P.O. Box 1450

Minneapolis, MN 55485-759
    
	
Wells Fargo Bank N.A. FBO Gregory P. Sands Roth IRA
    	
 
    	
Wells Fargo Trust Operations - CHOPS

NW 7595

Account # 23883300

P.O. Box 1450

Minneapolis, MN 55485-759
    
	
Wells Fargo Bank N.A. FBO David E. Sweet Roth IRA
    	
 
    	
Wells Fargo Trust Operations - CHOPS

NW 7595

Account # 23883400

P.O. Box 1450

Minneapolis, MN 55485-7595
    
	
MPM BioEquities Master Fund LP
    	
 
    	
The John Hancock Tower

200 Clarendon Street, 54th floor

Boston, MA 02116
    

 

35

 

	
QVT Fund LP
    	
 
    	
c/o QVT Financial LP

1177 Avenue of the Americas

9th Floor

New York, NY 10036
    
	
Quintessence Fund L.P.
    	
 
    	
c/o QVT Financial LP

1177 Avenue of the Americas

9th Floor

New York, NY 10036
    
	
Hercules Technology II, L.P.
    	
 
    	
400 Hamilton Ave, Suite 310

Palo Alto, CA 94301
    
	
Avalon Ventures VI, LP
    	
 
    	
1134 Kline St

La Jolla, CA 92037
    
	
Avalon Ventures VI, GP Fund, LLC
    	
 
    	
1134 Kline St

La Jolla, CA 92037
    
	
Wylie Vale
    	
 
    	
1643 Valdes Drive

La Jolla, CA 92037
    
	
Tom Maniatis
    	
 
    	
2828 Broadway

Apartment 7E

New York, NY 10025
    
	
Peter Crisp
    	
 
    	
103 Horseshoe Rd.

Mill Neck, NY 11765-1005
    
	
Mark Ptashne
    	
 
    	
9 East 79th St.

New York, NY 10075
    
	
David Shaw
    	
 
    	
542 Black Point Rd..

Scarborough, ME 04074
    
	
David Molowa
    	
 
    	
1030 Wychwood Road

Westfield, NJ 07090
    
	
The Konrad Hans von Emster III and Elizabeth F. von Emster Revocable   Trust Dated January 18, 2005
    	
 
    	
1647 Ralston Ave

Belmont, CA 94002
    
	
Paul Walker
    	
 
    	
15 Cervantes Blvd, #306

San Francisco, CA 94123
    
	
Vaughn Kailian
    	
 
    	
1100 Fitzpatrick Lane, PO Box 70

Bodega, CA 94922
    
	
Leon Smith
    	
 
    	
39 Holton Lane

Essex Fells, NJ 07021
    
	
Michael Kassen 2003 GRAT
    	
 
    	
c/o Michael M. Kassen

315 North Avenue

Westport, CT 06880
    
	
Next Chapter Holdings LP
    	
 
    	
c/o   Mark R. Pattis

600   Central Avenue, Suite 205-210

Highland Park, IL 80035
    
	
Ropart Investments LLC
    	
 
    	
Attn: Peter Cawley

One East Weaver Street

Greenwich, CT 06831
    
	
UM Multi-Strategy Fund
    	
 
    	
c/o Cadogen Management LLC

Attn: Kyle Pickens

149 Fifth Avenue, 15th Floor

New York, NY 10010
    
	
Victor Dzau
    	
 
    	
4006 Dover Road

Durham, NC 27707
    

 

36

 

	
Valinco Investments Limited 
    	
 
    	
c/o Denlow Private Trustco Limited

29 Middle Road

Devonshire DV 06

Bermuda
    
	
DGAM Alternative Strategy Fund LP
    	
 
    	
Desjardins Global Asset Management

Attn: Florent Salmon

1 Complexe Desjardins, South Tower, 25th   Floor

Montreal, QC H5B 1B3

Canada
    
	
DGAM Alternative Strategy Fund II SPC CELL A
    	
 
    	
Desjardins Global Asset Management

Attn: Florent Salmon

1 Complexe Desjardins, South Tower, 25th   Floor

Montreal, QC H5B 1B3

Canada
    
	
Citco Global Custody (NA) N.V. as custodian for Absolutissimo-Cadogan
    	
 
    	
Attn:   Chantel Winkel

Schottegatweg   Oost 44

Curacao

Netherlands   Antilles
    
	
Alkermes, Inc.
    	
 
    	
852 Winter Street

Waltham, MA 02451
    
	
Celgene Corporation
    	
 
    	
86 Morris Avenue

Summit, NJ    07901
    
	
MidCap Financial, LLC
    	
 
    	
7735 Old Georgetown Road

Suite 400

Bethesda, MD 20814

Attn: Bob Goodridge
    

 

37

 

Exhibit 4.7

 

Form of Confidentiality and Proprietary Information Agreement

 

38

 

EMPLOYEE CONFIDENTIALITY, NON-COMPETITION, AND PROPRIETARY INFORMATION AGREEMENT

 

AGREEMENT, effective as of                                             , between Acceleron Pharma Inc., a Delaware corporation (the “Company”), and                                             (the “Employee”).

 

1.                                      Employee will make full and prompt disclosure to the Company of all inventions, improvements, modifications, discoveries, methods, technologies, biological materials, and developments, and all other materials, items, techniques, and ideas related directly or indirectly to the business of the Company (all of which are collectively termed “Intellectual Property” hereinafter), whether patentable or not, made or conceived by Employee or under Employee’s direction during Employee’s employment with the Company, whether or not made or conceived during normal working hours, or on the premises of the Company.

 

2.                                      Employee agrees that all Intellectual Property, as defined above, shall be the sole property of the Company and its assigns, and the Company and its assigns shall be the sole owner of all patents and other rights in connection therewith.  Employee hereby assigns to the Company any rights Employee may have or acquire in all Intellectual Property and all related patents, copyrights, trademarks, trade names, and other industrial and intellectual property rights and applications therefore, in the United States and elsewhere.  Employee further agrees that with regard to all future developments of Intellectual Property, Employee will assist the Company in every way that may be reasonably required by the Company (and at the Company’s expense) to obtain and, from time to time, enforce patents on Intellectual Property in any and all countries that the Company may require, and to that end, Employee will execute all documents for use in applying for and obtaining such patents thereon and enforcing the same, as the Company may desire, together with any assignment thereof to the Company or persons designated by the Company, and Employee hereby appoints the Company Employee’s attorney to execute and deliver any such documents or assignments requested by the Company.  Employee’s obligation to assist the Company in obtaining and enforcing patents for Intellectual Property in any and all countries shall continue beyond the termination of Employee’s employment with the Company, but the Company shall compensate Employee at a reasonable, standard hourly rate following such termination for time directly spent by Employee at the Company’s request for such assistance.

 

3.                                      Employee hereby represents that Employee has no continuing obligation to assign to any former employer or any other person, corporation, institution, or firm any Intellectual Property as described above.  Employee represents that Employee’s performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information acquired by Employee, in confidence or in trust, prior to Employee’s employment by the Company.  Employee has not entered into, and Employee agrees not to enter into, any agreement (either written or oral), which would put Employee in conflict with this Agreement.

 

39

 

4.                                      Employee agrees to assign to the Company any and all copyrights and reproduction rights to any material prepared by Employee in connection with this Agreement, and developed during the term of Employee’s employment with the Company.

 

5.                                      Employee understands and agrees that a condition of Employee’s employment and continued employment with the Company, is that Employee has not brought and will not bring to the Company or use in the performance of Employee’s duties at the Company any materials or documents rightfully belonging to a former employer which are not generally available to the public.  Employee may bring such materials and documents to the Company provided Employee has obtained written authorization from such former employer for their possession and use.  Accordingly, this is to advise the Company that any materials and/or documents belonging to a former employer and which are not generally available to the public that Employee has brought or will bring to the Company or has used or will use in Employee’s employment are identified in Exhibit A appended to this Agreement, and as to each such item, Employee represents that Employee has obtained prior to the effective date of this Agreement, written authorization for their possession and use in Employee’s employment with the Company.

 

6.                                      Employee recognizes that the services to be performed by Employee hereunder are special, unique, and extraordinary and that, by reason of Employee’s employment with the Company, Employee may acquire Confidential Information (as hereinafter defined) concerning the operation of the Company, the use or disclosure of which would cause the Company substantial loss and damage which could not be readily calculated and for which no remedy at law would be adequate.  Accordingly, Employee agrees that Employee will not (directly or indirectly) at any time, whether during or after Employee’s employment with the Company:

 

(i)            knowingly use for any improper personal benefit or for any other reason whatsoever any Confidential Information that Employee may acquire or has acquired by reason of Employee’s employment with the Company, or;

 

(ii)           disclose any such Confidential Information to any person or entity except (A) in the performance of Employee obligations to the Company hereunder, (B) as required by a court of competent jurisdiction, (C) in connection with the enforcement of Employee rights under this Agreement, or (D) with the prior consent of the Board of Directors of the Company.

 

As used herein “Confidential Information” includes information with respect to the facilities and methods of the Company, reagents, chemical compounds, cell lines or subcellular constituents, organisms, or other biological materials, trade secrets, and other Intellectual Property, systems, patents and patent applications, procedures, manuals, confidential reports, financial information, business plans, prospects, or opportunities, personnel information, or lists of customers and suppliers; provided, however, that Confidential Information shall not include any information that is known or becomes generally known or available publicly other than as a result of disclosure by Employee which is not permitted as described in clause (ii) above, or the Company discloses to others without obtaining an agreement of confidentiality.

 

40

 

Employee confirms that all Confidential Information is the exclusive property of the Company.  All business records, papers and documents and electronic materials kept or made by Employee relating to the business of the Company which comprise Confidential Information, shall be and remain the property of the Company during the Employee’s employment and at all times thereafter. Upon the termination, for any reason, of Employee’s employment with the Company, or upon the request of the Company at any time, Employee shall deliver to the Company, and shall retain no copies of any written or electronic materials, records and documents made by Employee or coming into Employee possession concerning the business or affairs of the Company and which comprise Confidential Information.

 

7.                                      During the term of Employee’s employment with the Company and, in the event of a voluntary termination by the Employee for any reason or termination by the Company for cause as determined by the Company’s Board of Directors, for a period of one (1) year after the date of termination of the Employee’s employment with the Company (the “Restricted Period”), the Employee shall not directly or indirectly, for Employee’s own account or for the account of others, as an officer, director, stockholder (other than as the holder of less than 1% of the outstanding stock of any publicly traded company), owner, partner, employee, promoter, consultant, manager or otherwise participate in the promotion, financing, ownership, operation, or management of, or assist in or carry on through proprietorship, a corporation, partnership, or other form of business entity or otherwise which is in competition with the Company within the United States or any other country in which the Company is conducting or is actively seeking or planning to conduct business as of the date of such termination.

 

During the Restricted Period, the Employee shall not, whether for Employee’s own account or for the account of any other person (excluding the Company):

 

(i)            solicit or contact in an effort to do business with any person who was or is a customer of the Company during the term of this Assignment or after its termination, or any affiliate of any such person, if such solicitation or contact is for the purpose of competition with the Company; or

 

(ii)           solicit or induce any of the Company’s employees to leave their employment with the Company or accept employment with anyone else or hire any such employees.

 

Nothing herein shall prohibit or preclude the Employee from performing any other types of services that are not precluded by this Section 7 for any other person.

 

Employee has carefully read and considered the provision of this Section (including the Restricted Period, scope of activity to be restrained, and the geographical scope) to be fair and reasonable and are reasonably required for the protection of the interests of the Company, it’s officers, directors, employees, creditors, and shareholders.  Employee understands that the restrictions contained in this Section may limit Employee’s ability to engage in a business similar to the Company’s business, but acknowledges that Employee will receive sufficiently high remuneration and other benefits from the Company hereunder to justify such restrictions.

 

41

 

The Employee shall give prompt notice to the Company of the Employee’s acceptance of employment during the Restricted Period, which notice shall include the name of, the business of, and the position that Employee shall hold with such other employer.

 

8.                                      In the event that Employee’s employment is transferred by the Company to a subsidiary, affiliated company, or acquiring company (as the case may be), Employee’s employment by such company will, for the purpose of this Agreement, be considered as continued employment with the Company, unless Employee executes an agreement, substantially similar in substance to this Agreement, and until the effective date of said agreement in any such company for which Employee becomes employed.

 

9.                                      Upon termination of Employee’s employment for any reason, unless such employment is transferred to a subsidiary, affiliated or acquiring company of the Company, Employee agrees to leave with, or return to, the Company all records, drawings, notebooks, and other documents pertaining to the Company’s Confidential Information, whether prepared by Employee or others, and also any equipment, tools, or other devices, owned by the Company, then in Employee’s possession however such items were obtained, and Employee agrees not to reproduce any document or data relating thereto.

 

10.                               Employee obligations under this Agreement shall survive the termination of Employee’s employment with the Company regardless of the manner of, and reason for, such termination, and shall be binding upon Employee’s heirs, executors, and administrators.

 

11.                               Prior to entering the employ of the Company, Employee has lawfully terminated employment with all previous employers.  Employee acknowledges that this Agreement does not constitute a contract of employment and does not imply that the Company will continue his or her employment for any period of time.

 

12.                               As a matter of record, Employee has identified in Exhibit B appended to this Agreement, all Intellectual Property relevant to the subject matter of Employee’s employment with the Company, which has been made or conceived or first reduced to practice by Employee alone or jointly with others prior to Employee’s employment with the company which Employee desires to exclude from Employee’s obligations under this Agreement; and Employee represents that such list is complete.  If there is no such list on Exhibit B, Employee represents that Employee has no such Intellectual Property at the time of execution of this Agreement.

 

13.                               No delay or omission by the Company in exercising any right under this Agreement will operate as a waiver of that or any other right.  A waiver or consent given by the Company on any one occasion is effect only in that instance and will not be construed as a bar to or waiver of any right on any other occasion.

 

14.                               Employee agrees that in addition to any other rights and remedies available to the Company for any breach or threatened breach by Employee of Employee’s obligations hereunder, the Company shall be entitled to enforcement of Employee’s obligations hereunder by whatever means are at the Company’s disposal, including court injunction.

 

42

 

15.                               The Company may assign this Agreement to any other corporation or entity which acquires (whether by purchase, merger, consolidation or otherwise) all or substantially all of the business and/or assets of the Company.

 

16.                               If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, then such provision shall be enforceable to the extent that a court deems it reasonable to enforce such provision.  If such provision shall be unreasonable to enforce to any extent, such provision shall be served and all remaining provisions shall continue in full force and effect.

 

17.                               Employee hereby acknowledges receipt of the Company’s Confidentiality Policy.

 

18.                               This Agreement shall be effective as of the date set forth below next to Employee’s signature.

 

19.                               This Agreement shall be governed in all respects by the laws of the Commonwealth of Massachusetts.  Each of the Company and Employee (a) hereby irrevocably submits to the exclusive jurisdiction of the state courts of The Commonwealth of Massachusetts or the United States District Court located in The Commonwealth of Massachusetts for the purpose of any action between the Company and Employee arising in whole or in part under or in connection with this Agreement, (b) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court and (c) hereby agrees not to commence any such action other than before one of the above-named courts.  Notwithstanding the previous sentence the Company or Employee may commence any action in a court other than the above-named courts solely for the purpose of enforcing an order or judgment issued by one of the above-named courts.

 

[Remainder of page intentionally left blank.]

 

43

 

IN WITNESS WHEREOF, Employee has executed this Agreement under seal as of the date set 

 

forth above:

 

	
BY:
    	
 
    	
 
    
	
Name   of Employee:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
ACCEPTED   AND AGREED TO:
    	
 
    
	
 
    	
 
    
	
Acceleron   Pharma Inc.
    	
 
    
	
 
    	
 
    
	
BY:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

Acceleron Pharma Inc.

 

44

 

EXHIBIT A

TO

CONFIDENTIAL AND PROPRIETARY INFORMATION AGREEMENT

 

EXHIBIT B

TO

CONFIDENTIAL AND PROPRIETARY INFORMATION AGREEMENT

 

45

 

EMPLOYEE CONFIDENTIALITY AGREEMENT

 

AGREEMENT, effective as of                                                , between Acceleron Pharma Inc., a Delaware corporation (the “Company”), and                                                      (the “Employee”).

 

Employee understands and agrees that a condition of Employee’s employment and continued employment with the Company, is that Employee has not brought and will not bring to the Company or use in the performance of Employee’s duties at the Company any materials or documents rightfully belonging to a former employer which are not generally available to the public.  Employee may bring such materials and documents to the Company provided Employee has obtained written authorization from such former employer for their possession and use.  Accordingly, this is to advise the Company that any materials and/or documents belonging to a former employer and which are not generally available to the public that Employee has brought or will bring to the Company or has used or will use in Employee’s employment are identified in Exhibit A appended to this Agreement, and as to each such item, Employee represents that Employee has obtained prior to the effective date of this Agreement, written authorization for their possession and use in Employee’s employment with the Company.

 

1.                                      Employee recognizes that the services to be performed by Employee hereunder are special, unique, and extraordinary and that, by reason of Employee’s employment with the Company, Employee may acquire Confidential Information (as hereinafter defined) concerning the operation of the Company, the use or disclosure of which would cause the Company substantial loss and damage which could not be readily calculated and for which no remedy at law would be adequate.  Accordingly, Employee agrees that Employee will not (directly or indirectly) at any time, whether during or after Employee’s employment with the Company:

 

(i)            knowingly use for any improper personal benefit or for any other reason whatsoever any Confidential Information that Employee may acquire or has acquired by reason of Employee’s employment with the Company, or;

 

(ii)           disclose any such Confidential Information to any person or entity except (A) in the performance of Employee obligations to the Company hereunder, (B) as required by a court of competent jurisdiction, (C) in connection with the enforcement of Employee rights under this Agreement, or (D) with the prior consent of the Board of Directors of the Company.

 

As used herein “Confidential Information” includes information with respect to the facilities and methods of teh Company, reagents, chemical compounds, cell lines or subcellular constituents, organisms, or other biological materials, trade secrets, and other Intellectual Property, systems, patents and patent applications, procedures, manuals, confidential reports, financial information, business plans, prospects, or opportunities, personnel information, or lists of customers and suppliers; provided, however, that Confidential Information shall not include any information that is known or becomes generally known or available publicly other than as a result of disclosure by Employee which is not permitted as described in clause (ii) above, or the Company discloses to others without obtaining an agreement of confidentiality.

 

46

 

Employee confirms that all Confidential Information is the exclusive property of the Company.  All business records, papers and documents and electronic materials kept or made by Employee relating to the business of the Company which comprise Confidential Information, shall be and remain the property of the Company during the Employee’s employment and at all times thereafter. Upon the termination, for any reason, of Employee’s employment with the Company, or upon the request of the Company at any time, Employee shall deliver to the Company, and shall retain no copies of any written or electronic materials, records and documents made by Employee or coming into Employee possession concerning the business or affairs of the Company and which comprise Confidential Information.

 

2.                                      In the event that Employee’s employment is transferred by the Company to a subsidiary, affiliated company, or acquiring company (as the case may be), Employee’s employment by such company will, for the purpose of this Agreement, be considered as continued employment by the Company, unless Employee executes an agreement, substantially similar in substance to this Agreement, and until the effective date of said agreement in any such company for which Employee becomes employed.

 

3.                                      Upon termination of Employee’s employment, unless such employment is transferred to a subsidiary, affiliated or acquiring company of the Company, Employee agrees to leave with, or return to, the Company all records, drawings, notebooks, and other documents pertaining to the Company’s Confidential Information, whether prepared by Employee or others, and also any equipment, tools, or other devices, owned by the Company, then in Employee’s possession however such items were obtained, and Employee agrees not to reproduce any document or data relating thereto.

 

4.                                      Employee obligations under this Agreement shall survive the termination of Employee’s employment with the Company regardless of the manner of, and reason for such termination, and shall be binding upon Employee’s heirs, executors, and administrators.

 

5.                                      Prior to entering the employ of the Company, Employee has lawfully terminated employment with all previous employers.  Employee acknowledges that this Agreement does not constitute a contract of employment and does not imply that the Company will continue his or her employment for any period of time.

 

6.                                      No delay or omission by the Company in exercising any right under this Agreement will operate as a waiver of that or any other right.  A waiver or consent given by the Company on any one occasion is effect only in that instance and will not be construed as a bar to or waiver of any right on any other occasion.

 

7.                                      Employee agrees that in addition to any other rights and remedies available to the Company for any breach or threatened breach by Employee of Employee’s obligations hereunder, the Company shall be entitled to enforcement of Employee’s obligations hereunder by whatever means are at the Company’s disposal, including court injunction.

 

47

 

8.             The Company may assign this Agreement to any other corporation or entity which acquires (whether by purchase, merger, consolidation or otherwise) all or substantially all of the business and/or assets of the Company.

 

20.          If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, then such provision shall be enforceable to the extent that a court deems it reasonable to enforce such provision.  If such provision shall be unreasonable to enforce to any extent, such provision shall be served and all remaining provisions shall continue in full force and effect.

 

21.          Employee hereby acknowledges receipt of the Company’s Confidentiality Policy.

 

22.          This Agreement shall be effective as of the date set forth below next to Employee’s signature.

 

23.          This Agreement shall be governed in all respects by the laws of the Commonwealth of Massachusetts.  Each of the Company and Employee (a) hereby irrevocably submits to the exclusive jurisdiction of the state courts of The Commonwealth of Massachusetts or the United States District Court located in The Commonwealth of Massachusetts for the purpose of any action between the Company and Employee arising in whole or in part under or in connection with this Agreement, (b) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court and (c) hereby agrees not to commence any such action other than before one of the above-named courts.  Notwithstanding the previous sentence the Company or Employee may commence any action in a court other than the above-named courts solely for the purpose of enforcing an order or judgment issued by one of the above-named courts.

 

[Remainder of page intentionally left blank.]

 

48

 

IN WITNESS WHEREOF, Employee has executed this Agreement under seal as of the date set forth above:

 

	
BY:
    	
 
    	
 
    
	
Name   of Employee:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
ACCEPTED   AND AGREED TO:
    	
 
    
	
 
    	
 
    
	
Acceleron   Pharma Inc.
    	
 
    
	
 
    	
 
    
	
BY:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

 

EXHIBIT A

TO

EMPLOYEE CONFIDENTIALITY AGREEMENT

 

 

Exhibit 4.12

 

Form of Management Rights Agreement

 

N/A

 

 

Exhibit 4.14

 

Form of Board Observer Confidentiality Agreement

 

 

CONFIDENTIAL DISCLOSURE AGREEMENT

 

THIS CONFIDENTIAL DISCLOSURE AGREEMENT (the “Agreement”) made as [                     ] (the “Effective Date”), is between Acceleron Pharma, Inc., having an address at 24 Emily Street, Cambridge, MA 02139 (Telephone: 617-576-2220; Facsimile: 617-576-2224) (“Acceleron”), Celgene Corporation, a Delaware corporation having an address at 86 Morris Avenue, Summit, NJ 07901 (Telephone: 908-673-9000) (together with its subsidiaries and affiliates collectively referred to as “Celgene”), and [                     ] (the “Observer”), a representative designated as an observer of Acceleron’s board of directors by Celgene purusant to Section 4.14 of the Amended and Restated Investors’ Rights Agreement dated [                        ].  In connection with such observations, Acceleron has disclosed and delivered and may continue to disclose or deliver to the Observer certain proprietary or confidential information. This Agreement governs those disclosures.

 

1.              “Confidential Information” means (i) Investment Information and (ii) Scientific Information.

 

2.              “Investment Information” means any and all non-public scientific, technical, business or financial information, in whatever form (written, oral or visual) relating to Acceleron and delivered to the Observer other than Scientific Information.  For clarity, “Investment Information” includes any such information relating specifically to programs based on ActRIIB, such as ACE-031, and programs based on ALK-1, such as ACE-041, disclosed by  Acceleron to the Observer after December 20, 2007.

 

3.              “Purpose” means the exercise of Celgene’s rights and the performance of Celgene’s obligations pursuant to the License, Collaboration and Option Agreement between Acceleron and Celgene, dated February 20, 2008 (the “License Agreement”).

 

4.              “Scientific Information” means any and all non-public scientific, technical, business or financial information, in whatever form (written, oral or visual) relating specifically to programs based on ActRIIA, such as ACE-011, programs based on ActRIIB, such as ACE-031, programs based on ALK-1, such as ACE-041, programs based on antibodies that bind to Activin A and/or Activin B, and programs based on antibodies that bind to BMP3, disclosed by Acceleron to the Observer provided that such information relating specifically to programs based on ActRIIB, such as ACE-031 and programs based on ALK-1, such as ACE-041 disclosed by Acceleron to the Observer after December 20, 2007 shall not be considered Scientific Information hereunder.

 

5.             General Nondisclosure.  Each of Celgene and the Observer agrees that it will (a) hold in confidence all Confidential Information and not publish or disclose it except as provided hereunder; (b) use the Scientific Information solely for the Purpose and the Investment Purpose; (c) treat Confidential Information with the same degree of care it uses to protect its own confidential information but in no event with less than a reasonable degree of care; (d) reproduce the Scientific Information solely to accomplish the Purpose and the Investment Purpose, and (e) disclose Confidential Information solely to Celgene’s employees or consultants on a need-to-know basis, provided that each such employee and consultant is 

 

 

bound by obligations of confidentiality at least as restrictive as those set forth in this Agreement.

 

6.          Additional Restrictions on Investment Information.  In addition to all obligations of Celgene  and the Observer pursuant to Section 4, each of Celgene and the Observer also covenants that it will (a) use the Investment Information solely for the purpose of evaluating Celgene’s equity investment in Acceleron (the “Investment Purpose”); (b) reproduce the Investment Information only as necessary and solely to accomplish the Investment Purpose, and (c) disclose Investment Information solely to individuals that are employees within Celgene’s Business Development, Finance or Legal Departments, and outside counsel retained by employees within Investor’s Business Development, Finance or Legal Departments, in each case solely to the extent that such individuals have a need to use the Investment Information for the Investment Purpose and provided that each such employee and consultant is bound by obligations of confidentiality at least as restrictive as those set forth in this Agreement.

 

7.              Exceptions.  Celgene and the Observer will have no obligations of confidentiality and non-use with respect to any portion of the Confidential Information which:

 

(a)                     is or later becomes generally available to the public by use, publication or the like, through no fault of Celgene or the Observer;

 

(b)                     is obtained from a third party who had the legal right to disclose the same to Celgene and the Observer;

 

(c)                      Celgene or the Observer already possesses, as evidenced by its written records that predate the receipt thereof, or

 

(d)                     is hereafter independently developed by Celgene or the Observer without reference to the information provided by Acceleron.

 

Celgene or the Observer may disclose Confidential Information as  required by law or applicable regulation including, without limitation, by oral questions, interrogatories, request for information or documents, subpoena, civil investigative demand or other similar process.  Celgene and the Observer will give Acceleron prompt notice thereof so that Acceleron may attempt to seek an appropriate protective order.

 

8.              Expiration.  The obligation to maintain the confidentiality under this Agreement of Investment Information will expire five (5) years from the last date of disclosure of any Investment Information (the “Investment Information Expiration Date”).  The obligation to maintain the confidentiality under this Agreement of Scientific Information will expire seven (7) years following the termination or expiration of the License Agreement.  Celgene and the Observer will promptly return to Acceleron all Confidential Information that is Investment Information, including all copies and reproductions thereof, upon Acceleron’s written request after the earlier to occur of the Investment Information Expiration Date and the date on which Celgene is no longer entitled to appoint an observer of Acceleron’s board of directors.  Celgene and the Observer will promptly return to Acceleron all Confidential Information that is Scientific Information, including all copies and reproductions thereof, to

 

 

the extent required under the License Agreement.  Notwithstanding its obligation to return Confidential Information to Acceleron, Celgene may retain one (1) copy of Confidential Information in its confidential files, solely for record purposes.

 

9.              Injunctive Relief.  It is understood and agreed that Acceleron may be irreparably injured by a breach of this Agreement; that money damages would not be an adequate remedy for any such breach; and that Acceleron will be entitled to seek equitable relief, including injunctive relief and specific performance, as a remedy for any such breach, and such remedy will not be Acceleron’s exclusive remedy for any breach of this Agreement.

 

10.       Representations.  Each of Celgene and the Observer acknowledges that Confidential Information may still be under development, or may be incomplete, and that such information may relate to products that are under development or are planned for development. ACCELERON MAKES NO WARRANTIES WHATSOEVER REGARDING THE ACCURACY OF THE CONFIDENTIAL INFORMATION.

 

11.       Rights and Licenses.  It is understood that no patent right or license is granted by this Agreement except for the Purpose and that the disclosure of Confidential Information does not result in any obligation by Acceleron to grant Celgene or the Observer any right in and to such Confidential Information.

 

12.       Miscellaneous.  This Agreement (a) contains the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements, written or oral, between Acceleron and Celgene with respect to the disclosure or delivery to the Observer of certain proprietary or confidential information, (b) may be modified only by mutual written agreement of the parties, (c) may not be assigned or transferred by any party without the prior written consent of each other party; provided, however, that Acceleron may assign this Agreement in connection with a merger or sale of substantially all of its assets to which this Agreement relates, (d) will be governed by and construed in accordance with, the laws of the State of New York, without regard to any choice of law principle that would dictate the application of the law of another jurisdiction, and (e) may be executed by facsimile, which will be deemed an original.

 

[remainder of page intentionally left blank]

 

 

 

	
ACCELERON   PHARMA, INC.
    	
 
    	
CELGENE   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Signature:
    	
 
    
	
 
    	
  duly   authorized
    	
 
    	
 
    	
  duly   authorized
    
	
Name:
    	
 
    	
 
    	
Print   Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
								

 

	
OBSERVER
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:Exhibit 10.5

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of June 7, 2012 (the “Effective Date”) among OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 133 North Fairfax Street, Alexandria, Virginia 22314 (“Oxford”), as collateral agent (in such capacity, “Collateral Agent”), the Lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to time including Oxford in its capacity as a Lender, SILICON VALLEY BANK, a California corporation with an office located at 3003 Tasman Drive, Santa Clara, CA 95054 (“SVB”), and MIDCAP FINANCIAL SBIC, LP, a Delaware limited partnership, with an office located at 7255 Woodmont Avenue, Suite 200, Bethesda, Maryland 20814 (“MidCap”) (each a “Lender” and collectively, the “Lenders”), and ACCELERON PHARMA INC., a Delaware corporation with offices located at 128 Sidney Street, Cambridge, Massachusetts 02139 (“Borrower”), provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders.  The parties agree as follows:

 

1.             ACCOUNTING AND OTHER TERMS

 

1.1          Accounting terms not defined in this Agreement shall be construed in accordance with GAAP.  Calculations and determinations must be made in accordance with GAAP.  Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13.  All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.  All references to “Dollars” or “$” are United States Dollars, unless otherwise noted.

 

2.             LOANS AND TERMS OF PAYMENT

 

2.1          Promise to Pay.  Borrower hereby unconditionally promises to pay each Lender, the outstanding principal amount of all Term Loans advanced to Borrower by such Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when due in accordance with this Agreement.

 

2.2          Term Loans.

 

(a)           Availability.  Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, on the Effective Date, to make term loans to Borrower in an aggregate amount of Twenty Million Dollars ($20,000,000) (the “Term Loan Amount”) according to each Lender’s Term Loan Commitment Percentage as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term Loan”, and collectively as the “Term Loans”).  After repayment, no Term Loan may be re-borrowed.

 

(b)           Repayment.  Borrower shall make monthly payments of interest only (in arrears) commencing on the first (1st) Payment Date following the Funding Date of the Term Loans, and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the Amortization Date.  Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal and interest, in arrears, to each Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s Term Loans, (2) the effective rate of interest, as determined in Section 2.3(a), and (3) a repayment schedule beginning on the Amortization Date and ending on the Maturity Date.  All unpaid principal and accrued and unpaid interest with respect to the Term Loans is due and payable in full on the Maturity Date.  The Term Loans may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).

 

(c)           Mandatory Prepayments.  If the Term Loans are accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Lenders, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of:  (i) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (ii) the Final Payment, (iii) the Prepayment Fee, plus (iv) all other Obligations that are due and payable, including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts in accordance with Section 2.3(b).  Notwithstanding (but without duplication with) the foregoing, on the Maturity Date, if the Final Payment had not previously been paid in full in connection

 

 

with the prepayment of the Term Loans in full, Borrower shall pay to Collateral Agent, for payment to each Lender in accordance with its respective Pro Rata Share, the Final Payment in respect of the Term Loan(s).

 

(d)           Permitted Prepayment of Term Loans.  Borrower shall have the option to prepay all or a portion of the Term Loans advanced by the Lenders under this Agreement, provided Borrower (i) provides written notice to Collateral Agent of its election to prepay the Term Loans or a portion thereof at least thirty (30) days prior to such prepayment, and (ii) (x) in the case of prepayment of the aggregate outstanding principal amount of the Term Loans, pays to the Lenders on the date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (A) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, plus (B) the Final Payment, plus (C) the Prepayment Fee, plus (D) all other Obligations that are due and payable, including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts in accordance with Section 2.3(b), and (y) in the case of prepayment of a portion of the Term Loans, pays to the Lenders on the date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (A) all outstanding principal of the portion of the Term Loans being prepaid plus accrued and unpaid interest thereon through the prepayment date, plus (B) the Final Payment allocable to the portion of the Term Loans being prepaid , plus (C) the Prepayment Fee in respect of the Term Loans being prepaid, plus (D) all other Obligations that are then due and payable, including Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts in accordance with Section 2.3(b).  Partial prepayments of the Term Loans and the Final Payment payable in connection therewith shall be allocated and applied pro rata among the outstanding Term Loans.

 

2.3          Payment of Interest on the Credit Extensions.

 

(a)           Interest Rate.  Subject to Section 2.3(b), the principal amount outstanding under the Term Loans shall accrue interest at a fixed per annum rate (which rate shall be fixed for the duration of the applicable Term Loan) equal to the Basic Rate, determined by Collateral Agent on the Funding Date of the Term Loans, which interest shall be payable monthly in arrears in accordance with Sections 2.2(b) and 2.3(e). Interest shall accrue on each Term Loan commencing on, and including, the Funding Date of the Term Loans, and shall accrue on the principal amount outstanding under such Term Loan through and including the day on which such Term Loan is paid in full.

 

(b)           Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall accrue interest at a fixed per annum rate equal to the rate that is otherwise applicable thereto plus five percentage points (5.00%) (the “Default Rate”).  Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent.

 

(c)           360-Day Year.  Interest shall be computed on the basis of a three hundred sixty (360) day year consisting of twelve (12) months of thirty (30) days.

 

(d)           Debit of Accounts.  Collateral Agent and each Lender may debit (or ACH) any deposit accounts, maintained by Borrower or any of its Subsidiaries, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes the Lenders under the Loan Documents when due.  Any such debits (or ACH activity) shall not constitute a set-off.

 

(e)           Payments.  Except as otherwise expressly provided herein, all payments by Borrower under the Loan Documents shall be made to the respective Lender to which such payments are owed, at such Lender’s office in immediately available funds on the date specified herein. Unless otherwise provided, interest is payable monthly on the Payment Date of each month.  Payments of principal and/or interest received after 12:00 noon Eastern time are considered received at the opening of business on the next Business Day.  When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable, shall continue to accrue until paid. All payments to be made by Borrower hereunder or under any other Loan Document, including payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be made without set-off, recoupment or counterclaim, in lawful money of the United States and in immediately available funds.

 

2

 

2.4          Secured Promissory Notes.  The Term Loans shall be evidenced by a Secured Promissory Note or Notes in the form attached as Exhibit D hereto (each a “Secured Promissory Note”), and shall be repayable as set forth in this Agreement.  Borrower irrevocably authorizes each Lender to make or cause to be made, on or about the Funding Date of the Term Loans or at the time of receipt of any payment of principal on such Lender’s Secured Promissory Note, an appropriate notation on such Lender’s Secured Promissory Note Record reflecting the making of such Term Loan or (as the case may be) the receipt of such payment.  The outstanding amount of each Term Loan set forth on such Lender’s Secured Promissory Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender’s Secured Promissory Note Record shall not limit or otherwise affect the obligations of Borrower under any Secured Promissory Note or any other Loan Document to make payments of principal of or interest on any Secured Promissory Note when due.  Upon receipt of an affidavit of an officer of a Lender as to the loss, theft, destruction, or mutilation of its Secured Promissory Note, Borrower shall issue, in lieu thereof, a replacement Secured Promissory Note in the same principal amount thereof and of like tenor.

 

2.5          Fees.  Borrower shall pay to Collateral Agent:

 

(a)           Closing Fee.  A fully earned, non-refundable closing fee equal to Two Hundred Thousand ($200,000) to be shared among the Lenders pursuant to their respective Commitment Percentages (the “Term Loan Fee”).  Borrower paid and the Lenders received One Hundred Thousand Dollars ($100,000) of the Term Loan Fee prior to the Effective Date.  The remaining One Hundred Thousand Dollars ($100,000) of the Term Loan Fee shall be due and payable on the Effective Date.

 

(b)           Final Payment.  The Final Payment, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata Shares;

 

(c)           Prepayment Fee.  The Prepayment Fee, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata Shares; and

 

(d)           Lenders’ Expenses.  All Lenders’ Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due (and in the absence of any other due date specified herein, such Lenders’ Expenses shall be due within five (5) days of demand therefor).

 

2.6          Withholding.  Payments received by the Lenders from Borrower hereunder will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any governmental authority (including any interest, additions to tax or penalties applicable thereto).  Specifically, however, if at any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder to the Lenders, Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction, each Lender receives a net sum equal to the sum which it would have received had no withholding or deduction been required and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority.  Borrower will, upon request, furnish the Lenders with proof reasonably satisfactory to the Lenders indicating that Borrower has made such withholding payment; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Borrower.  The agreements and obligations of Borrower contained in this Section 2.6 shall survive the termination of this Agreement.

 

2.7          SBIC Acknowledgement.  Borrower acknowledges that MidCap has notified Borrower that MidCap is a Federal licensee under the Small Business Investment Act of 1958, as amended.

 

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3.             CONDITIONS OF LOANS

 

3.1          Conditions Precedent to Initial Credit Extension.  Each Lender’s obligation to make a Term  Loan is subject to the condition precedent that Collateral Agent and each Lender shall consent to or shall have received, in form and substance satisfactory to Collateral Agent and each Lender, such documents, and completion of such other matters, as Collateral Agent and each Lender may reasonably deem necessary or appropriate, including, without limitation:

 

(a)           this Agreement, each Secured Promissory Note to be issued on the Effective Date, the Investment Letter, and the Post-Closing Letter, each duly executed by Borrower;

 

(b)           duly executed original Secured Promissory Notes in favor of each Lender according to its Term Loan Commitment Percentage;

 

(c)           the Operating Documents of Borrower and good standing certificates of Borrower certified by the Secretary of State of the State of Delaware as of a date no earlier than thirty (30) days prior to the Effective Date;

 

(d)           a completed Perfection Certificate;

 

(e)           the Annual Projections, for the current fiscal year;

 

(f)            duly executed original officer’s certificate for Borrower, in a form acceptable to Collateral Agent and the Lenders;

 

(g)           certified copies, dated as of date no earlier than thirty (30) days prior to the Effective Date, of financing statement searches, as Collateral Agent shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the Credit Extension on the Effective Date, will be terminated or released;

 

(h)           a duly executed legal opinion of counsel to Borrower dated as of the Effective Date;

 

(i)            evidence satisfactory to Collateral Agent and the Lenders that the insurance policies required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Collateral Agent, for the ratable benefit of the Lenders;

 

(j)            completed SBA Forms 480, 652 and 1031 by Borrower; and

 

(k)           payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof.

 

3.2          Conditions Precedent to all Credit Extensions.  The obligation of each Lender to make each Credit Extension is subject to the following conditions precedent:

 

(a)           receipt by (i) the Lenders of an executed Disbursement Letter in the form of Exhibit B-1 attached hereto; and (ii) SVB of an executed Loan Payment/Advance Request Form in the form of Exhibit B-2 attached hereto];

 

(b)           the representations and warranties in Section 5 hereof shall be true, accurate and complete in all material respects on the date of the Disbursement Letter (and the Loan Payment/Advance Request Form) and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the Credit Extension.  Each Credit Extension is Borrower’s representation and warranty

 

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on that date that the representations and warranties in Section 5 hereof are true, accurate and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and

 

(c)           in such Lender’s sole, but reasonable discretion, there has not been any Material Adverse Change or any material adverse deviation by Borrower from the Annual Projections of Borrower presented to and accepted by Collateral Agent and each Lender.

 

3.3          Covenant to Deliver.  Borrower agrees to deliver to Collateral Agent and the Lenders each item required to be delivered to Collateral Agent under this Agreement as a condition precedent to any Credit Extension.  Borrower expressly agrees that a Credit Extension made prior to the receipt by Collateral Agent or any Lender of any such item shall not constitute a waiver by Collateral Agent or any Lender of Borrower’s obligation to deliver such item, and any such Credit Extension in the absence of a required item shall be made in each Lender’s sole discretion.

 

3.4          Procedures for Borrowing.  Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan set forth in this Agreement, to obtain a Term Loan, Borrower shall notify the Lenders (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time one (1) Business Day prior to the date the Term Loan is to be made.  Together with any such electronic, facsimile or telephonic notification, Borrower shall deliver to the Lenders by electronic mail or facsimile a completed Disbursement Letter (and the Loan Payment/Advance Request Form, with respect to SVB) executed by a Responsible Officer or his or her designee.  The Lenders may rely on any telephone notice given by a person whom a Lender reasonably believes is a Responsible Officer or designee.  On the Funding Date, each Lender shall credit and/or transfer (as applicable) to the Designated Deposit Account, an amount equal to its Term Loan Commitment.

 

4.             CREATION OF SECURITY INTEREST

 

4.1          Grant of Security Interest.  Borrower hereby grants Collateral Agent, for the ratable benefit of the Lenders, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Collateral Agent, for the ratable benefit of the Lenders, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.  Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral, subject only to Permitted Liens that are permitted by the terms of this Agreement to have priority to Collateral Agent’s Lien.  If Borrower shall acquire a commercial tort claim (as defined in the Code) with a value in excess of One Hundred Thousand Dollars ($100,000.00), Borrower, shall promptly notify Collateral Agent in a writing signed by Borrower, as the case may be, of the general details thereof (and further details as may be required by Collateral Agent) and grant to Collateral Agent, for the ratable benefit of the Lenders, in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Collateral Agent.

 

Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank Services Agreements with SVB.  Regardless of the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes SVB thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and SVB to have all such Obligations secured by the first priority perfected security interest in the Collateral granted herein (subject only to Permitted Liens that may have superior priority to SVB’s Lien in this Agreement).]

 

If this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash.  Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as the Lenders’ obligation to make Credit Extensions has terminated, Collateral Agent shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower.   In the event (x) all Obligations (other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (y) this Agreement is terminated, SVB shall terminate the security interest granted herein upon Borrower providing cash collateral in respect of any

 

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outstanding obligations relating to Bank Services at such time reasonably acceptable to SVB in its good faith business judgment.  In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to SVB cash collateral in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then one hundred percent (100%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then one hundred ten percent (110%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by SVB in its good faith business judgment), to secure all of the Obligations relating  to such  Letters of Credit.

 

4.2          Authorization to File Financing Statements.  Borrower hereby authorizes Collateral Agent to file financing statements or take any other action required to perfect Collateral Agent’s security interests in the Collateral, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Collateral Agent’s interest or rights under the Loan Documents, including a notice that any disposition of the Collateral, except to the extent permitted by the terms of this Agreement, by Borrower, or any other Person, shall be deemed to violate the rights of Collateral Agent under the Code.

 

5.             REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to Collateral Agent and the Lenders as follows at all times:

 

5.1          Due Organization, Authorization: Power and Authority.  Borrower and each of its Subsidiaries is duly existing and in good standing as a Registered Organization in its jurisdictions of organization or formation and Borrower and each of its Subsidiaries is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its businesses or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to result in a Material Adverse Change.  In connection with this Agreement, Borrower and each of its Subsidiaries has delivered to Collateral Agent a completed perfection certificate signed by an officer of Borrower or such Subsidiary (each a “Perfection Certificate” and collectively, the “Perfection Certificates”).  Borrower represents and warrants that (a) Borrower and each of its Subsidiary’s exact legal name is that which is indicated on its respective Perfection Certificate and on the signature page of each Loan Document to which it is a party; (b) Borrower and each of its Subsidiaries is an organization of the type and is organized in the jurisdiction set forth on its respective Perfection Certificate; (c) each Perfection Certificate accurately sets forth each of Borrower’s and its Subsidiaries’ organizational identification number or accurately states that Borrower or such Subsidiary has none; (d) each Perfection Certificate accurately sets forth Borrower’s and each of its Subsidiaries’ place of business, or, if more than one, its chief executive office as well as Borrower’s and each of its Subsidiaries’ mailing address (if different than its chief executive office); (e) Borrower and each of its Subsidiaries (and each of its respective predecessors) have not, in the past five (5) years, changed its jurisdiction of organization, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificates pertaining to Borrower and each of its Subsidiaries, is accurate and complete (it being understood and agreed that Borrower and each of its Subsidiaries may from time to time update certain information in the Perfection Certificates (including the information set forth in clause (d) above) after the Effective Date to the extent permitted by one or more specific provisions in this Agreement); such updated Perfection Certificates subject to the review and approval of Collateral Agent.  If Borrower or any of its Subsidiaries is not now a Registered Organization but later becomes one, Borrower shall notify Collateral Agent of such occurrence and provide Collateral Agent with such Person’s organizational identification number within five (5) Business Days of receiving such organizational identification number.

 

The execution, delivery and performance by Borrower and each of its Subsidiaries of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s or such Subsidiaries’ organizational documents, including its respective Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law applicable thereto, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or such Subsidiary, or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect) or are being obtained pursuant to Section 6.1(b), or (v) constitute an event of default under any material agreement by which Borrower or any of such Subsidiaries, or their respective properties, is bound.  Neither Borrower nor any of

 

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its Subsidiaries is in default under any agreement to which it is a party or by which it or any of its assets is bound in which such default could reasonably be expected to result in a Material Adverse Change.

 

5.2          Collateral.

 

(a)           Borrower and each its Subsidiaries have good title to, have rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien under the Loan Documents, free and clear of any and all Liens except Permitted Liens, and neither Borrower nor any of its Subsidiaries have any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the Collateral Accounts or the other investment accounts, if any, described in the Perfection Certificates delivered to Collateral Agent in connection herewith with respect of which Borrower or such Subsidiary has given Collateral Agent notice and taken such actions as are necessary to give Collateral Agent a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors.

 

(b)           On the Effective Date, and except as disclosed on the Perfection Certificate (i) the Collateral is not in the possession of any third party bailee (such as a warehouse), and (ii)  no such third party bailee possesses components of the Collateral in excess of Fifty Thousand Dollars ($50,000.00).  None of the components of the Collateral shall be maintained at locations other than as disclosed in the Perfection Certificates on the Effective Date or as permitted pursuant to Section 6.11.

 

(c)           All Inventory is in all material respects of good and marketable quality, free from material defects.

 

(d)           Borrower and each of its Subsidiaries is the sole owner of the Intellectual Property each respectively purports to own, free and clear of all Liens other than Permitted Liens.  (i) Each of Borrower’s and its Subsidiaries’ Patents is valid and enforceable and no part of Borrower’s or its Subsidiaries’ Intellectual Property has been judged invalid or unenforceable, in whole or in part, and (ii) to the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property or any practice by Borrower or its Subsidiaries violates the rights of any third party except to the extent such claim could not reasonably be expected to result in a Material Adverse Change. Except as noted on the Perfection Certificates, neither Borrower nor any of its Subsidiaries is a party to, nor is bound by, any material license or other material agreement with respect to which Borrower or such Subsidiary is the licensee that (i) prohibits or otherwise restricts Borrower or its Subsidiaries from granting a security interest in Borrower’s or such Subsidiaries’ interest in such material license or material agreement or any other material property, or (ii) for which a default under or termination of could interfere with Collateral Agent’s or any Lender’s right to sell any Collateral.  Borrower shall provide written notice to Collateral Agent and each Lender within ten (10) days of Borrower or any of its Subsidiaries entering into or becoming bound by any such license or agreement with respect to which Borrower or any Subsidiary is the licensee (other than over-the-counter software that is commercially available to the public).  Borrower shall, and shall cause its Subsidiaries to, take such commercially reasonable steps as Collateral Agent and any Lender requests to obtain the consent of, or waiver by, any Person whose consent or waiver is necessary for (i) all such licenses or agreements with respect to which Borrower or any Subsidiary is the licensee to be deemed “Collateral” and for Collateral Agent and each Lender to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement, whether now existing or entered into in the future, and (ii) Collateral Agent and each Lender shall have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Collateral Agent’s and such Lender’s rights and remedies under this Agreement and the other Loan Documents.

 

5.3          Litigation.  Except as disclosed (i) on the Perfection Certificates, or (ii) in accordance with Section 6.9 hereof, there are no actions, suits, investigations, or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than Seventy-Five Thousand Dollars ($75,000.00).

 

5.4          No Material Deterioration in Financial Condition; Financial Statements.  All consolidated financial statements for Borrower and its Subsidiaries, delivered to Collateral Agent fairly present, in conformity with GAAP, in all material respects the consolidated financial condition of Borrower and its Borrower’s Subsidiaries, and the consolidated results of operations of Borrower and its Subsidiaries.  There has not been any

 

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material deterioration in the consolidated financial condition of Borrower and its Subsidiaries since the date of the most recent financial statements submitted to any Lender.

 

5.5          Solvency.  Borrower and each of its Subsidiaries is Solvent.

 

5.6          Regulatory Compliance.  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.  Neither 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 nor any of its Subsidiaries has violated any laws, ordinances or rules, the violation of which could reasonably be expected to result in a Material Adverse Change.  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 consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.

 

None of Borrower, any of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or 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 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, any of its Subsidiaries, or to the knowledge of Borrower and any of their 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.

 

5.7          Investments.  Neither Borrower nor any of its Subsidiaries owns any stock, shares, partnership interests or other equity securities except for Permitted Investments.

 

5.8          Tax Returns and Payments; Pension Contributions.  Borrower and each of its Subsidiaries has timely filed all required tax returns and reports, and Borrower and each of its Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower and such Subsidiaries, in all jurisdictions in which Borrower or any such Subsidiary is subject to taxes, including the United States, unless such taxes are being contested in accordance with the following sentence.  Borrower and each of its Subsidiaries, may defer payment of any contested taxes, provided that Borrower or such Subsidiary, (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Collateral Agent in writing of the commencement of, and any material development in, the proceedings, and (c) posts bonds or takes any other steps required to prevent the Governmental Authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.”  Neither Borrower nor any of its Subsidiaries is aware of any claims or adjustments proposed for any of Borrower’s or such Subsidiaries’, prior tax years which could result in additional taxes becoming due and payable by Borrower or its Subsidiaries.  Borrower and each of its Subsidiaries have paid all material amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and neither Borrower nor any of its Subsidiaries have, withdrawn from participation in, and have not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any material liability of Borrower or its Subsidiaries, including any material liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority. For purposes of the foregoing sentence of this Section 5.8 “material” shall mean any amount or liability, individually or in the aggregate, in excess of $100,000.

 

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5.9          Use of Proceeds.  Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements in accordance with the provisions of this Agreement, and not for personal, family, household or agricultural purposes.   A portion of the proceeds of the initial Credit Extension shall be used on the Effective Date to repay in full the Existing Facility.

 

5.10        Full Disclosure.  No written representation, warranty or other statement of Borrower or any of its Subsidiaries in any certificate or written statement given to Collateral Agent or any Lender, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Collateral Agent or any Lender, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

 

5.11        Definition of “Knowledge.”  For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of the Responsible Officers.

 

6.             AFFIRMATIVE COVENANTS

 

Borrower shall, and shall cause each of its Subsidiaries to, do all of the following:

 

6.1          Government Compliance.

 

(a)           Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of organization and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Change.  Comply with all laws, ordinances and regulations to which Borrower or any of its Subsidiaries is subject, the noncompliance with which could reasonably be expected to result in a Material Adverse Change.

 

(b)           Obtain and keep in full force and effect, all of the Governmental Approvals necessary for the performance by Borrower and its Subsidiaries of their respective businesses and obligations under the Loan Documents and the grant of a security interest to Collateral Agent for the ratable benefit of the Lenders, in all of the Collateral.  Borrower shall promptly provide copies to Collateral Agent of any material Governmental Approvals obtained by Borrower or any of its Subsidiaries.

 

6.2          Financial Statements, Reports, Certificates.

 

(a)           Deliver to each Lender:

 

(i)            as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated and consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of Borrower and its Subsidiaries, for such month certified by a Responsible Officer and in a form reasonably acceptable to Collateral Agent;

 

(ii)           as soon as available, but no later than one hundred eighty (180) days after the last day of Borrower’s fiscal year or within five (5) days of filing with the SEC, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm acceptable to Collateral Agent in its reasonable discretion;

 

(iii)          as soon as available after review thereof by Borrower’s Board of Directors, but no later than thirty (30) days after the last day of each of Borrower’s fiscal years, Borrower’s annual financial projections for the entire current fiscal year as approved by Borrower’s Board of Directors, which such annual

 

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financial projections shall be set forth in a month-by-month format (such annual financial projections as originally delivered to Collateral Agent and the Lenders are referred to herein as the “Annual Projections”; provided that, any revisions of the Annual Projections approved by Borrower’s Board of Directors shall be delivered to Collateral Agent and the Lenders no later than seven (7) days after such approval; and, unless Collateral Agent notifies Borrower to the contrary in writing within thirty (30) days after receipt thereof, the term “Annual Projections” shall include such revisions);

 

(iv)          within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or holders of Subordinated Debt;

 

(v)           in the event that Borrower becomes subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission;

 

(vi)          prompt notice of (A) any material change in the composition of the Intellectual Property, (B) notice of the registration of any copyright, including any subsequent ownership right of Borrower or any of its Subsidiaries in or to any copyright, patent or trademark, and (C) prompt notice of Borrower’s knowledge of any event that could reasonably be expected to materially and adversely affect the value of the Intellectual Property;

 

(vii)         as soon as available, but no later than thirty (30) days after the last day of each month, copies of the month-end account statements for each deposit account or securities account maintained by Borrower or its Subsidiaries, which statements may be provided to Collateral Agent and each Lender by Borrower or directly from the applicable institution(s);

 

(viii)        Within ninety (90) days after the end of each fiscal year of Borrower, and at such other times as MidCap may reasonably request to the extent related to SBA regulations, Borrower shall provide to MidCap such forms and financial and other information with respect to any business or financial condition of Borrower or any of its Subsidiaries required by the SBA, including, but not limited to (i) forms and information with respect to MidCap’s or any Lender’s reporting requirements under SBA Form 468 (attached hereto as Exhibit F) and (ii) information regarding the full-time equivalent jobs created or retained in connection with any Lender’s investment in Borrower, the impact of the financing on Borrower’s business in terms of revenues and profits and on taxes paid by Borrower and its employees.

 

(ix)          Upon request of MidCap, the Borrower shall use commercially reasonable efforts to promptly (and in any event within twenty (20) days of such request) furnish to MidCap all information reasonably requested, to the extent reasonably available to the Borrower in order for MidCap or any Lender to comply with the requirements of 13 C.F.R. Section 107.620 or to prepare or file SBA Form 468 and any other information requested or required by the SBA;

 

(x)           other financial information as reasonably requested by Collateral Agent or any Lender.

 

Notwithstanding the foregoing, documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address.

 

(b)           Concurrently with the delivery of the financial statements specified in Section 6.2(a)(i) above but no later than thirty (30) days after the last day of each month, deliver to each Lender, a duly completed Compliance Certificate signed by a Responsible Officer.

 

(c)           Keep proper books of record and account in accordance with GAAP in all material respects, in which full, true and correct entries in all material respects shall be made of all dealings and transactions in relation to its business and activities.  Borrower shall, and shall cause each of its Subsidiaries to, allow, at the sole

 

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cost of Borrower, Collateral Agent or any Lender, during regular business hours upon reasonable prior notice (provided that no notice shall be required when an Event of Default has occurred and is continuing), to visit and inspect any of its properties, to examine and make abstracts or copies from any of its books and records, and to conduct a collateral audit and analysis of its operations and the Collateral.  Such audits shall be conducted no more often than twice every year unless (and more frequently if) an Event of Default has occurred and is continuing.

 

6.3          Inventory; Returns.  Keep all Inventory in good and marketable condition, free from material defects except for Inventory for which adequate reserves have been made.  Returns and allowances between Borrower, or any of its Subsidiaries, and their respective Account Debtors shall follow Borrower’s, or such Subsidiary’s, customary practices as they exist at the Effective Date.  Borrower must promptly notify Collateral Agent and the Lenders of all returns, recoveries, disputes and claims that involve more than One Hundred Thousand Dollars ($100,000.00) individually or in the aggregate in any calendar year.

 

6.4          Taxes; Pensions.  Timely file and require each of its Subsidiaries to timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely file, all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower or its Subsidiaries, except for deferred payment of any taxes contested pursuant to the terms of Section 5.8 hereof, and shall deliver to Lenders, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with the terms of such plans.

 

6.5          Insurance.  Keep Borrower’s and its Subsidiaries’ business and the Collateral insured for risks and in amounts standard for companies in Borrower’s and its Subsidiaries’ industry and location and as Collateral Agent may reasonably request.  Insurance policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to Collateral Agent and Lenders.  All property policies shall have a lender’s loss payable endorsement showing Collateral Agent as lender loss payee and waive subrogation against Collateral Agent, and all liability policies shall show, or have endorsements showing, Collateral Agent, as additional insured.  The Collateral Agent shall be named as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Collateral Agent, that it will give the Collateral Agent thirty (30) days prior written notice before any such policy or policies shall be materially altered or canceled. At Collateral Agent’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments.  Proceeds payable under any policy shall, at Collateral Agent’s option, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the Obligations.  Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to Fifty Thousand Dollars ($50,000.00) with respect to any loss, but not exceeding One Hundred Thousand Dollars ($100,000.00), in the aggregate for all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Collateral Agent has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Collateral Agent, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the Obligations.  If Borrower or any of its Subsidiaries fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons, Collateral Agent and/or any Lender may make, at Borrower’s expense, all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Collateral Agent or such Lender deems prudent.

 

6.6          Operating Accounts.

 

(a)           Maintain all of Borrower’s  Collateral Accounts, operating and investment accounts with Silicon Valley Bank, which accounts are subject to Control Agreements in favor of Collateral Agent; provided that deposits and investments in excess of $50,000,000 may be maintained in Collateral Accounts, operating and investment accounts with an institution other than Silicon Valley Bank, provided such Collateral Accounts, operating and investment accounts are subject to Control Agreements in favor of Collateral Agent.

 

(b)           Borrower shall provide Collateral Agent five (5) days’ prior written notice before Borrower or any of its Subsidiaries establishes any Collateral Account at or with any Person other than Silicon

 

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Valley Bank or its Affiliates.  In addition, for each Collateral Account that Borrower or any of its Subsidiaries, at any time maintains, Borrower or such Subsidiary shall cause the applicable bank or financial institution (other than Silicon Valley Bank) at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Collateral Agent’s Lien in such Collateral Account in accordance with the terms hereunder prior to the establishment of such Collateral Account, which Control Agreement may not be terminated without prior written consent of Collateral Agent.  The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s, or any of its Subsidiaries’, employees and identified to Collateral Agent by Borrower as such in the Perfection Certificates.

 

(c)                                  Neither Borrower nor any of its Subsidiaries shall maintain any Collateral Accounts except Collateral Accounts maintained in accordance with Sections 6.6(a) and (b).

 

6.7                               Protection of Intellectual Property Rights.  Borrower and each of its Subsidiaries shall: (a) use commercially reasonable efforts to protect, defend and maintain the validity and enforceability of its Intellectual Property that is material to Borrower’s business; (b) promptly advise Collateral Agent in writing of material infringement by a third party of its Intellectual Property; and (c) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Collateral Agent’s prior written consent.

 

6.8                               Litigation Cooperation.  Commencing on the Effective Date and continuing through the termination of this Agreement, make available to Collateral Agent and the Lenders, without expense to Collateral Agent or the Lenders, Borrower and each of Borrower’s officers, employees and agents and Borrower’s Books, to the extent that Collateral Agent or any Lender may reasonably deem them necessary to prosecute or defend any third-party suit or proceeding instituted by or against Collateral Agent or any Lender with respect to any Collateral or relating to Borrower.

 

6.9                               Notices of Litigation and Default.  Borrower will give prompt written notice to Collateral Agent and the Lenders of any litigation or governmental proceedings pending or threatened (in writing) against Borrower or any of its Subsidiaries, which could reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of Seventy-Five Thousand Dollars ($75,000.00) or more or which could reasonably be expected to have a Material Adverse Change.  Without limiting or contradicting any other more specific provision of this Agreement, promptly (and in any event within three (3) Business Days) upon Borrower becoming aware of the existence of any Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, Borrower shall give written notice to Collateral Agent and the Lenders of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default.

 

6.10                        Intentionally Omitted.

 

6.11                        Landlord Waivers; Bailee Waivers.  In the event that Borrower or any of its Subsidiaries, after the Effective Date, intends to add any new offices or business locations, including warehouses, or otherwise store any portion of the Collateral with, or deliver any portion of the Collateral to, a bailee, in each case pursuant to Section 7.2, then Borrower or such Subsidiary will first provide the written notice thereof to Collateral Agent and, in the event that the Collateral at any new location has a value in excess of Fifty Thousand ($50,000.00) in the aggregate, such bailee or landlord, as applicable, must execute and deliver a bailee waiver or landlord waiver, as applicable, in form and substance reasonably satisfactory to Collateral Agent prior to the addition of any new offices or business locations, or any such storage with or delivery to any such bailee, as the case may be.

 

6.12                        Creation/Acquisition of Subsidiaries.  In the event Borrower, or any of its Subsidiaries creates or acquires any Subsidiary, Borrower shall provide prior written notice to Collateral Agent and each Lender of the creation or acquisition of such new Subsidiary and, within thirty (30) days of the formation or acquisition of such new Subsidiary, take all such action as may be reasonably required by Collateral Agent or any Lender to cause each such Subsidiary to become a co-Borrower hereunder or to guarantee the Obligations of Borrower under the Loan Documents and, in each case, grant a continuing pledge and security interest in and to the assets of such Subsidiary (substantially as described on Exhibit A hereto); and , within thirty (30) days of the formation or acquisition of such

 

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new Subsidiary, Borrower shall grant and pledge to Collateral Agent, for the ratable benefit of the Lenders, a perfected security interest in the stock, units or other evidence of ownership of each such Subsidiary.

 

6.13                        Further Assurances.

 

(a)                                 Execute any further instruments and take further action as Collateral Agent or any Lender reasonably requests to perfect or continue Collateral Agent’s Lien in the Collateral or to effect the purposes of this Agreement.

 

(b)                                 Deliver to Collateral Agent and Lenders, within five (5) days after the same are sent or received, copies of all material correspondence, reports, documents and other filings with any Governmental Authority that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals material to Borrower’s business or otherwise could reasonably be expected to result in a Material Adverse Change.

 

6.14                        Right to Invest.  Borrower shall grant to each Lender a right to invest in Borrower’s future private equity rounds on the terms and conditions as more fully set forth in the Investment Letter.

 

6.15                        Post-Closing Obligations.  Within forty-five (45) days following the Effective Date, the Borrower shall deliver (or cause to be delivered) the documents set forth on Schedule 1.2.

 

7.                                      NEGATIVE COVENANTS

 

Borrower shall not, and shall not permit any of its Subsidiaries to, do any of the following without the prior written consent of the Required Lenders:

 

7.1                               Dispositions.  Convey, sell, lease, transfer, assign, dispose of or otherwise make cash payments (excluding payments of operating expenses in the ordinary course of business consistent with the Annual Projections) (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers; (b) of Inventory in the ordinary course of business; (c) of worn-out or obsolete Equipment; and (d) in connection with Permitted Liens, Permitted Investments and Permitted Licenses.

 

7.2                               Changes in Business, Management, Ownership, or Business Locations.  (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses engaged in by Borrower as of the Effective Date or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) have a change in senior management (unless such change is approved by the Borrower’s Board of Directors and implemented within ninety (90) days with the consent of the Lenders), or (ii) enter into any transaction or series of related transactions in which the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than forty nine percent (49%) of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions (other than by the sale of Borrower’s equity securities in a public offering, a private placement of public equity or to venture capital investors so long as Borrower identifies to Collateral Agent the venture capital investors prior to the closing of the transaction).  Borrower shall not, without at least thirty (30) days’ prior written notice to Collateral Agent: (A) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Fifty Thousand Dollars ($50,000.00) in assets or property of Borrower or any of its Subsidiaries); (B) change its jurisdiction of organization, (C) change its organizational structure or type, (D) change its legal name, or (E) change any organizational number (if any) assigned by its jurisdiction of organization.

 

7.3                               Mergers or Acquisitions.  Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock, shares or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary (provided such surviving Subsidiary is a “co-Borrower” hereunder or has provided a secured Guaranty of Borrower’s Obligations hereunder) or with (or into) Borrower provided Borrower is the surviving legal entity, and as long as no Event of Default is occurring prior thereto or arises as a result therefrom. Without limiting the foregoing, Borrower shall not, without the prior written consent of the Required Lenders, enter into any binding contractual arrangement with any Person to attempt to facilitate a merger or acquisition of Borrower, unless (i) no

 

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Event of Default exists when such agreement is entered into by Borrower, (ii) such agreement does not give such Person the right to claim any fee, payment or damages from any parties in connection with a sale of Borrower’s stock or assets pursuant to or resulting from an assignment for the benefit of creditors, an asset turnover to Borrower’s creditors (including, without limitation, Collateral Agent and/or the Lenders), foreclosure, bankruptcy or similar liquidation, and (iii) Borrower notifies Collateral Agent in advance of entering into such an agreement.

 

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

 

7.5                               Encumbrance.  Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein (except for Permitted Liens that are permitted by the terms of this Agreement to have priority over Collateral Agent’s Lien), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Collateral Agent, for the ratable benefit of the Lenders) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or such Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.

 

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

 

7.7                               Distributions; Investments. (a) Pay any dividends (other than dividends payable solely in capital stock) or make any distribution or payment in respect of or redeem, retire or purchase any capital stock (other than repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements, stockholder rights plans, director or consultant stock option plans, or similar plans, provided such repurchases do not exceed One Hundred Thousand Dollars ($100,000.00) in the aggregate per fiscal year), or (b) directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so.

 

7.8                               Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower or any of its Subsidiaries, except for (a) transactions that are in the ordinary course of Borrower’s or such Subsidiary’s business, upon fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would be obtained in an arm’s length transaction with a non-affiliated Person, and (b) Subordinated Debt or equity investments by Borrower’s investors in Borrower or its Subsidiaries.

 

7.9                               Subordinated Debt.  (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to the Lenders.

 

7.10                        Compliance.  Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to result in a Material Adverse Change, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.

 

7.11                        Compliance with Anti-Terrorism Laws.  Collateral Agent hereby notifies Borrower and each of its Subsidiaries that pursuant to the requirements of Anti-Terrorism Laws, and Collateral Agent’s policies and practices, Collateral Agent is required to obtain, verify and record certain information and documentation that

 

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identifies Borrower and each of its Subsidiaries and their principals, which information includes the name and address of Borrower and each of its Subsidiaries and their principals and such other information that will allow Collateral Agent to identify such party in accordance with Anti-Terrorism Laws.  Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries permit any Affiliate to, directly or indirectly, knowingly enter into any documents, instruments, agreements or contracts with any Person listed on the OFAC Lists.  Borrower and each of its Subsidiaries shall immediately notify Collateral Agent if Borrower or such 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 or predicate crimes to money laundering.  Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries, permit any Affiliate 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.

 

8.                                      EVENTS OF DEFAULT

 

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

 

8.1                               Payment Default.  Borrower fails to (a) make any payment of principal or interest on any Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day grace period shall not apply to payments due on the Maturity Date or the date of acceleration pursuant to Section 9.1 (a) hereof).  During the cure period, the failure to cure the payment default is not an Event of Default (but no Credit Extension will be made during the cure period);

 

8.2                               Covenant Default.

 

(a)                                 Borrower or any of its Subsidiaries fails or neglects to perform any obligation in Sections 6.2 (Financial Statements, Reports, Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7 (Protection of Intellectual Property Rights), 6.9 (Notice of Litigation and Default), 6.11 (Landlord Waivers; Bailee Waivers), or 6.12 (Creation/Acquisition of Subsidiaries), or Borrower violates any covenant in Section 7; or

 

(b)                                 Borrower, or any of its Subsidiaries, fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period).  Grace periods provided under this Section shall not apply, among other things, to financial covenants or any other covenants set forth in subsection (a) above;

 

8.3                               Material Adverse Change.  A Material Adverse Change occurs;

 

8.4                               Attachment; Levy; Restraint on Business.

 

(a)                                 (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or any of its Subsidiaries or of any entity under control of Borrower or its Subsidiaries on deposit with any Lender or any Lender’s Affiliate or any bank or other institution at which Borrower or any of its Subsidiaries maintains a Collateral Account, or (ii) a notice of lien, levy, or assessment is filed against Borrower or any of its

 

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Subsidiaries assets by any government agency, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; and

 

(b)                                 (i) any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower or any of its Subsidiaries from conducting any part of its business;

 

8.5                               Insolvency.  (a) Borrower or any of its Subsidiaries is or becomes Insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and not dismissed or stayed within forty-five (45) days (but no Credit Extensions shall be made while Borrower or any Subsidiary is Insolvent and/or until any Insolvency Proceeding is dismissed);

 

8.6                               Other Agreements.  There is a default in any agreement to which Borrower or any of its Subsidiaries is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Fifty Thousand Dollars ($50,000.00) or that could reasonably be expected to result in a Material Adverse Change;

 

8.7                               Judgments.  One or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least Fifty Thousand Dollars ($50,000.00) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower or any of its Subsidiaries and shall remain unsatisfied, unvacated, or unstayed for a period of ten (10) days after the entry thereof (provided that no Credit Extensions will be made prior to the satisfaction, vacation, or stay of such judgment, order or decree);

 

8.8                               Misrepresentations.  Borrower or any of its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Collateral Agent and/or Lenders or to induce Collateral Agent and/or the Lenders to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made;

 

8.9                               Subordinated Debt.  A default or breach occurs under any agreement between Borrower or any of its Subsidiaries and any creditor of Borrower or any of its Subsidiaries that signed a subordination, intercreditor, or other similar agreement with Collateral Agent or the Lenders, or any creditor that has signed such an agreement with Collateral Agent or the Lenders breaches any terms of such agreement;

 

8.10                        Guaranty.  (a) Any Guaranty terminates or ceases for any reason to be in full force and effect; (b) any Guarantor does not perform any obligation or covenant under any Guaranty; (c) any circumstance described in Sections 8.3, 8.4, 8.5, 8.7, or 8.8 occurs with respect to any Guarantor; or (d) the liquidation, winding up, or termination of existence of any Guarantor; or (e) (i) a material impairment in the perfection or priority of Collateral Agent’s Lien in the collateral provided by Guarantor or in the value of such collateral or (ii) a Material Adverse Change with respect to any Guarantor;

 

8.11                        Governmental Approvals.  Any Governmental Approval shall have been revoked, rescinded, suspended, modified in an adverse manner, or not renewed in the ordinary course for a full term and such revocation, rescission, suspension, modification or non-renewal has resulted in or could reasonably be expected to result in a Material Adverse Change; or

 

8.12                        Lien Priority.  Any Lien created hereunder or by any other Loan Document shall at any time fail to constitute a valid and perfected Lien on any of the Collateral purported to be secured thereby, subject to no other Lien, other than Permitted Liens.

 

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9.                                      RIGHTS AND REMEDIES

 

9.1                               Rights and Remedies.

 

(a)                                 Upon the occurrence and during the continuance of an Event of Default, Collateral Agent may, and at the written direction of any Lender shall, without notice or demand, do any or all of the following: (i) deliver notice of the Event of Default to Borrower, (ii) by notice to Borrower declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations shall be immediately due and payable without any action by Collateral Agent or the Lenders) or (iii) by notice to Borrower suspend or terminate the obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders (but if an Event of Default described in Section 8.5 occurs all obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders shall be immediately terminated without any action by Collateral Agent or the Lenders).

 

(b)                                 Without limiting the rights of Collateral Agent and the Lenders set forth in Section 9.1(a) above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the right at the written direction of the Required Lenders, without notice or demand, to do any or all of the following:

 

(i)                                     foreclose upon and/or sell or otherwise liquidate, the Collateral;

 

(ii)                                  apply to the Obligations any (a) balances and deposits of Borrower that Collateral Agent or any Lender holds or controls, or (b) any amount held or controlled by Collateral Agent or any Lender owing to or for the credit or the account of Borrower; and/or

 

(iii)                               commence and prosecute an Insolvency Proceeding or consent to Borrower commencing any Insolvency Proceeding.

 

(c)                                  Without limiting the rights of Collateral Agent and the Lenders set forth in Sections 9.1(a) and (b) above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the right, without notice or demand, to do any or all of the following:

 

(i)                                     settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Collateral Agent considers advisable, notify any Person owing Borrower money of Collateral Agent’s security interest in such funds, and verify the amount of such account;

 

(ii)                                  make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral.  Borrower shall assemble the Collateral if Collateral Agent requests and make it available in a location as Collateral Agent reasonably designates.  Collateral Agent may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Collateral Agent a license to enter and occupy any of its premises, without charge, to exercise any of Collateral Agent’s rights or remedies;

 

(iii)                               ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, and/or advertise for sale, the Collateral.  Collateral Agent is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s and each of its Subsidiaries’ labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Collateral Agent’s exercise of its rights under this Section 9.1, Borrower’s and each of its Subsidiaries’ rights under all licenses and all franchise agreements inure to Collateral Agent, for the benefit of the Lenders;

 

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(iv)                              place a “hold” on any account maintained with Collateral Agent or the Lenders and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;

 

(v)                                 demand and receive possession of Borrower’s Books;

 

(vi)                              appoint a receiver to seize, manage and realize any of the Collateral, and such receiver shall have any right and authority as any competent court will grant or authorize in accordance with any applicable law, including any power or authority to manage the business of Borrower or any of its Subsidiaries;

 

(vii)                           subject to clauses 9.1(a) and (b), exercise all rights and remedies available to Collateral Agent and each Lender under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof);

 

(viii)                        for any Letters of Credit, demand that Borrower (i) deposit cash with SVB in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then one hundred percent (100%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then one hundred ten percent (110%), of the Dollar Equivalent of the aggregate face amount of all Letters of Credit remaining undrawn (plus all interest, fees, and costs due or to become due in connection therewith (as estimated by SVB in its good faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit; and

 

(ix)                              terminate any FX Contracts.

 

Notwithstanding any provision of this Section 9.1 to the contrary, upon the occurrence of any Event of Default, Collateral Agent shall have the right to exercise any and all remedies referenced in this Section 9.1 without the written consent of Required Lenders following the occurrence of an Exigent Circumstance.  As used in the immediately preceding sentence, “Exigent Circumstance” means any event or circumstance that, in the reasonable judgment of Collateral Agent, imminently threatens the ability of Collateral Agent to realize upon all or any material portion of the Collateral, such as, without limitation, fraudulent removal, concealment, or abscondment thereof, destruction or material waste thereof, or failure of Borrower or any of its Subsidiaries after reasonable demand to maintain or reinstate adequate casualty insurance coverage, or which, in the judgment of Collateral Agent, could reasonably be expected to result in a material diminution in value of the Collateral.

 

9.2                               Power of Attorney.  Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s or any of its Subsidiaries’ name on any checks or other forms of payment or security; (b) sign Borrower’s or any of its Subsidiaries’ name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Collateral Agent or a third party as the Code or any applicable law permits.  Borrower hereby appoints Collateral Agent as its lawful attorney-in-fact to sign Borrower’s or any of its Subsidiaries’ name on any documents necessary to perfect or continue the perfection of Collateral Agent’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and Collateral Agent and the Lenders are under no further obligation to make Credit Extensions hereunder.  Collateral Agent’s foregoing appointment as Borrower’s or any of its Subsidiaries’ attorney in fact, and all of Collateral Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Collateral Agent’s and the Lenders’ obligation to provide Credit Extensions terminates.

 

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9.3                               Protective Payments.  If Borrower or any of its Subsidiaries fail to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower or any of its Subsidiaries is obligated to pay under this Agreement or any other Loan Document, Collateral Agent may obtain such insurance or make such payment, and all amounts so paid by Collateral Agent are Lenders’ Expenses and immediately due and payable, bearing interest at the then highest applicable rate (including the Default Rate if applicable at such time), and secured by the Collateral.  Collateral Agent will make reasonable efforts to provide Borrower with notice of Collateral Agent obtaining such insurance or making such payment at the time it is obtained or paid or within a reasonable time thereafter.  No such payments by Collateral Agent are deemed an agreement to make similar payments in the future or Collateral Agent’s waiver of any Event of Default.

 

9.4                               Application of Payments and Proceeds.  Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, (a) Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Collateral Agent from or on behalf of Borrower or any of its Subsidiaries of all or any part of the Obligations, and, as between Borrower on the one hand and Collateral Agent and Lenders on the other, Collateral Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Collateral Agent may deem advisable notwithstanding any previous application by Collateral Agent, and (b) the proceeds of any sale of, or other realization upon all or any part of the Collateral shall be applied: first, to the Lenders’ Expenses; second, to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of the United States Bankruptcy Code, would have accrued on such amounts); third, to the principal amount of the Obligations outstanding; and fourth, to any other indebtedness or obligations of Borrower owing to Collateral Agent or any Lender under the Loan Documents.  Any balance remaining shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct.  In carrying out the foregoing, (x) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category, and (y) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for such category.  Any reference in this Agreement to an allocation between or sharing by the Lenders of any right, interest or obligation “ratably,” “proportionally” or in similar terms shall refer to Pro Rata Share unless expressly provided otherwise.  Collateral Agent, or if applicable, each Lender, shall promptly remit to the other Lenders such sums as may be necessary to ensure the ratable repayment of each Lender’s portion of any Term Loan and the ratable distribution of interest, fees and reimbursements paid or made by Borrower.  Notwithstanding the foregoing, a Lender receiving a scheduled payment shall not be responsible for determining whether the other Lenders also received their scheduled payment on such date; provided, however, if it is later determined that a Lender received more than its ratable share of scheduled payments made on any date or dates, then such Lender shall remit to Collateral Agent or other Lenders such sums as may be necessary to ensure the ratable payment of such scheduled payments, as instructed by Collateral Agent.  If any payment or distribution of any kind or character, whether in cash, properties or securities, shall be received by a Lender in excess of its ratable share, then the portion of such payment or distribution in excess of such Lender’s ratable share shall be received by such Lender in trust for and shall be promptly paid over to the other Lender for application to the payments of amounts due on the other Lenders’ claims.  To the extent any payment for the account of Borrower is required to be returned as a voidable transfer or otherwise, the Lenders shall contribute to one another as is necessary to ensure that such return of payment is on a pro rata basis.  If any Lender shall obtain possession of any Collateral, it shall hold such Collateral for itself and as agent and bailee for Collateral Agent and other Lenders for purposes of perfecting Collateral Agent’s security interest therein. Notwithstanding anything to the contrary herein, any warrants issued to the Lenders by Borrower, the stock issuable thereunder, any equity securities purchased by Lenders, any amounts paid thereunder, any dividends, and any other rights in connection therewith shall not be subject to the terms and conditions of this Agreement.  Nothing herein shall affect any Lender’s rights under any such warrants, stock, or other equity securities to administer, manage, transfer, assign, or exercise such warrants, stock, or other equity securities for its own account.

 

9.5                               Liability for Collateral.  So long as Collateral Agent and the Lenders comply with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Collateral Agent and the Lenders, Collateral Agent and the Lenders shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.  Borrower bears all risk of loss, damage or destruction of the Collateral.

 

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9.6                               No Waiver; Remedies Cumulative.  Failure by Collateral Agent or any Lender, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Collateral Agent or any Lender thereafter to demand strict performance and compliance herewith or therewith.  No waiver hereunder shall be effective unless signed by Collateral Agent and the Required Lenders and then is only effective for the specific instance and purpose for which it is given.  The rights and remedies of Collateral Agent and the Lenders under this Agreement and the other Loan Documents are cumulative.  Collateral Agent and the Lenders have all rights and remedies provided under the Code, any applicable law, at law, or in equity.  The exercise by Collateral Agent or any Lender of one right or remedy is not an election, and Collateral Agent’s or any Lender’s waiver of any Event of Default is not a continuing waiver.  Collateral Agent’s or any Lender’s delay in exercising any remedy is not a waiver, election, or acquiescence.

 

9.7                               Demand Waiver.  Borrower waives, to the fullest extent permitted by law, demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Collateral Agent or any Lender on which Borrower or any Subsidiary is liable.

 

10.                               NOTICES

 

All notices, consents, requests, approvals, demands, or other communication (collectively, “Communication”) by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below.  Any of Collateral Agent, Lender or Borrower may change its mailing address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.

 

	
If   to Borrower:
    	
 
    	
ACCELERON   PHARMA INC.

128   Sidney Street

Cambridge,   Massachusetts 02139

Attention:  Chief Executive Officer

Fax:  (617) 649-9988
    
	
 
    	
 
    	
 
    
	
with   a copy (which shall not constitute notice) to:
    	
 
    	
ROPES &   GRAY LLP

Prudential   Tower

800   Boylston Street

Boston,   Massachusetts 02199

Attention:  Thomas B. Draper, Esquire

Fax:  (617) 235-0024
    
	
 
    	
 
    	
 
    
	
If   to Collateral Agent and/or the Lenders:
    	
 
    	
OXFORD   FINANCE LLC

133   North Fairfax Street

Alexandria,   Virginia 22314

Attention:  Legal Department

Fax:  (703) 519-5225

Email:  LegalDepartment@oxfordfinance.com
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
SILICON   VALLEY BANK

275   Grove Street, Suite 2-200

Newton,   Massachusetts 02466

Attn:  Ms. Christina Zorzi

Fax:  (671) 969-4395

Email:   Czorzi@SVB.com 
    

 

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MIDCAP FINANCIAL SBIC, LP

7255   Woodmont Avenue, Suite 200

Bethesda,   Maryland 20814

Attention:  General Counsel

Fax:  (301) 941-1450

Email:   rgoodridge@midcapfinancial.com 
    
	
 
    	
 
    	
 
    
	
with   a copy (which shall not constitute notice) to:
    	
 
    	
RIEMER &   BRAUNSTEIN LLP

Three   Center Plaza

Boston,   Massachusetts 02108-2003

Attention:  John J. Malloy, Esquire

Fax:  (617) 692-3449
    

 

11.                               CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

 

New York law governs the Loan Documents without regard to principles of conflicts of law that would cause the application of the laws of any jurisdiction other than the State of New York.  Borrower, Lenders and Collateral Agent each submit to the exclusive jurisdiction of the State and Federal courts in the City of New York, Borough of Manhattan.  NOTWITHSTANDING THE FOREGOING, COLLATERAL AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH COLLATERAL AGENT AND THE LENDERS (IN ACCORDANCE WITH THE PROVISIONS OF SECTION 9.1) DEEM NECESSARY OR APPROPRIATE TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE COLLATERAL AGENT’S AND THE LENDERS’ RIGHTS AGAINST BORROWER OR ITS PROPERTY.  Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court.  Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, first class, registered or certified mail return receipt requested, proper postage prepaid.

 

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER, COLLATERAL AGENT, AND THE LENDERS EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

 

12.                               GENERAL PROVISIONS

 

12.1                        Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party.  Borrower may not transfer, pledge or assign this Agreement or any rights or obligations under it without Collateral Agent’s and each Lender’s prior written consent (which may be granted or withheld in Collateral Agent’s and each Lender’s discretion, subject to Section 12.6).  Each Lender shall have the right, without the consent of or notice to Borrower or any other Lender (i)  to pledge or grant security interests in all or any part of, or any interest in, such Lender’s obligations, rights, and benefits under this Agreement and the other Loan Documents in connection with financing transactions for such Lender or its Affiliates or securitization transactions in which such Lender is involved, and (ii) to grant participations in all or any part of, or any interest in, such Lender’s obligations, rights, and benefits under this Agreement and the other Loan Documents; provided that no such pledge, grant of a security interest or participation shall release such Lender from any of its obligations hereunder.  The Lenders have the right, without the consent of or notice to Borrower, to sell, transfer, assign or 

 

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negotiate (any such sale, transfer, assignment or negotiation, a “Lender Transfer”) all or any part of, or any interest in, the Lenders’ obligations, rights, and benefits under this Agreement and the other Loan Documents; provided, however, that any such Lender Transfer other than to an Eligible Assignee shall require the prior written consent of the Required Lenders (such approved assignee, an “Approved Lender”).  Borrower and Collateral Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned until Collateral Agent shall have received an effective assignment agreement in the form attached hereto executed, delivered and fully completed by the applicable parties thereto.  Notwithstanding anything to the contrary contained herein, so long as no Event of Default has occurred and is continuing, no Lender Transfer (other than a Lender Transfer (i) in respect of the Warrants or (ii) in connection with (x) assignments by a Lender due to a forced divestiture at the request of any regulatory agency; or (y) upon the occurrence of a default, event of default or similar occurrence with respect to a Lender’s own financing or securitization transactions) shall be permitted, without Borrower’s consent, to a direct competitor of Borrower or a vulture hedge fund, each as reasonably determined by Collateral Agent.  Additionally, no Lender Transfer, and no pledge, security interest or grant of a participation interest in a Lender’s interests under the Loan Documents, may be made to Borrower or an Affiliate or Subsidiary of Borrower unless all Lenders shall have given their written consent thereto.

 

12.2                        Indemnification.  Borrower agrees to indemnify, defend and hold Collateral Agent and the Lenders and their respective directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Collateral Agent or the Lenders (each, an “Indemnified Person”) harmless against:  (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party in connection with; related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents; and (b) all losses or Lenders’ Expenses incurred, or paid by Indemnified Person in connection with; related to; following; or arising from, out of or under, the transactions contemplated by the Loan Documents between Collateral Agent, and/or the Lenders and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct.  Borrower hereby further indemnifies, defends and holds each Indemnified Person harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel for such Indemnified Person) in connection with any investigative, response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnified Person shall be designated a party thereto and including any such proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other than any broker retained by Collateral Agent or Lenders) asserting any right to payment for the transactions contemplated hereby which may be imposed on, incurred by or asserted against such Indemnified Person as a result of or in connection with the transactions contemplated hereby and the use or intended use of the proceeds of the loan proceeds except for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements directly caused by such Indemnified Person’s gross negligence or willful misconduct.

 

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

 

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

 

12.5                        Correction of Loan Documents.  Collateral Agent and the Lenders may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent with the agreement of the parties.

 

12.6                        Amendments in Writing; Integration.  (a) No amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, or any consent to any departure by Borrower or any of its Subsidiaries therefrom, shall in any event be effective unless the same shall be in writing and signed by Borrower, Collateral Agent and the Required Lenders provided that:

 

(i)                                     no such amendment, waiver or other modification that would have the effect of increasing or reducing a Lender’s Term Loan Commitment or Commitment Percentage shall be effective as to such Lender without such Lender’s written consent consent and no such amendment, waiver, or other modification that 

 

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would have the effect of increasing any Lender’s Term Loan Commitment shall be effective without the consent of the Required Lenders;

 

(ii)                                  no such amendment, waiver or modification that would affect the rights and duties of Collateral Agent shall be effective without Collateral Agent’s written consent or signature;

 

(iii)                               no such amendment, waiver or other modification shall, unless signed by all the Lenders directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with respect to any Term Loan or forgive any principal, interest (other than default interest) or fees (other than late charges) with respect to any Term Loan (B) postpone the date fixed for, or waive, any payment of principal of any Term Loan or of interest on any Term Loan (other than default interest) or any fees provided for hereunder (other than late charges or for any termination of any commitment); (C) change the definition of the term “Required Lenders” or the percentage of Lenders which shall be required for the Lenders to take any action hereunder; (D) release all or substantially all of any material portion of the Collateral or any Intellectual Property that is or becomes Collateral, authorize Borrower to sell or otherwise dispose of all or substantially all or any material portion of the Collateral or any Intellectual Property, or release any Guarantor of all or any portion of the Obligations or its guaranty obligations with respect thereto, except, in each case with respect to this clause (D), as otherwise may be expressly permitted under this Agreement or the other Loan Documents (including in connection with any disposition permitted hereunder); (E) amend, waive or otherwise modify this Section 12.6 or the definitions of the terms used in this Section 12.6 insofar as the definitions affect the substance of this Section 12.6; (F) consent to the assignment, delegation or other transfer by Borrower of any of its rights and obligations under any Loan Document or release Borrower of its payment obligations under any Loan Document, except, in each case with respect to this clause (F), pursuant to a merger or consolidation permitted pursuant to this Agreement; (G) amend any of the provisions of Section 9.4 or amend any of the definitions Pro Rata Share, Term Loan Commitment, Commitment Percentage or that provide for the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder; (H) subordinate the Liens granted in favor of Collateral Agent securing the Obligations; or (I) amend any of the provisions of Section 12.10.  It is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification of the type described in the preceding clauses (C), (D), (E), (F), (G), (H), and (I) of the preceding sentence;

 

(iv)                              the provisions of the foregoing clauses (i), (ii) and (iii) are subject to the provisions of any interlender or agency agreement among the Lenders and Collateral Agent pursuant to which any Lender may agree to give its consent in connection with any amendment, waiver or modification of the Loan Documents only in the event of the unanimous agreement of all Lenders.

 

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

 

12.7                        Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.

 

12.8                        Survival.  All covenants, representations and warranties made in this Agreement continue in full force and effect until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied.  Without limiting the foregoing, except as otherwise provided in Section 4.1, the grant of security interest by Borrower in Section 4.1 shall survive until the termination of or posting of cash collateral in respect of all Bank Services Agreements.  The obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral Agent, as well as the confidentiality provisions in Section 12.9 below, shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

 

12.9                        Confidentiality.  In handling any confidential information of Borrower, the Lenders and Collateral Agent shall exercise the same degree of care that it exercises for their own proprietary information, but disclosure of information may be made: (a) subject to the terms and conditions of this Agreement, to the Lenders’ 

 

23

 

and Collateral Agent’s Subsidiaries or Affiliates, provided Lender and Collateral Agent shall obtain such Subsidiary’s and Affiliate’s agreement to the terms of this provision or to similar confidentiality terms, or in connection with a Lender’s own financing or securitization transactions and upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization transaction; (b) to prospective transferees (other than those identified in (a) above) or purchasers of any interest in the Credit Extensions (provided, however, the Lenders and Collateral Agent shall, except upon the occurrence and during the continuance of an Event of Default, obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision or to similar confidentiality terms); (c) as required by law, regulation, subpoena, or other order; (d) to Lenders’ or Collateral Agent’s regulators or as otherwise required in connection with an examination or audit; (e) as Collateral Agent reasonably considers appropriate in exercising remedies under the Loan Documents; and (f) to third party service providers of the Lenders and/or Collateral Agent so long as such service providers have executed a confidentiality agreement with the Lenders and Collateral Agent with terms no less restrictive than those contained herein. Confidential information does not include information that either: (i) is in the public domain or in the Lenders’ and/or Collateral Agent’s possession when disclosed to the Lenders and/or Collateral Agent, or becomes part of the public domain after disclosure to the Lenders and/or Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent by a third party, if the Lenders and/or Collateral Agent does not know that the third party is prohibited from disclosing the information.  Collateral Agent and the Lenders may use confidential information for any purpose, including, without limitation, for the development of client databases, reporting purposes, and market analysis, so long as Collateral Agent or the Lenders do not disclose Borrower’s identity or the identity of any person associated with Borrower unless otherwise expressly permitted by this Agreement.  The provisions of the immediately preceding sentence shall survive the termination of this Agreement.  The agreements provided under this Section 12.9 supersede all prior agreements, understanding, representations, warranties, and negotiations between the parties about the subject matter of this Section 12.9.

 

12.10                 Right of Set Off.  Borrower hereby grants to Collateral Agent and to each Lender, a lien, security interest and right of set off as security for all Obligations to Collateral Agent and each Lender hereunder, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Collateral Agent or the Lenders or any entity under the control of Collateral Agent or the Lenders (including a Collateral Agent affiliate) or in transit to any of them.  At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Collateral Agent or the Lenders may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations.  ANY AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

12.11                 Silicon Valley Bank as Agent.  Collateral Agent hereby appoints Silicon Valley Bank (“SVB”) as its agent (and SVB hereby accepts such appointment) for the purpose of perfecting Collateral Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be perfected by possession or control, including without limitation, all Deposit Accounts maintained at SVB.

 

12.12                 Publicity.  Borrower will not directly or indirectly publish, disclose or otherwise use in any public disclosure, advertising material, promotional material, press release or interview, any reference to the name, logo or any trademark of Collateral Agent or any Lender or any of their Affiliates or any reference to this Agreement or the financing evidenced hereby, in any case except as required by applicable law, subpoena or judicial or similar order, in which case Borrower shall endeavor to give Collateral Agent prior written notice of such publication or other disclosure.

 

Each Lender and Borrower hereby authorizes each Lender to publish the name of such Lender and Borrower, the existence of the financing arrangements referenced under this Agreement, the primary purpose and/or structure of those arrangements, the amount of credit extended under each facility, the title and role of each party to this Agreement, and the total amount of the financing evidenced hereby in any “tombstone”, comparable advertisement or press release which such Lender elects to submit for publication.  In addition, each Lender and Borrower agrees that each Lender may provide lending industry trade organizations with information necessary and customary for inclusion in league table measurements after the Effective Date.  With respect to any of the foregoing, such 

 

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authorization shall be subject to such Lender providing Borrower and the other Lenders with an opportunity to review and confer with such Lender regarding, and approve, the contents of any such tombstone, advertisement or information, as applicable, prior to its initial submission for publication, but subsequent publications of the same tombstone, advertisement or information shall not require Borrower’s approval.

 

12.13                 Cooperation of Borrower.  If necessary, Borrower agrees to (i) execute any documents (including new Secured Promissory Notes) reasonably required to effectuate and acknowledge each assignment of a Term Loan Commitment or Loan to an assignee in accordance with Section 12.1, (ii) make Borrower’s management available to meet with Collateral Agent and prospective participants and assignees of Term Loan Commitments or Credit Extensions (which meetings shall be conducted no more often than twice every twelve months unless an Event of Default has occurred and is continuing), and (iii) assist Collateral Agent or the Lenders in the preparation of information relating to the financial affairs of Borrower as any prospective participant or assignee of a Term Loan Commitment or Term Loan reasonably may request. Subject to the provisions of Section 12.9, Borrower authorizes each Lender to disclose to any prospective participant or assignee of a Term Loan Commitment, any and all information in such Lender’s possession concerning Borrower and its financial affairs which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement, or which has been delivered to such Lender by or on behalf of Borrower in connection with such Lender’s credit evaluation of Borrower prior to entering into this Agreement.

 

13.                               DEFINITIONS

 

13.1                        Definitions.  As used in this Agreement, the following terms have the following meanings:

 

“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower.

 

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

 

“Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

 

“Agreement” is defined in the preamble hereof.

 

“Amortization Date” is, with respect to the Term Loans, July 1, 2013; provided that the Amortization Date shall be extended to January 1, 2014 if, as of July 1, 2013, the Borrower has cash on hand of at least the amount necessary to fund Borrower’s projected Cash Burn and projected debt service (including debt service on the Term Loans) for the succeeding twelve (12) month period (with such projected Cash Burn determined by multiplying (i) Borrower’s Cash Burn for the three (3) months ending May 31, 2013 times (ii) four (4)).

 

“Annual Projections” is defined in Section 6.2(a).

 

“Anti-Terrorism Laws” are any laws relating to terrorism or money laundering, including 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.

 

“Approved Fund” is any (i) investment company, fund, trust, securitization vehicle or conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business or (ii) any Person (other than a natural person) which temporarily warehouses loans for any Lender or any entity described in the preceding clause (i) and that, with respect to each of the preceding clauses (i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender.

 

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“Approved Lender” is defined in Section 12.1.

 

“Bank Services” are any products, credit services, and/or financial accommodations previously, now, or hereafter provided to Borrower or any of its Subsidiaries by SVB or any Affiliate of SVB, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in SVB’s various agreements related thereto (each, a “Bank Services Agreement”).

 

“Basic Rate” is, with respect to the Term Loans, the per annum rate of interest (based on a year of three hundred sixty (360) days) equal to the greater of (i) eight and one-half percent (8.50%) and (ii) the sum of (a) the ninety (90) day U.S. LIBOR rate reported in the Wall Street Journal three (3) Business Days prior to the Funding Date of the Term Loans, plus (b) eight and one one-hundredth percent (8.01%).

 

“Blocked Person” is 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” is defined in the preamble hereof.

 

“Borrower’s Books” are Borrower’s or any of its Subsidiaries’ books and records including ledgers, federal, and state tax returns, records regarding Borrower’s or its Subsidiaries’ assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

 

“Business Day” is any day that is not a Saturday, Sunday or a day on which Collateral Agent is closed.

 

“Cash Burn” for Borrower for any period shall mean the sum of the operating expenses and capital expenditures made by Borrower in such period.

 

“Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., and (c) certificates of deposit maturing no more than one (1) year after issue provided that the account in which any such certificate of deposit is maintained is subject to a Control Agreement in favor of Collateral Agent.  For the avoidance of doubt, the direct purchase by Borrower or any of its Subsidiaries of any Auction Rate Securities, or purchasing participations in, or entering into any type of swap or other derivative transaction, or otherwise holding or engaging in any ownership interest in any type of Auction Rate Security by Borrower or any of its Subsidiaries shall be conclusively determined by the Lenders as an ineligible Cash Equivalent, and any such transaction shall expressly violate each other provision of this Agreement governing Permitted Investments.  Notwithstanding the foregoing, Cash Equivalents does not include and Borrower, and each of its Subsidiaries, are prohibited from purchasing, purchasing participations in, entering into any type of swap or other equivalent derivative transaction, or otherwise holding or engaging in any ownership interest in any type of debt instrument, including, without limitation, any corporate or municipal bonds with a long-term nominal maturity for which the interest rate is reset through a dutch auction and more commonly referred to as an auction rate security(each, an “Auction Rate Security”).

 

“Claims” are defined in Section 12.2.

 

“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York; provided, that, to the extent that the Code is used to define any term herein or in any Loan 

 

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Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Collateral Agent’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

 

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.

 

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

 

“Collateral Agent” is, Oxford, not in its individual capacity, but solely in its capacity as agent on behalf of and for the benefit of the Lenders.

 

“Commitment Percentage” is set forth in Schedule 1.1, as amended from time to time.

 

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

 

“Communication” is defined in Section 10.

 

“Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit C.

 

“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.

 

“Control Agreement” is any control agreement entered into among the depository institution at which Borrower or any of its Subsidiaries maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower or any of its Subsidiaries maintains a Securities Account or a Commodity Account, Borrower and such Subsidiary, and Collateral Agent pursuant to which Collateral Agent obtains control (within the meaning of the Code) for the benefit of the Lenders over such Deposit Account, Securities Account, or Commodity Account.

 

“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.

 

“Credit Extension” is any Term Loan or any other extension of credit by Collateral Agent or Lenders for Borrower’s benefit.

 

“Default Rate” is defined in Section 2.3(b).

 

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

 

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“Designated Deposit Account” is Borrower’s deposit account, account number 3300665261 maintained with Silicon Valley Bank.

 

“Disbursement Letter” is that certain form attached hereto as Exhibit B-1.

 

“Dollars,” “dollars” and “$” each mean lawful money of the United States.

 

“Effective Date” is defined in the preamble of this Agreement.

 

“Eligible Assignee” is (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund and (iv) any commercial bank, savings and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended) and which extends credit or buys loans as one of its businesses, including insurance companies, mutual funds, lease financing companies, small business investment companies, business development companies and commercial finance companies, in each case, which at as of the date that it becomes a Lender either (A) has a rating of BBB or higher from Standard & Poor’s Rating Group and a rating of Baa2 or higher from Moody’s Investors Service, Inc. or (B) has total assets in excess of Seven Hundred Fifty Million Dollars ($750,000,000.00), and in each case of clauses (i) through (iv), which, through its applicable lending office, is capable of lending to Borrower without the imposition of any withholding or similar taxes; provided that notwithstanding the foregoing, “Eligible Assignee” shall not include, Borrower or any of Borrower’s Affiliates or, unless an Event of Default has occurred and is continuing, a direct competitor of Borrower or a vulture hedge fund, each as reasonably determined by Collateral Agent.  Notwithstanding the foregoing, (x) in connection with assignments by a Lender due to a forced divestiture at the request of any regulatory agency, the restrictions set forth herein shall not apply and Eligible Assignee shall mean 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 Eligible Assignee shall mean 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 Collateral Agent shall have received and accepted an effective assignment agreement from such Person or party in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible Assignee as Collateral Agent reasonably shall require.

 

“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

 

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

 

“Event of Default” is defined in Section 8.

 

“Existing Facility” is the indebtedness of Borrower to Oxford, SVB and MidCap Funding III, LLC pursuant to that certain Loan and Security Agreement, dated June 25, 2009, entered into by and among Oxford, SVB, MidCap Funding III, LLC and Borrower.

 

“Foreign Subsidiary” is defined in Section 6.12.

 

“Final Payment” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) due on the earliest to occur of (a) the Maturity Date, or (b) the acceleration of any Term Loan, or (c) the prepayment of a Term Loan pursuant to Section 2.2(c) or (d), equal to the original principal amount of such Term Loan multiplied by the Final Payment Percentage, payable to Lenders in accordance with their respective Pro Rata Shares. In the event of a partial prepayment of the Term Loans pursuant to Section 2.2(d), the portion of the Final Payment payable upon the partial prepayment shall be an amount equal to the principal amount of the Terms Loans being prepaid multiplied by the Final Payment Percentage.

 

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“Final Payment Percentage” is six percent (6.00%).

 

“Foreign Currency” means lawful money of a country other than the United States.

 

“Funding Date” is any date on which a Credit Extension is made to or on account of Borrower which shall be a Business Day.

 

“FX Contract” is any foreign exchange contract by and between Borrower and SVB under which Borrower commits to purchase from or sell to SVB a specific amount of Foreign Currency on a specified date. “GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States, which are applicable to the circumstances as of the date of determination.

 

“General Intangibles” are all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

 

“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

 

“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.

 

“Guarantor” is any Person providing a Guaranty in favor of Collateral Agent.

 

“Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise supplemented.

 

“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.

 

“Indemnified Person” is defined in Section 12.2.

 

“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

 

“Insolvent” means not Solvent.

 

“Intellectual Property” means all of Borrower’s or any Subsidiary’s right, title and interest in and to the following:

 

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(a)                                 its Copyrights, Trademarks and Patents;

 

(b)                                 any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating manuals;

 

(c)                                  any and all source code;

 

(d)                                 any and all design rights which may be available to Borrower;

 

(e)                                  any and all domain names;

 

(f)                                   any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and

 

(g)                                  all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

 

“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of any Person’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.

 

“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance, payment or capital contribution to any Person.

 

“Investment Letter” is that certain Equity Rights Letter, dated as of the Effective Date, in form and content reasonably acceptable to Collateral Agent and the Lenders, pursuant to which Borrower grants to Lenders or their Affiliates a right (but not an obligation) to invest up to Two Million Dollars ($2,000,000) in the aggregate, in any of Borrower’s future rounds of private equity financing on the terms, conditions and pricing set forth therein.

 

“Lender” is any one of the Lenders.

 

“Lender Transfer” is defined in Section 12.1 hereof.

 

“Lenders” are the Persons identified on Schedule 1.1 hereto and each assignee that becomes a party to this Agreement pursuant to Section 12.1.

 

“Lenders’ Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses, as well as appraisal fees, fees incurred on account of lien searches, inspection fees, and filing fees) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred by Collateral Agent and/or the Lenders in connection with the Loan Documents.

 

“Letter of Credit” is a standby or commercial letter of credit issued by SVB upon request of Borrower based upon an application, guarantee, indemnity, or similar agreement.

 

“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

 

“Loan Documents” are, collectively, this Agreement, the Perfection Certificates, each Compliance Certificate, each Disbursement Letter, each Loan Payment/Advance Request Form and any Bank Services Agreement, the Investment Letter, the Post-Closing Letter, any subordination agreements, any note, or notes or guaranties executed by Borrower or any other Person, and any other present or future agreement entered into by 

 

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Borrower, any Guarantor or any other Person for the benefit of the Lenders and Collateral Agent in connection with this Agreement, all as amended, restated, or otherwise modified.

 

“Loan Payment/Advance Request Form” is that certain form attached hereto as Exhibit B-2.]

 

“Material Adverse Change” is (a) a material impairment in the perfection or priority of Collateral Agent’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations or condition (financial or otherwise) or prospects of Borrower and its Subsidiaries, taken as a whole; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.

 

“Maturity Date” is (i) in the event that the Amortization Date is July 1, 2013, the date which is twenty-nine (29) months after the Amortization Date and (ii) in the event that the Amortization Date is extended to January 1, 2014, the date which is twenty-three (23) months after the Amortization Date.

 

“Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses, the Prepayment Fee, the Final Payment, and other amounts Borrower owes the Lenders now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral Agent, and the performance of Borrower’s duties under the Loan Documents.

 

“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.

 

“Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.

 

“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.

 

“Payment Date” is the first (1st) calendar day of each calendar month, commencing on July 1, 2012.

 

“Perfection Certificate” and “Perfection Certificates” is defined in Section 5.1.

 

“Permitted Indebtedness” is:

 

(a)                                 Borrower’s Indebtedness to the Lenders and Collateral Agent under this Agreement and the other Loan Documents;

 

(b)                                 Indebtedness existing on the Effective Date and disclosed on the Perfection Certificate(s);

 

(c)                                  Subordinated Debt;

 

(d)                                 unsecured Indebtedness to trade creditors incurred in the ordinary course of business;

 

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(e)                                  Indebtedness consisting of capitalized lease obligations and purchase money Indebtedness, in each case incurred by Borrower or any of its Subsidiaries to finance the acquisition, repair, improvement or construction of fixed or capital assets of such person, provided that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed One Hundred Thousand Dollars ($100,000.00) at any time and (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the property so acquired or built or of such repairs or improvements financed with such Indebtedness (each measured at the time of such acquisition, repair, improvement or construction is made);

 

(f)                                   Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of Borrower’s business;

 

(g)                                  Indebtedness representing reasonable and customary deferred compensation to employees in the form of year-end or special bonuses;

 

(h)                                 Indebtedness to SVB in respect of Bank Services in an amount not to exceed $250,000 in the aggregate at any time;

 

(i)                                     Indebtedness to SVB in respect of letter of credit obligations securing Borrower’s leasehold obligations provided the amount of such obligations shall not exceed One Million Dollars ($1,000,000) in the aggregate at any time; and

 

(j)                                    extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (e) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms upon Borrower, or its Subsidiary, as the case may be.

 

“Permitted Investments” are:

 

(k)                                 Investments disclosed on the Perfection Certificate(s) and existing on the Effective Date;

 

(l)                                     (i) Investments consisting of cash and Cash Equivalents and (ii) any Investments permitted by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Collateral Agent;

 

(m)                             Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower;

 

(n)                                 Investments consisting of Deposit Accounts in which Collateral Agent has a perfected security interest in accordance with Section 6.6 hereof;

 

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

 

(p)                                 Investments of Subsidiaries in or to other Subsidiaries or Borrower and Investments (excluding any Transfer of Intellectual Property or in-license) by Borrower in Subsidiaries not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year;

 

(q)                                 Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, consultants, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors, provided that the aggregate amount of such loans and advances shall not exceed $100,000 in any fiscal year;

 

(r)                                    Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; and

 

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(s)                                   Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph shall not apply to Investments of Borrower in any Subsidiary; and provided that any Instrument(s) evidencing such Investments shall be delivered to Collateral Agent for possession by Collateral Agent for the purpose of perfecting Collateral Agent’s Lien in such Instrument(s).

 

“Permitted Licenses” are (A) licenses of over-the-counter software that is commercially available to the public, and (B) non-exclusive and exclusive licenses for the use of the Intellectual Property of Borrower or any of its Subsidiaries entered into in the ordinary course of business, provided, that, with respect to each such license described in clause (B), (i) no Event of Default has occurred or is continuing at the time of such license; (ii) the license constitutes an arms-length transaction, the terms of which, on their face, do not provide for a sale or assignment of any Intellectual Property and do not restrict the ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on, or assign or otherwise Transfer any Intellectual Property; (iii) in the case of any exclusive license, (x) Borrower delivers three (3) Business Days’ prior written notice, together with copies of the materials relating to the proposed license provided to Borrower’s board of directors, to Collateral Agent and the Lenders, and delivers to Collateral Agent and the Lenders copies of the final executed licensing documents in connection with the exclusive license promptly upon consummation thereof, (y) any such license is made in connection with a bona fide corporate collaboration, partnership or out-license, and is approved by Borrower’s board of directors, (z) any such license could not result in a legal transfer of title of the licensed property and (aa) in the event the license is with respect to United States commercial rights in respect of ACE-041 and provides for up-front payments at the commencement of such license of the less than $25,000,000, the Lenders shall have provided their prior written consent to such license (and the Lenders shall be deemed to have consented to a license in the event that the Lenders have not, within four (4) Business Days of the receipt by the Lenders of the notice and board of directors materials set forth in clause (x) above, notified Borrower that the Lenders will not consent to the proposed license); and (iv) all upfront payments, royalties, milestone payments or other proceeds arising from the licensing agreement that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account that is governed by a Control Agreement.

 

“Permitted Liens” are:

 

(t)                                    Liens existing on the Effective Date and disclosed on the Perfection Certificates or arising under this Agreement and the other Loan Documents;

 

(u)                                 Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;

 

(v)                                 Liens securing Indebtedness permitted under clause (e) of the definition of “Permitted Indebtedness,” provided that (i) such Liens exist prior to the acquisition of, or attach substantially simultaneous with, or within twenty (20) days after the, acquisition, lease, repair, improvement or construction of, such property financed or leased by such Indebtedness and (ii) such liens do not extend to any property of Borrower other than the property (and proceeds thereof) acquired, leased or built, or the improvements or repairs, financed by such Indebtedness and (iii) such Liens secure no more than One Hundred Thousand Dollars ($100,000) in the aggregate amount outstanding;

 

(w)                               Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Fifty Thousand Dollars ($50,000.00), and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;

 

(x)                                 Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);

 

33

 

(y)                                 Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase;

 

(z)                                  leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Collateral Agent or any Lender a security interest therein;

 

(aa)                          banker’s liens, rights of setoff and Liens in favor of financial institutions incurred in the ordinary course of business arising in connection with Borrower’s deposit accounts or securities accounts held at such institutions solely to secure payment of fees and similar costs and expenses and provided such accounts are maintained in compliance with Section 6.6(b) hereof;

 

(bb)                          Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.4 or 8.7;

 

(cc)                            easements, reservations, rights-of-way, restrictions, minor defects or irregularities in title and similar charges or encumbrances affecting real property not constituting a material adverse effect on the business or condition (financial or otherwise) of Borrower;

 

(dd)                          Liens consisting of Permitted Licenses;

 

(ee)                            Liens on cash collateral securing Borrower’s Indebtedness to SVB under clauses (h) and (i) of the definition of Permitted Indebtedness, provided that the amount of such cash collateral shall not exceed the amount of such permitted Indebtedness at any time; and

 

(ff)                              Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) and (c) above, but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness may not increase.

 

“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

 

“Post Closing Letter” is the letter dated the Effective Date executed by Borrower in favor of the Administrative Agent and the Lenders containing certain post-closing covenants of Borrower.

 

“Prepayment Fee” is, with respect to any Term Loan subject to prepayment prior to the Maturity Date, whether by mandatory or voluntary prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount equal to:

 

(i)                                     for a prepayment made on or after the Effective Date through and including the first anniversary of the Effective Date, three percent (3.00%) of the principal amount of such Term Loan prepaid;

 

(ii)                                  for a prepayment made after the first anniversary of the Effective Date through and including the second anniversary of the Effective Date, two percent (2.00%) of the principal amount of the Term Loans prepaid;

 

(iii)                               for a prepayment made after the second anniversary of the Effective Date and prior to the Maturity Date, one percent (1.00%) of the principal amount of the Term Loans prepaid.

 

34

 

“Pro Rata Share” is, as of any date of determination, with respect to each Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the outstanding principal amount of Term Loans held by such Lender by the aggregate outstanding principal amount of all Term Loans.

 

“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made

 

“Required Lenders” means (i) for so long as all of the Persons that are Lenders on the Effective Date (each an “Original Lender”) have not assigned or transferred any of their interests in their respective Term Loans, Lenders holding one hundred percent (100%) of the aggregate outstanding principal balance of the Term Loans, or (ii) at any time from and after any Original Lender has assigned or transferred any interest in its Term Loans, Lenders holding, sixty-six percent (66%) or more of the aggregate outstanding principal balance of the Term Loans, plus, in respect of this clause (ii), (A) each Original Lender that has not assigned or transferred any portion of its respective Term Loan, (B) each assignee of an Original Lender provided such assignee was assigned or transferred and continues to hold one hundred percent (100%) of the assigning Original Lender’s interest in the Term Loans and (C) any Person or party providing financing to an Original Lender or formed to undertake a securitization transaction with respect to an Original Lender 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 (in each case in respect of clauses (A), (B) and (C) of this clause (ii), whether or not such Lender is included within the Lenders holding sixty-six percent (66%) of the Terms Loans); provided, however, that notwithstanding the foregoing, for purposes of Section 9.1(b) hereof, “Required Lenders” means (i) for so long as all Original Lenders retain one hundred percent (100%) of their interests in their respective Term Loans, Lenders holding one hundred percent (100%) of the aggregate outstanding principal balance of the Term Loans, or (ii) at any time from and after any Original Lender has assigned or transferred any interest in its Term Loans, Lenders holding, sixty-six percent (66%) or more of the aggregate outstanding principal balance of the Term Loans, plus, in respect of this clause (ii), each Original Lender that has not assigned or transferred any portion of its respective Term Loan (in each case in respect of this clause (ii), whether or not such Original Lender is included within the Lenders holding sixty-six percent (66%) of the Term Loans).  For purposes of this definition only, a Lender and Original Lender shall be deemed to include itself, and any Lender that is an Affiliate or Approved Fund of such Lender or Original Lender.

 

“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer” is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower acting alone.

 

“SBA” is the United States Small Business Administration or any successor thereto, and any analogous Governmental Authority.

 

“Secured Promissory Note” is defined in Section 2.4.

 

“Secured Promissory Note Record” is a record maintained by each Lender with respect to the outstanding Obligations owed by Borrower to Lender and credits made thereto.

 

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

 

“Solvent” is, with respect to any Person: the fair salable value of such Person’s consolidated assets (including goodwill minus disposition costs) exceeds the fair value of such Person’s liabilities; such Person is not left with unreasonably small capital after the transactions in this Agreement; and such Person is able to pay its debts (including trade debts) as they mature.

 

35

 

“Subordinated Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all Indebtedness of Borrower and/or its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Collateral Agent and the Lenders entered into between Collateral Agent, Borrower, and/or any of its Subsidiaries, and the other creditor), on terms acceptable to Collateral Agent and the Lenders.

 

“Subsidiary” is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or one or more of Affiliates of such Person.

 

“Term Loan” is defined in Section 2.2(a)(i) hereof.

 

“Term Loan Commitment” is, for any Lender, the obligation of such Lender to make a Term Loan, up to the principal amount shown on Schedule 1.1.  “Term Loan Commitments” means the aggregate amount of such commitments of all Lenders.

 

“Term Loan Fee” is defined in Section 2.5(a) hereof.

 

“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

 

“Transfer” is defined in Section 7.1.

 

“Warrants” are those certain Warrants to Purchase Stock dated as of June 25, 2009, or any date thereafter, issued by Borrower in favor of each Lender or such Lender’s Affiliates.

 

[Balance of Page Intentionally Left Blank]

 

36

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.

 

	
BORROWER:
    	
 
    
	
 
    	
 
    
	
ACCELERON   PHARMA INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By   
    	
/s/   Kevin McLaughlin
    	
 
    
	
Name:   
    	
Kevin   McLaughlin
    	
 
    
	
Title:   
    	
Chief   Financial Officer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
COLLATERAL   AGENT:
    	
 
    
	
 
    	
 
    
	
OXFORD   FINANCE LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By   
    	
/s/   Mark Davis
    	
 
    
	
Name:   
    	
Mark   Davis
    	
 
    
	
Title:   
    	
Vice   President — Finance, Secretary & Treasurer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
LENDERS:
    	
 
    
	
 
    	
 
    
	
OXFORD   FINANCE LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By   
    	
/s/   Mark Davis
    	
 
    
	
Name:   
    	
Mark   Davis
    	
 
    
	
Title:   
    	
Vice   President — Finance, Secretary & Treasurer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
SILICON   VALLEY BANK
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By   
    	
/s/   Christina Zorzi
    	
 
    
	
Name:   
    	
Christina   Zorzi
    	
 
    
	
Title:   
    	
Relationship   Manager
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
MIDCAP   FINANCIAL SBIC, LP
    	
 
    
	
 
    	
 
    
	
By:   
    	
MIDCAP   FINANCIAL SBIC GP, LLC, its General Partner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By   
    	
/s/   Josh Groman
    	
 
    
	
 
    	
Name:   
    	
Josh   Groman
    	
 
    
	
 
    	
Title:   
    	
Authorized   Signatory
    	
 
    

 

[Signature Page to Loan and Security Agreement]

 

 

SCHEDULE 1.1

 

Lenders and Commitments

 

Term Loans

 

	
Lender
    	
 
    	
Term Loan Commitment
    	
 
    	
Commitment Percentage
    	
 
    
	
OXFORD FINANCE LLC
    	
 
    	
$
    	
7,500,000
    	
 
    	
37.50
    	
%
    
	
SILICON VALLEY BANK
    	
 
    	
$
    	
5,000,000
    	
 
    	
25
    	
%
    
	
MIDCAP FINANCIAL SBIC, LP
    	
 
    	
$
    	
7,500,000
    	
 
    	
37.50
    	
%
    
	
TOTAL
    	
 
    	
$
    	
20,000,000
    	
 
    	
100.00
    	
%
    

 

 

 

SCHEDULE 1.2

 

Post-Closing Deliverables

 

1.                                      Duly executed original Control Agreements with respect to any Collateral Accounts maintained by Borrower or any of its Subsidiaries;

 

2.                                      Landlord’s consent executed in favor of Collateral Agent in respect of each of Borrower’s facilities in Cambridge, Massachusetts.

 

3.                                      Bailee’s consent executed in favor of Collateral Agent in respect of the property at which Borrower’s property is located in Allentown, Pennsylvania.

 

 

EXHIBIT A

 

Description of Collateral

 

The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:

 

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and

 

All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

 

Notwithstanding the foregoing, the Collateral does not include any Intellectual Property; provided, however, (x) the Collateral shall include all Accounts and all proceeds of Intellectual Property and (y) if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Collateral Agent’s security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual Property.

 

Pursuant to the terms of a certain negative pledge arrangement with Collateral Agent and the Lenders, Borrower has agreed not to encumber any of its Intellectual Property.

 

 

EXHIBIT B-1

 

Form of Disbursement Letter

 

[see attached]

 

 

DISBURSEMENT LETTER

 

June 7, 2012

 

The undersigned, being the duly elected and acting of ACCELERON PHARMA INC., a Delaware corporation with offices located at 128 Sidney Street, Cambridge, Massachusetts 02139 (“Borrower”), does hereby certify to OXFORD FINANCE LLC (“Oxford” and “Lender”), as collateral agent (the “Collateral Agent”) in connection with that certain Loan and Security Agreement dated as of June 7, 2012, by and among Borrower, Collateral Agent and the Lenders from time to time party thereto (the “Loan Agreement”; with other capitalized terms used below having the meanings ascribed thereto in the Loan Agreement) that:

 

1.                                      The representations and warranties in Section 5 of the Loan Agreement and in the other Loan Documents are and shall be true, accurate, and complete in all material respects on the date of this Disbursement Letter (and the Loan Payment/Advance Request Form) and on the Funding Date of the Credit Extension requested hereby; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided further that those representations and warranties expressly referring to a specific date shall be true, accurate, and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the Credit Extension.

 

2.                                      Borrower is in compliance with the covenants and requirements contained in Sections 4, 6 and 7 of the Loan Agreement.

 

3.                                      All conditions referred to in Section 3 of the Loan Agreement to the making of the Loan to be made on or about the date hereof have been satisfied or waived by Collateral Agent.

 

4.                                      No Material Adverse Change has occurred.

 

5.                                      The undersigned is a Responsible Officer.

 

[Balance of Page Intentionally Left Blank]

 

 

7.                                      The proceeds of the Term Loan shall be disbursed as follows:

 

	
Disbursement from Oxford:
    	
 
    	
 
    	
 
    
	
Loan Amount
    	
 
    	
$
    	
 
    	
 
    
	
Plus:
    	
 
    	
 
    	
 
    
	
—Deposit Received
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Less:
    	
 
    	
 
    	
 
    
	
—Closing Fee
    	
 
    	
$
    	
(     
    	
)
    
	
—Existing Debt Payoff to be remitted to [PAYOFF   BANK] 
    	
 
    	
$
    	
(     
    	
)
    
	
 
    	
 
    	
 
    	
 
    
	
—Lender’s Legal Fees
    	
 
    	
$
    	
(     
    	
)*
    
	
 
    	
 
    	
 
    	
 
    
	
Net Proceeds due from Oxford:
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Disbursement from SVB:
    	
 
    	
 
    	
 
    
	
Loan Amount
    	
 
    	
$
    	
 
    	
 
    
	
Plus:
    	
 
    	
 
    	
 
    
	
—Deposit Received
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Less:
    	
 
    	
 
    	
 
    
	
—Closing Fee
    	
 
    	
$
    	
(     
    	
)
    
	
—Existing Debt Payoff to be remitted to [PAYOFF   BANK] 
    	
 
    	
$
    	
(     
    	
)
    
	
 
    	
 
    	
 
    	
 
    
	
Net Proceeds due from SVB:
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Disbursement from MidCap:
    	
 
    	
 
    	
 
    
	
Loan Amount
    	
 
    	
$
    	
 
    	
 
    
	
Plus:
    	
 
    	
 
    	
 
    
	
—Deposit Received
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Less:
    	
 
    	
 
    	
 
    
	
—Closing Fee
    	
 
    	
$
    	
(     
    	
)
    
	
—Existing Debt Payoff to be remitted to [PAYOFF   BANK] 
    	
 
    	
$
    	
(     
    	
)
    
	
 
    	
 
    	
 
    	
 
    
	
Net Proceeds due from MidCap:
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
TOTAL TERM LOAN NET   PROCEEDS FROM LENDERS
    	
 
    	
$
    	
 
    	
 
    

 

8.                                      The Term Loan shall amortize in accordance with the Amortization Table attached hereto.

 

9.                                      The aggregate net proceeds of the Term Loans shall be transferred to the Designated Deposit Account as follows:

 

	
Account   Name:
    	
Acceleron   Pharma Inc.
    
	
 
    	
 
    
	
Bank   Name:
    	
Silicon   Valley Bank
    
	
 
    	
 
    
	
Bank   Address:
    	
3003   Tasman Drive
   Santa Clara, California 95054
    

 

* Legal fees and costs are through the Effective Date.  Post-closing legal fees and costs, payable after the Effective Date, to be invoiced and paid post-closing.

 

 

	
Account   Number:
    	
                                                                        
    
	
 
    	
 
    
	
ABA   Number:
    	
121140399
    

 

[Balance of Page Intentionally Left Blank]

 

 

Dated as of the date first set forth above.

 

	
BORROWER:
    	
 
    
	
 
    	
 
    
	
ACCELERON PHARMA INC.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
COLLATERAL AGENT AND LENDER:
    	
 
    
	
 
    	
 
    	
 
    
	
OXFORD FINANCE LLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

[Signature Page to Disbursement Letter]

 

 

AMORTIZATION TABLE
  (Term Loan)

 

[see attached]

 

 

EXHIBIT B-2

 

Loan Payment/Advance Request Form

 

DEADLINE FOR SAME DAY PROCESSING IS NOON PACIFIC TIME*

 

	
Fax   To:
    	
 
    	
Date:
    	
 
    

 

LOAN PAYMENT:

 

ACCELERON PHARMA INC.

 

	
From   Account #
    	
 
    	
 
    	
To   Account #
    	
 
    
	
(Deposit Account #)
    	
 
    	
(Loan Account #)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Principal   $
    	
 
    	
 
    	
and/or   Interest $
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Authorized   Signature:
    	
 
    	
 
    	
Phone Number:
    	
 
    
	
Print   Name/Title:
    	
 
    	
 
    	
 
    
									

 

LOAN ADVANCE:

 

Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.

 

	
From   Account #
    	
 
    	
 
    	
To   Account #
    	
 
    
	
(Loan Account #)
    	
 
    	
(Deposit Account #)
    
	
 
    	
 
    	
 
    	
 
    
	
Amount   of Advance $
    	
 
    	
 
    	
 
    
						

 

The representations and warranties in Section 5 of the Loan Agreement and in the other Loan Documents are and shall be true, accurate, and complete in all material respects on the date of the Disbursement Letter (and this Loan Payment/Advance Request Form) and on the Funding Date of the Credit Extension requested hereby; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the Credit Extension:

 

	
Authorized   Signature:
    	
 
    	
 
    	
Phone   Number:
    	
 
    
	
Print   Name/Title:
    	
 
    	
 
    	
 
    

 

OUTGOING WIRE REQUEST:

Complete only if all or a portion of funds from the loan advance above is to be wired.

Deadline for same day processing is noon, Pacific Time

 

	
Beneficiary   Name:
    	
 
    	
Amount   of Wire: $
    	
 
    
	
Beneficiary   Bank:
    	
 
    	
Account   Number:
    	
 
    
	
City   and State:
    	
 
    	
 
    	
 
    
					

 

	
Beneficiary   Bank Transit (ABA) #:
    	
 
    	
Beneficiary   Bank Code (Swift, Sort, Chip, etc.):
    	
 
    
	
 
    	
 
    	
(For International Wire Only)
    	
 
    
	
Intermediary   Bank:
    	
 
    	
Transit   (ABA) #:
    	
 
    
	
For   Further Credit to:
    	
 
    
							

 

	
Special   Instruction:
    	
 
    

 

 

By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).

 

	
Authorized   Signature:
    	
 
    	
 
    	
2nd Signature (if required):
    	
 
    
	
Print   Name/Title:
    	
 
    	
 
    	
Print   Name/Title:
    	
 
    
	
Telephone   #:
    	
 
    	
 
    	
Telephone   #:
    	
 
    	
]
    
							

 

 

EXHIBIT C

 

Compliance Certificate

 

	
TO:
    	
OXFORD   FINANCE LLC, as Collateral Agent and a Lender
   SILICON VALLEY BANK, as a Lender

MIDCAP FINANCIAL SBIC, LP, as a Lender
    

 

	
FROM:
    	
ACCELERON   PHARMA INC.
    

 

The undersigned authorized officer (“Officer”) of ACCELERON PHARMA INC. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan Agreement;” capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),

 

(a)                                 Borrower is in complete compliance for the period ending                                with all required covenants except as noted below;

 

(b)                                 There are no Events of Default, except as noted below;

 

(c)                                  Except as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material respects on this date and for the period described in (i), above; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date.

 

(d)                                 Borrower, and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports, Borrower, and each of Borrower’s Subsidiaries, has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower, or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan Agreement;

 

(e)                                  No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.

 

Attached are the required documents, if any, supporting our certification(s).  The Officer, on behalf of Borrower, further certifies that the attached financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial statements, for the absence of footnotes and subject to year-end audit adjustments as to the interim financial statements.

 

Please indicate compliance status since the last Compliance Certificate by circling Yes, No, or N/A under “Complies” column.

 

	
 
    	
 
    	
Reporting Covenant
    	
 
    	
Requirement
    	
 
    	
Actual
    	
 
    	
Complies
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1)
    	
 
    	
Financial   statements
    	
 
    	
Monthly   within 30 days
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2)
    	
 
    	
Annual   (CPA Audited) statements
    	
 
    	
Within   180 days FYE
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3)
    	
 
    	
Annual   Financial Projections/Budget (prepared on a monthly basis)
    	
 
    	
Annually   (within 10 days of FYE), and when revised
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    	
 
    

 

 

	
4)
    	
 
    	
A/R &   A/Pagings
    	
 
    	
If   applicable
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5)
    	
 
    	
8-K,   10-K and 10-Q Filings
    	
 
    	
If   applicable, within 5 days of filing
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6)
    	
 
    	
Compliance   Certificate
    	
 
    	
Monthly   within 30 days
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
7)
    	
 
    	
IP   Report
    	
 
    	
When   required
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
8)
    	
 
    	
Total   amount of Borrower’s cash and cash equivalents at the last day of the   measurement period
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
9)
    	
 
    	
Total   amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day   of the measurement period
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
 
    	
 
    	
Deposit and Securities
   Accounts
    	
 
    	
(Please list all accounts; attach   separate sheet if additional space needed)
    	
 
    

 

	
 
    	
 
    	
Bank
    	
 
    	
Account Number
    	
 
    	
New Account?
    	
 
    	
Acct Control 
   Agmt in place?
    	
 
    
	
1)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
Yes
    	
 
    	
No
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
Yes
    	
 
    	
No
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
Yes
    	
 
    	
No
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
Yes
    	
 
    	
No
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
Yes
    	
 
    	
No
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
Yes
    	
 
    	
No
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Other Matters
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Have   there been any changes in management since the last Compliance Certificate?
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Have   there been any transfers/sales/disposals/retirement of Collateral or IP   prohibited by the Loan Agreement?
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Have   there been any new or pending claims or causes of action against Borrower   that involve more than Seventy Five Thousand Dollars ($75,000.00)?
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
 
    	
 
    
															

 

 

	
 
    	
 
    	
Exceptions
    	
 
    	
 
    
	
 
    	
 
    	
Please   explain any exceptions with respect to the certification above: (If no   exceptions exist, state “No exceptions.”    Attach separate sheet if additional space needed.)
    	
 
    	
 
    
	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
LENDERS USE ONLY
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
ACCELERON   PHARMA INC.
    	
DATE
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    	
Received   by:
    	
 
    	
 
    	
Verified   by:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    	
Date:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Compliance   Status
    	
 
    	
Yes
    	
 
    	
No
    
																	

 

 

EXHIBIT D

 

Form of Secured Promissory Note

 

[see attached]

 

 

SECURED PROMISSORY NOTE
 (Term Loan)

 

	
$
    	
Dated: June 7, 2012
    

 

FOR VALUE RECEIVED, the undersigned, ACCELERON PHARMA INC., a Delaware corporation with offices located at 128 Sidney Street, Cambridge, Massachusetts 02139, (“Borrower”) HEREBY PROMISES TO PAY to the order of [OXFORD FINANCE LLC][SILICON VALLEY BANK] [MIDCAP FINANCIAL SBIC, LP] (“Lender”) the principal amount of [                      ] MILLION DOLLARS ($                            ) or such lesser amount as shall equal the outstanding principal balance of the Term Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term Loan, at the rates and in accordance with the terms of the Loan and Security Agreement dated June 7, 2012 by and among Borrower, Lender, Oxford Finance LLC, as Collateral Agent, and the other Lenders from time to time party thereto (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  If not sooner paid, the entire principal amount and all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan Agreement.  Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement.

 

Principal, interest and all other amounts due with respect to the Term Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Secured Promissory Note (this “Note”).  The principal amount of this Note and the interest rate applicable thereto, and all payments made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note.

 

The Loan Agreement, among other things, (a) provides for the making of a secured Term Loan by Lender to Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.

 

This Note may not be prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement.

 

This Note and the obligation of Borrower to repay the unpaid principal amount of the Term Loan, interest on the Term Loan and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement.

 

Presentment for payment, demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived.

 

Borrower shall pay all reasonable fees and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not performed when due.

 

This Note shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York.

 

The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or its agent.  Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is identified as the owner of an interest in the obligation.  Borrower shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Note on the part of any other person or entity.

 

[Balance of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
ACCELERON   PHARMA INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Term Loan Secured Promissory Note

 

 

LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL

 

	
Date
    	
 
    	
Principal  
    Amount
    	
 
    	
Interest   Rate
    	
 
    	
Scheduled  
    Payment_Amount
    	
 
    	
Notation   By
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

CORPORATE BORROWING CERTIFICATE

 

	
BORROWER:
    	
ACCELERON   PHARMA INC.
    	
DATE: June 7, 2012
    
	
 
    	
 
    	
 
    
	
LENDERS:
    	
OXFORD FINANCE LLC, as Collateral Agent and a   Lender
    	
 
    
	
 
    	
SILICON VALLEY BANK, as a Lender  

MIDCAP FINANCIAL SBIC, LP, as a Lender
    	
 
    

 

I hereby certify as follows, as of the date set forth above:

 

1.             I am the Secretary, Assistant Secretary or other officer of Borrower.  My title is as set forth below.

 

2.             Borrower’s exact legal name is set forth above.  Borrower is a corporation existing under the laws of the State of Delaware.

 

3.             Attached hereto as Exhibit A and Exhibit B, respectively, are true, correct and complete copies of (i) Borrower’s Articles/Certificate of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth in paragraph 2 above; and (ii) Borrower’s Bylaws.  Neither such Articles/Certificate of Incorporation nor such Bylaws have been amended, annulled, rescinded, revoked or supplemented, and such Articles/Certificate of Incorporation and such Bylaws remain in full force and effect as of the date hereof.

 

4.             The attached resolutions were duly and validly adopted by Borrower’s Board of Directors at a duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate action).  Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and the Lenders may rely on them until each Lender receives written notice of revocation from Borrower.

 

[Balance of Page Intentionally Left Blank]

 

 

5.             The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to their names.

 

	
Name
    	
 
    	
Title
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
[                  ]
    	
 
    	
[President]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
[                  ]
    	
 
    	
[Chief Financial Officer, Treasurer]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
[                  ]
    	
 
    	
[Secretary]
    	
 
    	
 
    

 

 

	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

*** If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.

 

I, the                                                      of Borrower, hereby certify as to paragraphs 1 through 5 above, as

[print title]

of the date set forth above.

 

	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

[Signature Page to Corporate Borrowing Certificate]

 

 

EXHIBIT A

 

Articles/Certificate of Incorporation (including amendments)

 

[see attached]

 

 

EXHIBIT B

 

Bylaws

 

[see attached]

 

 

EXHIBIT A TO UCC FINANCING STATEMENT

 

Description of Collateral

 

The Collateral consists of all of Debtor’s right, title and interest in and to the following personal property:

 

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and

 

All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

 

Notwithstanding the foregoing, the Collateral does not include any Intellectual Property; provided, however, (x) the Collateral shall include all Accounts and all proceeds of Intellectual Property and (y) if a judicial authority (including a U.S. Bankruptcy Court) holds that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Collateral Agent’s security interest in such Accounts and such other property of Debtor that are proceeds of the Intellectual Property.

 

Pursuant to the terms of a certain negative pledge arrangement with Collateral Agent and the Lenders, Debtor has agreed not to encumber any of its Intellectual Property.

 

Capitalized terms used but not defined herein have the meanings ascribed in the Uniform Commercial Code in effect in the State of New York as in effect from time to time (the “Code”) or, if not defined in the Code, then in the Loan and Security Agreement by and between Debtor, Secured Party and the other Lenders party thereto (as modified, amended and/or restated from time to time).

 

 

Exhibit F - SBA Form 468

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