EXHIBIT 10.3


 


EXECUTION COPY


 


WAIVER, CONSENT AND FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


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


 


W  I  T  N  E
S  S  E  T  H:


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(a)          Mandatory Prepayments.


 


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


 


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


 


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(b)         Additional Reporting.


 


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


 


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


 


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


 


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


 


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


 


10

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


9.             Release.


 


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


 


11

















 


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


 


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


 


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


 


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


 


11.          Provisions of General Application.


 


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


 


12

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


[SIGNATURE PAGES TO FOLLOW]


 


13

















 


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


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  HELICOS
  BIOSCIENCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ivan Trifunovich

  
	
   

  	
  Name:

  	
  Ivan
  Trifunovich

  
	
   

  	
  Title:

  	
  Chairman,
  President and Chief Executive Officer

  



 


 


HELICOS
BIOSCIENCES CORPORATION


WAIVER, CONSENT AND FOURTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT


SIGNATURE
PAGE


 

















 


	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter Gibson

  
	
   

  	
  Name:

  	
  Peter
  Gibson

  
	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSPC, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter Gibson

  
	
   

  	
  Name:

  	
  Peter
  Gibson

  
	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CIT
  HEALTHCARE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Alisa Milarelli

  
	
   

  	
  Name:

  	
  Alisa
  Milarelli

  
	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  



 


HELICOS
BIOSCIENCES CORPORATION


WAIVER, CONSENT AND FOURTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT


SIGNATURE PAGE