Exhibit
10.1


 


EXECUTION VERSION


 


THIS
INSTRUMENT AND THE INDEBTEDNESS, RIGHTS AND OBLIGATIONS EVIDENCED HEREBY AND
ANY LIENS OR OTHER SECURITY INTERESTS SECURING SUCH RIGHTS AND OBLIGATIONS ARE
SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AND INTERCREDITOR AGREEMENT (AS AMENDED, RESTATED, SUPPLEMENTED
OR MODIFIED FROM TIME TO TIME, THE “SUBORDINATION AGREEMENT”) DATED AS OF
NOVEMBER 16, 2010, BY AND AMONG THE SUBORDINATED CREDITORS IDENTIFIED THEREIN
AND GENERAL ELECTRIC CAPITAL CORPORATION IN ITS CAPACITY AS AGENT FOR CERTAIN
LENDERS (TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, “SENIOR CREDITOR AGENT”), TO
CERTAIN INDEBTEDNESS, RIGHTS, AND OBLIGATIONS OF HELICOS BIOSCIENCES
CORPORATION TO SENIOR CREDITOR AGENT AND SENIOR CREDITOR (AS DEFINED THEREIN)
AND LIENS AND SECURITY INTERESTS OF SENIOR CREDITOR AGENT SECURING THE SAME ALL
AS DESCRIBED IN THE SUBORDINATION AGREEMENT, AND EACH HOLDER AND TRANSFEREE OF
THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND
BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.


 


SUBORDINATED SECURED NOTE PURCHASE AGREEMENT


 


THIS SUBORDINATED SECURED NOTE PURCHASE AGREEMENT (“Agreement”), is made as of November 16, 2010 (the “Effective Date”), by and among HELICOS BIOSCIENCES
CORPORATION, a Delaware corporation (the “Company”),
and each of the purchasers named on the Schedule of Purchasers attached hereto
as Schedule 1 (the “Schedule of
Purchasers”) as a “Purchaser” (each individually a “Purchaser,” and collectively the “Purchasers”).


 


WHEREAS, the Company requires additional funds in order to
fund its operations;


 


WHEREAS, the Company desires to issue and sell the Notes to
the Purchasers, and the Purchasers desire to purchase the Notes from the
Company, as set forth herein and in the Notes; and


 


WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company and the Purchasers shall enter into the Security
Agreement and the other Transaction Documents;


 


NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:


 


1.             DEFINITIONS.


 


1.1          “Additional
Committed Loan Closing” or “Additional Committed Loan
Closings” shall have the meanings ascribed to such terms in Section 2.1(b)(ii).


 


1.2          “Additional
Discretionary Loan Closing” or “Additional Discretionary
Loan Closings” shall have the meanings ascribed to such terms in Section 2.1(b)(iii).


 

















 


1.3          “Affiliate”
shall mean, with respect to any person, (a) each person that, directly or
indirectly, owns or controls 5% or more of the stock or membership interests
having ordinary voting power in the election of directors or managers of such
person, and (b) each person that controls, is controlled by or is under
common control with such person.


 


1.4          “Agreement”
shall have the meaning ascribed to such term in the preamble to this Agreement.


 


1.5          “Business Day”
shall mean and include any day other than Saturdays, Sundays, or other days on
which commercial banks in Boston, Massachusetts are required or authorized to
be closed.


 


1.6          “Change in
Control” shall mean (i) any of the chief executive officer or the
chief financial officer of Company as of the date hereof shall cease to be
involved in the day to day operations or management of the business of Company,
and a successor or interim successor of such officer is not appointed within
180 days of such cessation or involvement, (ii) the acquisition, directly
or indirectly, by any person or group (as such term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934) of more than forty percent (40%) of the
voting power of the voting stock of Company by way of merger or consolidation
or otherwise, (iii) beginning on the earlier of 5 days following the next
annual meeting of the shareholders of the Company or June 30, 2011, during
any period of twelve consecutive calendar months, individuals who at the
beginning of such period constituted the board of directors of Company
(together with any new directors whose election by the board of directors of
Company or whose nomination for election by the stockholders of Company was approved
by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason other
than death or disability to constitute a majority of the directors then in
office, or (iv) Company ceases to own and control, directly or indirectly,
all of the economic and voting rights associated with the outstanding voting
capital stock (or other voting equity interest) of each of its Subsidiaries.


 


1.7          “Closing”
or “Closings” shall mean the Initial Loan
Closing, the Additional Committed Loan Closings and the Additional
Discretionary Loan Closings, as applicable.


 


1.8          “Collateral”
shall have the meaning ascribed to such term in the Security Agreement.


 


1.9          “Commitment
Termination Date” shall have the meaning ascribed to such term in Section 2.1(b).


 


1.10        “Company”
shall have the meaning ascribed to such term in the preamble to this Agreement.


 


1.11        “Contingent
and Contractual Arrangements” means any contingent fee agreement or
contractual obligation of the Company consented to by the Majority Purchasers
in their sole discretion.


 


1.12        “Default”
shall mean any event or condition, which with the giving of notice or the
passage of time, or both, would constitute an Event of Default.


 


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1.13        “Future
Convertible Debt Issuance” shall mean any sale by the Company of
debt securities convertible into equity securities of the Company taking place
on or following the Effective Date.


 


1.14        “Future Round”
shall mean any sale by the Company of its equity securities taking place on or
following the Effective Date other than to employees, directors, consultants or
advisors of the Company pursuant to an equity incentive plan approved by the
Company’s board of directors and stockholders.


 


1.15        “GAAP”
shall mean generally accepted accounting principles consistent with those from
time to time adopted by the Financial Accounting Standards Board, or its
predecessor.


 


1.16        “Initial Loan
Closing” shall have the meaning ascribed to such term in Section 2.1(b)(i).


 


1.17        “Intellectual
Property” shall have the meaning ascribed to such term in the
Security Agreement.


 


1.18        “Intercreditor
Agreement” shall mean that certain Subordination and Intercreditor
Agreement, dated as of the date hereof, entered into among the Purchasers and
the Senior Agent, as the same may amended, restated and otherwise in effect
from time to time.


 


1.19        “Loan”
shall have the meaning ascribed to such term in Section 2.1(a)(i).


 


1.20        “Loan Closing”
shall have the meaning ascribed to such term in Section 2.1(b)(iii).


 


1.21        “Loan Party”
means the Company.


 


1.22        “Majority
Purchasers” shall mean either (i) at least one of the
Purchasers affiliated with Flagship Ventures and one of the Purchasers
affiliated with Atlas Venture, or (ii) the holders of at least two-thirds
of the aggregate outstanding principal amount of all the Notes.


 


1.23        “Management
Incentive Plan” shall mean any management incentive plan approved by
the Company’s board of directors and consented to by the Majority Purchasers in
their sole discretion.


 


1.24        “Material
Adverse Effect” shall mean any material adverse effect on any of (a) the
operations, business, assets, properties, or condition (financial or otherwise)
of Company, individually, or the Loan Parties, collectively, (b) the
ability of a Loan Party to perform any of its obligations under any Transaction
Document to which it is a party, (c) the legality, validity or enforceability
of any Transaction Document, (d) the rights and remedies of the Purchasers
under any Transaction Document or (e) the validity, perfection or priority
of any lien in favor of the Purchasers on any of the Collateral.


 


1.25        “Maturity
Date” shall have the meaning ascribed to such term in Section 2.1(c).


 


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1.26        “New Equity
Offering” shall have the meaning ascribed to such term in Section 5.3.


 


1.27        “Notes”
shall mean the subordinated secured promissory notes issued to the Purchasers
pursuant to Section 2.1, in substantially
the form attached hereto as Exhibit A.


 


1.28        “Obligations”
shall mean (a) the obligation of the Loan Parties to pay the Purchasers
all of the unpaid principal amount of, and accrued interest on (including any
and all amounts which would become due but for the operation of the automatic
stay pursuant to 11 U.S.C. § 502(b) and § 506(b)), the Notes, this
Agreement, and the other Transaction Documents and (b) the obligation of
the Loan Parties to pay any fees, costs and expenses of the Purchasers under
the Notes, this Agreement or any other Transaction Document (including any and
all amounts which would become due but for the operation of the automatic stay
pursuant to 11 U.S.C. § 502(b) and § 506(b))


 


1.29        “Pro Rata
Portion” shall mean the percentage set forth in the column titled “Pro Rata Portion” opposite each such Purchaser’s name on the
Schedule of Purchasers.


 


1.30        “Purchasers”
shall have the meaning ascribed to such term in the preamble to this Agreement.


 


1.31        “Risk Premium
Agreement” shall mean that certain Risk Premium Payment Agreement,
dated as of the date hereof, by and among the Company and the Purchasers, and
in substantially the form attached as Exhibit D, as the same may be
amended, restated and otherwise in effect from time to time.


 


1.32        “Schedule of
Purchasers” shall have the meaning ascribed to such term in the
preamble to this Agreement.


 


1.33        “Security
Agreement” shall mean the Security Agreement, dated as of the date
hereof, by and among the Company and the Purchasers, and in substantially the
form attached as Exhibit B, as the same may be amended, restated
and otherwise in effect from time to time.


 


1.34        “Senior Agent”
means General Electric Capital Corporation, as agent for the Senior Lenders.


 


1.35        “Senior Debt”
shall have the meaning ascribed to such term in the Intercreditor Agreement.


 


1.36        “Senior Debt
Documents” shall have the meaning ascribed to such term in the
Intercreditor Agreement.


 


1.37        “Senior
Facility” means that certain Loan and Security Agreement, dated as
of December 31, 2007, entered into between the Company, as borrower, the
Senior Agent and the Senior Lenders, and the other parties or persons, if any,
who are or become parties thereto as guarantors, as amended by that certain
First Amendment to Loan and Security Agreement and Post-Closing Obligations
Letter dated as of February 14, 2008, as amended by that certain Second
Amendment to Loan and Security Agreement, dated as of June 27, 2008, by
and among the Company, the Senior Agent and the Senior Lenders, as amended by
that certain 


 


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Waiver and Third Amendment to Loan and Security
Agreement, dated as of December 29, 2008, by and among the Company, the
Senior Agent and the Senior Lenders, and as amended by the Senior Facility
Fourth Amendment, in each case as the foregoing may be amended, restated,
refinanced or replaced from time to time.


 


1.38        “Senior
Facility Fourth Amendment” means that that certain Waiver, Consent
and Fourth Amendment to Loan and Security Agreement, dated as of the date
hereof, by and among the Company, the Senior Agent and the Senior Lenders.


 


1.39        “Senior
Lenders” shall mean the “Lenders” under the Senior Facility
Agreement.


 


1.40        “Securities
Act” shall mean the Securities Act of 1934, as amended, and the rules and
regulations promulgated thereunder.


 


1.41        “Subsidiary”
shall have the meaning ascribed to such term in Section 4.1.


 


1.42        “Transaction
Documents” shall mean this Agreement, the Notes, the Risk Premium
Agreement and the Security Agreement, together with all other documents,
agreements or instruments executed or delivered in connection with any of the
foregoing.


 


2.             LOANS; CLOSINGS.


 


2.1          Loans.


 


(a)           Loans.


 


(i)            Subject to the terms and conditions hereof including
the conditions set forth in Schedules 2.1(b)(i),
2.1(b)(ii) and 2.1(b)(iii) as applicable, the Company
shall issue, and the Purchasers shall purchase from the Company Notes in an
aggregate original principal amount not to exceed $2,000,000.04 (the “Aggregate Committed Note Amount”) in accordance with
following schedule (such Notes being referred to as the “Committed
Notes”): (A) at the Initial Loan Closing which shall occur on November 16,
2010, Committed Notes having an aggregate original principal amount of
$333,333.34, and (B) on the date that is ten (10) days following
delivery by the Company to the Purchasers of a Notice (as defined below), or,
with respect to each such date, on one or more other dates as may be agreed
between the Company and the Majority Purchasers.  In addition, after a Purchaser has issued its
Pro Rata Portion of the Aggregate Committed Note Amount in accordance with the
prior sentence, subject to the terms and conditions hereof, the Company may
request that a Purchaser purchase additional Notes from the Company under this
Agreement (such Notes being referred to as the “Discretionary
Notes”) in an aggregate original principal amount not to exceed such
Purchaser’s Pro Rata Portion of $1,999,999.96 (the “Aggregate
Discretionary Note Amount” and together with the Aggregate Committed
Note Amount, the “Aggregate Note Amount”),
and each Purchaser shall have the right (in its full and absolute discretion),
but not the obligation, to purchase its Pro Rata Portion of the Discretionary
Notes which the Company requests to be issued at such applicable Additional
Closing.  To the extent that a Purchaser
has determined (with respect to any Discretionary Notes) or is committed (with
respect to any Committed Notes), in response to any request by the Company, to
purchase Notes at a Loan Closing, and subject to the terms and conditions
hereof, including, without limitation, the conditions set forth in Schedules 2.1(b)(i), 2.1(b)(ii) and 2.1(b)(iii), as
applicable, the Company will issue and sell to the 


 


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applicable Purchasers, and such Purchasers will
purchase from the Company, Notes in an aggregate original principal amount not
to exceed the Aggregate Discretionary Note Amount or the Aggregate Committed
Note Amount, as applicable (such purchases of Notes being referred to as the “Loans”).  The
Aggregate Note Amount for all Purchasers for all Loans shall not exceed
$4,000,000 in the aggregate, or each Purchaser’s Pro Rata Portion of the
Aggregate Committed Note Amount or the Aggregate Discretionary Note Amount, as
applicable.


 


(ii)           The purchase price for the Notes shall be paid by
the Purchasers by wire transfer of immediately available funds.  Each Purchaser’s obligations hereunder are
several and not joint, and accordingly the failure of any Purchaser to purchase
Notes hereunder will not increase the obligations of any other Purchaser.


 


(b)           Loan Closings.


 


(i)            Initial Loan  Closing.  The initial closing (the “Initial Loan  Closing”) of
the sale by the Company of Notes and the purchase by the Purchasers of Notes
shall occur on the Effective Date, at which time each Purchaser shall purchase
from the Company a Committed Note in the original principal amount of its Pro Rata
Portion of $333,333.34 (for an aggregate amount from all Purchasers of
$333,333.34), which Initial Loan Closing shall be held via the remote exchange
of documents on the date hereof.


 


(ii)           Additional Committed Loan  Closings.  One or more
additional Closings (each an “Additional Committed Loan
Closing” and together, the “Additional Committed Loan  Closings”)
of the sale by the Company of Committed Notes and the purchase by the
Purchasers of Committed Notes issued by the Company shall be held via the remote
exchange of documents on such dates occurring on or before the earlier to occur
of (i) December 31, 2012 and (ii) the occurrence of any event
described in Section 7.1(f) of this
Agreement (such earlier date being referred to as the “Commitment
Termination Date”) as the Company shall request in written notices
(each, a “Notice”) (which shall indicate the
aggregate principal amount of additional Notes the Company requests to issue at
such Additional Committed Loan Closing) to be delivered to the Purchasers at
least ten (10) days prior to the proposed date of each such Additional
Committed Loan Closing; provided that (i) the Notes to be issued pursuant
to Section 2.1(a)(i)(B) shall be
Committed Notes (and their issuance shall reduce the remaining amount of the
commitment to issue Committed Notes on a dollar for dollar basis), shall be in
an aggregate original principal amount of $333,333.34 with respect to each such
Additional Committed Loan Closing, and shall be issued no more frequently than
once per calendar month or on such other dates as may be agreed between the
Company and the Majority Purchasers), (ii) the aggregate amount of Notes
purchased by any Purchaser shall not exceed $1,000,000.02 for the Committed
Notes, (iii) no Committed Notes shall be issued at any Additional
Committed Loan Closing unless the conditions to Additional Committed Loan
Closings set forth on Schedule 2.1(b)(ii) attached hereto have been
fulfilled (or waived by all the Purchasers).


 


(iii)          Additional Discretionary Loan Closings.  One or more additional Closings (each an “Additional Discretionary Loan Closing” and together, the “Additional Discretionary Loan Closings”) of the sale by the
Company of Discretionary Notes and the purchase by the Purchasers of
Discretionary Notes issued by the Company shall be held via the remote exchange
of documents on such dates occurring on or before the Commitment Termination
Date as the Company shall request in a Notice to be delivered to the Purchasers
at least ten (10) days prior to the proposed date of each such Additional
Discretionary Loan Closing; provided that (i) no Discretionary Notes shall
be issued to any Purchaser unless and until 


 


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Committed Notes have been issued to such Purchaser
in an aggregate original principal amount of such Purchaser’s Pro Rata Portion
of the Aggregate Committed Note Amount and there is no further obligation to
issue any Committed Notes, (ii) the aggregate amount of Notes purchased by
any Purchaser shall not exceed $999,999.98 for the Discretionary Notes (iii) no
Purchaser shall have any obligation to purchase any Discretionary Notes, (iv) no
Discretionary Notes shall be issued at any Additional Discretionary Loan
Closing unless the conditions to Additional Discretionary Loan Closings set
forth on Schedule 2.1(b)(iii) attached
hereto have been fulfilled (or waived by the Purchasers), and (vi) Discretionary
Loan Closings shall occur no more frequently than once in any calendar
month.  The Initial Loan Closing, the
Additional Committed Loan Closings and the Additional Discretionary Loan
Closings are each sometimes referred to herein as a “Loan Closing”
and collectively, as the “Loan Closings.”


 


(iv)          Transactions at Each Closing.  At each Closing, the Company shall issue and
the Purchasers shall purchase, on a several and not joint basis, the amount of
Notes as provided in Section 2.1
hereof (but in any event, at each Closing on the purchase and sale of a
Committed Note, including at the Initial Loan Closing, the aggregate amount of
Notes to be issued at such Closing shall not exceed $333,333.34, and with
respect to the purchase and sale of all Notes, the aggregate original principal
amount shall not exceed $4,000,000).  At
each Closing, the Company shall issue to each Purchaser a Note representing the
principal amount of the Note issued to such Purchaser at such Loan Closing.


 


(c)           Loan Term; Interest; Repayment;
No Prepayment.


 


(i)            Loan Term.  The term of each Note will begin on date of
issuance of the applicable Note and will be due and payable, subject to the
terms and conditions of the Intercreditor Agreement, on the earliest to occur
of (i) demand of the Majority Purchasers, which demand shall not be
earlier than December 31, 2012, (ii) the Company receiving at least
$10,000,000 of proceeds from a Future Round, (iii) a Change in Control, or
(iv) a Default or Event of Default shall have occurred and be continuing
that either automatically triggers, or pursuant to which Senior Agent or any of
the Senior Lenders shall have commenced either (x) the acceleration of the
Senior Debt or (y) the taking of any action to setoff against, sweep, or
otherwise exercise any rights or remedies against any deposit account or
securities account of the Company (such earliest date being the “Maturity Date”).


 


(ii)           Repayment.  The Company will repay each Note plus all
accrued and unpaid interest thereon on the Maturity Date.  At least three (3) Business Days prior
to any repayment of the principal amount of any Note and/or any accrued and
unpaid interest thereon (other than at the Maturity Date), the Company shall
provide the Purchaser holding such Note with written notice of such repayment.


 


(iii)          Interest.  Interest on each Note will accrue from the
date of issuance of such Note at a fixed per annum rate of interest equal to
ten percent (10.0%), and be compounded quarterly.  All computations of interest and fees
calculated on a per annum basis shall be made by the Purchaser holding such
Note on the basis of a 360-day year, in each case for the actual number of days
occurring in the period for which such interest and fees are payable.  Each determination of an interest rate or the
amount of a fee hereunder shall be made by the Purchaser holding such Note and
shall be conclusive, binding and final for all purposes, absent manifest error.


 


(iv)          No Prepayment.  The principal amount of any Note and all
accrued and unpaid interest thereon and any and all other sums payable to the
Purchaser 


 


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holding such Note may not be prepaid prior to the
Maturity Date without the consent of the Majority Purchasers.


 


(d)           Conversion.


 


(i)            Each Purchaser has the right, at its option, in
connection with any Future Round, to convert all or any portion of the
outstanding principal of the Notes held by such Purchaser together with all
unpaid accrued interest on such Notes and any and all unpaid Risk Premium
Amount, into fully-paid and non-assessable shares of New Securities, on terms
consistent with those of such Future Round. 
In addition, each Purchaser has the right, at its option, from and after
any Future Convertible Debt Issuance, to convert all or any portion of the
outstanding principal of the Notes held by such Purchaser together with all
unpaid accrued interest on such Notes and any and all unpaid Risk Premium
Amount, into fully-paid and non-assessable shares of New Securities on terms
consistent with the conversion provisions of the debt securities issued in such
Future Convertible Debt Issuance. 
Notwithstanding any provision of this Agreement to the contrary, no New
Securities shall be issuable upon conversion of the Notes unless (i) the
New Securities issued upon conversion of Notes are issued at or above the
greater of the book or market value of the common stock of the Company as of
the date of this Agreement (adjusted proportionately in the event that the New
Securities are not shares of common stock of the Company or are not convertible
into shares of common stock of the Company on a 1:1 basis), (ii) that the
issuance of such New Securities upon conversion of Notes will not, (A) if
any stockholder at the time of such conversion holds 20% or more of the
outstanding common stock of the Company or voting power of the Company’s
securities, result in the largest stockholder immediately prior to such
conversion ceasing to be the largest stockholder of the Company immediately
following such conversion, or, (B) if no stockholder at the time of such
conversion holds 20% or more of the outstanding common stock of the Company or
voting power of the Company’s securities, result in any stockholder holding 20%
or more of the outstanding common stock of the Company or voting power of the
Company’s securities immediately following such conversion and (iii) the
issuance of such New Securities is in compliance with the Voting Rights Policy
of the NASDAQ Stock Market.  In order to
exercise this optional conversion privilege, the holder of the Note shall
surrender such Note to the Company in connection with the closing of the
applicable Future Round or at or following the closing of the applicable Future
Convertible Debt Issuance, accompanied by written notice to the Company in the
form attached hereto as Exhibit E indicating, the amount of the
principal, unpaid accrued interest and/or Risk Premium Amount with respect to
which the holder elects to exercise the optional conversion right and, to the
extent the Notes are entitled to more than one type of conversion right
pursuant to this Section 2.1(d), which types
of conversion rights the holder wishes to exercise and in what amounts.  Such notice shall also state the name or
names (with address) in which the certificate or certificates for shares of New
Securities which shall be issuable on such conversion shall be issued.  Assuming the satisfaction of the conditions
specified in clauses (i) through (iii) of the third sentence of this
paragraph with respect to the conversions requested in the aggregate by
Purchasers in connection with a Future Round and with respect to any individual
conversion relating to a Future Convertible Debt Issuance, as promptly as
practicable after the surrender of the applicable Note for conversion, the
receipt of the notice specified above and the closing of the Future Round or
Future Convertible Debt Issuance, as applicable, the Company shall deliver or
cause to be delivered at its principal executive office to the holder, or on
the holder’s written order, a certificate or certificates for the number of
full shares of New Securities issuable upon such conversion, in accordance with
the provisions hereof.  If less than the
entire outstanding principal amount of the applicable Note is being converted,
a new Note shall promptly be issued by the Company and delivered to the applicable
Purchaser for the unconverted principal balance and shall be of like tenor as
to all terms as the 


 


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Note surrendered. 
If the conditions specified in clauses (i) through (iii) of
the third sentence of this paragraph are not satisfied with respect to the
conversions requested in the aggregate by Purchasers in connection with a
Future Round or with respect to any individual conversion relating to a Future
Convertible Debt Issuance, the Purchasers shall only be entitled to conversion
of such Notes to the extent such conversion may be effected in accordance with
such conditions (in the event that more than one Purchaser has requested
conversion of Notes that, pursuant these conditions, may only be effected in
part, such partial right to conversion shall be allocated among them in
accordance with their respective Pro Rata Portions) and the Company shall
return to each Purchaser Notes representing the balance, following such
conversion, of any Notes that such holder that has surrendered it.  For purposes of this Section, (i) the
term “New Securities” shall mean, with
respect to any Future Round, the shares of common stock (or other new
securities) of the Company to be issued in such Future Round, and, with respect
to any Future Convertible Debt Issuance, the shares of common stock (or other
new securities) of the Company issuable upon conversion of the debt securities
of the Company issued in such Future Convertible Debt Issuance; and (ii) the
term “Risk Premium Amount” shall mean, with
respect to any particular conversion of Notes by any particular Purchaser, the
amount, determined at the time of such conversion, of due and payable but
unpaid sums owing by the Company to such Purchaser pursuant to the Risk Premium
Agreement.


 


(ii)           No fractional shares of New Securities shall be
issuable upon conversion of any Note, but a payment in cash will be made in
respect of any fraction of a share which would otherwise be issuable upon such
conversion.  Such payment shall be based
on the per share purchase price of the New Securities in the Future Round, as
specified in the definitive purchase agreement for such Future Round.


 


3.             REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  In connection with the transactions provided
for herein, the Company hereby represents and warrants to the Purchasers as of
the date hereof, and as of the date of the issuance of each Discretionary Note,
as follows:


 


3.1          Due Organization and
Authorization.  Each Loan Party’s exact legal name is as set
forth in on the signature page hereto and each Loan Party is, and will
remain, duly organized, existing and in good standing under the laws of the
jurisdiction of its organization as specified on the signature page hereto,
has its chief executive office at the location specified on the signature page hereto,
and is, and will remain, duly qualified and licensed in every jurisdiction
wherever necessary to carry on its business and operations, except where the
failure to be so qualified and licensed could not reasonably be expected to
have a Material Adverse Effect. This Agreement and the other Transaction
Documents have been duly authorized, executed and delivered by each Loan Party
and constitute legal, valid and binding agreements enforceable in accordance
with their terms. The execution, delivery and performance by each Loan Party of
each Transaction Document executed or to be executed by it is in each case
within such Loan Party’s powers.


 


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


 


3.3          No Conflicts.  The entry into, and performance by each Loan Party
of, the Transaction Documents will not (a) violate any of the
organizational documents of such Loan 


 


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Party, (b) violate any law, rule, regulation, order, award or
judgment applicable to such Loan Party, or (c) result in any breach of or
constitute a default under, or result in the creation of any lien, claim or
encumbrance on any of such Loan Party’s property (except for liens in favor of
the Purchasers) pursuant to, any indenture, mortgage, deed of trust, bank loan,
credit agreement, or other Material Agreement (as defined below) to which such
Loan Party is a party. As used herein, “Material Agreement”
shall mean any agreement or contract to which such Loan Party is a party and
involving the receipt or payment of amounts in the aggregate exceeding $290,000
per year and (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.


 


3.4          Litigation.  Except as set forth on Schedule 3.4, there are no actions, suits, proceedings, and to the
best of the Loan Parties’ knowledge, there are no investigations, pending
against or affecting any Loan Party before any court, federal, state,
provincial, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or any basis thereof,
which involves the possibility of any judgment or liability that could
reasonably be expected to have a Material Adverse Effect, or which questions
the validity of the Transaction Documents, or the other documents required
thereby or any action to be taken pursuant to any of the foregoing, nor does
any Loan Party have reason to believe that any such actions, suits, proceedings
or investigations are threatened.


 


3.5          Financial Statements.  All financial statements delivered to Purchasers
pursuant to this Agreement have been prepared in accordance with GAAP (subject,
in the case of unaudited financial statements, to the absence of footnotes and
normal year end audit adjustments), and since the date of the most recent
audited financial statement, no event has occurred which has had or could
reasonably be expected to have a Material Adverse Effect except as otherwise
disclosed in a report on Form 10-Q or Form 8-K filed with the SEC (as
defined below) prior to the date of this Agreement.


 


3.6          Use of Proceeds.  The proceeds of the Loan shall be used for working
capital, capital expenditures and general corporate purposes.


 


3.7          Collateral.  Each Loan Party is, and will remain, the sole and
lawful owner, and in possession of, the Collateral, and has the sole right and
lawful authority to grant the security interest described in the Security
Agreement.  The Collateral is, and will
remain, free and clear of all liens, claims and encumbrances of any kind
whatsoever, except for (a) liens in favor of the Purchasers to secure the
obligations to the Purchaser under this Agreement, the Notes and the other
Transaction Documents, (b) liens in favor of Senior Agent, on behalf of
itself and Senior Lenders, to secure the obligations to them under the Senior
Facility, (c) liens (i) with respect to the payment of taxes,
assessments or other governmental charges or (ii) of suppliers, carriers,
materialmen, warehousemen, workmen or mechanics and other similar liens, in
each case imposed by law and arising in the ordinary course of business, and
securing amounts that are not yet due or that are being contested in good faith
by appropriate proceedings diligently conducted and with respect to which
adequate reserves or other appropriate provisions are maintained on the books
of the applicable Loan Party in accordance with GAAP and which do not involve,
in the reasonable judgment of Majority Purchasers, the likely risk of the sale,
forfeiture or loss of any portion of the Collateral in excess of $290,000 (a “Permitted Contest”), (d) liens existing on the date
hereof and set forth on Schedule 3.7
hereto, (e) liens securing Indebtedness permitted under Section 5.2(c) below, provided that (i) such
liens exist prior to the acquisition of, or attach substantially simultaneous
with, or within 20 days after the, acquisition, repair, improvement or
construction of, such property financed by such Indebtedness and (ii) such
liens do not extend to any property of a Loan Party other than the property
(and proceeds thereof) acquired or built, or


 


10
















 


the improvements or repairs, financed by such Indebtedness, (f) liens
granted pursuant to Contingent and Contractual Arrangements and (g) licenses
described in Section 5.3(c) and (d) below (all of such liens described in the foregoing
clauses (a) through (g) are called “Permitted
Liens”).


 


3.8           Compliance with Laws.  Each Loan Party is and will remain in compliance in
all material respects with all laws, statutes, ordinances, rules and
regulations applicable to it including, without limitation, (a) meeting the
minimum funding requirements of the United States Employee Retirement Income
Security Act of 1974 (as amended, “ERISA”) with
respect to any employee benefit plans subject to ERISA, (b) no Loan Party
is an “investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940 and (c) no Loan
Party is engaged principally, or as one of the important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations T, U and X of the Board of Governors
of the Federal Reserve System (the “Federal Reserve Board”).


 


3.9           Intellectual Property.  The Intellectual Property is and will remain free
and clear of all liens, claims and encumbrances of any kind whatsoever, except
for (i) liens, claims or encumbrances arising as a result of the
litigation described on Schedule 3.4
and (ii) Permitted Liens described in clauses (a), (b), (c)(i) and
(g) of Section 3.7. 
No Loan Party has nor will it enter into any other agreement or
financing arrangement in which a negative pledge in such Loan Party’s
Intellectual Property is granted to any other party. No Loan Party has any
interest in, or title to any patents, trademarks or material licenses that are
registered or the subject of pending applications for registrations except (i) as
disclosed on Schedule 2 of the Security Agreement, and (ii) patents which
have not yet been licensed or published. 
Each Loan Party owns or has rights to use all Intellectual Property
material to the conduct of its business as now or heretofore conducted by it
without any actual or claimed infringement upon the rights of third parties.


 


3.10         Taxes; Pension.  All tax returns, reports and statements, including
information returns, required by any governmental authority to be filed by each
Loan Party and its Subsidiaries have been filed with the appropriate
governmental authority (other than those tax returns, reports and statements
for which a request for extension of the time in which to file has been timely
filed by the applicable Loan Party with the applicable governmental authority
and such extension has been granted by such governmental authority, in which
case such tax returns, reports and statements shall have been filed by such
extension date) all taxes, levies, assessments and similar charges have been
paid prior to the date on which any fine, penalty, interest or late charge may
be added thereto for nonpayment thereof (or any such fine, penalty, interest,
late charge or loss has been paid), excluding taxes, levies, assessments and
similar charges or other amounts which are the subject of a Permitted Contest.
Proper and accurate amounts have been withheld by each Loan Party from its
respective employees for all periods in compliance with applicable laws and
such withholdings have been timely paid to the respective governmental
authorities.  Each Loan Party has paid
all amounts necessary to fund all present pension, profit sharing and deferred
compensation plans in accordance with their terms, and no Loan Party has
withdrawn from participation in, or has permitted partial or complete
termination of, or permitted the occurrence of any other event with respect to,
any such plan which could reasonably be expected to result in any liability of
a Loan Party in excess of $290,000, including any liability to the Pension
Benefit Guaranty Corporation or its successors or any other governmental
authority.


 


3.11         Full Disclosure.  No representation, warranty or other statement made
by a Loan Party, or on behalf of a Loan Party by an officer of such Loan Party,
contains any 


 


11

















 


untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained therein not misleading, it being
recognized by the Purchasers that the projections and forecasts provided by
Loan Parties in good faith and based upon reasonable and stated assumptions are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections and forecasts may differ from the projected or
forecasted results.


 


3.12         Status of Subsidiaries.  Company has no Subsidiaries, whether direct or
indirect, other than Helicos Biosciences Securities Corporation, a
Massachusetts corporation (“HBSC”).  HBSC has not engaged in any business or own
any assets (other than to hold cash and Cash Equivalents in account number
1139758613 located at RBS Citizens, National Association), nor has it incurred
any Indebtedness, liens, claims or encumbrances or any other liabilities other
than liabilities associated solely with any taxes on HBSC and bank fees
associated with HBSC’s bank accounts.


 


4.             AFFIRMATIVE COVENANTS.  Until the Obligations have been paid in full,
the Company no longer has the right to request additional Loans be issued
hereunder and this Agreement and the other Transaction Documents have been
terminated:


 


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


 


4.2           Notice to the
Purchasers.  Loan Parties shall provide each Purchaser
with (a) notice of any change in the accuracy of any of the
representations and warranties provided in Section 3
above, within 50 days of the end of the fiscal quarter in which such change
occurs for fiscal quarters ending March 31, June 30 or September 30
and within 95 days of the end of the fiscal quarter in which such change occurs
for fiscal quarters ending December 31, or on such other date as may be
reasonably requested by any Purchaser, (b) notice of the occurrence of any
Default or Event of Default, promptly (but in any event within 3 days) after
the date on which any officer of a Loan Party obtains knowledge of the
occurrence of any such event, (c) copies of all statements, reports and
notices made available generally by Company to its securityholders or to any
holders of Material Indebtedness, all notices sent to Company or any Loan Party
by the holders of such Material Indebtedness, and all documents filed with the
Securities and Exchange Commission (“SEC”) or any
securities exchange or governmental authority exercising a similar function,
promptly, but in any event within 3 days of delivering or receiving such
information to or from such persons, (d) a report of any legal actions
pending or threatened against Company or any Subsidiary that could result in
damages or costs to Company or any Subsidiary of $290,000 or more promptly, but
in any event within 3 Business Days, upon receipt of notice thereof, (e) a
report of any new applications or registrations that Company has made or filed
in respect of any Intellectual Property or a change in status of any
outstanding application or registration within 50 days of the end of each
fiscal quarter ending March 31, June 30 or September 30 and
within 95 days of the end of each fiscal quarter ending December 31, or 


 


12

















 


on such other date as may be reasonably requested by any Purchaser, and (f) copies
of all statements, reports and notices delivered to or by a Loan Party in
connection with any Material Agreement promptly (but in any event within 3
Business Days) upon receipt thereof.


 


4.3           Financial Statements.  Company shall deliver to
the Purchasers copies of each financial statement, and each certification with
respect to such financial statements provided or required to be provided to the
Senior Agent or the Senior Lenders under the Senior Facility.  Company shall deliver to the Purchasers (i) as
soon as available and in any event not later than 30 days after the end of each
fiscal year of Company, an annual budget for Company, on a consolidated and, if
available, consolidating basis, approved by the Board of Directors of Company,
for the current fiscal year, consistent with the past budgets previously
provided to the Purchasers and (ii) such budgets, sales projections, or
other financial information as any Purchaser may reasonably request from time
to time generally prepared by Company in the ordinary course of business.  The Company shall deliver to
each Purchaser such financial statements or information as the Company provides
to its stockholders simultaneously with the delivery thereof to the
stockholders.


 


4.4           Compliance
with Laws; Contracts.  Company
will, and will cause each Subsidiary to comply in all material respects with
all applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, all applicable
environmental laws).


 


4.5           Insurance.  Company, at its expense, shall maintain, and shall
cause each Subsidiary to maintain, insurance (including, without limitation,
comprehensive general liability, hazard, and business interruption insurance)
with respect to all of its properties and businesses (including, the
Collateral), in such amounts and covering such risks as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and in any event with deductible amounts, insurers and
policies that shall be reasonably acceptable to the Majority Purchasers.
Company shall deliver to the Purchasers certificates of insurance evidencing
such coverage, together with, to the extent requested by the Majority
Purchasers, endorsements to such policies naming the Purchasers as a lender
loss payee or additional insured, as appropriate, in form and substance
reasonably satisfactory to the Majority Purchasers (and, until the Senior Debt
has been paid in full in cash, the agent under the Senior Facility). Company
appoints each Purchaser as its attorney in-fact to make, settle and adjust all
claims under and decisions with respect to Company’s policies of insurance, and
to receive payment of and execute or endorse all documents, checks or drafts in
connection with insurance payments.  The
Purchasers shall not act as Company’s attorney-in-fact unless an Event of
Default has occurred and is continuing. The appointment of the Purchasers as
Company’s attorney in fact is a power coupled with an interest and is
irrevocable until all of the Obligations are indefeasibly paid in full.
Proceeds of insurance shall be applied, at the option of Majority Purchasers,
to repair or replace the Collateral or to reduce any of the Obligations.


 


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


 


4.7           Protection of Intellectual
Property.  Each Loan Party shall take all necessary
actions to: (a) protect, defend and maintain the validity and
enforceability of its 


 


13

















 


Intellectual Property to the extent material to the conduct of its
business now or heretofore conducted by it or proposed to be conducted by it, (b) promptly,
but in any event within 5 Business Days, advise the Purchasers in writing of
material infringements of its Intellectual Property, (c) not allow any
Intellectual Property material to such Loan Party’s business to be abandoned,
forfeited or dedicated to the public without the written consent of the
Majority Purchasers, and (d) notify the Purchasers promptly, but in any
event within 3 days, if it knows or has reason to know that any application or
registration relating to any patent, trademark or copyright (now or hereafter
existing) material to its business may become abandoned or dedicated, or if any
adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court) regarding
such Loan Party’s ownership of any Intellectual Property material to its
business, its right to register the same, or to keep and maintain the same.
Each Loan Party shall remain liable under each of its Intellectual Property
licenses pursuant to which it is a licensee (“Licenses”)
to observe and perform all of the conditions and obligations to be observed and
performed by it thereunder.  None of the
Purchasers shall have any obligation or liability under any such License by
reason of or arising out of this Agreement, the granting of a lien, if any, in
such License or the receipt by any Purchaser of any payment relating to any
such License.  None of the Purchasers
shall be required or obligated in any manner to perform or fulfill any of the
obligations of any Loan Party under or pursuant to any License, or to make any
payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any License, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts which may have been
assigned to it or which it may be entitled at any time or times.


 


4.8           Special Collateral Covenants.


 


(a)           Each Loan Party shall remain in possession
of its respective Collateral solely at the location(s) specified on Schedule 4.8 attached hereto; except that the Purchasers
shall have the right to possess (i) any chattel paper or instrument that
constitutes a part of the Collateral, (ii) any other Collateral in which
the Purchasers’ security interest may be perfected only by possession and (iii) any
Collateral after the occurrence of an Event of Default in accordance with this
Agreement and the other Transaction Documents. 
The Purchasers may inspect (and representatives of any Purchaser may
inspect or accompany such Purchaser on any such inspection) any of the
Collateral during normal business hours, and in the absence of a Default or an
Event of Default, after giving Company reasonable prior notice.  If any Purchaser asks, each Loan Party will
promptly notify such Purchaser in writing of the location of any Collateral.


 


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


 


(c)           The Purchasers do not authorize and each Loan
Party agrees it shall not (i) part with possession of any of the Collateral
(except (A) to any Purchaser, (B) to the Senior Agent or any Senior
Lender as contemplated by the Senior Facility, (C) for maintenance and
repair, or (C) for a Permitted Disposition), or (ii) remove any of
the Collateral from the continental United States other than (x) Inventory
with a value not to exceed $1,150,000 and (y) cash not to exceed $115,000.


 


14

















 


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


 


(e)           Each Loan Party shall, at all times, keep
accurate and complete records of the Collateral, and the Purchasers shall have
the right to inspect and make copies of all of Loan Parties’ books and records
relating to the Collateral during normal business hours, and in the absence of
a Default or an Event of Default, after giving the applicable Loan Parties
reasonable prior notice.


 


(f)            Each Loan Party agrees and acknowledges that
any third person who may at any time possess all or any portion of the
Collateral shall be deemed to hold, and shall hold, the Collateral as the agent
of, and as pledge holder for, the Purchasers. 
The Purchasers, at the direction of the Majority Purchasers, may at any
time give notice to any third person described in the preceding sentence that
such third person is holding the Collateral as the agent of, and as pledge
holder for, the Purchasers; provided, however, that the Purchasers shall not so
notify account debtors except after the occurrence and during the continuation
of a Default or Event of Default.


 


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


 


4.10         Additional Subsidiaries. Simultaneously with the formation or
acquisition of any Subsidiary of any Loan Party, to the extent that such
Subsidiary becomes an obligor or provides its assets as security or collateral
(whether as a company, a guarantor or otherwise) on account of the Senior
Facility, such Subsidiary shall become an obligor and provide its assets as
security and collateral on account of this Purchase Agreement and the other
Transaction Documents to the same extent (but in all cases, the obligations of
such new obligors shall be subject to the Intercreditor Agreement to the same
extent as this Agreement is subject thereto. 
Notwithstanding the foregoing, (i) this Section 4.10 shall not
operate as consent to any formation or acquisition of a Subsidiary that is not
expressly permitted under this Agreement and (ii) HBSC shall not be
required to guaranty this Agreement or grant a lien in any of its assets.


 


5.             NEGATIVE COVENANTS.  Until the Obligations have been paid in full,
the Company no longer has the right to request Loans hereunder and this
Agreement and the other Transaction Documents have been terminated:


 


5.1           Liens.  No Loan Party shall, and no Loan Party shall permit
any of its Subsidiaries to, create, incur, assume or permit to exist any lien,
security interest, claim or 


 


15

















 


encumbrance or grant any negative pledges on any Collateral or
Intellectual Property, except Permitted Liens.


 


5.2           Indebtedness.  No Loan Party shall, and no Loan Party shall permit
any of its Subsidiaries to, directly or indirectly create, incur, assume,
permit to exist, guarantee or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness (as hereinafter defined), except for (a) the
Obligations, (b) Indebtedness existing on the date hereof and set forth on
Schedule 5.2 to this Agreement, (c) Indebtedness
consisting of capitalized lease obligations and purchase money Indebtedness, in
each case incurred by Company or any of its Subsidiaries to finance the
acquisition, repair, improvement or construction of fixed or capital assets of
such person, provided that (i) the aggregate outstanding principal amount
of all such Indebtedness does not exceed $290,000 at any time and (ii) the
principal amount of such Indebtedness does not exceed the lower of the cost or
fair market value of the property so acquired or built or of such repairs or
improvements financed with such Indebtedness (each measured at the time of such
acquisition, repair, improvement or construction is made), (d) Indebtedness
owing by any Loan Party to another Loan Party, provided that (i) each Loan
Party shall have executed and delivered to each other Loan Party a demand note
(each, an “Intercompany Note”) to evidence
such intercompany loans or advances owing at any time by each Loan Party to the
other Loan Parties, which Intercompany Note shall be in form and substance
reasonably satisfactory to the Majority Purchasers and shall be pledged and
delivered to the Purchasers as additional Collateral for the Obligations, (ii) any
and all Indebtedness of any Loan Party to another Loan Party shall be subordinated
to the Obligations pursuant to the subordination terms set forth in each
Intercompany Note, (iii) no Default or Event of Default would occur both
before and after giving effect to any such Indebtedness, (e) Indebtedness
incurred under any Management Incentive Plan or Contingent and Contractual
Arrangement and (f) such other Indebtedness to which the Majority
Purchasers have provided their written consent, as determined in their sole
discretion.  The term “Indebtedness” shall mean, with respect to any person, at any
date, without duplication, (i) all obligations of such person for borrowed
money, (ii) all obligations of such person evidenced by bonds, debentures,
notes or other similar instruments, or upon which interest payments are
customarily made, (iii) all obligations of such person to pay the deferred
purchase price of property or services, but excluding obligations to trade
creditors in the ordinary course of business, (iv) all capital lease
obligations of such person, (v) the principal balance outstanding under
any synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product, (vi) all obligations of such
person to purchase securities (or other property) which arise out of or in
connection with the issuance or sale of the same or substantially similar
securities (or property), (vii) all contingent or non-contingent
obligations of such person to reimburse any bank or other person in respect of
amounts paid under a letter of credit or similar instrument, (viii) all
equity securities of such person subject to repurchase or redemption otherwise
than at the sole option of such person, (ix) all “earnouts” and similar
payment obligations of such person, (x) all indebtedness secured by a lien
on any asset of such person, whether or not such indebtedness is otherwise an
obligation of such person, (xi) all obligations of such person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter
the risks of that person arising from fluctuations in currency values or
interest rates, in each case whether contingent or matured, and (xii) all
obligations or liabilities of others guaranteed by such person.


 


5.3           Dispositions.  No Loan Party shall, and no Loan Party shall permit
any of its Subsidiaries to, convey, sell, rent, lease, sublease, mortgage,
license, transfer or otherwise dispose of (collectively, “Transfer”)
any of the Collateral or any Intellectual Property, except for the following
(collectively, “Permitted Dispositions”): (a) sales
of Inventory in the ordinary 


 


16

















 


course of business, (b) dispositions by a Loan Party or any of its
Subsidiaries of tangible assets for cash and fair value that are no longer used
or useful in the business of such Loan Party or such Subsidiary so long as (i) no
Default or Event of Default exists at the time of such disposition or would be
caused after giving effect thereto and (ii) the fair market value of all
such assets disposed of does not exceed $290,000 since the date of the Initial
Closing, (c)  non-exclusive licenses for the use of Company’s Intellectual
Property in the ordinary course of business, (d) exclusive licenses for
the use of Company’s Intellectual Property in the ordinary course of business,
so long as, with respect to each such exclusive license, (i) no Default of
Event of Default exists at the time of such Transfer, (ii) the license
constitutes an arms-length transaction made in connection with a bona fide
corporate collaboration in the ordinary course of business and the terms of
which, on their face, do not provide for a sale or assignment of any
Intellectual Property, (iii) Company delivers 10 Business Days prior
written notice and a brief summary of the terms of the license to the
Purchasers, (iv) Company delivers to the Purchasers copies of the final
executed licensing documents in connection with the license promptly upon
consummation of the license, and (v) all royalties, milestone payments or
other proceeds arising from the licensing agreement are paid to a deposit
account that is governed by an Account Control Agreement, and (f) dispositions
of cash to HBSC so long as (i) no Default or Event of Default exists at
the time or after giving effect thereto, and (ii) such cash shall be
comprised solely of net cash proceeds of a public offering of common stock or
other equity financing, in each case that takes place after the Initial Loan
Closing (a “New Equity Offering”).


 


5.4           Change in Name, Location or
Executive Office; Change in Business; Change in Fiscal Year.  No Loan Party shall, and no Loan Party shall permit
any of its Subsidiaries to, (a) change its name or its state of
organization, (b) without 30 days prior written notification to the
Purchasers, relocate its chief executive office, (c) engage in any
business other than or reasonably related or incidental to the businesses
currently engaged in by such Loan Party or Subsidiary or (d) without 30
days prior written notification to the Purchasers, change its fiscal year end.


 


5.5           Mergers or
Acquisitions.  No Loan Party shall merge or consolidate,
and no Loan Party shall permit any of its Subsidiaries to merge or consolidate,
with or into any other person or entity (other than mergers of a Subsidiary
into Company in which Company is the surviving entity) or acquire, or permit
any of its Subsidiaries to acquire, all or substantially all of the capital
stock or property of another person or entity. 
Notwithstanding the foregoing, a Loan Party may acquire all or
substantially all of the assets or stock of another person or entity (such
person or entity, the “Target”) so
long as (a) the Purchasers shall receive at least twenty (20) Business
Days’ prior written notice of such proposed acquisition, which notice shall
include a reasonably detailed description of such proposed acquisition; (b) such
acquisition shall only comprise a business, or those assets of a business,
substantially of the type engaged in by the Loan Parties as of the date of the
Initial Loan Closing; (c) such acquisition shall be consensual and shall
have been approved by Target’s board of directors or similar governing body (as
applicable); (d) the purchase price paid and/or payable (whether in cash,
stock or other form of consideration) in connection with all acquisitions
(including all transaction costs and all Indebtedness, liabilities and
contingent obligations incurred or assumed in connection therewith or otherwise
reflected in a consolidated balance sheet of Company and Target) (i) together
with any Investments made pursuant to Section 5.7(a)(vi),
shall not exceed $4,600,000 in the aggregate for all acquisitions and (ii) if
paid in cash, shall be paid solely with the net cash proceeds of a New Equity
Offering; (e) the business and assets acquired in such permitted
acquisition shall be free and clear of all liens (other than Permitted Liens); (f) at
or prior to the closing of any permitted acquisition, the Purchasers will be
granted a first priority perfected lien (subject to Permitted Liens) in all
assets acquired pursuant thereto or in the assets and stock of 


 


17

















 


Target, and the Loan Parties and Target shall have executed such
documents and taken such actions as may be reasonably required by the Majority
Purchasers in connection therewith; (g) on or prior to the date of such
acquisition, the Purchasers shall have received, in form and substance
reasonably satisfactory to the Majority Purchasers, copies of the acquisition
agreement and related agreements and instruments, and all opinions,
certificates, lien search results and other documents reasonably requested by
the Purchasers; (h) at the time of such acquisition and after giving
effect thereto, no Default or Event of Default has occurred and is continuing; (i) the
net worth of the Company after giving effect to any such acquisition shall be
equal to or better than Company’s net worth prior to such acquisition; and (j) after
giving pro forma effect to such acquisition the Cash Burn Amount of Company and
its Subsidiaries, on a consolidated basis, shall not exceed the Cash Burn
Amount of Company and its Subsidiaries on a consolidated basis prior to giving
effect to any such acquisition by more than twenty-three percent (23%) (“Permitted Acquisitions”). 
As used herein, “Cash Burn Amount”
means, with respect to Company and its consolidated Subsidiaries, as of any
date of determination and based on the financial statements most recently
delivered to the Purchasers in accordance with this Agreement, the difference
between: (1) the quotient of (i) the sum of, without duplication, (A) net
income (loss), plus (B) depreciation and amortization, minus (C) nonfinanced
capital expenditures, in each case of clauses (A), (B) and (C), for the
immediately preceding six (6) month period on a trailing basis, divided by
(ii) six (6), minus (2) the quotient of (i) the current portion
of interest bearing liabilities due and payable in the immediately succeeding
six (6) months divided by (ii) six (6).


 


5.6           Restricted Payments.  No Loan Party shall, and no Loan Party shall permit
any of its Subsidiaries to, (a) declare or pay any dividends or make any
other distribution or payment on account of or redeem, retire, defease or
purchase any capital stock (other than the payment of dividends to Company,
certain cash payments not to exceed $230,000 and non-cash dividends, in each
case solely in connection with equity award agreements under the Company’s
stock option plan), (b) make any payment in respect of management fees or
consulting fees (or similar fees) to any equityholder or other affiliate of
Company (other than pursuant to any Management Incentive Plan), or (c) be
a party to or bound by an agreement that restricts a Subsidiary from paying
dividends or otherwise distributing property to Company or (d) make any
payments on account of intercompany Indebtedness permitted under Section 7.2 (except in accordance with the terms of the
applicable Intercompany Note then in effect with respect to such intercompany
Indebtedness).


 


5.7           Investments.  No Loan Party shall, and no Loan Party shall permit
any of its Subsidiaries to, directly or indirectly (a) acquire or own, or
make any loan, advance or capital contribution (an “Investment”)
in or to any person or entity other than (i) to another Loan Party to the
extent permitted under the terms and conditions set forth in Section 7.2(e), (ii) Investments existing on the
date hereof and set forth on Schedule 5.7 to
this Agreement, (iii) Investments in cash, Cash Equivalents and
Investments made pursuant to the Company’s Investment policy attached hereto as
Exhibit C, (iv) loans or advances to employees of Company or
any of its Subsidiaries to finance travel, entertainment and relocation expenses
and other ordinary business purposes in the ordinary course of business as
presently conducted, provided that the aggregate outstanding principal amount
of all loans and advances permitted pursuant to this clause shall not exceed
$115,000 at any time, (v) investments in HBSC permitted pursuant to Section 5.3(f) and (vi) Investments in the
form of joint ventures, partnerships or equity investments so long as such
Investments (i) together with any Permitted Acquisitions pursuant to Section 5.5, shall not exceed $4,600,000, (ii) shall
be in businesses substantially of the type engaged by such Loan Parties as of
the date of the Initial Loan Closing, (iii) if paid in cash, shall be paid
solely with the net cash proceeds of a New Equity Offering, (iv) the net
worth of the 


 


18

















 


Company after giving effect to any such Investment shall be equal to or
better than Company’s net worth prior to such Investment, and (v) after
giving pro forma effect to such Investment the Cash Burn Amount of Company and
its Subsidiaries, on a consolidated basis, shall not exceed the Cash Burn
Amount of Company and its Subsidiaries on a consolidated basis prior to giving
effect to any such Investment by more than twenty-three percent (23%)
(collectively, the “Permitted Investments”),
or (b) engage in any joint venture or partnership with any other person or
entity other than as permitted pursuant to Section 5.7(a)(vi) above.
The term “Cash Equivalents” means (v) any
readily-marketable securities (i) issued by, or directly, unconditionally
and fully guaranteed or insured by the United States federal government or (ii) issued
by any agency of the United States federal government the obligations of which
are fully backed by the full faith and credit of the United States federal
government, (w) any readily-marketable direct obligations issued by any
other agency of the United States federal government, any state of the United
States or any political subdivision of any such state or any public
instrumentality thereof, in each case having a rating of at least “A-1” from
S&P or at least “P-1” from Moody’s, (x) any commercial paper rated at
least “A-1” by S&P or “P-1” by Moody’s and issued by any entity organized
under the laws of any state of the United States, (y) any U.S.
dollar-denominated time deposit, insured certificate of deposit, overnight bank
deposit or bankers’ acceptance issued or accepted by (i) the Majority
Purchasers or (ii) any commercial bank that is (A) organized under
the laws of the United States, any state thereof or the District of Columbia, (B) “adequately
capitalized” (as defined in the regulations of its primary federal banking
regulators) and (C) has Tier 1 capital (as defined in such regulations) in
excess of $250,000,000 or (z) shares of any United States money market
fund that (i) has substantially all of its assets invested continuously in
the types of investments referred to in clause (v), (w), (x) or (y) above
with maturities as set forth in the proviso below, (ii) has net assets in
excess of $500,000,000 and (iii) has obtained from either S&P or Moody’s
the highest rating obtainable for money market funds in the United States;
provided, however, that the maturities of all obligations specified in any of
clauses (v), (w), (x) and (y) above shall not exceed 365 days.


 


5.8           Transactions with
Affiliates.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, directly or indirectly enter into or permit
to exist any transaction with any Affiliate of a Loan Party or any Subsidiary
of a Loan Party except for (i) transactions that are in the ordinary
course of such Loan Party’s or such Subsidiary’s business, upon fair and
reasonable terms that are no more favorable to such Affiliate than would be
obtained in an arm’s length transaction, (ii) any Management Incentive
Plan and (iii) the transactions contemplated by this Agreement and the
other Transaction Documents.


 


5.9           Compliance.  No Loan Party shall, and no Loan Party shall permit
any of its Subsidiaries to, (a) fail to comply with the laws and
regulations described in clauses (a) through and including (d) of Section 5.8 herein, (b) use any portion of the
Loans to purchase or carry margin stock (within the meaning of Regulation U of
the Federal Reserve Board) or (c) fail to comply in any material respect
with, or violate in any material respect any other law or regulation applicable
to it.


 


5.10         Intentionally
Omitted.


 


5.11         Helicos Biosciences
Securities Corporation.  HBSC shall not engage in any trade or
business, or own any assets (other than cash and Cash Equivalents in account
number 1139758613 located at RBS Citizens, National Association) or incur any
Indebtedness, Liens or any other liabilities other than liabilities associated
solely with any taxes on HBSC and bank fees associated with HBSC’s bank
accounts.


 


19
















 


6.                                      REPRESENTATIONS
AND WARRANTIES OF THE PURCHASERS.


 


In connection with the transactions provided for
herein, each Purchaser hereby represents and warrants to the Company as
follows:


 


6.1                               Authorization.  Such Purchaser is validly existing and has
the requisite power and authority to execute and deliver each Transaction
Document to which it is a party. Each of this Agreement and the Security
Agreement has been, and in the case of each Note will be on the date of
issuance, duly executed and delivered by such Purchaser, and constitutes the
valid and legally binding obligation of such Purchaser, enforceable in
accordance with its terms, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, or similar laws
relating to or affecting the enforcement of creditors’ rights and
(ii) laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.


 


6.2                               Purchase Entirely for Own Account.  Such Purchaser acknowledges that this Agreement
is made with such Purchaser in reliance upon such Purchaser’s representation to
the Company that the Notes will be acquired for investment for such Purchaser’s
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that such Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the same.  By executing this Agreement,
such Purchaser further represents that such Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or
grant participations to such person or to any third person, with respect to any
of the Notes.


 


6.3                               Disclosure of Information.  Such Purchaser acknowledges that it has
received all the information it considers necessary or appropriate for deciding
whether to acquire the Notes.  Such
Purchaser further represents that it has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the
offering of the Notes.


 


6.4                               Investment Experience.  Such Purchaser is an investor in securities
of companies in the development stage and acknowledges that it is able to fend
for itself, can bear the economic risk of its investment and has such knowledge
and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Notes.


 


6.5                               Accredited Investor.  Such Purchaser is an “accredited investor”
within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act and has not been organized solely for the purpose of acquiring
any of the Notes.


 


6.6                               Restricted Securities.  Such Purchaser understands that the Notes are
characterized as “restricted securities” under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction or
transactions not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act only in certain limited circumstances. 
Such Purchaser represents that it is familiar with Rule 144
promulgated under the Securities Act, as presently in effect, and understands
the resale limitations imposed thereby and by the Securities Act.


 


6.7                               Legends.  It is understood that the Notes may bear the
following legend, as well as other legends:


 


20

















 


“THIS
SUBORDINATED SECURED PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED,
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.”


 


7.                                      EVENTS
OF DEFAULT AND REMEDIES.


 


7.1                               Events
of Default.  The
occurrence of any one or more of the following events shall constitute an “Event of Default”:


 


(a)                                 Failure to Pay.  Any
Loan Party shall fail to pay (i) any principal when due, or (ii) any
interest, fees or other Obligations (other than as specified in clause (i))
within a period of 3 days after the due date thereof (other than on the Maturity
Date).


 


(b)                                 Failure
to Observe or Perform Covenants or Agreements.  (i) Any Loan Party breaches any of its obligations under
Section 4.1 (solely as it relates
to maintaining its existence), Section 4.2, Section 4.3,
Section 4.4, or Article 5, or (ii) Any Loan Party
breaches any of its other obligations under any of the Transaction Documents
and fails to cure such breach within 30 days after the earlier of (i) the
date on which an officer of such Loan Party becomes aware, or through the
exercise of reasonable diligence should have become aware, of such failure and (ii) the
date on which notice shall have been given to Company from any Purchaser.


 


(c)                                  Incorrectness
of any Representation or Warranty.  Any warranty, representation or statement made or
deemed made by or on behalf of any Loan Party in any of the Transaction
Documents or otherwise in connection with any of the Obligations shall be false
or misleading in any material respect (provided, that if such representation or
warranty (i) relates to a specific date it shall be true and correct as of
such date and (ii) contains a materiality qualifier, it shall be true and
correct in all respects); and provided further that solely with respect to any
Loan Party’s breach of Section 4.1
solely as a result of such Loan Party’s failure to be in good standing in its
applicable jurisdiction of incorporation or formation, such Loan Party shall
have 5 Business Days in which to cure such default (for the avoidance of doubt
this cure period shall not apply to any Loan Party’s representation with
respect to existence or due organization or any other representation or
warranty in this Agreement).


 


(d)                                 Attachment.  Any
portion of the Collateral in excess of $290,000 is subjected to attachment,
execution, levy, seizure or confiscation in any legal proceeding or otherwise,
or if any legal or administrative proceeding is commenced against any Loan
Party or any portion of the Collateral in excess of $290,000, which in the good
faith judgment of the Majority Purchasers subjects any portion of the
Collateral in excess of $290,000 to a material risk of attachment, execution,
levy, seizure or confiscation and no bond is posted or protective order
obtained to negate such risk.


 


(e)                                  Judgments, et al.  One
or more judgments, orders or decrees shall be rendered against any Loan Party
or any Subsidiary of a Loan Party that exceeds by more than $290,000 any
insurance coverage applicable thereto (to the extent the relevant insurer has 


 


21

















 


been notified of
such claim and has not denied coverage therefor) and either (i) enforcement
proceedings shall have been commenced by any creditor upon any such judgment,
order or decree or (ii) such judgment, order or decree shall not have been
vacated or discharged for a period of 20 consecutive days and there shall not
be in effect (by reason of a pending appeal or otherwise) any stay of
enforcement thereof.


 


(f)                                   Bankruptcy or Insolvency,
et al.  (i) Any
proceeding shall be instituted by or against any Loan Party or any Subsidiary
of a Loan Party seeking to adjudicate it as bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, composition of it or its debts or any similar order, in each case under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or seeking the entry of an order for relief or the appointment of a
custodian, receiver, trustee, conservator, liquidating agent, liquidator, other
similar official or other official with similar powers, in each case for it or
for any substantial part of its property and, in the case of any such
proceedings instituted against (but not by or with the consent of) such Loan
Party or such Subsidiary, either such proceedings shall remain undismissed or
unstayed for a period of 45 days or more or any action sought in such
proceedings shall occur or (ii) Any Loan Party or any Subsidiary of a Loan
Party shall take any corporate or similar action or any other action to
authorize any action described in clause (i) above.


 


(g)                                  Material
Adverse Change.  An event or development occurs
which could reasonably be expected to have a Material Adverse Effect.


 


(h)                                 Failure
of this Agreement or Any Other Transaction Documents.  (i) Any
provision of any Transaction Document shall fail to be valid and binding on, or
enforceable against, a Loan Party party thereto, or (ii) Any Transaction
Document purporting to grant a security interest to secure any Obligation shall
fail to create a valid and enforceable security interest on any portion of the
Collateral in excess of $250,000 purported to be covered thereby or such
security interest shall fail or cease to be a perfected lien with the priority
required in the relevant Transaction Document, or any Loan Party shall state in
writing that any of the events described in clause (i) or (ii) above
shall have occurred.


 


(i)                                     Cross-Defaults.  (i) Any
Loan Party or any Subsidiary of a Loan Party defaults under any Material
Agreement (after any applicable grace period contained therein), (ii) (A) Any
Loan Party or any Subsidiary of a Loan Party fails to make (after any
applicable grace period) any payment when due (whether due because of scheduled
maturity, required prepayment provisions, acceleration, demand or otherwise) on
any Indebtedness (other than the Obligations) of such Loan Party or such
Subsidiary having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $290,000 (other than
the Indebtedness under the Senior Facility) (“Material
Indebtedness”), (B) Any other event shall occur or condition
shall exist under any contractual obligation relating to any such Material
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of (without regard to any subordination terms with
respect thereto), the maturity of such Material Indebtedness or (C) Any
such Material Indebtedness shall become or be declared to be due and payable,
or be required to be prepaid, redeemed, defeased or repurchased (other than by
a regularly scheduled required prepayment), prior to the stated maturity
thereof, or (iii) Company or any Subsidiary defaults under any obligation
for payments due under any lease agreement in excess of $50,000; provided,
however, that to the extent and for so long as the Senior Agent and the Senior
Lenders have consented and agreed to any such defaults under Section 3(k) of
the Senior Facility Fourth Amendment, such defaults shall not constitute a
breach of this clause (i).


 


22

















 


(j)                                    Change
in Control.  A Change in
Control of the Company shall have occurred.


 


(k)                                 Acceleration of Senior Debt.  Obligations under the Senior Debt shall have
been accelerated or the Senior Agent or any of the Senior Lenders shall have
commenced the taking of any action to setoff against, sweep, or otherwise
exercise any rights or remedies against any deposit account or securities
account of the Company.


 


(l)                                     Cease
Operations.  The Company
shall cease operations, or shall take any action to authorize or affect any of
the foregoing.


 


7.2                               Remedies.  Upon the occurrence of an Event of Default,
but subject to the
terms and conditions of the Intercreditor Agreement, at the option
and upon the declaration of the Majority Purchasers, or automatically if any
Event of Default under Section 7.1(f) hereof
occurs, the entire unpaid principal and accrued and unpaid interest on such
Note shall, without presentment, demand, protest, or notice of any kind, all of
which are hereby expressly waived, be forthwith due and payable, and such
holder may, immediately and without expiration of any period of grace, enforce
payment of all amounts due and owing under such Note and exercise any and all
other remedies granted to it at law, in equity or otherwise (provided that any
remedies available pursuant the Security Agreement shall be exercised in
accordance with the terms thereof).


 


8.                                      MISCELLANEOUS.


 


8.1                               Successors and Assigns.  Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties, provided,
however, that (i) the Company may not assign its obligations under
this Agreement without the written consent of the Majority Purchasers and (ii) except
while an Event of Default has occurred and is continuing, no Purchaser may
assign its obligations under this Agreement other than to its Affiliates
(which, for the avoidance of doubt, shall include any management company of a
Purchaser that is a venture capital fund) without the written consent of the
Company.  For the avoidance of doubt, it shall
be understood that any Purchaser may assign, without the consent of any party
hereto, all or any part of its rights and obligations under this Agreement to
any of its Affiliates, including its rights and obligations to purchase any
Committed Notes or Discretionary Notes. 
Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.


 


8.2                               Governing Law.  This Agreement and the Notes  shall be governed by and construed under the laws of the
Commonwealth of Massachusetts.


 


8.3                               Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


8.4                               Titles and Subtitles.  The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.


 


23

















 


8.5                               Notices.  All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed effectively given: 
(i) upon personal delivery to the party to be notified, (ii) on
the date of the sender’s receipt of confirmation of proper transmission if sent
by facsimile, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid or (iv) one
(1) Business Day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of
receipt.  All communications shall be
sent to the respective parties at the following addresses (or at such other
addresses as shall be specified by notice given in accordance with this Section 8.5):


 


If to the Company:


 


HELICOS BIOSCIENCES
CORPORATION.


One
Kendall Square


Suite 7301


Cambridge, MA 02139


Attention:  Chief Financial Officer


 


With
a copy, delivery of which shall not constitute notice to the Company, to:


 


Goodwin
Procter LLP


53 State Street


Boston, MA 02109


Attention:                Stuart Cable, Esq.


James
Matarese, Esq.


 


If to Purchasers:


 


At
the respective addresses shown on the Schedule of Purchasers (provided that for
Purchasers sharing a single address as shown on the Schedule of Purchasers,
delivery of a single notice or other communication, as applicable, addressed to
all such Purchasers, to such address in accordance with the remainder of this Section 8.5,
shall be sufficient to for compliance with this Section 8.5), with a copy, delivery of which shall not
constitute notice to any Purchaser hereunder, to:


 


Wilmer
Cutler Pickering Hale and Dorr LLP


60
State Street


Boston,
MA 02109


Attn:  Philip P. Rossetti, Esq.


Facsimile:  617-526-5000.


 


8.6                               Entire Agreement; Amendments and
Waivers.  The Transaction Documents and
the other documents delivered pursuant hereto or thereto constitute the full
and entire understanding and agreement between and among the parties with
regard to the subjects hereof and thereof. 
The Company’s agreements with each of the Purchasers are separate
agreements, and the sales of the Notes to each of the Purchasers are separate
sales.  Notwithstanding anything to the
contrary set forth herein, any term of this Agreement or any other Transaction
Document (including, without limitation, each Note) may be amended and the
observance of any term of this Agreement or any other Transaction Document
(including, without limitation, each Note) may be waived (either generally or
in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Majority Purchasers and any such
amendment or waiver shall be binding on all Purchasers.  Any waiver or 


 


24

















 


amendment
effected in accordance with this Section 8.6
shall be binding upon each party to this Agreement and any holder of any Notes
acquired under this Agreement at the time outstanding and each future holder of
any such Notes.  No amendment to or
waiver of any provision of any Note shall be made unless such amendment or
waiver is made with respect to all the Notes.


 


8.7                               Effect of Amendment or Waiver.  Each Purchaser acknowledges and agrees that
by the operation of Section 8.6
hereof and subject to the terms thereof, the Majority Purchasers shall have the
right and power to diminish or eliminate all rights of such Purchaser under
this Agreement, the Security Agreement, each Note issued to such Purchaser and
the other Transaction Documents; provided, however,  no amendment, waiver or consent shall (a) extend
or increase the commitment of a Purchaser without the written consent of such
Purchaser whose commitment is being extended or increased, (b) postpone
any date fixed by this Agreement or any other Transaction Document for any
payment of principal, interest, fees or other amounts due to the Purchasers
without the written consent of each Purchaser entitled to receive such payment,
(c) reduce the principal of, or the rate of interest specified herein on,
any Loan, or any fees or other amounts payable hereunder or under any other
Transaction Document without the written consent of each Purchaser entitled to
receive such amount, or (d) change any provision of this Section 8.7
or the definition of “Majority Purchasers” without the written consent of each
Purchaser directly affected thereby.


 


8.8                               Exculpation Among Purchasers.  Each Purchaser acknowledges that it is not
relying upon any person, firm, corporation or stockholder, other than the
Company and its officers and directors in their capacities as such, in making
its investment or decision to invest in the Company.  Each Purchaser agrees that no other Purchaser
nor the respective controlling persons, officers, directors, partners, agents,
shareholders or employees of any other Purchaser shall be liable for any action
heretofore or hereafter taken or omitted to be taken by any of them in
connection with the purchase and sale of the Notes.


 


8.9                               Severability.  If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.


 


8.10                        Indemnity; Costs, Expenses and
Attorneys’ Fees.  The Company
shall pay all costs and expenses that each Purchaser incurs with respect to the
preparation, negotiation, execution and delivery of this Agreement and the
other Transaction Documents or any amendments, modifications or waivers of the
provisions hereof or thereof.  The
Company shall pay all reasonable costs and expenses that each Purchaser incurs
in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Transaction Documents, including
its rights under this Section, (B) in connection with the Loans made
hereunder, or (C) in connection with the Risk Premium Agreement, including
in each case all such reasonable out of pocket expenses incurred during any
workout, restructuring or negotiations in respect thereof.  The Company shall indemnify and hold each
Purchaser harmless from any loss, cost, liability and legal or other expense,
including reasonable attorneys’ fees of such Purchaser’s counsel, which a
Purchaser may directly or indirectly suffer or incur by reason of the failure
of the Company to perform any of its obligations under this Agreement, any
Note, the Security Agreement, any other Transaction Document or any other
agreement or instrument executed in connection herewith or therewith, any grant
of or exercise of remedies, or any Purchaser’s execution or performance of this
Agreement, any Transaction Document or any agreement executed in connection
herewith or therewith.


 


25

















 


8.11                        Further Assurance.  From time to time, the Company shall execute
and deliver to the Purchasers such additional documents and shall provide such
additional information to the Purchasers as any Purchaser may reasonably
require to carry out the terms of this Agreement, the Notes, the Security
Agreement and any other agreements executed in connection herewith or
therewith.


 


8.12                        Waiver of Jury Trial.  TO THE EXTENT EACH MAY LEGALLY DO SO,
EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR
INCIDENTAL TO, THE DEALING OF THE PARTIES HERETO WITH RESPECT TO THIS
AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE.  TO THE
EXTENT EACH MAY LEGALLY DO SO, EACH PARTY HERETO HEREBY AGREES THAT ANY
SUCH CLAIM, DEMAND, ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL
WITHOUT A JURY AND THAT EITHER PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY
OTHER PARTY HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.


 


8.13                        Pari Passu Interest.  The Company and the Purchasers acknowledge
and agree that the payment of all or any portion of the outstanding principal
amount of any Notes and all interest or any premium thereon shall be pari passu
in right of payment and in all other respects to all of the other Notes issued
hereunder.  In the event a Purchaser
receives payments in excess of its Pro Rata Portion of the Company’s payments
to the Purchasers of all of the Notes pursuant to such repayment, then such
Purchaser shall hold in trust all such excess payments for the benefit of the
holders of the other Notes and shall pay such amounts held in trust to such
other holders upon demand by such holders.


 


[Signature pages follow]


 


26

















 


IN WITNESS WHEREOF, the parties have executed
this Subordinated Secured Note Purchase Agreement as an instrument under seal
as of the date first above written.


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HELICOS
  BIOSCIENCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ivan Trifunovich

  
	
   

  	
   

  	
  Name: Ivan Trifunovich

  
	
   

  	
   

  	
  Title: Chairman, President and Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  Jurisdiction
  of Organization: Delaware

  
	
   

  	
  Chief
  Executive Office:

  
	
   

  	
  One
  Kendall Square

  
	
   

  	
  Suite 7301

  
	
   

  	
  Cambridge,
  MA 02139

  



 


 


[Signature Page to Note Purchase Agreement]


 

















 


	
   

  	
  PURCHASERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APPLIED GENOMIC
  TECHNOLOGY CAPITAL FUND, L.P.;

  
	
   

  	
  AGTC ADVISORS
  FUND, L.P.

  
	
   

  	
   

  	
  Each by AGTC
  Partners, L.P., its General Partner

  
	
   

  	
   

  	
  By NewcoGen Group
  Inc. its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Noubar Afeyan

  
	
   

  	
   

  	
   

  	
  Name: Noubar
  Afeyan

  
	
   

  	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
   

  
	
   

  	
  One
  Memorial Drive, Seventh Floor

  
	
   

  	
  Cambridge,
  MA 02142

  
	
   

  	
  Attn:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NEWCOGEN
  GROUP LLC;

  
	
   

  	
  NEWCOGEN
  EQUITY INVESTORS LLC;

  
	
   

  	
  NEWCOGEN-ELAN
  LLC;

  
	
   

  	
  NEWCOGEN-PE
  LLC;

  
	
   

  	
  NEWCOGEN-LONG
  REIGN HOLDING LLC;

  
	
   

  	
  ST
  NEWCOGEN LLC

  
	
   

  	
   

  
	
   

  	
  Each
  by its Manager NewcoGen Group Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Noubar Afeyan

  
	
   

  	
   

  	
  Name:
  Noubar Afeyan

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
   

  
	
   

  	
  One
  Memorial Drive, Seventh Floor

  
	
   

  	
  Cambridge,
  MA 02142

  
	
   

  	
  Attn:

  
					



 


 


[Signature Page to Note Purchase Agreement]


 

















 


	
   

  	
  PURCHASERS:

  
	
   

  	
   

  
	
   

  	
  FLAGSHIP VENTURES FUND 2004, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
  By its General Partner

  
	
   

  	
   

  	
  Flagship Ventures General Partner LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Noubar Afeyan

  
	
   

  	
   

  	
   

  	
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
  One
  Memorial Drive, Seventh Floor

  
	
   

  	
  Cambridge,
  MA 02142

  
	
   

  	
  Attn:

  



 


 


[Signature
Page to Note Purchase Agreement]


 






 












 


	
   

  	
  PURCHASERS:

  
	
   

  	
   

  
	
   

  	
  ATLAS VENTURE FUND
  VI, L.P.

  
	
   

  	
  ATLAS VENTURE
  ENTREPRENEURS’ FUND VI, L.P.

  
	
   

  	
  By:

  	
  Atlas Venture
  Associates VI, L.P.

  
	
   

  	
   

  	
  Their General
  Partner

  
	
   

  	
  By:

  	
  Atlas Venture
  Associates VI, Inc.

  
	
   

  	
   

  	
  Its General
  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kristen Laguerre

  
	
   

  	
   

  	
  Name:  Kristen Laguerre

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  25 First Street,
  Suite 303

  
	
   

  	
  Cambridge, MA
  02141

  
	
   

  	
  Attention: General
  Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ATLAS VENTURE FUND
  VI, GMBH & CO. KG

  
	
   

  	
  By:

  	
  Atlas Venture
  Associates VI, L.P.

  
	
   

  	
   

  	
  Its Managing Limited
  Partner

  
	
   

  	
  By:

  	
  Atlas Venture
  Associates VI, Inc.

  
	
   

  	
   

  	
  Its General
  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kristen Laguerre

  
	
   

  	
   

  	
  Name:  Kristen Laguerre

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  25 First Street,
  Suite 303

  
	
   

  	
  Cambridge, MA
  02141

  
	
   

  	
  Attention: General
  Counsel

  
				



 


 


[Signature Page to Note Purchase Agreement]


 

















 


	
   

  	
  PURCHASERS:

  
	
   

  	
   

  
	
   

  	
  ATLAS VENTURE FUND
  V, L.P.

  
	
   

  	
  ATLAS VENTURE
  ENTREPRENEURS’ FUND V, L.P.

  
	
   

  	
  By:

  	
  Atlas Venture
  Associates V, L.P.

  
	
   

  	
   

  	
  Their General
  Partner

  
	
   

  	
  By:

  	
  Atlas Venture
  Associates V, Inc.

  
	
   

  	
   

  	
  Its General
  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kristen Laguerre

  
	
   

  	
   

  	
  Name:  Kristen Laguerre

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  25 First Street,
  Suite 303

  
	
   

  	
  Cambridge, MA
  02141

  
	
   

  	
   

  
	
   

  	
  Attention: General
  Counsel

  
				



 


 


[Signature
Page to Note Purchase Agreement]


 

















 


SCHEDULE 1


 


SCHEDULE OF PURCHASERS


 


A.            Purchasers


 


	
  Purchaser

  	
   

  	
  Pro Rata Portion

  	
   

  	
  Aggregate

  Discretionary Note

  Amount

  	
   

  	
  Initial Closing

  Amount

  	
   

  
	
  APPLIED GENOMIC TECHNOLOGY CAPITAL FUND, L.P.

  	
   

  	
  27.70016

  	
  %

  	
  $

  	
  554,003.20

  	
   

  	
  $

  	
  92,333.87

  	
   

  
	
  AGTC ADVISORS FUND, L.P.

  	
   

  	
  1.662093

  	
  %

  	
  $

  	
  33,241.86

  	
   

  	
  $

  	
  5,540.31

  	
   

  
	
  NEWCOGEN GROUP LLC

  	
   

  	
  3.533979

  	
  %

  	
  $

  	
  70,679.58

  	
   

  	
  $

  	
  11,779.93

  	
   

  
	
  NEWCOGEN EQUITY INVESTORS LLC

  	
   

  	
  3.226449

  	
  %

  	
  $

  	
  64,528.97

  	
   

  	
  $

  	
  10,754.83

  	
   

  
	
  NEWCOGEN-ELAN LLC

  	
   

  	
  0.230652

  	
  %

  	
  $

  	
  4,613.04

  	
   

  	
  $

  	
  768.84

  	
   

  
	
  NEWCOGEN-PE LLC

  	
   

  	
  0.889356

  	
  %

  	
  $

  	
  17,787.12

  	
   

  	
  $

  	
  2,964.52

  	
   

  
	
  NEWCOGEN-LONG REIGN HOLDING LLC

  	
   

  	
  0.183516

  	
  %

  	
  $

  	
  3,670.32

  	
   

  	
  $

  	
  611.72

  	
   

  
	
  ST NEWCOGEN LLC

  	
   

  	
  0.183393

  	
  %

  	
  $

  	
  3,667.86

  	
   

  	
  $

  	
  611.31

  	
   

  
	
  FLAGSHIP VENTURES FUND 2004, L.P. 

  	
   

  	
  12.390402

  	
  %

  	
  $

  	
  247,808.03

  	
   

  	
  $

  	
  41,301.34

  	
   

  
	
  ATLAS VENTURE FUND V, L.P.

  	
   

  	
  19.736842105409

  	
  %

  	
  $

  	
  394,736.83

  	
   

  	
  $

  	
  65,789.48

  	
   

  
	
  ATLAS VENTURE ENTREPRENEURS’ FUND V, L.P.

  	
   

  	
  0.263157894591

  	
  %

  	
  $

  	
  5,263.16

  	
   

  	
  $

  	
  877.19

  	
   

  
	
  ATLAS VENTURE FUND VI, L.P.

  	
   

  	
  28.601635137276

  	
  %

  	
  $

  	
  572,032.69

  	
   

  	
  $

  	
  95,338.79

  	
   

  
	
  ATLAS VENTURE FUND VI, GMBH & CO. KG

  	
   

  	
  0.523711020282

  	
  %

  	
  $

  	
  10,474.22

  	
   

  	
  $

  	
  1,745.70

  	
   

  
	
  ATLAS VENTURE ENTREPRENEURS’ FUND VI, L.P.

  	
   

  	
  0.874653842442

  	
  %

  	
  $

  	
  17,493.08

  	
   

  	
  $

  	
  2,915.51

  	
   

  
	
  TOTAL:

  	
   

  	
  100

  	
  %

  	
  $

  	
  1,999,999.96

  	
   

  	
  $

  	
  333,333.34

  	
   

  



 

















 


SCHEDULE 2.1(b)(i)


 


LIST OF CONDITIONS TO INITIAL LOAN CLOSING


 


(a)           Company shall have duly executed and delivered
to Purchasers the Agreement, the Committed Notes to be issued at the Initial
Loan Closing and the Risk Premium Agreement.


 


(b)           Company shall have delivered or
caused to be delivered to Purchasers:


 


(i)            a certificate of the Secretary of
the Company, certifying (a) that the authorized officers of the Company have
the authority to execute, deliver, and perform their obligations under each of
the Transaction Documents; (b) that attached to such certificate is a true,
correct, and complete copy of the resolutions of the board of directors of the
Company then in full force and effect authorizing and ratifying the execution,
delivery, and performance by such authorized officers of the Transaction
Documents, (c) the names of the authorized officers authorized to execute the
Transaction Documents on behalf of the Company, together with a sample of the
true signatures of such authorized officers, (d) that attached to such
certificate is a true, correct, and complete copy of the by-laws of the Company
then in full force and effect; and (e) that attached to such certificate is a
true, correct, and complete copy of the Certificate of Incorporation of the
Company then in full force and effect and as certified by the Secretary of
State of Delaware;


 


(ii)           certificate of good standing of
Company as of a date acceptable to the Majority Purchasers from the Secretary
of State of the Commonwealth of Massachusetts and the Secretary of State of the
State of Delaware;


 


(iii)          reimbursement for Purchasers’
out-of-pocket expenses (including reasonable attorney’s fees) incurred in
connection with the preparation, execution and delivery of this Agreement and
the other Transaction Documents;


 


(iv)          opinion of counsel to Company, in form
and substance acceptable to the Majority Purchasers and their counsel;


 


(v)           an executed and effective Waiver,
Consent and Fourth Amendment to the Senior Facility, which restructures the
payment obligations under the Senior Facility on terms and conditions
acceptable to the Purchasers, in their sole discretion;


 


(vii)         the executed Intercreditor Agreement;


 


(viii)        a certificate of an officer of the
Company certifying that (i) each of the conditions set forth in Schedules
2.1(b)(i) and 2.1(b)(ii) of this Agreement have been satisfied, (ii) each of
the representations and warranties set forth in Section 3 of this Agreement is
true and correct, (iii) after giving effect to this Agreement and the other
Transaction Documents, and the initial Loans being made at the Initial Loan
Closing, no Event of Default exists, and (iv) attached thereto are true,
correct and complete copies of the Senior Facility and the Senior Facility
Amendment (referenced below) as in effect at the Initial Loan Closing;


 


(ix)           an executed and effective amendment
to the Amended and Restated Investor Rights Agreement, dated as of March 1,
2006, by and between the Company and the Investors specified therein in the
form attached hereto as Exhibit F; and


 

















 


(x)            an executed Intellectual Property
Security Agreement in the form attached hereto as Exhibit G.


 

















 


SCHEDULE 2.1(b)(ii)


 


LIST OF CONDITIONS TO ADDITIONAL COMMITTED LOAN CLOSINGS


 


(a)           The Company shall have delivered to
the Purchasers (i) a Notice and (ii) the applicable executed Committed Notes.


 


(b)           At the time of, and immediately after
giving effect to, such Loan, no Default or Event of Default shall have occurred
and be continuing that either automatically triggers, or pursuant to which
Senior Agent or any of the Senior Lenders shall have commenced either (x) the
acceleration of the Senior Debt or (y) the taking of any action to setoff
against, sweep, or otherwise exercise any rights or remedies against any
deposit account or securities account of the Company.


 


(c)           At the time of, and immediately after
giving effect to, such Loan no event described in Section 7.1(f) of the
Agreement shall have occurred and be continuing.


 

















 


SCHEDULE 2.1(b)(iii)


 


LIST OF CONDITIONS TO ADDITIONAL DISCRETIONARY LOAN CLOSINGS


 


Such
conditions, certificates, instruments and agreements as the Purchasers in their
sole discretion shall require.


 


NOTWITHSTANDING
THE FULFILLMENT OF ANY OR ALL OF THE FOREGOING CONDITIONS AND/OR THE COMPLIANCE
BY THE COMPANY WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE COMPANY
ACKNOWLEDGES AND AGREES THAT THE PURCHASERS HAVE NO COMMITMENT TO PURCHASE ANY
DISCRETIONARY NOTE OR MAKE ANY OTHER EXTENSION OF CREDIT AS A DISCRETIONARY
NOTE PURSUANT TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, THE
PURCHASE OF SUCH DISCRETIONARY NOTES BY ANY PURCHASER SHALL AT ALL TIMES BE IN THE
SOLE AND ABSOLUTE DISCRETION OF SUCH PURCHASER.


 






 












 


EXHIBIT A


 


FORM OF NOTE


 


THIS
INSTRUMENT AND THE INDEBTEDNESS, RIGHTS AND OBLIGATIONS EVIDENCED HEREBY AND
ANY LIENS OR OTHER SECURITY INTERESTS SECURING SUCH RIGHTS AND OBLIGATIONS ARE
SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SUBORDINATION AND INTERCREDITOR AGREEMENT (AS AMENDED, RESTATED, SUPPLEMENTED
OR MODIFIED FROM TIME TO TIME, THE “SUBORDINATION AGREEMENT”) DATED AS OF
NOVEMBER 16, 2010, BY AND AMONG THE SUBORDINATED CREDITORS IDENTIFIED THEREIN
AND GENERAL ELECTRIC CAPITAL CORPORATION IN ITS CAPACITY AS AGENT FOR CERTAIN
LENDERS (TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, “SENIOR CREDITOR AGENT”), TO
CERTAIN INDEBTEDNESS, RIGHTS, AND OBLIGATIONS OF HELICOS BIOSCIENCES
CORPORATION TO SENIOR CREDITOR AGENT AND SENIOR CREDITOR (AS DEFINED THEREIN)
AND LIENS AND SECURITY INTERESTS OF SENIOR CREDITOR AGENT SECURING THE SAME ALL
AS DESCRIBED IN THE SUBORDINATION AGREEMENT, AND EACH HOLDER AND TRANSFEREE OF
THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND
BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.


 


THIS
SUBORDINATED SECURED PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED,
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.


 


SUBORDINATED SECURED PROMISSORY NOTE


 


	
  No. N-[    ]

  	
   

  	
  Date of Issuance

  
	
  $[                    ]

  	
   

  	
  [Month Day, Year]

  



 


FOR
VALUE RECEIVED, HELICOS
BIOSCIENCES CORPORATION, a Delaware corporation (the “Company”), hereby promises to pay
                                                          
(the “Purchaser”), the principal sum of
[AMOUNT IN WORDS Dollars and [AMOUNT] Cents
($                      ),
together with interest thereon from the date of this Note.  Interest shall accrue at a rate set forth in
the Purchase Agreement, calculated as set forth in the Purchase Agreement.  Notwithstanding anything herein or in the
Subordinated Secured Note Purchase Agreement, dated as of November     ,
2010, by and between the Company, the Purchaser and the other purchasers party
thereto (the “Purchase Agreement”), the
principal and accrued interest shall be due and payable by the Company upon the
occurrence of the Maturity Date.


 

















 


This
Note is one of the Notes issued pursuant to the Purchase Agreement, and
capitalized terms used and not defined herein shall have the meanings set forth
in the Purchase Agreement.


 


1.             Payment.  All payments
shall be made in lawful money of the United States of America at the principal
office of the Company, or at such other place as the holder hereof may from
time to time designate in writing to the Company.  Payment shall be credited first to Costs (as
defined below), if any, then to accrued interest due and payable and any
remainder applied to principal.  The
Company hereby waives demand, notice, presentment, protest and notice of
dishonor.


 


2.             Security.  This Note is secured under the Security Agreement, entered into concurrently with
execution and delivery of the Purchase Agreement.  Reference is hereby made to the Security
Agreement for a description of the nature and extent of the security for this
Note and the rights with respect to such security of the holder of this Note.


 


3.             Conversion. This Note shall be subject to conversion as set
forth in Section 2.1(d) of the Purchase
Agreement.


 


4.             Amendments and Waivers; Resolutions of Dispute; Notice.  The provisions of the Purchase Agreement
shall govern any amendment or waiver of any term of this Note, the resolution
of any controversy or claim arising out of or relating to this Note and the
provision of notice.


 


5.             Successors and Assigns. 
This Note applies to, inures to the benefit of, and binds the successors
and assigns of the parties hereto; provided, however, that the
Company may not assign its obligations under this Note except as provided in
the Purchase Agreement.  Any transfer of
this Note may be effected only pursuant to the Purchase Agreement and by
surrender of this Note to the Company and reissuance of a new note to the transferee.  Upon transfer in accordance with this Section 4,
this Note shall be reissued to, and registered in the name of, the transferee,
or a new Note for like principal amount and interest shall be issued to, and
registered in the name of, the transferee. 
The Purchaser and any subsequent holder of this Note receive this Note
subject to the foregoing terms and conditions, and agree to comply with the
foregoing terms and conditions.


 


6.             Expenses.  The Company
hereby agrees, subject only to any limitation imposed by applicable law, to pay
all reasonable expenses, including reasonable attorneys’ fees and legal
expenses, incurred by the holder of this Note (“Costs”)
in collecting any amounts payable hereunder which are not paid when due,
whether by declaration or otherwise.  The
Company agrees that any delay on the part of the holder in exercising any
rights hereunder will not operate as a waiver of such rights.  The holder of this Note shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies, and no waiver of any kind shall be valid unless in writing and signed
by the party or parties waiving such rights or remedies.


 


7.             Governing Law.  This
Note shall be governed by and construed under the laws of the Commonwealth of
Massachusetts.


 


Executed
as in instrument under seal.


 


	
   

  	
  HELICOS BIOSCIENCES CORPORATION

  



 

















 


	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: