Exhibit 10.1

 

LOGO [g269369g1021082510901.jpg]

 

DATED   MAY 24, 2016

(1)    KREOS CAPITAL IV (UK) LIMITED

(2)    ALBIREO LIMITED

(3)    ALBIREO AB

(4)    ELOBIX AB

 

 

SUPPLEMENTAL DEED

relating to a Loan Agreement

dated 18 December 2014

 

 

5 Fleet Place London EC4M 7RD

Tel: +44 (0)20 7203 5000 ● Fax: +44 (0)20 7203 0200 ● DX: 19 London/Chancery
Lane

www.charlesrussellspeechlys.com

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CONTENTS

 

1

 

DEFINITIONS AND INTERPRETATION

     1   

2

 

SHARE EXCHANGE AGREEMENT & ASSOCIATED WAIVERS

     3   

3

 

AMENDMENT AND RESTATEMENT

     4   

4

 

INTRA-GROUP LOAN AGREEMENT

     4   

5

 

GUARANTEE AND SECURITY AGREEMENT

     4   

6

 

EFFECT UPON THE LOAN DOCUMENTS

     4   

7

 

TERMINATION

     4   

8

 

EXISTING SECURITY

     5   

9

 

WARRANTIES AND REPRESENTATIONS

     5   

10

 

COSTS AND EXPENSES

     6   

11

 

FURTHER ASSURANCES

     6   

12

 

THIRD PARTIES

     6   

13

 

COUNTERPARTS

     6   

14

 

ENTIRE AGREEMENT

     6   

15

 

CONFIDENTIALITY

     6   

16

 

GOVERNING LAW AND JURISDICTION

     7   

SCHEDULE 1

     8   

SCHEDULE 2

     9   

SCHEDULE 3

     10   

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THIS SUPPLEMENTAL DEED (this Deed) is made as a deed on 24 May 2016 BETWEEN:

 

(1) KREOS CAPITAL IV (UK) LIMITED, a company incorporated in England and Wales
with registered number 07758282 and whose registered office is at 25-28 Old
Burlington Street, London W1S 3AN (Lender); and

 

(2) ALBIREO LIMITED, a company incorporated in England and Wales with registered
number 06445879 and whose registered office is at First Floor, 100 Victoria
Embankment, London EC4Y 0DH (Borrower); and

 

(3) ALBIREO AB, a company incorporated in Sweden with registered number
5567374631 whose registered office is at Arvid Wallgrens backe 20, 413 46
Gothenburg, Sweden (Guarantor 1); and

 

(4) ELOBIX AB, a company incorporated in Sweden with registered number
5569469421 whose registered office is at Arvid Wallgrens backe 20, 413 46
Gothenburg, Sweden (Guarantor 2),

together the “Parties” and each a “Party”.

BACKGROUND

 

(A) This Deed is supplemental to an agreement between the Parties for the
provision of a loan facility of up to 6,000,000 euros dated 18 December 2014, as
amended pursuant to a deed of variation between the Parties dated 4 February
2016, (the Loan Agreement) and certain Finance Documents as defined in the Loan
Agreement (Finance Documents) (together being referred to as the Loan
Documents).

 

(B) The Parties have agreed to vary the Loan Documents in the manner set out in
this Deed in connection with the purchase and sale of all or substantially all
of the outstanding share capital in the Borrower to Biodel Inc. and the
concurrent equity fundraising by the Borrower, in each case as contemplated by
the Share Exchange Agreement (Transaction). This Deed is supplemental to the
Loan Documents.

AGREED PROVISIONS

 

1 DEFINITIONS AND INTERPRETATION

 

1.1 In this Deed the following expressions shall have the following meanings:

 

  1.1.1 Biodel: means a Delaware corporation named Biodel, Inc. on the date of
this Deed and contemplated to be renamed Albireo Pharma, Inc. from or shortly
after Closing;

 

  1.1.2 Closing: has the meaning given in the Share Exchange Agreement;

 

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  1.1.3 Effective Date: means the date on which the last of the following events
occurs:

 

  (a) Closing;

 

  (b) entry into the Guarantee and Security Agreement by Biodel in accordance
with clause 5; and

 

  (c) execution and issuance of the Replacement Warrant in accordance with
clause 2.1 of the Warrant Substitution Agreement;

 

  1.1.4 End Date: means the first to occur of the Effective Date or the date on
which this Deed terminates pursuant to clause 7;

 

  1.1.5 Further Fundraising: means the unconditional subscription for the issue
and allotment of shares in the Borrower:

 

  (a) by shareholders and loan note holders of the Borrower as set out in the
Share Exchange Agreement; or

 

  (b) by such parties on such terms as approved in writing by the Lender, such
approval not to be unreasonably withheld or delayed;

 

  1.1.6 Guarantee and Security Agreement: means the guarantee and security
agreement in substantially the form set out in schedule 3 hereto;

 

  1.1.7 Guarantors: together Guarantor 1 and Guarantor 2;

 

  1.1.8 Share Exchange Agreement: means the share exchange agreement in the
agreed form entered into between the Borrower, Biodel and the shareholders and
loan note holders of the Borrower on or around the date of this Deed;

 

  1.1.9 Replacement Warrant: means the warrant to purchase shares of the common
stock of Biodel in substantially the form set out at schedule 1 to the Warrant
Substitution Agreement; and

 

  1.1.10 Warrant Substitution Agreement: means the warrant substitution
agreement entered into by Kreos Capital IV (Expert Fund) Limited and the
Borrower on or about the date of this Deed.

 

1.2 Unless otherwise provided in this Deed or where the context otherwise
requires, terms and expressions defined in the Loan Documents shall have the
same meanings where used in this Deed.

 

1.3 The rules of interpretation of the Loan Agreement shall apply to this Deed
as if set out in this Deed, save that the references in the Loan Agreement to
this Agreement shall be construed as references to this Deed.

 

1.4 Unless the context otherwise requires, in this Deed any reference to a
clause or schedule is to a clause or schedule (as the case may be) of or to this
Deed.

 

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2 SHARE EXCHANGE AGREEMENT & ASSOCIATED WAIVERS

 

2.1 The Parties agree and acknowledge that the entry by Borrower and its
shareholders and loan note holders into the Share Exchange Agreement and
performance by the Borrower and its shareholders and loan note holders of their
respective obligations under or in connection with the Share Exchange Agreement
shall not:

 

  2.1.1 constitute an Event of Default under the terms of the Loan Agreement;
nor

 

  2.1.2 result in a deemed service of notice under clauses 5.4.1.1 and 5.4.2 of
the Loan Agreement.

 

2.2 The Lender hereby waives each and any breach of the Loan Agreement of the
type described below occurring prior to the date of this Deed:

 

  2.2.1 any late, non- or incomplete delivery by the Borrower or a Guarantor of
the information required by clauses 8.1.1 through 8.1.8 of the Loan Agreement;

 

  2.2.2 any breach by a Guarantor of clause 8.1.27 of the Loan Agreement as
consequence of any cash payments that have been made by a Guarantor to an
account of Albireo, Inc. that is not subject to a Security Interest in favour of
the Lender (provided that such cash payments have not resulted in the aggregate
cash balance across all accounts of Albireo, Inc. being greater than US$200,000
at any one time); and

 

  2.2.3 without prejudice to any claims for default interest or other costs and
charges arising from late payments, any late payments by the Borrower of amounts
due under the Loan Agreement.

 

2.3 The Lender hereby agrees that no cash payment made by a Guarantor, on or
after the date of this Deed, to an account of Albireo, Inc. that is not subject
to a Security Interest in favour of the Lender shall constitute a breach of
clause 8.1.27 of the Loan Agreement, unless such payment will result in the
aggregate cash balance across all accounts of Albireo, Inc. being greater than
US$100,000 at any one time (other than where such payment is being transferred
by a Guarantor for the purpose of Albireo, Inc. paying employee compensation, in
which case such cash balance will not exceed US$200,000 at any one time and
Borrower shall notify the Lender concurrently with or before such transfer and
supply the Lender with reasonable supporting information to demonstrate that
such payment is for purposes of employee compensation).

 

2.4 The Borrower represents to the Lender that, at the date of this Deed, the
activities of Albireo, Inc. comprise only of providing management, corporate
development and administrative services to the Group and undertakes to the
Lender that no extension in the activities of Albireo, Inc. shall occur, (other
than an extension of activities as a consequence of the appointment of a Chief
Medical Officer or a person in similar role), without the prior written consent
of the Lender, such consent not to be unreasonably withheld or delayed.

 

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3 AMENDMENT AND RESTATEMENT

With effect on and from the Effective Date, the terms of the Loan Agreement
shall be replaced in their entirety by the terms of the amended and restated
Loan Agreement set out in Schedule 1 to this Deed (the Amended and Restated Loan
Agreement).

 

4 INTRA-GROUP LOAN AGREEMENT

No later than two (2) Business Days after the Effective Date:

 

4.1 the Lender, Guarantor 1 and Guarantor 2 shall each deliver and release to
the Borrower their executed (but undated) counterpart of the deed of variation
of and accession to the Intra-Group Loan Agreement in the form set out in
Schedule 2 to this Deed (the Deed of Variation & Accession); and

 

4.2 the Borrower shall procure that Biodel delivers and releases to the Borrower
its duly executed (but undated) counterpart of the Deed of Variation &
Accession.

 

5 GUARANTEE AND SECURITY AGREEMENT

No later than two (2) Business Days after the Effective Date, the Borrower shall
procure that Biodel shall enter into the Guarantee and Security Agreement.

 

6 EFFECT UPON THE LOAN DOCUMENTS

 

6.1 The terms of the Loan Documents shall remain in full force and effect save
as amended in accordance with clauses 3 and 4 of this Deed and the Loan
Documents shall be read together with this Deed.

 

6.2 Without prejudice to the obligations of the Borrower and the Guarantors
under the Loan Documents, the Borrower shall, as from the date hereof until the
End Date, provide all information relating to the Transaction as the Lender may
reasonably require, including any amendments to the Share Exchange Agreement,
the registration statement filed with the SEC and any amendments thereto, cap
tables and the calculations for the Exchange Ratio (as defined in the Share
Exchange Agreement) required pursuant to the Share Exchange Agreement as the
same shall be produced from time to time.

 

6.3 Subject to clause 2 above, the Lender reserves all rights or remedies it may
have now or in the future and nothing herein shall waive or otherwise prejudice
any right or remedy of the Lender under the Loan Documents.

 

7 TERMINATION

 

7.1 This Deed will terminate with immediate effect upon the occurrence of any of
the following events:

 

  7.1.1 the termination of the Share Exchange Agreement,

 

  7.1.2 the amendment or waiver, prior to Closing, of any material provision or
right contained in the Share Exchange Agreement, or any document entered into in
respect thereof, where such amendment or waiver is, in the reasonable opinion of
the Lender, materially adverse to the Borrower and has not been approved in
advance by the Lender, and such termination is confirmed by notice from the
Lender to the Borrower; or

 

  7.1.3 Closing not occurring by 31 December 2016.

 

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7.2 Without prejudice to the Lender’s rights under clause 7.1.2, furthermore,
unless the Lender otherwise agrees in writing, this Deed will have been deemed
to have terminated immediately prior to Closing, where Closing occurs, but:

 

  7.2.1 Company Net Cash (as defined in the Share Exchange Agreement) together
with any Further Fundraising between the date of this Deed and the Closing, is
an amount, in aggregate, of less than US$20,000,000; or

 

  7.2.2 the Sellers (as defined in the Share Exchange Agreement) in aggregate,
own less than 60% of the pro forma capitalization of Biodel upon Closing.

 

8 EXISTING SECURITY

 

8.1 The Borrower confirms, acknowledges and agrees that the Security Documents:

 

  8.1.1 other than any Security Documents governed by Swedish law, rank as a
continuing security for the payment and discharge of the Loan including, without
limitation, all present and future monies, obligations and liabilities owed by
the Borrower to the Lender, whether actual or contingent and whether owed
jointly or severally, as principal or surety and/or in any other capacity, under
or in connection with Loan Documents; and

 

  8.1.2 governed by Swedish law, shall continue to secure the Secured
Obligations (as defined in each Security Document governed by Swedish law); and

 

  8.1.3 shall continue in full force and effect in all respects and the Security
Documents and this Deed shall be read and construed together.

 

9 WARRANTIES AND REPRESENTATIONS

 

9.1 The Borrower makes the representations and warranties set out in this clause
9 to the Lender on the date of this Deed and on the Effective Date by reference
to the facts and circumstances existing on each such date.

 

9.2 Save for the obligations of the Borrower to procure actions by Biodel as set
out in clauses 4.2 and 5 (the Biodel Obligations), the Borrower and each
Guarantor has the power and authority to execute, deliver and perform its
obligations under this Deed and the transactions and other documents
contemplated by it.

 

9.3 The execution, delivery and performance of the obligations in, and
transactions and other documents contemplated by, this Deed do not and will not
contravene or conflict with its constitutional documents and/or any agreement
binding on the Borrower, each Guarantor or the Borrower’s and each Guarantor’s
assets or constitute a default or a termination event (however described) under
any such agreement or instrument.

 

9.4 Save in respect of the Biodel Obligations, the Borrower and each Guarantor
has taken all necessary action and obtained all required or desirable
authorisations to enable it to execute, deliver and perform its obligations
under this Deed and any transactions or other documents contemplated by it and
that any such authorisations are in full force and effect.

 

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10 COSTS AND EXPENSES

The Borrower shall promptly or, failing which, within fifteen Business Days of
demand, pay to the Lender an amount equal to all costs and expenses (including
value added tax) incurred by the Lender in relation to the preparation,
negotiation and issuing of this Deed and the transactions and other documents
contemplated by it (including any amendments thereto or the enforcement
thereof).

 

11 FURTHER ASSURANCES

The Borrower and the Guarantors agree that each shall, on the request of the
Lender and at its own expenses execute, do or procure all such actions,
documents or things as may be necessary to give effect to the terms of this Deed
and the transactions and other documents contemplated it.

 

12 THIRD PARTIES

A person who is not a party to this Deed cannot enforce or enjoy the benefit of
any term of this Deed under the Contracts (Rights of Third Parties) Act 1999.

 

13 COUNTERPARTS

This Deed may be executed in any number of counterparts and this shall have the
same effect as if the signatures on such counterparts were on a single copy of
this Deed.

 

14 ENTIRE AGREEMENT

This Deed constitutes the entire agreement between the Parties and supersedes
and extinguishes all previous agreements, promises, assurances, warranties,
representations and understandings between them, whether written or oral,
relating to its subject matter.

 

15 CONFIDENTIALITY

The Parties acknowledge and agree that the Borrower may disclose, and may
authorise Biodel to disclose this Deed, any of the Loan Documents and/or any of
the information contained therein to the extent required to be disclosed
pursuant to or in connection with the Share Exchange Agreement, including but
not limited to, any documents required to be disclosed or any information
required to be provided as part of the process of preparing and filing with the
SEC a Registration Statement on Form S-4.

 

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16 GOVERNING LAW AND JURISDICTION

 

16.1 This Deed and any dispute or claim arising out of or in connection with it
or its subject matter or formation (including non-contractual disputes or
claims) shall be governed by and construed in accordance with the Law of England
and Wales.

 

16.2 The Parties irrevocably agree that the courts of England and Wales shall
have exclusive jurisdiction to settle any dispute or claim that arises out of or
in connection with this Deed or its subject matter or formation (including
non-contractual disputes or claims). Nothing in this clause shall limit the
right of the Lender to take proceedings against the Borrower in any other court
of competent jurisdiction, nor shall the taking of proceedings in any one or
more jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not, to the extent permitted by the law of such other
jurisdiction.

This agreement is executed as a deed and is delivered on the day and year first
before written.

 

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SCHEDULE 1

Amended and Restated Loan Agreement

 

8

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AMENDED AND RESTATED AGREEMENT

AGREEMENT FOR THE PROVISION OF A LOAN FACILITY

OF UP TO €6,000,000

Dated 18 December 2014 (“Agreement Date”)

(As amended by a Deed of Variation dated 4 February 2016 and as amended and
restated by a Supplemental Agreement dated      May 2016 (“Restatement Date”))

Between

KREOS CAPITAL IV (UK) LIMITED, a company incorporated in England and Wales under
registered number 07758282 whose registered office is at 25-28 Old Burlington
Street, London, W1S 3AN (the “Lender”, which expression shall include its
successors and assigns);

ALBIREO LIMITED, a company incorporated in England and Wales under registered
number 06445879 whose registered office is at First Floor, 100 Victoria
Embankment, London EC4Y 0DH (the “Borrower”);

ALBIREO AB, a company incorporated in Sweden under registered number 556737-4631
whose registered office is at Arvid Wallgrens Backe 20 413 46, Gothenburg,
Sweden (“Guarantor 1”); and

ELOBIX AB, a company incorporated in Sweden under registered number 556946-9421
whose registered office is at Arvid Wallgrens Backe 20 413 46, Gothenburg,
Sweden (“Guarantor 2”).

WHEREAS:

 

1. The Borrower wishes to borrow up to the Total Loan Facility (as defined
below) and the Lender wishes to make the Total Loan Facility available to the
Borrower on the terms of this agreement (the “Loan Agreement”); and

 

2. The Borrower hereby confirms that on or about the Agreement Date it shall
enter into the Initial Security Documents as security for monies borrowed by the
Borrower hereunder.

 

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LOAN FACILITY TERMS:

 

Total Loan Facility   

€6,000,000 to be drawn down in one or multiple tranches as follows:

 

(i) Tranche 1: no less than €2,000,000 (two million Euros) but no more than
€6,000,000 (six million Euros)

 

(ii) Further Tranche(s): the balance of unutilised sums not drawn down in
Tranche 1, subject to the Minimum Drawdown Amount requirement

 

Expiry Date   

Tranche 1: 31 December 2014

 

Further Tranches: 1 June 2015

 

(subject to Clause 3.4 below)

Advance Payment   

In respect of Tranche 1: €228,882.53 (calculated by reference to the Repayment
Schedule set out in Part B of Schedule A)

 

In relation to each Further Tranche(s) an amount equal to the last Monthly
Repayment inclusive of principal and interest as set out in the applicable
Repayment Schedule

Repayment Term   

Thirty-six (36) months (in respect of each Tranche)

 

With respect to each Tranche, the first six (6) monthly instalments shall be
interest only followed by thirty(30) monthly instalments comprising principal
and interest

Transaction Fee    1% of the Total Loan Facility, with payment to be satisfied
by way of a corresponding reduction in the Tranche 1 proceeds or otherwise
payable in accordance with Clause 11.1 below End of Loan Payment    1.25% of the
amount drawn down under each Tranche payable at expiration of each Loan Term
Minimum Drawdown Amount    €2,000,000 (two million Euros) in respect of each
Tranche

 

1 DEFINITIONS

In this Loan Agreement, including the recitals set out above, unless otherwise
defined:

 

1.1 “A3309 Business” means the development and exploitation of the A3309 Patents
pursuant to the A3309 Business Agreements,

 

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1.2 “A3309 Business Agreements” means the Asset Transfer Agreement, the G&S
Services Agreement and R&D Services Agreement both between Guarantor 1 and
Guarantor 2 dated 18 December 2013, the Intra-Group Loan Agreement, the Licence
Agreements and this Loan Agreement;

 

1.3 “A3309 Patents” means the patents and patent applications listed in Part 2
of Schedule C, together with any improvements and continuations;

 

1.4 “A4250 Patents” means the patents and patent applications listed in Part 1
of Schedule C together with any improvements and continuations;

 

1.5 “Accounts” means in relation to the Borrower, the audited annual profit and
loss account and balance sheet of the Borrower for the period ended on
31 December 2013;

 

1.6 “Advance Payment” has the meaning given in Clause 5.1 and is in the amount
set forth above in the Loan Facility Terms;

 

1.7 “Affiliate” means, in relation to any person, a subsidiary of that person or
a holding company of that person or any other subsidiary of that holding
company;

 

1.8 “Applicable Interest Rate” has the meaning given in Clause 6.1;

 

1.9 “Albireo Pharma” means a Delaware corporation renamed Albireo Pharma, Inc.
(formerly known as Biodel Inc.) upon completion of the Albireo Reverse
Transaction;

 

1.10 “Albireo Reverse Transaction” means the sale of the entire issued share
capital of the Borrower to Albireo Pharma in which the shareholders in the
Borrower immediately prior to such sale collectively hold more than 50% of the
common stock of Albireo Pharma immediately following completion of such sale;

 

1.11 “Asset Transfer Agreement” means the asset transfer agreement dated
18 December 2013 between Guarantor 1 and Guarantor 2, pursuant to which certain
assets were transferred from Guarantor 1 to Guarantor 2;

 

1.12 “Business Day” means any day on which banks are generally open for business
in London and Stockholm other than a Saturday or Sunday;

 

1.13 “Business Plan” means the business plan and budget for the Group dated
25 November 2014;

 

1.14 “Change of Control” means a situation where any person, or group of
connected persons not having control (as defined in sections 450 and 451 of the
Corporation Tax Act 2010) of a Group Company on the Restatement Date acquires
control of the relevant Group Company (including any situation where control of
any Group Company is acquired as a consequence or in connection with the listing
of equity securities on any stock exchange);

 

1.15 “Charged Assets” means the assets and undertaking charged or to be charged
to the Lender from time to time pursuant to the Security Documents;

 

1.16 “Companies Registrar” means the Registrar of Companies in England and Wales
and /or the equivalent in any relevant foreign jurisdiction;

 

1.17 “Conditions Subsequent” means the conditions set out in clause 3.8;

 

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1.18 “Confidential Information” means all information relating to the Borrower,
any Guarantor, the Group, the Finance Documents or the Loan of which the Lender
becomes aware (or has become aware) in its capacity as, or for the purpose of
becoming, a Lender or which is received by the Lender in relation to, or for the
purpose of becoming the Lender under, the Finance Documents or the Loan, from
any member of the Group or any of its advisers, in whatever written form, and
includes information given in any document, electronic file or any other way of
representing or recording information which contains or is derived or copied
from such information but excludes information that:

 

  (i) is or becomes public information other than as a direct or indirect result
of any breach by the Lender of Clause 17; or

 

  (ii) is not identified in writing at the time of delivery as confidential by
any member of the Group or any of its advisers or which cannot reasonably be
considered to be confidential;

 

  (iii) is known by the Lender before the date the information is disclosed to
it in accordance with paragraphs (i) or (ii) above or is lawfully obtained by
the Lender after that date, from a source which is, as far as the Lender is
aware, unconnected with the Group and which, in either case, as far as the
Lender is aware, has not been obtained in breach of, and is not otherwise
subject to, any obligation of confidentiality;

 

1.19 “Confidentiality Agreement” means a confidentiality agreement in the form
agreed by the Borrower and the Lender;

 

1.20 “Confirmatory Assignments” means the assignment of the A4250 Patents from
AstraZeneca AB to Albireo AB for Sweden, Germany and Great Britain and the
assignment of the A3309 Patents from Astra Zeneca AB to Albireo AB for Sweden
and from Albireo AB to Elobix AB for Germany, Great Britain, Sweden, USA and
Canada, all in the agreed form;

 

1.21 “Contractual Currency” has the meaning given to it in Clause 5.3;

 

1.22 “Drawdown” means the drawdown of a Tranche under the Loan Facility;

 

1.23 “Drawdown Date” means, unless otherwise provided herein, the date on which
any Tranche is actually advanced to the Borrower by the Lender;

 

1.24 “Drawdown Notice” means a drawdown notice served in accordance with Clause
3.2 in the form attached hereto as Schedule A (as may be amended by the Borrower
with the prior written consent of the Lender);

 

1.25 “End of Loan Payment” means the End of Loan Payment set forth above under
the Loan Facility Terms;

 

1.26 “Event of Default” means any of the events or circumstances described in
Clause 9;

 

1.27 “Expiry Date” means in respect of each Tranche the date set forth above
under the heading Loan Facility Terms;

 

1.28 “Finance Documents” means this Loan Agreement, the Security Documents, the
Drawdown Notice, the Intra-Group Loan Agreement, the Shareholder Undertaking,
the Subordination Agreement, the Confirmatory Assignments and any other document
designated in writing as such by the Lender and the Borrower;

 

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1.29 “Financial Indebtedness” means (i) monies borrowed, (ii) finance or capital
leases, (iii) receivables sold or discounted (other than on a non-recourse
basis), (iv) other transactions or arrangements having the commercial effect of
borrowing, (v) the market to market value of derivative transactions entered
into in connection with protection against or benefit from fluctuation in any
rate or price, (vi) counter-indemnity obligations in respect of guarantees or
other instruments issued by a bank or financial institution; and
(vii) liabilities under guarantees or indemnities for any of the obligations
referred to in items (i) to (vi);

 

1.30 “First Drawdown” means drawdown of Tranche 1 of this Loan Facility;

 

1.31 “Fund Manager” means a person whose principal business is to make, manage
or advise upon investment in securities;

 

1.32 “Group” means (i) the Borrower and its subsidiaries (if any), (ii) any
holding company of the Borrower, and (iii) any subsidiaries of such holding
companies from time to time and “Group Company” means any member of the Group;

 

1.33 “Guaranteed Obligations”: all monies, debts and liabilities of any nature
from time to time due, owing or incurred by the Borrower to the Lender under or
in connection with any present or future debt facilities provided by the Lender
to the Borrower;

 

1.34 “Guarantors” means each of Guarantor 1 and Guarantor 2, and their
successors and assigns from time to time;

 

1.35 “Intellectual Property” means copyrights and related rights (including,
without limitation, rights in computer software), patents, supplementary
protection certificates, utility models, trade marks, trade names, service
marks, domain name registrations, registered and unregistered rights in designs,
database rights, semi-conductor topography rights, plant variety rights, rights
protectable by the law of passing off or by laws against unfair competition,
rights in undisclosed or confidential information (such as know how, trade
secrets and inventions (whether patentable or not)), and other similar
intellectual property rights (whether registered or not) and applications for
such rights as may exist anywhere in the world;

 

1.36 “Interim Repayment” means the payment in respect of interest accruing
during the period from each Drawdown Date to the first Monthly Repayment Date
being the amount of interest accruing at the Applicable Interest Rate on the
amount drawn down for the period from and including the Drawdown Date to the
First Monthly Repayment Date;

 

1.37 “Initial Security Documents” means the documents in the agreed form listed
in Schedule B and dated on or about the Agreement Date;

 

1.38 “Intra-Group Loan Agreement” means the intra-group loan agreement, in the
agreed form, entered into between the Lender and the Obligors (as amended, from
time to time, in accordance with its terms);

 

1.39 “Licence Agreements” means the intellectual property licence agreements
entered into between Guarantor 1 and each of Ferring International Center SA
(“Ferring”) (now terminated) and EA Pharma Co., Ltd. (formerly known as
Ajinomoto Pharmaceuticals Co. Ltd.) (“Ajinomoto”) dated 2 July 2012 and 2 April
2012 respectively and transferred by Guarantor 1 to Guarantor 2;

 

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1.40 “Loan” means the loan to be made in accordance with the terms of this Loan
Agreement;

 

1.41 “Loan Facility” means the loan facility set out in this Loan Agreement, as
varied, amended or extended from time to time;

 

1.42 “Loan Term” means with respect to each Tranche, the period commencing on
the Drawdown Date and expiring on the 36th Monthly Repayment Date thereafter;

 

1.43 “Minimum Drawdown Amount” means the minimum amount permitted to be drawn
down in each Tranche and is the amount set forth above under the heading Loan
Facility Terms;

 

1.44 “Monthly Repayment” means a monthly repayment of a Loan as stated in the
Repayment Schedule;

 

1.45 “Monthly Repayment Date” means the first Business Day of a calendar month,
and “First Monthly Repayment Date” shall mean the first Monthly Repayment Date
following the relevant Drawdown Date;

 

1.46 “Obligor” means each of the Borrower and Guarantors;

 

1.47 “Guarantor 1 Accounts” means the unaudited profit and loss account of
Guarantor 1 for the period ended 31 December 2013;

 

1.48 “Guarantor 2 Accounts” means the unaudited profit and loss account of
Guarantor 1 for the period ended 31 December 2013;

 

1.49 “Patents” means together the A3309 Patents and the A4250 Patents;

 

1.50 “Permitted Cash Payment” any cash payment made by a Guarantor to a bank
account of Albireo, Inc. unless such payment will result in the aggregate cash
balance across all accounts of Albireo, Inc. being greater than US$100,000 at
any one time (other than where such payment is being transferred by a Guarantor
for the purpose of Albireo, Inc. paying employee compensation, in which case
such cash balance will not exceed US$200,000 at any one time and the Borrower
shall notify the Lender concurrently with or before such transfer and supply the
Lender with reasonable supporting information to demonstrate that such payment
is for purposes of employee compensation);

 

1.51 “Permitted Disposals” shall mean:

 

  (i) any disposal of any obsolete or redundant vehicles, plant and equipment
for cash;

 

  (ii) any disposal of Charged Assets that is permitted by the terms of the
Finance Documents;

 

  (iii) the transfer of the A3309 Patents from Guarantor 1 to Guarantor 2
pursuant to the Asset Transfer Agreement and/or the relevant Confirmatory
Assignment;

 

  (iv) any payment of cash to a third party in such Obligor’s ordinary course of
business or any payment of cash to a member of the Group subject to clause
8.1.24;

 

  (v) any licencing of the Intellectual Property in the ordinary course of
trading on an arm’s length basis, provided that the proceeds of such licensing
are used for the business of the Group, which shall, for the avoidance of doubt,
include repayment obligations in respect of the Loan;

 

  (vi) any licencing of Intellectual Property of the Group between the Obligors;
and

 

  (vii) any sale of assets in the ordinary course of trading on arms length
terms.

 

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1.52 “Permitted Security Interest” shall mean: (i) any Security Interest
provided to the Lender under this Loan Agreement or any Security Document, (ii),
any netting or set off arrangement entered into by any Group Company in the
ordinary course of its banking arrangements for the purpose of netting debit and
credit balances, (iii) any lien arising by operation of law and in the ordinary
course of trading, (iv) any Security Interest created or arising under or in
connection with the Licence Agreements; and (v) any legal interest of
AstraZeneca AB in the Patents referred to in the Confirmatory Assignments
(pending registration of such assignments pursuant to Clause 3.8.1) and in any
other patents or applications owned by any Group Company;

 

1.53 “Permitted Transferee” means any of:

 

  (i) a Related Fund;

 

  (ii) any Affiliate of the Lender;

 

  (iii) any custodian of the Lender;

 

  (iv) any fund or financial institution whose business involves making or
holding equity or debt (or a combinations of debt and equity) investments; or

 

  (v) in the context of a secondary transaction (ie any transaction in which the
Lender sells its interest in the Loan as a package, together with the interest
in the Warrant Instrument (or any replacement thereof) held by Kreos Capital IV
(Expert Fund) Limited (or by any person to whom Kreos Capital IV (Expert Fund)
Limited has transferred or assigned such interests in accordance with the terms
thereof), to a third party and such third party assumes any remaining funding or
other obligations of the Lender under the Loan) any third party,

provided always that a person shall not be a Permitted Transferee to the extent
that person is engaged, interested or concerned whether as principal, agent,
representative, partner, director, employee, joint venturer, investor,
consultant or otherwise in the pharmaceutical or biotechnology sectors (but in
each case disregarding any holding of up to 5% of any class of securities of any
company listed on a recognised investment exchange);

 

1.54 “Related Fund” in relation to a fund, partnership, company, syndicate or
other entity whose business is managed by a Fund Manager (an “Investment Fund”)
or a nominee of that person):

 

  (i) any participant or partner in or member of any such Investment Fund or the
holders of any unit trust which is a participant or partner in or member of any
Investment Fund (but only in connection with the dissolution of the Investment
Fund or any distribution of assets of the Investment Fund pursuant to the
operation of the Investment Fund in the ordinary course of business);

 

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  (ii) any Investment Fund managed by that Fund Manager;

 

  (iii) any Parent Undertaking or Subsidiary Undertaking of that Fund Manager,
or any Subsidiary Undertaking of any Parent Undertaking of that Fund Manager; or

 

  (iv) any trustee, nominee or custodian of such Investment Fund and vice versa;
or

 

  (v) any Affiliate of the Investment Fund;

 

1.55 “Repayment Schedule” has the meaning given in Clause 5.2.3;

 

1.56 “Reservations” means:

 

  (i) the principle that equitable remedies are remedies which may be granted or
refused at the discretion of the court;

 

  (ii) the limitation of enforcement by laws relating to bankruptcy, insolvency,
liquidation, reorganisation, court schemes, moratoria, administration and other
laws generally affecting the rights of creditors;

 

  (iii) the time barring of claims under applicable statutes;

 

  (iv) the fact that a charge, even expressed as being fixed, will only qualify
as such if the chargee has the necessary degree of control over the relevant
assets and the proceeds thereof, and it exercises that control in practice; and

 

  (v) similar principles and similar matters arising under the laws of any
foreign jurisdictions in which the relevant obligations may have to be
performed;

 

1.57 “Sale” shall mean the first to occur of a Change of Control of Albireo
Pharma or the Borrower;

 

1.58 “Security Documents” means the Initial Security Documents, and any other
applicable document evidencing the security over assets of the Borrower (or any
Group Company), or (for the avoidance of doubt) any document creating a Security
Interest in favour of the Lender over any assets of the Group;

 

1.59 “Security Interest” means any mortgage, charge (whether fixed or floating,
legal or equitable), pledge, lien, hypothecation, assignment by way of security
or otherwise, trust arrangement, title retention or encumbrance, any other type
of security interest or preferential arrangement having a similar effect to any
of the foregoing or in the nature of security of any kind whatsoever and in any
jurisdiction;

 

1.60 “Security Period” means the period commencing on the Drawdown Date and
ending on the later of the date on which (i) the Lender is obliged to release
its Security Interest over the Charged Assets in accordance with clause 14; and
(ii) all amounts due and payable by the Borrower under this Loan Agreement and
the Security Documents have been indefeasibly repaid in full;

 

1.61 “Shareholder Loan Notes” means the loan notes of the Borrower issued to its
shareholders for an aggregate sum of 1,250,000 Euros pursuant to a loan note
instrument issued on or around the Agreement Date in the agreed form;

 

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1.62 “Subordination Agreement” means a subordination deed relating to any sums
owing by the Borrower to its shareholders pursuant to the Shareholder Loan Notes
in the agreed form;

 

1.63 “Shareholder Undertaking” means the undertaking to the Lender from certain
shareholders of the Borrower to provide up to 2,000,000 Euros of additional
equity in the agreed form;

 

1.64 “Taxes” means all present and future income, value added and other taxes,
levies, imposts, deductions, charges and withholdings in the nature of taxes
(other than taxes on the profits of the Lender) whatsoever together with
interest thereon and penalties with respect thereto made on or in respect
thereof;

 

1.65 “Total Loan Facility” means the amount set forth above under the heading
Loan Facility Terms;

 

1.66 “Tranche” an amount drawn down pursuant to this Loan Agreement as set forth
above under the heading Loan Facility Terms;

 

1.67 “Transaction Fee” has the meaning given in Clause 11.1 and is the amount
set forth above in the Loan Facility Terms;

 

1.68 “Warrant Certificate” shall have the meaning given to such term in the
Warrant Instrument; and

 

1.69 “Warrant Instrument” means a warrant instrument in agreed form creating
warrants that are to be issued by the Borrower to Kreos Capital IV (Expert Fund)
Limited on the Agreement Date.

 

2 INTERPRETATION

In this Loan Agreement (unless the context requires otherwise) any reference to:

 

2.1 any law or legislative provision includes a reference to any subordinate
legislation made under that law or legislative provision before the Agreement
Date, to any modification, re-enactment or extension of that law or legislative
provision made before that date and to any former law or legislative provision
which it consolidated or re-enacted before that date;

 

2.2 any gender includes a reference to other genders and the singular includes a
reference to the plural and vice versa;

 

2.3 a Clause or Schedule is to a Clause or Schedule (as the case may be) of or
to this Loan Agreement;

 

2.4 a “person” shall be construed as including a reference to an individual,
firm, company, corporation, unincorporated body of persons or any country (or
state thereof or any agency thereof);

 

2.5 an “amendment” includes a supplement, novation or re-enactment in writing
and “amended” is to be construed accordingly;

 

2.6 “assets” includes present and future properties, undertakings, revenues,
rights and benefits of every description;

 

2.7 an “authorisation” includes an authorisation, consent, approval, resolution,
licence, exemption, filing, registration and notarisation;

 

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2.8 a “regulation” includes any regulation, rule, official directive, request or
guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation;

 

2.9 “control” shall bear the meaning set out in sections 450 and 451 of the
Corporation Tax Act 2010;

 

2.10 “controlling interest” shall be construed accordingly;

 

2.11 “holding company” means a holding company within the meaning of section
1159 of the Companies Act 2006;

 

2.12 “subsidiary” means a subsidiary company within the meaning of section 1159
of the Companies Act 2006;

 

2.13 “Subsidiary Undertaking” means an undertaking within the meaning of section
1162 of the Companies Act 2006;

 

2.14 “Parent Undertaking” means an undertaking within the meaning of section
1162 of the Companies Act 2006;

 

2.15 Any reference to any clause (or to any specified provision) of this Loan
Agreement, or any other document or a provision of any other document, shall be
construed as a reference to this Loan Agreement, that document or a provision of
that document as in force for the time being and as amended in accordance with
the terms thereof, or, as the case may be, with the agreement of the relevant
parties and (where such consent is, by the terms of this Loan Agreement or the
relevant document, required to be obtained as a condition to such amendment
being permitted) the prior written consent of the Lender;

 

2.16 “other” and “otherwise” are not to be construed ejusdem generis with any
foregoing words where a wider construction is possible and “including” and “in
particular” are to be construed as being by way of illustration or emphasis only
and are not to be construed as, nor shall they take effect as, limiting the
generality of any foregoing words;

 

2.17 a document being in “agreed form” is a document which is previously agreed
in writing by or on behalf of the Lender and the Borrower;

 

2.18 any reference to an Event of Default being continuing is a reference to an
Event of Default that has not been waived or remedied to the satisfaction of the
Lender;

 

2.19 where any representation or warranty is qualified by knowledge, such
qualification shall mean to the knowledge of the relevant Obligor having made
all reasonable enquiry; and

 

2.20 the headings in this Loan Agreement are inserted for convenience only and
do not form part of this Loan Agreement and do not affect its interpretation.

 

3 LOAN FACILITY

 

3.1 Lender’s Commitment

 

3.1.1 Subject to Clause 3.5 below, the Lender agrees to make available to the
Borrower the Total Loan Facility under the terms of this Loan Agreement, to be
drawn down as set out in the Loan Facility Terms and in accordance with Clause
3.2.

 

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3.1.2 The Lender shall not be under any commitment to advance any Tranche or any
part thereof after the Expiry Date or upon the earlier termination of the Loan
Facility in accordance with Clause 3.4.

 

3.1.3 The unutilised portion (if any) of the Loan Facility shall be cancelled
after the expiry of the final period for Drawdown as specified in the Loan
Facility Terms, whereupon the Total Loan Facility shall be reduced accordingly.

 

3.1.4 In granting the Loan Facility the Lender is relying on the representations
and warranties contained in Clause 7.

 

3.1.5 Each Drawdown made under the Loan Facility shall be secured by the
Security Documents.

 

3.2 Date of Advance(s) of the Loan

Subject to Clause 3.1.2, (and subject to the satisfaction of the relevant
conditions set forth in Clause 3.5), Tranche 1 shall be advanced and made
available to the Borrower within 2 Business Days of the Agreement Date (with the
Borrower required to submit an executed Drawdown Notice in this regard). Further
Tranches shall be advanced and made available to the Borrower within fifteen
Business Days from receipt by the Lender of an executed Drawdown Notice. Each
Drawdown Notice shall constitute a separate and independent obligation of the
Borrower incorporating the terms of this Loan Agreement. Once a Drawdown Notice
has been delivered to the Lender, it is irrevocable. Each Tranche requested to
be advanced pursuant to a Drawdown Notice shall be in an amount equal to the
Minimum Drawdown Amount or a multiple thereof.

 

3.3 Method of Disbursement

The payment by the Lender to the account specified in the Drawdown Notice shall
constitute the making of the Loan (or the relevant part thereof) and the
Borrower shall thereupon become indebted, as principal and direct obligor, to
the Lender in an amount equal to the Loan (or the relevant part thereof).

 

3.4 Termination or Modification of Funding Commitment

The Lender’s commitment to advance each Tranche of the Loan in accordance with
the terms of this Loan Agreement is limited in aggregate to the amount of the
Total Loan Facility; provided, however, that the Lender, acting in its sole
discretion, may terminate or modify its funding commitment pursuant to this Loan
Agreement at any time if:

 

3.4.1 there is, in the reasonable opinion of the Lender, any material adverse
change in the general affairs, business, management, results of operations,
condition (financial or otherwise) or prospects of the Group whether or not
arising from transactions in the ordinary course of business;

 

3.4.2 there is, in the Lender’s reasonable opinion, any accelerated depreciation
in the value of the Charged Assets;

 

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3.4.3 there is, in the reasonable opinion of the Lender, any material deviation
by the Borrower from the Business Plan (as it may have been supplemented in
writing with the prior consent of the Lender) presented to the Lender prior to
the Agreement Date;

 

3.4.4 on either the date of the Drawdown Notice or at the Drawdown Date:

 

  (i) an Event of Default has occurred and is continuing or would result from
the borrowing to be made pursuant to the Drawdown Notice; or

 

  (ii) the Borrower’s representations and warranties in Clause 7.1 or those
which are set out in any Security Document would not be true if repeated on each
of those dates with reference to the circumstances then existing.

 

3.5 Conditions Precedent requirements relative to the Advance of the Loan

 

3.5.1 Subject to clause 3.5.2 the Lender’s obligation to provide the Loan (or
any part thereof) is subject to the prior satisfaction by the Borrower of the
following conditions (or waiver thereof by the Lender):

 

  (i) the provision of a certified copy of the resolutions of the Borrower’s and
each Guarantor’s board of directors and, to the extent required, shareholders,
authorising the transactions contemplated by this Loan Agreement and the
execution and delivery to the Lender of this Loan Agreement and the Finance
Documents;

 

  (ii) certified copies of the Certificate of Incorporation and the Memorandum
and Articles of Association of the Borrower in force at the Agreement Date, plus
certified up to date copies of the registration certificates and articles of
association of each Guarantor in force at the Agreement Date;

 

  (iii) all necessary consents of shareholders, warrant holders, and other third
parties (including landlords) with respect to the entering into of this Loan
Agreement and the execution of the Finance Documents, have been obtained;

 

  (iv) a certificate of a director of:

 

  (a) the Borrower in the agreed form confirming that the borrowing of the Loan
Facility in full would not cause any borrowing limit binding on the Borrower to
be exceeded; and

 

  (b) Guarantor 1 and Guarantor 2 in the agreed form confirming that the
guaranteeing of the Loan Facility in full (subject to agreed limitations as set
out in Clause 10.1.3) would not cause any guaranteeing limit binding on such
Guarantor to be exceeded;

 

  (v) specimen signatures, authenticated by a director or the company secretary
of the Borrower, of the persons authorised to execute and deliver this Loan
Agreement and the Finance Documents, in the resolutions of the board of
directors referred to in Clause 3.5.1(i);

 

  (vi) the parties having executed and delivered to the Lender the Finance
Documents and each notice required to be sent under the Security Documents;

 

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  (vii) in the Lender’s sole opinion, there has been no accelerated depreciation
in value of the Charged Assets;

 

  (viii) the Borrower’s compliance with Clauses 11.1 and 11.2 (it being agreed
between the parties that (without prejudice to the terms of Clauses 4.1 and 4.2)
such compliance can be satisfied, at the option of the Borrower with respect to
liabilities under Clause 11.2, by such agreed amounts being withheld by the
Lender from the proceeds of the Drawdown);

 

  (ix) delivery to the Lender of the Business Plan;

 

  (x) delivery to the Lender of the most recent management accounts of the
Borrower (being those prepared to 30 November 2014);

 

  (xi) delivery to the Lender of any such other documentation in form and
substance reasonably satisfactory to the Lender as the Lender may reasonably
request;

 

  (xii) the Charged Assets being free and clear of all Security Interests
whatsoever (except for the Permitted Security Interest); and

 

  (xiii) the Borrower receiving (or having received during the 20 Business Days
preceding the Agreement Date) at least €1,250,000 pursuant to the Shareholder
Loan Notes,

each copy document delivered under conditions 3.5.1(ix) and (x) shall be
certified as a true and up to date copy by a director or the company secretary
of the Borrower.

 

3.5.2 Unless the Lender shall otherwise reasonably require, on any subsequent
drawdown after First Drawdown satisfaction of conditions in Clauses 3.5.1 (v),
(vi), (ix) and (x) shall not be necessary.

 

3.5.3 The Borrower on the Agreement Date shall:

 

  (i) deliver to Kreos Capital IV (Expert Fund) Limited an original of the
Warrant Instrument; and

 

  (ii) deliver to Kreos Capital IV (Expert Fund) Limited an original Warrant
Certificate.

 

3.6 Waiver Possibility

If the Lender advances all or any part of the Loan to the Borrower prior to the
satisfaction of all or any of the conditions referred to in Clause 3.5 (which
the Lender has no obligation to do) the Borrower shall satisfy or procure the
satisfaction of such condition or conditions which have not been satisfied
within fourteen (14) Business Days of the Drawdown Date (or within such longer
period as the Lender may agree or specify in writing), provided, that the Lender
at its discretion may waive the satisfaction of any condition, in whole or in
part and with or without conditions, without prejudicing the Lender’s right to
require subsequent fulfilment of such conditions.

 

3.7 Charged Assets

 

3.7.1 Unless the Lender shall otherwise agree in writing, the Borrower shall use
the Loan solely for the purpose of general working capital and for supporting of
the financial needs of Guarantor 1 and Guarantor 2. The Lender shall not be
under any obligation to concern itself with the application of the Loan.

 

3.7.2 The Charged Assets charged to the Lender pursuant to the Security
Documents shall form security for the monies borrowed by the Borrower.

 

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3.8 Conditions Subsequent

 

3.8.1 Immediately after First Drawdown, the Borrower shall instruct one of its
patent agents, Novitas Patent AB or Zacco Sweden AB, using appropriate local
counsel (where necessary), to deliver the Confirmatory Assignments to the
relevant patent registries to record the relevant Guarantor as the holder of the
patents referred to therein without delay and to prepare and deliver the
documents required to register the Lender’s security interests over the Patents
to the patent registries of UK, USA, Germany, Canada and Sweden as soon as
reasonably possible and thereafter use all commercially reasonable endeavours to
achieve registration of the Guarantors as the holders of the patents in each
aforesaid jurisdiction and registration of the Lender’s security interests
thereon. If any objection or challenge to any such registration is received or
if any material delay in any such registration occurs or is likely to occur, the
Borrower shall forthwith inform the Lender thereof, and, without prejudice to
the Lender’s rights hereunder, agree how to deal with such objection, challenge
or delay. The Lender may, by written notice to the Borrower, take on the
registration process from the Borrower at the cost of and with the continuing
assistance of the Borrower at any time.

 

3.8.2 Excluding any original documents required to be retained by the Borrower
for the purpose of completing the registration formalities under Clauses 3.8.1
and 3.8.3, the original counterparts of those documents referred to in Clause
3.5.1(vi) that have been executed by any of the Obligors or any shareholder of
the Borrower shall be sent to the Lender (or their solicitors) within 5 Business
Days in respect of documents executed by the Borrower or any such shareholder
who is ordinarily resident in the United Kingdom and within 10 Business Days in
respect of documents executed by Guarantor 1 and Guarantor 2 or any such
shareholder who is ordinarily resident in a jurisdiction other than the United
Kingdom following signing of this Loan Agreement.

 

3.8.3 The Borrower shall submit all relevant Security Documents to the Companies
Registrar or any equivalent in any relevant foreign jurisdiction and register
the applicable Security Interests therein, subject to compliance with all
applicable laws in respect of such registration within the time frame provided
for under applicable law.

 

4 TERM

 

4.1 This Loan Agreement is effective upon execution by the Lender and the
Borrower and shall continue until the later of (i) the Expiry Date and (ii) the
date upon which the Borrower shall have unconditionally performed all its
obligations hereunder.

 

4.2 If the conditions set out in Clause 3.5 have not been satisfied on or prior
to the Expiry Date (except to the extent waived in writing by the Lender), the
Lender shall in its sole discretion have the option to either terminate this
Loan Agreement or extend the relevant Expiry Date for the purpose of extending
the period in which such conditions must be satisfied.

 

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5 REPAYMENT AND PREPAYMENT

 

5.1 Advance Payment

On the date of each Drawdown with respect to a Tranche, the Borrower shall pay
to the Lender (by way of deduction by Lender from the amount of the Tranche
actually advanced to the Borrower) the advance payment specified above in the
Loan Facility Terms with respect to the applicable Tranche (the “Advance
Payment”) which shall be held by the Lender and applied in or towards payment of
the last Monthly Repayment in respect of that particular Tranche (or applied by
the Lender as a reduction in the sums due and payable from the Borrower in
respect of any pre-payment made under clause 5.4).

 

5.2 Repayments

 

5.2.1 The Borrower shall pay all unpaid and accrued interest in respect of each
Tranche outstanding on each Monthly Repayment Date.

 

5.2.2 The Borrower shall repay principal in respect of each Tranche outstanding
in accordance with Clause 5.2.3.

 

5.2.3 Subject to the Repayment Term, the Borrower shall on each Monthly
Repayment Date and in respect of each Tranche, pay a fixed monthly amount to the
Lender as specified in a repayment schedule issued by the Lender prior to the
Drawdown Date in respect of each Tranche as shall be produced and may be revised
from time to time by the Lender in accordance with the terms of this Loan
Agreement (the “Repayment Schedule”) (save that the first six Monthly Repayments
of any Tranche shall be interest only).

 

5.2.4 All payments that the Borrower makes under this Loan Agreement shall be
made in full, without any deduction, set-off or counterclaim and in immediately
available cleared funds on the due date to an account which the Lender may
specify to the Borrower for the purpose.

 

5.2.5 The Repayment Schedule set out in Part B of Schedule A is in respect of
the Tranche 1 only (calculated on the assumption that the Drawdown Date for
Tranche 1 is the Agreement Date and that Drawdown Notice for Tranche 1 is for an
amount of €6,000,000) and whilst it is recognised and agreed by the parties that
the principles and basis of calculation contained therein (and otherwise
provided for in this Loan Agreement) shall be applied consistently in respect of
other Repayment Schedules produced by the Lender in respect of Further Tranches,
the Borrower acknowledges that the Repayment Schedule set out in Part B of
Schedule A is for indicative purposes only (and is not conclusive and binding on
the Lender) in respect of Further Tranches.

 

5.2.6 The Lender shall have the right to issue a revised Repayment Schedule from
time to time (and the Borrower acknowledges that the amount required to be
repaid pursuant to Clause 5.2.3 may be increased from time to time in accordance
with any revised Repayment Schedule) if the Lender considers it necessary
following any failure by the Borrower to make any Monthly Repayment on the due
date in order to ensure that, in respect of each Tranche, on the expiry of the
Loan Term there will be no amounts owing from the Borrower to the Lender
pursuant to this Loan Agreement, or in the event of any manifest error contained
in a prior Repayment Schedule.

 

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5.2.7 The Borrower shall with respect to each Tranche repay the principal amount
of the Loan for such Tranche outstanding together with all accrued and unpaid
interest, the End of Loan Payment for such Tranche, all unpaid fees, costs and
expenses and all other sums due and payable by the Borrower to the Lender under
this Loan Agreement in respect of such Tranche and the Security Documents on the
expiry of the Loan Term with respect to each Tranche.

 

5.2.8 Subject to clause 5.2.9, each payment received by the Lender in respect of
any Tranche shall be applied as follows:

 

5.2.8.1 firstly, to discharge all outstanding fees, costs and expenses of or due
to the Lender in respect of such Tranche;

 

5.2.8.2 secondly, to discharge all accrued interest in respect of such Tranche;
and

 

5.2.8.3 thirdly, to reduce the outstanding principal balance of such Tranche.

 

5.2.9 For the avoidance of doubt, the Lender may in its discretion apply any
payment received or recovered from the Borrower to discharge any unpaid amount
in respect of any Tranche.

 

5.2.10 Any amount repaid or prepaid may not be redrawn.

 

5.2.11 If the Drawdown Date is not a Monthly Repayment Date, the Borrower shall
pay to the Lender on the Drawdown Date (by way of deduction by the Lender of the
amount of the Tranche actually advanced to the Borrower) the Interim Repayment
which shall discharge interest accrued on the Tranche for the period from the
Drawdown Date to First Monthly Repayment Date.

 

5.3 Currency of Payments

Repayment of the Loan and payment of all other amounts owed to the Lender will
be paid in the currency in which the each Tranche has been provided (the
“Contractual Currency”), i.e. in Euros, unless otherwise agreed by the parties
in writing. The Borrower shall bear the cost in the event of and in respect of
any conversion of a currency to the Contractual Currency.

 

5.4 Prepayments

 

5.4.1 The Borrower shall be entitled to prepay the Loan, in whole but not in
part, subject to the following conditions:

 

5.4.1.1 the Borrower shall submit to the Lender an irrevocable written request
to prepay the Loan, at least 30 Business Days in advance, indicating the amount
to be prepaid and the date of the proposed prepayment, provided that such
prepayment shall be made on the last Business Day of a calendar month;

 

5.4.1.2 on the date of prepayment the Borrower shall pay the Lender an amount
equal to:

 

  (i) the outstanding principal amount of the Loan;

 

  (ii) all accrued and unpaid interest;

 

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  (iii) in respect of each Tranche, the aggregate of the future monthly interest
payments scheduled to be paid by the Borrower on each Monthly Repayment Date (as
is set out in the most recent Repayment Schedule issued by the Lender) each
discounted for the period from the date of prepayment to the expiry of the Loan
Term, in each case discounted from the applicable Monthly Repayment Date to the
date of prepayment at the rate of 5% (five per Cent.) per annum. For the
avoidance of doubt, no partial repayments of the Loan are permitted under this
Clause 5.4.1.2 or otherwise;

 

  (iv) the End of Loan Payment;

 

  (v) all unpaid fees, costs and expenses due and payable by the Borrower to the
Lender under this Loan Agreement; and

 

  (vi) all other sums due and payable by the Borrower to the Lender under this
Loan Agreement,

and to the extent that the Lender considers that any calculation in a written
request received from the Borrower under this clause 5.4 is incorrect or that
other sums would otherwise be due and payable on the proposed date of repayment,
the Lender shall promptly notify the Borrower in writing of any corrected figure
or identifying the amount and nature of such additional sums.

 

5.4.2 Subject to Clause 5.4.3, upon the occurrence of a Change of Control or a
Sale, the Borrower shall be deemed to have served a notice under Clause 5.4.1.1
with the relevant date for prepayment of the amounts provided for under Clause
5.4.1.2 being the last Business Day of the calendar month in which such notice
is deemed to have been served.

 

5.4.3 The parties agree that the Albireo Reverse Transaction (and the entry by
the Borrower or any of its shareholders into any agreement for the purpose of
effecting the Albireo Reverse Transaction) shall not result in a deemed service
of notice under Clause 5.4.1.1 (or, for the avoidance of doubt, Clause 5.4.2).

 

6 INTEREST

 

6.1 Interest on the principal amount of each Tranche from time to time shall
accrue from day to day at a rate of 11.5% per annum (the “Applicable Interest
Rate”), from the Drawdown Date until the repayment in full of the relevant
Tranche. Interest on the Loan and each part thereof shall be calculated and paid
in the Contractual Currency.

 

6.2 Time of payment of any sum due from the Borrower is of the essence under
this Loan Agreement. If the Borrower fails to pay any sum to the Lender on its
due date for payment the Borrower shall pay to the Lender forthwith on demand
interest on such sum (compounded on a monthly basis) from the due date to the
date of actual payment (as well after as before judgment) at a rate equal to the
Applicable Interest Rate plus 3% per annum. If the Borrower fails to pay any sum
within ten (10) Business Days after such sum is due, the Borrower shall pay to
the Lender a one off late payment charge of 3% of such sum to compensate the
Lender for additional administrative expense.

 

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7 REPRESENTATIONS AND WARRANTIES

 

7.1 The Borrower and each Guarantor as relevant warrants and represents the
following as at Agreement Date:

 

7.1.1 the Borrower is a private limited company duly organised and validly
existing under the laws of England and Wales;

 

7.1.2 Guarantor 1 is a private limited company duly organised and validly
existing under the laws of Sweden;

 

7.1.3 Guarantor 2 is a private limited company duly organised and validly
existing under the laws of Sweden;

 

7.1.4 the Borrower and each Guarantor as relevant has the corporate capacity,
and has taken all corporate action and obtained all consents, including third
party consents, necessary for it:

 

  (i) to execute this Loan Agreement, and each Finance Document and Security
Document to which the Borrower and/or each Guarantor is or is to be party;

 

  (ii) to borrow or guarantee (as applicable) under this Loan Agreement and to
make all the payments contemplated by, and to comply with all its other
obligations under this Loan Agreement, and each Finance Document to which the
Borrower and/or each Guarantor is or is to be party; and

 

  (iii) to grant the Lender first priority Security Interest in respect of the
Charged Assets pursuant to the Security Documents to which the Borrower and/or
each Guarantor is or is to be party;

 

7.1.5 subject to the Reservations and to the agreement of the Lender hereunder
that its security over the Patents is only registered in certain jurisdictions,
this Loan Agreement, and the Finance Documents and Security Documents to which
the Borrower and/or each Guarantor is or is to be party, do now or, as the case
may be, will, upon execution and delivery (and, where applicable, registration
as provided for in this Loan Agreement and the Security Documents):

 

  (i) constitute the legal, valid and binding obligations of the Borrower and
each Guarantor, enforceable against the Borrower and each Guarantor in
accordance with their respective terms; and

 

  (ii) create legal, valid and binding security interests enforceable in
accordance with their respective terms;

 

7.1.6 the execution and (where applicable) registration by the Borrower and/or
each Guarantor of this Loan Agreement and each Finance Document and Security
Documents to which it is or is to be party, and the borrowing by the Borrower of
the Loan and its compliance with this Loan Agreement and each Finance Document
to which the Borrower and/or each Guarantor is or is to be party, will not
involve or lead to a contravention of:

 

  (i) any applicable law or other legal requirement; or

 

  (ii) the constitutional documents of the Borrower or any Guarantor; or

 

  (iii) any contractual or other obligation or restriction which is binding on
the Borrower or any Guarantor or any of their assets;

 

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7.1.7 save with respect to any registrations that are required to be obtained
under clause 3.8, all consents, licences, approvals and authorisations required
by the Borrower and/or each Guarantor in connection with the entry into,
performance, validity and enforceability of this Loan Agreement, and the Finance
Documents and the Security Documents to which it is or is to be party have been
or (upon execution thereof) shall have been obtained by the Drawdown Date and
are (or upon execution thereof shall be) in full force and effect during the
life of this Loan Agreement;

 

7.1.8 all financial and other information furnished by or on behalf of the
Borrower and/or each Guarantor in connection with the negotiation of this Loan
Agreement and the Finance Documents and Security Documents delivered to the
Lender pursuant to this Loan Agreement or the Finance Documents or Security
Documents was true and accurate in all material respects when given, there are
no other facts or matters the omission of which would have made any statement or
information contained therein misleading in any material respect and all
projections and statements of belief and opinion given to the Lender were made
in good faith after due and careful enquiry;

 

7.1.9 the Accounts, Guarantor 1’s Accounts and Guarantor 2’s Accounts were
prepared in accordance with accounting principles and practices generally
accepted in the jurisdiction of incorporation of the Guarantor to which such
accounts relate and consistently applied and fairly represent (in conjunction
with the notes thereto) the financial condition of such Guarantor as at the date
to which they were drawn up and the results of that Guarantor’s operations
during the financial year then ended;

 

7.1.10 since publication of the Accounts, there has been no material adverse
change in the business or financial condition of the Borrower and or Guarantor 1
or Guarantor 2;

 

7.1.11 the management accounts of the Group prepared to 30 November 2014 were
prepared with all due care and on a basis consistent with generally accepted
accounting principles and practices used by the Group in the preparation of
management accounts and accurately reflect the financial position of the Group
at such date;

 

7.1.12 the Business Plan has been prepared with all due care in accordance with
the facts and the opinions stated therein are reasonable and since the Business
Plan has been prepared, there has been no material adverse change in the
business or financial condition of the Group;

 

7.1.13 the Borrower has its centre of main interest (COMI) in the United Kingdom
for the purposes of the EU Regulations on Insolvency Proceedings 2000;

 

7.1.14 Guarantor 1 has its COMI in Sweden for the purposes of the EU Regulations
on Insolvency Proceedings 2000;

 

7.1.15 Guarantor 2 has its COMI in Sweden for the purposes of the EU Regulations
on Insolvency Proceedings 2000;

 

7.1.16 there is no action, proceeding or claim pending or, so far as the
Borrower and/or any Guarantor is aware or ought reasonably to be aware,
threatened against any Group Company before any court or administrative agency
which might have a material adverse effect on the business, condition of
operations of the Borrower and any Guarantor;

 

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7.1.17 the Borrower and/or each Guarantor owns with good and marketable title
all the Charged Assets and, subject to the Licence Agreements in relation to the
A3309 Patents, the Charged Assets are free from all security interests and other
interests and rights of every kind except for any Permitted Security Interest,
(but not including 1.49 (ii) and (iii)). Subject to the Confirmatory Assignments
and (in respect of pending registrations) as stated in Schedule C, all the
Patents are duly registered in the names of either the Borrower or one of the
Guarantors in those jurisdictions listed in Schedule C, all renewal and other
fees are paid up to date in respect of the Patents, all applications for Patents
(as applicable) are being duly prosecuted and no material third party challenge
or objection to any such Patents and applications for Patents has been received
or are threatened, and so far as each Obligor is aware, there are no
circumstances existing in which any such challenge or objection is reasonably
likely;

 

7.1.18 the Licence Agreements, when read together with the Asset Transfer
Agreement and Confirmatory Assignments, contains all terms and conditions
relating to the matters contained therein, and since their signature, there has
been no variation, waiver or release of their terms. The Licence Agreements are,
subject to the application of the Asset Transfer Agreement, in full force and
effect. Save with respect to any breach or potential breach of the Licence
Agreements that may have arisen in connection with of Ferring International
Center SA’s conduct of the development program, so far as the Borrower and/or
any Guarantor is aware no breach of the Licence Agreements is continuing and no
Group company is aware of any actual or potential breach of the Licence
Agreements;

 

7.1.19 neither the Borrower nor any Guarantor is insolvent, or subject to
bankruptcy proceedings or other admission to other insolvency proceedings and is
not in any situation that would require recapitalization pursuant mandatory
provisions or any laws applicable to the Borrower or each Guarantor;

 

7.1.20 the provision of all management and other services carried out by Group
Companies for the benefit of other Group Companies is and will continue to be on
normal arms’ length terms.

 

7.2 The representations and warranties of the Borrower and each Guarantor set
out in this Clause 7 shall survive the execution of this Loan Agreement and
shall be deemed to be repeated on each Drawdown Date with respect to the facts
and circumstances then existing, as if made at such time including that, in
respect of paragraphs 7.1.9 to 7.1.12, references to Accounts, management
accounts and Business Plan shall refer to the latest available version of such
documents on each Drawdown Date.

 

7.3 The Lender hereby agrees that it shall not constitute a breach of any
warranty and representation given (or repeated) by the Borrower and each
Guarantor under clauses 7.1 and 7.2 if on the date that such warranty or
representation is given (or repeated) the transfers of the Patents from
AstraZeneca AB to Albireo AB (and, where relevant, from Guarantor 1 to Guarantor
2 pursuant to the Asset Purchase Agreement and/or the Confirmatory Assignments)
have not been registered with the relevant recordal authorities (which in
respect of the registration of transfers that are required to be undertaken
pursuant to Clause 3.8.1, is only as a result of the time taken by the relevant
authority in the normal course of its business to carry out such recordal
(rather than any other reason including any breach of Clause 3.8.1)), and so
long as they remain registered in the names of those holders set out in Schedule
C.

 

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8 UNDERTAKINGS

 

8.1 Subject to Clause 8.2 with respect to the Information Covenants below, the
Borrower and each Guarantor undertakes to the Lender to comply with the
following provisions of this Clause 8 at all times during the Security Period:

Information Covenants

 

8.1.1 the Borrower and each Guarantor will provide to the Lender with the
following information by way of monthly reports:

 

8.1.1.1 details of any changes to the management/directors of any Group Company;

 

8.1.1.2 details of any Group Company incorporated on or after the Agreement
Date;

 

8.1.1.3 any statement, statement of accounts, reports or any other information
as required to be provided on a monthly basis under the Security Documents;

 

8.1.1.4 such other information (financial or otherwise) as the Lender may
reasonably request from time to time concerning any Group Company and its
affairs (including, without limitation, information concerning the Charged
Assets, its assets from time to time and any request for amplification or
explanation of any item in the financial statements, budgets or other material
provided by the Borrower and/or each Guarantor under this Loan Agreement);

 

8.1.2 the Borrower and/or each Guarantor will provide to the Lender all
documents, confirmations and evidence required by the Lender to satisfy its
“know your customer” requirements or similar identification checks in order to
meet its obligations from time to time under applicable money laundering, or
similar, laws and regulations;

 

8.1.3 when available, but no later than: (a) forty-five (45) days after the last
day of each fiscal quarter, the Borrower will provide to the Lender a
company-prepared consolidated balance sheet, statement of cash flow and
statement of operations covering the Group’s consolidated operations for such
fiscal quarter; and (b) one hundred eighty (180) days after the last day of
Borrower’s fiscal year, audited consolidated financial statements of the Group
as of and for such fiscal year, together with an unqualified opinion on the
financial statements (other than any qualifications with respect to
“going-concern”) from an independent certified public accounting firm acceptable
to Lender in its reasonable discretion, it being understood that Ernst & Young
LLP is acceptable to Lender;

 

8.1.4 the Borrower will provide the Lender with (and shall procure that this
Group Company will provide the Lender with) all documents dispatched by the
Borrower and each Group Company to all its shareholders, or all its creditors,
generally at the same time as they are dispatched;

 

8.1.5 the Borrower will grant the Lender the right, on reasonable notice, to
have a representative of the Lender meet with the managing director and finance
director of the Borrower throughout the Security Period to review and discuss
the operating performance and financial condition of the Group. In addition,
upon the occurrence of an Event of Default the Lender shall be entitled to have
a representative to attend all meetings of the Borrower’s board of directors in
a non-voting observer capacity for so long as the relevant Event of Default is
continuing (and the Borrower agrees to give notice of all board meetings to the
Lender at the same time as to its directors during such period);

 

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8.1.6 the Borrower will notify the Lender as soon as it becomes aware of:

 

  (i) the occurrence of an Event of Default; or

 

  (ii) any matter which indicates that an Event of Default has occurred, may
have occurred or is likely to occur,

and will thereafter keep the Lender fully up to date with all developments
concerning such Event of Default;

Other Covenants

 

8.1.7 the Borrower and each Guarantor will maintain in force and promptly obtain
or renew, and will promptly send certified copies to the Lender of, all consents
required:

 

  (i) for the Borrower and each Guarantor to perform its obligations under this
Loan Agreement and each Finance Document, as relevant;

 

  (ii) for the validity or enforceability of this Loan Agreement and any Finance
Document; and

 

  (iii) for the Borrower and each Guarantor to continue to own the Charged
Assets,

and the Borrower and each Guarantor will, comply with the terms of all such
consents;

 

8.1.8 the Borrower and each Guarantor will obtain, effect and keep effective all
permissions, licences, consents, registrations and permits which may from time
to time be required (i) in connection with the Charged Assets, (ii) to conduct
its business, and (iii) to continue to use on current terms, all material
Intellectual Property used in its business, provided however that neither the
Borrower nor any Guarantor shall be obliged to maintain any registrations of any
patents other than the Patents and, other than as required pursuant to Clauses
3.8.1, 8.1.21 and 8.1.22, neither the Borrower nor any Guarantor shall be
required to register a transfer or maintain any registrations of those Patents
that are (a) currently registered in the name of AstraZeneca AB (as set out in
Schedule C); or (b) that should otherwise be registered in the name of Guarantor
2 pursuant to the Asset Transfer Agreement or the Confirmatory Assignment but
are currently registered in the name of Guarantor 1 (as set out in Schedule C);

 

8.1.9 the Borrower and each Guarantor will maintain adequate risk protection
through insurances on and in relation to its business and assets to the extent
reasonably required on the basis of good business practice taking into account,
inter alia, its (and any Group Company’s) financial position and nature of
operations. All insurances must be with reputable independent insurance
companies or underwriters;

 

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8.1.10 the Borrower and each Guarantor shall not incur or allow to remain
outstanding any Financial Indebtedness, except:

 

  (i) under this Loan Agreement;

 

  (ii) where a Group Company is lending to or borrowing from another Group
Company pursuant to the Intra-Group Loan Agreement;

 

  (iii) non-speculative hedging transactions entered into in the ordinary course
of business in connection with protection against interest rate or currency
fluctuations;

 

  (iv) arising in the ordinary course of business with suppliers of goods or
services with a maximum duration of 60 days;

 

  (v) owing under or in connection with sums raised by the Borrower pursuant to
clause 3.5.1(xiii); and

 

  (vi) Financial Indebtedness incurred with the prior written consent of the
Lender.

 

8.1.11 Notwithstanding Clause 8.1.10, the Borrower and each Guarantor shall not
incur or allow to remain outstanding any Financial Indebtedness owing to any
shareholder of a Group Company (excluding other Group Companies and excluding
amounts owing under or in connection with sums raised by the Borrower pursuant
to clause 3.5.1(xiii)) or any persons or companies related to them, unless such
Financial Indebtedness is on terms (including interest, repayment and
subordination) satisfactory to the Lender;

 

8.1.12 Guarantor 2 shall:

 

  (i) carry on the A3309 Business in accordance with the A3309 Business
Agreements and otherwise in the ordinary course for its own benefit, or, to the
extent that loans are made pursuant the Intra-Group Loan Agreement for the
benefit of the Group;

 

  (ii) not make any material change to the nature or extent of its business
other than with the prior written consent of the Lender, such consent not to be
unreasonably withheld or delayed;

 

  (iii) not incur any liabilities other than (a) to a Group Company or the
Lender pursuant to the A3309 Business Agreements; (b) to the licensees pursuant
to the Licence Agreements; and (c) any liabilities that arise as a matter of law
as a consequence of carrying on the A3309 Business as described in sub-paragraph
(i) above.

 

8.1.13 the Borrower and each Guarantor shall not create or permit to subsist any
Security Interest over any of its assets including the Charged Assets except for
a Permitted Security Interest;

 

8.1.14 the Borrower and each Guarantor will not sell, assign, transfer or
otherwise dispose of the Charged Assets or any share therein (except for any
Permitted Disposal) and shall give immediate notice to the Lender upon its
becoming aware of any judicial process or encumbrance affecting the Charged
Assets;

 

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8.1.15 other than a Permitted Disposal or Permitted Security Interest, the
Borrower and each Guarantor shall not:

 

  (i) sell, transfer or otherwise dispose of any of its assets on terms whereby
they are leased to or intended to be re-acquired by any Group Company or
otherwise; or

 

  (ii) sell, transfer or otherwise dispose of any of its receivables on recourse
terms;

 

  (iii) enter into any arrangement under which money or the benefit of a bank or
other account may be applied, set-off or made subject to a combination of
accounts; or

 

  (iv) enter into any other preferential arrangement having a similar effect in
circumstances where the arrangement or transaction is entered into primarily as
a method of raising Financial Indebtedness or of financing the acquisition of an
asset.

 

8.1.16 Guarantor 1 and Guarantor 2 shall:

 

  (i) use all reasonable endeavours to maintain in force for the benefit of the
Group the Licence Agreements including the recovery and prosecution of all
rights to receive licence fees and other income deriving from them;

 

  (ii) not pledge or otherwise encumber or grant any security interest in or
over the Licence Agreements in whole or in part;

 

  (iii) not sell or assign the benefit of any right or interest in the Licence
Agreements or any benefit or income arising thereunder in whole or in part; and

 

  (iv) not amend the Licence Agreements in any material respect.

 

8.1.17 The Borrower and each Guarantor shall not grant any licence or any other
rights in or over any of their Intellectual Property (including the patents that
are subject to the Licence Agreements) other than (i) in the ordinary course of
business for the benefit of the Group; (ii) as between Group Companies for the
benefit of the Group; or (iii) pursuant to the obligations owing to the Lender
under this Loan Agreement and the Finance Documents.

 

8.1.18 the Borrower and each Guarantor will not make any distribution by way of
dividend or otherwise without the prior written consent of the Lender, provided
that, subject to the Intra-Group Loan Agreement, each Guarantor shall be
entitled to make a distribution to any Group Company without the prior consent
of the Lender;

 

8.1.19 the Borrower and each Guarantor shall be responsible for all costs
associated with the Charged Assets including all tax assessments, insurance
premiums, operating costs and repair and maintenance costs as well as any fees
associated with registering or perfecting of any Security Interest granted in
connection with this Loan;

 

8.1.20 the Borrower and each Guarantor shall at the request of the Lender from
time to time execute and deliver such further documents creating Security
Interests in favour of the Lender over the assets of the Borrower or a

 

24

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  Guarantor (but only where the relevant asset has been created, registered,
commercialised or acquired by the Borrower or a Guarantor (as applicable) after
the Agreement Date and only then to the extent that the relevant asset is, at
the date of the Lender’s request, and in the reasonable opinion of the Lender,
of material value taking account of the aggregate value of all assets of the
Group as at that same date) and in such form as the Lender may reasonably
require in its discretion from time to time to (i) secure all monies,
obligations and liabilities of the Borrower and/or any Group Company to the
Lender or (ii) following an Event of Default facilitate the realisation of the
Charged Assets or (iii) following an Event of Default exercise the powers
conferred on the Lender or a receiver appointed under any Security Document,
from time to time;

 

8.1.21 the Borrower and each Guarantor shall at the request of the Lender use
all commercially reasonable endeavours to register the Lender’s security
interests that are granted over the A3390 Patents pursuant to the pledge to be
entered into by the Lender and Guarantor 2 as part of the Initial Security
Documents in those jurisdictions requested by the Lender (acting reasonably,
taking into account the cost of the Borrower and Guarantors associated with
registrations in such additional jurisdictions) and being only those
jurisdictions in which, in the reasonable opinion of the Lender, the business of
Guarantor 2 is developing to a material respect;

 

8.1.22 the Borrower and each Guarantor shall at the request of the Lender use
all commercially reasonable endeavours to register the Lender’s security
interests that are granted over the A4250 Patents pursuant to the pledge to be
entered into by the Lender and Guarantor 1 as part of the Initial Security
Documents in those jurisdictions requested by the Lender (acting reasonably,
taking into account the cost of the Borrower and Guarantors associated with
registrations in such additional jurisdictions) and being only those
jurisdictions in which, in the reasonable opinion of the Lender, the business of
Guarantor 1 is developing to a material respect in respect of the A4250 Patents;

 

8.1.23 the Borrower and each Guarantor shall, during any period in which amounts
are owing from the Borrower to the Lender under this Loan Agreement, provide the
Lender with the right of first offer and refusal on all future debt funding of
the Borrower and/or any member of the Group other than any loans made between
Group Companies and disregarding also any sums raised by the Borrower pursuant
to clause 3.5.1(xiii);and

 

8.1.24 each Guarantor shall not make cash payments, other than a Permitted Cash
Payment, to a bank account of another Group Company unless the bank account of
the recipient Group Company is subject to a Security Interest in favour of the
Lender.

 

8.2 For so long as the Borrower or any Group Company is subject to the reporting
requirements under the Securities Exchange Act of 1934, as amended, and publicly
files reports on Form 10-K, 10-Q or 8-K (as the case may be) to the Securities
and Exchange Commission containing all of the information required by Clause
8.1.1.1, 8.1.3 or 8.1.4 (if applicable, for the period and by the date set forth
therein), the Borrower may satisfy the requirements of such Clause 8.1.1.1,
8.1.3 or 8.1.4, as the case may be, by such filing.

 

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9 EVENTS OF DEFAULT

 

9.1 An Event of Default occurs if:

 

9.1.1 any Group Company fails to pay when due and payable or (if so payable) on
demand any sum payable under this Loan Agreement, the Subordination Deed or the
Security Documents or under any document relating to the Security Documents in
each case other than where the failure is a failure or delay in the system for
funds transfer and such sum (together with any default interest owing in respect
thereof) is subsequently paid within three Business Days of the due date; or

 

9.1.2 any other breach by any Group Company occurs of any provision of this Loan
Agreement, or any Finance Document or the Borrower or any Group Company does not
comply with, perform or observe any other obligation accepted or undertaking
given by it to the Lender, unless the Lender (at its discretion) notifies the
Borrower in writing that it is satisfied that the breach has not put any of the
security for the Loan at risk or the Group Company remedies such breach (being a
breach capable of remedy) to the reasonable satisfaction of the Lender within 10
Business Days of the earlier of the Lender notifying the Borrower of the default
and the Borrower becoming aware of the default; and

 

9.1.3 any representation, warranty or statement made by, or by an officer of,
any Group Company in this Loan Agreement, the Subordination Deed or the Security
Documents or in the Drawdown Notice is incorrect, untrue or misleading in any
material respect when it is made or deemed repeated; or

 

9.1.4 Financial Indebtedness of any Group Company in an amount which the Lender
reasonably considers to be material is not paid when due or any Security
Interest over any of the assets of any Group Company is lawfully enforced;

 

9.1.5 any order shall be made by any competent court, a petition presented
(except to the extent such petition is frivolous or vexatious and is discharged,
stayed or dismissed within 21 days of presentation) or any resolution shall be
passed by any Group Company for the appointment of a liquidator, administrator
or receiver of, or for the winding up of, any Group Company or a moratorium is
imposed or declared over any or all of the assets and business of any Group
Company; or

 

9.1.6 an encumbrancer lawfully takes possession of or a receiver, liquidator,
supervisor, compulsory manager, trustee, administrator or similar official is
appointed over the whole or, in the opinion of the Lender, any material part of,
the assets of any Group Company or a distress, execution or other process is
levied or enforced upon or sued out against the whole or, in the opinion of the
Lender, a material part of the assets of any Group Company; or

 

9.1.7 an administration application is presented or made for the making of an
administration order or a notice of intention to appoint an administrator under
Schedule B1 to the Insolvency Act 1986 is issued by any Group Company or its
directors or by the holder of a qualifying floating charge (as defined in such
Schedule) or a notice of appointment of an administrator is filed by any person
with the court; or

 

9.1.8 any judgment made against any Group Company is not paid, stayed, appealed
or discharged within 14 days; or

 

9.1.9 any Group Company shall stop payment or shall be unable to, or shall admit
inability to, pay its debts as they fall due, or shall be adjudicated or found
bankrupt or insolvent, or shall enter into any composition or other arrangement
with its creditors generally; or

 

26

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9.1.10 any event shall occur which under the law of any jurisdiction to which
any Group Company is subject has an effect equivalent or similar to any of the
events referred to in Clause 9.1.6 or 9.1.9; or

 

9.1.11 any Group Company ceases, threatens to cease, or suspends carrying on its
business or a material part of its business; or

 

9.1.12 it becomes unlawful or impossible (i) for the Borrower and/or each Group
Company (as relevant) to discharge any liability under this Loan Agreement or to
comply with any other obligation which the Lender considers material under this
Loan Agreement, the Subordination Deed or the Security Documents, or (ii) for
the Lender to exercise or enforce any right under, or to enforce any Security
Interest created by, this Loan Agreement or the Security Documents; or

 

9.1.13 subject to the Reservations and to the agreement of the Lender hereunder
that its security over the Patents is only registered in certain jurisdictions,
any provision of this Loan Agreement or the Finance Documents proves to have
been or becomes invalid or unenforceable, or a Security Interest created by the
Security Documents proves to have been or becomes invalid or unenforceable or
such a Security Interest proves to have ranked after, or loses its priority to,
another Security Interest or any other third party claim or interest, provided
however that if the Borrower and/or any Group Company proposes replacement
security, and such replacement security is of a type and value and is
constituted in a manner acceptable to the Lender within such period of time as
the Lender may require, such event shall cease to constitute an Event of
Default; or

 

9.1.14 the security constituted by the Security Documents is in any way
materially imperilled or in jeopardy (including by way of depreciation in value
beyond a normal depreciation or the failure to achieve registration of the
Lender’s Security Interests pursuant to Clauses 3.8.1, 8.1.21 or 8.1.22 and/or
the Security Documents or the decision of any Obligor to cease maintaining,
prosecuting or enforcing any Patent that is, in the reasonable opinion of the
Lender, of material value to that Obligor (but which, save for any breach of
Clause 3.8.1, 8.1.21 or 8.1.22, shall not extend to include any decision of an
Obligor to not register with the relevant recordal authorities the transfer of
the Patents from AstraZeneca AB to Albireo AB (and, where relevant, from
Guarantor 1 to Guarantor 2 pursuant to the Asset Purchase Agreement and/or the
Confirmatory Assignments)) or any other material Intellectual Property of the
Group) provided however that if the Borrower and/or any Group Company proposes
replacement security, and such replacement security is of a type and value and
is constituted in a manner acceptable to the Lender within such period of time
as the Lender may require, such event shall cease to constitute an Event of
Default; or

 

9.1.15 any other event (whether related or not) occurs (including, without
limitation, a material (in the reasonable opinion of the Lender) adverse change,
from the position applicable as at the Agreement Date) in the business affairs,
operations, assets or condition (financial or otherwise) of the Group, the
effect of which is, in the reasonable opinion of the Lender, to materially
imperil, delay or prevent the due fulfilment by the Borrower and each Group
Company of any of its material obligations or undertakings in this Loan
Agreement, the Subordination Deed or the Security Documents; or

 

9.1.16 any breach of a Subordination Deed occurs by any Group Company; or

 

9.1.17 any event of default (howsoever described) specified in the Security
Documents shall occur.

 

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9.2 Lender’s Rights

On or at any time following the occurrence of any Event of Default for so long
as such Event of Default is continuing the Lender may:

 

9.2.1 serve on the Borrower a notice stating that all obligations of the Lender
to the Borrower under this Loan Agreement including (without limitation) the
obligation to advance the Loan (or any part thereof) are terminated; and/or

 

9.2.2 serve on the Borrower a notice stating that the Loan, all accrued interest
and all other amounts accrued or owing under this Loan Agreement and the
Security Documents are immediately due and payable; and/or

 

9.2.3 declare the Security Documents to be enforceable; and/or

 

9.2.4 take any other action which, as a result of the Event of Default or any
notice served under Clauses 9.2.1 or 9.2.2 above, the Lender is entitled to take
under the Security Documents or any applicable law.

 

9.3 End of Lender’s Obligations

Subject to clause 17.5, on the service of a notice under Clause 9.2.1 and/or
Clause 9.2.2, all the obligations of the Lender to the Borrower under this Loan
Agreement shall terminate

 

9.4 Acceleration

On the service of a notice under Clause 9.2.2, the following sums shall become
immediately due and payable:

 

9.4.1.1 the outstanding principal amount of the Loan;

 

9.4.1.2 all accrued and unpaid interest;

 

9.4.1.3 in respect of each Tranche, the aggregate of the monthly interest
payments scheduled to be paid by the Borrower on each Monthly Repayment Date (as
is set out in the most recent Repayment Schedule issued by the Lender) for the
period from the date of prepayment to the expiry of the Loan Term, in each case
discounted from the applicable Monthly Repayment Date to the date of prepayment
at the rate of three per cent per annum;

 

9.4.1.4 the End of Loan Payment;

 

9.4.1.5 all unpaid fees, costs and expenses due and payable by the Borrower to
the Lender under this Loan Agreement; and

 

9.4.1.6 all other sums due and payable by the Borrower to the Lender under this
Loan Agreement and the Security Documents.

 

9.5 Waiver of Event of Default

The Lender, at its sole and absolute discretion, may waive any Event of Default
hereunder, prior to or after the event or events giving rise thereto, provided
that such waiver may be effected only by written notice provided by the Lender
to the Borrower to that effect (and subject further to Clause 18.2 below); it
being understood and acknowledged, that if and so long as no notice of waiver of
an Event of Default was so provided, such Event of Default shall be deemed as
having occurred and in effect for all purposes hereunder.

 

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10 GUARANTEE AND INDEMNITY

 

10.1 In consideration of the Borrower entering into this Loan Agreement, and
subject to Clause 10.2, the Guarantors severally guarantee to the Lender,
whenever the Borrower does not pay any of the Guaranteed Obligations when due,
to pay on demand the Guaranteed Obligations.

 

10.2 The Guarantors as principal obligors and as a separate and independent
obligation and liability from their obligations and liabilities under Clause
10.1 severally agree to indemnify and keep indemnified the Lender in full and on
demand from and against all and any losses, costs, claims, liabilities, damages,
demands and expenses suffered or incurred by the Lender arising out of, or in
connection with, any failure of the Borrower to perform or discharge any of its
obligations or liabilities in respect of the Guaranteed Obligations.

 

10.3 Notwithstanding anything to the contrary herein or in any other Finance
Documents or other document containing any Guaranteed Obligations, the
obligations and liabilities of any Obligor incorporated in Sweden under this
Agreement or in any other Finance Document or other document containing any
Guaranteed Obligations shall be limited if (and only to the extent) required by
an application of the provisions of the Swedish Companies Act (Sw.
aktiebolagslagen (2005:551)) governing distribution of assets and it is
understood that the obligations of any such Obligor incorporated in Sweden for
such obligations and liabilities under this Agreement or in any other Finance
Document or other document containing any Guaranteed Obligations shall only
apply to the extent permitted by the above-mentioned provisions.

 

11 FEES, EXPENSES AND TAXES

 

11.1 Transaction Fee

The Parties hereby agree and acknowledge that a single Transaction Fee shall be
payable by the Borrower to the Lender and that such sum shall be satisfied by a
corresponding reduction being made to the Tranche 1 payment to be advanced by
the Lender pursuant to clause 3.2, provided always that if the Drawdown Date for
Tranche 1 does not occur within 15 Business Days of this Loan Agreement the
Transaction Fee shall become immediately due and payable by the Borrower to the
Lender.

 

11.2 Documentary Costs

The Borrower shall promptly pay to the Lender on the Lender’s demand, the
reasonable legal expenses plus applicable VAT and disbursements incurred by the
Lender in connection with:

 

11.2.1 the negotiation, preparation and completion of this Loan Agreement and
the Security Documents and the transactions contemplated hereby and thereby up
to an aggregate total of €85,000 on account of all such legal expenses, VAT and
disbursements;

 

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11.2.2 fulfilment of the Conditions Subsequent (to the extent the process is
taken on by the Lender pursuant to Clause 3.8.1), any amendment or supplement to
this Loan Agreement or the Security Documents or any proposal for such an
amendment to be made at the behest of the Borrower or the Guarantors or at the
request of the Lender following an Event of Default or pursuant to Clause
8.1.20, 8.1.24 or 8.1.25;

 

11.2.3 any consent or waiver by the Lender concerned under or in connection with
this Loan Agreement or the Security Documents or any request for such a consent
or waiver; and

 

11.2.4 any step taken or required by the Lender to register or procure
registration or perfection of its Security Interests hereunder, or with a view
to the protection, exercise or enforcement of any right or Security Interest
created by this Loan Agreement or the Security Documents or for any similar
purpose, following any breach or non-fulfilment of any provision of this Loan
Agreement or any Finance Document.

 

11.3 Certain taxes and duties

The Borrower shall promptly pay any documentary, stamp or other equivalent tax
or duty payable on or by reference to this Loan Agreement or the Security
Documents or local law equivalent, and shall, on the Lender’s demand, fully
indemnify the Lender against any costs, losses, liabilities and expenses
resulting from any failure or delay by the Borrower to pay such a tax.

 

11.4 Recovery of Overdue Fees

Without prejudice to any other provisions of this Loan Agreement, the Lender
shall be entitled (and the Borrower hereby irrevocably authorises the Lender),
at any time and from time to time, to apply any credit balance (whether or not
then due) to which the Borrower is then entitled on any account with the Lender
in (or towards) satisfaction of the sum or sums from time to time owing by the
Borrower to the Lender under and/or pursuant to this Clause 11.4. The Lender
shall give notice to the Borrower of any such application promptly thereafter.

 

11.5 Liability for Taxes

 

11.5.1 The Borrower and/or the Guarantors (as applicable) shall make all
payments to be made by it without any Tax deduction, unless a Tax deduction is
required by law. The Borrower and/or the Guarantors (as applicable) shall
promptly upon becoming aware that it must make a Tax deduction (or that there is
any change in the rate or the basis of a Tax deduction) notify the Lender.

 

11.5.2 If a Tax deduction is required by law to be made by the Borrower and/or
the Guarantors (as applicable), the amount of the payment due from the Borrower
shall be increased to an amount which (after making any Tax deduction) leaves an
amount equal to the payment which would have been due if no Tax deduction had
been required.

 

11.5.3 If the Borrower and/or the Guarantors (as applicable) is required to make
a Tax deduction, the Borrower shall make that Tax deduction and any payment
required in connection with that Tax deduction within the time allowed and in
the minimum amount required by law.

 

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11.5.4 Within thirty (30) days of making either a Tax deduction or any payment
required in connection with that Tax deduction, the Borrower and/or the
Guarantors (as applicable) shall deliver to the Lender evidence reasonably
satisfactory to it that the Tax deduction has been made or (as applicable) any
appropriate payment paid to the relevant taxing authority.

 

11.5.5 If an Obligor makes an increased payment under this Clause 11.5 and:

 

(a) a credit against, relief or remission for, or repayment of any tax (a “Tax
Credit”) is attributable to the payment; and

 

(b) the recipient of the grossed-up payment has obtained, utilised and fully
retained that Tax Credit on an affiliated group basis,

the Lender will pay to the relevant Obligor an amount which will leave the
recipient of the interest payment (after the payment) in the same after-tax
position as that in which it would have been had the gross-up payment under this
Clause 11.5 not been made. Where a deduction or withholding is required to be
made under this clause, the Lender shall give such assistance as may be
necessary or expedient to enable the Borrower to claim exemption from or a
reduction in the amounts that are required to be withheld and the Parties shall
use reasonable endeavours to ensure that such exemption or reduction is claimed.
Such assistance shall include the provision by the Lender of such forms as the
relevant tax authority may require the Borrower to complete.

 

11.6 Illegality and Increased Costs

 

11.6.1 If it is or becomes contrary to any law or regulation for the Lender to
make available the Loan Facility or to maintain its obligations to do so or fund
the Loan, the Lender shall promptly notify the Borrower whereupon (a) the
Lender’s obligations to make the Loan Facility available shall be terminated and
(b) the Borrower shall be obliged to prepay the Loan either (i) forthwith or
(ii) on a future specified date on or before the latest date permitted by the
relevant law or regulation.

 

11.6.2 If the result of any change in (or in the interpretation, administration
or application of), or to the generally accepted interpretation or application
of, or the introduction of, any law or regulation is to subject the Lender to
Taxes or change the basis of the payment of Taxes by the Lender with respect to
any payment under this Loan Agreement (other than Taxes on the overall net
income, profits or gains of the Lender), then (i) the Lender shall notify the
Borrower in writing of such event promptly upon its becoming aware of the same;
and (ii) the Borrower shall on demand, made at any time whether or not the Loan
has been repaid, pay to the Lender the amount of the increased costs which the
Lender has suffered as a result.

 

12 INDEMNITIES

 

12.1 Indemnity for Non-Scheduled Payments

Without derogating from Clause 11 above, the Borrower shall indemnify the Lender
fully on its demand in respect of all expenses, liabilities and losses which are
suffered or incurred by the Lender, as a result of or in connection with:

 

12.1.1 any Tranche not being borrowed on the date specified in the Drawdown
Notice for any reason other than a default by the Lender;

 

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12.1.2 any failure (for whatever reason) by the Borrower to make payment of any
amount due under this Loan Agreement or the Security Documents on the due date
or, if so payable, on demand; or

 

12.1.3 the occurrence and/or continuance of an Event of Default and/or the
acceleration of repayment of the Loan under Clause 9.4 and in respect of any
Taxes (other than Taxes on the overall net income, profits or gains of the
Lender) for which the Lender is liable or held liable in connection with any
amount paid or payable to the Lender (whether for its own account or otherwise)
under this Loan Agreement or the Security Documents upon the occurrence and/or
continuance of an Event of Default.

 

12.2 Third Party Claims Indemnity

 

12.2.1 The Borrower shall indemnify the Lender fully on its demand in respect of
claims, demands, proceedings, liabilities, taxes, losses and expenses of every
kind, including without limitation legal fees and expenses (“liability items”)
which may be made or brought against, or incurred by, the Lender, in any
country, in relation to any action lawfully taken, or omitted or neglected to be
taken, under or in connection with this Loan Agreement or the Security Documents
by the Lender or by any receiver appointed under the Security Documents in each
case after the occurrence of any Event of Default and solely in connection with
that Event of Default.

 

12.2.2 The Borrower shall indemnify the Lender fully on its demand in respect of
all expenses, liabilities and losses which are suffered or incurred by the
Lender, as a result of any third party claims or proceedings brought against the
Lender as a consequence of any breach or inaccuracy of any of the
representations and/or warranties contained in Clause 7 hereof or in the
Security Documents or any breach of any covenant, commitment or agreement by the
Borrower contained in Clause 8 hereof or elsewhere in this Loan Agreement or in
the Security Documents.

 

13 RISK AND INSURANCE

 

13.1 All risk of loss, theft and damage of and to the Charged Assets from any
cause whatsoever shall be the risk of the Borrower, and no such event shall
relieve the Borrower of any obligation under a Drawdown Notice.

 

13.2 The Borrower shall:

 

13.2.1 bear all risk of loss of or damage to the Charged Assets whether insured
against or not;

 

13.2.2 to the extent that any of the Charged Assets would typically be insured
by a good and prudent owner, maintain with an insurance company approved by the
Lender, in accordance with good and prudent practices of owners of such Charged
Assets, fully comprehensive insurance under a standard form of “new for old” all
risks policy including, third party, and business interruption for a 6 month
period covering (i) loss of or damage to, the Charged Assets and against such
other risks as assets of the same type as the Charged Assets are normally (or
when used in the manner or for the purposes for which the Charged Assets are to
be used) insured, and the new replacement value of

 

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  the Charged Assets; and (ii) all liability whatsoever (including liability of
the Lender) to any third party whomsoever including any employee, agent or
subcontractor of the Lender or of the Borrower who may suffer damage to or loss
of property or death or personal injury, whether arising directly or indirectly
from the Charged Assets or their use;

 

13.2.3 use all reasonable efforts to procure that the interest of the Lender is
noted under any policy maintained under clause 13.2.2 and that the Lender is
loss payee;

 

13.2.4 upon request produce to the Lender any policy maintained under clause
13.2.2 and all premium receipts;

 

13.2.5 promptly notify the Lender of any event which may give rise to a claim
under any policy maintained under clause 13.2.2 and upon request irrevocably
appoint the Lender to be its sole agent to negotiate agree or compromise such
claim; and

 

13.2.6 subject always to normal practice under the law governing the relevant
insurance policy, upon request assign by way of security, or following the
occurrence of an Event of Default, a complete assignment to the Lender the
Borrower’s rights under any policy maintained under clause 13.2.2 and
irrevocably appoint the Lender to institute any necessary proceedings.

 

14 END OF LOAN PAYMENT

The Borrower shall be required to pay the Lender, at the time of the last
payment on each Loan, the End of Loan Payment. Upon payment of the last End of
Loan Payment, subject to the terms of this Loan Agreement and the Security
Documents (including the making of all payments hereunder and thereunder), the
Lender shall take appropriate action to promptly release all Security Interests
in favour of the Lender over the Charged Assets. Failure to pay the End of Loan
Payment shall constitute a breach of this Loan Agreement.

 

15 POWER OF ATTORNEY

 

15.1 The Borrower by way of security hereby irrevocably appoints the Lender and
separately any receiver appointed under any Security Document severally to be
its attorney in its name and to act on its behalf and to execute and complete
any deeds or documents which the Lender may require for perfecting its title to
or for vesting the Charged Assets both present and future in the Lender or its
respective nominees or in any purchaser and otherwise generally to sign seal and
deliver and otherwise perfect any such legal or other Security Interest referred
to in Clause 8.1.20 and all such deeds and documents and to do all such acts and
things as may be required for the full exercise of the powers conferred
hereunder or under any Security Document including any sale, lease, disposition,
realisation or getting in and this appointment shall operate as a general power
of attorney made under s.10 of the Powers of Attorney Act 1971. The Borrower
hereby covenants with the Lender and separately with any such receiver to ratify
and confirm any deed, document, act and thing and all transactions which any
such attorney may lawfully execute or do. The appointments made and powers
granted pursuant to this Clause 15.1, shall not vest in the Lender or any
receiver until an Event of Default has occurred and only then for so long as
such Event of Default is continuing.

 

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16 NOTICES

 

16.1 Any notice, demand or other communication (“Notice”) to be given by any
party under, or in connection with, this Loan Agreement shall be in writing and
signed by or on behalf of the party giving it. Any Notice shall be served by
sending it by fax to the number set out in Clause 16.2, or delivering it by hand
to the address set out in Clause 16.2 and in each case marked for the attention
of the relevant party set out in Clause 16.2 (or as otherwise notified from time
to time in accordance with the provisions of this Clause 16). Any Notice so
served by fax or hand shall be deemed to have been duly given or made as
follows:

 

16.1.1 if sent by fax, at the time of transmission; or

 

16.1.2 in the case of delivery by hand, when delivered,

provided that in each case where delivery by fax or by hand occurs after 5pm on
a Business Day (local time in the place of receipt) or on a day which is not a
Business Day, service shall be deemed to occur at 9am on the next following
Business Day (local time in the place of receipt).

References to time in the Clause are to local time in the country of the
addressee.

 

16.2 The addresses and fax number of the parties for the purpose of Clause 16
are as follows:

 

16.2.1 Lender

 

Address:    Kreos Capital   

25-28 Old Burlington Street

London W1S 3AN

Fax:    +44 (0)207 409 1034 For the attention of: Nick Gainsley with a copy to:
Address:    Charles Russell Speechlys LLP   

6 New Street Square

London EC4A 3LX

Fax:    +44 (0)207 427 6600 For the attention of: Chris Putt

 

16.2.2 Borrower and each Guarantor

 

Address:    Albireo AB,    Arvid Wallgrens Backe 20 413 46   

Gothenburg

Sweden

Fax:    +46 31 820223 For the attention of: Jan Mattsson with a copy to:
Address:    Bristows LLP   

100 Victoria Embankment

London EC4Y 0DH

Fax:    +44 (0)20 7400 8050 For the attention of: David Horner

 

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16.3 A party may notify all other parties to this Loan Agreement of a change to
its name, relevant addressee, address or fax number for the purposes of this
Clause 16, provided that such notice shall only be effective on:

 

16.3.1 the date specified in the notification as the date on which the change is
to take place; or

 

16.3.2 if no date is specified or the date specified is less than five Business
Days after the date on which notice is given, the date following five Business
Days after notice of any change has been given.

 

16.4 In proving service it shall be sufficient to prove that the envelope
containing such notice was properly addressed and delivered to the address shown
thereon or that the facsimile transmission was made and a facsimile confirmation
report was received, as the case may be.

 

17 CONFIDENTIALITY

 

17.1 Confidential Information

The Lender agrees to keep all Confidential Information confidential and not to
disclose it to anyone, save to the extent permitted by Clause 17.2, and to
ensure that all Confidential Information is protected with security measures and
a degree of care that would apply to its own confidential information.

 

17.2 Disclosure of Confidential Information

 

17.2.1 The Lender may disclose Confidential Information:

 

  (i) to any of its Permitted Transferees and any of its or their officers,
directors, employees, professional advisers and auditors such Confidential
Information as the Lender shall reasonably consider appropriate if any person to
whom the Confidential Information is to be given pursuant to this paragraph
(i) is informed in writing of its confidential nature and that some or all of
such Confidential Information may be price-sensitive information except that
there shall be no such requirement to so inform if the recipient is subject to
professional obligations to maintain the confidentiality of the information or
is otherwise bound by adequate requirements of confidentiality in relation to
the Confidential Information;

 

  (ii) to any person:

 

  (a) to (or through) whom it assigns or transfers (or may potentially assign or
transfer) all or any of its rights and/or obligations under the Finance
Documents in accordance with this Loan Agreement or which succeeds (or which may
potentially succeed) it as Lender and, in each case, to any of that person’s
Affiliates, Related Funds, Representatives and professional advisers;

 

  (b) with (or through) whom it enters into (or may potentially enter into),
whether directly or indirectly, any sub-participation in relation to, or any
other transaction under which payments are to be made or may be made by
reference to, one or more Finance Documents and/or the Borrower and to any of
that person’s Affiliates, Related Funds, Representatives and professional
advisers;

 

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  (c) appointed by the Lender or by a person to whom paragraph (ii)(a) or
(b) above applies to receive communications, notices, information or documents
delivered pursuant to the Finance Documents on its behalf;

 

  (d) to whom information is required or requested to be disclosed by any court
of competent jurisdiction or any governmental, banking, taxation or other
regulatory authority or similar body, the rules of any relevant stock exchange
or its fund documentation or pursuant to any applicable law or regulation;

 

  (e) to whom information is required to be disclosed in connection with, and
for the purposes of, any litigation, arbitration, administrative or other
investigations, proceedings or disputes;

 

  (f) to whom or for whose benefit that Lender charges, assigns or otherwise
creates a Security Interest (or may do so) pursuant to this Loan Agreement ;

 

  (g) with the consent of the Borrower,

in each case, such Confidential Information as that Lender shall consider
appropriate if:

 

  (iii) in relation to paragraphs (ii)(a), (ii)(b), (ii)(c) and (ii)(f) above
and, to the extent disclosure is required or requested under the Lender’s fund
documentation as contemplated in paragraph (ii)(d) above, the person to whom the
Confidential Information is to be given has entered into a Confidentiality
Agreement except that there shall be no requirement for a Confidentiality
Agreement if the recipient is a professional adviser and is subject to
professional obligations to maintain the confidentiality of the Confidential
Information;

 

  (iv) in relation to paragraphs (ii)(d) and (ii)(e) above, the person to whom
the Confidential Information is to be given is informed of its confidential
nature and that some or all of such Confidential Information may be
price-sensitive information; and

 

  (v) to any person appointed by that Lender or by a person to whom paragraph
(ii)(a) or (ii)(b) above applies to provide administration or settlement
services in respect of one or more of the Finance Documents including without
limitation, in relation to the trading of participations in respect of the
Finance Documents, such Confidential Information as may be required to be
disclosed to enable such service provider to provide any of the services
referred to in this paragraph (v) if the service provider to whom the
Confidential Information is to be given has entered into a confidentiality
agreement substantially in the form of Confidentiality Agreement agreed between
the Borrower and the Lender,

provided always that the Lender shall at all times take all reasonable steps to
restrict the amount of Confidential Information that is disclosed to any person
and shall not, in any event, be permitted to disclose Confidential Information
to any person under paragraphs (ii)(a), (ii)(b), (ii)(c) and (ii)(f) above to
the extent that such person is engaged, interested or concerned whether as
principal, agent, representative, partner, director, employee, joint venturer,
investor, consultant or otherwise in the pharmaceutical or biotechnology sectors
(but in each case disregarding any holding of up to 5% of any class of
securities of any company listed on a recognised investment exchange).

 

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17.3 Entire agreement on Confidential Information

Without prejudice to clause 18.7 this Clause, 17 constitutes the entire
agreement between the Parties in relation to the obligations of the Lender under
the Finance Documents regarding Confidential Information and supersedes any
previous agreement, whether express or implied, regarding Confidential
Information.

 

17.4 Notification of disclosure

 

17.4.1 The Lender agrees (to the extent permitted by law and regulation) to
inform the Borrower:

 

  (i) of the circumstances of any disclosure of Confidential Information made
pursuant to paragraph (ii)(d) of Clause 17.2.1 (Disclosure of Confidential
Information) except where such disclosure is made to any of the persons referred
to in that paragraph during the ordinary course of its supervisory or regulatory
function; and

 

  (ii) upon becoming aware that Confidential Information has been disclosed in
breach of this Clause 17.

 

17.5 Term

The obligations in this Clause 17 will end on the date that is five years after
the Agreement Date.

 

18 GENERAL

 

18.1 All agreements, covenants, representations and warranties of the Borrower
contained in this Loan Agreement or in the Drawdown Notices or other documents
delivered pursuant hereto or in connection herewith and continuing, shall
survive and remain binding following the execution and delivery of this Loan
Agreement until the expiration, cancellation or other termination of this Loan
Agreement or the repayment of all amounts due hereunder to the Lender. Following
the expiration, cancellation or other termination of this Loan Agreement or the
repayment of all amounts due hereunder to the Lender, no further obligations
shall remain between the Obligors and the Lender under this Loan Agreement
except for the confidentiality obligations detailed in Clause 17, which shall
remain in force until expiry in accordance with their terms.

 

18.2 No failure to exercise, nor any delay in exercising, on the part of the
Lender, any right or remedy hereunder shall operate as a waiver, nor shall any
single or partial exercise of any right or remedy prevent any further or other
exercise or the exercise of any other right or remedy. The rights and remedies

 

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  provided in this Loan Agreement are cumulative and not exclusive of any rights
or remedies provided by law or in equity. Waiver by the Lender of any default
shall not constitute waiver of any other default.

 

18.3 The Borrower may not assign or transfer its rights, benefits and
obligations under this Loan Agreement. The Lender shall have the right, in its
sole discretion, to assign, sell, pledge, grant a security interest in or
otherwise encumber its rights under this Loan Agreement and/or one or more
Drawdown Notices (i) to any Permitted Transferee or (ii) to anyone who may be
acting as an agent for any Permitted Transferee in entering into any Drawdown
Notice. The Borrower hereby irrevocably consents to any assignment, sale,
pledge, grant of a security interest or any other disposal to a Permitted
Transferee. The Borrower agrees that if it receives notice from the Lender that
it is to make payments under this Loan Agreement and/or any Drawdown Notice to
such Permitted Transferee rather than to the Lender, or that any of its other
obligations under the relevant Drawdown Notice are to be owed to the named
Permitted Transferee, the Borrower shall comply with any such notice and payment
made by the Borrower under any such notice shall constitute a full discharge of
the relevant payment obligation. Subject to the foregoing, this Loan Agreement
and each Drawdown Notice inures to the benefit of, and is binding upon, the
successors and assigns of the Lender. If the Lender assigns or transfers any of
its rights or obligations under this Agreement and, as a result of circumstances
existing at the date the assignment, transfer or change occurs, a Guarantor
would be obliged to make a payment to the new Lender under Clause 11.5
(Liability for Taxes) or Clause 11.6 (Illegality and Increased Costs), then the
new Lender (if not an Affiliate of the Lender) is only entitled to receive
payment under those Clauses to the same extent as the Lender would have been if
the assignment, transfer or change had not occurred.

 

18.4 Clause titles are solely for convenience and are not an aid in the
interpretation of this Loan Agreement.

 

18.5 If, at any time, any provision herein is or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.

 

18.6 A person who is not a party to this Agreement has no right under the
Contract (Rights of Third Parties) Act 1999 to enforce or enjoy the benefits of
this Agreement.

 

18.7 This Loan Agreement, together with the Security Documents, constitutes the
entire agreement between the parties with respect to the subject matter hereof.
This Loan Agreement may not be modified except in writing executed by the Lender
and the Borrower. No supplier or agent of the Lender is authorised to bind the
Lender or to waive or modify any term of this Loan Agreement.

 

18.8 This Loan Agreement may be executed in counterparts (including facsimile
copies), each of which shall be an original, but all such counterparts shall
together constitute one and the same instrument.

 

38

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

18.9 This Loan Agreement and any non-contractual obligations arising out of or
in connection with it are governed by English law. The courts of England have
exclusive jurisdiction to settle any dispute arising out of or in connection
with this Loan Agreement (including a dispute relating to the existence,
validity or termination of this Loan Agreement or any non-contractual obligation
arising out of or in connection with this Loan Agreement (a “Dispute”). The
parties to this Loan Agreement agree that the courts of England are the most
appropriate and convenient courts to settle Disputes and accordingly no party to
this Loan Agreement will argue to the contrary. This Clause 18.9 is for the
benefit of the Lender only. As a result, the Lender shall not be prevented from
taking proceedings relating to a Dispute in any other courts with jurisdiction.
To the extent allowed by law, the Lender may take concurrent proceedings in any
number of jurisdictions.

 

39

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

SCHEDULE A

Part A

FORM OF DRAWDOWN NOTICE

DRAWDOWN NOTICE

Drawdown

No. [                    ]

dated                              2014

between

 

KREOS CAPITAL IV (UK) LIMITED    ALBIREO LIMITED the (“Lender”)    the
(“Borrower”)

This Drawdown Notice forms a Schedule to a Loan Agreement between the Lender and
the Borrower dated [            ] 2014 (the “Loan Agreement”)

The Lender has granted the Borrower a loan facility pursuant to the terms and
conditions set out in the Loan Agreement and as detailed below.

Words and expressions in this Drawdown Notice shall have the same meanings as in
the Loan Agreement.

Loan Details

 

Total Loan Facility    €6,000,000 Amount of Loan Facility to be drawn down
pursuant to this Drawdown Notice    €[●] Loan Term    36 months Bank Account
Details for remittance of funds    [●] Drawdown Date (which shall be a Business
Day no later than the Date of Expiry of the Loan Facility)    [●] Repayment
Schedule    As set out in Part B hereof

We confirm that:

 

(a) the representations and warranties made by us in the Loan Agreement are true
and accurate on the date of this Drawdown Notice as if made on such date; and

 

(b) no Event of Default has occurred and is continuing or would result from the
delivery of this Drawdown Notice.

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

for and on behalf of

ALBIREO LIMITED

Authorised Signatory

Name                                          
                                   

Dated [                    ]

 

2

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

Part B

Repayment Schedule

 

3

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

Albireo - Restructure Proposal

January 2016

 

     Revised Repayment Schedule                      Total Payment         

DUE DATE

   Principal      Interest      Other      due      Principle
Outstanding  

01. Dez 15

                 4.657.560,46   

01. Jan 16

     69.806,31         44.634,95         0,00         114.441,27        
4.587.754,15   

01. Feb 16

     70.475,29         43.965,98         0,00         114.441,27        
4.517.278,86   

01. Mrz 16

     71.150,68         43.290,59         0,00         114.441,27        
4.446.128,18   

01. Apr 16

     71.832,54         42.608,73         0,00         114.441,27        
4.374.295,65   

01. Mai 16

     72.520,93         41.920,33         0,00         114.441,27        
4.301.774,71   

01. Jun 16

     73.215,92         41.225,34         0,00         114.441,27        
4.228.558,79   

01. Jul 16

     209.476,31         40.523,69         0,00         250.000,00        
4.019.082,48   

01. Aug 16

     211.483,79         38.516,21         0,00         250.000,00        
3.807.598,69   

01. Sep 16

     213.510,51         36.489,49         0,00         250.000,00        
3.594.088,17   

01. Okt 16

     215.556,66         34.443,34         0,00         250.000,00        
3.378.531,52   

01. Nov 16

     217.622,41         32.377,59         0,00         250.000,00        
3.160.909,11   

01. Dez 16

     219.707,95         30.292,05         0,00         250.000,00        
2.941.201,16   

01. Jan 17

     232.448,19         28.186,51         9.365,30         270.000,00        
2.708.752,97   

01. Feb 17

     234.675,82         25.958,88         9.365,30         270.000,00        
2.474.077,15   

01. Mrz 17

     236.924,79         23.709,91         9.365,30         270.000,00        
2.237.152,36   

01. Apr 17

     239.195,32         21.439,38         9.365,30         270.000,00        
1.997.957,04   

01. Mai 17

     241.487,61         19.147,09         9.365,30         270.000,00        
1.756.469,43   

01. Jun 17

     243.801,87         16.832,83         9.365,30         270.000,00        
1.512.667,56   

01. Jul 17

     246.138,30         14.496,40         9.365,30         270.000,00        
1.266.529,26   

01. Aug 17

     248.497,13         12.137,57         9.365,30         270.000,00        
1.018.032,13   

01. Sep 17

     250.878,56         9.756,14         9.365,30         270.000,00        
767.153,57   

01. Okt 17

     253.282,81         7.351,89         9.365,30         270.000,00        
513.870,76   

01. Nov 17

     255.710,10         4.924,59         9.365,30         270.000,00        
258.160,66   

01. Dez 17

     258.160,66         2.474,04         409.365,30         670.000,00        
0,00      

 

 

          

 

 

    

Tota I

     4.657.560,46               5.826.647,59         

 

 

          

 

 

          0,00               0,00      

Albireo - Restructure (241115) Final 20160119

 

4

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

SCHEDULE B

INITIAL SECURITY DOCUMENTS

Debenture by the Borrower

Swedish law pledge by Albireo Limited over the Shares in Guarantor 1

Pledge by Guarantor 1 over the shares in Guarantor 2

Pledge by Guarantor 1 of its bank accounts

Pledge by Guarantor 1 over A4250 patents

Pledge by Guarantor 2 over A3309 patents

Pledge by Guarantor 2 of its bank accounts

 

5

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

SCHEDULE C

THE PATENTS

Part 1

 

Docket

Number

  Country   Registered Owner   Application Number  

Patent

Number

  Status IBAT 100479 (A4250 composition of matter) NP0141AL   Albania  
AstraZeneca AB   02765013.4   2007/02231   Granted - (G) NP0141AR   Argentina  
AstraZeneca AB   20103379   AR037089B1   Granted - (G) NP0141AT   Austria  
AstraZeneca AB   02765013.4   349214   Granted - (G) NP0141AU   Australia  
Albireo AB   2002329387   2002329387   Granted - (G) NP0141BE   Belgium  
AstraZeneca AB   02765013.4   1427423   Granted - (G) NP0141BG   Bulgaria  
AstraZeneca AB   02765013.4   1427423   Granted - (G) NP0141BR   Brazil  
AstraZeneca AB   PI0212346-0     Filed - (F) NP0141CA   Canada   Albireo AB  
2459449   2459449   Granted - (G) NP0141CH   Switzerland   AstraZeneca AB  
02765013.4   1427423   Granted - (G) NP0141CL   Chile   AstraZeneca AB  
2074/2002   50039   Granted - (G) NP0141CY   Cyprus   Albireo AB   02765013.4  
1427423   Granted - (G) NP0141CZ   Czech Republic   AstraZeneca AB   02765013.4
  1427423   Granted - (G) NP0141DE   Germany   AstraZeneca AB   02765013.4  
60217136.9   Granted - (G) NP0141DK   Denmark   AstraZeneca AB   02765013.4  
1427423   Granted - (G) NP0141EE   Estonia   AstraZeneca AB   02765013.4  
1427423   Granted - (G) NP0141ES   Spain   AstraZeneca AB   02765013.4   2278045
  Granted - (G) NP0141FI   Finland   AstraZeneca AB   02765013.4   1427423  
Granted - (G) NP0141FR   France   AstraZeneca AB   02765013.4   1427423  
Granted - (G) NP0141GB   Great Britain   AstraZeneca AB   02765013.4   1427423  
Granted - (G) NP0141GR   Greece   AstraZeneca AB   02765013.4   3061212  
Granted - (G) NP0141HK   Hong Kong   AstraZeneca AB   04108119.5   1065258  
Granted - (G) NP0141HU   Hungary   Albireo AB   P0401196   227623   Granted -
(G) NP0141ID   Indonesia   AstraZeneca AB   W-00200400445   ID 0020053   Granted
- (G) NP0141IE   Ireland   AstraZeneca AB   02765013.4   1427423   Granted - (G)
NP0141IL   Israel   Albireo AB   160691   160691   Granted - (G) NP0141IN  
India   AstraZeneca AB   539/DELNP/2004   248635   Granted - (G) NP0141IT  
Italy   AstraZeneca AB   02765013.4   1427423   Granted - (G) NP0141JP   Japan  
Albireo AB   2003-526415   3616635   Granted - (G) NP0141KR   Republic of Korea
  Albireo AB   10-2004-7003407   0935623   Granted - (G) NP0141LT   Lithuania  
AstraZeneca AB   02765013.4   1427423   Granted - (G) NP0141LU   Luxembourg  
AstraZeneca AB   02765013.4   1427423   Granted - (G) NP0141LV   Latvia  
AstraZeneca AB   02765013.4   1427423   Granted - (G) NP0141MC   Monaco  
AstraZeneca AB   02765013.4   1427423   Granted - (G) NP0141MK   Macedonia  
AstraZeneca AB   02765013.4   1427423   Granted - (G) NP0141MX   Mexico  
AstraZeneca AB   PA/A/2004/002179   256257   Granted - (G) NP0141MY   Malaysia  
AstraZeneca AB   PI20023317   MY131995A   Granted - (G) NP0141NL   Netherlands  
AstraZeneca AB   02765013.4   1427423   Granted - (G) NP0141NO   Norway  
Albireo AB   20040948   327041   Granted - (G) NP0141NZ   New Zealand  
AstraZeneca AB   531796   531796   Granted - (G) NP0141PH   Philippines  
AstraZeneca AB   1-2004-500326     Filed - (F) NP0141PL   Poland   AstraZeneca
AB   P369078     Filed - (F) NP0141PT   Portugal   AstraZeneca AB   02765013.4  
1427423   Granted - (G) NP0141RO   Romania   AstraZeneca AB   02765013.4  
1427423   Granted - (G) NP0141RU   Russian Federation   AstraZeneca AB  
2004110716   2305681   Granted - (G) NP0141SA   Saudi Arabia   AstraZeneca AB  
02230379   2078   Granted - (G) NP0141SE   Sweden   AstraZeneca AB   02765013.4
  1427423   Granted - (G) NP0141SG   Singapore   AstraZeneca AB   200401088-0  
102496   Granted - (G) NP0141SI   Slovenia   AstraZeneca AB   02765013.4  
1427423   Granted - (G) NP0141SK   Slovak Republic   Albireo AB   02765013.4  
E1654   Granted - (G) NP0141TH   Thailand   AstraZeneca AB   076424     Filed -
(F) NP0141TR   Turkey   AstraZeneca AB   02765013.4   1427423   Granted - (G)
NP0141TW   Taiwan   Albireo AB   091120297   I331143   Granted - (G) NP0141UA  
Ukraine   AstraZeneca AB   2004042638   77209   Granted - (G) NP0141US   United
States   Albireo AB   10/488870   7132416   Granted - (G) NP0141UY   Uruguay  
AstraZeneca AB   27436     Filed - (F) NP0141VE   Venezuela   AstraZeneca AB  
1708/2002     Filed - (F) NP0141ZA   South Africa   AstraZeneca AB   2004/01798
  2004/01798   Granted - (G)

 

6

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

Part 2

 

Docket

Number

  Country   Registered Owner   Application Number  

Patent

Number

  Status IBAT 100248 (A3309/elobixibat composition of matter) 212795   Albania  
Albireo AB   01271366.5   2007/02331   Registered 212173   Argentina   Albireo
AB   P010106011   AR035723   Registered 212785   Austria   Albireo AB  
01271366.5   1345918   Registered 211778   Australia   Albireo AB   2002222228  
2002222228   Registered 212815   Bangladesh   AstraZeneca AB   290/2001  
1003779   Registered 212790   Belgium   Albireo AB   01271366.5   1345918  
Registered 211779   Bulgaria   Albireo AB   107928   66342   Registered Under
211782   Brazil   AstraZeneca AB   PI0116397-3     Examination 211796   Canada  
Albireo AB   2431461   2431461   Registered 212345   Switzerland   Albireo AB  
01271366.5   1345918   Registered 211798   China   Albireo AB   01821031.7  
ZL01821031.7   Registered 212784   Cyprus Czech   AstraZeneca AB   01271366.5  
1345918   Registered Under 211803   Republic   Albireo AB   PV2003-1717    
Examination 212783   Germany   Albireo AB   01271366.5   60127997.2   Registered
212782   Denmark   Albireo AB   01271366.5   1345918   Registered 211808  
Estonia   Albireo AB   P200300307   05158   Registered 212128   Egypt  
AstraZeneca AB   1345/2001     Application allowed 212781   Spain   Albireo AB  
01271366.5   1345918   Registered 212772   Finland   Albireo AB   01271366.5  
1345918   Registered 212740   France   Albireo AB   01271366.5   1345918  
Registered 212733   United Kingdom   Albireo AB   01271366.5   1345918  
Registered 212719   Greece   Albireo AB   01271366.5   1345918   Registered
212667   Hong Kong   Albireo AB   03109193.3   1056732   Registered 211815  
Hungary   Albireo AB   P0301953   229050   Registered 211816   Indonesia  
Albireo AB   W-00200301203   ID 0027751   Registered 212717   Ireland   Albireo
AB   01271366.5   1345918   Registered 211817   Israel   Albireo AB   156341  
156341   Registered 211821   India   Albireo AB   560/MUMNP/2003   209158  
Registered 211822   Iceland   Albireo AB   6852   2833   Registered 212461  
Italy   Albireo AB   01271366.5   1345918   Registered 211825   Japan   Albireo
AB   2002-551548   3665055   Registered 211857   Republic of Korea   Albireo AB
  10-2003-7008425   0882342   Registered 212336   Liechtenstein   Albireo AB  
01271366.5   1345918   Registered 212459   Lithuania   Albireo AB   01271366.5  
1345918   Registered 212458   Luxembourg   Albireo AB   01271366.5   1345918  
Registered 212457   Latvia   Albireo AB   01271366.5   1345918   Registered
212455   Monaco   Albireo AB   01271366.5   1345918   Registered 212793  
Macedonia (F.Y.R.O.M)   Albireo AB   01271366.5   1345918   Registered 212114  
Mexico   Albireo AB   2003/005637   240483   Registered 212169   Malaysia  
Albireo AB   PI20015774   MY-137508-A   Registered 212451   Netherlands  
AstraZeneca AB   01271366.5   1345918   Registered 212117   Norway   Albireo AB
  20032829   326620   Registered 212118   New Zealand   Albireo AB   526562  
526562   Registered         1-2003-   212817   Philippines   Albireo AB  
1-2003-500537   500537   Registered 212119   Poland   Albireo AB   P-363380    
Registered 212447   Portugal   Albireo AB   01271366.5   1345918   Registered
212446   Romania   Albireo AB   01271366.5   1345918   Registered   Russian    
    212121   Federation   Albireo AB   2003122205   2302414   Registered 212132
  Saudi Arabia   Albireo AB   02220610   1961   Registered 212349   Sweden  
AstraZeneca AB   01271366.5   1345918   Registered 212122   Singapore   Albireo
AB   200302941-0   96959   Registered 212348   Slovenia   Albireo AB  
01271366.5   1345918   Registered 212123   Slovakia   Albireo AB   PP0776/2003  
287059   Registered 212172   Thailand   Albireo AB   070606    
Application filed 212346   Turkey   Albireo AB   01271366.5   1345918  
Registered 212171   Taiwan   Albireo AB   090131712   I291951   Registered
212124   Ukraine   Albireo AB   2003076824   79085   Registered 212125   USA  
Albireo AB   10/451262   7192945   Registered 212126   South Africa   Albireo AB
  2003/4266   2003/4266   Registered

 

7

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

Duly executed as a deed by the parties on the date first set out on the first
page of this Loan Agreement.

 

BORROWER      Signed by      ALBIREO LIMITED      By JAN MATTSON     

 

Director      In the presence of:     
Witness Signature                                  
                                          
Witness name                                   
                                                  Witness address
                                                                               
Witness occupation                                          
                                GUARANTOR 1      Signed by      ALBIREO AB     
By JAN MATTSON     

 

Authorised signatory           GUARANTOR 2      Signed by      ELOBIX AB      By
JAN MATTSON     

 

Authorised signatory      LENDER      Signed      For and on behalf of     
KREOS CAPITAL IV (UK) LIMITED      Name:
                                         
                                                      Title:
                                         
                                                       

 

8

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

SCHEDULE 2

Deed of Variation & Accession

 

9

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

 

LOGO [g269369g1021082713907.jpg]

 

DATED   2016

(1)    KREOS CAPITAL IV (UK) LIMITED

(2)    ALBIREO LIMITED

(3)    ALBIREO AB

(4)    ELOBIX AB

(5)    ALBIREO PHARMA, INC.

 

 

DEED OF VARIATION AND ACCESSION

relating to an Intra-Group Loan Agreement

dated 18 December 2014

 

 

5 Fleet Place London EC4M 7RD

Tel: +44 (0)20 7203 5000 ● Fax: +44 (0)20 7203 0200 ● DX: 19 London/Chancery
Lane

www.charlesrussellspeechlys.com

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

CONTENTS

 

1

 

DEFINITIONS AND INTERPRETATION

     1   

2

 

AMENDMENT AND RESTATEMENT

     2   

3

 

ACCESSION

     2   

4

 

FURTHER ASSURANCE

     2   

5

 

COUNTERPARTS

     2   

6

 

THIRD PARTY RIGHTS

     2   

7

 

GOVERNING LAW AND JURISDICTION

     2   

SCHEDULE 1

     4   

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

THIS DEED OF VARIATION AND ACCESSION (this Deed) is made as a deed on
             2016

BETWEEN:

 

(1) KREOS CAPITAL IV (UK) LIMITED, a company incorporated in England and Wales
with registered number 07758282 and whose registered office is at 25-28 Old
Burlington Street, London W1S 3AN (Lender); and

 

(2) ALBIREO LIMITED, a company incorporated in England and Wales with registered
number 06445879 and whose registered office is at First Floor, 100 Victoria
Embankment, London EC4Y 0DH (Borrower); and

 

(3) ALBIREO AB, a company incorporated in Sweden with registered number
5567374631 whose registered office is at Arvid Wallgrens backe 20, 413 46
Gothenburg, Sweden (Guarantor 1);

 

(4) ELOBIX AB, a company incorporated in Sweden with registered number
5569469421 whose registered office is at Arvid Wallgrens backe 20, 413 46
Gothenburg, Sweden (Guarantor 2), and

 

(5) ALBIREO PHARMA, INC. (formerly Biodel Inc.), a Delaware corporation (Albireo
Pharma).

together the “Parties” and each a “Party”.

BACKGROUND

 

(A) This Deed is supplemental to a Supplemental Deed dated [    ] May 2016
relating to a loan agreement dated 18 December 2014 (Supplemental Deed) between
the Lender, the Borrower, Guarantor 1 and Guarantor 2, an agreement between the
same parties that regulates the intra-group lending between the Borrower,
Guarantor 1 and Guarantor 2 dated 18 December 2014, (the Existing Intra-Group
Loan Agreement), and a Share Exchange Agreement (as defined in the Supplemental
Deed) dated [    ] May 2016.

 

(B) With effect from the date hereof, the parties have agreed to vary the
Existing Intra-Group Loan Agreement in the manner set out in this Deed and to
provide for Albireo Pharma to accede to the Existing Intra-Group Loan Agreement
as varied herein.

AGREED PROVISIONS

 

1 DEFINITIONS AND INTERPRETATION

 

1.1 Terms defined in the Existing Intra-Group Loan Agreement shall have the same
meaning when used in this Deed unless otherwise defined herein.

 

1.2 The rules of interpretation of the Existing Intra-Group Loan Agreement shall
apply to this Deed as if set out in this Deed.

 

1.3 The Schedules form part of this Deed and shall have effect as of set out in
full in the body of this Deed. Any reference to this Deed includes the
Schedules.

 

1

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

2 AMENDMENT AND RESTATEMENT

 

2.1 With effect on and from the date of this agreement (the Effective Date), the
Existing Intra-Group Loan Agreement shall be amended and restated in the form
set out in Schedule 1 (the Amended and Restated Intra-Group Loan Agreement) so
that the rights and obligations of the Parties shall, on and from the Effective
Date, be governed by and construed in accordance with the provisions of the
Amended and Restated Intra-Group Loan Agreement.

 

2.2 The amendment and restatement of the Existing Intra-Group Loan Agreement
shall be without prejudice to any rights or obligations of the Parties accrued
up to the Effective Date under the Existing Intra-Group Loan Agreement.

 

3 ACCESSION

Each of the Parties agrees that, from the Effective Date, Albireo Pharma shall
by virtue of this Deed accede to the Amended and Restated Intra-Group Loan
Agreement as a Lender and, in such capacity, observe, perform and be bound by
the provisions of the Amended and Restated Intra-Group Loan Agreement and (to
the extent that monies are advanced thereunder) assume all of the rights under
the Amended and Restated Intra-Group Loan Agreement (as though Albireo Pharma
was an original party to the Amended and Restated Intra-Group Loan Agreement as
a Lender).

 

4 FURTHER ASSURANCE

The Parties shall do all such acts and things necessary or desirable to give
effect to the provisions of this Deed.

 

5 COUNTERPARTS

This Deed may be executed in any number of counterparts, each of which when
executed shall constitute a duplicate original, but all the counterparts
together shall constitute one agreement.

 

6 THIRD PARTY RIGHTS

A person who is not a party to this Deed shall not have any rights under the
Contracts (Rights of Third Parties) Act 1999 to enforce, or enjoy the benefit
of, any term of this Deed. This does not affect any right or remedy of a third
party which exists, or is available, apart from that Act.

 

7 GOVERNING LAW AND JURISDICTION

 

7.1 This Deed and any dispute or claim arising out of or in connection with it
or its subject matter or formation (including non-contractual disputes or
claims) shall be governed by and construed in accordance with the Law of England
and Wales.

 

2

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

7.2 The Parties to this Deed irrevocably agree that the courts of England and
Wales shall have exclusive jurisdiction to settle any dispute or claim that
arises out of or in connection with this Deed or its subject matter or formation
(including non-contractual disputes or claims). Nothing in this clause shall
limit the right of the Lender to take proceedings against the Borrower in any
other court of competent jurisdiction, nor shall the taking of proceedings in
any one or more jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not, to the extent permitted by the law of
such other jurisdiction.

This agreement is executed as a deed and is delivered on the day and year first
before written.

 

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SCHEDULE 1

Amended and Restated Intra-Group Loan Agreement

 

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AMENDED AND RESTATED INTRA-GROUP LOAN AGREEMENT

INTRA-GROUP LOAN AGREEMENT

This Loan Agreement (the “Agreement”) is entered into on [●] 2016 by and between
(1) Albireo Pharma Inc., formerly Biodel Inc., a Delaware corporation (“Topco”),
(2) Albireo Limited, a company incorporated in England and Wales under
registered number 06445879 whose registered office is at First Floor, 100
Victoria Embankment, London EC4Y 0DH (“A UK”), (3) Albireo AB, a company
incorporated in Sweden under registered number 5567374631 whose registered
office is at Arvid Wallgrens Backe 20 413 46, Gothenburg, Sweden (“A AB”),
(4) Elobix AB, a company incorporated in Sweden under registered number
556946-9421 whose registered office is at Arvid Wallgrens Backe 20 413 46,
Gothenburg, Sweden (“Elobix”) and (5) Kreos Capital IV (UK) Limited a company
incorporated in England and Wales under number 07758282 whose registered office
at 25 Old Burlington Street, London W1S 3AN (“Kreos”).

Whereas:-

 

(a) This Agreement is supplemental to a deed of variation and accession between
the parties hereto made on [] 2016 of an intra-group loan agreement made on
18 December 2014 between the parties hereto (other than Topco) (Original
Intra-group Loan Agreement), which in turn relates to a loan facility in an
aggregate amount of EUR6,000,000 signed on 18 December 2014 provided to A UK for
the benefit of the Group by Kreos (“Kreos Facility”). The Kreos Facility is
guaranteed by A AB and Elobix; and

 

(b) A UK is the 100% parent company of A AB and A AB is the 100% parent company
of Elobix.

It is hereby agreed as follows:-

 

1. Definitions and Interpretation

 

1.1 In this agreement the following words and phrases shall have the following
meanings:-

 

  •   “Borrower”: any of A UK, A AB or Elobix who borrows funds from a Lender
pursuant to this Agreement,

 

  •   “Group” means Topco and its subsidiaries (as defined in section 1159 of
the Companies Act 2006) and “Group Company” means any member of the Group,

 

  •   “Lender”: any of A UK, A AB, Elobix or Topco who lends funds to any
Borrower pursuant to this Agreement,

 

  •   “Loan”: a loan made by any Lender pursuant to this Agreement,

 

  •   “Security Interest”: has the meaning given to such term in the Kreos
Facility.

 

1.2 Unless otherwise defined here in, words and phrases used in this Agreement
shall have the same meanings as set out in the Kreos Facility.

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2. Loan

 

2.1 Each of the Lenders agree to fund the Borrowers on the terms of this
Agreement.

 

2.2 Prior to the Final Repayment Date, no Lender shall make any loan or
otherwise give credit to any Borrower other than on the terms set out in this
Agreement.

 

3. Terms of Loan

 

3.1 The purpose of the Loan shall be used for general working capital and other
business purposes as permitted in the respective Borrowers’ incorporation
documents, and each Borrower shall repay to the Lender any Loan drawn-down by
such Borrower, plus accrued interest, and applicable bank commissions and other
charges on the terms hereof.

 

3.2 The making and amount of any Loan shall be agreed between the relevant
Lender and the relevant Borrower from time to time. At Kreos’ request, A UK
shall inform Kreos of the sum owing under this agreement from time to time.

 

3.3 Subject to Clause 10 and other than to the extent prepaid in accordance with
Clause 3.4, the principal amount of all Loans made to any Borrower together with
all accrued interest shall be due and payable in full on the date that is
coterminous with the repayment of all amounts due and owing from A UK under the
Kreos Facility (the “Final Repayment Date”) or such later date as may be agreed
between the relevant Lender and Borrower.

 

3.4 Any outstanding principal or interest owing from a Borrower to Lender under
this Agreement may at anytime, without penalty, be prepaid by a Borrower,
provided that:

 

  A) any payment made by a Borrower prior to the Final Repayment Date under this
Clause 3.4 is made to a bank account that is subject to a Security Interest in
favour of Kreos (or its permitted successors and assigns of any rights granted
under the Kreos Facility); and

 

  B) no Borrower shall be entitled to make a prepayment to Topco under this
Clause 3.4 at any time prior to the Final Repayment Date.

 

4. Drawings of Loan Amounts

 

4.1 Whenever a Borrower and a Lender have agreed a Loan, such Borrower shall
give the Lender at least three business days’ advance written request therefor,
or such shorter period of advance request as shall be acceptable to the Lender.

 

4.2 Subject to clause 3.4 B), all repayments of principal and interest made by
any of the Parties prior to the Final Repayment Date shall be made to a bank
account that is subject to a Security Interest in favour of Kreos (or its
permitted successors and assigns of any rights granted under the Kreos
Facility).

 

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4.3 Any amounts outstanding as between each of A UK, A AB and Elobix under the
Original Intra-group Loan Agreement (including both principal and any accrued
interest) shall automatically be governed by the terms of this Agreement as at
First Drawdown, with any such balances constituting a Loan hereunder as between
the relevant Borrower and the relevant Lender. A UK, A AB and Elobix hereby
agree that this Agreement constitutes the entire agreement between each of them
with respect to intra-group lending arrangements and that this Agreement
supersedes and extinguishes any existing agreements and arrangements as may be
in place as between each of them.

 

4.4 Save for accrued rights and obligations, the Original Intra-group Loan
Agreement is hereby terminated and replaced by this Agreement.

 

5. Interest

 

5.1 Each Borrower shall pay the Lender interest on the outstanding principal
amounts of indebtedness owed by such Borrower to the Lender in respect of any
Loan at an annual rate of interest agreed by such Borrower and Lender (provided
that the annual rate of interest with respect to any Loan is not more than
15.2 per cent).

 

5.2 Interest shall accrue on a daily basis from the date of draw-down of such
Loan and shall be payable in accordance with Clause 3.3.

 

6. Borrower’s warranty

Each Borrower warrants to the Lender that it has agreed and received all
necessary authorizations in connection with the entry into this Agreement and
that it has legal power to execute and perform this Agreement.

 

7. Subordination to Kreos

Each of the Lenders agrees that its Loans shall be subordinated to Kreos,
subject always to the right to receive prepayment in accordance with Clause 3.4.
Without prejudice to the foregoing, (a) without prior written consent from
Kreos, none of the Lenders or Borrowers (as applicable) shall amend, encumber,
pre-pay (otherwise than in accordance with Clause 3.4 above) or assign their
Loans, nor set off or compromise any liability owing between them in settlement
of any Loans, and (b) on the Loans becoming payable pursuant to clause 10
hereof, such Loans shall be applied towards settlement of the Lenders’
obligations under the Kreos Facility (or under any guarantee entered into in
respect thereof), and pending such payment, all such Loans shall be held on
trust for Kreos.

 

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8. Procedure for Amendments to this Agreement

Any amendments to this Agreement are only effective if in written form and
signed by all parties hereto (including Kreos), provided that the Lender and any
one of the Borrowers may amend the terms of a Loan as between themselves without
requiring the consent of any other Borrowers.

 

9. Assignment of Rights and Duties

No Lender or Borrower shall have the right to assign its rights and duties
hereunder without the written consent of Kreos.

 

10. Events of Default and Liability of Borrowers

 

10.1 Each of the following shall constitute an event of default as between a
given Borrower and the Lender:

 

  A) such Borrower fails to make any payment of interest or principal in respect
of a Loan when due and such failure continues for a period of fifteen days after
notice thereof to such Borrower;

 

  B) such Borrower ceases to be a Group Company;

 

  C) such Borrower files or has filed against it any petition seeking relief
under any bankruptcy, insolvency or other similar statute for the protection of
creditors, or if a liquidator, receiver, administrative receiver, administrator,
compulsory manager or other similar officer is appointed for a material portion
of such Borrower’s assets; or

 

  D) any acceleration of the loan made to A UK by Kreos following an “Event of
Default” as such term is defined pursuant to the Kreos Facility;

 

10.2 Upon the occurrence of any event of default, the Lender shall declare such
Borrower to be in default hereunder by giving written notice thereof to the
relevant Borrower, such declaration of default to become effective immediately.
Upon any such declaration of default, all amounts due and payable by that
Borrower shall immediately be accelerated and become due and payable as of the
effective date of such declaration of default, without presentment, demand or
protest.

 

11. Governing Law

The parties agree that this Agreement shall be governed, construed and
interpreted in accordance with the laws of England and Wales, subject to the
jurisdiction of the Courts of England and Wales.

 

12. Notices

All notices sent pursuant to this Agreement shall be in writing in the English
language and shall be deemed received only upon actual receipt. Notices shall be
sent to the addresses of each party as set out in the first paragraph of this
Agreement unless a Party provides five business days’ notice to the other
Parties of any alternative address to which notices should be sent.

 

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13. Counterparts

This Agreement may be executed in any number of counterparts, each of which when
executed shall constitute a duplicate original, but all the counterparts shall
together constitute one agreement.

 

14. Third Party Rights

 

14.1 Except as expressly provided in this Agreement, a person who is not a party
to this Agreement has no right under the Contracts (Rights of Third Parties) Act
1999 to enforce or enjoy the benefit of any term of this Agreement. This does
not affect any right or remedy of a third party which exists, or is available,
apart from that act.

 

14.2 Any person who is not a party to this Agreement, but who becomes a member
of the Group (as defined in the Kreos Facility), may become a Lender and/or a
Borrower under this Agreement (and a party hereto) by executing a deed of
accession in such form as may be agreed, from time to time, by all of the
parties hereto.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed on the
date and time stated above.

 

Signed by Albireo Limited    )    by    )    Signed by Albireo AB    )    By   
)    Signed by Elobix AB    )    by    )    Signed by Kreos Capital IV (UK)
Limited    )    By    )    Signed by Albireo Pharma Inc by    )    by    )   

 

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EXECUTION PAGE

This agreement is executed as a deed and is delivered on the day and year first
before written.

 

EXECUTED as a DEED for and on behalf of KREOS CAPITAL IV (UK) LIMITED acting by
a director in the presence of:     Witness name:  

 

  Witness signature:  

 

  Witness address:  

 

  Witness occupation:  

 

  EXECUTED as a DEED for and on behalf of ALBIREO LIMITED acting by a director
in the presence of:     Witness name:  

 

  Witness signature:  

 

  Witness address:  

 

  Witness occupation:  

 

 

EXECUTED as a DEED for and on behalf of ALBIREO AB acting by

                     under its authority:

   

EXECUTED as a DEED for and on behalf of ELOBIX AB acting by

                     under its authority:

    EXECUTED as a DEED for and on behalf of ALBIREO PHARMA, INC.    

acting by

                     under its authority:

   

 

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SCHEDULE 3

Guarantee and Security Agreement

 

7

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GUARANTY AND SECURITY AGREEMENT

GUARANTY AND SECURITY AGREEMENT (“Agreement”), dated as of [●], 2016, by and
between ALBIREO PHARMA, INC. (f/k/a Biodel, Inc.), a Delaware corporation
(“Guarantor”) having a principal place of business at 50 Milk Street, 16th
Floor, Boston, MA 02109, and KREOS CAPITAL IV (UK) LIMITED, a company
incorporated under the laws of England and Wales (“Kreos”) whose registered
office is at 25-28 Old Burlington Street, London W1S 3AN, United Kingdom.
Guarantor and Kreos are sometimes hereinafter referred to individually as a
“party” and collectively as the “parties.”

RECITALS:

Kreos and Albireo Limited, a company incorporated under the laws of England and
Wales (the “Borrower”), Albireo AB, a company incorporated in Sweden (“Albireo
Guarantor”); and Elobix AB, a company incorporated in Sweden (“Elobix
Guarantor”) have entered into that certain Amended and Restated Agreement for
the Provision of a Loan Facility of up to €6,000,000 Dated 18 December 2014, as
Amended by a Deed of Variation Dated 4 February 2016 and as Amended and Restated
on the date hereof, pursuant to a Supplemental Agreement Dated [●] May 2016,
Kreos, as lender, Borrower, as borrower, and Albireo Guarantor and Elobix
Guarantor, as guarantors (such agreement, as heretofore, now and hereafter
amended, modified or supplemented, is referred to herein together as the “Loan
Agreement”). Borrower is to be, subject to stamping, a wholly-owned subsidiary
of Guarantor, and Guarantor acknowledges that it and its operations will
directly benefit from the loans and other financial accommodations being made by
Kreos to Borrower pursuant to the Loan Agreement (collectively, the “Loan”).
This Agreement is a “Security Document” for the purpose of the Loan Agreement.

NOW, THEREFORE, for and in consideration of Kreos’ agreeing to amend and restate
the Loan Agreement concurrently herewith, and in order to induce Kreos to
continue to extend the Loan to Borrower, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
Guarantor hereby agrees as follows:

1. Unconditional Guaranty. Guarantor hereby unconditionally and irrevocably
guaranties, as a primary obligor and not merely as a surety, without offset or
deduction, (a) the full and punctual payment when due of all obligations and
amounts payable by Borrower to Kreos, however arising, including those arising
under the Loan Agreement and any security agreement, pledge agreement or other
agreement entered into or delivered in connection with the Loan Agreement
(together with the Loan Agreement, the “Loan Documents”), including all fees and
expenses payable by Borrower thereunder and all expenses incurred by Kreos in
enforcing any rights under the Loan Documents or this Agreement and (b) the full
performance and observance of all of the covenants, conditions and agreements
provided in the Loan Documents to be performed or observed by Borrower. In the
case of a failure of Borrower punctually to make any payment of principal of, or
interest, make-whole or premium in respect of the Loan or under or pursuant to
the Loan Documents, Guarantor hereby agrees to cause such payment to be made
punctually when and as the same shall become due and payable, whether at stated
maturity, on a prepayment date, by declaration of acceleration, or otherwise, as
if such payment were made by Borrower, it being the intention of Guarantor that
the guaranty set forth herein (the “Guaranty”) shall be a guaranty of payment
and not of collection. The obligations and agreements of Guarantor hereunder
shall be performed and observed without requiring any notice of non-payment,
non-performance or non-observance, or any proof thereof or demand therefor, all
of which Guarantor hereby expressly waives. All of the indebtedness, obligations
and liabilities described in this Section 1 are hereinafter collectively
referred to as the “Obligations.” This Agreement together with any security
agreement, pledge agreement or other agreement securing this Agreement are
hereinafter collectively referred to as the “Guaranty Documents.”

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2. Character of Obligations; Consents and Waivers by Guarantor.

(a) This Agreement and the Guaranty hereunder shall be binding upon Guarantor,
its successors and assigns, and shall remain in full force and effect until the
monetary Obligations of Borrower pursuant to the Loan Documents (other than
contingent obligations of the Borrower under the Loan Agreement as to which no
claim has then arisen) are fully and indefeasibly paid, performed and discharged
in accordance with their terms and there are no outstanding commitments by Kreos
to extend any financial accommodations to the Borrower (at which time this
Agreement and the Security Interests (defined below) granted hereunder shall
terminate and Kreos shall execute and deliver to the Guarantor, upon the
Guarantor’s written request and at the Guarantor’s expense, such documents as
shall be reasonably necessary to effectuate the termination of such Security
Interests held by Kreos, it being agreed that should any contingent obligations
of the Borrower subsequently arise and become monetized, then in any such event,
this Agreement and the Security Interests granted hereunder shall be
reinstated), irrespective of, and neither this Agreement nor the Guaranty shall
be terminated by, the existence of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting the terms of any Loan Document or the
Loan or the rights or obligations of Borrower thereunder or with respect
thereto. The liability of Guarantor under this Agreement and the Guaranty
hereunder shall, to the fullest extent permitted by law, be absolute,
unconditional and irrevocable irrespective of:

(i) any lack of validity or enforceability of Borrower’s obligations under or
with respect to the Loan, any Loan Document or any other agreement or instrument
relating thereto,

(ii) any change, whether or not agreed or consented to by Guarantor, in the
time, manner or place of payment of, or in any other term of, all or any of the
Loan or of any Loan Document or any other amendment, renewal, extension,
acceleration, compromise or waiver of or any consent or departure from the terms
or provisions of the Loan or any Loan Document or any indulgence granted to
Borrower,

(iii) the lack of power or authority of Borrower to execute and deliver any Loan
Document; any defense, set-off or counterclaim which may at any time be
available to or asserted by Borrower or Guarantor (as the case may be) against
Kreos with respect to Borrower’s or Guarantor’s (as the case may be) obligations
under the Loan or any Loan Document or the Guaranty Documents; the existence or
continuance of Borrower or Guarantor (as the case may be) as a legal entity; the
consolidation or merger of Borrower or Guarantor (as the case may be) with or
into any other corporation, or the sale, lease or other disposition by Borrower
or Guarantor (as the case may be) of all or

 

2

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substantially all of its assets to any other business entity, whether or not
effected in compliance with the provisions of any Loan Document; or the
bankruptcy or insolvency of Borrower or Guarantor (as the case may be), the
admission in writing by Borrower or Guarantor (as the case may be) of its
inability to pay its debts as they mature, or its making of a general assignment
for the benefit of, or entering into a composition or arrangement with,
creditors,

(iv) any act, failure to act, delay or omission whatsoever on the part of Kreos,
including any failure to demand, delay in demanding or rescission of a demand
for any payment under any Loan Document, the guaranties of the Albireo
Guarantor, the Elobix Guarantor or any other guaranty which may at any time be
in effect with respect to the obligations of Borrower guaranteed hereunder, any
failure to give to Borrower, Guarantor or the Albireo Guarantor, the Elobix
Guarantor or any other guarantor under any such other guaranty notice of default
in the making of any payment due and payable under any Loan Document or notice
of any failure on the part of Borrower to do any act or thing or to observe or
perform any covenant, condition or agreement by it to be observed or performed
under any Loan Document; or any action taken by Kreos in the exercise or release
of any right or power conferred by any Loan Document or any such other guaranty
at any time entered into, or the partial exercise or partial release of any such
right or power by Kreos, or the failure, delay or omission by Kreos to exercise
any such right or power,

(v) any invalidation of any such other guaranty or its repudiation by the
Albireo Guarantor, the Elobix Guarantor or any other guarantor thereunder,
whether or not under color of right, or any act, failure to act, delay or
omission whatsoever on the part of Kreos with respect to any such other guaranty
or the Albireo Guarantor, the Elobix Guarantor or any other guarantor
thereunder, including any termination of such other guaranty, any amendment,
compromise or waiver of or any consent or departure from the terms or provisions
of such other guaranty or any release of the Albireo Guarantor, the Elobix
Guarantor or any other guarantor thereunder from liability thereunder,

(vi) any release, discharge, modification, compromise, surrender, or exchange of
any property at any time pledged or mortgaged or in which a security interest at
any time has been granted as collateral for repayment of the Loan or any other
obligations of Borrower guaranteed hereunder, or any amendment or termination of
or consent or waiver under any agreement or instrument now or hereafter
providing for granting, pledging, mortgaging or conveying collateral for the
Loan or any such other obligations,

(vii) accepting or entering into new or additional agreements, security
documents, guarantees or other instruments in addition to, in exchange for or
relative to any Loan Document, Guaranty Document, all or any part of the
Guarantor’s Obligations, or any collateral now or in the future serving as
security for the Guarantor’s Obligations, and in connection therewith accepting,
receiving and holding any additional collateral for all or any part of the
Guarantor’s Obligations (including from the Albireo Guarantor, the Elobix
Guarantor or any other guarantor);

 

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(viii) any legal action by Kreos against Borrower with respect to its
obligations under any Loan Document or the foreclosing of or other realization
upon any security interest in or lien on any collateral now or hereafter
securing Borrower’s obligations, and

(ix) any other event or circumstance which might otherwise constitute a defense
available to, or a discharge of Borrower in respect of its obligations under any
Loan Document, the Albireo Guarantor, the Elobix Guarantor or any such other
guarantor in respect of its obligations under its guaranty or Guarantor in
respect of its obligations under this Agreement;

it being the purpose and intent of this Agreement that the obligations of
Guarantor hereunder shall be absolute, unconditional and irrevocable and shall
not be discharged or terminated except by full and complete payment and
performance in accordance with their terms of all of the obligations which
Borrower has under each Loan Document.

(b) Guarantor does hereby waive and relinquish, so far as it may lawfully and
effectively do so, (i) the benefit and advantage of any and all valuation, stay,
appraisement, extension or redemption law or laws now in effect or hereafter
enacted, (ii) promptness, diligence, notice of acceptance of the Guaranty by
Kreos, and notice of default, dishonor, presentment, demand, non-payment,
non-performance or any other notice to or upon Borrower or Guarantor, and
(iii) any right to assert against Kreos, as a defense, counterclaim, set-off or
cross-claim, any defense (legal or equitable), setoff, counterclaim or claim
which Guarantor may now or hereafter have against Borrower.

3. Primary Liability of Guarantor. Guarantor agrees that this Agreement may be
enforced by Kreos without the necessity at any time of resorting to or
exhausting any other security or collateral and without the necessity at any
time of having recourse to Borrower under any Loan Document or recourse to any
other person or entity (including the Albireo Guarantor, the Elobix Guarantor or
any other guarantor) liable in respect of any of the obligations guaranteed
hereunder.

4. No Subrogation. Notwithstanding any payment or payments made by or expenses
incurred by Guarantor pursuant to this Agreement, Guarantor shall not claim or
assert and waives any subrogation right, in whole or in part, to the rights of
Kreos against Borrower under any Loan Document until Kreos shall have been
indefeasibly paid in full all such amounts for which Borrower is or shall become
indebted under any Loan Document. Guarantor hereby agrees that, as between
Guarantor on the one hand and Kreos on the other hand, the obligations of
Borrower which are covered by the Guaranty may be declared to be forthwith due
and payable as provided in any Loan Document notwithstanding any stay,
injunction or other prohibition preventing such declaration as against Borrower
and that, in the event of any such declaration, such obligations (whether or not
then due and payable by Borrower) shall forthwith become due and payable by
Guarantor for purposes of this Agreement.

 

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5. Security Interests.

(a) In order to secure the due and punctual payment and performance of all of
Guarantor’s Obligations, and the due and punctual payment and performance of all
obligations, indebtedness and liabilities of Guarantor to Kreos and under the
Guaranty Documents, in each case whether now existing or hereafter incurred, in
each case including all such indebtedness to Kreos incurred by Guarantor prior
to, during or following any proceeding in respect of a bankruptcy,
reorganization or insolvency (a “Reorganization”) of Guarantor and all interest
on such indebtedness according to the terms thereof, regardless of the extent
allowed as a claim against Guarantor in any Reorganization (all of the foregoing
indebtedness, obligations and liabilities of Guarantor described in this
Section 5(a), whether now existing or hereinafter arising, being herein referred
to collectively as the “Guarantor’s Obligations”), Guarantor hereby grants to
Kreos, its successors and assigns, a continuing security interest in and to, ,
the following described now owned or hereafter acquired personal property of
Guarantor (hereinafter collectively called the “Collateral”):

 

  (a) all of Guarantor’s right, title and interest in and to the Borrower and to
any successor business entities, and the right to receive all payments and
distributions due or to become due under all related partnership agreements,
operating agreements, and other constituent documents governing or establishing
such business entities (collectively, the “Constituent Documents”), bank
deposits, deposit accounts, checking accounts, certificates of deposit and cash,
whether now owned or hereafter acquired by Guarantor, or in which Guarantor may
now have or hereafter acquire an interest;

 

  (b) all accessions, additions or improvements to, and all proceeds and
products of the foregoing, whether now owned or hereafter acquired by Guarantor,
or in which Guarantor may now have or hereafter acquire an interest.

6. Delivery of Pledged Investment Property.

(a) All of Guarantor’s right, title and interests in the Borrower, and to any
successor business entities (collectively, the “Pledged Investment Property”)
shall be promptly delivered to Kreos by Guarantor following Guarantor’s
registration as the holder of legal title to the Borrower, and shall, if
certificated, be in suitable form for transfer by delivery, and shall be
accompanied by duly executed instruments of transfer or assignments in blank,
with signatures appropriately guaranteed, and accompanied in each case by any
required transfer tax stamps, all in form and substance reasonably satisfactory
to Kreos (other than UK stamp duties required to be paid in order that the
transferee is able to be lawfully registered as the holder of legal title to the
Pledged Investment Property). If the Pledged Investment Property is not
certificated, Guarantor shall cause the issuer to register Kreos as the
registered collateral assignee thereof and enter into a control agreement with
Kreos in such form as Kreos shall reasonably require.

 

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7. Filing; Further Assurances.

(a) Guarantor will, at its expense, execute, deliver, file and record (in such
manner and form as Kreos may reasonably require), or permit Kreos to file and
record, any financing statements, any carbon, photographic or other reproduction
of a financing statement or this Agreement (which the parties agree shall be
sufficient as a financing statement hereunder), any specific assignments or any
other paper that may be reasonably necessary or desirable, or that Kreos may
reasonably request, in order to create, confirm, preserve, perfect or validate
any Security Interest or to enable Kreos to exercise and enforce its rights and
remedies hereunder or under applicable law with respect to any of the
Collateral. Guarantor hereby authorizes Kreos to prepare and file such financing
statements and/or other instruments or recordings as Kreos may at any time
reasonably request or require with respect to the Collateral and the Security
Interests, including such financing statements as indicate or describe the
Collateral, as defined herein, and Guarantor hereby ratifies all such financing
statements filed by Kreos prior to the date hereof.

8. Representations and Warranties of Guarantor. Assuming the accuracy of the
representations and warranties made by Guarantor (then Biodel Inc.) in that
certain Share Exchange Agreement made and entered into as of May [●], 2016, by
and among Guarantor, Borrower and the persons listed on Schedule thereto,
Guarantor hereby represents and warrants to Kreos as follows:

(a) Except for “Permitted Liens” (as that term is defined in Exhibit A),
Guarantor is, or to the extent that certain of the Collateral is to be acquired
after the date of this Agreement, will be, the owner of the Collateral free from
any adverse lien, security interest or other encumbrance.

(b) Except for such financing statements as may be described in Exhibit A, no
financing statement or other lien filing covering the Collateral is on file in
any public office, other than the financing statements filed pursuant to this
Agreement.

(c) Guarantor is the sole beneficial owner, and is to be, subject to stamping
and registration, the sole legal owner, of the Pledged Investment Property as
set forth in the Constituent Documents, and Guarantor has not sold, assigned,
transferred, mortgaged, encumbered or pledged any part thereof.

(d) Except as specifically set forth in the Constituent Documents, none of
Guarantor’s Pledged Investment Property is subject to any restriction which
would prohibit or restrict the security interest, pledge and assignment
hereunder or the exercise of Kreos’s remedies hereunder. Notwithstanding
anything to the contrary set forth in the Constituent Documents, Guarantor
hereby waives compliance with all such restrictions or prohibitions set forth in
the Constituent Documents in order to permit the collateral assignment, security
interest and pledge hereunder and the exercise by Kreos of all of its rights and
remedies hereunder.

(e) The execution and delivery of, and performance by Guarantor of its
obligations under, this Agreement will not violate in any material respect any
applicable provision of law, any order, judgment or decree of any court or other
agency of government, the Constituent Documents or any material indenture,
agreement or other instrument to which Guarantor is a party, or by which
Guarantor or any of its assets is bound, or be in conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under, or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets of
Guarantor pursuant to, any such indenture, agreement or instrument.

 

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(f) There are no restrictions upon the voting rights or the transfer of all or
any of the Pledged Investment Property existing on the date hereof (other than
may appear on the face of the certificate thereof or as may be imposed by the
Securities Act of 1933, as amended (the “Securities Act”), or any laws, rules or
regulations of state or local authorities) and Guarantor has the right to vote,
pledge, or grant a security interest in and otherwise transfer the Pledged
Investment Property free of any encumbrances (other than applicable restrictions
imposed by Federal or state securities and antitrust laws or regulations).

(g) Guarantor (i) is a corporation duly organized and validly existing under the
laws of the State of Delaware and is duly qualified to transact business in each
jurisdiction where the nature of its activities requires such qualification
(except where failure to so qualify would not have a material adverse effect on
Guarantor’s business or operations), (ii) has the corporate power and corporate
authority to own its properties and to carry on its business as now being
conducted, (iii) has the corporate power and corporate authority to execute and
deliver, and perform its obligations under, the Guaranty Documents to which it
is a party or signatory, and (iv) except for the Borrower, has no direct
subsidiaries as of the date hereof.

(h) The execution and delivery of, and performance by Guarantor of its
obligations under, this Agreement and the other Guaranty Documents have been
duly authorized by all requisite corporate action and will not violate any
provision of law, any order, judgment or decree of any court or other agency of
government, the certificate of incorporation or by-laws of Guarantor or any
material indenture, agreement or other instrument to which Guarantor is a party,
or by which Guarantor is bound, or be in conflict with, result in a breach of,
or constitute (with due notice or lapse of time or both) a default under, or
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of Guarantor pursuant to,
any such indenture, agreement or instrument. This Guaranty constitutes the valid
and binding obligation of Guarantor enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer and
similar laws regarding creditors’ rights and equitable principles.

(i) Guarantor is not required to obtain any consent, approval or authorization
from, or to file any declaration or statement with, any governmental
instrumentality or other agency, or any other person, in connection with or as a
condition to the execution, delivery or performance of this Guaranty or the
other transactions contemplated by the Guaranty Documents.

(j) There is no action, suit or proceeding at law or in equity or by or before
any governmental instrumentality or other agency, including any arbitration
board or tribunal, now pending or, to the knowledge of Guarantor, threatened,
(i) which questions the validity of this Guaranty, or any action taken or to be
taken pursuant hereto or thereto, or (ii) against or affecting Guarantor which,
if adversely determined, either in any case or in the aggregate, would have a
material adverse effect on the business, operations, properties, assets or
financial condition, of Guarantor and its subsidiaries, taken as a whole.

 

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(k) Guarantor is not now insolvent (as defined under any applicable federal or
state law relating to bankruptcy, insolvency or fraudulent conveyance or
transfer) and Guarantor’s obligations under this Guaranty do not render
Guarantor insolvent; Guarantor is not contemplating either the filing of a
petition by Guarantor under any state or federal bankruptcy or insolvency laws
or the liquidating of all or a major portion of Guarantor’s property; and
Guarantor has no knowledge of any person contemplating the filing of any such
petition against Guarantor.

9. Covenants of Guarantor. Guarantor hereby covenants and agrees as follows:

(a) Guarantor will use commercially reasonable efforts to defend the Collateral
against all claims and demands of all persons at any time claiming any interest
therein, and will keep the Collateral free from any adverse lien, security
interest or encumbrance, except for Permitted Liens.

(b) Guarantor will provide Kreos, at least thirty (30) business days prior to
occurrence, with written notice of (i) any change in the chief executive office
of Guarantor, or (ii) the movement or location of any material Collateral to or
at any address other than as set forth in Exhibit B.

(c) Guarantor will promptly pay any and all material taxes, assessments and
governmental charges upon the Collateral prior to the date penalties are
attached thereto, except to the extent that such taxes, assessments and charges
shall be contested in good faith by Guarantor and reserves in accordance with
generally accepted accounting principles in the United States as in effect from
time to time (“GAAP”) have been set aside therefor.

(d) Guarantor will promptly notify Kreos of any event (which shall not include a
change in general economic conditions) causing a substantial loss or diminution
in the value of all or any material part of the Collateral and the amount or an
estimate of the amount of such loss or diminution.

(e) Guarantor will have and maintain at all times with respect to the Collateral
such insurance coverage as a prudent business person would maintain under
similar circumstances.

(f) Guarantor will not sell or offer to sell or otherwise assign, transfer or
dispose of the Collateral or any interest therein, without the prior written
consent of Kreos; provided, however, that Guarantor may grant liens under
clauses (c) and (d) of the definition of Permitted Liens. For the avoidance of
doubt, Guarantor may sell its inventory, if any, and other assets including
payments of cash in the ordinary course of its business and may sell other
assets outside the ordinary course of business not consisting of Collateral

(g) Guarantor will not knowingly use the Collateral in violation of any statute
or ordinance.

(h) Guarantor will not change its name, jurisdiction of organization, identity
or structure, without thirty (30) days prior written notice to Kreos and the
delivery to Kreos by Guarantor of all documents and instruments necessary for
Kreos to continue its perfected security interest in the Collateral, the form
and substance of which documents and instruments shall be acceptable to Kreos in
Kreos’s reasonable discretion.

 

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(i) Guarantor will perform and observe, or cause to be performed and observed,
all of Guarantor’s obligations under the Constituent Documents, and will not,
without the prior written consent of Kreos, amend or modify the Constituent
Documents in any material adverse way to Kreos.

(j) Guarantor will keep its records concerning the Collateral, at Guarantor’s
executive office as shown on Exhibit B, or at such other place or places of
business as Kreos may approve in writing, such approval not to be unreasonably
withheld, conditioned or delayed. Guarantor will hold and preserve such records
and chattel paper and will permit representatives of Kreos at any time during
normal business hours following reasonable notice to examine and inspect the
Collateral and to make abstracts from such records and chattel paper, and will
furnish to Kreos such information and reports regarding the Collateral and the
Account Debtors as Kreos may from time to time reasonably request, provided that
Kreos, in conducting any such inspection, shall not unreasonably interfere with
the operation of Guarantor’s business.

(k) Guarantor shall at any time and from time to time, whether or not Article 9
is in effect in any particular jurisdiction, take such steps as Kreos may
reasonably request for Kreos (i) to obtain an acknowledgement, in form and
substance reasonably satisfactory to Kreos, of any bailee having possession of
any of the Collateral that the bailee holds such Collateral for Kreos, (ii) to
obtain “control” of any investment property(as such term is defined in Article
9) with any agreements establishing control to be in form and substance
reasonably satisfactory to Kreos, and (iii) otherwise to insure the continued
perfection and priority of the Security Interests in any of the Collateral and
of the preservation of Kreos’s rights therein.

(l) Guarantor shall be in compliance in all material respects with all federal,
state and local laws, rules and regulations applicable to it.

10. Deposit Accounts

(a) With respect to each deposit account (“Collection Account”) now maintained
by Guarantor at any bank (“Depository Bank”), Guarantor shall use its reasonable
best efforts to deliver to Kreos a Control Agreement (each a “Control
Agreement”) in substantially the form of Exhibit C or in such other form as may
be reasonably acceptable to Kreos, Guarantor, such Depository Bank and Kreos in
respect of such Control Agreement, duly executed and delivered by the
appropriate parties thereto, authorizing and directing such Depository Bank,
upon receipt of written notice from Kreos, to comply solely with instructions
originated by Kreos and to take such further action as Kreos may reasonably deem
desirable to effect the transfer of exclusive ownership and disposition of the
funds in all Collection Accounts, without further consent by or notice to
Guarantor. Kreos agrees that it will not deliver any such written notice to the
Depository Bank unless an Event of Default shall have occurred and is
continuing. Until all of Guarantor’s Obligations (other than indemnification and
other contingent obligations which, by their terms, are intended to survive
termination of this Agreement) have been indefeasibly paid in full, Guarantor
agrees not to enter into any agreement or execute and deliver any direction
which would modify, impair or adversely affect the rights and benefits of Kreos
under any

 

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Control Agreement. Guarantor shall not open, establish or maintain any
Collection Account without first having notified Kreos thereof and, without
first having delivered to Kreos a duly executed Control Agreement with respect
to such Collection Account. Guarantor shall notify Kreos in writing not less
than five (5) days prior to the date it shall open or establish any Collection
Account.

11. Record Ownership of Pledged Investment Property. Upon the occurrence and
during the continuance of any Event of Default, Kreos may upon written notice to
Guarantor cause any or all of the Pledged Investment Property to be transferred
of record into Kreos’s name. Guarantor will promptly give to Kreos copies of any
notices or other communications received by Guarantor with respect to Pledged
Investment Property registered in the name of Guarantor and Kreos will promptly
give to Guarantor copies of any notices and communications received by Kreos
with respect to Pledged Investment Property registered in the name of Kreos.

12. Right to Receive Distributions on Pledged Investment Property. Unless an
Event of Default shall have occurred and be continuing, Guarantor shall be
entitled, from time to time, to collect and receive for its own use all
dividends, interest and other payments and distributions made upon or with
respect to the Pledged Investment Property, except:

(i) stock dividends,

(ii) dividends payable in securities or other property,

(iii) dividends or distributions on dissolution, or on partial or total
liquidation, or in connection with a reduction of capital, capital surplus or
paid-in surplus, and

(iv) other securities issued with respect to or in lieu of, or upon conversion
of, the Pledged Investment Property (whether upon conversion of the convertible
securities included therein or through stock split, spin-off, split-off,
reclassification, merger, consolidation, sale of assets, combination of shares
or otherwise).

From time to time upon receiving a written request from Guarantor accompanied by
a certificate signed by the President or Chief Financial Officer on behalf of
Guarantor stating that no Event of Default has occurred and is continuing, Kreos
shall deliver to Guarantor suitable assignments and orders for the payment to
Guarantor or upon its order of all dividends and securities listed in
(i) through (iv) above to which Guarantor is entitled as aforesaid, upon or with
respect to any Pledged Investment Property which are registered in Kreos’s name.

13. Right to Vote Pledged Investment Property.

(a) Unless an Event of Default shall have occurred and be continuing, Guarantor
shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Pledged Investment Property and to
exercise conversion rights with respect to the convertible securities included
therein.

 

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(b) If an Event of Default shall have occurred and be continuing, Kreos shall
have the right to the extent permitted by law, and Guarantor shall take all such
action as may be reasonably necessary or appropriate to give effect to such
right, to vote and to give consents, ratifications and waivers and take any
other action with respect to all the Pledged Investment Property with the same
force and effect as if Kreos were the absolute and sole owner thereof.

14. General Authority. Guarantor hereby irrevocably appoints Kreos as
Guarantor’s true and lawful attorney, with full power of substitution, in the
name of Guarantor, Kreos or otherwise, for the sole use and benefit of Kreos,
but at Guarantor’s expense, to the extent permitted by law to exercise, at any
time and from time to time after any Event of Default has occurred and is
continuing (or otherwise to the extent Kreos reasonably determines in its
discretion that the exercise of such powers is necessary to protect Kreos’s
interests in such Collateral or its rights hereunder), all or any of the
following powers with respect to all or any of the Collateral (which power shall
be in addition and supplemental to any powers, rights and remedies of Kreos
described herein or otherwise available to Kreos under applicable law):

(i) to demand, sue for, collect, receive and give acquaintance for any and all
moneys due or to become due upon or by virtue thereof,

(ii) to receive, take, endorse, assign and deliver any and all checks, notes,
drafts, documents and other negotiable and non-negotiable instruments and
chattel paper taken or received by Kreos in connection therewith,

(iii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,

(iv) to sell, transfer, assign or otherwise deal in or with the same or the
proceeds or avails thereof or any related goods securing the Customer
Receivables, as fully and effectually as if Kreos were the absolute owner
thereof,

(v) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto,

(vi) to discharge any taxes, liens, security interests or other encumbrances at
any time placed thereon,

(vii) to enforce, cancel or modify the Constituent Documents, but only to the
extent that Kreos in its sole discretion deems necessary or advisable to protect
or enforce its rights and remedies hereunder,

(viii) to redirect delivery of Guarantor’s mail to Kreos,

(ix) to demand, collect, sue for, recover, receive, compromise and adjust, and
make, execute and deliver receipts and releases for all amounts that may be or
may thereafter become due, owing or payable with respect to the Pledged
Investment Property, and

(x) to the extent permitted by law, including without limitation, state and
local rules, regulations and policies and Federal and state securities laws, to
execute any document or form, in the name of Guarantor, which may be necessary
or desirable in connection with any sale of the Pledged Investment Property by
Kreos, including without limitation Form 144 (or any successor form) promulgated
by the Securities and Exchange Commission; provided that Kreos shall give
Guarantor not less than ten (10) days’ prior written notice of the time and
place of any sale or other intended disposition of any of the Collateral.

Such appointment as attorney is irrevocable while this Agreement is in effect
and coupled with an interest.

 

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15. Events of Default. Guarantor shall be in default under this Agreement upon
the occurrence of any one or more of the following events (each such event is
herein being referred to as an “Event of Default”):

(a) default by Guarantor in the observance or performance of any of its monetary
Obligations under this Agreement,

(b) default by Guarantor in the observance or performance of any covenant or
agreement contained in Section 9(b), 9(c), 9(e), 9(f), 9(g), 9(h), 9(i), 9(j) or
9(k), or default by Guarantor in the observance or performance of any other
covenant or agreement contained in any of the Guaranty Documents (other than
those covered by Section 15(a)) and continuation thereof for a period of ten
(10) business days after the date Kreos gives Guarantor written notice thereof,

(c) breach by Guarantor of any representation or warranty herein contained or
any such representation or warranty shall prove to be false or misleading in any
material respect when made or deemed to be made,

(d) the filing of a petition by or against Guarantor for relief under any
Chapter of the United States Bankruptcy Code of 1978, as amended (which petition
if filed by a third party against Guarantor is not dismissed within thirty
(30) days of filing), or any other act of insolvency by Guarantor, or

(e) the occurrence of any “Event of Default” as defined in the Loan Agreement or
under the provisions of any other Loan Document.

16. Remedies Upon Event of Default. If an Event of Default shall have occurred
and be continuing, Kreos may take any of the following actions:

(a) Kreos may exercise all the rights and remedies of a secured party under the
UCC (whether or not the UCC is in effect in the jurisdiction where such rights
and remedies are exercised) and, in addition, Kreos may, without being required
to give any notice, except as herein provided or as may be required by mandatory
provisions of law, including provisions that require a secured party to act in a
commercially reasonable manner, (i) apply the cash, if any, then held by it as
Collateral hereunder, for the purposes and in the manner specified in
Section 18, and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Obligations in full, sell the Collateral, or any
part or component thereof, at one or more public or private sales for cash, upon
credit or for future delivery, and at such price or prices as Kreos may
reasonably deem satisfactory.

 

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(b) Kreos may require Guarantor to assemble all or any part of the Collateral
and make it available to Kreos at a place to be designated by Kreos which is
reasonably convenient. Any holder of an Obligation may be the purchaser of any
or all of the Collateral so sold at any public sale (and, if the Collateral is
of a type customarily sold in a recognized market or is of a type which is the
subject of widely distributed standard price quotations, at any private sale)
and thereafter hold the same absolutely, free from any right or claim of
whatsoever kind. Upon any such sale, Kreos shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so sold. Each
purchaser at any such sale shall hold the Collateral so sold absolutely, free
from any claim or right of whatsoever kind, including any equity or right of
redemption of Guarantor.

(c) Unless the Collateral to be sold is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market, Kreos
shall give Guarantor at least ten (10) business days’ prior written notice of
its intention to make any such public or private sale. Guarantor agrees that
such notice constitutes “reasonable notification” within the meaning of the UCC.
Such notice in the case of a public sale shall state the time and place fixed
for such sale. Such notice in the case of a private sale or disposition shall
state the time after which any private sale or other intended disposition is to
be made.

(d) Any such public sale shall be held at such time or times within ordinary
business hours and at public or private place or places as Kreos may fix in the
notice of such sale. At any public or private sale, the Collateral may be sold
in one lot as an entirety or in separate parcels, as Kreos may reasonably
determine. Kreos shall not be obligated to make such sale pursuant to any such
notice. Kreos may, without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and placed fixed for the sale, and such sale may be made at any time or
place to which the same may be adjourned. In case of any sale of all or any part
of the Collateral on credit or for future delivery, the Collateral so sold may
be retained by Kreos until the selling price is paid by the purchaser thereof,
but Kreos shall not incur any liability in case of the failure of such purchaser
to take up and pay for the Collateral so sold and, in case of any such failure,
such Collateral may again be sold upon like notice.

(e) Kreos, instead of exercising the power of sale herein conferred upon it, may
proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.

(f) To enforce the provisions of this Agreement, Kreos is empowered to request
the appointment of a receiver from any court of competent jurisdiction. The
receiver shall have the power to dispose of the Collateral in any manner lawful
in the jurisdiction in which his appointment is confirmed, including the power
to conduct a public or private sale of the Collateral. Kreos may bid at any such
public or private sale.

 

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(g) GUARANTOR ACKNOWLEDGES THAT THE APPOINTMENT OF A RECEIVER IS INTEGRAL TO
KREOS’S REALIZATION OF THE VALUE OF THE COLLATERAL, THAT THERE IS NO ADEQUATE
REMEDY AT LAW FOR FAILURE BY GUARANTOR TO COMPLY WITH THE PROVISIONS OF THIS
SECTION AND THAT SUCH FAILURE WOULD NOT BE ADEQUATELY COMPENSABLE IN DAMAGES,
AND THEREFORE AGREES THAT THE AGREEMENTS CONTAINED IN THIS SECTION MAY BE
SPECIFICALLY ENFORCED.

(h) All rights and remedies contained herein shall be separate and cumulative
and in addition to all other rights and remedies available to a secured party
under applicable law, and the exercise of one shall not in any way limit or
prejudice the exercise of any other such rights or remedies.

(i) If at any time when Kreos shall determine to exercise its right to sell all
or any part of the Pledged Investment Property pursuant to subsection (a)(ii) of
this Section 16, Guarantor recognizes that Kreos may be unable to effect a
public sale of the Pledged Investment Property by the reason of certain
prohibitions contained in the Securities Act, or other applicable state or
federal laws, and Kreos may therefore resort to one or more private arm’s-length
sales thereof to a restricted group of purchasers. Guarantor agrees that any
such private sales may be at prices and on other terms less favorable to the
seller than if sold at public sales and that such private arm’s-length sales
shall not by reason thereof be deemed not to have been made in a commercially
reasonable manner. Kreos shall sell all or any part of the Pledged Investment
Property at a price which it deems commercially reasonable under the
circumstances. Kreos shall be under no obligation to delay a sale of any of the
Pledged Investment Property for the period of time necessary to permit the
issuer of such securities to register such securities for public sale under the
Securities Act, or such other applicable laws, even if the issuer would agree to
do so. Subject to the foregoing, Kreos agrees that any sale of the Pledged
Investment Property shall be made in a commercially reasonable manner, and
Guarantor agrees to use commercially reasonable efforts to cause the issuer or
issuers of the Pledged Investment Property contemplated to be sold, to execute
and deliver, all at Guarantor’s expense, all such instruments and documents, and
to do or cause to be done all such other acts and things as may be necessary or,
advisable to exempt the Pledged Investment Property from registration under the
provisions of the Securities Act, and to make all amendments to such instruments
and documents which, in the opinion of Kreos, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto, and
other applicable law.

(j) The receipt by Kreos of the purchase money paid at any such sale made by it
shall be a sufficient discharge therefor to any purchaser (other than Kreos) of
the Collateral, or any portion thereof, sold as aforesaid; and no such purchaser
(or his or its representatives or assigns) (other than Kreos), after paying such
purchase money and receiving such receipt, shall be bound to see to the
application of such purchase money or any part thereof or in any manner
whatsoever be answerable for any loss, misapplication or nonapplication of any
such purchase money, or any part thereof, or be bound to inquire as to the
authorization, necessity, expediency or regularity of any such sale.

 

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17. Application of Collateral and Proceeds. The proceeds of any sale of, or
other realization upon, all or any part of the Collateral shall be applied in
the following order of priorities:

(a) first, to pay the reasonable expenses of such sale or other realization and
all reasonable expenses, liabilities and advances incurred or made by Kreos in
connection therewith, and any other unreimbursed expenses for which Kreos is to
be reimbursed pursuant to Section 18,

(b) second, to the payment of all amounts due under the Loan,

(c) third, to the payment of the remaining Obligations of Guarantor in such
order and manner as Kreos in its sole discretion, shall determine, and

(d) finally, unless applicable law otherwise provides, to pay to Guarantor, or
its successors or assigns, or as a court of competent jurisdiction may direct,
any surplus then remaining from such proceeds.

18. Expenses; Kreos’ Lien. Guarantor will forthwith upon demand pay to Kreos:

(a) the amount of any taxes which Kreos may at any time be required to pay by
reason of the Security Interests (including any applicable transfer taxes) or to
free any of the Collateral from any lien thereon arising by reason of such
taxes, and

(b) the amount of any and all reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of its counsel and of any person or entity not
regularly in its employ, which Kreos may reasonably incur in connection with
(i) the preparation, administration and enforcement of this Agreement, (ii) the
collection, sale or other disposition of any of the Collateral, (iii) the
exercise by Kreos of any of the powers, rights or remedies conferred upon it or
them hereunder, or (iv) any default on Guarantor’s part hereunder.

19. Indemnification. In any suit, proceeding or action brought by Kreos relating
to any Collateral for any sum owing with respect thereto or to enforce any
rights or claims with respect thereto, Guarantor will save, indemnify and keep
Kreos harmless from and against all expense (including reasonable attorneys’
fees and expenses), loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the Account
Debtor or other person or entity obligated on the Collateral, arising out of a
breach by any obligor of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to, or in favor of, such
obligor or its successors from Guarantor, except in the case of Kreos to the
extent such expense, loss or damage is attributable to the gross negligence or
willful misconduct of Kreos as finally determined by a court of competent
jurisdiction. All such obligations of Guarantor shall be and remain enforceable
against, and only against, Guarantor and shall not be enforceable against Kreos.

20. Waivers; Non-Exclusive Remedies; Consent to Jurisdiction; Service of
Process. No failure on the part of Kreos to exercise, and no delay in
exercising, and no course of dealing with respect to, any right, power or remedy
under this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise by Kreos of any right, power or remedy

 

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under this Agreement preclude any other right, power or remedy. The remedies in
this Agreement are cumulative and are not exclusive of any other remedies
provided by law. ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER GUARANTY DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK, STATE OF NEW YORK,
OR, AT KREOS’S SOLE OPTION, IN SUCH OTHER COURT IN WHICH KREOS SHALL INITIATE
LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
THE MATTER IN CONTROVERSY. GUARANTOR, TO THE EXTENT THAT IT MAY LAWFULLY DO SO,
HEREBY CONSENTS TO THE JURISDICTION OF ALL SUCH COURTS, AS WELL AS TO THE
JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR
THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ANY OF
GUARANTOR’S OBLIGATIONS ARISING HEREUNDER OR UNDER THE OTHER GUARANTY DOCUMENTS
OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND EXPRESSLY WAIVES
ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE, INCLUDING THE INCONVENIENCE OF
SUCH FORUM, IN ANY OF SUCH COURTS. TO THE EXTENT THAT GUARANTOR HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
GUARANTOR’S OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER GUARANTY DOCUMENTS TO
THE MAXIMUM EXTENT PERMITTED BY LAW.

21. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY ACTION
BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE OTHER GUARANTY DOCUMENTS OR
ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH. NEITHER OF THE PARTIES,
NOR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS, SHALL SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION OR PROCEDURE
BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY OF THE OTHER GUARANTY
DOCUMENTS ENTERED INTO IN CONNECTION HEREWITH OR THEREWITH OR THE DEALINGS OR
THE RELATIONSHIP BETWEEN THE PARTIES, OR EITHER OF THEM. NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE
PROVISIONS OF THIS SECTION 22 HAVE BEEN FULLY DISCUSSED BY THE PARTIES, AND
THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER PARTY HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO THE OTHER PARTY THAT THE PROVISIONS OF THIS
SECTION 22 WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

 

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22. Changes in Writing. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally but only by a statement in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.

23. New York Law; Meaning of Terms. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SAID STATE, except (a) to the extent that
remedies provided by the laws of any state other than New York are governed by
the laws of said state, and (b) to the extent that Article 9 (including Sections
9-406 and 9-408) in effect in the state in which an Account Debtor is physically
located shall govern all issues relating to the applicability, effectiveness,
interpretation and enforceability of any restrictions on assignment of, or the
granting of security interests with respect to, accounts and general
intangibles, applicable to such Account Debtor’s accounts and general
intangibles, whether pursuant to the agreements between the Account Debtor and
Guarantor relating thereto or statutes, rules and regulations applicable to such
Account Debtor’s accounts and general intangibles. Unless otherwise defined
herein, or unless the context otherwise requires, all terms used herein which
are defined in the UCC, as amended from time to time, have the meanings therein
stated.

24. Waiver of Marshaling. Guarantor and Kreos waive any right to require the
marshaling of any Collateral and acknowledge and agree that in exercising any
rights under or with respect to the Collateral, (i) Kreos is under no obligation
to marshal any Collateral; (ii) Kreos may, in its absolute discretion, realize
upon the Collateral in any order and in any manner it so elects; and (iii) Kreos
may, subject to Section 18, apply the proceeds of the Collateral to Guarantor’s
Obligations in any order and in any manner it so elects.

25. Separability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.

26. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns; provided
that Guarantor may not assign its obligations hereunder or otherwise sell,
transfer, encumber or otherwise dispose of the Collateral except as expressly
permitted by the terms hereof.

27. Headings. The headings in this Agreement are for the purposes of reference
only and shall not limit or otherwise affect the meaning hereof.

28. Counterparts. This Agreement may be executed by the parties in counterparts,
with the same effect as if they had signed the same document. Any such
counterpart may be executed and delivered by email, facsimile transmission or
other electronically recorded copy (including a .pdf file), all with the same
force and effect as if the same were a manually executed and delivered original
counterpart. Each counterpart shall be deemed to be an original, and it shall
not be necessary in making proof of the contents of this Agreement to produce or
account for more than one counterpart. Neither party shall raise the use of
electronic mail or a facsimile machine to deliver a signature or the fact that
any signature was transmitted or communicated

 

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through the use of electronic mail or a facsimile machine as a defense to the
formation of a contract and each party forever waives any such defense. All
counterparts shall be construed together and shall constitute one instrument,
and the signature page from any counterpart may be attached to another
counterpart to form a complete agreement.

29. Attorneys’ Fees and Costs of Collection. If at any time or times hereafter
Kreos employs counsel to pursue collection, to intervene, to sue for enforcement
of the terms of this Agreement or of any Loan Document, or to file a petition,
complaint, answer, motion or other pleading in any suit or proceeding relating
to this Agreement or any Loan Document, then in such event, to the fullest
extent permitted by applicable law, all of the reasonable attorneys’ fees
relating thereto shall be an additional liability of Guarantor to Kreos
hereunder, payable on demand.

30. Reinstatement. This Agreement and the Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time any payment, or
any part thereof, of the obligations which are covered by the Guaranty is
rescinded or must otherwise be restored or returned by Kreos upon the
insolvency, bankruptcy or reorganization of Borrower, any other guarantor or
otherwise, all as though such payment had not been made.

31. Condition of Borrower, etc. Guarantor agrees that Kreos will have no
obligation to investigate the financial condition or affairs of Borrower for the
benefit of Guarantor or to advise Guarantor of any fact respecting, or any
change in, the financial condition or affairs of Borrower which might come to
the knowledge of Kreos at any time, whether or not Kreos knows or believes or
has reason to know or believe that any such fact or change is unknown to
Guarantor or might (or does) materially increase the risk of Guarantor as
guarantor or might (or would) affect the willingness of Guarantor to continue as
guarantor with respect to the obligations of Borrower.

32. Notices. Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed or
sent by telex, telecopy, graphic scanning or other telegraphic communications
equipment of the sending party, as follows:

(a) if to Guarantor, to it at: 50 Milk Street, 16th Floor, Boston, MA 02109

(b) if to Kreos, to it at: 25-28 Old Burlington Street, London W1S 3AN, United
Kingdom

All notices and other communications given to either person hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
next business day if delivered by hand or overnight courier service or sent by
telex, telecopy, graphic scanning or other telegraphic communications equipment
of the sender, or on the date five (5) business days after dispatch by certified
or registered mail if mailed, postage and fees prepaid, in each case delivered,
sent or mailed (properly addressed) to such person as provided herein or at such
other address or telex, telecopy or other number as shall have been designated
by such person in a notice complying with the terms hereof; provided that if any
attempted delivery of notice in accordance with the provisions of this
Section 33 is refused or rejected, such notice shall be deemed received as of
the date of the attempted delivery of such notice. For purposes of this
Section 33, a “business day” is any weekday on which banks in London, England
and Boston, Massachusetts are permitted or required to be open.

 

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33. Rights Cumulative. All liabilities and obligations of Borrower to which this
Agreement applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of Kreos in exercising any right, power or privilege hereunder, and no
course of dealing between Guarantor and Kreos, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder on the part of Kreos preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights,
powers and remedies herein expressly provided unto Kreos are cumulative and not
exclusive of any rights, powers or remedies which Kreos would otherwise have.

34. Copies of Loan Documents. Guarantor acknowledges that executed or conformed
copies of the Loan Documents have been made available to its principal executive
officers and such officers are familiar with the contents thereof.

35. Interpretation. Whenever from the context it appears appropriate, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa. The use of words “include” or
“including” in this Agreement shall be by way of example rather than limitation
and shall be deemed to be followed by the words “without limitation.” Reference
to any agreement, document or instrument means such agreement, document or
instrument as amended, modified or supplemented from time to time in accordance
with the terms thereof. Unless otherwise indicated, reference in this Agreement
to an “Exhibit” or “Section” is to an Exhibit to or Section of this Agreement.
When used in this Agreement, words such as “herein,” “hereinafter,” “hereof,”
“hereto,” and “hereunder” shall refer to this Agreement as a whole, unless the
context clearly requires otherwise. The use of the words “or,” “either” and
“any” shall not be exclusive. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring either party by virtue of the authorship of any of the provisions of
this Agreement.

[balance of page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed on
their behalf as of the day and year first above written by one of their officers
duly authorized thereunto.

 

ALBIREO PHARMA, INC. By:  

 

  Name:   Title: KREOS CAPITAL IV (UK) LIMITED By:  

 

  Name:   Title:

[Signature page to Guaranty and Security Agreement]

 

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EXHIBIT A

LIENS ON COLLATERAL

“Permitted Liens” are:

(a) 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 by
appropriate proceedings which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto, and for which Borrower
maintains adequate reserves on its books;

(b) 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) 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, and for which Borrower
maintains adequate reserves on its book;

(c) 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);

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

(e) Liens in favor of Kreos or an affiliate thereof.

 

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EXHIBIT B

LOCATIONS OF COLLATERAL

50 Milk Street, 16th Floor, Boston, Massachusetts 02109*[LIST ANY OTHER
LOCATIONS WHERE COLLATERAL IS LOCATED]*

 

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EXHIBIT C

FORM OF CONTROL AGREEMENT

To be obtained from Depository Bank(s) in which Guarantor maintains Collection
Account(s)

 

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EXECUTION PAGE

This agreement is executed as a deed and is delivered on the day and year first
before written.

 

EXECUTED as a DEED for and on

behalf of KREOS CAPITAL IV (UK) LIMITED acting by a director in the

presence of:

   /s/ Luca Colciago    Witness name:   

PASCALLE FIOLKA

   Witness signature:   

/s/ Pascalle Fiolka

   Witness address:   

[***]

   Witness occupation:   

Administrator

  

EXECUTED as a DEED for and on

behalf of ALBIREO LIMITED acting by a director in the presence of:

   /s/ Ron Cooper    Witness name:   

PETE ZORN

   Witness signature:   

/s/ Pete Zorn

   Witness address:   

[***]

   Witness occupation:   

Biotech Counsel & Executive

  

EXECUTED as a DEED for and on behalf of ALBIREO AB acting by

JAN MATTSSON under its authority:

   /s/ Jan Mattsson   

EXECUTED as a DEED for and on behalf of ELOBIX AB acting by

JAN MATTSSON under its authority:

   /s/ Jan Mattsson   

 

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