exv10w43






Exhibit 10.43




LOAN AND SECURITY AGREEMENT

No. V08302



This Loan and Security Agreement (this “Loan Agreement”), made as of September 12, 2008 by and
between BlueCrest Capital Finance, L.P. (“Lender”), a Delaware limited partnership with its
principal place of business at 225 West Washington Street, Suite 200, Chicago, Illinois 60606, and
Omeros Corporation (“Borrower”), a Washington corporation with its principal place of business at
1420 Fifth Avenue, Suite 2600, Seattle, WA 98101.



In consideration of the promises set forth herein, Lender and Borrower agree upon the following
terms and conditions:




1. General Definitions



The following words, terms and /or phrases shall have the meanings set forth thereafter and such
meanings shall be applicable to the singular and plural form thereof giving effect to the numerical
difference:




     A. “Account” means any “account,” as such term is defined in the UCC, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any interest and, in any
event, shall include all accounts receivable, book debts, rights to payment, and other forms of
obligations now owned or hereafter received or acquired by or belonging or owing to Borrower
(including under any trade name, style or division thereof), whether or not arising out of goods or
software sold or licensed or services rendered by Borrower or from any other transaction (including
any such obligation that may be characterized as an account or contract right under the UCC), and
all of Borrower’s rights in, to and under all purchase orders or receipts now owned or hereafter
acquired by it for goods or services, and all of Borrower’s rights to any goods represented by any
of the foregoing (including unpaid seller’s rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), and all monies due or
to become due to Borrower under all purchase orders and contracts for the sale of goods or the
performance of services or both by Borrower or in connection with any other transaction (whether or
not yet earned by performance on the part of Borrower), now in existence or hereafter occurring,
including the right to receive the proceeds of said purchase orders and contracts, and all
collateral security and guarantees of any kind given by any Person with respect to any of the
foregoing.



     B. “Account Debtor” means any Person obligated on an Account.



     C. “Affiliate” means, as applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For the purposes of this
definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled
by” and “under common control with”), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 10% or more of the securities having ordinary voting power for
the election of directors of such Person or (ii) to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities or by contract or
otherwise.



     D. “Borrower’s Liabilities” means all obligations and liabilities of Borrower to Lender
(including without limitation all debts, claims, and indebtedness) whether primary, secondary,
direct, contingent, fixed or otherwise, heretofore, now and/or from time to time hereafter owing,
due or payable, however evidenced, created, incurred, acquired or owing and however arising,
whether under this Loan Agreement and/or any promissory note or other instrument issued pursuant
hereto or the “Other Agreements” (hereinafter defined), or by oral agreement or operation of law or
otherwise.



     E. “Business Day” means a day of the year on which banks are not required or authorized to
close in New York City or Chicago, Illinois.



     F. “Cash” means all cash, money (as such term is defined in the UCC), currency, and liquid
funds, wherever held, in which Borrower now or hereafter acquires any right, title, or interest.



     G. “Change of Control” means, at any time, a transaction or series of related transactions in
which the shareholders of Borrower immediately prior to such transaction or series of transactions
shall cease to beneficially own and control, directly or indirectly, a majority of the voting
interests in the capital stock or other ownership interests of Borrower or the right to elect a
majority of the seats on Borrower’s board of directors immediately after such transaction or series
of transactions; provided, however, that an equity financing for the purpose of
raising capital from accredited investors, including, without limitation, venture capital, private
equity, strategic or institutional investors shall not be deemed to be a Change of Control so long
as (i) Borrower gives Lender at least



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ten (10) Business Days prior notice of the names of such investors, and (ii) existing venture
capital, private equity, strategic or institutional investors shall not sell any of their existing
stakes in Borrower in such financing transaction.



     H. “Charges” means all national, federal, state, county, city, municipal and/or other
governmental taxes, levies, assessments, charges, liens, claims or encumbrances upon and/or
relating to the Collateral, Borrower’s Liabilities, Borrower’s business, Borrower’s ownership
and/or use of any of its assets, and/or Borrower’s income and/or gross receipts.



     I. “Chattel Paper” means any “chattel paper,” as such term is defined in the UCC, now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.



     J. “Cleanup” means all actions required to: (1) clean up, remove, treat or remediate Hazardous
Materials in the indoor or outdoor environment; (2) prevent the release of Hazardous Materials so
that they do not migrate, endanger or threaten to endanger public health or welfare or the indoor
or outdoor environment; (3) perform pre-remedial studies and investigations and post-remedial
monitoring and care; or (4) respond to any government requests for information or documents in any
way relating to cleanup, removal, treatment or remediation or potential cleanup, removal, treatment
or remediation of Hazardous Materials in the indoor or outdoor environment.



     K. “Collateral” has the meaning set forth in Section 5.1 hereof.



     L. “Copyright License” means any written agreement granting any right to use any Copyright or
Copyright registration, now owned or hereafter acquired by Borrower or in which Borrower now holds
or hereafter acquires any interest



     M. “Copyrights” means all of the following property, now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest: (i) all copyrights,
whether registered or unregistered, held pursuant to the laws of the United States, any State
thereof or of any other country; (ii) all registrations, applications and recordings in the United
States Copyright Office or in any similar office or agency of the United States, of any State
thereof or of any other country; (iii) all continuations, renewals or extensions thereof; and (iv)
all registrations to be issued under any pending applications.



     N. “Default” means any condition or event that, after notice or lapse of time or both, would
constitute an Event of Default.



     O. “Deposit Accounts” means any “deposit accounts,” as such term is defined in the UCC, and in
any event includes any checking account, savings account, or certificate of deposit now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.



     P. “Documents” means any “documents,” as such term is defined in the UCC, now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.



     Q. “Environmental Claim” means any claim, action, cause of action, investigation or notice
(written or oral) by any Person alleging potential liability (including, without limitation, an
obligation to conduct a Cleanup or potential liability for investigatory costs, Cleanup costs,
governmental response costs, natural resources damages, property damages, personal injuries, or
penalties) arising out of, based on or resulting from (a) the presence or release of any Hazardous
Materials at any location, whether or not owned, leased or operated by Borrower or any of its
Subsidiaries, or (b) circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.



     R. “Environmental Laws” means all federal, state, local and foreign laws and regulations
relating to pollution or protection of human health or the environment, including, without
limitation, laws relating to releases or threatened releases of Hazardous Materials or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, release, disposal,
transport or handling of Hazardous Materials, laws and regulations with regard to recordkeeping,
notification, disclosure and reporting requirements respecting Hazardous Materials and laws
relating to the management or use of natural resources.



     S. “Equipment” means any “equipment”, as such term is defined in the UCC, and in any event
shall include but not be limited to computers and peripherals, laboratory equipment, manufacturing
equipment, networking equipment, switching and backbone equipment, servers and routers and other
hardware including disk drives and laser printers, office furniture, fixtures and office equipment,
test and other equipment, and software, and all accessions, additions, attachments, accessories and
improvements thereof and all replacements and/or substitutions therefore and all proceeds and
products thereof.



     T. “Event of Default” has the meaning set forth in Section 8.1 hereof.



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     U. “Financials” means those financial statements described in Section 7.3 hereof.



     V. “Fixtures” means any “fixtures,” as such term is defined in the UCC, together with all
right, title and interest of Borrower in and to all extensions, improvements, betterments,
accessions, renewals, substitutes, and replacements of, and all additions and appurtenances to any
of the foregoing property, and all conversions of the security constituted thereby, immediately
upon any acquisition or release thereof or any such conversion, as the case may be, now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.



     W. “GAAP” means generally accepted accounting principles in the United States, in effect from
time to time, consistently applied.



     X. “General Intangibles” means any “general intangibles,” as such term is defined in the UCC,
and, in any event, shall include all right, title and interest which Borrower may now or hereafter
have in or under any rights to payment; payment intangibles; software; proprietary or confidential
information; business records and materials; customer lists; interests in partnerships, joint
ventures, business associations, corporations, and limited liability companies; permits; claims in
or under insurance policies (including unearned premiums and retrospective premium adjustments);
and rights to receive tax refunds and other payments and rights of indemnification now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.



     Y. “Goods” means any “goods,” as such term is defined in the UCC, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.



     Z. “Hazardous Materials” means all substances defined as Hazardous Substances, Oils,
Pollutants or Contaminants in the National Oil and Hazardous Substances Pollution Contingency Plan,
40 C.F.R. § 300.5, or defined as such by, or regulated as such under, any Environmental Law.



     AA. “Instruments” means any “instrument,” as such term is defined in the UCC, now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest.



     BB. “Intellectual Property” means



          (i)  all Copyrights; Trademarks; Patents; and Licenses; and applications therefor and
reissues, extensions, or renewals thereof; and goodwill associated with any of the foregoing;




          (ii) Any and all trade secrets, inventions, know-how, methods, processes, drawings,
specifications or other data or information and all memoranda, notes and records with respect to
any research and development and any and all intellectual property rights in computer software and
computer software products now or hereafter existing, created, acquired or held; and




          (iii) Any and all claims for damages by way of past, present and future infringement of any of
the rights included above, with the right, but not the obligation, to sue for and collect such
damages for said use or infringement of the intellectual property rights identified above,
provided, however, that during an Event of Default which is then continuing, such claims shall be
considered Proceeds of Intellectual Property for purposes of Section 5.1;




     CC. “Inventory” means any “inventory,” as such term is defined in the UCC, now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest,
and, in any event, shall include all Goods and personal property that are held by or on behalf of
Borrower for sale or lease or are furnished or are to be furnished under a contract of service, or
that constitute raw materials, work in process or materials used or consumed or to be used or
consumed in Borrower’s business, or the processing, packaging, promotion, delivery or shipping of
the same, and all finished goods, whether or not the same is in transit or in the constructive,
actual or exclusive possession of Borrower or is held by others for Borrower’s account, including
all property covered by purchase orders and contracts with suppliers and all Goods billed and held
by suppliers and all such property that may be in the possession or custody of any carriers,
forwarding agents, truckers, warehousemen, vendors, selling agents or other Persons.



     DD. “Investment Property” means all “investment property,” as such term is defined in the UCC,
and in any event includes any certificated security, uncertificated security, money market funds,
bonds, mutual funds, and U.S. Treasury bills or notes, now owned or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest.



     EE. “Letter of Credit Rights” means any “letter of credit rights,” as such term is defined in
the UCC, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest, including any right to payment or performance under any letter of credit.



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     FF. “License” means any Copyright License, Patent License, Trademark License or other license
of rights or interests now held or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest and any renewals or extensions thereof.



     GG. “Loan” has the meaning set forth in Section 2.1 hereof.



     HH. “Material Adverse Effect” means a material adverse effect upon (i) the business
operations, properties, assets, results of operations or financial condition of Borrower, taken as
a whole with respect to Borrower’s viability, that reasonably would be expected to result in the
Borrower’s inability to repay any portion of the Loans in accordance with the terms hereof, (ii)
the validity, perfection, value or priority of Lender’s security interest in the Collateral, (iii)
the enforceability of any material provision of this Loan Agreement or any Other Agreement or (iv)
the ability of Lender to enforce its rights and remedies under this Loan Agreement or any Other
Agreement.



     II. “Other Agreements” means all agreements, instruments and documents, including, without
limitation, the Warrants, the Success Fee Agreement, any notes, guaranties, security agreements,
warrants, account pledge and control agreements, fee arrangements, financing statements and all
other written matter heretofore, now and/or from time to time hereafter executed by and/or on
behalf and/or for the benefit of Borrower and delivered to Lender.



     JJ. “Patent License” means any written agreement granting any right with respect to any
invention on which a Patent is in existence or a Patent application is pending, in which agreement
Borrower now holds or hereafter acquires any interest.



     KK. “Patents” means all of the following property, now owned or hereafter acquired by
Borrower: (a) all letters patent of, or rights corresponding thereto, in the United States or in
any other country, all registrations and recordings thereof, and all applications for letters
patent of, or rights corresponding thereto, in the United States or any other country, including
registrations, recordings and applications in the United States Patent and Trademark Office or in
any similar office or agency of the United States, any State thereof or any other country; (b) all
reissues, continuations, continuations-in-part or extensions thereof; (c) all petty patents,
divisionals, and patents of addition; and (d) all patents to be issued under any such applications.



     LL. “Permitted Debt” means (i) Borrower’s indebtedness to Lender under this Loan Agreement or
any of the Other Agreements; (ii) indebtedness to trade creditors incurred in the ordinary course
of business on ordinary trade terms and accrued expenses incurred in the ordinary course of
business; (iii) other indebtedness for equipment financing in an aggregate outstanding principal
amount not to exceed $1,500,000 at any time; (iv) Subordinated Debt; (v) other unsecured
indebtedness in an aggregate outstanding amount not to exceed $100,000; or (vi) any extension,
renewal or refinancing of the indebtedness described in (iii) above, provided that the principal
amount of, and interest rate on, such indebtedness may not be increased.



     MM. “Permitted Liens” means all (i) Charges for amounts not yet delinquent or being contested
in good faith by appropriate proceedings and for which adequate reserves have been made in
accordance with GAAP; (ii) statutory liens of landlords, carriers, warehousemen, mechanics and
materialmen incurred in the ordinary course of business for sums not yet delinquent or that are
being contested in good faith by appropriate proceedings being diligently conducted and for which
Borrower maintains adequate reserves in accordance with GAAP; (iii) liens arising from judgments,
decrees or attachments in circumstances which do not constitute an Event of Default hereunder; (iv)
the following deposits, to the extent made in the ordinary course of business: deposits under
worker’s compensation, unemployment insurance, social security and other similar laws, or to secure
the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or
to secure indemnity, performance or other similar bonds for the performance of bids, tenders or
contracts (other than for the repayment of borrowed money) or to secure statutory obligations
(other than liens arising under ERISA or environmental liens) or surety or appeal bonds, or to
secure indemnity, performance or other similar bonds; (v) banker’s liens, rights of setoff and
similar liens arising by operation of law on deposits made in the ordinary course of business,
including all deposit accounts and securities accounts, provided such liens do not arise in respect
of borrowed money; (vi) liens arising in connection with clause (iii) of the definition of
Permitted Debt on any Equipment (and any accessions, attachments, replacements or improvements
thereon) which was acquired or financed by Borrower or any of its Subsidiaries to secure the
purchase price of such Equipment, provided that the lien is confined solely to the Equipment so
acquired or financed, and improvements thereon and the proceeds thereof; (vii) leases or subleases
and non-exclusive licenses and sublicenses granted to others in the ordinary course of business;
(viii) liens in favor of customs and revenue authorities arising as a matter of law to secure
payments of custom duties in connection with the importation of goods; and (ix) liens securing
Subordinated Debt.



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     NN. “Person” means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, unincorporated organization, association, corporation, institution,
entity, party or government (whether national, federal, state, county, city, municipal or
otherwise, including without limitation, any instrumentality, division, agency, body or department
thereof).



     OO. “Proceeds” means “proceeds,” as such term is defined in the UCC.



     PP. “Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents, Chattel Paper,
Supporting Obligations, letters of credit, proceeds of any letter of credit, and Letter of Credit
Rights, and (ii) all customer lists, software, and business records related thereto.



     QQ. “Securities Account” means any “securities account” as such term is defined in the UCC,
and in any event includes any account to which a financial asset is or may be credited in
accordance with an agreement under which the person maintaining the account undertakes to treat the
person for whom the account is maintained as entitled to exercise the rights that comprise the
financial asset.



     RR. “Subordinated Debt” means indebtedness owed to a Person other than Lender and subordinated
to Borrower’s Liabilities pursuant to the terms and conditions of a subordination agreement
acceptable to Lender in its sole discretion.



     SS. “Subsidiary” means, with respect to any Person, any corporation, partnership, limited
liability company, association, joint venture or other business entity of which more than 50% of
the total voting power of shares of stock or other ownership interests entitled (without regard to
the occurrence of any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions) having the power to
direct or cause the direction of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof.



     TT. “Success Fee Agreement” has the meaning set forth in Section 2.5(b) hereof.



     UU. “Supporting Obligations” means any “supporting obligations,” as such term is defined in
the UCC, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest.



     VV. “Term Loan” has the meaning set forth in Section 2.1 hereof.



     WW. “Trademark License” means any written agreement granting any right to use any Trademark or
Trademark registration, now owned or hereafter acquired by Borrower or in which Borrower now holds
or hereafter acquires any interest.



     XX. “Trademarks” means all of the following property, now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest: (a) all trademarks,
tradenames, corporate names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have appeared or appear, and
designs of like nature, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and any applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or any political
subdivision thereof, (b) all reissues, extensions or renewals thereof, and (c) all rights in World
Wide Web addresses, uniform resource locators and domain names and applications and registrations
therefor.



     YY. “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
Illinois, provided that if by reason of mandatory provisions of law, the perfection, the effect of
perfection or non-perfection or the priority of the security interest granted hereunder in any
Collateral (as hereinafter defined) or the availability of any remedy hereunder is governed by the
Uniform Commercial Code as in effect on or after the date hereof in other jurisdiction(s), then
“UCC” means the Uniform Commercial Code as in effect on or after the date hereof in such other
jurisdiction(s) for the purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection, or priority or availability of such remedy.



     ZZ. “Warrants” has the meaning set forth in Section 2.5(b) hereof.



2. The Loans



2.1 Term Loan. On the terms and subject to the conditions contained in this Loan Agreement,
including those listed in Section 2.5 hereof, Lender shall loan to Borrower a term loan (the “Term
Loan”), in an amount up to Twenty Million Dollars ($20,000,000.00), in four tranches as follows:
(i) on the date hereof, the initial advance in an amount of Five Million Dollars ($5,000,000), (ii)
on or before December 31, 2008, an additional advance (the “Second Tranche”) in an amount of up to
Six Million Dollars ($6,000,000), (iii) on or before December 31, 2008, an


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additional advance (the “Third Tranche”) in an amount of up to Six Million Dollars ($6,000,000),
and (iv) on or before March 31, 2009, an additional advance (the “Fourth Tranche”) in an amount of
up to Three Million Dollars ($3,000,000), each pursuant to a funding request submitted to Lender in
the form attached hereto as Exhibit B (the “Funding Request”) not later than 9:00 a.m.
(prevailing Chicago time) not less than five (5) Business Days prior to the date of such proposed
borrowing. In no event shall the aggregate amount of the advances made hereunder exceed Twenty
Million Dollars ($20,000,000.00). This is not a revolving line of credit and Borrower may not
repay and re-borrow the amounts advanced or to be advanced under this Section 2.1. Each advance in
respect of the Term Loan (each, a “Loan”) shall be repaid in thirty-nine (39) monthly installments
as follows: (i) commencing on the first Business Day of the first month after the date of the
relevant Loan, three (3) monthly payments of interest only (paid in arrears); and then (ii)
commencing on the first Business Day of the fourth month after the date of the relevant Loan,
thirty-six (36) equal monthly scheduled installments of principal and interest (paid in arrears),
each such payment to be made on the first Business Day of the relevant month.



2.2 Evidence and Nature of Loans. Each Loan to be made by Lender to Borrower pursuant to
this Loan Agreement will be evidenced by one or more promissory notes (in form and substance
satisfactory to Lender) to be executed and delivered by Borrower to Lender before or concurrently
with Lender’s disbursement of such Loan to or for the account of Borrower. All of Borrower’s
Liabilities (including all Loans under this Loan Agreement) shall be secured by Lender’s security
interest in the Collateral and by all other security interests, liens, claims and encumbrances now
and/or from time to time hereafter granted by Borrower to Lender, whether hereunder or under the
Other Agreements.



2.3 Use of Proceeds. Borrower warrants and represents to Lender that Borrower shall use the
proceeds of each Loan made by Lender to Borrower pursuant to this Loan Agreement and any advances
made pursuant to the Other Agreements solely for legal and proper corporate purposes (duly
authorized by its Board of Directors) and consistent with all applicable laws and statutes.



2.4 Direction to Remit. Borrower hereby authorizes and directs Lender to disburse, for and
on behalf of Borrower and for Borrower’s account, the proceeds of the Loan made by Lender to
Borrower pursuant to this Loan Agreement to such Person or Persons as an officer or director of
Borrower shall direct, whether in writing or orally.



2.5 Conditions Precedent. (a) The following conditions precedent must be met before each
Loan is made hereunder: (i) No event, condition or change that has had, or could reasonably be
expected to have, a Material Adverse Effect shall have occurred since the later of the date of this
Loan Agreement or the date of the last Loan made by the Lender to Borrower hereunder, (ii) The
representations and warranties contained in this Loan Agreement and in the Other Agreements shall
be true and correct in all material respects on and as of the date of such Loan unless such
representations and warranties were made as of a specified date, in which case such representations
and warranties shall be true and correct in all material respects as of such specified date, (iii)
As of the date of such Loan, no event shall have occurred and be continuing or would result from
such Loan or the application of the proceeds thereof that would constitute an Event of Default or a
Default, and (iv) Such other documents and information as Lender may reasonably request from
Borrower from time to time after consultation with Borrower.




     (b) In addition, the following conditions precedent must be met before the initial Loan is
made hereunder: (i) Payment of all fees required under this Loan Agreement or the Other
Agreements, (ii) Receipt by Lender of satisfactory release documents from any and all conflicting
secured creditors (other than holders of Permitted Liens), (iii) Receipt by Lender of appropriate
filings and other means of perfecting its security interest in the Collateral, including but not
limited to specific collateral assignments of Collateral consisting of instruments or evidenced by
titles, (iv) Lender shall have received copies of the certificates and evidences of insurance
contemplated under Section 5.6 hereof and the Financials described in Section 7.3 for the periods
ending June 30, 2008 and July 31, 2008, (v) Receipt by Lender, to the extent requested, of adequate
proof of free and clear ownership of the Collateral, including but not limited to paid in full
invoices and cancelled checks or other means of payment for said invoices, (vi) Execution by
Borrower and applicable financial institution(s) of any required account control agreements for the
benefit of Lender, (vii) Delivery by Borrower of a satisfactory landlord waiver duly executed and
delivered by Borrower’s Seattle, Washington landlord, (viii) Receipt by Lender of Warrants to
purchase up to $400,000 of shares of Borrower’s Common Stock, in form and substance satisfactory to
Lender (the “Warrants”), (ix) a success fee agreement, in form and substance satisfactory to Lender
(the “Success Fee Agreement”), and (ix) Delivery by Borrower of a legal opinion of counsel to
Borrower relating to this Loan Agreement and the Other Agreements in form and substance
satisfactory to Lender.



     (c) In addition, the following conditions must be met before the Second Tranche is made
available hereunder: (i) Borrower has demonstrated (by providing minutes and resolutions, or
actions by unanimous written consent, of the Board of Directors relating thereto) to Lender that
the Board of Directors of Borrower has reviewed OMS201 Phase 1 data from the trial being conducted
as of the date hereof and after such review, approved the advancement of OMS201 to the next
clinical trial.



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     (d) In addition, the following conditions must be met before the Third Tranche is made
available hereunder: (i) Borrower has demonstrated (by providing minutes and resolutions, or
actions by unanimous written consent, of the Board of Directors relating thereto) to Lender that
the Board of Directors of Borrower has reviewed OMS302 Phase 1 data from the trial being conducted
as of the date hereof and after such review, approved the advancement of OMS302 to the next
clinical trial.



     (e) In addition, the following conditions must be met before the Fourth Tranche is made
available hereunder: (i) Borrower has received not less than $25 million in cash proceeds on or
after the date hereof but prior to March 31, 2009, from any of the following sources: (i) the sale
of equity securities (including the exercise of any stock options or warrants), (ii) the incurrence
of Subordinated Debt, (iii) the receipt of proceeds of any grants, (iv) the receipt of proceeds
from any strategic partnerships or co-development projects and/or (iv) the receipt of proceeds from
licensing and joint venture fees, evidenced to the reasonable satisfaction of Lender.


2.6 Payments and Taxes. Subject to the satisfaction of Lender’s (including any permitted
assignee) obligation in the last sentence of this Section 2.6, any and all payments made by
Borrower under this Loan Agreement or any Other Agreement shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any governmental authority (including
any interest, additions to tax or penalties applicable thereto) other than any taxes imposed on or
measured by Lender’s overall net income and franchise taxes imposed on it (in lieu of net income
taxes), by a jurisdiction (or any political subdivision thereof) as a result of Lender being
organized or resident, conducting business (other than a business deemed to arise from Lender
having executed, delivered or performed its obligations or received a payment under, or enforced,
or otherwise with respect to, this Loan Agreement or any Other Agreement) or having its principal
office in such jurisdiction (“Indemnified Taxes”). Subject to the satisfaction of Lender’s
obligation in the last sentence of this Section 2.6, if any Indemnified Taxes shall be required by
law to be withheld or deducted from or in respect of any sum payable under this Loan Agreement or
any Other Agreement to Lender (w) an additional amount shall be payable as may be necessary so
that, after making all required withholdings or deductions (including withholdings or deductions
applicable to additional sums payable under this Section) Lender receives an amount equal to the
sum it would have received had no such withholdings or deductions been made, (x) Borrower shall
make such withholdings or deductions, (y) Borrower shall pay the full amount withheld or deducted
to the relevant taxing authority or other authority in accordance with applicable law and (z)
Borrower shall deliver to Lender evidence of such payment. Borrower’s obligation hereunder shall
survive the termination of this Loan Agreement. Lender (including any permitted assignee) shall
provide Borrower, within thirty (30) days following the execution of this Loan Agreement (or
promptly after any permitted assignment of Lender’s interests hereunder), with a properly executed
IRS Form W-9 (or such other form) certifying Borrower’s exemption from “backup withholding” within
the meaning of Section 3406 of the Internal Revenue Code.




3. Interest, Fees and Repayment



3.1 Interest. Each Loan shall bear interest payable monthly in arrears on the first
Business Day of each month, calculated on the basis of a 360 day year comprised of twelve (12)
thirty day months at a per annum rate equal to the interest rate of 12.50%. In no event shall
interest accrue or be payable in connection with any Loan in an amount in excess of that permitted
under applicable law. If the note(s) so provide, the interest thereunder may be precomputed for
the period ending when payments thereunder are due and on the assumption that all payments will be
made on their respective due dates. Payments due under any note and not made by their scheduled due
date for a period in excess of five (5) days thereafter shall be overdue and shall be subject to a
service charge in an amount equal to two percent (2%) of the delinquent amount, but not more than
the maximum rate permitted by law, whichever is less. In addition, and notwithstanding the
forgoing, during the continuance of an Event of Default all outstanding Borrower’s Liabilities in
respect of the Loans shall bear interest (payable on demand) at a rate that is two percent (2%) per
annum in excess of the Loan Interest Rate applicable to each Loan and other Borrower’s Liabilities
from time to time.



3.2 Fees. Borrower agrees to pay to Lender a fee of $25,000 to cover due diligence and
other costs and expenses incurred in connection with the Loan, of which Lender acknowledges receipt
of $25,000. All fees payable hereunder shall be earned when due and payable hereunder, and shall
not be refundable in whole or in part. Notwithstanding anything in this Loan Agreement, Borrower’s
obligation with respect to the Lender’s legal fees and costs for negotiating and documenting this
Loan Agreement and the Other Agreements in respect of the origination of the Loan shall not exceed
$25,000 and such legal fees and costs shall be paid our of the $25,000 that Lender has already
received pursuant to this Section 3.2.



3.3 Repayment. Borrower’s Liabilities under this Loan Agreement are absolute and
unconditional. Any and all costs, fees and expenses payable pursuant to this Loan Agreement or any
of the Other Agreements shall be payable by Borrower to Lender or to such other person or persons
designated by Lender, within three (3) Business Days of


7









 






receipt of written invoice with a reasonably detailed itemization of such costs, fees and expenses.
All payments to Lender shall be payable by 2:00 p.m. (prevailing Chicago time) at Lender’s
principal place of business specified at the beginning of this Loan Agreement or at such other
place or places as Lender may designate in writing to Borrower. All payments to Persons other than
Lender shall be payable at such place or places as Lender may designate in writing to Borrower.



3.4 Application of Payments. Provided that an “Event of Default” (hereinafter defined)
does not exist, the application of payments received by Lender pursuant to this Loan Agreement
shall be applied first to any and all late charges, fees and expenses then due and payable; second
to interest then due and payable hereunder; third to the principal of the Loans then due and
payable, fourth to the remaining Loans then outstanding and finally, to any other Borrower
Liabilities then outstanding. From and after an Event of Default, Lender shall have the continuing
and exclusive right to apply any and all such payments received by Lender to any portion of
Borrower’s Liabilities, including to any of Borrower’s Liabilities arising under any of the Other
Agreements. Solely for the purpose of computing interest earned by Lender, payments received by
Lender shall be applied as aforesaid on the Business Day following receipt by Lender. Checks or
other items of payment received after 2:00 p.m. prevailing Chicago, Illinois time shall be deemed
received the following Business Day.



3.5 Accuracy of Statements Each statement of account by Lender delivered to Borrower
relating to Borrower’s Liabilities shall be presumed correct and accurate (absent manifest error)
and shall constitute an account stated between Borrower and Lender unless thereafter waived in
writing by Lender, in Lender’s discretion. Any objection to the statement that Borrower may have
must be delivered to Lender, by registered or certified mail, within thirty (30) days after
Borrower’s receipt of said statement.




4. Term and Prepayment



4.1 Term. This Loan Agreement shall be in effect until the indefeasible payment in full to
Lender of all of Borrower’s Liabilities. Except as provided below, Borrower has no right to prepay
Borrower’s Liabilities under this Loan Agreement and the Other Agreements.



4.2 Voluntary Prepayment. Borrower may, upon at least thirty (30) days prior written
notice to Lender (stating the proposed date of prepayment, which date shall then be the due date
for such Loan), prepay the outstanding principal amount of all Loans then outstanding in whole, but
not in part by paying to Lender, immediately available funds, an amount equal to the sum of (i) the
outstanding principal amount of all Loans then outstanding, (ii) all accrued and unpaid interest,
fees and expenses on the Loans through the date of prepayment, and (iii) (A) in the event that such
prepayment is made on or prior to the date which is eighteen (18) months after the date of the
relevant Loan, a prepayment premium equal to 2% of the principal amount being prepaid; and (B) in
the event that such prepayment is made after the date which is more than eighteen months after the
date of the relevant Loan but on or prior to the maturity date of the relevant Loan, a prepayment
premium equal to 1% of the principal amount being prepaid.




5. Collateral and Security



5.1 Grant of Security Interest. To further secure to Lender the prompt full and faithful
payment and performance of Borrower’s Liabilities (other than those arising under the Warrants or
the Success Fee Agreement) and the prompt, full and complete performance by Borrower of each of its
covenants and duties under this Loan Agreement and the Other Agreements, Borrower grants to Lender,
a valid, first priority continuing security interest in and lien upon all of the following (except
as to assets or property with Permitted Liens, upon which a lien which may be other than a first
priority lien is granted), whether now owned or hereafter acquired and wherever located:





	 	(i)	 	All Receivables;
	 
	 	(ii)	 	All Equipment;
	 
	 	(iii)	 	All Fixtures;
	 
	 	(iv)	 	All General Intangibles (other than Intellectual Property);
	 
	 	(v)	 	All Inventory;
	 
	 	(vi)	 	All Investment Property;
	 
	 	(vii)	 	All Deposit Accounts and Securities Accounts;
	 
	 	(viii)	 	All Cash;
	 
	 	(ix)	 	All Documents;




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	 	(x)	 	All Proceeds from the sale, transfer or other disposition of Intellectual
Property;
	 
	 	(xi)	 	All other Goods and tangible and intangible personal property of Borrower other
than Intellectual Property, whether now or hereafter owned or existing, leased,
consigned by or to, or acquired by, Borrower and wherever located, and
	 
	 	(xii)	 	to the extent not otherwise included, all Proceeds of each of the foregoing
and all accessions to, substitutions and replacements for, and rents, profits and
products of each of the foregoing and all attachments, accessories, accessions,
replacements, substitutions, additions or improvements to any of the foregoing,
wherever located and all products and proceeds of the foregoing including without
limitation proceeds of insurance policies insuring the foregoing and all books and
records with respect thereto;




(all of the foregoing personal property is hereinafter sometimes individually and sometimes
collectively referred to as “Collateral”). Notwithstanding anything herein contained or construed
to the contrary, Borrower is not granting to Lender, and Lender is not receiving from Borrower, any
grant of a security interest in (i) any of the outstanding capital stock or other equity interests
of any directly owned Subsidiary of Borrower organized under the laws of any jurisdiction other
than the United States, any State thereof or the District of Columbia in excess of 65% of the
voting power of all classes of such capital stock or other equity interests of such Subsidiary
entitled to vote or (ii) any of Borrower’s now owned or hereafter acquired Intellectual Property
(other than a security interest in the Proceeds from the sale, transfer or other disposition of
Intellectual Property); provided, however, that software, firmware and operating
systems that cannot be removed from the Collateral without rendering the Collateral inoperable
shall be deemed to be part of the “Collateral” unless such construction is prohibited by or
inconsistent with any relevant license or other agreement respecting such software, firmware or
operating system or (iii) any property subject to a lien described in clause (vi) of the definition
of Permitted Liens in which the granting of a security interest therein is prohibited by or would
constitute a default under any agreement or document governing such property, provided,
that immediately upon the ineffectiveness, lapse or termination of any such provision, the
Collateral shall include, and Borrower shall be deemed to have granted a security interest in, all
such rights and interests as if such provision had never been in effect or (iv) Borrower’s cash
collateral account maintained at Comerica Bank to secure certain lease obligations, provided that
the principal amount of such cash collateral account shall not exceed $250,000, but only for such
times as Borrower is obligated to maintain such cash collateral account in respect of such lease
obligations. Borrower shall make appropriate entries upon its financial statements and its books
and records disclosing Lender’s security interest in the Collateral.



Borrower hereby further agrees that, except as expressly permitted herein including with respect to
Permitted Liens, Borrower shall not hereafter grant a security interest in or pledge any of its
Intellectual Property to any other party.



5.2 Further Assurances. Borrower shall execute and/or deliver to Lender, at any time and
from time to time hereafter at the request of Lender, all agreements, instruments, UCC financing
statements (or other required perfection instruments), documents and other written matter
(hereinafter individually and/or collectively, referred to as “Additional Documentation”) that
Lender reasonably may request, in a form and substance reasonably acceptable to Lender, to perfect
and maintain Lender’s perfected security interest in the Collateral and to consummate the
transactions contemplated in or by this Loan Agreement and the Other Agreements. Borrower,
irrevocably, (a) hereby makes, constitutes and appoints Lender (and all Persons designated by
Lender for that purpose) as Borrower’s true and lawful attorney (and agent-in-fact) to sign the
name of Borrower on the Additional Documentation and to deliver the Additional Documentation to
such Persons as Lender, in its sole and absolute discretion, may elect, (b) authorizes completion
and filing of any such Additional Documentation by Lender or its agents, whether paper or
electronic, (c) hereby ratifies and confirms the completion and filing of Additional Documentation
by Lender or its agent, paper or electronic, occurring prior to the date hereof, and (d) declares
that Borrower has the present intention to authenticate and process any such Additional
Documentation, whether paper or electronic, and whether or not completed and filed by Lender or its
agents before or after the date hereof.



5.3 Inspection of Collateral. Lender (by any of its officers, employees and/or agents)
shall have the right, upon prior written notice (so long as an Event of Default is not continuing)
and during Borrower’s usual business hours, to inspect the Collateral and all related records (and
the premises upon which it is located) and to verify the amount and condition of or any other and
all financial records and matters whether or not relating to the Collateral, provided that Lender
shall not conduct such inspections more than once per year unless an Event of Default exits.
During the continuance of an Event of Default, all costs, fees and expenses incurred by Lender, or
for which Lender has become obligated, in connection with such inspection and/or verification shall
be payable by Borrower to Lender. Borrower agrees to use its commercially reasonable efforts to
cause its employees and agents to cooperate with Lender in all inspections.




9









 







5.4 Controlled Accounts; Proceeds of Collateral. (a) Except for Deposit Accounts which
Borrower and Lender agree shall be closed by Borrower within thirty (30) days from the date hereof,
Borrower shall deliver, or cause to be delivered to Lender an account control agreement in form and
substance satisfactory to Lender and duly authorized, executed and delivered by Borrower and each
bank or financial institution where Borrower maintains a deposit or securities account (each a
“Controlled Account”); provided, however, that Lender will not exercise its right to control
amounts in a Controlled Account unless an Event of Default hereunder or under the Other Agreements
has occurred and is continuing. Borrower will provide such evidence of the closure of any Deposit
Accounts as provided above as Lender may reasonably request. With respect to Borrower’s
subsidiary, nura, inc., Borrower shall not be required to deliver an account control agreement for
any deposit accounts maintained by such entity so long as the aggregate amounts of Cash on deposit
therein does not exceed $20,000.




     (b) All proceeds arising from the disposition of any Collateral by Borrower shall be
deposited in a Controlled Account within one Business Day after receipt by Borrower. Nothing in
this Section limits the restrictions on disposition of Collateral set forth elsewhere in this Loan
Agreement.


5.5 Third Party Claims. Lender, in its sole and absolute discretion, without waiving or
releasing any obligation, liability or duty of Borrower under this Loan Agreement or the Other
Agreements or any Event of Default, may (but shall be under no obligation to) at any time or times
hereafter, pay, acquire and/or accept an assignment of any security interest, lien, encumbrance or
claim asserted (other than Permitted Liens) by any Person against the Collateral. All sums paid by
Lender in respect thereof and all costs, fees and expenses, including reasonable attorneys’ fees,
court costs, expenses and other charges relating thereto incurred by Lender on account thereof
shall be payable by Borrower to Lender.



5.6 Insurance. Borrower shall at all times throughout the term of this Loan Agreement and
any extension hereof procure and maintain at its own expense the following minimum insurance
coverages which shall be provided by insurance carriers with an AM Best rating of A, Class C
or as otherwise acceptable to Lender and with such deductibles and exclusions as approved by
Lender: (1) Special Form property damage insurance covering the Collateral which shall include
but not be limited to fire and extended coverage and where applicable mechanical breakdown and
electrical malfunction, and which shall be written in amount not less than the current replacement
cost of Borrower’s property; and, (2) Commercial general liability insurance which may include
excess liability insurance written on occurrence basis with a limit of not less than $2,000,000,
and (3) Workers’ compensation insurance in accordance with statutory limits and employers’
liability coverage which may include excess liability in an amount not less than $1,000,000.



Any insurance carried and maintained in accordance with this Loan Agreement by Borrower shall be
endorsed to provide that: (i) Lender shall be additional insured and loss payee with respect to
the property insurance described in subsection (1) of the prior paragraph, and Lender shall be an
additional insured with respect to the liability insurance described in subsection (2) of the prior
paragraph; and (ii) The insurers thereunder waive all rights of subrogation against Lender, any
right of setoff and counterclaim and any other right to deduction due to outstanding premiums,
whether by attachment or otherwise; (iii) Such insurance shall be primary without right of
contribution of any other insurance carried by or on behalf of Lender; and (iv) Inasmuch as such
policies are written to cover more than one insured, all terms, conditions, insuring agreements and
endorsements (other than the limits of liability) shall operate in the same manner as if there were
a separate policy covering each insured; and (v) If such insurance is canceled for any reason
whatsoever, including nonpayment of premium, or any substantial change is made in the coverage that
affects the interests of Lender the insurer shall use commercially reasonable efforts to notify the
Lender of such change or cancellation prior to the effective date of such change or cancellation.
Borrower, irrevocably, appoints Lender as Borrower’s true and lawful attorney (and agent-in fact)
for the purpose of making, settling and adjusting claims under such policies, endorsing the name of
Borrower on any check, draft, instrument or other item of payment for the proceeds of such policies
and for making all determinations and decisions with respect to such policies, and such appointment
will be effective during the existence of an Event of Default hereunder.



On or before the initial funding by Lender hereunder, and at each policy anniversary date, Borrower
shall arrange to furnish Lender with appropriate Certificates of Insurance. Such Certificates of
Insurance shall be executed by each insurer or by an authorized representative of each insurer, and
shall identify insurers, the type of insurance, the insurance limits and the policy term and shall
specifically list the special endorsements (i) through (v) above.



In case of the failure to procure or maintain such insurance, Lender shall have the right, but not
the obligation, to obtain such insurance and any premium paid by Lender shall be immediately due
and payable by Borrower to Lender. The maintenance of any policy or policies of insurance pursuant
to this Section shall not limit any obligation or liability of Borrower pursuant to any other
Sections or provisions of this Loan Agreement.




10









 







If no Event of Default has occurred and is continuing, proceeds from claims under any casualty
policy will, at Borrower’s option, be payable to Borrower to replace the property subject to the
claim or otherwise acquire property useful to the business of Borrower, provided that any such
replacement property shall be deemed Collateral in which Lender has been granted a first priority
security interest; during the existence of an Event of Default, proceeds from claims payable under
any casualty policy will, at Lender’s option, be payable to Lender and applied against Borrower’s
Liabilities. If an Event of Default has occurred and is continuing, all proceeds payable under any
such policy shall, at Lender’s option, be payable to Lender to be applied on account of the
Borrower’s Liabilities.



5.7 Charges on Collateral. Borrower shall not permit any Charges (other than Permitted
Liens) to arise, or to remain, and Borrower shall pay promptly when due, and discharge, such
Charges. In the event Borrower, at any time or times hereafter, shall fail to pay such Charges when
due or to obtain such discharges, Borrower shall so advise Lender thereof in writing. Lender may,
without waiving or releasing any obligation or liability of Borrower hereunder or Event of Default,
in its sole and absolute discretion, at any time or times thereafter, make such payment, or any
part thereof, or obtain such discharge and take any other action with respect thereto which Lender
deems advisable. All sums so paid by Lender and any expenses, including reasonable attorneys’ fees,
court costs, expenses and other charges relating thereto, shall be payable by Borrower to Lender
upon demand.



5.8 UCC Filing Authorization. Borrower hereby authorizes Lender and its counsel and other
representatives to file, at any time on or after the date hereof, UCC financing statements and
continuation statements, and amendments to financing statements, in any jurisdictions and with any
filing offices as Lender may determine, in its sole discretion, are necessary or advisable to
perfect the security interests granted to Lender hereunder and under the Other Agreements. Such
financing statements may describe the Collateral in the same manner as described herein or therein
or may contain an indication or description of Collateral that describes such property in any other
manner as Lender may determine is necessary or advisable to ensure the perfection of the security
interest in the Collateral.



5.9 Accounts. So long as no Event of Default has occurred and is continuing, subject to
Section 7.4 hereof, Borrower may settle, adjust or compromise any claim, offset, counterclaim or
dispute with any Account Debtor. At any time that an Event of Default has occurred and is
continuing, Lender may, at its option, notify Borrower that Lender intends to have the exclusive
right to settle, adjust or compromise any claim, offset, counterclaim or dispute with Account
Debtors or grant any credits, discounts or allowances and on and after such notice from Lender to
Borrower, Lender shall have such exclusive right.




6. Warranties and Representations 





	6.1	 	Borrower Representations. Borrower warrants and represents to Lender, as of the date
hereof and as of the date of any Loan made hereunder, and agrees and covenants to Lender that:
	 
	(a)	 	Borrower is and at all times hereafter shall be (i) a Person having that legal name and
organizational structure as set forth above, duly organized and existing and in good standing
under the laws of the state of its organization as set forth above and (ii) qualified or
licensed to do business in all other states in which the laws require Borrower to be so
qualified and/or licensed, except in such states where the failure to be so qualified or
licensed would not reasonably be expected to have a Material Adverse Effect;
	 
	(b)	 	Borrower is duly authorized and empowered to enter into, execute, deliver and perform this
Loan Agreement and the Other Agreements and the execution, delivery and/or performance by
Borrower of this Loan Agreement and the Other Agreements, and the use by Borrower of the
proceeds of the Loans hereunder, shall not, by the lapse of time, the giving of notice or
otherwise, conflict with or constitute a violation of any applicable law (including, without
limitation, Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation thereof) or a breach of any provision contained in Borrower’s
organizational documents or contained in any agreement, instrument or document to which
Borrower is now or hereafter a party or by which it is or may become bound or give rise to or
result in any default thereunder, except to the extent that non-compliance either individually
or in the aggregate could reasonably be expected to have a Material Adverse Effect;
	 
	(c)	 	This Loan Agreement is (and when executed or delivered, each Other Agreement will be) the
legally valid and binding obligation of Borrower, enforceable against Borrower in accordance
with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable
principles (whether enforcement is sought in equity or at law).
	 
	(d)	 	Except as disclosed to Lender in writing prior to the date hereof, there are no actions or
proceedings which are pending, or to its knowledge threatened in writing, against Borrower
where such actions or proceedings could reasonably be expected to have a Material Adverse
Effect. Borrower is not in breach of or a party to any contract or agreement or subject to
any charge, restriction, judgment, decree or order which has or could




11









 






	 	 	reasonably be expected to have a Material Adverse Effect, nor is Borrower in default with
respect to any indenture, security agreement, mortgage, deed or other similar agreement relating
to the borrowing of monies to which it is a party or by which it is bound that could reasonably
be expected to have a Material Adverse Effect;
	 
	(e)	 	Except as disclosed to Lender in writing prior to the date hereof, Borrower has and is in
good standing with respect to all licenses, patents, copyrights, trademarks, trade names,
governmental permits, certificates, consents and franchises necessary to continue to conduct
its business as previously conducted by it and to own or lease and operate its properties as
now owned or leased by it, except, in each case, where failure to be in good standing or to
obtain such permits, certificates, consents or franchises could not reasonably be expected to
have a Material Adverse Effect;
	 
	(f)	 	The financial statements delivered by Borrower to Lender prior to the date hereof and the
Financials delivered by Borrower to Lender pursuant to Section 7.3 hereof fairly and
accurately present the assets, liabilities and financial conditions and results of operations
of Borrower as of the dates and for the periods stated therein and have been prepared in
accordance with GAAP (except for (i) the absence of footnotes and subject to normal year end
adjustments with respect to interim, unaudited Financials and (ii) non-compliance with GAAP
that is disclosed by Borrower to Lender with such specificity as Lender may reasonably
require), and, as of the date of this Loan Agreement and as of the date of funding of any
Loans hereunder, no event, condition or change that has had, or could reasonably be expected
to have, a Material Adverse Effect has occurred since the date of this Loan Agreement;
	 
	(g)	 	As to the Accounts and other Collateral, (i) Borrower has and at all times hereafter shall
have good, indefeasible and merchantable title to and ownership of the Collateral and the
Accounts described and/or listed on any certificate or schedule relating to the Accounts
delivered to Lender, free and clear of all liens, claims, security interests and encumbrances
except those of Lender and Permitted Liens; (ii) except for (A) mobile equipment (including
laptop computers and other similar office equipment) and (B) other property with an aggregate
value of not more than $125,000, the Collateral shall be kept and/or maintained solely at the
addresses identified in writing to Lender; (iii) Borrower, promptly upon reasonable demand by
Lender, shall deliver to Lender any and all evidence of ownership of, including without
limitation, vendor invoices and proofs of payment thereof, certificates of title to and
applications for title to, any Collateral; (iv) Borrower shall keep and maintain the
Collateral in good operating condition and repair (ordinary wear and tear excepted) and shall
make all necessary replacements thereof and renewals thereto so that the value and operating
efficiency thereof shall at all times be maintained and preserved; and (v) Borrower shall not
permit any such items to become a fixture to real estate or accession to other personal
property.
	 
	(h)	 	As to Lender’s security interest, (i) Lender’s security interest in the Collateral is now and
at all times hereafter shall be perfected and have a first priority (subject to Permitted
Liens); (ii) except for (A) mobile equipment (including laptop computers and similar office
equipment) and (B) other property with an aggregate value of not more than $125,000, the
offices and/or locations where Borrower keeps the Collateral and Borrower’s books and records
concerning the Collateral are at the locations identified to Lender in writing and Borrower
shall not remove such books and records and/or the Collateral therefrom to any other location
unless Borrower gives Lender written notice thereof at least thirty (30) days prior thereto
and the same is within the contiguous forty-eight (48) states of the United States of America;
and (iii) the addresses identified to Lender in writing as Borrower’s chief executive office
and principal place(s) of business are Borrower’s sole offices and place(s) of business, and
Borrower, by written notice delivered to Lender at least thirty (30) days prior thereto, shall
advise Lender of any change thereto.
	 
	(i)	 	Borrower is not an “investment company” or a company “controlled” by an “investment company”
as such terms are defined in the Investment Company Act of 1940.
	 
	(j)	 	All income and other tax returns and reports required to be filed by Borrower have been
timely filed, and all taxes shown on such tax returns to be due and payable and all other
assessments, fees and governmental charges upon Borrower and its properties, assets, income,
businesses and franchises have been paid when due and payable except to the extent that (A)
such taxes, assessments, charges or claims (i) are being contested in good faith by
appropriate proceedings (promptly instituted and diligently conducted) so long as such reserve
or other appropriate provision, if any, as shall be required in conformity with GAAP shall
have been made therefor and (ii) such proceeding shall stay the attachment, sale, disposition,
foreclosure or forfeiture of any asset of Borrower in connection with any such contested tax,
assessment, charge or claim or, (B) the failure to timely pay such taxes, assessments, charges
or claims could not reasonably be expected to have a Material Adverse Effect. All necessary
and appropriate estimated payments (including any interest and penalties) in respect of
assessed tax liability under Borrower’s state and federal tax returns have been made on a
timely basis, except with respect to any tax liabilities that are being contested in good
faith provided adequate reserves have been




12









 






	 	 	made in accordance with GAAP and such proceeding shall stay the attachment, sale, disposition,
foreclosure or forfeiture of any asset of Borrower in connection with such contest of such tax,
assessment, charge or claim.
	 
	(k)	 	As of the date hereof and of each Loan (i) the sum of Borrower’s debt (including contingent
liabilities) does not exceed the present fair saleable value of Borrower’s present assets;
(ii) in Borrower’s reasonable belief, Borrower’s capital is not unreasonably small in relation
to its business as it exists and as is contemplated at such time; and (iii) Borrower has not
incurred and does not intend to incur, or believe that it will incur, debts beyond its ability
to pay such debts as they become due.
	 
	(l)	 	No information furnished to Lender by or on behalf of Borrower for use in connection with the
transactions contemplated hereby contains or will contain, any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances in which the same were made,
provided, that any projections contained in such materials are based upon good faith estimates
and assumptions believed by Borrower to be reasonable at the time made and such projections
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. There
are no facts known to Borrower that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
	 
	(m)	 	Borrower has provided to Lender on or prior to the date hereof a schedule that correctly
identifies the ownership interest (including all options, warrants and other rights to acquire
capital stock) of Borrower and each of its Subsidiaries as of the date hereof.
	 
	(n)	 	(i) Borrower (A) has been and is in compliance in all material respects with all applicable
Environmental Laws, except to the extent that the failure to so comply, either individually or
in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; (B)
has not received any written communication, whether from a governmental authority or
otherwise, alleging that Borrower is not in such compliance, and there are no past or present
actions, activities, circumstances conditions, events or incidents that may prevent or
interfere with such compliance in the future; (ii) there is no Environmental Claim pending or,
to the best knowledge of Borrower, threatened (in writing) against Borrower or against any
Person whose liability for any Environmental Claim Borrower has or may have retained or
assumed either contractually or by operation of law that individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect; and (iii) there are no past or
present actions, activities, circumstances, conditions, events or incidents, including,
without limitation, the release, threatened release or presence of any Hazardous Material,
which could reasonably be expected to form the basis of any Environmental Claim against
Borrower or, to the best knowledge of Borrower, against any Person whose liability for any
Environmental Claim Borrower has or may have retained or assumed either contractually or by
operation of law that individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.
	 
	(o)	 	(i) Borrower is an “operating company” within the meaning of the regulations of the United
States Department of Labor included within 29 CFR Section 2510.3-101 (the “DOL Regulations”)
or is in compliance with such other exception as may be available under such regulations to
prevent the assets of Borrower from being treated as the assets of any employee benefit plan
for purposes of the DOL Regulations and (ii) neither Borrower nor any subsidiary of Borrower
maintains or is obligated to make contributions to any employee benefit plan that is subject
to Title IV of the Employee Retirement Income Security Act of 1974, as amended from time to
time, and any successor statute (“ERISA”).





7. Affirmative and Negative Covenants



7.1 Affirmative Covenants. Borrower covenants with Lender that Borrower shall, and shall
cause each of its Subsidiaries to: (a) except as permitted pursuant to Section 7.2(a), preserve and
keep in full force and effect its existence and all rights and franchises, licenses and permits
material to its business, (b) promptly after Borrower becomes aware thereof, pay all income and
other taxes and assessments imposed upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty or fine accrues thereon, provided
however, that Borrower may contest any such tax in good faith provided adequate reserves have been
made in accordance with GAAP and such proceeding shall stay the attachment, sale, disposition,
foreclosure or forfeiture of any asset of Borrower in connection with such contest of such tax,
assessment, charge or claim, (c) comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority, (d) keep adequate
books of record and account, in which complete entries shall be made of all financial transactions
and the assets and of its business, (e) on or prior to September 15, 2008 and promptly after the
establishment of any new facilities or co-host locations, deliver to Lender duly executed landlord
or collateral access agreements, in form and substance satisfactory to Lender, for all premises
(including offices and co-location




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facilities) at which any Collateral is located (other than (i) Borrower’s offices in Seattle,
Washington for which a landlord agreement was delivered to Lender on or prior to the date hereof
and (ii) locations where Collateral comprised of mobile equipment and other miscellaneous equipment
having an aggregate value not more than $125,000) and (f) promptly take any and all necessary
Cleanup action on, under or affecting any property owned, leased or operated by Borrower in
accordance with all laws and the policies, orders and directives of all federal, state and local
governmental authorities, and conduct and complete such Cleanup action in material compliance with
all applicable Environmental Laws.



7.2 Negative Covenants Borrower covenants with Lender that Borrower shall not, and shall
not permit any of its Subsidiaries to:




     (a) grant a security interest in, assign, sell or transfer any of the Collateral or any of its
Intellectual Property to any person or permit, grant, or suffer or permit a lien, claim or
encumbrance upon any of the Collateral or Intellectual Property, except for (i) Permitted Liens,
(ii) the sale of Inventory and obsolete or unneeded Equipment in the ordinary course of business,
or upon Lender’s prior written consent, (iii) (A) non-exclusive licenses and non-exclusive
sub-licenses of Borrower’s Intellectual Property in the ordinary course of business (which shall
include such practices as are customary for companies in the same industry as Borrower) or (B)
exclusive licenses and exclusive sublicenses thereof where such exclusivity is with respect to
geographic location, fields of use, customized products for specific customers and/or time-based as
approved or ratified by Borrower’s Board of Directors, (iv) transactions otherwise permitted by
this Section 7.2 or (v) other transfers not to exceed $250,000 in any calendar year;



     (b) permit or suffer any Charges to attach to or affect any of the Collateral or Intellectual
Property (other than Permitted Liens);



     (c) permit or suffer any receiver, trustee or assignee for the benefit of creditors to be
appointed to take possession of any of the Collateral;



     (d) merge or consolidate with or acquire any Person except in a transaction in which Borrower
is the surviving Person or, if Borrower is not the surviving Person, such transaction does not
result in a Change of Control;



     (e) incur or permit or suffer to exist any indebtedness for borrowed money or for the deferred
purchase price for property or services (other than Permitted Debt);



     (f) voluntarily prepay any indebtedness for borrowed money prior to its scheduled maturity
other than (A) pursuant to the terms hereof or (B) for the conversion of such indebtedness for
borrowed money into equity securities and the payment of cash in lieu of the issuance of fractional
shares;



     (g) make or pay (i) any dividend or other distribution, direct or indirect, on account of any
shares of any class of stock of Borrower, except for dividends payable in capital stock or (ii) any
redemption, retirement or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock of Borrower or any outstanding warrants, options or
other rights to acquire such shares, except that Borrower may (i) repurchase capital stock of
former employees, directors or consultants pursuant to stock repurchase agreements or other similar
in the ordinary course of business and (ii) repurchase capital stock pursuant to Borrower’s rights
of first refusal pursuant to its investor rights agreement with its investors, provided that such
repurchases in the aggregate do not exceed $200,000 in any fiscal year;



     (h) except as otherwise permitted pursuant to this Loan Agreement, enter into (i) any
transaction with any Affiliate unless such transaction is on terms that are no less favorable to
Borrower, or such Subsidiary, than would be obtained in an arms’ length transaction with a
non-affiliated Person or (ii) any transaction (including, without limitation, any sale of assets)
not in the ordinary course of its business (which shall include such transactions as are customary
for companies in the same industry as Borrower);



     (i) make any change in any of its business objectives, purposes and operations, which has, or
could reasonably be expected to have, a Material Adverse Effect;



     (j) without thirty (30) days’ prior written notice to Lender, make any change in its legal
name or state of formation or organization;



     (k) adopt or otherwise become obligated to contribute to any employee benefit plan that is
subject to Title IV of ERISA; or



     (l) take any action or fail to take an action if, as a result of such action or inaction,
Borrower would fail to qualify as an “operating company” within the meaning of the DOL Regulations
or otherwise comply with such other



14









 







exception as may be available under such regulations to prevent the assets of Borrower from
being treated as the assets of any employee benefit plan for purposes of the DOL Regulations.


7.3 Covenants regarding Financial Statements. Borrower shall cause to be furnished to
Lender,




     (i)   the unqualified (other than a “going-concern” qualification), audited fiscal year end
financial statements of Borrower (which shall not contain any exception relating to scope of
review) no later than 150 days after the related fiscal year end,



     (ii)  no later than 30 days after the related month end, the internally prepared monthly
financial statements of Borrower, certified by Borrower’s chief financial officer, each containing
consolidated and, upon Lender’s reasonable request, consolidating profit and loss statements for
the month then ended and for Borrower’s fiscal year to date, consolidated and, upon Lender’s
reasonable request, consolidating balance sheets as at the last day of such month and a
consolidated statement of cash flows for the month then ended and for Borrower’s fiscal year to
date,



     (iii) summary monthly bank statements, no later than 30 days after the related month end,
reflecting month-end cash balances,



     (iv) a monthly Compliance and Disclosure Certificate, substantially in the form of Exhibit A
attached hereto and made a part hereof,



     (v)  promptly after becoming available, copies of Borrower’s annual operating plan and any
revisions thereto and



     (vi) such other financial and business information of Borrower as Lender may reasonably
require, including such other financial and operating performance data as is provided to its
outside investors or commercial lenders and, if applicable, required to be provided to shareholders
by the Securities and Exchange Commission. Each financial statement to be furnished to Lender must
be prepared in accordance with GAAP, except for normal year-end adjustments and the absence of
footnotes in unaudited interim financial statements. Borrower also agrees to promptly provide to
Lender notice of, and such other data and information (financial and otherwise) at any time and
from time to time relating to, any legal actions or proceedings pending, or to its knowledge,
threatened in writing against Borrower (other than actions such as trade mark oppositions for which
Borrower in its reasonable belief determines the potential exposure is de minimis) or the
occurrence of any event or change that has, or could reasonably be expected to have, a Material
Adverse Effect. Financial statements may be delivered via electronic mail to Lender.


7.4 Further Covenants. (a) Borrower may not grant any credit, discount, allowance or
extension, or enter into any agreement for any of the foregoing, except for credits, discounts,
allowances or extensions made or given in the ordinary course of Borrower’s business in accordance
with Borrower’s historic credit and collection practices and policies without the prior consent of
Lender (which shall include such practices as are customary for companies in the same industry as
Borrower).




     (b) Lender shall have the right, once per year upon reasonable notice, or during the
continuance of and Event of Default at any time or times, in Lender’s name or in the name of a
nominee of Lender, to verify the validity, amount or any other matter relating to any Accounts, by
mail, telephone, facsimile transmission or otherwise.


7.5 Indemnification and Liability. Borrower hereby agrees to indemnify Lender and hold
Lender harmless from and against any and all claims, debts, liabilities, demands, obligations,
actions, causes of action, penalties, reasonable costs and expenses (including reasonable
attorneys’ fees) (each a “Claim”), of every nature, character and description, which Lender may
sustain or incur based upon or arising out of the Collateral, any of Borrower’s Liabilities, any
relationship or agreement between Lender and Borrower, or any other matter, cause or thing
whatsoever occurred, done, omitted or suffered to be done by Lender relating to Borrower or
Borrower’s Liabilities (except any Claim arising as the result of the gross negligence or willful
misconduct of Lender). Should any third-party suit or proceeding be instituted by or against Lender
with respect to any Collateral or relating to Borrower, Borrower shall, without expense to Lender,
make available Borrower and its officers, employees and agents and Borrower’s books and records, to
the extent that Lender may deem them reasonably necessary in order to prosecute or defend any such
suit or proceeding. Borrower’s obligation hereunder shall survive termination of this Loan
Agreement.




8. Default



8.1 Events of Default.  The occurrence of any one of the following events shall constitute
a default (“Event of Default”) by Borrower under this Loan Agreement:




15









 








     (a) if Borrower fails to pay any principal of any Loans when due and payable or fails to pay
any other Borrower’s Liabilities within five (5) days after the same are due and payable;



     (b) if any representation, warranty, financial statement, statement, report or certificate
made, deemed made or delivered by Borrower, to Lender in writing is not true and correct in all
material respects when made, deemed made or delivered;



     (c) if Borrower fails or neglects to perform, keep or observe any term, provision, condition
or covenant contained in this Loan Agreement or in the Other Agreements (except covenants contained
in Section 7.2 and 7.3 which must be performed, kept or observed in all respects), which is
required to be performed, kept or observed by Borrower, other than the payment of Borrower’s
Liabilities and the same is not cured within fifteen (15) days;



     (d) if any of the Collateral or any other of Borrower’s other material assets are attached,
seized, subjected to a writ or distress warrant, or are levied upon, or come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors and such event is not
satisfied or dismissed within fifteen (15) days;



     (e) if any event, condition or change shall occur that has had a Material Adverse Effect;



     (f) if a petition under any section or chapter of the Bankruptcy Code or any similar law or
regulation shall be filed by or against Borrower (and with respect to any involuntary action, such
action is not dismissed or stayed within 45 days) or if Borrower shall make an assignment for the
benefit of its creditors or if any case or proceeding is filed by Borrower for its dissolution or
liquidation;



     (g) if Borrower is enjoined, restrained or in any way prevented by court order from conducting
all or any material part of its business affairs and such court order is not dismissed or stayed
within 15 days;



     (h) if an application is made by Borrower or any Person for the appointment of a receiver,
trustee or custodian for the Collateral or any other of Borrower’s assets (and with respect to any
involuntary action, such action is not dismissed or stayed within 45 days);



     (i) if a notice of lien or Charges (other than Permitted Liens) are filed of record with
respect to any of the Collateral by any Person and such notice of lien or Charges are not released
within fifteen (15) days;



     (j) if any Change of Control shall occur;



     (k) if any money judgment, writ or warrant of attachment or similar process (if not adequately
covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged
coverage) in excess of $500,000 shall be entered or filed against Borrower or any of its
Subsidiaries or any of their respective assets and such money judgment, writ or warrant of
attachment or similar process is not effectively stayed within thirty (30) days or is not released,
vacated or otherwise dismissed within 30 days;



     (l) this Loan Agreement or any Other Agreement shall for any reason fail or cease to be valid
and binding on, or enforceable against, Borrower or any other party thereto or Borrower shall so
assert;



     (m) this Loan Agreement or any Other Agreement shall for any reason cease to be in full force
and effect or cease to create a valid and enforceable lien and security interest on any material
portion of the Collateral purported to be covered thereby or any such lien and security interest
shall fail or cease to be a perfected and first priority lien and security interest (subject to
Permitted Liens); or



     (n) if Borrower is in default (i) in the payment of any of Borrower’s indebtedness to Lender
under any Other Agreement; or (ii) in the payment of any indebtedness to any Person other than
Lender in excess of $500,000 (other than trade payables which are being contested by Borrower in
good faith and for which adequate reserves have been established in accordance with GAAP), or, in
the case of clause (i) or (ii), any other event shall occur or condition shall exist under any
agreement or instrument relating to any such indebtedness and such default, condition or event
gives the holders of such debt (or any agent or trustee on their behalf) the then current right to
accelerate such indebtedness. Borrower shall provide written notice of any events or circumstances
which would give rise to an Event of Default under this Section 8.1 promptly (but in no event more
than two (2) Business Days) after becoming aware of such events or circumstances. Failure of
Borrower to give such notice promptly shall constitute an Event of Default hereunder.


8.2 Lender’s Rights and Remedies. Upon an Event of Default under Section 8.1(f), without
notice by Lender to, or demand by Lender of, Borrower, all of Borrower’s Liabilities (other than
those arising under the Warrants or the Success Fee Agreement) shall be automatically accelerated
and shall be due and payable forthwith and any other commitments to provide any financing hereunder
shall automatically terminate, and upon any other Event of Default, without notice by Lender, to or
demand by Lender of, Borrower, Lender may accelerate all of Borrower’s Liabilities (other than
those arising under the Warrants or the Success Fee Agreement) and same shall be due and


16









 






payable forthwith and/or Lender may terminate any other commitments to provide any financing
hereunder. Lender may, in its sole and absolute discretion: (a) exercise any one or more of the
rights and remedies accruing to a Lender under the UCC or other applicable law of the relevant
state or states or other applicable jurisdiction, and in equity, and under any other instrument or
agreement now or in the future entered into between Lender and Borrower, including under this Loan
Agreement and the Other Agreements; (b) enter, with or without process of law and without breach of
the peace, any premises where the Collateral or the books and records of Borrower related thereto
is or may be located, and without charge or liability to Lender therefor seize and remove the
Collateral (and copies of Borrower’s books and records relating to the Collateral) from said
premises and/or remain upon said premises and use the same (together with said books and records)
for the purpose of collecting, preparing and disposing of the Collateral; (c) sell, lease, license
or otherwise dispose of the Collateral or any part thereof by one or more contracts at one or more
public or private sales for cash or credit, provided, however, that Borrower shall be credited with
the net proceeds of such sale(s) only when such proceeds are actually received by Lender; and (d)
require Borrower to assemble the Collateral and make it available to Lender at a place or places to
be designated by Lender which is reasonably convenient to Lender and Borrower.



In addition, at any time an Event of Default has occurred and is continuing, Lender may, in its
discretion, enforce the rights of Borrower against any Account Debtor, secondary obligor or other
obligor in respect of any of the Accounts. Without limiting the generality of the foregoing, at
any time or times that an Event of Default has occurred and is continuing, Lender may, in its
discretion, at such time or times (1) notify any or all Account Debtors, secondary obligors or
other obligors in respect thereof that the Accounts have been assigned to Lender and that Lender
has a security interest therein and Lender may direct any or all Account Debtors, secondary
obligors and other obligors to make payment of Accounts directly to Lender, (2) extend the time of
payment of, compromise, settle or adjust for cash, credit, return of merchandise or otherwise, and
upon any terms or conditions, any and all Accounts or other obligations included in the Collateral
and thereby discharge or release the Account Debtor or any secondary obligors or other obligors in
respect thereof without affecting any of Borrower’s Liabilities, (3) demand, collect or enforce
payment of any Accounts or such other obligations, but without any duty to do so, and Lender shall
not be liable for any failure to collect or enforce the payment thereof nor for the negligence of
its agents or attorneys with respect thereto and (4) take whatever other action Lender may deem
necessary or desirable for the protection of its interests. At any time that an Event of Default
has occurred and is continuing, at Lender’s request, all invoices and statements sent to any
Account Debtor shall state that the Accounts and such other obligations have been assigned to
Lender and are payable directly and only to Lender and Borrower shall deliver to Lender such
originals of documents evidencing the sale and delivery of goods or the performance of services
giving rise to any Accounts as Lender may require.



All of Lender’s rights and remedies under this Loan Agreement and the Other Agreements are
cumulative and non-exclusive. Exercise or partial exercise by Lender of one or more of its rights
or remedies shall not be deemed an election, nor bar Lender from subsequent exercise or partial
exercise of any other rights or remedies. Lender agrees to give notice of any sale to Borrower at
least ten (10) days prior to any public sale or at least ten (10) days before the time after which
any private sale may be held. Borrower agrees that Lender may purchase any such Collateral
(including by way of credit bid), and may postpone or adjourn any such sale from time to time by an
announcement at the time and place of sale or by announcement at the time and place of such
postponed or adjourned sale, without being required to give a new notice of sale. Borrower agrees
that Lender has no obligation to preserve rights against prior parties to the Collateral.



8.3 Power of Attorney. Upon the occurrence and during the continuance of any Event of
Default, without limiting Lender’s other rights and remedies, Borrower grants to Lender an
irrevocable power of attorney coupled with an interest (in addition to such other powers of
attorney granted to Lender elsewhere in this Loan Agreement), authorizing and permitting Lender at
any time, at its option, but without obligation, with or without notice to Borrower, and at
Borrower’s expense, to execute on behalf of Borrower any Additional Documentation, or such other
instruments or documents as may be reasonably necessary in order to exercise a right of Borrower or
Lender, including but not limited to the execution of any proof of claim in bankruptcy, any notice
of lien, claim of mechanic’s or other lien, or assignment or satisfaction of mechanic’s or other
lien, or to take control in any manner of any cash or non-cash proceeds of Collateral and take any
action or pay any sum required of Borrower pursuant to this Loan Agreement and any Other Agreement.
In no event shall Lender’s rights under the foregoing power of attorney or any of Lender’s other
rights under this Loan Agreement be deemed to indicate that Lender is in control of the business,
management or properties of Borrower.




9. General Provisions



9.1 Notices. All notices, demands or other communications required or permitted to be given
or delivered under or by reason of the provisions hereof shall be in writing and shall be deemed to
have been given when (i)


17









 






delivered personally to the recipient, (ii) sent via facsimile transmission, (iii) the next
Business Day after having been sent to the recipient by reputable overnight courier service
(charges prepaid) or (iv) four Business Days after having been mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the parties hereunder at their respective addresses and
transmission numbers indicated on the signature page hereof, or to such other address or to the
attention of such other person as the recipient party has specified by prior written notice to the
sending party.



9.2 Severability. Should any provision of this Loan Agreement be held by any court of
competent jurisdiction to be void or unenforceable, such defect shall not affect the remainder of
this Loan Agreement, which shall continue in full force and effect.



9.3 Integration; Modification. This Loan Agreement, the Other Agreements and such other
written agreements, documents and instruments as may be executed in connection herewith or pursuant
hereto are the final, entire and complete agreement between Borrower and Lender and supersede all
prior and contemporaneous negotiations and oral representations and agreements, all of which are
merged and integrated in this Loan Agreement and the Other Agreements. There are no oral
understandings, representations or agreements between the parties which are not set forth in this
Loan Agreement or the Other Agreements or in other written instruments, documents or agreements
signed by the parties in connection herewith. If any provision contained in this Loan Agreement is
in conflict with, or inconsistent with, any provision in the Other Agreements, the provision
contained in this Loan Agreement shall govern and control, it being the intent of the parties,
however, that the terms of each of the Loan Agreement and the Other Agreements shall be remain in
full force and effect. This Loan Agreement and the Other Agreements may not be modified, altered or
amended except by an agreement in writing signed by Borrower and Lender.



9.4 Time of Essence. Time is of the essence in the performance by Borrower of each and
every obligation under this Loan Agreement.



9.5 Attorneys’ Fees and Other Costs. Subject to the limitations on legal fees and costs set
forth in Section 3.2, Borrower shall reimburse Lender for all out-of-pocket costs and expenses,
including but not limited to reasonable attorneys’ fees and all filing, recording, search, title
insurance, appraisal, audit, and other reasonable costs incurred by Lender in connection with any
amendment or waiver to this Loan Agreement or any Other Agreement; seeking to enforce any of its
rights hereunder against Borrower or the Collateral, including in bankruptcy; enforcing Lender’s
security interest in the Collateral, and representing Lender in all such matters. Borrower shall
also pay Lender’s standard charges for returned checks in effect from time to time. Borrower’s
obligation hereunder shall survive termination of this Loan Agreement.



9.6 Benefit of Agreement; Assignment. The provisions of this Loan Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns, heirs, beneficiaries
and representatives of Borrower and Lender; provided, however, that Borrower may not assign or
transfer any of its rights under this Loan Agreement or any of the Other Agreements without the
prior written consent of Lender, and any prohibited assignment shall be void. Borrower hereby
consents to Lender’s sale, assignment, transfer or other disposition, at any time and from time to
time hereafter, of this Loan Agreement, or the Other Agreements, or of any portion thereof,
including without limitation Lender’s rights, titles, interests, remedies, powers and/or duties,
provided that Lender shall not assign this Loan Agreement or the Other Agreements to any party
known by Lender to be an actual, current competitor of Borrower. Borrower shall establish and
maintain a record of ownership (the “Register”) in which it agrees to register by book
entry Lender’s and each initial and subsequent assignee’s interest in each Loan, and in the right
to receive any payments hereunder and any assignment of any such interest. Notwithstanding
anything to the contrary contained in this Loan Agreement, the Loans (including the notes in
respect of such Loans) are registered obligations and the right, title, and interest of Lender and
its assignees in and to such Loans shall be transferable upon notation of such transfer in the
Register, pursuant to Borrower’s obligation above. In no event is any note to be considered a
bearer instrument or bearer obligation. This Section shall be construed so that the Loans are at
all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and
881(c)(2) of the Internal Revenue Code and any related regulations (or any successor provisions of
the Code or such regulations).



9.7 Joint and Several Liability. If Borrower consists of more than one Person, their
liability shall be joint and several, and the compromise of any claim with, or the release of, any
Borrower shall not constitute a compromise with, or a release of, any other Borrower.



9.8 Paragraph Headings. Paragraph headings are only used in this Loan Agreement for
convenience. The term “including”, whenever used in this Loan Agreement, shall mean “including but
not limited to”. This Loan Agreement has been fully reviewed and negotiated between the parties and
no uncertainty or ambiguity in any term or provision of this Loan Agreement shall be construed
strictly against Lender or Borrower under any rule of construction or otherwise.




18









 







9.9 Interest Laws. Notwithstanding any provision to the contrary contained in this Loan
Agreement or any Other Agreement, Borrower shall not be required to pay, and Lender shall not be
permitted to collect, any amount of interest in excess of the maximum amount of interest permitted
by applicable law (“Excess Interest”). If any Excess Interest is provided for or determined by a
court of competent jurisdiction to have been provided for in this Loan Agreement or in any Other
Agreement, then in such event: (1) the provisions of this subsection shall govern and control; (2)
Borrower shall not be obligated to pay any Excess Interest; (3) any Excess Interest that Lender may
have received hereunder or under any Other Agreement shall be, at such Lender’s option, (a) applied
as a credit against the outstanding principal balance of Borrower’s Liabilities or accrued and
unpaid interest (not to exceed the maximum amount permitted by law), (b) refunded to the payor
thereof, or (c) any combination of the foregoing; (4) the interest rate(s) provided for herein or
in any Other Agreement shall be automatically reduced to the maximum lawful rate allowed from time
to time under applicable law (the “Maximum Rate”), and this Loan Agreement and the Other Agreements
shall be deemed to have been and shall be, reformed and modified to reflect such reduction; and (5)
Borrower shall not have any action against Lender for any damages arising out of the payment or
collection of any Excess Interest.



9.10 No Implied Waivers. Lender’s failure at any time or times hereafter to exercise any
rights or remedies or to require strict performance by Borrower of any provision of this Loan
Agreement shall not waive, affect or diminish any right of Lender thereafter to demand strict
compliance and performance therewith and all rights and remedies shall continue in full force and
effect until all of Borrower’s Liabilities have been fully and indefeasibly paid and performed. Any
suspension or waiver by Lender of an Event of Default by Borrower under this Loan Agreement or the
Other Agreements shall not suspend, waive or affect any other Event of Default by Borrower under
this Loan Agreement or the Other Agreements, whether the same is prior or subsequent thereto and
whether of the same or of a different type. No waiver by Lender of any Event of Default or of any
of the undertakings, agreements, warranties, covenants and representations of Borrower contained in
this Loan Agreement or the Other Agreements shall be effective unless specifically waived by an
instrument in writing signed by an officer of Lender.



9.11 Acceptance by Lender. This Loan Agreement shall become effective upon acceptance by
Lender, in writing, at its principal place of business as set forth above. If so accepted by
Lender, this Loan Agreement and the Other Agreements shall be deemed to have been made at said
place of business.



9.12 LAW AND VENUE. THIS LOAN AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS AND DECISIONS OF THE STATE OF ILLINOIS. BORROWER CONSENTS AND SUBMITS TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF
ILLINOIS. BORROWER WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION
BROUGHT AGAINST BORROWER BY LENDER OR TO ASSERT THAT ANY ACTION INSTITUTED BY LENDER OR BORROWER IN
SUCH COURT IS AN IMPROPER VENUE OR SUCH ACTION SHOULD BE TRANSFERRED TO A MORE CONVENIENT FORUM.



9.13 WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH WAIVE THE RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS LOAN AGREEMENT
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.



9.14 CONFIDENTIALITY. The provisions of this Loan Agreement and the Other Agreements shall
be held in strictest confidence by Borrower and shall not be publicized or disclosed in any manner
whatsoever; provided, however, that Borrower may disclose this Loan Agreement and the Other
Agreements (i) in confidence to its attorneys, accountants, auditors, insurers, tax preparers,
current and prospective investors or acquirors, and financial advisors, (ii) insofar as such
disclosure may be necessary to enforce its terms or (iii) as required by applicable law.



In handling any confidential information (confidential information shall include, without
limitation, information about the disclosing party’s financial condition and projections; business,
marketing or strategic plans; customer lists; price lists; databases; trade secrets; inventions;
targets (genes or proteins); product prototypes and designs; techniques, formulae, algorithms and
other non-public process information; and software (including source code, object code and machine
code) relating to the foregoing), the receiving party and its employees and agents shall maintain
the confidentiality of such confidential information and shall not disclose such confidential
information to any third party or use the confidential information for any purpose other than for
the performance of this Agreement, except that disclosure of such information may be made (i) to
the subsidiaries or Affiliates in connection with their present or prospective business relations
with the receiving party, (ii) to prospective transferees or purchasers of any interest in the
Loans, provided that they have entered into a comparable confidentiality agreement in favor of
Borrower and have delivered a copy to Borrower, (iii) as required by law, regulations, rule or
order, subpoena, judicial order or similar order, (iv) as may be required in connection with the
examination, audit or similar


19









 






investigation and (v) as the receiving party may determine in connection with the enforcement of
any remedies hereunder. Confidential information hereunder shall include all non-public
information delivered to the receiving party by the disclosing party in connection herewith,
provided that confidential information shall not include information that either: (a) is in the
public domain or in the knowledge or possession of the receiving party when disclosed, or becomes
part of the public domain after disclosure to receiving party through no fault of the receiving
party; or (b) is disclosed to the receiving party by a third party, provided the receiving party
does not have actual knowledge that such third party is prohibited from disclosing such
information.



9.15 Notice to Borrower. Lender hereby notifies Borrower as follows:





ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.



Signature Page Follows:




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In Witness Whereof, this Loan and Security Agreement has been duly executed as of the day and year
first above written.




	 	 	 	 	 	 	 
	Borrower:

	 	 	 	Accepted By:	 	 
	 
	 	 	 	 	 	 
	Borrower:

	 	Omeros Corporation
	 	Lender:
	 	BlueCrest Capital Finance, L.P.
	 

	 	 	 	 	 	By: BlueCrest Capital Finance GP, LLC, 
	 

	 	 	 	 	 	       its general partner
	By:

	 	/s/ Gregory A. Demopulos
	 	By:
	 	/s/ Mark King
	 
	 	 	 	 	 	 
	Name:

	 	Gregory A. Demopulos, M.D.
	 	Name:
	 	Mark King
	Title:

	 	Chairman & CEO
	 	Title:
	 	Managing Director
	 
	 	 	 	 	 	 
	Address for Notices:

	 	1420 Fifth Avenue, Suite 2600
	 	Address for Notices:
	 	225 West Washington, Suite 200
	 

	 	Seattle, WA 98101
	 	 	 	Chicago, IL 60606
	 

	 	Attention: CEO
	 	 	 	Attention: Legal Department
	Telephone:

	 	206-676-5000
	 	Telephone:
	 	312-368-4973
	Facsimile:

	 	206-676-5005
	 	Facsimile:
	 	312-443-0126
	 
	 	 	 	 	 	 
	 

	 	with a copy to:
	 	 	 	with a copy to:
	 
	 	 	 	 	 	 
	 

	 	1420 Fifth Avenue, Suite 2600
	 	 	 	225 West Washington, Suite 200
	 

	 	Seattle, WA 98101
	 	 	 	Chicago, IL 60606
	 

	 	Attention: General Counsel
	 	 	 	Attention: Mark King
	Telephone:

	 	206-676-5000
	 	Telephone:
	 	312-368-4978
	Facsimile:

	 	206-676-5005
	 	Facsimile:
	 	312-443-0126







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EXHIBIT A 




Officer’s Compliance and Disclosure Certificate

(attachment to monthly financial reports)




          Reference is hereby made to certain loan or credit agreements (together with all instruments,
documents and agreements entered into in connection therewith, the “Loan Documents”) by and between
BlueCrest Capital Finance, L.P. (“Lender “) and Omeros Corporation (“Borrower”). The undersigned,
                    , hereby certifies to Lender that he/she is the duly elected and acting
                    
of Borrower and that, in his/her capacity as the acting                     :




	 	(i)	 	FINANCIAL STATEMENTS — General. The attached financial statements fairly
reflect the financial condition of Borrower in all material respects in accordance with
GAAP (except for (i) the absence of footnotes and subject to normal year end adjustments
with respect to interim, unaudited Financials and (ii) non-compliance with GAAP that is
disclosed by Borrower to Lender with such specificity as Lender may reasonably require),
except as disclosed on the attached Schedule of Financial Statement Exceptions (if
none, so state on said Schedule) and there has been no material adverse change in the
assets, liabilities or financial condition of Borrower since Borrower’s most recent
delivery of financial statements to Lender pursuant to the terms of the Loan Documents;
	 
	 	(ii)	 	FINANCIAL STATEMENTS — Off-Balance Sheet. All material financial obligations
and contingent obligations of Borrower not otherwise listed and itemized on the attached
financial statements, are disclosed on the attached Schedule of Financial Statement
Exceptions, including but not limited to material off-balance sheet leasing
obligations, and guarantees of financial obligations of Borrower, its affiliates,
subsidiaries, officers and related parties (if none, so state on said Schedule);
	 
	 	(iii)	 	FINANCIAL STATEMENTS — Related Party Transactions. All material related
party transactions, including but not limited to loans, receivables or payables due to/from
Borrower’s officers or employees, affiliates, subsidiaries, or other related parties, are
disclosed on the attached Schedule of Financial Statement Exceptions (if none, so
state on said Schedule);
	 
	 	(iv)	 	COMPLIANCE WITH APPLICABLE LAW. Except as noted on the attached Schedule
of Compliance Issues, there are no material events whereby Borrower or, to the
knowledge of Borrower, Borrower’s directors, employees, affiliates, subsidiaries or other
related parties are acting or conducting business contrary to applicable local, state, or
national laws in the country or countries in which said parties are conducting business;
	 
	 	(v)	 	ABSENCE OF DEFAULT. Except as noted on the attached Schedule of Compliance
Issues, no Default or Event of Default exists on the date hereof; and
	 
	 	(vi)	 	LITIGATION. Except as disclosed pursuant to the last sentence of this clause
(vi), there are no actions, suits or proceedings pending or, to the knowledge of Borrower
and the undersigned, threatened (in writing) against or affecting Borrower in any court or
before any governmental commission, board or authority which could reasonably be expected
to have a material adverse effect (separately or in the aggregate) on the ability of
Borrower to perform its obligations under the any of Loan Documents. Borrower is involved
in such litigation (other than actions such as trade mark oppositions for which Borrower in
its reasonable belief determines the potential exposure is de minimis) as are listed on the
attached Schedule of Compliance Issues (if none, so state on said Schedule).





The undersigned has executed this certificate as of                     , 200_.




	 	 	 	 	 	 	 	 	 
	 

	 	Signature: 	 	 	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By (printed name and title): 	 	 	 	 
	 

	 	 	 	 	 

	 	 






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SCHEDULE OF FINANCIAL STATEMENT EXCEPTIONS




	 	 	 	 	 
	Category of Disclosure	 	Financial Date	 	Comments (if none, state “none”)
	 
	 	 	 	 
	General Exceptions:
	 	 	 	 
	 
	 	 	 	 
	Off-Balance Sheet:
	 	 	 	 
	 
	 	 	 	 
	Related Party Transactions:
	 	 	 	 






SCHEDULE OF COMPLIANCE ISSUES




	 	 	 	 	 	 	 	 
	Parties Involved
	 	Date of filing/incident	 	Nature
of Dispute or Issue	 (if none, state “none)”
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Compliance Issues:	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Litigation Issues:	 	 	 	 	 






	 	 	 	 	 	 	 
	 

	 	Signatory Initials:	 	 	 	 
	 

	 	 	 	 

	 	 






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EXHIBIT B




FUNDING REQUEST NO. ___

FOR

LOAN AND SECURITY AGREEMENT NO. V08302

BY AND BETWEEN

BLUECREST CAPITAL FINANCE, L.P., AS LENDER

AND

OMEROS CORPORATION, AS BORROWER



Borrower hereby requests an advance under the terms of the above described Loan and Security
Agreement (the “Loan Agreement”) in the original principal
amount of                      Dollars
($                    ).



Borrower hereby acknowledges and agrees that the representations and warranties as set forth in the
Loan Agreement are as if fully set forth herein, and further agrees that any and all Conditions
Precedent to the making of an advance by the Lender set forth in the Loan Agreement either have
been satisfied or will be satisfied as a result of the making by Lender of this advance. Borrower
represents and warrants that there has been no Material Adverse Effect since the later of the date
of the Loan Agreement or the date of the last Loan made by the Lender thereunder.



The advance requested hereby shall be secured by the Collateral as defined in the Loan Agreement.



The undersigned certifies that the undersigned is a duly authorized signatory of the Borrower, and
that as such the undersigned is authorized to execute this request on behalf of the Borrower.




	 	 	 	 	 
	 	 	OMEROS CORPORATION

	 	 	Borrower
	 
	 	 	 	 
	 

	 	By: 	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	Name:	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its: 	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	Date: 	 
	 

	 	 	 	 






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