EXHIBIT 10.3

 

EXECUTION COPY

 

WAIVER, CONSENT AND FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

THIS WAIVER, CONSENT AND FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
“Amendment”) is made as of November 16, 2010, by and between HELICOS BIOSCIENCES
CORPORATION a Delaware corporation (the “Borrower”), and GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation acting in its capacity as agent (the
“Agent”) for the lenders under the Loan Agreement (as defined below) (the
“Lenders”), and the Lenders.

 

W I T N E S S E T H:

 

WHEREAS, Borrower, Agent and Lenders are parties to that certain Loan and
Security Agreement, dated as of December 31, 2007, as amended by that certain
First Amendment to Loan and Security Agreement and Post-Closing Obligations
Letter, dated as of February 14, 2008, as further amended by that certain Second
Amendment to Loan and Security Agreement, dated as of June 27, 2008, and as
further amended by that certain Waiver and Third Amendment to Loan and Security
Agreement, dated as of December 29, 2008 (as the same may be amended,
supplemented and modified from time to time, the “Loan Agreement”; capitalized
terms used herein have the meanings given to them in the Loan Agreement except
as otherwise expressly defined herein), pursuant to which Lenders have agreed to
provide to Borrower certain loans and other extensions of credit in accordance
with the terms and conditions thereof;

 

WHEREAS, Events of Default have occurred and are continuing under the Loan
Agreement as a result of (1) the Borrower’s failure to make the Scheduled
Payment of interest and principal on the Term Loan due on November 1, 2010 in
accordance with Section 8.1(a) of the Loan Agreement, (2) the Borrower’s failure
to appoint a new chief operating officer and vice president of product research
and development in accordance with Section 8.1(k)(i) of the Loan Agreement,
(3) the Borrower’s failure to pay when due the trade credit and other
obligations described on Schedule 1 attached hereto, which failure constitutes
an Event of Default under Section 8.1(g)(i) of the Loan Agreement, (4) the
Borrower’s breach of its obligations owing to Optikos Corporation, the Leiden
University Medical Center and The Institute of Physical and Chemical Research in
the manner and under the agreements described on Schedule 1, which breaches
constitute Events of Default under Sections 8.1(j)(i) and 8.1(j)(ii) of the Loan
Agreement, (5) the Borrower’s breach of clauses (c) and (e) of Section 5.10 of
the Loan Agreement prior to the date hereof as a result of the Borrower’s
failure to pay its debts as such debts become due and the admission in writing
by the Borrower of its inability to pay its debts generally, which breaches
constitute Events of Default under Section 8.1(d) of the Loan Agreement, (6) the
Borrower’s breach of Section 7.2 of the Loan Agreement by the issuance on
September 15, 2009 and December 15, 2009 of warrants constituting “Indebtedness”
pursuant to clause (viii) of the definition thereof, which breach constitutes an
Event of Default under Section 8.1(b) of the Loan Agreement, and (5) the
Borrower’s failure to provide timely notice in accordance with Section 6.2(b) of
the Loan Agreement of, or make correct representations and warranties pursuant
to Section 8.1(d) of the Loan Agreement regarding, the Events of Default

 

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described in clauses (1) through (6) above (collectively, the Events of Default
described in clauses (1) through (7) above, the “Specified Events of Default”);

 

WHEREAS, Borrower has requested that Agent and Lenders waive their rights with
respect to the Specified Events of Default, and Agent and Lenders are willing to
grant such waiver solely in accordance with and subject to the terms and
conditions of this Amendment; and

 

WHEREAS, Borrower has requested that Agent and Lenders (i) consent to certain
transactions as provided herein and (ii) make certain amendments to the Loan
Agreement, in each case in accordance with, and subject to, the terms and
conditions of this Amendment.

 

NOW, THEREFORE, in consideration of the premises, the covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties do hereby agree as
follows:

 

1.             Acknowledgment of Obligations.  Borrower hereby acknowledges,
confirms and agrees that as of the close of business on November 16, 2010,
Borrower is indebted to the Lenders in respect of the Term Loan in the aggregate
principal amount of $2,255,566.  Borrower hereby acknowledges, confirms and
agrees that all Term Loans made prior to the Amendment Effective Date (as
defined below), together with interest accrued and accruing thereon, and fees,
costs, expenses and other charges owing by Borrower to Agent and Lenders under
the Loan Agreement and the other Debt Documents, are unconditionally owing by
Borrower to Agent and Lenders, without offset, defense or counterclaim of any
kind, nature or description whatsoever except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditor’s rights generally.

 

2.             Waiver.  In reliance upon the representations, warranties and
covenants of the Loan Parties contained in this Amendment, and subject to the
terms and conditions set forth in this Amendment, the Agent and Lenders hereby
waive the Specified Events of Default as of the Amendment Effective Date.  The
waiver set forth in the immediately preceding sentence relates solely to the
Specified Events of Default, and nothing in this Amendment is intended (or shall
be construed) to constitute a waiver by Agent or Lenders of any other Default or
Event of Default which may now or hereafter exist under the Loan Agreement.

 

3.             Consents.              Subject to the terms and conditions of
this Amendment, including, without limitation, the conditions precedent to the
effectiveness of this Amendment in Section 8 hereof, and notwithstanding
anything in the Loan Agreement or any of the other Debt Documents to the
contrary, as of the Amendment Effective Date, Agent and Lenders hereby consent
as follows:

 

(a)   With respect to the Term Loan, and notwithstanding the provisions of
Section 2.3(b) of the Loan Agreement, the Borrower shall pay to the Agent, for
the ratable benefit of the Lenders, one (1) payment of interest only (payable in
arrears) on November 16, 2010 and nine (9) equal consecutive payments of
principal and interest (payable in arrears) on each Scheduled Payment Date
commencing on December 1, 2010, each in an amount sufficient to fully amortize
the principal and interest due with respect to the Term Loan over such
nine-month period.

 

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(b)   If, as of November 29, 2010, (1) no Event of Default has occurred and is
continuing, (2) to the extent necessary to comply with clause (3) hereof, the
Borrower has received cash proceeds during November, 2010 from the issuance of
Subordinated Debt, and (3) the Borrower has unrestricted balance sheet cash and
Cash Equivalents in one or more deposit or securities accounts subject to an
Account Control Agreement equal to or greater than the aggregate amount of
expenses of the Borrower for the prior period of four weeks (including any pro
forma adjustments thereto reasonably acceptable to Agent and each Lender), then,
notwithstanding the provisions set forth in Section 2(a) above, the Borrower
shall pay to the Agent, for the ratable benefit of the Lenders, one (1) payment
of interest only (payable in arrears) on December 1, 2010 and nine (9) equal
consecutive payments of principal and interest (payable in arrears) on each
Scheduled Payment Date commencing on January 1, 2011, each in an amount
sufficient to fully amortize the principal and interest due with respect to the
Term Loan over such nine-month period.

 

(c)   If Borrower satisfied the conditions set forth in Section 2(b) above, and
if, as of December 27, 2010, (1) no Event of Default has occurred and is
continuing, (2) to the extent necessary to comply with clause (3) hereof, the
Borrower has received cash proceeds during December, 2010 from the issuance of
Subordinated Debt, and (3) the Borrower has unrestricted balance sheet cash and
Cash Equivalents in one or more deposit or securities accounts subject to an
Account Control Agreement equal to or greater than the aggregate amount of
expenses of the Borrower for the prior period of four weeks (including any pro
forma adjustments thereto reasonably acceptable to Agent and each Lender), then,
notwithstanding the provisions set forth in Sections 2(a) and 2(b) above, the
Borrower shall pay to the Agent, for the ratable benefit of the Lenders, one
(1) payment of interest only (payable in arrears) on January 1, 2011 and nine
(9) equal consecutive payments of principal and interest (payable in arrears) on
each Scheduled Payment Date commencing on February 1, 2011, each in an amount
sufficient to fully amortize the principal and interest due with respect to the
Term Loan over such nine-month period.

 

(d)   If Borrower satisfied the conditions set forth in Sections 2(b) and
2(c) above, and if, as of January 28, 2011, (1) no Event of Default has occurred
and is continuing, (2) to the extent necessary to comply with clause (3) hereof,
the Borrower has received cash proceeds during January, 2011 from the issuance
of Subordinated Debt, and (3) the Borrower has unrestricted balance sheet cash
and Cash Equivalents in one or more deposit or securities accounts subject to an
Account Control Agreement equal to or greater than the aggregate amount of
expenses of the Borrower for the prior period of four weeks (including any pro
forma adjustments thereto reasonably acceptable to Agent and each Lender), then,
notwithstanding the provisions set forth in Sections 2(a), 2(b) and 2(c) above,
the Borrower shall pay to the Agent, for the ratable benefit of the Lenders, one
(1) payment of interest only (payable in arrears) on February 1, 2011 and nine
(9) equal consecutive payments of principal and interest (payable in arrears) on
each Scheduled Payment Date commencing on March 1, 2011, each in an amount
sufficient to fully amortize the principal and interest due with respect to the
Term Loan over such nine-month period.

 

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(e)   If Borrower satisfied the conditions set forth in Sections 2(b), 2(c) and
2(d) above, and if, as of February 25, 2011, (1) no Event of Default has
occurred and is continuing, (2) to the extent necessary to comply with clause
(3) hereof, the Borrower has received cash proceeds during February, 2011 from
the issuance of Subordinated Debt, and (3) the Borrower has unrestricted balance
sheet cash and Cash Equivalents in one or more deposit or securities accounts
subject to an Account Control Agreement equal to or greater than the aggregate
amount of expenses of the Borrower for the prior period of four weeks (including
any pro forma adjustments thereto reasonably acceptable to Agent and each
Lender), then, notwithstanding the provisions set forth in Sections 2(a), 2(b),
2(c) and 2(d) above, the Borrower shall pay to the Agent, for the ratable
benefit of the Lenders, one (1) payment of interest only (payable in arrears) on
March 1, 2011 and nine (9) equal consecutive payments of principal and interest
(payable in arrears) on each Scheduled Payment Date commencing on April 1, 2011,
each in an amount sufficient to fully amortize the principal and interest due
with respect to the Term Loan over such nine-month period.

 

(f)    If Borrower satisfied the conditions set forth in Sections 2(b), 2(c),
2(d) and 2(e) above, and if, as of March 29, 2011, (1) no Event of Default has
occurred and is continuing, (2) to the extent necessary to comply with clause
(3) hereof, the Borrower has received cash proceeds during March, 2011 from the
issuance of Subordinated Debt, and (3) the Borrower has unrestricted balance
sheet cash and Cash Equivalents in one or more deposit or securities accounts
subject to an Account Control Agreement equal to or greater than the aggregate
amount of expenses of the Borrower for the prior period of four weeks (including
any pro forma adjustments thereto reasonably acceptable to Agent and each
Lender), then, notwithstanding the provisions set forth in Sections 2(a), 2(b),
2(c), 2(d) and 2(e) above, the Borrower shall pay to the Agent, for the ratable
benefit of the Lenders, one (1) payment of interest only (payable in arrears) on
April 1, 2011 and nine (9) equal consecutive payments of principal and interest
(payable in arrears) on each Scheduled Payment Date commencing on May 1, 2011,
each in an amount sufficient to fully amortize the principal and interest due
with respect to the Term Loan over such nine-month period..

 

(g)   In consideration for consenting to the interest-only payment described in
Section 2(a) above, the Borrower hereby agrees that the Final Payment Fee due
with respect to the Term Loan shall be increased by $50,000.  Further, (1) if
the conditions described in Section 2(d) above for the deferral of the principal
payment for February 1, 2011 are satisfied, then the Final Payment Fee due with
respect to the Term Loan shall automatically be increased by an additional
$50,000, (2) if the conditions described in Section 2(e) above for the deferral
of the principal payment for March 1, 2011 are satisfied, then the Final Payment
Fee due with respect to the Term Loan shall automatically be increased by an
additional $50,000 and (3) if the conditions described in Section 2(f) above for
the deferral of the principal payment for April 1, 2011 are satisfied, then the
Final Payment Fee due with respect to the Term Loan shall automatically be
increased by an additional $50,000, for a maximum aggregate increase of the
Final Payment Fee by $200,000.

 

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(h)   The Agent and Lenders consent to (i) the issuance by Borrower to Flagship
Ventures (“Flagship”) and Atlas Venture (“Atlas”) and their respective
affiliates (Atlas together with Flagship and certain affiliates of Atlas and
Flagship, being the “Purchasers”) of subordinated secured Indebtedness in an
aggregate amount not to exceed $4,000,000, pursuant to that certain Subordinated
Secured Note Purchase Agreement dated as of the date hereof by and among the
Company and the Purchasers and (ii) the incurrence of Indebtedness by the
Company pursuant to that certain Risk Premium Payment Agreement dated as of the
date hereof by and among the Company and the Purchasers (such Indebtedness
described in clauses (i) and (ii) above, the “Subordinated Debt”); provided,
however, that (i) such Indebtedness is subordinated to the Obligations pursuant
to a subordination agreement in the form attached hereto as Exhibit B executed
by Agent, Borrower and each Purchaser (the “Subordination Agreement”) and
(ii) such Indebtedness may be secured by a security interest in all Collateral
of the Borrower, so long as such security interest is subordinated to the
security interest of the Agent in the Collateral pursuant to the Subordination
Agreement.

 

(i)    The Agent and Lenders consent to (i) the incurrence by Borrower of
subordinated secured Indebtedness pursuant to that certain Letter Fee Agreement
Regarding Legal Services (the “GP Letter Agreement”) dated as of October 22,
2010 by and among the Company and Goodwin Procter LLP (“Goodwin”) (the “GP
Subordinated Debt”); provided, however, that (i) such Indebtedness is
subordinated to the Obligations pursuant to a subordination agreement in the
form attached hereto as Exhibit C executed by Agent, Borrower and Goodwin (the
“GP Subordination Agreement”) and (ii) such Indebtedness may be secured by a
security interest in the patent infringement lawsuit Helicos BioSciences
Corporation v. Pacific Biosciences of California, Inc., Life Technologies
Corporation, and Illumina, Inc., No. 1:10-cv-00735, filed in the United States
District Court for the District of Delaware (the “Cause of Action”) together
with all proceeds thereof including without limitation the Total Recovery as
defined in the GP Letter Agreement, so long as such security interest in such
lawsuit and proceeds thereof is subordinated to the security interest of the
Agent in the Collateral pursuant to the GP Subordination Agreement.

 

(j)    For each interest-only payment that Borrower is permitted to make under
this Section 2, the Applicable Term Loan Maturity Date for the Term Loan shall
be deemed to be extended by one (1) month, unless such Term Loan otherwise
becomes due and payable hereunder, whether by acceleration of the Obligations
pursuant to Section 8.2 or otherwise.

 

(k)   The Agent and Lenders hereby further consent and agree that,
notwithstanding any provision in the Loan Agreement to the contrary, the
continuation of the failure by the Borrower after the date hereof to pay
obligations and to perform under agreements described in clauses (3) and (4) of
the second “Whereas” clause in this Amendment and as further described on
Schedule 1 hereto, shall not constitute new Events of Default; provided,
however, that any development or occurrence arising from or otherwise related to
such to failure to pay obligations or to perform under agreements described in
clauses (3) and (4) of the second “Whereas” clause in this Amendment

 

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that qualifies as an independent Event of Default under the Loan Agreement
(including, without limitation, any involuntary bankruptcy filing or any
judgment described in Section 8.1(f) of the Loan Agreement) shall constitute a
new and independent Event of Default under the Loan Agreement as of the date of
such development or occurrence.

 

(l)    The Agent and Lenders hereby further consent and agree that,
notwithstanding any provision in Section 7.2 of the Loan Agreement to the
contrary, the Borrower may incur the Indebtedness described on Schedule 2
hereto.

 

(m)  The Agent and the Lenders hereby further consent and agree that,
notwithstanding any provisions in Sections 7.6 and 7.8 of the Loan Agreement to
the contrary, the Borrower may enter into and perform its obligations under any
management incentive plan (a “Management Incentive Plan”) that is both
(1) approved by the Company’s board of directors and (2) consented to in writing
by the Agent and Lenders in their sole discretion.

 

4.             Amendments to Loan Agreement.  Subject to the terms and
conditions of this Amendment, including, without limitation, the conditions
precedent set forth in Section 8 hereof, the Loan Agreement is hereby amended as
follows:

 

(a)   Section 2.7 of the Loan Agreement is hereby amended by deleting clause
(b) of such section in its entirety and replacing the following in lieu thereof:

 

“(b)         Final Payment Fee.  Upon all outstanding principal amounts with
respect to any Term Loan being repaid, or being required to be repaid, in full
(whether voluntary, scheduled or mandatory or otherwise), for each Term Loan
Borrower shall pay to Agent, for the ratable accounts of Lenders, a fee equal to
4.00% of the original principal amount of such Term Loan (the ‘Final Payment
Fee’); provided, however, notwithstanding the foregoing, solely with respect to
the Initial Term Loan, in lieu of the 4.00% fee set forth above, Borrower shall
pay to Agent, for the ratable accounts of Lenders, a fee equal to 2.00% of the
original principal amount of the Initial Term Loan, which fee shall be fully
earned on the Effective Date of (and as such term is defined in) the Third
Amendment, but shall be due and payable on the Applicable Term Loan Maturity
Date for the Subsequent Term Loan.”

 

(b)   Section 3.1 of the Loan Agreement is hereby amended by deleting the
definition of “Collateral” provided therein and substituting, in lieu thereof,
the following new definition of “Collateral”:

 

All of such Loan Party’s personal property of every kind and nature (except for
up to $250,000 held as letter of credit cash collateral in account number
1170338428 with RBS Citizens, National Association) whether now owned or
hereafter acquired by, or arising in favor of, such Loan Party, and regardless
of where located, including, without limitation, all accounts, chattel paper
(whether tangible or electronic), commercial tort claims (including, without
limitation, all

 

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commercial tort claims relating to the patent infringement lawsuit titled
Helicos BioSciences Corporation v. Pacific Biosciences of California, Inc., Life
Technologies Corporation, and Illumina, Inc., No. 1:10-cv-00735, filed in the
United States District Court for the District of Delaware), deposit accounts,
documents, equipment, financial assets, fixtures, goods, instruments, investment
property (including, without limitation, all securities accounts), inventory,
letter-of-credit rights, letters of credit, securities, supporting obligations,
cash, cash equivalents, any other contract rights (including, without
limitation, rights under any license agreements), or rights to the payment of
money, and general intangibles (including Intellectual Property, as defined in
Section 3.3 below), and all books and records of such Loan Party relating
thereto, and in and against all additions, attachments, accessories and
accessions to such property, all substitutions, replacements or exchanges
therefor, all proceeds, insurance claims, products, profits and other rights to
payments not otherwise included in the foregoing (with each of the foregoing
terms that are defined in the UCC having the meaning set forth in the UCC).

 

Notwithstanding the foregoing, the term “Collateral” shall not include any
contract, instrument or chattel paper in which any Loan Party has any right,
title or interest if and to the extent such contract, instrument or chattel
paper includes a provision containing a restriction on assignment such that the
creation of a security interest in the right, title or interest of the Loan
Party therein would be prohibited and would, in and of itself, cause or result
in a default thereunder enabling another person party to such contract,
instrument or chattel paper to enforce any remedy with respect thereto or give
another person the right to terminate, accelerate or otherwise adversely alter
the Loan Party’s rights, title and interest thereunder; provided, however, that
the foregoing exclusion shall not apply if (i) such prohibition has been waived
or such other person has otherwise consented to the creation hereunder of a
security interest in such contract, instrument or chattel paper, or (ii) such
prohibition would be rendered ineffective pursuant to Sections 9-407(a) or
9-408(a) of the UCC, as applicable and as then in effect in any relevant
jurisdiction, or any other applicable law (including the Bankruptcy Code or
principles of equity); provided further that immediately upon the
ineffectiveness, lapse or termination of any such provision, the term
“Collateral” shall include, and the Loan Party shall be deemed to have granted a
security interest in, all its rights, title and interests in and to such
contract, instrument or chattel paper as if such provision had never been in
effect; and provided further that the foregoing exclusion shall in no way be
construed so as to limit, impair or otherwise affect any Lender’s unconditional
continuing security interest in and to all rights, title and interests of such
Loan Party in or to any payment obligations or other rights to receive monies
due or to become due under any such contract, instrument or chattel paper and in
any such monies and other proceeds of such contract, instrument or chattel
paper.

 

(c)   Section 3.3 of the Loan Agreement is hereby amended by deleting the
section in its entirety and replacing the following in lieu thereof:

 

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Section 3.3.  Grant of Intellectual Property Security Interest.  The Collateral
shall include all intellectual property of each Loan Party, which shall be
defined as any and all copyrights, trademarks, tradenames, servicemarks,
patents, inventions, designs, design rights, software and databases, licenses,
trade secrets, customer lists, know-how, and intangible rights of each Loan
Party, any marketing rights of each Loan Party, and any goodwill, applications,
registrations, claims, products, awards, judgments, amendments, renewals,
extensions, improvements and insurance claims related thereto (collectively,
“Intellectual Property”) now or hereafter owned or licensed by a Loan Party,
together with all accessions and additions thereto, proceeds and products
thereof (including, without limitation, any proceeds resulting under insurance
policies).  In order to perfect or protect Agent’s security interest and other
rights in Loan Party’s Intellectual Property, each Loan Party hereby authorizes
Agent to file a patent security agreement, substantially in the form provided by
Agent (“Patent Security Agreement”) and/or a trademark security agreement,
substantially in the form provided by Agent (“Trademark Security Agreement”)
with the United States Patent and Trademark Office and a copyright security
agreement, substantially in the form provided by Agent (“Copyright Security
Agreement” and together with the Patent Security Agreement and the Trademark
Security Agreement, the “Intellectual Property Security Agreements”) with the
United States Copyright Office as each are applicable and required by Agent.

 

(d)         Section 5.3 of the Loan Agreement is hereby amended by deleting the
second sentence thereof and replacing such sentence with the following:

 

As used herein, “Material Agreement” shall mean (i) any agreement or contract to
which such Loan Party is a party and involving the receipt or payment of amounts
in the aggregate exceeding $250,000 per year, (ii) any agreement or contract to
which such Loan Party is a party the termination of which could reasonably be
expected to have a Material Adverse Effect and (iii) any agreement or contract
relating to any Indebtedness of the Loan Parties that is consented to in the
sole discretion of the Agent and Lenders and is subordinated to the Obligations
on terms and conditions acceptable to Agent (any such subordinated Indebtedness,
“Subordinated Indebtedness”).

 

(e)          Section 6.2 of the Loan Agreement is hereby amended by deleting the
word “and” prior to clause (f) therein, inserting a comma in lieu thereof, and
inserting the following new clause (g) before the final punctuation therein:

 

and (g) copies of all statements, reports and notices made available generally
by any Loan Party to any holders of Subordinated Indebtedness, and all notices
sent to any Loan Party by the holders of any Subordinated Indebtedness.

 

(f)            Section 7.6 of the Loan Agreement is hereby amended by deleting
the word “or” prior to clause (d) therein, inserting a comma in lieu thereof,
and inserting the following new clause (e) before the final punctuation therein:

 

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or (e) purchase or make any payment on or with respect to any Subordinated
Indebtedness.

 

(g)         Section 8.1(i) is hereby amended by inserting the following language
immediately prior to the final semicolon therein:

 

, or any subordination provision set forth in any document evidencing or
relating to the Subordinated Indebtedness shall, in whole or in part, terminate
or otherwise fail or cease to be valid and binding on, or enforceable against,
any agent for or holder of the Subordinated Indebtedness (or such person shall
so state in writing).

 

(h)         The term “Debt Documents” used in the Loan Agreement shall be deemed
to include any subordination agreement relating to the Subordinated Indebtedness
and each of the Patent Security Agreement, Trademark Security Agreement and
Copyright Security Agreement.

 

5.             Additional Agreements.  In addition to the Consents and
Amendments referenced above, Borrower, Agent and Lenders further agree to the
following:

 

(a)          Mandatory Prepayments.

 

(i)  Immediately (and in any event within three (3) Business Days) after receipt
by Borrower of any (A) up front license fee, up front royalty payment, legal
settlement, proceeds of any sale, license or other disposition of all or any
part of, or rights in, the Intellectual Property, or (B) any up front payment
from non-research and development funding related partnerships or
collaborations, Borrower shall prepay the Term Loan in an amount equal to
seventy-five percent (75%) of the gross proceeds of each such fee, payment or
proceeds.  This Section 5(a)(i) shall not be deemed to be a consent to any
transactions that is not expressly permitted in accordance with the terms and
conditions of the Loan Agreement.

 

(ii)   Any mandatory prepayment made pursuant to this Section 5(a) shall be
applied as follows:  first, to pay all fees, costs, indemnities, reimbursements
and expenses then due to Agent and Lenders under the Debt Documents; second, to
pay all accrued interest on the Term Loan then due to Lenders in accordance with
their respective Pro Rata Shares, until paid in full; and third, to the
remaining Scheduled Payments of principal pursuant to Section 2.3(b) in inverse
order of maturity.  Principal payments made pursuant to the immediately
preceding sentence will not be subject to any pre-payment premium under the Debt
Documents.

 

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(b)         Additional Reporting.

 

Borrower agrees to submit to Agent and each Lender (i) upon the reasonable
request of the Agent and in any event on the first Business Day of each other
week, a written cash forecast in form and substance reasonably satisfactory to
Agent which compares actual expenditures with budgeted expenditures, and
(ii) upon the reasonable request of the Agent and in any event on the first
Business Day of every month, a written summary and update in form and substance
reasonably satisfactory to Agent and each Lender regarding Borrower’s pursuit of
strategic initiatives.  Borrower’s failure to deliver, within three (3) Business
Days of the specified time for delivery, either of (i) a biweekly cash forecast
or (ii) a monthly written summary in accordance with this Section 5(b) shall be
an immediate Event of Default under the Loan Agreement.

 

6.             No Other Consents or Amendments.  Except for the consents,
amendments, and agreements to the Loan Agreement expressly provided in Sections
3, 4 and 5 above, the Loan Agreement and the other Debt Documents shall remain
unchanged and in full force and effect in accordance with its terms, and this
Amendment shall be limited precisely and expressly as drafted and shall not be
construed as a consent to the amendment, restatement, modification,
supplementation or waiver of any other terms or provisions of the Loan Agreement
or any other Debt Documents.

 

7.             Representations and Warranties.  To induce Agent and Lenders to
enter into this Amendment, Borrower hereby warrants, represents and covenants to
and with Agent and Lenders that: (a) after giving effect to this Amendment, no
Default or Event of Default shall have occurred and be continuing, (b) set forth
on Exhibit A is a summary of all Intellectual Property of the Loan Parties as of
the date hereof, including an indication whether any such Intellectual Property
has been abandoned (such Intellectual Property, the “Abandoned IP”), (c) upon
filing of the Patent Security Agreement, Trademark Security Agreement and
Copyright Security Agreement, as applicable, with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, and the
filing of appropriate UCC financing statements, all action necessary or
desirable to protect and perfect Agent’s lien on each Loan Party’s Intellectual
Property shall have been duly taken, and (d) after giving effect to this
Amendment, all of the representations and warranties in the Loan Agreement and
each other Debt Document are true and correct in all material respects on and as
of the Amendment Effective Date (except to the extent that any such
representations or warranties expressly referred to a specific prior date, in
which case such representation or warranty shall be true and correct in all
material respects on and as of such date).  Any breach in any material respect
by Borrower of any of its representations, warranties and covenants contained in
this Section 7 shall be an Event of Default under the Loan Agreement.

 

8.             Conditions Precedent to Effectiveness of this Amendment.  This
Amendment shall become effective as of the date (the “Amendment Effective Date”)
upon which Agent receives each of the following, in each case, in form and
substance satisfactory to Agent:

 

(a)                                  one or more counterparts of this Amendment
duly executed, completed and delivered by Borrower;

 

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(b)                                 evidence that Borrower has received gross
cash proceeds of at least $333,333 from the issuance on the date hereof of
Subordinated Debt;

 

(c)                                  one or more counterparts of the
Subordination Agreement, dated the date hereof, and executed by each of the
Purchasers, Agent and Borrower, and the GP Subordination Agreement, dated as of
the date hereof, and executed by GP, Agent and Borrower;

 

(d)                                 one or more counterparts of a Patent
Security Agreement, Trademark Security Agreement and Copyright Security
Agreement, as applicable, duly executed, completed and delivered by Borrower, to
be filed with the appropriate filing office on the Amendment Effective Date with
respect to all Intellectual Property other than Abandoned IP;

 

(e)                                  evidence satisfactory to Agent and each
Lender that the UCC financing statement filed against Borrower has been amended
to include the Intellectual Property;

 

(f)                                    current UCC lien, judgment, bankruptcy
and tax lien search results, and United States Patent and Trademark Office
search results, demonstrating that there are no other security interests or
liens on the Collateral, other than Permitted Liens;

 

(g)                                 a Secretary’s Certificate providing
verification of incumbency and attaching the Borrower’s board resolutions
approving the transactions contemplated by this Amendment;

 

(h)                                 evidence satisfactory to Agent that Borrower
shall have paid to Agent’s outside counsel, Kilpatrick Stockton LLP, the costs
and expenses owing to such counsel pursuant to Section 11(a) below in the amount
of $20,000, which payment shall be made by wire transfer in accordance with the
wire transfer instructions set forth on Exhibit D hereto, and evidence
satisfactory to CIT Healthcare LLC that Borrower shall have paid to CIT
Healthcare LLC’s outside counsel, Waller Lansden Dortch & Davis, LLP, the costs
and expenses owing to such counsel pursuant to Section 11(a) below in the amount
of $14,000, which payment shall be made by wire transfer in accordance with the
wire transfer instructions set forth on Exhibit D hereto; and

 

(i)                                     one or more counterparts of an amendment
to the Warrant of each Lender, in form and substance satisfactory to Agent and
each Lender, which amendment shall effect the repricing of the Warrants from
$4.80 to $0.01.

 

9.             Release.

 

(a)                                  In consideration of the agreements of Agent
and Lenders contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Borrower, on behalf of
itself and its successors, assigns, and other legal representatives, hereby
absolutely, unconditionally and irrevocably releases, remises and forever
discharges Agent and Lenders and their successors and assigns, and their present
and former shareholders, affiliates,

 

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subsidiaries, divisions, predecessors, directors, officers, attorneys, employees
and other representatives (Agent and Lenders and all such other persons being
hereinafter referred to collectively as the “Releasees” and individually as a
“Releasee”), of and from all demands, actions, causes of action, suits,
covenants, contracts, controversies, agreements, promises, sums of money,
accounts, bills, reckonings, damages and any and all other claims,
counterclaims, defenses, rights of set-off, demands and liabilities whatsoever
other than with respect to claims made to correct manifest errors with respect
to the calculation of amounts owing pursuant to the Loan Agreement
(individually, a “Claim” and collectively, “Claims”) of every name and nature,
known or unknown, suspected or unsuspected, both at law and in equity, which
Borrower or any of its successors, assigns, or other legal representatives may
now or hereafter own, hold, have or claim to have against the Releasees or any
of them for, upon, or by reason of any circumstance, action, cause or thing
whatsoever which arises at any time on or prior to the Amendment Effective Date,
including, without limitation, for or on account of, or in relation to, or in
any way in connection with the Loan Agreement or any of the other Debt Documents
or transactions thereunder or related thereto.

 

(b)                                 Borrower understands, acknowledges and
agrees that its release set forth above may be pleaded as a full and complete
defense and may be used as a basis for an injunction against any action, suit or
other proceeding which may be instituted, prosecuted or attempted in breach of
the provisions of such release.

 

(c)                                  Borrower agrees that no fact, event,
circumstance, evidence or transaction which could now be asserted or which may
hereafter be discovered shall affect in any manner the final, absolute and
unconditional nature of the release set forth above.

 

10.          Covenant not to Sue.  Borrower, on behalf of itself and its
respective successors, assigns, and other legal representatives, hereby
absolutely, unconditionally and irrevocably, covenants and agrees with and in
favor of each Releasee that it will not sue (at law, in equity, in any
regulatory proceeding or otherwise) any Releasee on the basis of any Claim
released, remised and discharged by Borrower pursuant to Section 9 above.  If
Borrower or any of its respective successors, assigns or other legal
representatives violates the foregoing covenant, Borrower, for itself and its
successors, assigns and legal representatives, jointly and severally agrees to
pay, in addition to such other damages as any Releasee may sustain as a result
of such violation, all reasonable attorneys’ fees and costs incurred by any
Releasee as a result of such violation.

 

11.          Provisions of General Application.

 

(a)                                  Costs and Expenses.  Borrower absolutely
and unconditionally agrees to pay to Agent and each Lender, on demand by Agent
or such Lender at any time and as often as the occasion therefore may require,
whether or not all or any of the transactions contemplated by this Amendment are
consummated: all reasonable fees and out-of-pocket expenses and disbursements of
any counsel to Agent or such Lender in connection with the preparation,
negotiation, execution, or

 

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delivery of this Amendment and expenses which shall at any time be incurred or
sustained by Agent or such Lender as a consequence of or in any way in
connection with the preparation, negotiation, execution, or delivery of this
Amendment and any agreements prepared, negotiated, executed or delivered in
connection with the transactions contemplated hereby.

 

(b)                                 Advice of Counsel.  Each of the parties
represents to each other party hereto that it has discussed this Amendment with
its counsel.

 

(c)                                  Further Assurances.  The parties hereto
shall execute and deliver such additional documents and take such additional
action as may be necessary or desirable to effectuate the provisions and
purposes of this Amendment.

 

(d)                                 Binding Effect.  This Amendment shall be
binding upon and inure to the benefit of each of the parties hereto and their
respective successors and assigns.  No person or entity shall have any rights
under this Agreement or any other Debt Document as a third party beneficiary.

 

(e)                                  Severability.  Any provision of this
Amendment held by a court of competent jurisdiction to be invalid or
unenforceable shall not impair or invalidate the remainder of this Amendment.

 

(f)                                    Governing Law.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

 

(g)                                 Counterparts.  This Amendment may be
executed in multiple counterparts, each of which shall be deemed to be an
original and all of which when taken together shall constitute one and the same
instrument.  Delivery of an executed counterpart of this Amendment by facsimile
or electronic mail shall be equally effective as delivery of an original
executed counterpart of this Amendment.

 

[SIGNATURE PAGES TO FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver, Consent and
Fourth Amendment to Loan and Security Agreement to be duly executed and
delivered as of the day and year specified at the beginning hereof.

 

 

BORROWER:

 

 

 

HELICOS BIOSCIENCES CORPORATION

 

 

 

 

 

By:

/s/ Ivan Trifunovich

 

Name:

Ivan Trifunovich

 

Title:

Chairman, President and Chief Executive Officer

 

 

HELICOS BIOSCIENCES CORPORATION

WAIVER, CONSENT AND FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

SIGNATURE PAGE

 

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AGENT:

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

 

 

 

 

By:

/s/ Peter Gibson

 

Name:

Peter Gibson

 

Title:

Duly Authorized Signatory

 

 

 

 

 

 

 

LENDERS:

 

 

 

 

 

HSPC, INC.

 

 

 

 

By:

/s/ Peter Gibson

 

Name:

Peter Gibson

 

Title:

Duly Authorized Signatory

 

 

 

 

 

 

 

CIT HEALTHCARE LLC

 

 

 

 

By:

/s/ Alisa Milarelli

 

Name:

Alisa Milarelli

 

Title:

Duly Authorized Signatory

 

HELICOS BIOSCIENCES CORPORATION

WAIVER, CONSENT AND FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

SIGNATURE PAGE

 

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