EXHIBIT 10.1

FORBEARANCE AGREEMENT

This FORBEARANCE AGREEMENT (this “Agreement”) is made and entered into as of
September 30, 2010, by and among ANGIOTECH PHARMACEUTICALS, INC., a corporation
organized under the laws of the Province of British Columbia, Canada (“Parent”),
each of Parent’s Subsidiaries identified as a “Borrower” on the signature pages
hereof (such Subsidiaries, each a “Borrower”, and collectively, jointly and
severally, the “Borrowers”), the Lenders (as defined in the Credit Agreement
referred to below) listed on the signature pages hereof and WELLS FARGO CAPITAL
FINANCE, LLC, a Delaware limited liability company formerly known as Wells Fargo
Foothill, LLC, in its capacity as arranger and administrative agent (“Agent”)
for the Lenders.

WITNESSETH:

WHEREAS, the Parent, the Borrowers, the Lenders and Agent are parties to that
certain Credit Agreement, dated as of February 27, 2009 (as amended,
supplemented or modified, the “Credit Agreement”);

WHEREAS, the Parent has notified Agent and the Lenders that it does not intend
to make the interest payment due October 1, 2010 on the Senior Subordinated
Notes on a timely basis, which event would constitute a Default under
Section 8.7 of the Credit Agreement and an Event of Default under Section 8.13
of the Credit Agreement (the “Prospective Default”);

WHEREAS, under the terms of the Credit Agreement, it is a condition to the
applicable Lenders continuing to make Advances to the Borrowers that, among
other things, no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall result from the
making thereof; and

WHEREAS, the Borrowers have requested that the Lenders with a Revolver
Commitment continue to fund requested Advances notwithstanding the existence of
the Prospective Default and that Agent and the Lenders forbear from exercising
their rights and remedies under the Credit Agreement, the other Loan Documents
and applicable law, all of which Agent and the Lenders are willing to do on the
terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the agreements and provisions herein
contained, the parties hereto do hereby agree as follows:

Section 1. Definitions. Any capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.

Section 2. Acknowledgments. Each of the above recitals is expressly incorporated
herein and is represented by the Parent and each Borrower to be true and
correct. Without limiting the foregoing, the Parent and each Borrower
acknowledges and agrees that, but for the effectiveness of this Agreement,
(a) the Prospective Default would occur and be continuing, (b) the existence

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of the Prospective Default would relieve the applicable members of the Lender
Group from any obligation to extend any Advance or provide any other credit
under the Credit Agreement or any other Loan Documents, and (c) the existence of
the Prospective Default would permit the Lender Group, as applicable, to, among
other things, (i) suspend or terminate any commitment to provide Advances or
provide any other credit under the Credit Agreement or any other Loan Document,
(ii) accelerate all or any portion of the Obligations, (iii) charge interest on
any and all of the Obligations at the default rate applicable under the
Section 2.6(c) of the Credit Agreement, (iv) commence any legal or other action
to collect any or all of the Obligations from the Borrowers, any other Loan
Party and/or any Collateral, (v) foreclose or otherwise realize on any or all of
the Collateral, and/or appropriate, set-off and apply to the payment of any or
all of the Obligations, any or all of the Collateral, and/or (vi) take any other
enforcement action or otherwise exercise any or all rights and remedies provided
for by any or all of the Credit Agreement, the other Loan Documents or
applicable law.

Section 3. Reaffirmation of Obligations, etc. The Parent and each Borrower
hereby acknowledges that the Loan Documents and the Obligations constitute the
valid and binding obligations of each such Person enforceable against each such
Person in accordance with their respective terms, and the Parent and each
Borrower hereby reaffirms its obligations under the Loan Documents. Agent’s and
the Lenders’ entry into this Agreement or any of the documents referenced
herein, their negotiations with any party with respect to any Loan Document,
their conduct of any analysis or investigation of the operations of the Parent,
any Borrower, any Collateral or any Loan Document, their acceptance of any
payment from the Parent, any Borrower or any other party of any payments made
prior to or after the date hereof, their making of any Advance or other
extension of credit prior to or after the date hereof, or any other action or
failure to act on the part of any member of the Lender Group shall not, except
as expressly provided herein, (a) constitute a modification of any Loan
Document, (b) constitute a waiver of any condition, Default or Event of Default
under the Credit Agreement, including, without limitation, the Prospective
Default, or a waiver of any term or provision of any Loan Document, (c) excuse
any Loan Party from any of its obligations under any of the Loan Documents, or
(d) toll the running of any time periods applicable to any rights and remedies
of the Lender Group or any member thereof, including, without limitation, any
grace periods with respect to any Defaults under the Loan Documents or
otherwise. The Parent and each Borrower agrees that it will not assert laches,
waiver or any other defense to the enforcement of any of the Loan Documents
based upon any agreement or action by any member of the Lender Group referenced
in, set forth in or contemplated by, this Agreement.

Section 4. Forbearance and Agreement to Continue to Lend. During the Forbearance
Period (as defined below): (a) the Lender Group shall not take any action or
commence any proceedings with respect to the enforcement of any of its rights or
remedies under the Loan Documents or applicable law as a result of the
Prospective Default; and (b) the Lenders with Revolver Commitments shall,
notwithstanding the existence of the Prospective Default, continue to fund
Advances (and extend any other credit provided for under the Credit Agreement)
but subject to all other applicable provisions of the Credit Agreement.

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“Forbearance Period” shall mean the period commencing upon the Effective Date
and continuing until the earliest to occur of: (i) other than the Prospective
Default, any Default or any Event of Default (including any other Default or
Event of Default arising from the failure to make the interest payment due
October 1, 2010 on the Senior Subordinated Notes, including, without limitation,
the acceleration of all or any of the Senior Notes or the taking of any action
by any Indenture Trustee or any holder of any of the Senior Notes to obtain
payment of all or any of the Senior Notes); (ii) any Material Adverse Change
since the date of this Agreement and (iii) the Specified Date.

“Specified Date” shall mean October 31, 2010; provided, that if the Senior
Subordinated Notes Indenture is amended, pursuant to a supplemental indenture
that (x) is effective as to, and is binding and enforceable against, all holders
of the Senior Subordinated Notes, and (y) extends the date on which the failure
of the Parent to make the interest payment under the Senior Subordinated Notes
due on October 1, 2010 (the “Required Interest Payment Date”) becomes an “Event
of Default” (as defined in the Senior Subordinated Notes Indenture) under the
Senior Subordinated Notes Indenture to a date that is more than 30 days
following the Required Interest Payment Date (such date, the “Cure Period
Termination Date”), the term “Specified Date” shall mean the Cure Period
Termination Date; provided, further, that in all events, and notwithstanding
anything to the contrary contained herein, the “Specified Date” shall occur no
later than November 30, 2010.

Section 5. Rights Upon Termination of Forbearance Period. The Parent and each
Borrower acknowledges and agrees that upon the termination of the Forbearance
Period as provided in Section 4 hereof, Agent, on behalf of the Lender Group,
shall be entitled to exercise any or all of its remedies available under the
Loan Documents or applicable law.

Section 6. Representations and Warranties. In order to induce Agent and the
Lenders to enter into this Agreement, the Parent and each Borrower hereby
represents and warrants that:

6.01 No Default. At and as of the date of this Agreement and at and as of the
Effective Date, other than the Prospective Default, no Default or Event of
Default exists.

6.02 Representations and Warranties True and Correct. At and as of the date of
this Agreement, and after giving effect to this Agreement, except for the
existence of the Prospective Default, each of the representations and warranties
contained in the Credit Agreement and the other Loan Documents, is true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) (except to the extent
that such representations and warranties relate solely to an earlier date, in
which case they shall only be required to be true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) on such earlier date).

6.03 Corporate Power, Etc. The Parent and each Borrower (a) has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby and (b) has taken all action,
corporate or otherwise, necessary to authorize the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby.

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6.04 Binding Effect. This Agreement has been duly executed and delivered by the
Parent and each Borrower and constitutes the legal, valid and binding obligation
of each such Person, enforceable against each such Person in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, relating to or affecting the enforcement of creditors’
rights generally, and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

6.05 No Duress. This Agreement has been entered into without force or duress, of
the free will of the Parent and each Borrower. The Parent’s and each Borrower’s
decision to enter into this Agreement is a fully informed decision and such
Person is aware of all legal and other ramifications of such decision.

6.06 Counsel. The Parent and each Borrower has read and understands this
Agreement, has consulted with and been represented by legal counsel in
connection herewith, and has been advised by its counsel of its rights and
obligations hereunder and thereunder.

Section 7. Conditions. This Agreement shall be effective as of September 30,
2010 (the “Effective Date”) upon the fulfillment, in a manner satisfactory to
Agent of all of the following conditions precedent set forth in this Section 7:

7.01 Execution of Documents. Agent shall have received (a) a copy of this
Agreement duly executed by Parent, the Borrowers, Agent and the Lenders, and
(b) a copy of the Consent and Affirmation set forth as Exhibit A to this
Agreement duly executed by the Guarantors.

7.02 Representations and Warranties. As of the Effective Date, the
representations and warranties set forth in Section 6 hereof shall be true and
correct.

7.03 Forbearance Fee. The Borrowers shall have paid to Agent, for its sole and
separate account, a fully earned and nonrefundable forbearance fee equal to
$50,000.

7.04 Compliance with Terms. The Loan Parties shall have complied in all respects
with the terms hereof and of any other agreement, document, instrument or other
writing to be delivered by any Loan Party in connection herewith.

Section 8. Release and Covenant Not to Sue.

8.01 The Parent and each Borrower hereby absolutely and unconditionally releases
and forever discharges the Lender Group, and any and all of their respective
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing (each a “Released Party”), from any and all claims, demands

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or causes of action of any kind, nature or description, whether arising in law
or equity or upon contract or tort or under any state or federal law or
otherwise, which the Parent or any Borrower has had, now has or has made claim
to have against any such person for or by reason of any act, omission, matter,
cause or thing whatsoever arising at any time on or prior to and including the
date of this Agreement, whether such claims, demands and causes of action are
matured or unmatured or known or unknown, and in each case, arising for or on
account of, in relation to, or in any way in connection with, any of the Credit
Agreement, any other Loan Document and/or the transactions thereunder or related
thereto. It is the intention of the Parent and each Borrower in providing this
release that the same shall be effective as a bar to each and every claim,
demand and cause of action specified, and in furtherance of this intention it
waives and relinquishes all rights and benefits under any applicable law, which
provides that:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him might have materially affected his settlement with the debtor.”

8.02 The Parent and each Borrower acknowledges that it may hereafter discover
facts different from or in addition to those now known or believed to be true
with respect to such claims, demands, or causes of action and agree that this
instrument shall be and remain effective in all respects notwithstanding any
such differences or additional facts. The Parent and each Borrower understands,
acknowledges and agrees that the release set forth above may be pleaded as a
full and complete defense and may be used as a basis for an injunction against
any action, suit or other proceeding which may be instituted, prosecuted or
attempted in breach of the provisions of such release.

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

Section 9. Miscellaneous.

9.01 Continuing Effect. Except as specifically provided herein, the Credit
Agreement and the other Loan Documents shall remain in full force and effect in
accordance with their respective terms and are hereby ratified and confirmed in
all respects.

9.02 No Waiver. This Agreement is limited as specified and the execution,
delivery and effectiveness of this Agreement shall not operate as a
modification, acceptance or waiver of any provision of the Credit Agreement or
any other Loan Document, except as specifically set forth herein.

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9.03 References.

(a) From and after the Effective Date, the Credit Agreement, the other Loan
Documents and all agreements, instruments and documents executed and delivered
in connection with any of the foregoing shall each be deemed modified hereby to
the extent necessary, if any, to give effect to the provisions of this
Agreement.

(b) From and after the Effective Date, (i) all references in the Credit
Agreement to “this Agreement”, “hereto”, “hereof”, “hereunder” or words of like
import referring to the Credit Agreement shall mean the Credit Agreement as
modified hereby and (ii) all references in the Credit Agreement, the other Loan
Documents or any other agreement, instrument or document executed and delivered
in connection therewith to the “Credit Agreement”, “thereto”, “thereof”,
“thereunder” or words of like import referring to the Credit Agreement shall
mean the Credit Agreement as modified hereby.

9.04 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

9.05 Severability. The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Agreement in any jurisdiction.

9.06 Counterparts. This Agreement may be executed in any number of counterparts,
each of which counterparts when executed and delivered shall be an original, but
all of which shall together constitute one and the same instrument. A complete
set of counterparts shall be lodged with the Borrowers and Agent.

9.07 Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

9.08 Binding Effect; Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parent, the Borrowers, the Lenders and Agent and their
respective successors and assigns; provided, however, that no rights or
obligations of the Parent or any Borrower under this Agreement shall be assigned
or delegated without the prior written consent of Agent.

9.09 Expenses. The Borrowers agree to pay Agent upon demand for all Lender Group
Expenses incurred by Agent in connection with the preparation, negotiation and
execution of this Agreement and any document required to be furnished herewith.

9.10 Submission of Agreement. The submission of this Agreement to the parties or
their agents or attorneys for review or signature does not constitute a
commitment by Agent or any Lender to take or refrain from taking any action
contemplated hereby and this Agreement shall have no binding force or effect
until all of the conditions to the effectiveness of this Agreement have been
satisfied as set forth herein.

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9.11 Modification. This Agreement may not be amended, waived or modified in any
manner without the written consent of the party against whom the amendment,
waiver or modification is sought to be enforced.

[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

ANGIOTECH PHARMACEUTICALS, INC.,

as Parent

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   Chief Financial Officer

AFMEDICA, INC.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

AMERICAN MEDICAL INSTRUMENTS HOLDINGS, INC.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

ANGIOTECH AMERICA, INC.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

ANGIOTECH BIOCOATINGS CORP.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

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ANGIOTECH CAPITAL, LLC,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

ANGIOTECH PHARMACEUTICALS (US), INC.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

B.G. SULZLE, INC.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

MANAN MEDICAL PRODUCTS, INC.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

MEDICAL DEVICE TECHNOLOGIES, INC.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

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NEUCOLL, INC.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

QUILL MEDICAL, INC.,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

SURGICAL SPECIALTIES CORPORATION,

as a Borrower

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

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WELLS FARGO CAPITAL FINANCE, LLC,

as Agent and as a Lender

By:  

/s/ Dennis J. Rebman

Title:   Vice President

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CONSENT AND REAFFIRMATION

In connection with the foregoing Forbearance Agreement (the “Agreement”), each
of the undersigned, being a Guarantor (as defined in the Credit Agreement
referenced in the Agreement) under the Guaranty (as defined in the Credit
Agreement referenced in the Agreement), hereby (i) acknowledges and agrees to
the terms of the Agreement, (ii) makes each acknowledgment of the Parent and the
Borrowers set forth in Section 2 of the Agreement and agrees that each such
acknowledgment of the Parent and the Borrowers is binding upon such Guarantor,
and (iii) confirms and agrees that its Guaranty is and shall continue to be, in
full force and effect and is hereby ratified and confirmed in all respects
except that, upon the effectiveness of, and on and after the date of the
Agreement, each reference in such Guaranty to the Credit Agreement (as defined
in the Agreement), “thereunder”, “thereof” or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement as
modified by the Agreement. Although Agent and the Lenders have informed the
Guarantors of the matters set forth above, and each Guarantor has acknowledged
the same, each Guarantor understands and agrees that neither the Lender Group
nor the Bank Product Providers have any duty under the Credit Agreement, any
Guaranty or any other agreement with any Guarantor to so notify any Guarantor or
to seek such an acknowledgement, and nothing contained herein is intended to or
shall create such a duty as to any transaction hereafter.

Each Guarantor hereby absolutely and unconditionally releases and forever
discharges each Released Party (as defined in the Agreement), from any and all
claims, demands or causes of action of any kind, nature or description, whether
arising in law or equity or upon contract or tort or under any state or federal
law or otherwise, which such Guarantor has had, now has or has made claim to
have against any such person for or by reason of any act, omission, matter,
cause or thing whatsoever arising at any time on or prior to and including the
date of the Agreement, whether such claims, demands and causes of action are
matured or unmatured or known or unknown, and in each case, arising for or on
account of, in relation to, or in any way in connection with, any of the Credit
Agreement, any Guaranty, any other Loan Document and/or the transactions
thereunder or related thereto. It is the intention of each Guarantor in
providing this release that the same shall be effective as a bar to each and
every claim, demand and cause of action specified, and in furtherance of this
intention it waives and relinquishes all rights and benefits under any
applicable law, which provides that:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him might have materially affected his settlement with the debtor.”

Each Guarantor acknowledges that it may hereafter discover facts different from
or in addition to those now known or believed to be true with respect to such
claims, demands, or causes of action and agree that this instrument shall be and
remain effective in all respects notwithstanding any such differences or
additional facts. Each Guarantor understands, acknowledges and agrees that the
release set forth above may be pleaded as a full and complete defense and may be
used as a basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or attempted in

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breach of the provisions of such release. Each Guarantor, on behalf of itself
and its successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably, covenants and agrees with and in favor of each
Released Party above that it will not sue (at law, in equity, in any regulatory
proceeding or otherwise) any Released Party on the basis of any claim released,
remised and discharged by such Guarantor pursuant to the above release. If any
Guarantor or any of its successors, assigns or other legal representations
violates the foregoing covenant, such Guarantor, for itself and its successors,
assigns and legal representatives, agrees to pay, in addition to such other
damages as any Released Party may sustain as a result of such violation, all
attorneys’ fees and costs incurred by such Released Party as a result of such
violation.

[Remainder of this page intentionally left blank.]

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IN WITNESS WHEREOF, each Guarantor has executed this Consent and Reaffirmation
on and as of the date of the Agreement.

 

ANGIOTECH PHARMACEUTICALS, INC.,

a corporation organized under the laws of the Province of British Columbia,
Canada

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   Chief Financial Officer

0741693 B.C. LTD.,

a corporation organized under the laws of the Province of British Columbia,
Canada

By:  

/s/ Jay Dent

Title:   Jay Dent   Director

ANGIOTECH FLORIDA HOLDINGS, INC.,

a Delaware corporation

By:  

/s/ K. Thomas Bailey

Title:   K. Thomas Bailey   President

ANGIOTECH INTERNATIONAL HOLDINGS, CORP.,

a corporation organized under the laws of the Province of Nova Scotia, Canada

By:  

/s/ Jay Dent

Title:   Jay Dent   Director