Exhibit 10.1

Execution Version

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT, dated as of February 10, 2012 (as amended,
restated, supplemented or otherwise modified from time to time, this
“Agreement”) is among GENERAL ELECTRIC CAPITAL CORPORATION (“GECC”), in its
capacity as agent for Lenders (as defined below) (together with its successors
and assigns in such capacity, “Agent”), the financial institutions who are or
hereafter become parties to this Agreement as lenders (together with GECC,
collectively the “Lenders”, and each individually, a “Lender”), BG MEDICINE,
INC., a Delaware corporation (“Borrower”), and the other entities or persons, if
any, who are or hereafter become parties to this Agreement as guarantors (each a
“Guarantor” and collectively, the “Guarantors”, and together with Borrower, each
a “Loan Party” and collectively, “Loan Parties”).

RECITALS

Borrower wishes to borrow funds from time to time from Lenders, and Lenders
desire to make loans, advances and other extensions of credit, severally, but
not jointly, to Borrower from time to time pursuant to the terms and conditions
of this Agreement.

AGREEMENT

Loan Parties, Agent and Lenders agree as follows:

1. DEFINITIONS.

As used in this Agreement, all capitalized terms shall have the definitions as
provided herein. Any accounting term used but not defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States of America, as in effect from time to time (“GAAP”) and all
calculations shall be made in accordance with GAAP. The term “financial
statements” shall include the accompanying notes and schedules. All other terms
used but not defined herein shall have the meaning given to such terms in the
Uniform Commercial Code as adopted in the State of New York, as amended and
supplemented from time to time (the “UCC”).

2. LOANS AND TERMS OF PAYMENT.

2.1 Term Loans.

(a) Commitment. Subject to the terms and conditions hereof, each Lender,
severally, but not jointly, agrees to make term loans (each a “Term Loan” and
collectively, the “Term Loans”) to Borrower from time to time on any Business
Day (as defined below) during the period from the Closing Date (as defined
below) until February 10, 2013 (the “Commitment Termination Date”) in an
aggregate principal amount not to exceed such Lender’s commitment as identified
on Schedule A hereto (such commitment of each Lender as it may be amended to
reflect assignments made in accordance with this Agreement or terminated or
reduced in accordance with this Agreement, its “Commitment”, and the aggregate
of all such commitments, the “Commitments”). Notwithstanding the foregoing, the
aggregate principal amount of the Term Loans made hereunder shall not exceed
$15,000,000 (the “Total Commitment”). Each Lender’s obligation to fund a Term
Loan shall be limited to such Lender’s Pro Rata Share (as defined below) of such
Term Loan. Subject to the terms and conditions hereof, the initial Term Loan
shall be made on the Closing Date in an aggregate principal amount equal to
$10,000,000 (the “Initial Term Loan”). After the Initial Term Loan but prior to
the Commitment Termination Date, and subject to the terms and conditions hereof,
Borrower may request no more than one (1) additional Term Loan in the amount of
$5,000,000 (the “Subsequent Term Loan”).

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(b) Method of Borrowing. When Borrower desires a Term Loan, Borrower will notify
Agent (which notice shall be irrevocable) by facsimile (or by telephone,
provided that such telephonic notice shall be promptly confirmed in writing, but
in any event on or before the following Business Day) on the date that is ten
(10) Business Days prior to the day the Term Loan is to be made (or such shorter
period of time as Agent may agree) (the “Funding Date”), provided that the
Funding Date of the Initial Term Loan shall be the Closing Date. Agent and
Lenders may act without liability upon the basis of such written or telephonic
notice reasonably believed by Agent to be from any authorized officer of
Borrower. Agent and Lenders shall have no duty to verify the authenticity of the
signature appearing on any such written notice.

(c) Funding of Term Loans. Promptly after receiving a request for a Term Loan,
Agent shall notify each Lender of the contents of such request and such Lender’s
Pro Rata Share of the requested Term Loan. Upon the terms and subject to the
conditions set forth herein, each Lender, severally and not jointly, shall make
available to Agent its Pro Rata Share of the requested Term Loan, in lawful
money of the United States of America in immediately available funds, to the
Collection Account (as defined below) prior to 11:00 a.m. (New York time) on the
specified date. Agent shall, unless it shall have determined that one of the
conditions set forth in Section 4.1 or 4.2, as applicable, has not been
satisfied, by 4:00 p.m. (New York time) on such day, credit the amounts received
by it in like funds (net of any amounts due and payable to Agent under the terms
of this Agreement) to Borrower by wire transfer to, unless otherwise specified
in a Disbursement Letter (as defined below), the following deposit account of
Borrower (or such other deposit account as specified in writing by an authorized
officer of Borrower and acceptable to Agent) (the “Designated Deposit Account”):

Bank Name: Comerica Bank

Bank Address: 333 W. Santa Clara Street, San Jose, CA 95113

ABA#: 121-137-522

Account #: 1894-55436-7

Account Name: BG Medicine Inc

Ref: GE / Comerica

(d) Notes. The Term Loans made by each Lender shall be evidenced by this
Agreement, and if requested by a Lender, a promissory note substantially in the
form of Exhibit A hereto (each a “Note” and, collectively, the “Notes”).

(e) Agent May Assume Funding. Unless Agent shall have received notice from a
Lender prior to the date of any particular Term Loan that such Lender will not
make available to Agent such Lender’s Pro Rata Share of such Term Loan, Agent
may assume that such Lender has made such amount available to it on the date of
such Term Loan in accordance with subsection (c) of this Section 2.1, and may
(but shall not be obligated to), in reliance upon such assumption, make
available a corresponding amount for the account of Borrower on such date. If
and to the extent that such Lender shall not have so made such amount available
to Agent, such Lender and Borrower severally agree to repay to Agent forthwith
on demand such corresponding amount funded by Agent together with interest
thereon, for each day from the day such amount is made available to Borrower
until the day such amount is repaid to Agent, at (i) in the case of Borrower, a
rate per annum equal to the interest rate applicable thereto pursuant to
Section 2.2(a), and (ii) in the case of such Lender, a floating rate per annum
equal to, for each day from the day such amount is made available to Borrower
until such amount is reimbursed to Agent, the weighted

 

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average of the rates on overnight federal funds transactions among members of
the Federal Reserve System, as determined by Agent in its sole discretion (the
“Federal Funds Rate”) for the first Business Day and thereafter, at the interest
rate applicable to such Term Loan. If such Lender shall repay such corresponding
amount to Agent, the amount so repaid shall constitute such Lender’s loan
included in such Term Loan for purposes of this Agreement.

2.2 Interest and Repayment.

(a) Interest. Each Term Loan shall accrue interest on the outstanding principal
amount thereof in arrears from the date made until such Term Loan is fully
repaid at an annual rate of interest equal to the sum of (i) the Reference Rate
(as defined below) plus (ii) 8.0% per annum. All computations of interest and
fees calculated on a per annum basis shall be made by Agent on the basis of a
360-day year, in each case for the actual number of days occurring in the period
for which such interest and fees are payable. Each determination of an interest
rate or the amount of a fee hereunder or under the Fee Letter (as defined below)
shall be made by Agent and shall be conclusive, binding and final for all
purposes, absent manifest error.

(b) Determination of Reference Rate. As used herein, the term “Reference Rate”
means, for any day during a calendar month, a floating rate of interest
determined by Agent equal to (i) the higher of (A) 1.25% per annum and (B) the
offered rate per annum for deposits in U.S. dollars for an interest period of
three (3) calendar months that appears on Reuters Screen LIBOR01 Page as of
11:00 A.M. (London, England time) on the second full Business Day on which banks
in the City of London, England are generally open for interbank or foreign
exchange transactions (such Business Day a “LIBOR Business Day”) immediately
prior to the first day of such calendar month, or with respect to the period
commencing on the Closing Date and ending on the last day of the calendar month
in which the Closing Date occurs, on the second full LIBOR Business Day prior to
the Closing Date (unless the first day of such calendar month is not a Business
Day, in which event the next succeeding Business Day will be used); divided by
(ii) a number equal to 1.0 minus the aggregate (but without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements in effect on the
day that is two (2) LIBOR Business Days prior to the first day of such calendar
month or the Closing Date (including basic, supplemental, marginal and emergency
reserves under any regulations of the Federal Reserve Board or other applicable
governmental authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board) that
are required to be maintained by a member bank of the Federal Reserve System. If
the rate described in clause (i)(B) above shall cease to exist or be available,
such rate shall be the rate of interest per annum at which deposits of U.S.
Dollars in immediately available funds are offered as of 11:00 A.M. (London,
England time) two (2) LIBOR Business Days prior to such day by major financial
institutions reasonably satisfactory to Agent in the London interbank market for
a three (3) month interest period for the applicable principal amount on such
date of determination.

(c) Payments of Principal and Interest.

(i) Interest Payments. For each Term Loan, Borrower shall pay interest to Agent,
for the ratable benefit of the Lenders, at the rate of interest for such Term
Loan determined in accordance with Section 2.2(a) in arrears on the first day of
each calendar month (each, a “Scheduled Payment Date”) commencing on the first
day of the calendar month occurring after the month during which such Term Loan
was made.

 

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(ii) Principal Payments. For the Initial Term Loan, Borrower shall pay principal
to Agent, for the ratable benefit of the Lenders, in thirty (30) equal
consecutive payments of $333,333.33 on each Scheduled Payment Date, commencing
on March 1, 2013 (the “Amortization Start Date”). For the Subsequent Term Loan
(if funded), Borrower shall pay principal to Agent, for the ratable benefit of
the Lenders, in thirty (30) equal consecutive payments of $166,666.67 on each
Scheduled Payment Date, commencing on the Amortization Start Date.

(iii) Payments Generally. Notwithstanding the foregoing provisions of this
Section 2.2(c), all unpaid principal and accrued interest and other outstanding
monetary Obligations (as defined below) with respect to any Term Loan are due
and payable in full to Agent, for the ratable benefit of Lenders, on the earlier
of (A) August 1, 2015 or (B) the date that such Term Loan otherwise becomes due
and payable hereunder, whether by acceleration of the Obligations pursuant to
Section 8.2 or otherwise (the earlier of (A) or (B), the “Term Loan Maturity
Date”). Each scheduled payment of interest or principal hereunder is referred to
herein as a “Scheduled Payment.”

(d) No Reborrowing. Once a Term Loan is repaid or prepaid, it cannot be
reborrowed.

(e) Payments. All payments (including prepayments) to be made by any Loan Party
under any Debt Document shall be made by wire transfer or ACH transfer in
immediately available funds (which shall be the exclusive means of payment
hereunder) in U.S. dollars, without setoff or counterclaim to the Collection
Account (as defined below) before 11:00 a.m. (New York time) on the date when
due. All payments received by Agent after 11:00 a.m. (New York time) on any
Business Day or at any time on a day that is not a Business Day may, in Agent’s
sole discretion, be deemed to be received on the next Business Day. Whenever any
payment required under this Agreement would otherwise be due on a date that is
not a Business Day, such payment shall instead be due on the next Business Day,
and additional fees or interest, as the case may be, shall accrue and be payable
for the period of such extension. All Scheduled Payments due to Agent and
Lenders under Section 2.2(c) shall be effected by automatic debit of the
appropriate funds from Borrower’s operating account specified on the Automatic
Payment Authorization Agreement (as defined below). As used herein, the term
“Collection Account” means the following account of Agent (or such other account
as Agent shall identify to Borrower in writing):

Bank Name: Deutsche Bank

Bank Address: New York, NY

ABA Number: 021 001 033

Account Number: 50271079

Account Name: GECC HH Cash Flow Collections

Ref: BG Medicine/CFN HFS2986

(f) Withholdings and Increased Costs. All payments shall be made free and clear
of any taxes, withholdings, duties, impositions or other charges (other than
taxes on the overall net income of any Lender and comparable taxes), such that
Agent and Lenders will receive the entire amount of any Obligations, regardless
of source of payment. If Agent or any Lender shall have determined that the
introduction of or any change in, after the date hereof, any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
reduces the rate of return on Agent or such Lender’s capital as a consequence of
its obligations hereunder or increases the cost to Agent or such Lender of
agreeing to make or making, funding or maintaining

 

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any Term Loan, then Borrower shall from time to time upon demand by Agent or
such Lender (with a copy of such demand to Agent) promptly pay to Agent for its
own account or for the account of such Lender, as the case may be, additional
amounts sufficient to compensate Agent or such Lender for such reduction or for
such increased cost. A certificate as to the amount of such reduction or such
increased cost submitted by Agent or such Lender (with a copy to Agent) to
Borrower shall be conclusive and binding on Borrower, absent manifest error,
provided, that, neither Agent nor any Lender shall be entitled to payment of any
amounts under this Section 2.2(f) unless it has delivered such certificate to
Borrower within 180 days after the occurrence of the changes or events giving
rise to the increased costs to, or reduction in the amounts received by, Agent
or such Lender; provided further that, such 180 day limitation shall not apply
to any increased costs or reductions in the amounts received by Agent or any
Lender arising from (a) the Dodd-Frank Wall Street Reform and Consumer
Protection Act or any and all requests, rules, guidelines or directives
thereunder or issued in connection therewith or (b) any requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case
of this clause (b) pursuant to Basel III, and such Act and any such requests,
rules, guidelines or directives shall be deemed to be introduced or changed
after the date hereof, regardless of the date enacted, adopted or issued. This
provision shall survive the termination of this Agreement.

(g) Loan Records. Each Lender shall maintain in accordance with its usual
practice accounts evidencing the Obligations of Borrower to such Lender
resulting from such Lender’s Pro Rata Share of each Term Loan, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement. Agent shall maintain in accordance with its usual
practice a loan account on its books to record the Term Loans and any other
extensions of credit made by Lenders hereunder, and all payments thereon made by
Borrower. The entries made in such accounts shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
Obligations recorded therein; provided, however, that no error in such account
and no failure of any Lender or Agent to maintain any such account shall affect
the obligations of Borrower to repay the Obligations in accordance with their
terms.

(h) Payment of Expenses and other Obligations. Agent is authorized to, and at
its sole election may, debit funds from Borrower’s operating account specified
in the Automatic Payment Authorization Agreement to pay all Obligations under
this Agreement or any of the other Debt Documents if and to the extent Borrower
fails to promptly pay any such amounts as and when due (after taking into
account any applicable grace periods for such payment set forth in
Section 8.1(a)).

2.3 Prepayments. Borrower may voluntarily prepay, upon five (5) Business Days’
prior written notice to Agent, any Term Loan in full, but not in part. Upon the
date of (a) any voluntary prepayment of a Term Loan in accordance with the
immediately preceding sentence or (b) any mandatory prepayment of a Term Loan
required under this Agreement (whether by acceleration of the Obligations
pursuant to Section 8.2 or otherwise), Borrower shall pay to Agent, for the
ratable benefit of the Lenders, a sum equal to (i) all outstanding principal
plus accrued and unpaid interest with respect to such Term Loan, plus (ii) the
Final Payment Fee (as such term is defined in the Fee Letter) for such Term
Loan, and plus (iii) a prepayment premium (as yield maintenance for the loss of
a bargain and not as a penalty) equal to 1% of the principal amount of such Term
Loan being prepaid, if such prepayment is made on or before the two year
anniversary of such Term Loan.

2.4 Late Fees. If Agent does not receive any Scheduled Payment or other payment
under any Debt Document from any Loan Party within five (5) days after its due
date, then, at Agent’s election,

 

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such Loan Party agrees to pay to Agent for the ratable benefit of all Lenders, a
late fee equal to (a) 5.0% of the amount of such unpaid payment or (b) such
lesser amount that, if paid, would not cause the interest and fees paid by such
Loan Party under this Agreement to exceed the Maximum Lawful Rate (as defined
below) (the “Late Fee”).

2.5 Default Rate. All Term Loans and other Obligations shall bear interest, at
the election of Agent or upon the request of the Requisite Lenders (as defined
below) (or automatically while any Event of Default (as defined below) under
Section 8.1(g) exists), from and after the occurrence and during the
continuation of an Event of Default, at a rate equal to the lesser of (a) 5.0%
above the rate of interest applicable to such Obligations as set forth in
Section 2.2(b) immediately prior to the occurrence of the Event of Default and
(b) the Maximum Lawful Rate (the “Default Rate”). The application of the Default
Rate shall not be interpreted or deemed to extend any cure period or waive any
Default or Event of Default or otherwise limit Agent’s or any Lender’s right or
remedies hereunder. All interest payable at the Default Rate shall be payable on
demand.

2.6 Lender Fees. Borrower shall pay to Agent for the account of the Closing Date
Lenders the fees set forth in that certain fee letter, dated as of the Closing
Date, by and among Borrower, Agent and the Closing Date Lenders (the “Fee
Letter”) in the amounts and on the dates set forth therein, which fees shall be
fully earned and non-refundable when paid.

2.7 Maximum Lawful Rate. Anything herein, any Note or any other Debt Document
(as defined below) to the contrary notwithstanding, the obligations of Loan
Parties hereunder and thereunder shall be subject to the limitation that
payments of interest shall not be required, for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by Agent and Lenders would be contrary to the
provisions of any law applicable to Agent and Lenders limiting the highest rate
of interest which may be lawfully contracted for, charged or received by Agent
and Lenders, and in such event Loan Parties shall pay Agent and Lenders interest
at the highest rate permitted by applicable law (“Maximum Lawful Rate”);
provided, however, that if at any time thereafter the rate of interest payable
hereunder or thereunder is less than the Maximum Lawful Rate, Loan Parties shall
continue to pay interest hereunder at the Maximum Lawful Rate until such time as
the total interest received by Agent and Lenders is equal to the total interest
that would have been received had the interest payable hereunder been (but for
the operation of this paragraph) the interest rate payable since the making of
the Initial Term Loan as otherwise provided in this Agreement, any Note or any
other Debt Document.

2.8 Authorization and Issuance of the Warrants. As of the Closing Date, Borrower
has duly authorized the issuance on the Closing Date to Lenders (or their
respective affiliates or designees) of stock purchase warrants substantially in
the form of the warrant attached hereto as Exhibit F (collectively, the
“Warrants”) evidencing Lenders’ (or their respective affiliates or designees)
right to acquire their respective Pro Rata Share of up to 36,657 shares of
common stock of Borrower with an exercise price of $6.82 per share (the “Initial
Term Loan Warrants”). Prior to the funding of the Subsequent Term Loan, Borrower
agrees to duly authorize the issuance, on the Funding Date of the Subsequent
Term Loan, to Lenders of Warrants evidencing Lenders’ (or their respective
affiliates or designees) right to acquire their respective Pro Rata Share of
shares of common stock of Borrower in an amount equal to 2.5% of the principal
amount of the Subsequent Term Loan, divided by the Exercise Price as of the
Funding Date of the Subsequent Term Loan (the “Subsequent Term Loan Warrants”).
Subject to the terms and conditions of the Warrants, the exercise period shall
expire ten (10) years from the date such Warrants are issued. As used herein,
“Exercise Price” means an amount per share equal to the lesser of (a) the 10-day
trailing average of Borrower’s common stock price, as determined as of the close
of business on the Business Day immediately prior to the applicable Funding Date
and (b) Borrower’s common stock price, as determined as of the close of business
on the Business Day immediately prior to the applicable Funding Date.

 

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3. CREATION OF SECURITY INTEREST.

3.1 Grant of Security Interest. As security for the prompt payment and
performance, whether at the stated maturity, by acceleration or otherwise, of
all Term Loans and other debt, obligations and liabilities of any kind
whatsoever of Borrower to Agent and Lenders under the Debt Documents (other than
the Warrants) (whether for principal, interest, fees, expenses, prepayment
premiums, indemnities, reimbursements or other sums, and whether or not such
amounts accrue after the filing of any petition in bankruptcy or after the
commencement of any insolvency, reorganization or similar proceeding, and
whether or not allowed in such case or proceeding), absolute or contingent, now
existing or arising in the future, including but not limited to the payment and
performance of any outstanding Notes, and any renewals, extensions and
modifications of such Term Loans (such indebtedness under the Notes, Term Loans
and other debt, obligations and liabilities in connection with the Debt
Documents (other than the Warrants) are collectively called the “Obligations”),
and as security for the prompt payment and performance by each Guarantor of its
obligations under any guaranty entered into pursuant to Section 6.11, each Loan
Party does hereby grant to Agent, for the benefit of Agent and Lenders, a
security interest in the property listed below (all hereinafter collectively
called the “Collateral”):

All of such Loan Party’s personal property of every kind and nature (except for
Intellectual Property, as defined in, and to the extent excluded pursuant to,
Section 3.3) 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, 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, 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)

; provided, that, the grant of the security interest herein shall not extend to
and the term “Collateral” shall not include (a) equipment subject to liens
permitted pursuant to Section 7.2(c) solely to the extent that with respect to
financing agreements entered into in connection therewith (i) prior to the
Closing Date, such agreements prohibit the granting of a lien in such equipment
or (ii) after the Closing Date, such agreements prohibit the granting of a lien
in such equipment after the Loan Parties have used commercially reasonable
efforts to get such restriction removed; provided, that, upon the termination or
expiration of any such financing arrangement or prohibition on such lien such
equipment shall automatically be subject to the security interest granted in
favor of the Agent hereunder and become part of the “Collateral”; (b) each of
its Intellectual Property licenses pursuant to which it is a licensee (each, a
“License”) as in effect on the date hereof but only to the extent that the
granting of such security interest would constitute a default under such License
as in effect on the date hereof, and only to the extent that such prohibition or
default is enforceable under applicable law (including, without limitation,
Sections 9-406, 9-407 and 9-408 of the UCC); provided, that, upon the
termination or expiration of any such prohibition or default provision, such
License shall automatically be subject to the security interest granted in favor
of Agent hereunder and become part of the “Collateral”, and provided further
that the “Collateral” shall include all proceeds, products, substitutions and
replacements of any such License; (c) more than 66% of the issued and
outstanding voting capital stock of any Subsidiary of Borrower that is
incorporated or organized in a jurisdiction other than the United States or any
state or territory thereof (each a “Foreign Subsidiary”); and (d) deposit
accounts securing reimbursement obligations with respect

 

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to letters of credit permitted to be incurred under Section 7.2(g) so long as
the balance in such deposit accounts does not exceed the aggregate stated
principal amount of such letters of credit and such deposit accounts and the
funds therein do not secure any other Indebtedness (as defined below).

Each Loan Party hereby represents and covenants that such security interest
constitutes a valid, first priority security interest in the presently existing
Collateral (subject only to Permitted Liens that would be prior to the security
interest granted hereunder as a matter of law, but not solely as a result of a
prior UCC financing statement filing), and will constitute a valid, first
priority security interest in Collateral acquired after the date hereof (subject
only to Permitted Liens that would be prior to the security interest granted
hereunder as a matter of law, but not solely as a result of a prior UCC
financing statement filing). Each Loan Party hereby covenants that it shall give
written notice to Agent promptly upon the acquisition by such Loan Party or
creation in favor of such Loan Party of any commercial tort claim after the
Closing Date.

3.2 Financing Statements. Each Loan Party hereby authorizes Agent to file UCC
financing statements with all appropriate jurisdictions to perfect Agent’s
security interest (for the benefit of itself and Lenders) granted hereby.

3.3 Grant of Security Interest in Proceeds of Intellectual Property. The
Collateral shall not include any intellectual property of any Loan Party, which
shall be defined as all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, patent applications and
like protections, including improvements, divisions, continuations, renewals,
reissues, extensions, and continuations-in-part of the same, trademarks, trade
names, service marks, mask works, rights of use of any name, domain names, or
any other similar rights, any applications therefor, whether registered or not,
and the goodwill of the business of any Loan Party connected with and symbolized
thereby, know-how, operating manuals, trade secret rights, clinical and
non-clinical data, rights to unpatented inventions (collectively, “Intellectual
Property”) now owned or hereafter acquired; provided, however, that the
Collateral shall include all cash, royalty fees, awards, judgments, insurance
claims and other monetary claims, other proceeds, accounts and general
intangibles that consist of rights of a Loan Party to receive payment with
respect to the Intellectual Property and all income, royalties and proceeds at
any time due or payable to a Loan Party with respect to the Intellectual
Property and any of the foregoing, including, without limitation, (i) any
proceeds from the sale, licensing or other disposition of all or any part of, or
rights in, the Intellectual Property, (ii) all rights to payment of money of any
Loan Party for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof and (iii) any monetary damages
owing to any Loan Party with respect to any past, present or future infringement
of any Intellectual Property, together with all accessions and additions
thereto, proceeds and products thereof (including, without limitation, any
proceeds resulting under insurance policies of any Loan Party) (“Rights to
Payment”). Notwithstanding the foregoing, to the extent it is necessary under
applicable law to have a security interest in the underlying Intellectual
Property in order for Agent to have (i) a security interest in the Rights to
Payment or (ii) a security interest in any payments with respect to Rights to
Payment that are received after the commencement of a bankruptcy or insolvency
proceeding, then the Collateral shall automatically, and effective as of the
date hereof, include the Intellectual Property to the extent necessary to permit
attachment and perfection of Agent’s security interest (on behalf of itself and
Lenders) in the Rights to Payment and any payments in respect thereof. Agent
hereby agrees on behalf of itself and Lenders that, if Agent obtains a security
interest in the Intellectual Property pursuant to the immediately preceding
sentence, Agent will not exercise any remedies (under the UCC or otherwise) with
respect to the Intellectual Property other than remedies with respect to Rights
to Payment.

3.4 Termination of Security Interest. Upon the date on which all of the
Obligations (other than contingent indemnity obligations that survive the
termination of this Agreement and for which no

 

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claim has been asserted) are repaid in full in cash, all of the Commitments
hereunder are terminated, and this Agreement shall have been terminated and upon
receipt of a payoff letter or termination agreement executed by the Loan Parties
in form and substance reasonably acceptable to Agent (the “Termination Date”),
Agent shall, at Loan Parties’ sole cost and expense and without any recourse,
representation or warranty, release its Liens in the Collateral.

4. CONDITIONS OF CREDIT EXTENSIONS

4.1 Conditions Precedent to Initial Term Loan. No Lender shall be obligated to
make its Pro Rata Share of the Initial Term Loan, or to take, fulfill, or
perform any other action hereunder, until the following have been delivered to
Agent (the date on which the Lenders make the Initial Term Loan after all such
conditions shall have been satisfied in a manner satisfactory to Agent and the
Lenders or waived in accordance with this Agreement, the “Closing Date”):

(a) a counterpart of this Agreement duly executed by each Loan Party, each
Lender and Agent;

(b) a certificate executed by the Secretary of each Loan Party, the form of
which is attached hereto as Exhibit B-1 (each and collectively, the “Secretary’s
Certificate”), providing verification of incumbency and attaching (i) such Loan
Party’s board resolutions approving the transactions contemplated by this
Agreement and the other Debt Documents and (ii) such Loan Party’s governing
documents;

(c) Notes duly executed by Borrower in favor of each Lender that has requested a
Note;

(d) filed copies of UCC financing statements, collateral assignments, and
termination statements, with respect to the Collateral, as Agent shall request;

(e) certificates of insurance evidencing the insurance coverage, and
satisfactory additional insured and lender loss payable endorsements, in each
case as required pursuant to Section 6.4 herein;

(f) current UCC lien, judgment, bankruptcy and tax lien search results
demonstrating that there are no other Liens (as defined below) on the
Collateral, other than Permitted Liens (as defined below);

(g) a certificate of status/good standing of each Loan Party from the
jurisdiction of such Loan Party’s organization and a certificate of foreign
qualification from each jurisdiction where such Loan Party’s failure to be so
qualified could reasonably be expected to have a Material Adverse Effect (as
defined below), in each case as of a recent date acceptable to Agent;

(h) a landlord consent and/or bailee letter in favor of Agent executed by the
applicable landlord or bailee (the forms of which are attached hereto as Exhibit
C-1 and Exhibit C-2, as applicable (each an “Access Agreement”)), for any third
party location where any of the following are located: (a) any Loan Party’s
principal place of business, (b) any Loan Party’s books or records or
(c) Collateral with an aggregate value in excess of $100,000 at all locations;

(i) a legal opinion of Loan Parties’ counsel, in form and substance satisfactory
to Agent;

 

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(j) a completed Automatic Payment Authorization Agreement, a form of which is
attached hereto as Exhibit E (the “Automatic Payment Authorization Agreement”);

(k) a completed perfection certificate from each Loan Party, duly executed by
such Loan Party (each and collectively, the “Perfection Certificate”), a form of
which Agent previously delivered to Borrower;

(l) evidence that Borrower has opened depository, operating and securities
accounts at Comerica Bank and is in compliance with Section 7.10(a) with respect
to such accounts;

(m) one or more Account Control Agreements (as defined below), in form and
substance reasonably acceptable to Agent, duly executed by the applicable Loan
Parties and the applicable depository or financial institution, for each deposit
account to the extent required pursuant to Section 7.10(b);

(n) a pledge agreement, in form and substance satisfactory to Agent, executed by
each Loan Party and pledging to Agent, for the benefit of itself and Lenders, a
security interest in (a) 100% of the shares of the outstanding capital stock, of
any class, of each Subsidiary (as defined below) of each Loan Party that is
incorporated under the laws of any State of the United States or the District of
Columbia, (b) 66% of the shares of the outstanding voting capital stock and 100%
of the shares of the outstanding non-voting capital stock of each Foreign
Subsidiary and (c) any and all Indebtedness (as defined in Section 7.2 below)
owing to Loan Parties (the “Pledge Agreement”);

(o) a disbursement instruction letter, in form and substance satisfactory to
Agent and the Lenders, executed by each Loan Party, Agent and each Lender (the
“Disbursement Letter”);

(p) all other documents and instruments as Agent or any Lender may reasonably
deem necessary or appropriate to effectuate the intent and purpose of this
Agreement (together with the Agreement, the Notes, the Warrants, the Account
Control Agreements, the Access Agreements, the Perfection Certificate, the
Pledge Agreement, the Fee Letter, the Secretary’s Certificate and the
Disbursement Letter, and all other agreements, instruments, documents and
certificates executed and/or delivered to or in favor of Agent from time to time
in connection with this Agreement or the transactions contemplated hereby, the
“Debt Documents”); and

(q) Agent and Lenders shall have received the fees required to be paid by
Borrower (including, without limitation, those payable on the Closing Date
pursuant to the Fee Letter), and Borrower shall have reimbursed Agent and
Lenders for all fees, costs and expenses of closing presented as of the date of
this Agreement.

4.2 Conditions Precedent to All Term Loans. No Lender shall be obligated to make
its Pro Rata Share of any Term Loan, including the Initial Term Loan, unless the
following additional conditions have been satisfied:

(a) (i) all representations and warranties in Section 5 below shall be true as
of the date of such Term Loan; (ii) no Event of Default or any other event,
which with the giving of notice or the passage of time, or both, would
constitute an Event of Default (such event, a “Default”), has occurred and is
continuing or will result from the making of any Term Loan, and (iii) Agent
shall have received a certificate from an authorized officer of each Loan Party
confirming each of the foregoing, the form of which is attached hereto as
Exhibit B-2.

 

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(b) Agent shall have received the redelivery or supplemental delivery of the
items set forth in the following sections to the extent circumstances have
changed since the Initial Term Loan: Sections 4.1(b), (e), (f), (g), (k) and
(o);

(c) each Lender (or its respective affiliate or designee) shall have received
(i) with respect to the Initial Term Loan, an Initial Term Loan Warrant and
(ii) with respect to the Subsequent Term Loan, a Subsequent Term Loan Warrant;
and

(d) with respect to the Subsequent Term Loan, (i) the Loan Parties have achieved
at least $2,500,000 in cumulative product revenue measured on a trailing six
(6) month basis as of the last day of the month immediately preceding the
Funding Date of the Subsequent Term Loan (the “Minimum Product Revenue
Condition”) and (ii) Agent shall have received a certificate and supporting
documentation in form and substance reasonably acceptable to Agent executed by
Borrower’s Chief Financial Officer at least three (3) Business Days prior to the
Funding Date of the Subsequent Term Loan certifying and demonstrating that
Borrower has satisfied the Minimum Product Revenue Condition.

5. REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES.

Each Loan Party, jointly and severally, represents, warrants and covenants to
Agent and each Lender that:

5.1 Due Organization and Authorization. Each Loan Party’s exact legal name is as
set forth in the Perfection Certificate and each Loan Party is, and will remain,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization as specified in the Perfection Certificate, has
its chief executive office at the location specified in the Perfection
Certificate, and is, and will remain, duly qualified and licensed in every
jurisdiction wherever necessary to carry on its business and operations, except
where the failure to be so qualified and licensed could not reasonably be
expected to have a Material Adverse Effect. This Agreement and the other Debt
Documents have been duly authorized, executed and delivered by each Loan Party
and constitute legal, valid and binding agreements enforceable in accordance
with their terms (except as may be limited by bankruptcy, insolvency and similar
laws affecting the enforcement of creditors’ rights in general, and subject to
general principles of equity). Each Loan Party has all requisite power and
authority to own its assets, carry on its business and execute, deliver and
perform its obligations under the Debt Documents to which it is a party.

5.2 Required Consents. No filing, registration, qualification with, or approval,
consent or withholding of objections from, any governmental authority or
instrumentality or any other entity or person is required with respect to the
entry into, or performance by any Loan Party of, any of the Debt Documents,
except any obtained on or before the Closing Date.

5.3 No Conflicts. The entry into, and performance by each Loan Party of, the
Debt Documents will not (a) violate any of the organizational documents of such
Loan Party, (b) violate any law, rule, regulation, order, award or judgment
applicable to such Loan Party, or (c) result in any breach of or constitute a
default under, or result in the creation of any lien, security interest,
mortgage, pledge, claim or encumbrance of any kind (any of the foregoing, a
“Lien”) on any of such Loan Party’s property (except for Liens in favor of
Agent, on behalf of itself and Lenders) pursuant to, any indenture, mortgage,
deed of trust, bank loan, credit agreement, or other Material Agreement (as
defined below) to which such Loan Party is a party. As used herein, “Material
Agreement” means (i) any agreement or contract (other than employment or
compensation-related agreements) to which such Loan Party is a party and
involving the receipt or payment of amounts in the aggregate exceeding $100,000
per year, and (ii) any agreement

 

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or contract to which such Loan Party is a party of which the breach,
nonperformance, termination or failure to renew could reasonably be expected to
have a Material Adverse Effect. A description of all Material Agreements as of
the Closing Date is set forth on Schedule B hereto.

5.4 Litigation. There are no actions, suits, proceedings or investigations
pending against or, to the Knowledge of any Loan Party, affecting any Loan Party
before any court, federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or, to the Knowledge of any Loan Party, any basis thereof, which
involves the possibility of any judgment or liability that could reasonably be
expected to have a Material Adverse Effect, or which questions the validity of
the Debt Documents, or the other documents required thereby or any action to be
taken pursuant to any of the foregoing, nor does any Loan Party have reason to
believe that any such actions, suits, proceedings or investigations are
threatened. As used in this Agreement, the term “Material Adverse Effect” means
a material adverse effect on any of (a) the operations, business, assets,
properties, or condition (financial or otherwise) of Borrower, individually, or
the Loan Parties, taken as a whole, (b) the ability of a Loan Party to perform
any of its obligations under any Debt Document to which it is a party, (c) the
legality, validity or enforceability of any Debt Document, (d) the rights and
remedies of Agent or Lenders under any Debt Document or (e) the validity,
perfection or priority of any Lien in favor of Agent, on behalf of itself and
Lenders, on any of the Collateral. As used in this Agreement, the term
“Knowledge” means, as to any person or entity, such person or entity has
knowledge or should have had knowledge after using reasonable diligence.

5.5 Financial Statements. All financial statements delivered to Agent and
Lenders pursuant to Section 6.3 have been prepared in accordance with GAAP
(subject, in the case of unaudited financial statements, to the absence of
footnotes and normal year end audit adjustments), and since the date of the most
recent audited financial statements, no event has occurred which has had or
could reasonably be expected to have a Material Adverse Effect. There has been
no material adverse deviation from the most recent annual operating plan of
Borrower delivered to Agent and Lenders in accordance with Section 6.3.

5.6 Use of Proceeds; Margin Stock. The proceeds of the Term Loans shall be used
for working capital and general corporate purposes. No Loan Party and no
Subsidiary of any Loan Party is engaged in the business of purchasing or selling
margin stock (within the meaning of Regulations T, U and X of the Board of
Governors of the Federal Reserve System) (“Margin Stock”) or extending credit
for the purpose of purchasing Margin Stock. As of the Closing Date, except as
set forth on Schedule B, no Loan Party and no Subsidiary of any Loan Party owns
any Margin Stock.

5.7 Collateral. Each Loan Party is, and will remain, the sole and lawful owner,
and in possession of, the Collateral (except as expressly permitted under this
Agreement), and has the sole right and lawful authority to grant the security
interest described in this Agreement. The Collateral is, and will remain, free
and clear of all Liens, except for (a) Liens in favor of Agent, on behalf of
itself and Lenders, to secure the Obligations, (b) Liens (i) with respect to the
payment of taxes, assessments or other governmental charges or (ii) of
suppliers, carriers, materialmen, warehousemen, workmen or mechanics and other
similar Liens, in each case imposed by law and arising in the ordinary course of
business, and securing amounts that are not yet due or that are being contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves or other appropriate provisions are maintained on the
books of the applicable Loan Party in accordance with GAAP and which do not
involve, in the judgment of Agent, any risk of the sale, forfeiture or loss of
any of the Collateral (a “Permitted Contest”), (c) Liens existing on the date
hereof and set forth on Schedule B hereto, (d) Liens securing Indebtedness (as
defined in Section 7.2 below) permitted under Section 7.2(c) below, provided
that (i) such Liens exist prior to the acquisition of, or attach substantially
simultaneous with, or within 20 days after the, acquisition, repair, improvement
or construction of, such property financed by such Indebtedness and (ii) such
Liens do not extend to any property of a Loan Party other than the property

 

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(and proceeds thereof) acquired or built, or the improvements or repairs,
financed by such Indebtedness, (e) Licenses described in Section 7.3(c) below,
(f) liens in goods in favor of customs and revenue authorities arising as a
matter of law which secure payment of customs duties in connection with the
importation of goods in the ordinary course of business, (g) bankers’ liens or
rights of set off in deposit or securities accounts in favor of the financial
institution at which such deposit or securities account is located, provided,
that, if an Account Control Agreement is required for such deposit or securities
account, such liens or rights of set off have been waived or subordinated in a
manner satisfactory to Agent therein, (h) pledges or cash deposits made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance or other types of social security benefits (but not
including any lien imposed by ERISA (as defined below)) that secure amounts that
are not past due or payable, (i) liens from judgments, decrees or attachments in
circumstances not constituting an Event of Default, (j) rights retained by
licensors in such licensor’s owned Intellectual Property in connection with
Licenses and collaboration agreements permitted pursuant to this Agreement and
(k) Liens on deposit accounts securing reimbursement obligations with respect to
letters of credit permitted to be incurred under Section 7.2(g) so long as
(x) the balance in such deposit accounts does not exceed the aggregate stated
principal amount of such letters of credit and such deposit accounts and (y) the
funds therein do not secure any other Indebtedness (all of such Liens described
in the foregoing clauses (a) through (k) are called “Permitted Liens”).

5.8 Compliance with Laws.

(a) Each Loan Party is and will remain in compliance in all material respects
with all laws, statutes, ordinances, rules and regulations applicable to it.

(b) Without limiting the generality of the immediately preceding clause (a),
each Loan Party further agrees that it and each of its Subsidiaries is and will
remain in compliance in all material respects with all U.S. economic sanctions
laws, Executive Orders and implementing regulations as promulgated by the U.S.
Treasury Department’s Office of Foreign Assets Control (“OFAC”), and all
applicable anti-money laundering and counter-terrorism financing provisions of
the Bank Secrecy Act and all regulations issued pursuant to it. No Loan Party
nor any of its Subsidiaries, Affiliates or joint ventures (i) is a person or
entity designated by the U.S. Government on the list of the Specially Designated
Nationals and Blocked Persons (the “SDN List”) with which a U.S. person or
entity cannot deal with or otherwise engage in business transactions, (ii) is a
person or entity who is otherwise the target of U.S. economic sanctions laws
such that a U.S. person or entity cannot deal or otherwise engage in business
transactions with such person or entity, or (iii) is controlled by (including
without limitation by virtue of such person being a director or owning voting
shares or interests), or acts, directly or indirectly, for or on behalf of, any
person or entity on the SDN List or a foreign government that is the target of
U.S. economic sanctions prohibitions such that the entry into, or performance
under, this Agreement or any other Debt Document would be prohibited under U.S.
law.

(c) Each Loan Party and each of its Subsidiaries is in compliance with (i) the
Trading with the Enemy Act of 1917, Ch. 106, 40 Stat. 411, as amended, and each
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, (ii) the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, P.L. 107-56, as amended (the “Patriot Act”), and
(iii) other federal or state laws relating to “know your customer” and
anti-money laundering rules and regulations. No part of the proceeds of any Loan
will be used directly or indirectly for any payments to any government official
or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977.

 

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(d) Each Loan Party has met the minimum funding requirements of the United
States Employee Retirement Income Security Act of 1974 (as amended, “ERISA”)
with respect to any employee benefit plans subject to ERISA. No Loan Party is an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940.

5.9 Intellectual Property. The Intellectual Property is and will remain free and
clear of all Liens, except for Permitted Liens described in clauses (b)(i) and
(j) of Section 5.7. No Loan Party has nor will it enter into any agreement or
financing arrangement in which a negative pledge in such Loan Party’s
Intellectual Property is granted to any party (other than the negative pledge
granted herein to Agent and the Lenders). As of the Closing Date and each date a
Term Loan is advanced to Borrower, no Loan Party has any interest in, or title
to any Intellectual Property that is (i) a registered trademark or pending
trademark application, (ii) a registered copyright or copyright for which an
application has been filed or (iii) an issued patent or pending patent
application, in each case except as disclosed in the Perfection Certificate.
Each Loan Party owns or has rights to use all Intellectual Property material to
the conduct of its business as now conducted by it or proposed to be conducted
by it on the Closing Date and each subsequent date that this representation is
remade, without, to its Knowledge, any actual or claimed infringement upon the
rights of third parties.

5.10 Solvency. Both before and after giving effect to each Term Loan, the
transactions contemplated herein, and the payment and accrual of all transaction
costs in connection with the foregoing, each Loan Party is and will be Solvent.
As used herein, “Solvent” means, with respect to a Loan Party on a particular
date, that on such date (a) the fair value of the property of such Loan Party is
greater than the total amount of liabilities, including contingent liabilities,
of such Loan Party; (b) the present fair salable value of the assets of such
Loan Party is not less than the amount that will be required to pay the probable
liability of such Loan Party on its debts as they become absolute and matured;
(c) such Loan Party does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Loan Party’s ability to pay as such debts and
liabilities mature; (d) such Loan Party is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Loan Party’s property would constitute an unreasonably small capital; and
(e) such Loan Party is not “insolvent” within the meaning of Section 101(32) of
the United States Bankruptcy Code (11 U.S.C. § 101, et. seq.), as amended from
time to time. The amount of contingent liabilities (such as litigation,
guaranties and pension plan liabilities) at any time shall be computed as the
amount that, in light of all the facts and circumstances existing at the time,
represents the amount that can be reasonably be expected to become an actual or
matured liability.

5.11 Taxes; Pension. All federal, state and other material tax returns, reports
and statements, including information returns, required by any governmental
authority to be filed by each Loan Party and its Subsidiaries have been filed
with the appropriate governmental authority and all taxes, levies, assessments
and similar charges have been paid prior to the date on which any fine, penalty,
interest or late charge may be added thereto for nonpayment thereof (or any such
fine, penalty, interest, late charge or loss has been paid), excluding taxes,
levies, assessments and similar charges or other amounts which are the subject
of a Permitted Contest. Proper and accurate amounts have been withheld by each
Loan Party from its respective employees for all periods in compliance with
applicable laws and such withholdings have been timely paid to the respective
governmental authorities. Each Loan Party has paid all amounts necessary to fund
all present pension, profit sharing and deferred compensation plans in
accordance with their terms, and no Loan Party has withdrawn from participation
in, or has permitted partial or complete termination of, or permitted the
occurrence of any other event with respect to, any

 

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such plan which could reasonably be expected to result in any liability of a
Loan Party, including any liability to the Pension Benefit Guaranty Corporation
or its successors or any other governmental authority.

5.12 Full Disclosure. Loan Parties hereby confirm that all of the information
disclosed on the Perfection Certificate is true, correct and complete as of the
date of this Agreement and is true, correct and complete in all material
respects as of the Funding Date of the Subsequent Term Loan. No representation,
warranty or other statement made by or on behalf of a Loan Party to Agent or
Lenders (including in any certificate, instrument, agreement or document
delivered pursuant to this Agreement or any other Debt Document) contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained therein not misleading, it being recognized by
Agent and Lenders that the projections and forecasts provided by Loan Parties in
good faith and based upon reasonable and stated assumptions are not to be viewed
as facts and that actual results during the period or periods covered by any
such projections and forecasts may differ from the projected or forecasted
results.

 

  5.13 Regulatory Compliance.

(a) Each Loan Party has, and it and its products are in compliance with, all
applicable registrations, authorizations, approvals, licenses, permits,
clearances, certificates, and exemptions issued by the U.S. Food and Drug
Administration or any successor thereto (“FDA”) or any comparable foreign or
state governmental authority (including but not limited to pre-market approval
applications (“PMAs”), pre-market notification clearances (“510(k) clearance”),
investigational device exemptions (“IDEs”), CE Marks, pricing and reimbursement
approvals) (hereinafter “Registrations”) that are required to conduct its
business as currently conducted, or as proposed to be conducted, except where
the failure to comply could not reasonably be expected to have a Material
Adverse Effect. To the Knowledge of each Loan Party, neither the FDA nor any
comparable foreign or state governmental authority is considering limiting,
suspending, or revoking any such Registration. To the Knowledge of each Loan
Party, no product application or other submission to the FDA or any comparable
foreign or state governmental authority contained false or misleading
information or a significant omission at the time such application was made. The
Loan Parties have fulfilled and performed their obligations under each
Registration except where the failure to perform such obligations could not
reasonably be expected to have a Material Adverse Effect, and, to their
Knowledge, no event has occurred or condition or state of facts exists which
would constitute a breach or default under, or would cause revocation or
termination of, any such Registration. To the Knowledge of each Loan Party, any
third party that is a manufacturer of product components or products regulated
as medical devices and marketed or distributed by the Loan Parties is in
compliance with all Registrations required by the FDA or comparable foreign or
state governmental authorities.

(b) All products designed, developed, investigated, manufactured, assembled,
packaged, tested, labeled, distributed, sold or marketed by or, to the Knowledge
of the Loan Parties, on behalf of the Loan Parties that are subject to the
jurisdiction of the FDA or a comparable foreign or state governmental authority,
have been and are being designed, developed, investigated, manufactured,
assembled, packaged, tested, labeled, distributed, sold and marketed in
compliance with the requirements of the FDA and other comparable foreign or
state governmental authorities except where the failure to comply with such
requirements could not reasonably be expected to result in a Material Adverse
Effect.

(c) No Loan Party is subject to any obligation arising under an administrative
or regulatory action, Form FDA-483, warning letter, notice of violation letter,
consent decree, or other notice, response or commitment made to or with the FDA
or any comparable foreign or

 

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state governmental authority. To the Knowledge of each Loan Party, there is no
act, omission, event, or circumstance that would reasonably be expected to give
rise to or lead to any civil, criminal or administrative action.

(d) As of the Closing Date, no Loan Party is undergoing any inspection by the
FDA or any other foreign or state governmental authority related to any
activities or products of the Loan Parties.

(e) During the period of two calendar years immediately preceding the Closing
Date, no Loan Party has introduced into commercial distribution any products
manufactured by or, to the Knowledge of the Loan Parties, on behalf of any Loan
Party that were upon their shipment by any Loan Party adulterated or misbranded
in violation of 21 U.S.C. § 331. The Loan Parties have not received any written
notice from the FDA or comparable foreign or state governmental authority
alleging material noncompliance with any applicable laws, rules or regulations.
No product has been seized, withdrawn, recalled, or detained, and to the
Knowledge of the Loan Parties there are no facts or circumstances reasonably
likely to result in (i) the seizure, recall, or detention, of any product;
(ii) a change in the labeling of any product because of a risk; or (iii) a
termination, seizure or suspension of manufacturing, researching, distributing
or marketing of any product. To the Knowledge of the Loan Parties, there are no
pending or threatened proceedings against any Loan Party in the United States or
any other jurisdiction seeking the withdrawal, recall, import detention, or
seizure of any product.

(f) No Loan Party nor to the Knowledge of the Loan Parties, any of its
respective officers, directors, employees, agents or contractors (i) have been
excluded or debarred from any federal healthcare program (including without
limitation Medicare or Medicaid) or any other federal program (“Federal
Healthcare Program”) or (ii) have received written notice from the FDA or any
other comparable governmental authority with respect to debarment or
disqualification of any person that could reasonably be expected to have a
Material Adverse Effect. No Loan Party nor, to the Knowledge of each Loan Party,
any of its respective officers, directors, employees, agents or contractors have
been convicted of any crime or engaged in any conduct for which debarment is
mandated or permitted by 21 U.S.C. § 335a or such person or entity could be
excluded from participating in the federal health care programs under
Section 1128 of the Social Security Act or any similar law. To the Knowledge of
each Loan Party, no officer, or employee of any Loan Party, has (aa) made any
untrue statement of material fact or fraudulent statement to the FDA; (bb)
failed to disclose a material fact required to be disclosed to the FDA; or (cc)
committed an act, made a statement, or failed to make a statement that would
reasonably be expected to provide the basis for the FDA to invoke its policy
respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities,” as set forth in 56 Fed. Reg. 46191 (September 10, 1991).

(g) No Loan Party has granted rights to design, develop, manufacture, produce,
assemble, distribute, license, prepare, package, label, market or sell its
products to any other person nor is it bound by any agreement that affects any
Loan Party’s exclusive right to design, develop, manufacture, produce, assemble,
distribute, license, prepare, package, label, market or sell its products, other
than (i) Licenses permitted pursuant to Section 7.3(c) and (ii) outsourcing
service arrangements that do not involve the licensing or other grant of rights
in or to Intellectual Property and are not otherwise prohibited by the terms of
this Agreement, which are entered into in the ordinary course of business, in
all cases described in clause (i) or (ii) above, so long as, to the Knowledge of
the Loan Parties, the contracting counter-party is in compliance with all
requirements of the FDA and other comparable foreign or state governmental
authorities.

 

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6. AFFIRMATIVE COVENANTS.

6.1 Good Standing. Each Loan Party shall maintain its and each of its
Subsidiaries’ existence and good standing in its jurisdiction of organization
and maintain qualification in each jurisdiction in which the failure to so
qualify could reasonably be expected to have a Material Adverse Effect. Each
Loan Party shall maintain, and shall cause each of its Subsidiaries to maintain,
in full force all licenses, approvals and agreements, the loss of which could
reasonably be expected to have a Material Adverse Effect. “Subsidiary” means,
with respect to a Loan Party, any entity the management of which is, directly or
indirectly controlled by, or of which an aggregate of more than 50% of the
outstanding voting capital stock (or other voting equity interest) is, at the
time, owned or controlled, directly or indirectly by, such Loan Party or one or
more Subsidiaries of such Loan Party, and, unless the context otherwise requires
each reference to a Subsidiary herein shall be a reference to a Subsidiary of
Borrower.

6.2 Notice to Agent and the Lenders. Loan Parties shall provide Agent and
Lenders with (a) notice of the occurrence of any Default or Event of Default,
promptly (but in any event within five (5) days) after the date on which any
officer of a Loan Party obtains Knowledge of the occurrence of any such event,
(b) notice (which shall include a copy or electronic link) of all filings and
reports any Loan Party is required to file with the Securities and Exchange
Commission (“SEC”) pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 and any other filings related to any Loan Parties’ purchase or sale
of securities, and copies of all notices or other written communication received
by any Loan Party from the SEC or any securities exchange or governmental
authority exercising a similar function, promptly, but in any event within five
(5) days after delivering or receiving such information to or from such persons
(provided that an electronic link to any such statement, report or notice filed
with the SEC shall be sufficient to constitute a copy of the same), (c) written
notice of any legal actions pending or threatened in writing against any Loan
Party or any Subsidiary that could reasonably be expected to result in damages
or costs to any Loan Party or any Subsidiary of $250,000 or more, promptly, but
in any event within five (5) days after receipt of notice thereof, including
without limitation any such legal actions alleging potential or actual
violations of any Public Health Law, (d) together with the delivery of each
Compliance Certificate, a list of any new applications or registrations that any
Loan Party has made or filed in respect of any Intellectual Property or a change
in status of any outstanding application or registration, (e) notice of any
material amendments to, and copies of all material statements, reports and
notices delivered to or by a Loan Party in connection with, any Material
Agreement, or notice of any Loan Party entering into any Material Contract or
any termination or breach thereof, promptly (but in any event within five
(5) days) after the execution or receipt thereof or the termination or breach
thereof, (f) any written notice that the FDA or comparable foreign or state
governmental authority is limiting, suspending or revoking any Registration,
promptly, but in any event within five (5) Business Days after receipt thereof,
(g) notice that any Loan Party has become subject to any administrative or
regulatory action by the FDA or comparable foreign or state governmental
authority, or received a warning letter, notice of violation letter, or Form
FDA-483 observations that any product of any Loan Party has been seized,
withdrawn, recalled, detained, or subject to a suspension of manufacturing, or
the commencement of any proceedings in the United States or any other
jurisdiction seeking the withdrawal, recall, suspension, import detention, or
seizure of any product are pending or threatened in writing against any Loan
Party, promptly (but in any event within five (5) days) after receipt thereof,
and (h) no later than thirty (30) days after the end of each fiscal quarter, a
certificate of the chief financial officer of Borrower setting forth in
reasonable detail any Margin Stock owned by any Loan Party as of the last day of
such fiscal quarter. The term “Public Heath Laws” means all applicable laws,
statutes, ordinances, rules and regulations relating to the procurement,
development, clinical and non-clinical evaluation, product approval or
clearance, manufacture, production, analysis, distribution, importation,
exportation, quality, sale, labeling, promotion, or post-market requirements of
any medical device (including, without limitation, any ingredient or component
of the foregoing products) subject to regulation under the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. et seq.) and comparable federal and state laws.

 

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6.3 Financial Statements. Borrower shall deliver to Agent and Lenders (x) within
forty-five (45) days of each month end, unaudited consolidated and, if
available, consolidating balance sheets, statements of operations and cash flow
statements, in a form acceptable to Agent and certified by Borrower’s president,
chief executive officer or chief financial officer, (y) within five (5) days
after such statements are required to be provided to the SEC, quarterly
unaudited consolidated and, if available, consolidating balance sheets,
statements of operations and cash flow statements and (z) within five (5) days
after such statements are required to be provided to the SEC, annual audited
consolidated and, if available, consolidating balance sheets, statements of
operations and cash flow statements, certified by a recognized firm of certified
public accountants. All audited financial statements delivered pursuant to this
Section 6.3 shall be accompanied by the report of an independent certified
public accounting firm acceptable to Agent which report shall (i) contain an
unqualified opinion, stating that such consolidated financial statements present
fairly in all material respects the financial position for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years and
(ii) not include any explanatory paragraph expressing substantial doubt as to
going concern status (other than any going concern statement based solely on the
amount of cash and Cash Equivalents held by the Loan Parties). All such
statements are to be prepared using GAAP (subject, in the case of unaudited
financial statements, to the absence of footnotes and normal year end audit
adjustments) and are to be in compliance with applicable SEC requirements. All
financial statements delivered pursuant to this Section 6.3 shall be accompanied
by a compliance certificate, signed by the chief financial officer of Borrower,
in the form attached hereto as Exhibit D (each, a “Compliance Certificate”), and
an analysis that includes, with respect to such monthly statements, a comparison
to budget for the respective fiscal period, and with respect to such quarterly
and annual financial statements, a comparison of performance for such fiscal
period to the corresponding period in the prior year. Borrower shall deliver to
Agent and Lenders (i) as soon as available and in any event not later than sixty
(60) days after the end of each fiscal year of Borrower, an annual operating
plan for Borrower, on a consolidated and, if available, consolidating basis,
approved by the Board of Directors of Borrower, for the current fiscal year, in
form and substance reasonably satisfactory to Agent (provided that the Borrower
shall provide the operating plan for fiscal year 2012 no later than April 10,
2012) and (ii) such budgets, sales projections, or other business, financial,
corporate affairs and other information as Agent or any Lender may reasonably
request from time to time.

6.4 Insurance. Each Loan Party, at its expense, shall maintain, and shall cause
each Subsidiary to maintain, insurance (including, without limitation,
comprehensive general liability, hazard, and business interruption insurance)
with respect to all of its properties and businesses (including, the
Collateral), in such amounts and covering such risks as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and in any event with deductible amounts, insurers and
policies that shall be reasonably acceptable to Agent. Borrower shall deliver to
Agent certificates of insurance evidencing such coverage, together with
endorsements to such policies naming Agent as a lender loss payee or additional
insured, as appropriate, in form and substance satisfactory to Agent. Each
policy shall provide that coverage may not be canceled or altered by the insurer
except upon thirty (30) days prior written notice to Agent and shall not be
subject to co-insurance. Each Loan Party appoints Agent as its attorney-in-fact
to make, settle and adjust all claims under and decisions with respect to such
Loan Party’s policies of insurance, and to receive payment of and execute or
endorse all documents, checks or drafts in connection with insurance payments.
Agent shall not act as such Loan Party’s attorney-in-fact unless an Event of
Default has occurred and is continuing. The appointment of Agent as any Loan
Party’s attorney-in-fact is a power coupled with an interest and is irrevocable
until the Termination Date. Proceeds of insurance shall be applied, at the
option of Agent, to repair or replace the Collateral or to reduce any of the
Obligations. Notwithstanding the foregoing, provided no Default or Event of
Default has occurred and is continuing and the Borrower delivers to the Agent a
certificate, signed by the Borrower’s chief financial officer, that it intends
within one hundred twenty (120) days of receipt thereof (the “Reinvestment
Period”) to use all or a portion of such proceeds to purchase assets used or
useful in the ordinary course of business, the Borrower may use all or such

 

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portion of the proceeds in the manner set forth in such certificate; provided
that (i) the aggregate amount of such insurance proceeds so used and not subject
to prepayment under this Section 6.4 shall not exceed $1,000,000 in the
aggregate during the term of this Agreement and (ii) any such proceeds not so
used or committed to such use pursuant to a binding agreement within the
Reinvestment Period shall, on the first Business Day immediately following such
period, be applied in accordance with the immediately preceding sentence.

6.5 Taxes. Each Loan Party shall, and shall cause each Subsidiary to, timely
file all tax reports and pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it, or its income or profits or upon
its properties or any part thereof, before the same shall be in default and
before the date on which penalties attach thereto, except to the extent such
taxes, assessments and governmental charges or levies are the subject of a
Permitted Contest.

6.6 Agreement with Landlord/Bailee. Unless otherwise agreed to by Agent in
writing, each Loan Party shall obtain and maintain such Access Agreement(s) with
respect to any real property on which (a) a Loan Party’s principal place of
business, (b) a Loan Party’s books or records or (c) Collateral is located
(other than Collateral with an value of less than $50,000 at any one location or
$100,000 in the aggregate at all locations) as Agent may require. If Agent
agrees in writing that a Loan Party shall not be required to obtain and maintain
an Access Agreement with respect to any real property described in the
immediately preceding sentence, then within ten (10) Business Days after the due
date for any rental payments with respect to such real property, the Borrower
shall deliver to Agent (1) evidence in form reasonably satisfactory to Agent
that such rental payment was made and (2) a certification that no default or
event of default exists under any such lease.

6.7 Protection of Intellectual Property. Each Loan Party shall take all
necessary actions to: (a) protect, defend and maintain the validity and
enforceability of its Intellectual Property to the extent material to the
conduct of its business, (b) promptly advise Agent in writing of material
infringements of its Intellectual Property of which any Executive Officer has
knowledge and, should the Intellectual Property be material to such Loan Party’s
business, take all commercially reasonable actions to enforce its rights in its
Intellectual Property against infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution,
(c) not allow any Intellectual Property material to such Loan Party’s business
to be abandoned, forfeited or dedicated to the public without Agent’s written
consent (which decision regarding consent or non-consent by Agent shall not be
unreasonably delayed after such Loan Party delivers written notice to Agent of
such proposed abandonment or forfeiture), and (d) notify Agent promptly, but in
any event within five (5) days, if it knows or has reason to know that any
application or registration relating to any patent, trademark or copyright (now
or hereafter existing) material to its business is reasonably likely to become
abandoned or dedicated, or if it receives written notice of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court) regarding
such Loan Party’s ownership of any Intellectual Property material to its
business, its right to register the same, or to keep and maintain the same. Each
Loan Party shall comply with and preserve in all material respects each of its
Licenses and observe and perform all of the conditions and obligations to be
observed and performed by it thereunder, except (i) solely in the case of
software Licenses, to the extent such non-compliance could not reasonably be
expected to have a Material Adverse Effect or (ii) with respect to the
preservation of any such License, where such preservation is no longer useful in
the business. None of Agent or any Lender shall have any obligation or liability
under any such License by reason of or arising out of this Agreement, the
granting of a Lien, if any, in such License or the receipt by Agent (on behalf
of itself and Lenders) of any payment relating to any such License. None of
Agent or any Lender shall be required or obligated in any manner to perform or
fulfill any of the obligations of any Loan Party under or pursuant to any
License, or to make any payment, or to make any inquiry as to the nature or the
sufficiency of any

 

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payment received by it or the sufficiency of any performance by any party under
any License, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts which may have been
assigned to it or which it may be entitled at any time or times. The term
“Executive Officer” means the chief executive officer, president, chief
financial officer, executive vice president, senior vice president and any other
officer with substantially the same responsibility as any of the above.

6.8 Special Collateral Covenants.

(a) Each Loan Party shall remain in possession of its respective Collateral
solely at (1) the location(s) specified on the Perfection Certificate and
(2) other locations where portable goods of a de minimis value (such as laptops,
phones and other similar equipment) may be located in the ordinary course of
business; except that Agent, on behalf of itself and Lenders, shall have the
right to possess (i) any chattel paper or instrument that constitutes a part of
the Collateral, (ii) any other Collateral in which Agent’s security interest (on
behalf of itself and Lenders) may be perfected only by possession and (iii) any
Collateral after the occurrence of an Event of Default in accordance with this
Agreement and the other Debt Documents.

(b) Each Loan Party shall (i) use the Collateral only in its trade or business,
(ii) maintain all of the Collateral in good operating order and repair, normal
wear and tear excepted, and (iii) use and maintain the Collateral only in
material compliance with manufacturers’ recommendations and all applicable laws.

(c) Agent and Lenders do not authorize and each Loan Party agrees it shall not
(i) part with possession of any of the Collateral (except to Agent (on behalf of
itself and Lenders), for maintenance and repair, or for a Permitted
Disposition), or (ii) remove any of the Collateral from, or maintain any of the
Collateral outside of, the continental United States.

(d) Each Loan Party shall pay promptly when due all taxes, license fees,
assessments and public and private charges levied or assessed on any of the
Collateral, on its use, or on this Agreement or any of the other Debt Documents.
At its option, Agent may discharge taxes, Liens, security interests or other
encumbrances at any time levied or placed on the Collateral and, if the
applicable Loan Party fails to do so, may pay for the maintenance, insurance and
preservation of the Collateral and effect compliance with the terms of this
Agreement or any of the other Debt Documents. Each Loan Party agrees to
reimburse Agent, on demand, all costs and expenses incurred by Agent in
connection with such payment or performance and agrees that such reimbursement
obligation shall constitute Obligations.

(e) Each Loan Party shall, at all times, keep accurate and complete records of
the Collateral.

(f) Each Loan Party agrees and acknowledges that any third person who may at any
time possess all or any portion of the Collateral shall be deemed to hold, and
shall hold, the Collateral as the agent of, and as pledge holder for, Agent (on
behalf of itself and Lenders). Agent may at any time give notice to any third
person described in the preceding sentence that such third person is holding the
Collateral as the agent of, and as pledge holder for, Agent (on behalf of itself
and Lenders).

(g) Each Loan Party shall, during normal business hours, and in the absence of a
Default or an Event of Default, upon one (1) Business Day’s prior notice, as
frequently as Agent reasonably determines to be appropriate: (i) provide Agent
(who may be accompanied by

 

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representatives of any Lender at such Lender’s sole expense except as otherwise
agreed in Section 10.5) and any of its officers, employees and agents access to
the properties, facilities, advisors and employees (including officers) of each
Loan Party and to the Collateral, (ii) permit Agent (who may be accompanied by
representatives of any Lender at such Lender’s sole expense except as otherwise
agreed in Section 10.5), and any of its officers, employees and agents, to
inspect, audit and make extracts from any Loan Party’s books and records (or at
the request of Agent, deliver true and correct copies of such books and records
to Agent); provided, that, so long as no Default or Event of Default has
occurred and is continuing, the Loan Parties shall only be required to reimburse
Agent and any applicable Lender for costs and expenses under Section 10.5 with
respect to two (2) such inspections and audits under this Section 6.8(g) during
any calendar year, and (iii) permit Agent (who may be accompanied by
representatives of any Lender at such Lender’s sole expense except as otherwise
agreed in Section 10.5), and its officers, employees and agents, to inspect,
audit, appraise, review, evaluate and make test verifications and counts of the
Collateral of any Loan Party. Upon Agent’s request, each Loan Party will
promptly notify Agent in writing of the location of any Collateral. If a Default
or Event of Default has occurred and is continuing or if access is necessary to
preserve or protect the Collateral as determined by Agent, each such Loan Party
shall provide such access to Agent and to each Lender at all times and without
advance notice. Each Loan Party shall make available to Agent and its auditors,
as quickly as is possible under the circumstances, originals or copies of all
books and records that Agent may reasonably request.

6.9 Further Assurances. Each Loan Party shall, upon request of Agent, furnish to
Agent such further information, execute and deliver to Agent such documents and
instruments (including, without limitation, UCC financing statements) and shall
do such other acts and things as Agent may at any time reasonably request
relating to the perfection or protection of the security interest created by
this Agreement or for the purpose of carrying out the intent of this Agreement
and the other Debt Documents.

6.10 Compliance with Law. Each Loan Party shall comply with all applicable
statutes, rules, regulations, standards and orders administered or issued by any
governmental authority having jurisdiction over it, its business or its
products, except where the failure to comply would not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect. All
products developed, manufactured, tested, distributed or marketed by or on
behalf of any Loan Party that are subject to the jurisdiction of the FDA or any
comparable foreign or state governmental authority shall be developed, tested,
manufactured, distributed and marketed in compliance with the requirements of
the FDA and marketed in compliance with the Public Health Laws.

6.11 Additional Subsidiaries. At the time of or prior to the formation of any
Subsidiary of Borrower, Borrower shall cause to be executed and delivered to
Agent the following, each case in form and substance satisfactory to Agent:
(i) a guaranty agreement pursuant to which such Subsidiary shall guarantee the
payment and performance of all of the Obligations (and which guaranty agreement
shall be a “Debt Document” for the purposes of this Agreement); (ii) a joinder
to this Agreement pursuant to which such Subsidiary shall grant to Agent, for
the benefit of itself and Lenders, a first priority (subject to Permitted Liens
that would be prior to the security interest granted hereunder as a matter of
law, but not solely as a result of a prior UCC financing statement filing) and
perfected security interest in all assets of such Subsidiary of the same types
constituting “Collateral” under Section 3.1 hereof to secure the Obligations,
(iii) an amendment to the Pledge Agreement delivered on the Closing Date and
pursuant to which all of the capital stock of such new Subsidiary shall be
pledged to Agent, for the benefit of the Lenders, on a first priority and
perfected basis to secure the Obligations, and (iv) such other related documents
(including lien searches, certified corporate documents, good standing
certificates, closing certificates, legal opinions and other similar documents)
as Agent may request. No Subsidiary formed in accordance with this Section 6.11
may (x) be a Foreign Subsidiary or (y) have any assets or liabilities

 

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prior to the delivery of the documents required in immediately preceding
sentence. This Section 6.11 shall not operate as a consent to any formation of a
Subsidiary that is not expressly permitted under this Agreement.

7. NEGATIVE COVENANTS

7.1 Liens. No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
Collateral or Intellectual Property (other than Permitted Liens), or grant any
negative pledges on any Collateral or Intellectual Property.

7.2 Indebtedness. No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, directly or indirectly create, incur, assume, permit to exist,
guarantee or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness (as hereinafter defined), except for (a) the
Obligations, (b) Indebtedness existing on the date hereof and set forth on
Schedule B to this Agreement, (c) Indebtedness consisting of capitalized lease
obligations and purchase money Indebtedness, in each case incurred by Borrower
or any of its Subsidiaries to finance the acquisition, repair, improvement or
construction of fixed or capital assets of such person, provided that (i) the
aggregate outstanding principal amount of all such Indebtedness does not exceed
$500,000 at any time and (ii) the principal amount of such Indebtedness does not
exceed the lower of the cost or fair market value (plus taxes, shipping and
installation expenses) of the property so acquired or built or of such repairs
or improvements financed with such Indebtedness (each measured at the time of
such acquisition, repair, improvement or construction is made), (d) obligations
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement entered
into by a Loan Party in the ordinary course of business, consistent with
industry practice and designed to alter the risks arising from fluctuations in
currency values or interest rates, but not for speculative purposes and where
the principal amount subject to such agreement or arrangement does not exceed
$500,000, (e) guaranties by one or more Loan Parties of the Indebtedness of
another Loan Party, so long as such Indebtedness is otherwise permitted pursuant
to this Section 7.2, (f) Indebtedness owing by any Loan Party to another Loan
Party, provided that (i) each Loan Party shall have executed and delivered to
each other Loan Party a demand note in the form of Exhibit G hereto (each, an
“Intercompany Note”) to evidence such intercompany loans or advances owing at
any time by each Loan Party to the other Loan Parties, which Intercompany Note
shall be pledged and delivered to Agent pursuant to the Pledge Agreement as
additional Collateral for the Obligations, (ii) any and all Indebtedness of any
Loan Party to another Loan Party shall be subordinated to the Obligations
pursuant to the subordination terms set forth in each Intercompany Note, and
(iii) no Default or Event of Default would occur either before or after giving
effect to any such Indebtedness, (g) reimbursement obligations in connection
with letters of credit in an aggregate stated amount not to exceed $100,000,
inclusive of reimbursement obligations with respect to the Letter of Credit No.
SVBF005832, dated as of June 30, 2011 issued by Silicon Valley Bank in favor of
610 Lincoln LLC in the stated amount of $36,667.00 and (h) obligations owing to
trade creditors incurred in the ordinary course of business and past due by more
than 90 days in an amount not to exceed $100,000 in the aggregate.
Notwithstanding the foregoing, BG Netherlands shall not be permitted to incur
any Indebtedness. The term “Indebtedness” means, with respect to any person, at
any date, without duplication, (i) all obligations of such person for borrowed
money, (ii) all obligations of such person evidenced by bonds, debentures, notes
or other similar instruments, or upon which interest payments are customarily
made, (iii) all obligations of such person to pay the deferred purchase price of
property or services, but excluding obligations to trade creditors incurred in
the ordinary course of business and not past due by more than ninety (90) days,
(iv) all capital lease obligations of such person, (v) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product, (vi) all
obligations of such person to purchase securities (or other property) which
arise out of or in connection with the issuance or sale of the same or
substantially similar securities (or property), (vii) all contingent or

 

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non-contingent obligations of such person to reimburse any bank or other person
in respect of amounts paid under a letter of credit or similar instrument,
(viii) all equity securities of such person subject to repurchase or redemption
otherwise than at the sole option of such person, (ix) all “earnouts” and
similar payment obligations of such person, (x) all indebtedness secured by a
Lien on any asset of such person, whether or not such indebtedness is otherwise
an obligation of such person, (xi) all obligations of such person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter the
risks of that person arising from fluctuations in currency values or interest
rates, in each case whether contingent or matured, and (xii) all obligations or
liabilities of others guaranteed by such person.

7.3 Dispositions. No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, convey, sell, rent, lease, sublease, mortgage, license,
transfer or otherwise dispose of (collectively, “Transfer”) any of the
Collateral or any Intellectual Property, except for the following (collectively,
“Permitted Dispositions”): (a) sales of inventory in the ordinary course of
business, (b) dispositions by a Loan Party or any of its Subsidiaries of
obsolete or worn-out equipment and other tangible assets that are no longer used
or useful in the business of such Loan Party or Subsidiary for cash and fair
value so long as (i) no Default or Event of Default exists at the time of such
disposition or would be caused after giving effect thereto and (ii) the fair
market value of all such assets disposed of does not exceed $250,000 in any
calendar year, (c) non-exclusive licenses and licenses that could not result in
a legal transfer of title of the licensed property but that may be exclusive in
respects other than territory and that may be exclusive as to territory only as
to discreet geographical areas outside of the United States, in each case for
the use of any Loan Party’s Intellectual Property in the ordinary course of
business, so long as, with respect to each such license (i) no Default or Event
of Default has occurred and is continuing at the time of such Transfer, (ii) the
license constitutes an arms-length transaction in the ordinary course of
business (and in the case of an exclusive license, made in connection with a
bona fide corporate collaboration in the ordinary course of business and
approved by the board of directors of the applicable Loan Party) and the terms
of which, on their face, do not provide for a sale or assignment of any
Intellectual Property and do not restrict such Loan Party’s ability to pledge,
grant a security interest in or Lien on, or assign or otherwise Transfer any
Intellectual Property, (iii) the applicable Loan Party delivers at least fifteen
(15) days prior written notice and a brief summary of the terms of the license
to Agent, (iv) the applicable Loan Party delivers to Agent copies of the final
executed licensing documents in connection with the license promptly upon
consummation of the license and (v) all royalties, milestone payments or other
proceeds paid or payable to or for the benefit of a Loan Party arising from the
licensing agreement are paid to a deposit account that is governed by an Account
Control Agreement and (d) exclusive licenses of Intellectual Property with the
prior written consent of the Required Lenders.

7.4 Change in Name, Location or Executive Office; Change in Business; Change in
Fiscal Year. No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, (a) change its legal name, its jurisdiction of organization,
its organizational structure or type or any organizational identification number
(if any) assigned by its jurisdiction of organization, (b) relocate its chief
executive office without thirty (30) days prior written notification to Agent,
(c) engage in any business other than or reasonably related or incidental to the
businesses currently engaged in by such Loan Party or Subsidiary, (d) cease to
conduct business substantially in the manner conducted by such Loan Party or
Subsidiary as of the date of this Agreement or (e) without the prior written
consent of the Agent (which shall not be unreasonably withheld), change its
fiscal year end.

7.5 Mergers or Acquisitions. No Loan Party shall merge or consolidate, and no
Loan Party shall permit any of its Subsidiaries to merge or consolidate, with or
into any other person or entity (other than mergers of a Subsidiary into
Borrower in which Borrower is the surviving entity) or acquire, or permit any of
its Subsidiaries to acquire, all or substantially all of the capital stock or
property of another person or entity or all or substantially all of the assets
constituting any line of business, division, branch, operating division or other
unit operation of another person or entity.

 

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7.6 Restricted Payments. No Loan Party shall, and no Loan Party shall permit any
of its Subsidiaries to, (a) declare or pay any dividends or make any other
distribution or payment on account of or redeem, retire, defease or purchase any
capital stock (other than (i) the payment of dividends to Borrower or the
payment of dividends by a Subsidiary of any Loan Party to such Loan Party,
(ii) the payment of dividends or distributions payable solely in Borrower’s
capital stock, (iii) the issuance of capital stock upon the exercise or
conversion of warrants or options, or (iv) other than during the occurrence and
continuance of a Default or Event of Default, the repurchase of Borrower’s
capital stock from employees, former employees, directors or former directors or
their permitted transferees or estates upon their death, termination of
employment or retirement in an amount not to exceed $100,000 annually),
(b) purchase, redeem, defease or prepay any principal of, premium, if any,
interest or other amount payable in respect of any Indebtedness (other than with
respect to the Obligations as described in Section 2.3) prior to its scheduled
maturity, (c) make any payment in respect of (i) management fees (other than
customary director fees) or (ii) consulting fees (or similar fees) to (A) any
holder of two percent (2%) or more of the common stock of Borrower or securities
exercisable or convertible into common stock of Borrower or other Affiliate of a
Loan Party, or (B) to any other equityholder on terms more favorable than would
be obtained in an arm’s length transaction, (d) be a party to or bound by an
agreement that restricts a Subsidiary from paying dividends or otherwise
distributing property to Borrower.

7.7 Investments. No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, directly or indirectly (a) acquire or own, or make any loan,
advance or capital contribution (an “Investment”) in or to any person or entity,
(b) acquire or create any Subsidiary (other than the creation of Subsidiaries to
engage in businesses reasonably related or incidental to the businesses engaged
in by the Borrower as of the Closing Date, so long as Borrower complies with
Section 6.11 in connection therewith), or (c) engage in any joint venture or
partnership with any other person or entity, other than: (i) Investments
existing on the date hereof and set forth on Schedule B to this Agreement,
(ii) Investments in cash and Cash Equivalents (as defined below), (iii) loans or
advances to employees of Borrower or any other Loan Parties to finance travel,
entertainment and relocation expenses and other ordinary business purposes in
the ordinary course of business as presently conducted, provided that the
aggregate outstanding principal amount of all loans and advances permitted
pursuant to this clause (iii) shall not exceed $50,000 at any time,
(iv) intercompany loans among Loan Parties to the extent permitted and subject
to the terms and conditions of Section 7.2(f), (v) non-recourse equity capital
contributions made by Borrower to any of its Subsidiaries that constitutes a
Loan Party and (vi) investments in joint ventures or strategic alliances in the
ordinary course of business consisting of the non-exclusive licensing of
technology, the development of technology or the providing of technical support,
but in no event consisting of Investments of cash or tangible assets
(collectively, the “Permitted Investments”). The term “Cash Equivalents” means
(v) any readily-marketable securities (i) issued by, or directly,
unconditionally and fully guaranteed or insured by the United States federal
government or (ii) issued by any agency of the United States federal government
the obligations of which are fully backed by the full faith and credit of the
United States federal government, (w) any readily-marketable direct obligations
issued by any other agency of the United States federal government, any state of
the United States or any political subdivision of any such state or any public
instrumentality thereof, in each case having a rating of at least “A-1” from S&P
or at least “P-1” from Moody’s, (x) any commercial paper rated at least “A-1” by
S&P or “P-1” by Moody’s and issued by any entity organized under the laws of any
state of the United States, (y) any U.S. dollar-denominated time deposit,
insured certificate of deposit, overnight bank deposit or bankers’ acceptance
issued or accepted by (i) Agent or (ii) any commercial bank that is
(A) organized under the laws of the United States, any state thereof or the
District of Columbia, (B) “adequately capitalized” (as defined in the
regulations of its primary federal banking regulators) and (C) has Tier 1

 

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capital (as defined in such regulations) in excess of $250,000,000 or (z) shares
of any United States money market fund that (i) has substantially all of its
assets invested continuously in the types of investments referred to in clause
(v), (w), (x) or (y) above with maturities as set forth in the proviso below,
(ii) has net assets in excess of $500,000,000 and (iii) has obtained from either
S&P or Moody’s the highest rating obtainable for money market funds in the
United States; provided, however, that the maturities of all obligations
specified in any of clauses (v), (w), (x) and (y) above shall not exceed 365
days. For the avoidance of doubt, “Cash Equivalents” does not include (and each
Loan Party is prohibited from purchasing or purchasing participations in) any
auction rate securities or other corporate or municipal bonds with a long-term
nominal maturity for which the interest rate is reset through a Dutch auction.

7.8 Transactions with Affiliates. No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, directly or indirectly enter into or permit
to exist any transaction with any Affiliate (as defined below) of a Loan Party
or any Subsidiary of a Loan Party except for Permitted Investments described in
clauses (iv) and (v) of such definition or other transactions that are made upon
fair and reasonable terms that are no more favorable to such Affiliate than
would be obtained in an arm’s length transaction. As used herein, “Affiliate”
means, with respect to a Loan Party or any Subsidiary of a Loan Party, (a) each
person that, directly or indirectly, owns or controls 5.0% or more of the stock
or membership interests having ordinary voting power in the election of
directors or managers of such Loan Party or such Subsidiary, and (b) each person
that controls, is controlled by or is under common control with such Loan Party
or such Subsidiary; provided, that no Closing Date Lender or any affiliates of
such Closing Date Lender shall be deemed to be an “Affiliate”.

7.9 Compliance. No Loan Party shall, and no Loan Party shall permit any of its
Subsidiaries to, (a) fail to comply with the laws and regulations described in
clauses (b) or (c) of Section 5.8 herein, (b) use any portion of the Term Loans
to purchase, become engaged in the business of purchasing or selling, or extend
credit for the purpose of purchasing or carrying Margin Stock or (c) fail to
comply in any material respect with, or violate in any material respect any
other law or regulation (including without limitation any Public Health Law)
applicable to it.

7.10 Deposit Accounts and Securities Accounts.

(a) The Loan Parties will, so long as Comerica Bank is a Lender, maintain
depository, operating and securities accounts with Comerica Bank representing at
all times at least eighty-five percent (85%) of the U.S. dollar value of all the
Loan Parties’ and their respective subsidiaries’ account balances in all
financial institutions. Notwithstanding the foregoing, (i) from the Closing Date
through the 30th day following the Closing Date, Borrower may maintain the bank
accounts listed on Schedule B hereto (the “Existing Accounts”), provided that
all funds in and securities credited to such accounts are transferred to a
deposit or securities account at Comerica Bank subject to an Account Control
Agreement (as defined below) within two (2) Business Days of the respective
accounts at Comerica Bank being opened (and with respect to any securities
account, such account being subject to an Account Control Agreement) and
(ii) Borrower may maintain the deposit accounts excluded from “Collateral” in
Section 3.1(d) to the extent that the letter of credit obligations secured by
such accounts remain outstanding.

(b) No Loan Party shall directly or indirectly maintain or establish any deposit
account or securities account unless Agent, the applicable Loan Party or Loan
Parties and the depository institution or securities intermediary at which the
account is or will be maintained enter into a deposit account control agreement
or securities account control agreement, as the case may be, in form and
substance satisfactory to Agent (an “Account Control Agreement”) (which
agreement shall provide, among other things, that (i) such depository
institution or securities

 

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intermediary has no rights of setoff or recoupment or any other claim against
such deposit or securities account (except as agreed to by Agent), other than
for payment of its service fees and other charges directly related to the
administration of such account and for returned checks or other items of
payment, and (ii) such depository institution or securities intermediary shall
comply with all instructions of Agent without further consent of such Loan Party
or Loan Parties, as applicable, including, without limitation, an instruction by
Agent to comply exclusively with instructions of Agent with respect to such
account (such notice, a “Notice of Exclusive Control”)), prior to or
concurrently with the establishment of such deposit account or securities
account (or in the case of any such deposit account or securities account
maintained as of the date hereof, on or before the Closing Date); provided, that
an Account Control Agreement shall not be required for (x) any deposit account
exclusively used for payroll, payroll taxes, or other employee wage and benefit
payments to or for the benefit of the Loan Parties’ employees, provided that the
aggregate balance in such accounts does not exceed the amount necessary to make
the immediately succeeding payroll, payroll tax or benefit payment (or such
minimum amount as may be required by any requirement of law with respect to such
accounts), as applicable, (y) deposit accounts on which Liens are permitted
under Section 5.7(k) and (z)(i) from the Closing Date through the 30th day
following the Closing Date, that certain deposit account numbered 3300211799 at
Silicon Valley Bank (the “SVB Operating Account”), so long as all funds
deposited in such account are transferred to an account subject to an Account
Control Agreement within two (2) Business Days of their deposit therein and
(ii) the Existing Accounts (including the SVB Operating Account). Agent may only
give a Notice of Exclusive Control with respect to any deposit account or
securities account at any time at which an Event of Default has occurred and is
continuing. At the request of Agent, Borrower shall create or designate a
dedicated deposit account or accounts to be used exclusively for payroll or
withholding tax purposes.

7.11 Amendments to Other Agreements. No Loan Party shall amend, modify or waive
(a) any provision of any Material Agreement unless the net effect of such
amendment, modification or waiver is not materially adverse to Agent, Lenders
and/or any Loan Party, or (b) any of such Loan Party’s organizational documents
unless the net effect of such amendment, modification or waiver is not adverse
to Agent or Lenders and/or materially adverse to any Loan Party.

7.12 BG Netherlands. BG Netherlands shall not at any time have more than
$100,000 (or the foreign currency equivalent thereof) in assets or $50,000 (or
the foreign currency equivalent thereof) in liabilities.

7.13 Post Closing Covenants. No later than thirty (30) days after the Closing
Date (or such later date as Agent shall approve in writing), Borrower shall
deliver Account Control Agreements for each of its securities accounts at
Comerica Bank.

8. DEFAULT AND REMEDIES.

8.1 Events of Default. Loan Parties shall be in default under this Agreement and
each of the other Debt Documents if (each of the following, an “Event of
Default”):

(a) Borrower shall fail to pay (i) any principal when due, or (ii) any interest,
fees or other Obligations (other than as specified in clause (i)) within a
period of three (3) Business Days after the due date thereof (other than on the
Term Loan Maturity Date);

(b) any Loan Party breaches any of its obligations under Section 6.1 (solely as
it relates to maintaining its existence), Section 6.2, Section 6.3, Section 6.4,
or Article 7;

 

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(c) any Loan Party breaches any of its other obligations under any of the Debt
Documents and fails to cure such breach within thirty (30) days after the
earlier of (i) the date on which an officer of such Loan Party becomes aware, or
through the exercise of reasonable diligence should have become aware, of such
failure and (ii) the date on which notice shall have been given to Borrower from
Agent;

(d) any warranty, representation or statement made or deemed made by or on
behalf of any Loan Party in any of the Debt Documents or otherwise in connection
with any of the Obligations shall be false or misleading in any material respect
at the time such warranty, representation or statement was made or deemed to be
made;

(e) Collateral with an aggregate value equal to or greater than $100,000 is
subjected to attachment, execution, levy, seizure or confiscation in any legal
proceeding or otherwise, or if any legal or administrative proceeding is
commenced against any Loan Party or Collateral with an aggregate value equal to
or greater than $100,000, which in the good faith judgment of Agent subjects any
of the Collateral to a material risk of attachment, execution, levy, seizure or
confiscation and no bond is posted or protective order obtained to negate such
risk;

(f) one or more judgments, orders or decrees shall be rendered against any Loan
Party or any Subsidiary of a Loan Party that exceeds by more than $100,000 any
insurance coverage applicable thereto (to the extent the relevant insurer has
been notified of such claim and has not denied coverage therefor) or one or more
non-monetary judgments, orders or decrees shall be rendered against any Loan
Party or any Subsidiary of a Loan Party that could reasonably be expected to
result in a Material Adverse Effect, and in either case (i) enforcement
proceedings shall have been commenced by any creditor upon any such judgment,
order or decree or (ii) such judgment, order or decree shall not have been
satisfied, vacated or discharged for a period of ten (10) consecutive days and
there shall not be in effect (by reason of a pending appeal or otherwise) any
stay of enforcement thereof;

(g) (i) any Loan Party or any Subsidiary of a Loan Party shall generally not pay
its debts as such debts become due, shall admit in writing its inability to pay
its debts generally, shall make a general assignment for the benefit of
creditors, or shall cease doing business as a going concern, (ii) any proceeding
shall be instituted by or against any Loan Party or any Subsidiary of a Loan
Party seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief,
composition of it or its debts or any similar order, in each case under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors or
seeking the entry of an order for relief or the appointment of a custodian,
receiver, trustee, conservator, liquidating agent, liquidator, other similar
official or other official with similar powers, in each case for it or for any
substantial part of its property and, in the case of any such proceedings
instituted against (but not by or with the consent of) such Loan Party or such
Subsidiary, either such proceedings shall remain undismissed or unstayed for a
period of forty-five (45) days or more or any action sought in such proceedings
shall occur or (iii) any Loan Party or any Subsidiary of a Loan Party shall take
any corporate or similar action or any other action to authorize any action
described in clause (i) or (ii) above;

(h) a Material Adverse Effect has occurred;

(i) (i) any provision of any Debt Document shall fail to be valid and binding
on, or enforceable against, a Loan Party that is a party thereto, or (ii) any
Debt Document purporting to grant a security interest to secure any Obligation
shall fail to create a valid and enforceable security interest on any Collateral
purported to be covered thereby or such security interest shall

 

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fail or cease to be a perfected Lien with the priority required in the relevant
Debt Document, or any Loan Party shall state in writing that any of the events
described in clause (i) or (ii) above shall have occurred;

(j) (i) any Loan Party or any Subsidiary of a Loan Party defaults under any
Material Agreement (after any applicable grace period contained therein) where
the damages against or other losses incurred by such Loan Party could reasonably
be expected to exceed $250,000 or such default gives any other party to such
Material Agreement the right to terminate the Material Agreement, (ii) (A) any
Loan Party or any Subsidiary of a Loan Party fails to make (after any applicable
grace period) any payment when due (whether due because of scheduled maturity,
required prepayment provisions, acceleration, demand or otherwise) on any
Indebtedness (other than the Obligations) of such Loan Party or such Subsidiary
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $250,000 (“Material Indebtedness”),
(B) any other event shall occur or condition shall exist under any contractual
obligation relating to any such Material Indebtedness, if the effect of such
event or condition is to accelerate, or to permit the acceleration of (without
regard to any subordination terms with respect thereto), the maturity of such
Material Indebtedness or (C) any such Material Indebtedness shall become or be
declared to be due and payable, or be required to be prepaid, redeemed, defeased
or repurchased (other than by a regularly scheduled required prepayment), prior
to the stated maturity thereof, or (iii) any Loan Party defaults (beyond any
applicable grace period) under any obligation for payments due or otherwise
under any lease agreement that meets the criteria for the requirement of an
Access Agreement under Section 6.6 and, as a result thereof, the landlord
thereunder has the right to terminate such lease agreement;

(k) (i) any of the chief executive officer or the chief financial officer of
Borrower as of the date hereof shall cease to be involved in the day to day
operations or management of the business of Borrower and an appropriately
qualified (in accordance with industry standards) successor of such officer is
not appointed by the board of directors of Borrower on an interim or permanent
basis (or, with respect to the chief financial officer, the duties of such chief
financial officer are assumed by a qualified member of the finance department of
such Loan Party) within ninety (90) days of such cessation of involvement, and
such successor is in compliance with OFAC, money-laundering, anti-terrorism,
SEC, drug/device laws and regulations, and other similar regulations (in each
case, to the extent applicable to a natural Person), (ii) investment funds
managed directly or indirectly by, or otherwise affiliated with, Flagship
Ventures Management, Inc. (collectively, the “Permitted Holders”) shall cease to
have the right to appoint at least the same percentage of members of the board
of directors of Borrower as such Permitted Holders had on the Closing Date;
(iii) the acquisition, directly or indirectly, by any person or group (as such
term is used in Section 13(d)(3) of the Securities Exchange Act of 1934), other
than the Permitted Holders, of more than thirty-five percent (35%) of the voting
power of the voting stock of Borrower by way of merger or consolidation or
otherwise, (iv) during any period of twelve consecutive calendar months,
individuals who at the beginning of such period constituted the board of
directors of Borrower (together with any new directors whose election by the
board of directors of Borrower or whose nomination for election by the
stockholders of Borrower was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office or (v) except as expressly permitted
herein, Borrower ceases to own and control, directly or indirectly, all of the
economic and voting rights associated with the outstanding voting capital stock
(or other voting equity interest) of each of its Subsidiaries;

 

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(l) Any event beyond the control of a Loan Party occurs, whether or not insured
or insurable, as a result of which revenue-producing activities cease or are
curtailed by more than 33% at facilities of any Loan Party generating a material
percentage of such Loan Party’s consolidated revenues for the fiscal year
preceding such event and such cessation or curtailment continues for more than
one hundred twenty (120) days; or

(m) (i) Any recall, withdrawal, or discontinuance of marketing any of a Loan
Party’s products occurs; (ii) any Loan Party receives a warning letter from the
FDA that could reasonably be expected to have a Material Adverse Effect; (iii) a
product recall by a Loan Party that could reasonably be expected to result in
liability and expense to the Loan Parties of $100,000 or more occurs; or
(iv) any Loan Party enters into a settlement agreement with the FDA or any other
governmental authority that could reasonably be expected to have a Material
Adverse Effect.

8.2 Lender Remedies. Upon the occurrence of any Event of Default, at the written
request of the Requisite Lenders, Agent shall (1) terminate the Commitments with
respect to further Term Loans and (2) declare any or all of the Obligations to
be immediately due and payable, without demand or notice to any Loan Party and
the accelerated Obligations shall bear interest at the Default Rate pursuant to
Section 2.5, provided that, upon the occurrence of any Event of Default
specified in Section 8.1(g) above, the Obligations shall be automatically
accelerated. After the occurrence and during the continuance of an Event of
Default, Agent shall have (on behalf of itself and Lenders) all of the rights
and remedies of a secured party under the UCC, and under any other applicable
law. Without limiting the foregoing, (a) at the written request of the Requisite
Lenders, the Agent shall, or (b) upon the termination of the Commitments or the
acceleration of the Obligations pursuant to this Section 8.2, or upon receipt of
written request of the Requisite Lenders to exercise remedies generally, the
Agent may, (w) notify any account debtor of any Loan Party or any obligor on any
instrument which constitutes part of the Collateral to make payments to Agent
(for the benefit of itself and Lenders), (x) with or without legal process,
enter any premises where the Collateral may be and take possession of and remove
the Collateral from the premises or store it on the premises, (y) sell the
Collateral at public or private sale, in whole or in part, and have the right to
bid and purchase at such sale, or (z) lease or otherwise dispose of all or part
of the Collateral, applying proceeds from such disposition to the Obligations in
accordance with Section 8.3. If requested by Agent, Loan Parties shall promptly
assemble the Collateral and make it available to Agent at a place to be
designated by Agent. Agent may also render any or all of the Collateral unusable
at a Loan Party’s premises and may dispose of such Collateral on such premises
without liability for rent or costs. Any notice that Agent is required to give
to a Loan Party under the UCC of the time and place of any public sale or the
time after which any private sale or other intended disposition of the
Collateral is to be made shall be deemed to constitute reasonable notice if such
notice is given in accordance with this Agreement at least ten (10) days prior
to such action. Effective only upon the occurrence and during the continuance of
an Event of Default, each Loan Party hereby irrevocably appoints Agent (and any
of Agent’s designated officers or employees) as such Loan Party’s true and
lawful attorney to: (i) take any of the actions specified above in this
paragraph; (ii) endorse such Loan Party’s name on any checks or other forms of
payment or security that may come into Agent’s possession; (iii) settle and
adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Agent determines to be reasonable; and
(iv) do such other and further acts and deeds in the name of such Loan Party
that Agent may deem necessary or desirable to enforce its rights in or to any of
the Collateral or to perfect or better perfect Agent’s security interest (on
behalf of itself and Lenders) in any of the Collateral. For the purpose of
enabling Agent to exercise rights and remedies under this Section 8.2 at such
time as Agent shall be lawfully entitled to exercise such rights and remedies,
each Loan Party hereby grants to Agent (on behalf of itself and Lenders), (A) an
irrevocable, nonexclusive, worldwide license (exercisable without payment of
royalty or other compensation to such Loan Party), to use or sublicense any
Intellectual Property now owned or hereafter acquired by such Loan Party and
including in such license access to all media in which any of the licensed items
may be recorded or stored and to all computer

 

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software and programs used for the compilation or printout thereof and (B) an
irrevocable license (without payment of rent or other compensation to such Loan
Party) to use, operate and occupy all real property owned, operated, leased,
subleased or otherwise occupied by such Loan Party. The appointment of Agent as
each Loan Party’s attorney in fact is a power coupled with an interest and is
irrevocable until the Termination Date.

Notwithstanding anything to the contrary contained in this Section 8.2, Agent
shall not be required to obtain the consent of any Lender in exercising remedies
pursuant hereto in the event of any Exigent Circumstance (as defined below). As
used herein, “Exigent Circumstance” means any event or circumstance that, in the
reasonable judgment of Agent, imminently threatens the ability of Agent to
realize upon all or any material portion or material piece of the Collateral,
such as, without limitation, fraudulent removal, concealment, or abscondment
thereof, destruction or material waste thereof, or failure of any Loan Party
after reasonable demand to maintain or reinstate adequate casualty insurance
coverage, or which, in the judgment of Agent, could result in a material
diminution in value of the Collateral (including, for the avoidance of doubt and
without limitation, circumstances where Agent reasonably believes the Loan
Parties’ remaining cash and Cash Equivalents are being, or are likely to be,
significantly and imminently diminished).

8.3 Application of Proceeds. Proceeds from any Transfer of the Collateral or
from any Transfer of the Intellectual Property (other than Permitted
Dispositions) and all payments made to or proceeds of Collateral or Intellectual
Property received by Agent during the continuance of an Event of Default shall
be applied as follows: (a) first, to pay all fees, costs, indemnities,
reimbursements and expenses then due to Agent under the Debt Documents in its
capacity as Agent under the Debt Documents, until paid in full in cash,
(b) second, to pay all fees, costs, indemnities, reimbursements and expenses
then due to any Lenders under the Debt Documents in accordance with their
respective Pro Rata Shares, until paid in full in cash, (c) third, to pay all
interest on the Term Loans then due to Lenders in accordance with their
respective Pro Rata Shares (other than interest, fees, expenses and other
amounts accrued after the commencement of any proceeding referred to in
Section 8.1(g) if a claim for such amounts is not allowable in such proceeding),
until paid in full in cash, (d) fourth, to pay all principal on the Term Loans
then due to Lenders in accordance with their respective Pro Rata Shares, until
paid in full in cash, (e) fifth, to pay all other Obligations then due to
Lenders in accordance with their respective Pro Rata Shares (including, without
limitation, all interest, fees, expenses and other amounts accrued after the
commencement of any proceeding referred to in Section 8.1(g) whether or not a
claim for such amounts is allowable in such proceeding), until paid in full in
cash, and (f) sixth, to Borrower or as otherwise required by law. Borrower shall
remain fully liable for any deficiency.

9. The Agent.

9.1 Appointment of Agent.

(a) Each Lender hereby appoints GECC (together with any successor Agent pursuant
to Section 9.6) as Agent under the Debt Documents and authorizes Agent to
(a) execute and deliver the Debt Documents and accept delivery thereof on its
behalf from Loan Parties, (b) take such action on its behalf and to exercise all
rights, powers and remedies and perform the duties as are expressly delegated to
Agent under such Debt Documents and (c) exercise such powers as are reasonably
incidental thereto. The provisions of this Article 9 are solely for the benefit
of Agent and Lenders and none of Loan Parties nor any other person shall have
any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement and the other Debt
Documents, Agent shall act solely as an agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for any Loan Party or any other person. Agent shall have
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responsibilities except for those expressly set forth in this Agreement and the
other Debt Documents. The duties of Agent shall be mechanical and administrative
in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Debt Document or otherwise a fiduciary or trustee
relationship in respect of any Lender. Except as expressly set forth in this
Agreement and the other Debt Documents, Agent shall not have any duty to
disclose, and shall not be liable for failure to disclose, any information
relating to Borrower or any of its Subsidiaries that is communicated to or
obtained by GECC or any of its affiliates in any capacity.

(b) Without limiting the generality of clause (a) above, Agent shall have the
sole and exclusive right and authority (to the exclusion of the Lenders), and is
hereby authorized, to (i) act as the disbursing and collecting agent for the
Lenders with respect to all payments and collections arising in connection with
the Debt Documents (including in any other bankruptcy, insolvency or similar
proceeding), and each person making any payment in connection with any Debt
Document to any Lender is hereby authorized to make such payment to Agent,
(ii) file and prove claims and file other documents necessary or desirable to
allow the claims of Agent and Lenders with respect to any Obligation in any
proceeding described in any bankruptcy, insolvency or similar proceeding (but
not to vote, consent or otherwise act on behalf of such Lender), (iii) act as
collateral agent for Agent and each Lender for purposes of the perfection of all
Liens created by the Debt Documents and all other purposes stated therein,
(iv) manage, supervise and otherwise deal with the Collateral, (v) take such
other action as is necessary or desirable to maintain the perfection and
priority of the Liens created or purported to be created by the Debt Documents,
(vi) except as may be otherwise specified in any Debt Document, exercise all
remedies given to Agent and the other Lenders with respect to the Collateral,
whether under the Debt Documents, applicable law or otherwise and (vii) execute
any amendment, consent or waiver under the Debt Documents on behalf of any
Lender that has consented in writing to such amendment, consent or waiver;
provided, however, that Agent hereby appoints, authorizes and directs each
Lender to act as collateral sub-agent for Agent and the Lenders for purposes of
the perfection of all Liens with respect to the Collateral, including any
deposit account maintained by a Loan Party with, and cash and cash equivalents
held by, such Lender, and may further authorize and direct the Lenders to take
further actions as collateral sub-agents for purposes of enforcing such Liens or
otherwise to transfer the Collateral subject thereto to Agent, and each Lender
hereby agrees to take such further actions to the extent, and only to the
extent, so authorized and directed. Agent may, upon any term or condition it
specifies, delegate or exercise any of its rights, powers and remedies under,
and delegate or perform any of its duties or any other action with respect to,
any Debt Document by or through any trustee, co-agent, employee,
attorney-in-fact and any other person (including any Lender). Any such person
shall benefit from this Article 9 to the extent provided by Agent.

(c) If Agent shall request instructions from Requisite Lenders or all affected
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Debt Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders or all affected Lenders,
as the case may be, and Agent shall not incur liability to any person by reason
of so refraining. Agent shall be fully justified in failing or refusing to take
any action hereunder or under any other Debt Document (a) if such action would,
in the opinion of Agent, be contrary to law or any Debt Document, (b) if such
action would, in the opinion of Agent, expose Agent to any potential liability
under any law, statute or regulation or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Debt Document in accordance with the instructions
of Requisite Lenders or all affected Lenders, as applicable.

 

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9.2 Agent’s Reliance, Etc. Neither Agent nor any of its affiliates nor any of
their respective directors, officers, agents, employees or representatives shall
be liable for any action taken or omitted to be taken by it or them hereunder or
under any other Debt Documents, or in connection herewith or therewith, except
for damages caused by its or their own gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction. Without limiting the
generality of the foregoing, Agent: (a) may treat the payee of any Note as the
holder thereof until such Note has been assigned in accordance with
Section 10.1; (b) may consult with legal counsel, independent public accountants
and other experts, whether or not selected by it, and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts; (c) shall not be responsible
or otherwise incur liability for any action or omission taken in reliance upon
the instructions of the Requisite Lenders, (d) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Debt Documents; (e) shall not have any duty to inspect
the Collateral (including the books and records) or to ascertain or to inquire
as to the performance or observance of any provision of any Debt Document,
whether any condition set forth in any Debt Document is satisfied or waived, as
to the financial condition of any Loan Party or as to the existence or
continuation or possible occurrence or continuation of any Default or Event of
Default and shall not be deemed to have notice or knowledge of such occurrence
or continuation unless it has received a notice from Borrower or any Lender
describing such Default or Event of Default clearly labeled “notice of default”;
(f) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, effectiveness, genuineness, sufficiency or value of,
or the attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, any Debt Document or any other instrument
or document furnished pursuant hereto or thereto; and (g) shall incur no
liability under or in respect of this Agreement or the other Debt Documents by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopy, telegram, cable or telex) believed by it to be
genuine and signed or sent or otherwise authenticated by the proper party or
parties.

9.3 GECC and Affiliates. GECC shall have the same rights and powers under this
Agreement and the other Debt Documents as any other Lender and may exercise the
same as though it were not Agent; and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated, include GECC in its individual capacity.
GECC and its affiliates may lend money to, invest in, and generally engage in
any kind of business with, Borrower, any of Borrower’s Subsidiaries, any of
their Affiliates and any person who may do business with or own securities of
Borrower, any of Borrower’s Subsidiaries or any such Affiliate, all as if GECC
were not Agent and without any duty to account therefor to Lenders. GECC and its
affiliates may accept fees and other consideration from Borrower for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders. Each Lender acknowledges the potential conflict of interest
between GECC as a Lender holding disproportionate interests in the Term Loans
and GECC as Agent, and expressly consents to, and waives, any claim based upon,
such conflict of interest.

9.4 Lender Credit Decision. Each Lender acknowledges that it has, independently
and without reliance upon Agent or any other Lender and based on the financial
statements referred to in Section 6.3 and such other documents and information
as it has deemed appropriate, made its own credit and financial analysis of each
Loan Party and its own decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement. Each Lender acknowledges the potential
conflict of interest of each other Lender as a result of Lenders holding
disproportionate interests in the Term Loans, and expressly consents to, and
waives, any claim based upon, such conflict of interest.

 

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9.5 Indemnification. Lenders shall and do hereby indemnify Agent (to the extent
not reimbursed by Loan Parties and without limiting the obligations of Loan
Parties hereunder), ratably according to their respective Pro Rata Shares from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against Agent
in any way relating to or arising out of this Agreement or any other Debt
Document or any action taken or omitted to be taken by Agent in connection
therewith; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent’s gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
Without limiting the foregoing, each Lender agrees to reimburse Agent promptly
upon demand for its Pro Rata Share of any out-of-pocket expenses (including
reasonable counsel fees) incurred by Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and each
other Debt Document, to the extent that Agent is not reimbursed for such
expenses by Loan Parties. The provisions of this Section 9.5 shall survive the
termination of this Agreement.

9.6 Successor Agent. Agent may resign at any time by delivering notice of such
resignation to the Lenders and the Borrower, effective on the date set forth in
such notice. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within thirty (30) days after the resigning Agent’s giving notice of
resignation, then the resigning Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a Lender, if a Lender is willing to accept such
appointment, or otherwise shall be a commercial bank or financial institution or
a subsidiary of a commercial bank or financial institution if such commercial
bank or financial institution is organized under the laws of the United States
of America or of any State thereof. If no successor Agent has been appointed
pursuant to the foregoing, within thirty (30) days after the date such notice of
resignation was given by the resigning Agent, the Requisite Lenders shall
thereafter perform all the duties of Agent hereunder until such time, if any, as
the Requisite Lenders appoint a successor Agent as provided above. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent. Upon the earlier of the acceptance
of any appointment as Agent hereunder by a successor Agent or the effective date
of the resigning Agent’s resignation, the resigning Agent shall be discharged
from its duties and obligations under this Agreement and the other Debt
Documents, except that any indemnity rights or other rights in favor of such
resigning Agent shall continue. After any resigning Agent’s resignation
hereunder, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was acting as Agent under
this Agreement and the other Debt Documents.

9.7 Setoff and Sharing of Payments. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of Default and
subject to Section 9.8(e), each Lender is hereby authorized at any time or from
time to time upon the direction of Agent, without notice to Borrower or any
other person, any such notice being hereby expressly waived, to offset and to
appropriate and to apply any and all balances held by it at any of its offices
for the account of Borrower (regardless of whether such balances are then due to
Borrower) and any other properties or assets at any time held or owing by that
Lender or that holder to or for the credit or for the account of Borrower
against and on account of any of the Obligations that are not paid when due. Any
Lender exercising a right of setoff or otherwise receiving

 

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any payment on account of the Obligations in excess of its Pro Rata Share
thereof shall purchase for cash (and the other Lenders or holders shall sell)
such participations in each such other Lender’s or holder’s Pro Rata Share of
the Obligations as would be necessary to cause such Lender to share the amount
so offset or otherwise received with each other Lender or holder in accordance
with their respective Pro Rata Shares of the Obligations. Borrower agrees, to
the fullest extent permitted by law, that (a) any Lender may exercise its right
to offset with respect to amounts in excess of its Pro Rata Share of the
Obligations and may sell participations in such amounts so offset to other
Lenders and holders and (b) any Lender so purchasing a participation in the Term
Loans made or other Obligations held by other Lenders or holders may exercise
all rights of offset, bankers’ lien, counterclaim or similar rights with respect
to such participation as fully as if such Lender or holder were a direct holder
of the Term Loans and the other Obligations in the amount of such participation.
Notwithstanding the foregoing, if all or any portion of the offset amount or
payment otherwise received is thereafter recovered from the Lender that has
exercised the right of offset, the purchase of participations by that Lender
shall be rescinded and the purchase price restored without interest. The term
“Pro Rata Share” means, with respect to any Lender at any time, the percentage
obtained by dividing (x) the Commitment of such Lender then in effect (or, if
such Commitment is terminated, the aggregate outstanding principal amount of the
Term Loans owing to such Lender) by (y) the Total Commitment then in effect (or,
if the Total Commitment is terminated, the outstanding principal amount of the
Term Loans owing to all Lenders).

9.8 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.

(a) Advances; Payments. If Agent receives any payment for the account of Lenders
on or prior to 11:00 a.m. (New York time) on any Business Day, Agent shall pay
to each applicable Lender such Lender’s Pro Rata Share of such payment on such
Business Day. If Agent receives any payment for the account of Lenders after
11:00 a.m. (New York time) on any Business Day, Agent shall pay to each
applicable Lender such Lender’s Pro Rata Share of such payment on the next
Business Day. To the extent that any Lender has failed to fund any such payments
and Term Loans (a “Non-Funding Lender”), Agent shall be entitled to set off the
funding short-fall against that Non-Funding Lender’s Pro Rata Share of all
payments received from Borrower.

(b) Return of Payments.

(i) If Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from a
Loan Party and such related payment is not received by Agent, then Agent will be
entitled to recover such amount (including interest accruing on such amount at
the Federal Funds Rate for the first Business Day and thereafter, at the rate
otherwise applicable to such Obligation) from such Lender on demand without
setoff, counterclaim or deduction of any kind.

(ii) If Agent determines at any time that any amount received by Agent under
this Agreement must be returned to a Loan Party or paid to any other person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Debt Document, Agent will not
be required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to a Loan Party or such other person, without setoff,
counterclaim or deduction of any kind.

 

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(c) Non-Funding Lenders. The failure of any Non-Funding Lender to make any Term
Loan or any payment required by it hereunder shall not relieve any other Lender
(each such other Lender, an “Other Lender”) of its obligations to make such Term
Loan, but neither any Other Lender nor Agent shall be responsible for the
failure of any Non-Funding Lender to make a Term Loan or make any other payment
required hereunder. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Debt Document or constitute a “Lender” (or be included in the
calculation of “Requisite Lender” hereunder) for any voting or consent rights
under or with respect to any Debt Document. At Borrower’s request, Agent or a
person reasonably acceptable to Agent shall have the right with Agent’s consent
and in Agent’s sole discretion (but shall have no obligation) to purchase from
any Non-Funding Lender, and each Non-Funding Lender agrees that it shall, at
Agent’s request, sell and assign to Agent or such person, all of the Commitments
and all of the outstanding Term Loans of that Non-Funding Lender for an amount
equal to the principal balance of all Term Loans held by such Non-Funding Lender
and all accrued interest and fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed Assignment
Agreement (as defined below).

(d) Dissemination of Information. Agent shall use reasonable efforts to provide
Lenders with any notice of Default or Event of Default received by Agent from,
or delivered by Agent to Borrower, with notice of any Event of Default of which
Agent has actually become aware and with notice of any action taken by Agent
following any Event of Default; provided that Agent shall not be liable to any
Lender for any failure to do so, except to the extent that such failure is
attributable to Agent’s gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction. Lenders acknowledge that
Borrower is required to provide financial statements to Lenders in accordance
with Section 6.3 hereto and agree that Agent shall have no duty to provide the
same to Lenders.

(e) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement, the Notes or any other Debt Documents (including exercising any
rights of setoff) without first obtaining the prior written consent of Agent and
Requisite Lenders, it being the intent of Lenders that any such action to
protect or enforce rights under this Agreement and the Notes shall be taken in
concert and at the direction or with the consent of Agent and Requisite Lenders.

10. MISCELLANEOUS.

10.1 Assignment.

(a) Subject to the terms of this Section 10.1, each Lender shall have the right
to sell, transfer or assign, at any time or times, all or a portion of its
rights and obligations hereunder and under the other Debt Documents, its
Commitment, its Term Loans or any portion thereof or interest therein, including
any Lender’s rights, title, interests, remedies, powers or duties thereunder;
provided, however, that any such sale, transfer or assignment shall: (i) except
in the case of a sale, transfer or assignment to a Qualified Assignee (as
defined below), require the prior written consent of Agent and the Requisite
Lenders (which consent shall not be unreasonably withheld, conditioned or
delayed); (ii) require the execution of an assignment agreement in form and
substance reasonably satisfactory to, and acknowledged by, Agent (an “Assignment
Agreement”); (iii) be conditioned on such assignee Lender representing to the
assigning Lender and Agent that it is purchasing the applicable Commitment
and/or Term Loans to be assigned to it for its own account, for investment
purposes and not with a view to the distribution thereof;

 

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(iv) be in an aggregate amount of not less than $1,000,000, unless such
assignment is made to an existing Lender or an affiliate of an existing Lender
or is of the assignor’s (together with its affiliates’) entire interest of the
Term Loans or is made with the prior written consent of Agent; and (v) include a
payment to Agent of an assignment fee of $3,500 (unless otherwise agreed by
Agent). In the case of an assignment by a Lender under this Section 10.1(a), the
assignee shall have, to the extent of such assignment, the same rights, benefits
and obligations as all other Lenders hereunder. The assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitment and Term
Loans, as applicable, or assigned portion thereof from and after the date of
such assignment. Borrower hereby acknowledges and agrees that any assignment
shall give rise to a direct obligation of Borrower to the assignee and that the
assignee shall be considered to be a “Lender”. In the event any Lender assigns
or otherwise transfers all or any part of the Commitments and Obligations,
Borrower shall, upon the assignee’s or the assignor’s request, execute new Notes
in exchange for the Notes, if any, being assigned. Agent may amend Schedule A to
this Agreement to reflect assignments made in accordance with this Section.

As used herein, “Qualified Assignee” means (a) any Lender and any affiliate of
any Lender and (b) any commercial bank, savings and loan association or savings
bank or any other entity which is an “accredited investor” (as defined in
Regulation D under the Securities Act) which extends credit or buys loans as one
of its businesses, including insurance companies, mutual funds, lease financing
companies and commercial finance companies, in each case, which has a rating of
BBB or higher from S&P and a rating of Baa2 or higher from Moody’s at the date
that it becomes a Lender and in each case of clauses (a) and (b), which, through
its applicable lending office, is capable of lending to Borrower without the
imposition of any withholding or similar taxes; provided that no person proposed
to become a Lender after the Closing Date and determined by Agent to be acting
in the capacity of a vulture fund or distressed debt purchaser shall be a
Qualified Assignee, and no person or affiliate of such person proposed to become
a Lender after the Closing Date and that holds any subordinated debt or stock
issued by any Loan Party or its Affiliates (other than a Closing Date Lender or
an affiliate thereof) shall be a Qualified Assignee.

(b) In addition to the other rights provided in this Section 10.1, each Lender
may, without notice to or consent from Agent or any Loan Party, sell
participations to one or more persons or entities in or to all or a portion of
its rights and obligations under the Debt Documents (including all of its rights
and obligations with respect to the Term Loans); provided, however, that,
whether as a result of any term of any Debt Document or of such participation,
(i) no such participant shall have a commitment, or be deemed to have made an
offer to commit, to make any Term Loan hereunder, and, no such participant shall
be liable for any obligation of such Lender hereunder, (ii) such Lender’s rights
and obligations, and the rights and obligations of the Loan Parties and Agent
and other Lenders towards such Lender, under any Debt Document shall remain
unchanged and each other party hereto shall continue to deal solely with such
Lender, which shall remain the holder of the Obligations, and in no case shall a
participant have the right to enforce any of the terms of any Debt Document, and
(iii) the consent of such participant shall not be required (either directly, as
a restraint on such Lender’s ability to consent hereunder or otherwise) for any
amendments, waivers or consents with respect to any Debt Document or to exercise
or refrain from exercising any powers or rights such Lender may have under or in
respect of the Debt Documents (including the right to enforce or direct
enforcement of the Obligations), except for those described in clauses (ii),
(iii) and (viii) of subsection 10.8(c) hereof.

10.2 Notices. All notices, requests or other communications given in connection
with this Agreement shall be in writing, shall be addressed to the parties at
their respective addresses set forth on the signature pages hereto below such
parties’ name or in the most recent Assignment Agreement

 

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executed by any Lender (unless and until a different address may be specified in
a written notice to the other party delivered in accordance with this
Section 10.2), and shall be deemed given (a) on the date of receipt if delivered
by hand, (b) on the date of sender’s receipt of confirmation of proper
transmission if sent by facsimile transmission, (c) on the next Business Day
after being sent by a nationally-recognized overnight courier, and (d) on the
fourth Business Day after being sent by registered or certified mail, postage
prepaid. As used herein, the term “Business Day” means and includes any day
other than Saturdays, Sundays, or other days on which commercial banks in New
York, New York are required or authorized to be closed.

10.3 Correction of Debt Documents. Agent may correct patent errors and fill in
all blanks in this Agreement or the Debt Documents consistent with the agreement
of the parties.

10.4 Performance. Time is of the essence of this Agreement. This Agreement shall
be binding, jointly and severally, upon all parties described as the “Borrower”
and their respective successors and assigns, and shall inure to the benefit of
Agent, Lenders, and their respective successors and permitted assigns.

10.5 Payment of Fees and Expenses. Loan Parties agree, jointly and severally, to
pay or reimburse upon demand for all reasonable fees, costs and expenses
incurred by Agent and Lenders in connection with (a) the investigation,
preparation, negotiation, execution, administration of, or any amendment,
modification, waiver or termination of, this Agreement or any other Debt
Document, (b) any legal advice relating to Agent’s rights or responsibilities
under any Debt Document, (c) the administration of the Loans and the facilities
hereunder and any other transaction contemplated hereby or under the Debt
Documents and (d) the enforcement, assertion, defense or preservation of Agent’s
and Lenders’ rights and remedies under this Agreement or any other Debt
Document, in each case of clauses (a) through (d), including, without
limitation, reasonable attorneys’ fees and expenses, the reasonable allocated
cost of in-house legal counsel, reasonable fees and expenses of consultants,
auditors (including internal auditors) and appraisers and UCC and other
corporate search and filing fees and wire transfer fees. Borrower further agrees
that such fees, costs and expenses shall constitute Obligations. This provision
shall survive the termination of this Agreement.

10.6 Indemnity. Each Loan Party shall and does hereby jointly and severally
indemnify and defend Agent, Lenders, and their respective successors and
assigns, and their respective directors, officers, employees, consultants,
attorneys, agents and affiliates (each an “Indemnitee”) from and against all
liabilities, losses, damages, expenses, penalties, claims, actions and suits
(including, without limitation, related reasonable attorneys’ fees and the
allocated costs of in-house legal counsel) of any kind whatsoever arising,
directly or indirectly, which may be imposed on, incurred by or asserted against
such Indemnitee as a result of or in connection with this Agreement, the other
Debt Documents or any of the transactions contemplated hereby or thereby (the
“Indemnified Liabilities”); provided that, no Loan Party shall have any
obligation to any Indemnitee with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of such Indemnitee as determined by a final non-appealable judgment
of a court of competent jurisdiction. In no event shall any Indemnitee be liable
on any theory of liability for any special, indirect, consequential or punitive
damages (including, without limitation, any loss of profits, business or
anticipated savings). Each Loan Party waives, releases and agrees (and shall
cause each other Loan Party to waive, release and agree) not to sue upon any
such claim for any special, indirect, consequential or punitive damages, whether
or not accrued and whether or not known or suspected to exist in its favor. This
provision shall survive the termination of this Agreement.

10.7 Rights Cumulative. Agent’s and Lenders’ rights and remedies under this
Agreement or otherwise arising are cumulative and may be exercised singularly or
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any delay on the part of Agent or any Lender to exercise any right, power or
privilege under this Agreement shall operate as a waiver, nor shall any single
or partial exercise of any right, power or privilege preclude any other or
further exercise of that or any other right, power or privilege. NONE OF AGENT
OR ANY LENDER SHALL BE DEEMED TO HAVE WAIVED ANY OF ITS RESPECTIVE RIGHTS UNDER
THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR PAPER SIGNED BY
BORROWER UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY AGENT,
REQUISITE LENDERS OR ALL LENDERS, AS APPLICABLE. A waiver on any one occasion
shall not be construed as a bar to or waiver of any right or remedy on any
future occasion.

10.8 Entire Agreement; Amendments, Waivers.

(a) This Agreement and the other Debt Documents constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof and
supersede all prior understandings (whether written, verbal or implied) with
respect to such subject matter. Section headings contained in this Agreement
have been included for convenience only, and shall not affect the construction
or interpretation of this Agreement.

(b) Except for actions expressly permitted to be taken by Agent, no amendment,
modification, termination or waiver of any provision of this Agreement or any
other Debt Document, or any consent to any departure by a Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Agent, Borrower, and Lenders having more than (x) 50% of the aggregate
Commitments of all Lenders or (y) if such Commitments have expired or been
terminated, 50% of the aggregate outstanding principal amount of the Term Loans
(the “Requisite Lenders”); provided, however, that so long as a Closing Date
Lender does not assign any portion of its Commitment or Term Loan (other than an
assignment to any affiliate of such Closing Date Lender), the “Requisite
Lenders” shall include such Lender. Except as set forth in clause (c) below, all
such amendments, modifications, terminations or waivers requiring the consent of
any Lenders shall require the written consent of Requisite Lenders. As used
herein, “Closing Date Lender” shall mean each Lender listed on Schedule A
attached hereto as of the Closing Date, or any affiliate of such Lender to whom
all or any portion of the Loans are assigned in accordance with this Agreement.

(c) No amendment, modification, termination or waiver of any provision of this
Agreement or any other Debt Document shall, unless in writing and signed by
Agent and each Lender directly affected thereby: (i) increase or decrease any
Commitment of any Lender or increase or decrease the Total Commitment (which
shall be deemed to affect all Lenders), (ii) reduce the principal of or rate of
interest on any Obligation or the amount of any fees payable hereunder (other
than waiving the imposition of the Default Rate), (iii) postpone the date fixed
for or waive any payment of principal of or interest on any Term Loan, or any
fees hereunder, (iv) release all or substantially all of the Collateral, or
consent to a transfer of all or substantially all of the Intellectual Property,
in each case, except as otherwise expressly permitted in the Debt Documents
(which shall be deemed to affect all Lenders), (v) subordinate the Lien on all
or substantially all of the Collateral granted in favor of Agent securing the
Obligations (which shall be deemed to affect all Lenders), (vi) release a Loan
Party from, or consent to a Loan Party’s assignment or delegation of, such Loan
Party’s obligations hereunder and under the other Debt Documents or any
Guarantor from its guaranty of the Obligations (which shall be deemed to affect
all Lenders), (vii) amend, modify, terminate or waive Section 8.3, 9.7 or
10.8(b) or (c), or (viii) amend or modify the definition of “Requisite Lenders”.

 

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(d) Notwithstanding any provision in this Section 10.8 to the contrary, no
amendment, modification, termination or waiver affecting or modifying the rights
or obligations of Agent hereunder shall be effective unless signed by Borrower,
Agent and Requisite Lenders.

(e) Each Lender hereby consents to the release by Agent of any Lien held by
Agent for the benefit of itself and Lenders in any or all of the Collateral to
secure the Obligations upon (i) the occurrence of any Permitted Disposition
pursuant to Section 7.3 and (ii) the termination of the Commitments and the
payment and satisfaction in full of the Obligations.

10.9 Binding Effect. This Agreement shall continue in full force and effect
until the Termination Date; provided, however, that the provisions of this
Section and Sections 2.2(f), 9.5, 10.5 and 10.6 and the other indemnities
contained in the Debt Documents shall survive the Termination Date. The
surrender, upon payment or otherwise, of any Note or any of the other Debt
Documents evidencing any of the Obligations shall not affect the right of Agent
to retain the Collateral for such other Obligations as may then exist or as it
may be reasonably contemplated will exist in the future. This Agreement and the
grant of the security interest in the Collateral pursuant to Section 3.1 shall
automatically be reinstated if Agent or any Lender is ever required to return or
restore the payment of all or any portion of the Obligations (all as though such
payment had never been made).

10.10 Use of Logo. Each Loan Party authorizes Agent to use its name, logo and/or
trademark without notice to or consent by such Loan Party, in connection with
certain promotional materials that Agent may disseminate to the public. The
promotional materials may include, but are not limited to, brochures, video
tape, internet website, press releases, tombstones, advertising in newspaper
and/or other periodicals, lucites, and any other materials relating the fact
that Agent has a financing relationship with Borrower and such materials may be
developed, disseminated and used without Loan Parties’ review. Nothing herein
obligates Agent to use a Loan Party’s name, logo and/or trademark, in any
promotional materials of Agent. Loan Parties shall not, and shall not permit any
of its respective Affiliates to, issue any press release or other public
disclosure (other than any document filed with any governmental authority
relating to a public offering of the securities of Borrower or otherwise
required to be filed with the SEC) using the name, logo or otherwise referring
to General Electric Capital Corporation, GE Healthcare Financial Services, Inc.
or of any of their affiliates, the Debt Documents or any transaction
contemplated herein or therein without at least two (2) Business Days prior
written notice to and the prior written consent of Agent as applicable, unless,
and only to the extent that, Loan Parties or such Affiliate is required to do so
under applicable law and then, only after consulting with Agent prior thereto.

10.11 Waiver of Jury Trial. EACH OF LOAN PARTIES, AGENT AND LENDERS
UNCONDITIONALLY WAIVE ANY AND ALL RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER DEBT
DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS AMONG LOAN
PARTIES, AGENT AND/OR LENDERS RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION
OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
AMONG LOAN PARTIES, AGENT AND/OR LENDERS. THE SCOPE OF THIS WAIVER IS INTENDED
TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT.
THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

 

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10.12 Governing Law and Jurisdiction.

(a) GOVERNING LAW. THIS AGREEMENT, THE OTHER DEBT DOCUMENTS (EXCLUDING THOSE
DEBT DOCUMENTS THAT BY THEIR OWN TERMS ARE EXPRESSLY GOVERNED BY THE LAWS OF
ANOTHER JURISDICTION) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL,
PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK
SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF
ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS
IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO
THAT EXTENT.

(b) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK LOCATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY EXECUTING THIS AGREEMENT HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. NOTWITHSTANDING THE
FOREGOING, THE AGENT AND OTHER LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION
OR PROCEEDING AGAINST ANY LOAN PARTY (OR ANY PROPERTY OF SUCH LOAN PARTY) IN THE
COURT OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS.

(c) NON-EXCLUSIVE JURISDICTION. NOTHING CONTAINED IN THIS SECTION 10.12 SHALL
AFFECT THE RIGHT OF AGENT OR THE LENDERS TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY APPLICABLE REQUIREMENTS OF LAW OR COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION.

10.13 Confidentiality. Each Lender and Agent agrees to use all reasonable
efforts to maintain, in accordance with its customary practices, the
confidentiality of information obtained by it pursuant to any Debt Document and
designated in writing by any Loan Party as confidential, except that such
information may be disclosed (a) with the Borrower’s consent, (b) to such
Lender’s or Agent’s Related Persons (as defined below), as the case may be, that
are advised of the confidential nature of such information and are instructed to
keep such information confidential in accordance with the terms hereof, (c) to
the extent such information presently is or hereafter becomes (i) publicly
available other than as a result of a breach of this Section 10.13 or
(ii) available to such Lender or Agent or any of their Related Persons, as the
case may be, from a source (other than any Loan Party) not known by them to be
subject

 

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to disclosure restrictions, (d) to the extent disclosure is required by any
applicable law, rule, regulation, court decree, subpoena or other legal,
administrative, governmental or regulatory request, order or proceeding or
otherwise requested or demanded by any governmental authority, (e) to the extent
necessary or customary for inclusion in league table measurements, (f) (i) to
the National Association of Insurance Commissioners or any similar organization,
any examiner or any nationally recognized rating agency or (ii) otherwise to the
extent consisting of general portfolio information that does not identify Loan
Parties, (g) to current or prospective assignees or participants and to their
respective Related Persons, in each case to the extent such assignees,
participants or Related Persons agree to be bound by provisions substantially
similar to the provisions of this Section 10.13 (and such persons or entities
may disclose information to their respective Related Persons in accordance with
clause (b) above), (h) to any other party hereto, and (i) in connection with the
exercise or enforcement of any right or remedy under any Debt Document, in
connection with any litigation or other proceeding to which such Lender or Agent
or any of their Related Persons is a party or bound, or to the extent necessary
to respond to public statements or disclosures by Loan Parties or their Related
Persons referring to a Lender or Agent or any of their Related Persons. In the
event of any conflict between the terms of this Section 10.13 and those of any
other contractual obligation entered into with any Loan Party (whether or not a
Debt Document), the terms of this Section 10.13 shall govern. “Related Persons”
means, with respect to any person or entity, each affiliate of such person or
entity and each director, officer, employee, agent, trustee, representative,
attorney, accountant and each insurance, environmental, legal, financial and
other advisor and other consultants and agents of or to such person or entity or
any of its affiliates.

10.14 USA Patriot Act. Each Lender that is subject to the Patriot Act hereby
notifies the Loan Parties that pursuant to the requirements of the Patriot Act,
it is required to obtain, verify and record information that identifies each
Loan Party, which information includes the name and address of each Loan Party
and other information that will allow such Lender to identify each Loan Party in
accordance with the Patriot Act.

10.15 Counterparts. This Agreement may be executed in any number of counterparts
and by different parties in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery of an executed signature
page of this Agreement by facsimile transmission or electronic transmission
shall be as effective as delivery of a manually executed counterpart hereof.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each Loan Party, Agent and Lenders, intending to be legally
bound hereby, have duly executed this Agreement in one or more counterparts,
each of which shall be deemed to be an original, as of the day and year first
aforesaid.

BORROWER:

BG MEDICINE, INC.

 

By:   /s/ Michael W. Rogers                               Name: Michael W.
Rogers                         Title: EVP &
CFO                                    

Address For Notices For All Loan Parties:

BG Medicine, Inc.

610 Lincoln Street North

Waltham, Massachusetts 02451

Attention: Michael W. Rogers, EVP & CFO

Phone: (781) 890-1199

Facsimile: (781) 895-1119

[Signature Page to Loan and Security Agreement]

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AGENT AND LENDER:

GENERAL ELECTRIC CAPITAL CORPORATION

 

By:   _/s/ Alan M. Silbert                                           Name: Alan
M. Silbert                                     Title: Duly Authorized Signatory

Address For Notices:

General Electric Capital Corporation

c/o GE Healthcare Financial Services, Inc.

Two Bethesda Metro Center, Suite 600

Bethesda, Maryland 20814

Attention: Senior Vice President of Risk – Life Science Finance

Phone: (301) 961-1640

Facsimile: (301) 664-9855

With a copy to:

General Electric Capital Corporation

c/o GE Healthcare Financial Services, Inc.

Two Bethesda Metro Center, Suite 600

Bethesda, Maryland 20814

Attention: General Counsel

Phone: (301) 961-1640

Facsimile: (301) 664-9866

[Signature Page to Loan and Security Agreement]

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LENDER:

COMERICA BANK

 

By:   /s/ Brian Demmert                                                Name:
Brian Demmert                                       Title:
SVP                                                           

Address For Notices:

Comerica Bank

250 Lytton Ave., 3rd Floor

Palo Alto, California 94301

Attention: Brian Demmert

Facsimile: (650) 462-6049

With a copy to:

Comerica Bank

MC 7578

3920 Six Mile Road

Livonia, Michigan 48152

Attention: National Documentation Service

[Signature Page to Loan and Security Agreement]

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SCHEDULE A

COMMITMENTS

 

Name of Lender

  Commitment of such Lender   Pro Rata Share General Electric Capital

Corporation

  $10,000,000   66.666666667% Comerica Bank   $5,000,000   33.333333333% TOTAL  
$15,000,000   100%