Amendment No. 3 to Amended and Restated Loan and Security Agreement, dated as of February 9, 2022, by and among X4 Pharmaceuticals, Inc., each of its Qualified Subsidiaries (including X4 Therapeutics, Inc.), the Lender, and Hercules Capital, Inc., as Agent

    NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound, the parties hereto agree as follows:

1.Amendments.

1.1Definitions.

“Third Amendment Date” means February 9, 2022.

“Tranche 4 Term Loan” means a loan in an aggregate principal amount of up to Seventeen Million Five Hundred Thousand Dollars ($17,500,000).

2.2(a)(iii)    Tranche 3 Term Loan Advance. Subject to the terms and conditions of this Agreement, beginning on the date Borrower achieves Performance Milestone II and continuing through June 30, 2022, Borrower may request and Lenders severally (and not jointly) will make Term Loan Advances in an aggregate amount up to $7,500,000, in minimum increments of $2,500,000, or if the undrawn amount of the Tranche 3 Term Loan is less than $2,500,000, such lesser amount (each, a “Tranche 3 Term Loan Advance”). Notwithstanding the foregoing, effective on and as of the Third Amendment Date, Borrower, Lenders and Agent acknowledge and agree that the availability of the Tranche 3 Term Loan and Tranche 3 Term Loan Advances is terminated.

2.2(a)(iv)    Tranche 4 Term Loan Advance. Subject to the terms and conditions of this Agreement, beginning on the Third Amendment Date and continuing through December 31, 2022, subject to approval by Lender’s investment committee in its sole discretion, Borrower may request and Lenders severally (and not jointly) will make Term Loan Advances in an aggregate amount up to $17,500,000, in minimum increments of $5,000,000, or if the undrawn amount of the Tranche 4 Term Loan is less than $5,000,000, such lesser amount (each, a “Tranche 4 Term Loan Advance”)..

7.22    Minimum Cash.

(a)    Effective immediately upon the Initial Test Date, Borrower at all times thereafter shall maintain unrestricted Cash in an account or accounts of Borrower subject to an Account Control Agreement, in an aggregate amount greater than or equal to the greater of (i) $30,000,000 or (ii) 6 multiplied by the current RML (as determined as of the last reporting under Section 7.1); provided, however, that from and after Borrower’s achievement of Performance Milestone III, Borrower at all times thereafter shall maintain unrestricted Cash in an account or accounts of Borrower subject to an Account Control Agreement, in an aggregate amount greater than or equal to the greater of (x) $20,000,000, or (y) 3 multiplied by the current RML (as determined as of the last reporting under Section 7.1).

(b)    Notwithstanding the provisions of Section 7.22(a) above, if during the period beginning January 1, 2022 through June 30, 2022, Borrower shall have raised at least $33,000,000 in total All Source Cash Proceeds, then effective immediately thereafter, upon the Initial Test Date, Borrower at all times shall maintain unrestricted Cash in an account or accounts of Borrower subject to an Account Control Agreement, in an aggregate amount greater than or equal to $30,000,000; provided, however, that from and after Borrower’s achievement of Performance Milestone III, Borrower at all times thereafter shall maintain unrestricted Cash in an account or accounts of Borrower subject to an Account Control Agreement, in an aggregate amount greater than or equal to $20,000,000.

(c)    Notwithstanding the provisions of Sections 7.22(a) and 7.22(b) above, from and after the date the FDA approves the NDA for X4P-001 for the treatment of WHIM Syndrome, any requirement for Borrower to maintain minimum Cash pursuant to this Section 7.22 shall be extinguished.

1.3Exhibits and Schedules. The exhibits and schedules previously provided to or by Agent and Lender as of the Closing Date are hereby updated and amended, if applicable, as of the Third Amendment Date by the exhibits and schedules attached to this Third Amendment.

2.Borrower’s Representations And Warranties. Borrower represents and warrants that:

Borrower understands and acknowledges that Agent and Lender are entering into this Third Amendment in reliance upon, and in partial consideration for, the above representations and warranties, and agrees that such reliance is reasonable and appropriate.

3.Limitation. The amendments set forth in this Third Amendment shall be limited precisely as written and shall not be deemed (a) to be a waiver or modification of any other term or condition of the Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which Agent or Lender may now have or may have in the future under or in connection with the Agreement (as amended hereby) or any instrument or agreement referred to therein; or (b) to be a consent to any future amendment or modification or waiver to any instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the provisions thereof. Except as expressly amended hereby, the Agreement shall continue in full force and effect.

4.Effectiveness. This Third Amendment shall become effective upon the satisfaction of all the following conditions:

4.1Amendment. Borrower, Agent and Lender shall have duly executed and delivered this Third Amendment to Agent.

4.2Secretary’s Certificate. Borrower shall have delivered to Agent a secretary’s certificate, together with a certified copy of resolutions of the Borrower’s Board of Directors evidencing approval of the Third Amendment.

4.3Payment of Amendment Fee. Borrower shall have paid to Agent an amendment fee in the amount of $113,750.

4.4Payment of Agent and Lender Expenses. Borrower shall have paid all of Agent’s and Lender’s fees and expenses (including all reasonable attorneys' fees and reasonable expenses) incurred through the Third Amendment Date, in each case to the extent invoiced on or prior to the Third Amendment Date.

5.Release. In consideration of the agreements of Agent and each Lender contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf of itself and its successors, assigns, and other legal representatives, hereby fully, absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and each Lender, and its successors and assigns, and its present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, Lender and all such other persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which Borrower, or any of its successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time immediately prior to the effectiveness of this Amendment under the Agreement or any of the other Loan Documents or transactions thereunder or related thereto. Borrower understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release. Borrower agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above. Borrower hereby waives the provisions of California Civil Code section 1542, which states:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

6.Counterparts. This Third Amendment may be signed in any number of counterparts, and by different parties hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single instrument. All counterparts shall be deemed an original of this Third Amendment. This Third Amendment may be executed by facsimile, portable document format (.pdf) or similar technology signature, and such signature shall constitute an original for all purposes.

7.Incorporation By Reference.  The provisions of Section 11 of the Agreement shall be deemed incorporated herein by reference, mutatis mutandis.

8.Loan Documents. This Third Amendment shall constitute a Loan Document.

Accepted in Palo Alto, California:

7.12 DEPOSIT ACCOUNTS

(A)     Are all Cash balances held by Borrower held in accounts subject to an Account Control Agreement, other than Excluded Accounts? ____ Yes ____ No

(B)    Is the Cash held by the Excluded Subsidiary less than the sum of (i) 70% of the outstanding Indebtedness under the FFG Agreement and (ii) $5,000,000? ____ Yes ____ No

7.22(a) MINIMUM CASH

[Applies only if, during the period beginning January 1, 2022 through June 30, 2022, Borrower has not raised at least $33,000,000 in total All Source Cash Proceeds.]

7.22(b) MINIMUM CASH

[Applies only if, during the period beginning January 1, 2022 through June 30, 2022, Borrower has raised at least $33,000,000 in total All Source Cash Proceeds.]

7.24 SECURITY CORPORATION INVESTMENT CONDITIONS

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

Each new account that has been opened since delivery of the previous Compliance Certificate is designated below with a “*”.

Very Truly Yours,

X4 PHARMACEUTICALS, INC.

By:    ____________________________

Name: _____________________________

Its:    ____________________________