Document:

exv10w9

 

Exhibit 10.9

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN
COMPLIANCE WITH RULE 144 UNDER SAID ACT OR WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION.

WARRANT TO PURCHASE UP TO 54,000 SHARES OF COMMON STOCK

September 25, 2003

THIS CERTIFIES THAT, for value received, General Electric Capital Corporation (“Holder”) is
entitled to subscribe for and purchase a number of shares of the fully paid and nonassessable
Common Stock of Compound Therapeutics, Inc., a Delaware corporation (the “Company”) determined
pursuant to Section 1(a) below (the “Shares” or the “Stock”), at the Warrant Price (as hereinafter
defined), subject to the provisions and upon the terms and conditions hereinafter set forth.

1. Number of Shares; Warrant Price.

(a) Number. Prior to June 30, 2004, this Warrant shall be exercisable for a maximum of
Forty-Four Thousand (44,000) shares of Common Stock. After June 30, 2004, this Warrant shall be
exercisable for a maximum of Fifty-Four Thousand (54,000) shares of Common Stock; provided,
however, that if, prior to June 30, 2004, General Electric Capital Corporation has not made
available to the Company an aggregate of $1,350,000 pursuant to that certain Loan Proposal, dated
June 16, 2003, from GE Capital to the Company, then the maximum number of shares of Common Stock
issuable upon exercise of this Warrant shall be Forty-Four Thousand (44,000).

(b) The Warrant Price shall initially be 75/100 dollars ($.75) per share, subject to adjustment as
provided in Section 7 below.

2. Conditions to Exercise. The purchase right represented by this Warrant may be
exercised at any time, or from time to time, in whole or in part during the term commencing on the
date hereof and ending at 5:00 P.M. Pacific time on the fifth anniversary of the date of this
Warrant.

3. Method of Exercise; Payment; Issuance of Shares; Issuance of New Warrant.

(a) Cash Exercise. Subject to Section 2 hereof, the purchase right represented by this
Warrant may be exercised by the Holder hereof, in whole or in part, by the surrender of this
Warrant (with a duly executed Notice of Exercise in the form attached hereto) at the principal
office of the Company (as set forth in Section 18 below) and by payment to the Company, by check,
of an amount equal to the then applicable Warrant Price per share multiplied by the number of
shares then being purchased. In the event of any exercise of the rights represented by this
Warrant, certificates for the shares of stock so purchased shall be in the name of, and delivered
to, the Holder hereof, or as such Holder may direct (subject to the terms of transfer contained herein and
upon payment by such Holder hereof of any applicable transfer taxes). Such delivery shall be

 

 

made
within 30 days after exercise of the Warrant and at the Company’s expense and, unless this Warrant
has been fully exercised or expired, a new Warrant having terms and conditions substantially
identical to this Warrant and representing the portion of the Shares, if any, with respect to which
this Warrant shall not have been exercised, shall also be issued to the Holder hereof within 30
days after exercise of the Warrant.

(b) Net Issue Exercise. Holder may also elect to receive shares equal to the value of
this Warrant (or of any portion thereof remaining unexercised) by surrender of this Warrant at the
principal office of the Company together with notice of such election, in which event the Company
shall issue to Holder the number of shares of the Company’s Common Stock computed using the
following formula:

Where X = the number of shares of Stock to be issued to Holder.

Y = the number of shares of Stock purchasable under this Warrant (at the date of such calculation),
or, if only a portion, the amount of stock for which the Warrant is being exchanged.

A = the Fair Market Value of one share of the Company’s Common Stock (at the date of such
calculation).

B = Warrant Price (as adjusted to the date of such calculation).

(c) Fair Market Value. For purposes of this Section 3, Fair Market Value of one share of
the Company’s Stock shall mean:

(i) In the event of an exercise in connection with an Initial Public Offering, the per share
Fair Market Value for the Stock shall be the Offering Price per share at which the
underwriters initially sell Common Stock to the public; or

(ii) In the event there is a public market for the trading of the Common Stock, the average
of the closing bid and asked prices of Common Stock quoted in the Over-The-Counter Market
Summary, the last reported sale price quoted on the Nasdaq National Market (“NNM”) or on any
exchange on which the Common Stock is listed, whichever is applicable, as published in the
Western Edition of the Wall Street Journal for the ten (10) consecutive trading days prior
to the date of exercise, multiplied by the number of shares of; or

(iii) In any other instance, the per share Fair Market Value for the Stock shall be deemed
to be the amount most recently determined in good faith by the Company’s Board of Directors
to represent the fair market value per share of the Common Stock (including without
limitation a determination for purposes of granting Common Stock options or issuing Common
Stock under any plan, agreement or arrangement with employees of the Company. In such
event, upon request of the Holder, the Company’s Board of Directors
(or a representative thereof) shall prepare a certificate, to be signed by an authorized
officer of the Company, setting forth in reasonable detail the basis for and method of

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determination of the per share Fair Market Value of the Stock. Such certification shall be
made to Holder not later than twenty (20) business days after such request.

(d) Automatic Exercise. To the extent this Warrant is not previously exercised, it shall
be automatically exercised in accordance with Sections 

3(b) and 3(c) hereof (even if not
surrendered) immediately before its expiration or cancellation.

4. Representations and Warranties of Holder and the Company

(a) Representations and Warranties by Holder. The Holder represents and warrants to the Company
with respect to this purchase as follows:

(i) The Holder has substantial experience in evaluating and investing in private placement
transactions of securities of companies similar to the Company so that the Holder is capable
of evaluating the merits and risks of its investment in the Company and has the capacity to
protect its interests.

(ii) Except for transfers to a Holder’s affiliates, the Holder is acquiring the Warrant and
the Shares of Stock issuable upon exercise of the Warrant (collectively the “Securities”)
for investment for its own account and not with a view to, or for resale in connection with,
any distribution thereof. The Holder understands that the Securities have not been
registered under the Securities Act of 1933, as amended (the “Act”) by reason of a specific
exemption from the registration provisions of the Act which depends upon, among other
things, the bona fide nature of the investment intent as expressed herein.

(iii) The Holder acknowledges that the Securities must be held indefinitely unless
subsequently registered under the Act or an exemption from such registration is available.
The Holder is aware of the provisions of Rule 144 promulgated under the Act.

(iv) The Holder is an “accredited investor” within the meaning of Regulation D promulgated
under the Act.

(v) The Holder has had an opportunity to discuss the Company’s business, management and
financial affairs with its management and an opportunity to review the Company’s facilities.

(b) Company hereby represents and warrants to Holder that the statements in the following
paragraphs of this Section 4(b) are true and correct as of the date hereof.

(i) Corporate Organization and Authority. Company (a) is a corporation duly
organized, validly existing, and in good standing in its jurisdiction of incorporation, (b)
has the corporate power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted; and (c) is qualified as a foreign
corporation in all jurisdictions where such qualification is required.

(ii) Corporate Power. Company has all requisite legal and corporate power and
authority to execute, issue and deliver the Warrant, to issue the Common Stock issuable

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upon
exercise or conversion of the Warrant, and to carry out and perform its obligations under
the Warrant and any related agreements.

(iii) Authorization; Enforceability. All corporate action on the part of Company,
its officers, directors and shareholders necessary for the authorization, execution,
delivery and performance of its obligations under this Warrant and for the authorization,
issuance and delivery of the Warrant and Stock issuable upon exercise of the Warrant has
been taken and this Warrant constitutes the legally binding and valid obligation of Company
enforceable in accordance with its terms.

(iv) Valid Issuance of Warrant and Common Stock. The Warrant has been validly
issued and is free of restrictions on transfer other than restrictions on transfer set forth
herein and under applicable state and federal securities laws. The Common Stock issuable
upon conversion of this Warrant, when issued, sold and delivered in accordance with the
terms of this Warrant for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable, and will be free of restrictions on transfer other
than restrictions on transfer under this Warrant and under applicable state and federal
securities laws. Subject to applicable restrictions on transfer, the issuance and delivery
of the Warrant and the Common Stock issuable upon conversion of the Warrant are not subject
to any preemptive or other similar rights or any liens or encumbrances except as
specifically set forth in Company’s Certificate of Incorporation or this Warrant. Based on
the representations made by the Holder in Section 4(a) above, the offer, sale and issuance
of the Warrant and Common Stock, as contemplated by this Warrant, are exempt from the
prospectus and registration requirements of applicable United States federal and state
security laws, and neither Company nor any authorized agent acting on its behalf has or will
take any action hereafter that would cause the loss of such exemption.

(v) No Conflict with Other Instruments. The execution, delivery, and performance of
this Warrant will not result in any violation of, be in conflict with, or constitute a
default under, with or without the passage of time or the giving of notice (a) any provision
of Company’s Certificate of Incorporation or by-laws; (b) any provision of any judgment,
decree, or order to which Company is a party or by which it is bound or an event which
results in the creation of any material lien, charge or encumbrance upon any material assets
of Company; (c) any contract, obligation, or commitment to which Company is a party or by
which it is bound; or (d) any statute, rule, or governmental regulation applicable to
Company.

(vi) Capitalization. As of recent date, the authorized capital stock of Company
consists of 27,999,998 shares of Common Stock, $.001 par value, of which 5,300,000 were
issued and outstanding, and 16,000,000 shares of Preferred Stock, .001 par value, of which
8,666,672 were issued and outstanding. The currently outstanding shares have been duly
authorized and validly issued (including, without limitation, issued in compliance with
applicable federal and state securities laws), are fully paid and
nonassessable. Company has reserved 54,000 shares of Common Stock for issuance upon
exercise of this Warrant.

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(vii) Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any federal, state or
local governmental authority on the part of Company is required in connection with the
offer, sale or issuance of the Warrant (and the Stock issuable upon the exercise of this
Warrant), or the consummation of any other transaction contemplated hereby, except for the
following: (a) the filing of a notice on Form D under the Act and b) the compliance with
other applicable state securities laws, which compliance will have occurred within the
appropriate time periods therefor.

5. Legends.

(a) Each certificate representing the Securities shall be endorsed with the following legend:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE TRANSFERRED UNLESS COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT, A “NO ACTION” LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, A
TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE SECURITIES AND
EXCHANGE COMMISSION, OR (IF REASONABLY REQUIRED BY THE COMPANY) AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

The Company need not enter into its stock records a transfer of Securities unless the conditions
specified in the foregoing legend are satisfied. The Company may also instruct its transfer agent
not to allow the transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied.

(b) Removal of Legend and Transfer Restrictions. The legend relating to the Act endorsed
on a certificate pursuant to paragraph 5(a) of this Warrant shall be removed and the Company shall
issue a certificate without such legend to the Holder of the Securities if (i) the Securities are
registered under the Act and a prospectus meeting the requirements of Section 10 of the Act is
available or (ii) the Holder provides to the Company an opinion of counsel for the Holder
reasonably satisfactory to the Company, a no-action letter or interpretive opinion of the staff of
the SEC reasonably satisfactory to the Company, or other evidence reasonably satisfactory to the
Company, to the effect that public sale, transfer or assignment of the Securities may be made
without registration and without compliance with any restriction such as Rule 144.

6. Condition of Transfer or Exercise of Warrant. It shall be a condition to any transfer
or exercise of this Warrant that at the time of such transfer or exercise, the Holder shall provide
the Company with a representation in writing that the Holder or transferee is acquiring this
Warrant
and the shares of Stock to be issued upon exercise for investment purposes only and not with a view
to any sale or distribution, or will provide the Company with a statement of pertinent facts
covering any proposed distribution. As a further condition to any transfer of this Warrant of any

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or all of the shares of Stock issuable upon exercise of this Warrant, other than a transfer
registered under the Act, the Company may request a legal opinion, in form and substance
satisfactory to the Company and its counsel, reciting the pertinent circumstances surrounding the
proposed transfer and stating that such transfer is exempt from the registration and prospectus
delivery requirements of the Act. The Company shall not require Holder to provide an opinion of
counsel if the transfer is to an affiliate of Holder. Each certificate evidencing the shares
issued upon exercise of the Warrant or upon any transfer of the shares (other than a transfer
registered under the Act or any subsequent transfer of shares so registered) shall, at the
Company’s option, if the Shares are not freely saleable under Rule 144(k) under the Act, contain a
legend in form and substance satisfactory to the Company and its counsel, restricting the transfer
of the shares to sales or other dispositions exempt from the requirements of the Act. As further
condition to each transfer, at the request of the Company, the Holder shall surrender this Warrant
to the Company and the transferee shall receive and accept a Warrant, of like tenor and date,
executed by the Company.

7. Adjustment for Certain Events. The number and kind of securities purchasable upon the
exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time
upon the occurrence of certain events, as follows:

(a) Reclassification or Merger. In case of any reclassification or change of securities
of the class issuable upon exercise of this Warrant (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a subdivision or
combination), or in case of any merger of the Company with or into another corporation (other than
a merger with another corporation in which the Company is the acquiring and the surviving
corporation and which does not result in any reclassification or change of outstanding securities
issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the
assets of the Company, the Company, or such successor or purchasing corporation, as the case may
be, shall duly execute and deliver to the Holder a new Warrant (in form and substance satisfactory
to the Holder of this Warrant), or the Company shall make appropriate provision without the
issuance of a new Warrant, so that the Holder shall have the right to receive, at a total purchase
price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and
in lieu of the shares of Stock theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money and property receivable upon such
reclassification, change, merger or sale by a Holder of the number of shares of Stock then
purchasable under this Warrant, or in the case of such a merger or sale in which the consideration
paid consists all or in part of assets other than securities of the successor or purchasing
corporation, at the option of the Holder, the securities of the successor or purchasing corporation
having a value at the time of the transaction equivalent to the value of the Stock purchasable upon
exercise of this Warrant at the time of the transaction. Any new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 7. The provisions of this subparagraph (a) shall similarly apply to successive
reclassifications, changes, mergers and transfers.

(b) Subdivision or Combination of Shares. If the Company at any time while this Warrant
remains outstanding and unexpired shall subdivide or combine its outstanding shares of Common
Stock, the Warrant Price shall be proportionately decreased and the number of Shares issuable
hereunder shall be proportionately increased in the case of a subdivision and the Warrant Price

6

 

shall be proportionately increased and the number of Shares issuable hereunder shall be
proportionately decreased in the case of a combination.

(c) Stock Dividends and Other Distributions. If the Company at any time while this
Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Common Stock payable
in Common Stock, then the Warrant Price shall be adjusted, from and after the date of determination
of shareholders entitled to receive such dividend or distribution, to that price determined by
multiplying the Warrant Price in effect immediately prior to such date of determination by a
fraction (A) the numerator of which shall be the total number of shares of Common Stock issuable
upon exercise of this Warrant immediately prior to such dividend or distribution, and (B) the
denominator of which shall be the total number of shares of Common Stock issuable upon exercise of
this Warrant immediately after such dividend or distribution; or (ii) make any other distribution
with respect to Common Stock (except any distribution specifically provided for in Sections 7(a)
and 7(b)), then, in each such case, provision shall be made by the Company such that the Holder of
this Warrant shall receive upon exercise of this Warrant a proportionate share of any such dividend
or distribution as though it were the Holder of the Common Stock as of the record date fixed for
the determination of the shareholders of the Company entitled to receive such dividend or
distribution.

(d) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price, the number
of Shares purchasable hereunder shall be adjusted, to the nearest whole share, to the product
obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in
the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately
prior to such adjustment and the denominator of which shall be the Warrant Price immediately
thereafter.

8. Notice of Adjustments. Whenever any Warrant Price or the kind or number of securities
issuable under this Warrant shall be adjusted pursuant to Section 7 hereof, the Company shall
prepare a certificate signed by an officer of the Company setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the Warrant Price and number or kind of shares issuable upon exercise of the
Warrant after giving effect to such adjustment, and shall cause copies of such certificate to be
mailed (by certified or registered mail, return receipt required, postage prepaid) within thirty
(30) days of such adjustment to the Holder of this Warrant as set forth in Section 18 hereof.

9. Transferability of Warrant. This Warrant is transferable on the books of the Company
at its principal office by the registered Holder hereof upon surrender of this Warrant properly
endorsed, subject to compliance with Section 6 and applicable federal and state securities laws.
The Company shall issue and deliver to the transferee a new Warrant representing the Warrant so
transferred. Upon any partial transfer, the Company will issue and deliver to Holder a new Warrant
with respect to the Warrant not so transferred. Holder shall not have any right to transfer any
portion of this Warrant to any direct competitor of the Company.

10. Registration Rights; Agreement in Connection with Public Offering.

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(a) Investor Rights Agreement. The Holder shall become a party to the Investor Rights
Agreement, dated as of March 31, 2003, as amended from time to time, by and among the Company and
the other parties named therein, for purposes of providing “piggy-back” registration rights with
respect to the Shares.

(b) Lock-up. Holder agrees, in connection with the initial underwritten public offering
of the Company’s securities pursuant to a registration statement under the Act, (i) not to sell,
make short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares
of Common Stock held by Holder without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.

11. No Fractional Shares. No fractional share of Common Stock will be issued in
connection with any exercise hereunder, but in lieu of such fractional share the Company shall make
a cash payment therefor upon the basis of the Warrant Price then in effect.

12. Charges, Taxes and Expenses. Issuance of certificates for shares of Common Stock upon
the exercise of this Warrant shall be made without charge to the Holder for any United States or
state of the United States documentary stamp tax or other incidental expense with respect to the
issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the Holder.

13. No Shareholder Rights Until Exercise. This Warrant does not entitle the Holder hereof
to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof.

14. Registry of Warrant. The Company shall maintain a registry showing the name and
address of the registered Holder of this Warrant. This Warrant may be surrendered for exchange or
exercise, in accordance with its terms, at such office or agency of the Company, and the Company
and Holder shall be entitled to rely in all respects, prior to written notice to the contrary, upon
such registry.

15. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and, in the case of loss, theft, or destruction, of indemnity reasonably satisfactory to
it, and, if mutilated, upon surrender and cancellation of this Warrant, the Company will execute
and deliver a new Warrant, having terms and conditions substantially identical to this Warrant, in
lieu hereof.

16. Miscellaneous.

(a) Issue Date. The provisions of this Warrant shall be construed and shall be given
effect in all respect as if it had been issued and delivered by the Company on the date hereof.

(b) Successors. This Warrant shall be binding upon any successors or assigns of the
Company.

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(c) Governing Law. This Warrant shall be governed by and construed in accordance with the
laws of the State of Delaware.

(d) Headings. The headings used in this Warrant are used for convenience only and are not
to be considered in construing or interpreting this Warrant.

(e) Saturdays, Sundays, Holidays. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or
shall be a legal holiday in the State of Delaware, then such action may be taken or such right may
be exercised on the next succeeding day not a legal holiday.

(f) Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect of any litigation
directly or indirectly arising out of, under or in connection with this Warrant or the Securities.

(g) Attorney’s Fees. In the event of any dispute between the parties concerning the terms
and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect
from the other party all costs incurred in such dispute, including reasonable attorney’s fees.

17. No Impairment. The Company will not, by amendment of its Certificate of Incorporation
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder hereof against impairment.

18. Addresses. Any notice required or permitted hereunder shall be in writing and shall
be mailed by overnight courier, registered or certified mail, return receipt required, and postage
prepaid, or otherwise delivered by hand or by messenger, addressed as set forth below, or at such
other address as the Company or the Holder hereof shall have furnished to the other party.

	 	 	 	 	 	 	 
	 

	 	If to the Company:
	 	 	 	Compound Therapeutics, Inc.
	 

	 	 	 	 	 	1365 Main St.
	 

	 	 	 	 	 	Waltham, MA 02451
	 

	 	 	 	 	 	Attn: Dr. Frank Lee
	 
	 	 	 	 	 	 
	 

	 	If to the Holder:
	 	 	 	General Electric Capital Corporation
	 

	 	 	 	 	 	401 Merritt 7, Suite 23
	 

	 	 	 	 	 	Norwalk, CT 06851-1177
	 

	 	 	 	 	 	Attn: Credit Manager

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     IN WITNESS WHEREOF, Compound Therapeutics, Inc. has caused this Warrant to be executed by its
officers thereunto duly authorized.

Dated as of September 25, 2003.

	 	 	 	 	 	 	 
	 	 	COMPOUND THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Frank Lee
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:
	 	Frank Lee	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	CEO	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	Accepted:	 	 
	 
	 	 	 	 
	GENERAL ELECTRIC CAPITAL CORPORATION	 	 
	 
	 	 	 	 
	By:

	 	John Edel
 

Name: John Edel
	 	 
	 

	 	Title: SVP	 	 

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NOTICE OF EXERCISE

TO:

     The undersigned Warrantholder (“Holder”) elects to acquire shares of Stock (the “Common
Stock”) of                                         , (the “Company”), pursuant to the terms of the Stock Purchase
Warrant dated                                         , 2003 (the “Warrant”).

1. The Holder exercises its rights under the Warrant as set forth below:

	 	 	 	(     ) The Holder elects to
purchase                      shares of Common Stock as
provided in Section 3(a) and tenders herewith a 

        check in the amount
of $                     as
payment of the purchase price.

	 	 	 	(     ) The Holder elects to convert the purchase rights into shares of
Common Stock as provided in Section 3(b) of the Warrant.

2. The Holder surrenders the Warrant with this Notice of Exercise.

The Holder represents that it is acquiring the aforesaid shares of Common Stock for investment and
not with a view to or for resale in connection with distribution and that the Holder has no present
intention of distributing or reselling the shares.

Please issue a certificate representing the shares of the Common Stock in the name of the Holder or
in such other name as is specified below:

	 	 	 	 	 
	 

	 	Name:
	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 
	 	 	 	 
	 

	 	Taxpayer I.D.:	 	 

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Holder)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

11exv10w10

 

Exhibit 10.10

      

COMPOUND THERAPEUTICS, INC.

LOAN AND SECURITY AGREEMENT

      

 

 

     This LOAN AND SECURITY AGREEMENT is entered into as of December 15, 2003, by and between
COMERICA BANK (“Bank”) and Compound Therapeutics, Inc. (“Borrower”).

RECITALS

     Borrower wishes to obtain credit from time to time from Bank, and Bank desires to extend
credit to Borrower. This Agreement sets forth the terms on which Bank will advance credit to
Borrower, and Borrower will repay the amounts owing to Bank.

AGREEMENT,

     The parties agree as follows:

     1. DEFINITIONS AND CONSTRUCTION.

          1.1 Definitions. As used in this Agreement, the following terms shall have the
following definitions:

               “Accounts” means all presently existing and hereafter arising accounts, contract rights,
payment intangibles, and all other forms of obligations owing to Borrower arising out of the sale
or lease of goods (including, without limitation, the licensing of software and other technology)
or the rendering of services by Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all merchandise returned to
or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.

               “Affiliate” means, with respect to any Person, any Person that owns or controls directly or
indirectly such Person, any Person that controls or is controlled by or is under common control
with such Person, and each of such Person’s senior executive officers, directors, and partners.

               “Bank Expenses” means all: reasonable costs or expenses (including reasonable attorneys’ fees
and expenses) incurred in connection with the enforcement of the Loan Documents and Bank’s
reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan
Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency
Proceeding, whether or not suit is brought.

               “Borrower’s Books” means all of Borrower’s books and records including: ledgers; records
concerning Borrower’s assets or liabilities, the Collateral, business operations or financial
condition; and all computer programs, or tape files, and the equipment, containing such
information.

               “Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in
the State of California or Commonwealth of Massachusetts are authorized or required to close.

               “Change in Control” shall mean a transaction in which any “person” or “group” (within the
meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934), other than owners of
stock of the Borrower as of the date hereof or any Affiliates thereof becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of a sufficient number of shares of all classes of stock then outstanding of Borrower
ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to
elect a majority of the Board of Directors of Borrower, who did not have such power before such
transaction.

               “Closing Date” means the date of this Agreement.

               “Code” means the California Uniform Commercial Code.

               “Collateral” means the property described on Exhibit A attached hereto.

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               “Contingent Obligation” means, as applied to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend,
letter of credit or other obligation of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services
issued or provided for the account of that Person; and (iii) all obligations arising under any
interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate
collar agreement, or other agreement or arrangement designed to protect such Person against
fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that
the term “Contingent Obligation” shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determined amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith; provided, however, that
such amount shall not in any event exceed the maximum amount of the obligations under the guarantee
or other support arrangement.

               “Copyrights” means all common law and statutory copyrights and copyright registrations,
applications for registration, now existing or hereafter arising, in the United States of America
or in any foreign jurisdiction, obtained or to be obtained on or in connection with any of the
forgoing, or any parts thereof or any underlying or component elements of any of the forgoing,
together with the right to copyright and all rights to renew or extend such copyrights and the
right (but not the obligation) of Secured Party to sue in its own name and/or in the name of the
Debtor for past, present and future infringements of copyright.

               “Credit Extension” means each Term Advance or any other extension of credit by Bank for the
benefit of Borrower hereunder.

               “Daily Balance” means the amount of the Obligations owed at the end of a given day.

               “Equipment” means all present and future machinery, equipment, tenant improvements, furniture,
fixtures, vehicles, tools, parts and attachments in which Borrower has any interest, but only to
the extent such is included in Collateral.

               “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder.

               “Event of Default” has the meaning assigned in Article 8.

               “GAAP” means generally accepted accounting principles as in effect from time to time.

               “Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of
property or services (excluding obligations associated with deferred revenue liabilities),
including without limitation reimbursement and other obligations with respect to surety bonds and
letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations and (d) all Contingent Obligations.

               “Insolvency Proceeding” means any proceeding commenced by or against any person or entity
under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy
or insolvency law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

               “Intellectual Property Collateral” means all of Borrower’s right, title, and interest in and
to any Copyrights, Trademarks and Patents, all general intangibles (including software, but
excluding payment intangibles) relating to Copyrights, Trademarks and Patents, excluding (i)
insurance proceeds, (ii) all supporting obligations and the security therefor and (iii) any cash
proceeds and/or noncash proceeds of any of the foregoing.

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               “Inventory” means all present and future inventory in which Borrower has any interest,
including merchandise, raw materials, parts, supplies, packing and shipping materials, work in
process and finished products intended for sale or lease or to be furnished under a contract of
service, of every kind and description now or at any time hereafter owned by or in the custody or
possession, actual or constructive, of Borrower, including such inventory as is temporarily out of
its custody or possession or in transit and including any returns upon any accounts or other
proceeds, including insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and Borrower’s Books relating
to any of the foregoing.

               “Investment” means any beneficial ownership of (including stock, partnership interest or other
securities) any Person, or any loan, advance or capital contribution to any Person.

               “IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

               “Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other
encumbrance.

               “Loan Documents” means, collectively, this Agreement, any note or notes executed by Borrower,
and any other agreement entered into in connection with this Agreement, all as amended or extended
from time to time.

               “Material Adverse Effect” means a material adverse effect on (i) the business operations,
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole or (ii) the
ability of Borrower to repay the Obligations or otherwise perform its obligations under the Loan
Documents or (iii) the priority of Bank’s security interests in the Collateral.

               “Negotiable Collateral” means all of Borrower’s present and future letters of credit of which
it is a beneficiary, notes, drafts, instruments, securities, documents of title, and chattel paper,
and Borrower’s Books relating to any of the foregoing.

               “Obligations” means all debt, principal, interest, Bank Expenses and other amounts owed to
Bank by Borrower pursuant to this Agreement or any other agreement, whether absolute or contingent,
due or to become due, now existing or hereafter arising, including any interest that accrues after
the commencement of an Insolvency Proceeding.

               “Patents” means all (i) patents and patent applications filed in the United States Patent and
Trademark Office or any similar office of any foreign jurisdiction, and interests under patent
license agreements, including, without limitation, the inventions and improvements described and
claimed therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee,
(iii) damages, payments, including, without limitation, damages and payments for past, present or
future infringements thereof, (iv) right (but not the obligation) to sue in the name of Debtor
and/or in the name of Secured Party for past, present and future infringements thereof, (v) rights
corresponding thereto throughout the world in all jurisdictions in which such patents have been
issued or applied for, and (vi) reissues, divisions, continuations, renewals, extensions and
continuations-in-part with respect to any of the foregoing.

               “Periodic Payments” means all installments or similar recurring payments that Borrower may now
or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any
instrument, or agreement now or hereafter in existence between Borrower and Bank.

               “Permitted Indebtedness” means:

               (a) Indebtedness of Borrower in favor of Bank arising under this Agreement or any other Loan
Document;

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               (b) Indebtedness existing or committed on the Closing Date and disclosed in the Schedule;

               (c) Indebtedness secured by a lien described in clause (c) of the defined term “Permitted
Liens,” provided that (i) except for equipment acquired from Phylos, Inc., such Indebtedness does
not exceed the lesser of the cost or fair market value of the equipment financed with such
Indebtedness and (ii) such additional Indebtedness (over and above what is otherwise permitted
herein) does not exceed $1,500,000 in the aggregate principal amount outstanding at any given time;

               (d) Subordinated Debt;

               (e) Contingent Obligations entered into in the ordinary course of business (e.g. collaboration
agreements); and

               (f) Indebtedness
owing to a Strategic Partner secured by a Lien described in clause

               (g) of the
defined term “Permitted Liens”.

               “Permitted Investment” means:

               (a) Investments existing on the Closing Date disclosed in the Schedule;

               (b) (i) marketable direct obligations issued or unconditionally guaranteed by the United
States of America or any agency or any State thereof maturing within one (1) year from the date of
acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of
creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s
Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one
(1) year from the date of investment therein issued by Bank and (iv) Bank’s money market accounts;

               (c) Repurchases of stock from former employees, directors and consultants of Borrower,
provided that no Event of Default has occurred, is continuing or would exist after giving effect to
the repurchases;

               (d) Investments accepted in connection with transfers permitted under Sections 7.1 and 7.3
hereof;

               (e) Investments consisting of (i) travel advances and employee relocation loans and other
employee loans and advances in the ordinary course of business, and (ii) loans to employees,
officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries
pursuant to employee stock purchase plan agreements approved by Borrower’s Board of Directors;

               (f) Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers, suppliers or others and in settlement of delinquent obligations of,
and other disputes arising in the ordinary course of Borrower’s business;

               (g) Investments consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers, suppliers and others who are not Affiliates, in the ordinary course of
business, provided that this subparagraph (h) shall not apply to Investments of Borrower in any
Subsidiary; and

               (h) Investments in joint ventures, strategic alliances or collaborations in each case in the
ordinary course of Borrower’s business consisting of the licensing or assignment of technology, the
development of technology or the providing of technical support made upon prior written notice to
Bank in detail reasonably acceptable to Bank.

               “Permitted Liens” means the following:

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               (a) Any Liens disclosed in the Schedule or arising under this Agreement or the other Loan
Documents;

               (b) Liens for taxes, fees, assessments or other governmental charges or levies, either not
delinquent or being contested in good faith by appropriate proceedings;

               (c) Liens (i) upon or in any equipment which was not financed by Bank acquired or held by
Borrower or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing (or refinancing) the acquisition of such equipment, or
(ii) existing on such equipment at the time of its acquisition, provided that the Lien is confined
solely to the property so acquired, improvements thereon, and replacements thereof and additions
thereto, and the proceeds of the foregoing;

               (d) Liens incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that
any extension, renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced
does not increase;

               (e) Liens arising from final judgments, decrees or attachments not to exceed $500,000 in
amount against Borrower;

               (f) Liens in favor of other financial institutions arising in connection with Borrower’s
deposit accounts held at such institutions in accordance with the terms hereof; and

               (g) Liens granted to Strategic Partners on Intellectual Property advanced, deposited,
delivered or contributed to Borrower by such Strategic Partners, or developed by Borrower for such
Strategic Partners, on terms consented to by Bank, which consent shall not be unreasonably delayed
or withheld.

               “Person” means any individual, sole proprietorship, partnership, limited liability company,
joint venture, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or governmental agency.

               “Prime Rate” means the variable rate of interest, per annum, most recently announced by Bank,
as its “prime rate,” whether or not such announced rate is the lowest rate available from Bank.

               “Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer,
the Chief Financial Officer and the Controller of Borrower.

               “Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any.

               “Strategic Partner” means a Person engaged with Borrower in one or more joint ventures,
strategic alliances or collaborations entered into in the ordinary course of Borrower’s business,
which Persons shall not be banks, financial institutions, equipment lessors, equipment financers or
other Persons regularly engaged in the business of lending or investing money.

               “Subordinated Debt” means any debt incurred by Borrower that is subordinated to the debt owing
by Borrower to Bank on terms reasonably acceptable to Bank (and identified as being such by
Borrower and Bank).

               “Subsidiary” means any corporation, company or partnership in which (i) any general
partnership interest or (ii) more than 50% of the stock or other units of ownership which by the
terms thereof has the ordinary voting power to elect the Board of Directors, managers or trustees
of the entity, at the time as of which any determination is being made, is owned by Borrower,
either directly or through another Subsidiary.

               “Term Advance” has the meaning set forth in Section 2.1(a).

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               “Tenn Line” means credit extensions of up to Two Million Dollars ($2,000,000).

               “Term Maturity Date” means June 15, 2007.

               “Trademarks” means all trademarks, service marks, trade names and service names and the
goodwill associated therewith, together with the right to trademark and all rights to renew or
extend such trademarks and the right (but not the obligation) of Secured Party to sue in its own
name and/or in the name of the Debtor for past, present and future infringements of trademark.

               “Warrant” shall mean the warrant to purchase stock of the Borrower described in section 3.1(d)
hereof.

          1.2 Accounting Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP and all calculations made hereunder shall be made in accordance
with GAAP. When used herein, the terms “financial statements” shall include the notes and
schedules thereto.

     2. LOAN AND TERMS OF PAYMENT.

          2.1 Credit Extensions.

               Borrower promises to pay to the order of Bank, in lawful money of the United States of
America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrower
hereunder. Borrower shall also pay interest on the unpaid principal amount of such Credit
Extensions at rates in accordance with the terms hereof.

               (a) Term Advances.

                    (i) Subject to and upon the terms and conditions of this Agreement, Bank agrees to make Term
Advances to Borrower in an aggregate amount not to exceed the Term Line. The first Term Advance
may be up to One Million Five Hundred Thousand Dollars ($1,500,000), and may be requested at any
time within ten (10) days after the Closing Date. The second Term Advance may be up to Five
Hundred Thousand Dollars ($500,000), and may be requested at any time within ten (10) days after
Borrower receives at least $5,500,000 of proceeds from the sale or issuance of its Tranche B Series
A Preferred Stock. Borrower shall use the proceeds of the Term Advances to purchase, or to
refinance (including the replacement of cash used by the Borrower therefor) the purchase, certain
assets of Phylos, Inc.

                    (ii) Interest shall accrue from the date of each Term Advance at the rate specified in Section
2.3, and shall be payable monthly on the first day of each month so long as any Term Advances are
outstanding. Any Term Advances that are outstanding on June 15, 2004, shall be payable in
thirty-six (36) equal monthly installments of principal, plus all accrued interest, beginning on
July 1, 2004, and continuing on the same day of each month thereafter through the Term Maturity
Date, at which time all amounts owing under this Section 2.1(a) and any other amounts owing under
this Agreement shall be immediately due and payable. Term Advances, once repaid, may not be
reborrowed. Borrower may prepay any Term Advances, in whole or in part, without penalty or
premium.

                    (iii) When Borrower desires to obtain an Term Advance, Borrower shall notify Bank (which
notice shall be irrevocable) by facsimile transmission to be received no later than 3:30 p.m.
Eastern time on the Business Day on which the Term Advance is to be made. Such notice shall be
substantially in the form of Exhibit B, and shall include evidence of Borrower’s right to
purchase the assets.

          2.2 Overadvances. If the aggregate amount of the outstanding Term Advances exceeds
the Term Line at any time, Borrower shall immediately pay to Bank, in cash, the amount of such
excess.

          2.3 Interest Rates, Payments, and Calculations.

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               (a) Interest Rates. Except as set forth in Section 2.3(b), the Term Advances shall
bear interest, on the outstanding Daily Balance thereof, at a fixed rate equal to Seven Percent
(7.0%) per annum.

               (b) Late Fee; Default Rate. If any payment is not made within ten (10) days after the
date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) five
percent (5%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged
under applicable law. All Obligations shall bear interest, during the continuance of an Event of
Default, at a rate equal to three (3) percentage points above the interest rate applicable
immediately prior to the occurrence of the Event of Default. The default rate shall not be
increased again (i.e. 3 more percentage points above a rate already increased by 3 percentage
points) upon the occurrence of a subsequent Event of Default.

               (c) Payments. Interest hereunder shall be due and payable on the first calendar day
of each month during the term hereof. Bank shall, at its option, charge such interest, all Bank
Expenses, and all Periodic Payments against any of Borrower’s deposit accounts or against the Term
Line, in which case those amounts shall thereafter accrue interest at the rate then applicable
hereunder. Any interest not paid when due shall be compounded by becoming a part of the
Obligations, and such interest shall thereafter accrue interest at the rate then applicable
hereunder. All payments shall be free and clear of any taxes, withholdings, duties, impositions or
other charges, to the end that Bank will receive the entire amount of any Obligations payable
hereunder, regardless of source of payment.

               (d) Computation. In the event the Prime Rate is changed from time to time hereafter,
the applicable rate of interest hereunder shall be increased or decreased, effective as of the day
the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest
chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360)
day year for the actual number of days elapsed.

          2.4 Crediting Payments. Prior to the occurrence of an Event of Default, Bank shall
credit a wire transfer of funds, check or other item of payment to such deposit account or
Obligation as Borrower specifies. After the occurrence of an Event of Default, the receipt by Bank
of any wire transfer of funds, check, or other item of payment shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment on account unless such
payment is of immediately available federal funds or unless and until such check or other item of
payment is honored when presented for payment. Notwithstanding anything to the contrary contained
herein, any wire transfer or payment received by Bank after 3:00 p.m. Eastern time shall be deemed
to have been received by Bank as of the opening of business on the immediately following Business
Day. Whenever any payment to Bank under the Loan Documents would otherwise be due (except by
reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on
the next Business Day, and additional fees or interest, as the case may be, shall accrue and be
payable for the period of such extension.

          2.5 Fees. Borrower shall pay to Bank the following:

               (a) Facility Fee. On the Closing Date, a fee equal to $15,000, of which $5,000 was
paid upon commitment, and $10,000 shall be due on the Closing Date, and which shall be
nonrefundable; and

               (b) Bank Expenses. After the Closing Date, all Bank Expenses, including reasonable
attorneys’ fees and expenses, as and when they are incurred by Bank.

          2.6 Additional Costs. In case any changes after the Closing in any law, regulation,
treaty or official directive or the interpretation or application thereof by any court or any
governmental authority charged with the administration thereof or the compliance with any guideline
or request of any central bank or other governmental authority (whether or not having the force of
law):

               (a) subjects Bank to any tax with respect to payments of principal or interest or any other
amounts payable hereunder by Borrower or otherwise with respect to the transactions contemplated
hereby (except for taxes on the overall net income of Bank imposed by the United States of America
or any political subdivision thereof);

7

 

               (b) imposes, modifies or deems applicable any deposit insurance, reserve, special deposit or
similar requirement against assets held by, or deposits in or for the account of or loans by, Bank;
or

               (c) imposes upon Bank any other condition with respect to its performance under this
Agreement,

and the result of any of the foregoing is to increase the cost to Bank, reduce the income
receivable by Bank or impose any expense upon Bank with respect to the Obligations, Bank shall
notify Borrower thereof in writing. Borrower agrees to pay to Bank the amount of such increase in
cost, reduction in income or additional expense as and when such cost, reduction or expense is
incurred or determined, upon presentation by Bank of a statement of the amount and setting forth
Bank’s calculation thereof, all in reasonable detail, which statement shall be deemed true and
correct absent manifest error. Bank agrees that it will allocate any increased costs among its
customers similarly affected in good faith and in a manner consistent with Bank’s customary
practice.

          2.7 Term. This Agreement shall become effective on the Closing Date and, subject to
Section 12.7, shall continue in full force and effect for so long as any Obligations (other than in
connection with the Warrant) remain outstanding or Bank has any obligation to make Credit
Extensions under this Agreement. Notwithstanding the foregoing, Bank shall have the right to
terminate its obligation to make Credit Extensions under this Agreement immediately and without
notice upon the occurrence and during the continuance of an Event of Default. Notwithstanding
termination, Bank’s lien on the Collateral shall remain in effect for so long as any Obligations
(other than the Warrant) are outstanding.

     3. CONDITIONS OF LOANS.

          3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to make
the initial Credit Extension is subject to the condition precedent that Bank shall have received,
in form and substance satisfactory to Bank, the following:

               (a) this Agreement;

               (b) a certificate of the Secretary of Borrower with respect to incumbency and resolutions
authorizing the execution and delivery of this Agreement;

               (c) UCC National Form Financing Statement;

               (d) a warrant to purchase stock;

               (e) an agreement to provide insurance;

               (f) payment of the fee then due specified in Section 2.5 hereof;

               (g) current financial statements of Borrower; and

               (h) such other documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate.

          3.2 Conditions Precedent to all Credit Extensions. The obligation of Bank to make
each Credit Extension, including the initial Credit Extension, is further subject to the following
conditions:

               (a) timely receipt by Bank of the Payment/Advance Form as provided in Section 2.1; and

               (b) the representations and warranties contained in Section 5 shall be true and correct in all
material respects on and as of the date of such Payment/Advance Form and on the effective date of
each Credit Extension as though made at and as of each such date, and no Event of Default shall
have occurred and

8

 

be continuing, or would exist after giving effect to such Credit Extension (provided, however,
that those representations and warranties expressly referring to another date shall be true,
correct and complete in all material respects as of such date). The making of each Credit
Extension shall be deemed to be a representation and warranty by Borrower on the date of such
Credit Extension as to the accuracy of the facts referred to in this Section 3.2.

     4. CREATION OF SECURITY INTEREST.

          4.1 Grant of Security Interest. Borrower grants and pledges to Bank a continuing
security interest in all presently existing and hereafter acquired or arising Collateral in order
to secure prompt repayment of any and all Obligations and in order to secure prompt performance by
Borrower of each of its covenants and duties under the Loan Documents. Except as set forth in the
Schedule, such security interest constitutes a valid, first priority security interest in the
presently existing Collateral, and will constitute a valid, first priority security interest in
Collateral acquired after the date hereof. Bank agrees not to require control agreements with
respect to accounts maintained outside Bank pursuant to Section 6.7, and acknowledges that, by not
obtaining such control agreements, Bank may not have a first priority security interest therein.

          4.2 Release of Intellectual Property Collateral. Upon Borrower’s receipt of at least
$10,000,000 of proceeds from the sale or issuance of its Series B Preferred Stock (or other
financing subsequent or in addition to the $5,500,000 Series A Preferred Stock sale or issuance)
and/or from collaboration agreements entered into by the Borrower (or a combination of the
foregoing), as long as an Event of Default is not then continuing, Bank shall thereupon release its
Lien on the Intellectual Property Collateral. Upon Borrower’s receipt of at least $5,500,000 of
proceeds from the sale or issuance of its Series A Preferred Stock, as long as an Event of Default
is not then continuing, Bank shall release its Lien on the Intellectual Property Collateral upon
Borrower’s payment of $500,000 as a partial prepayment on account of the outstanding Term Advances.
Upon the occurrence of any of the foregoing events, the Bank shall take such action and provide
such documentation as the Borrower shall reasonably request to evidence and effectuate such
releases of the Intellectual Property Collateral. Despite any release of Bank’s Lien on the
Intellectual Property Collateral, (i) Bank will retain a Lien on the cash and noncash proceeds from
a disposition of any interest in the Intellectual Property Collateral, whether such proceeds are in
the form of accounts, general intangibles, or payment intangibles, and (ii) Borrower shall continue
to agree not to grant a security interest to any Persons other than Strategic Partners except for
Permitted Liens. Bank’s Lien shall not include Intellectual Property invested or otherwise
contributed by Strategic Partners to Borrower for one or more particular projects where such
investment or contribution, by its terms, restricts the application of such cash or property to
such projects and Bank has consented to the terms of such investment or contribution, which consent
shall not be unreasonably delayed or withheld.

          4.3 Delivery of Additional Documentation Required. Borrower shall from time to time
execute and deliver to Bank, at the reasonable request of Bank, all Negotiable Collateral, all
financing statements and other documents that Bank may reasonably request, in form satisfactory to
Bank, to perfect and continue the perfection of Bank’s security interests in the Collateral and in
order to fully consummate all of the transactions contemplated under the Loan Documents. Bank
shall, from time to time, execute and deliver to Borrower, at its request, all acknowledgements,
releases, and documents necessary or advisable to evidence or effectuate the exclusion or release
of certain assets from the Bank’s Collateral.

          4.4 Right to Inspect. Bank (through any of its officers, employees, or agents) shall
have the right, upon reasonable prior notice, from time to time during Borrower’s usual business
hours but no more than once a year (unless an Event of Default has occurred and is continuing), to
inspect Borrower’s Books and to make copies thereof and to check, test, and appraise the Collateral
in order to verify Borrower’s financial condition or the amount, condition of or any other matter
relating to, the Collateral.

     5. REPRESENTATIONS AND WARRANTIES.

          Borrower represents and warrants as follows:

          5.1 Due Organization and Qualification. Borrower and each Subsidiary is a corporation
duly existing under the laws of its state of incorporation and qualified and licensed to do
business in any state in which

9

 

the conduct of its business or its ownership of property requires that it be so qualified
except where the failure to so qualify would not have a Material Adverse Effect.

          5.2 Due Authorization; No Conflict. The execution, delivery, and performance of the
Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict
with nor constitute a breach of any provision contained in Borrower’s Certificate of Incorporation
or Bylaws, nor will they constitute an event of default under any material agreement to which
Borrower is a party or by which Borrower is bound. Borrower is not in default under any material
agreement to which it is a party or by which it is bound.

          5.3 No Prior Encumbrances. Borrower has good and marketable title to its property,
free and clear of Liens, except for Permitted Liens.

          5.4 Bona Fide Accounts. The Accounts are bona fide existing obligations. The
property and services giving rise to such Accounts has been delivered or rendered to the account
debtor or to the account debtor’s agent for immediate and unconditional acceptance by the account
debtor.

          5.5 Merchantable Inventory. All Inventory is in all material respects of good and
marketable quality, free from all material defects, except for Inventory for which adequate
reserves have been made.

          5.6 Intellectual Property Collateral. Borrower is the sole owner of or has the right
to use the Intellectual Property Collateral, and may enter into licenses, assignments or
collaboration agreements with respect to the Intellectual Property Collateral in the ordinary
course of business. Each of the issued Patents is valid and enforceable, and no material part of
the Intellectual Property Collateral has been judged invalid or unenforceable, in whole or in part,
and no claim has been made that any part of the Intellectual Property Collateral violates the
rights of any third party in any manner that could reasonably be expected to cause a Material
Adverse Effect.

          5.7 Name; Location of Chief Executive Office. Except as disclosed in the Schedule,
Borrower has not done business under any name other than that specified on the signature page
hereof. The chief executive office of Borrower is located at the address indicated in Section 10
hereof. All Borrower’s Inventory and Equipment is located only at the location(s) set forth in
Section 10 hereof or on the Schedule.

          5.8 Litigation. Except as set forth in the Schedule, there are no actions or
proceedings pending by or against Borrower or any Subsidiary before any court or administrative
agency in which an adverse decision could reasonably be expected to have a Material Adverse Effect,
or a material adverse effect on Borrower’s interest or Bank’s security interest in the Collateral.

          5.9 No Material Adverse Change in Financial Statements. All consolidated and
consolidating financial statements related to Borrower and any Subsidiary that Bank has received
from Borrower fairly present in all material respects Borrower’s financial condition as of the date
thereof and Borrower’s consolidated and consolidating results of operations for the period then
ended. There has not been a material adverse change in the consolidated or the consolidating
financial condition of Borrower since the date of the most recent of such financial statements
submitted to Bank.

          5.10 Solvency, Payment of Debts. Borrower is solvent and able to pay its debts
(including trade debts) as they mature.

          5.11 Regulatory Compliance. Borrower and each Subsidiary have met the minimum funding
requirements of ERISA with respect to any employee benefit plans subject to ERISA, and no event has
occurred resulting from Borrower’s failure to comply with ERISA that could reasonably be expected
to result in Borrower’s incurring any material liability. Borrower is not an “investment company”
or a company “controlled” by an “investment company” within the meaning of the Investment Company
Act of 1940. Borrower is not 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 and U of the Board of Governors of the Federal Reserve System). Borrower
has complied with all the provisions of the Federal Fair Labor Standards Act. Borrower has not

10

 

violated any statutes, laws, ordinances or rules applicable to it, violation of which could
reasonably be expected to have a Material Adverse Effect.

          5.12 Environmental Condition. Except as disclosed in the Schedule, none of Borrower’s
or any Subsidiary’s properties or assets has ever been used by Borrower or any Subsidiary or, to
the best of Borrower’s knowledge, by previous owners or operators, in the disposal of, or to
produce, store, handle, treat, release, or transport, any hazardous waste or hazardous substance
other than substantially in accordance with applicable law; to the best of Borrower’s knowledge,
none of Borrower’s properties or assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a hazardous waste or hazardous substance
disposal site, or a candidate for closure pursuant to any environmental protection statute; to
Borrower’s knowledge, no lien arising under any environmental protection statute has attached to
any revenues or to any real or personal property owned by Borrower or any Subsidiary; and neither
Borrower nor any Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other governmental agency concerning
any action or omission by Borrower or any Subsidiary resulting in the releasing, or otherwise
disposing of hazardous waste or hazardous substances into the environment.

          5.13 Taxes. Borrower and each Subsidiary have filed or caused to be filed all tax
returns required to be filed, and have paid, or have made adequate provision for the payment of,
all taxes reflected therein or which are being contested in good faith and for which adequate
reserves have been made.

          5.14 Subsidiaries. Borrower does not own any stock, partnership interest or other
equity securities of any Person, except for Permitted Investments.

          5.15 Government Consents. Borrower and each Subsidiary have obtained all consents,
approvals and authorizations of, made all declarations or filings with, and given all notices to,
all governmental authorities that are necessary for the continued operation of Borrower’s business
as currently conducted, the failure to obtain which could reasonably be expected to have a Material
Adverse Effect.

          5.16 Accounts. Except as disclosed in the Schedule, none of Borrower’s nor any
Subsidiary’s property is maintained or invested in a bank account or investment account with a
Person other than Bank.

          5.17 Full Disclosure. No representation, warranty or other statement made by Borrower
in any certificate or written statement furnished to Bank contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the statements contained
in such certificates or statements not misleading, as of the date thereof (it being recognized by
the Bank that projections and forecasts provided by the Borrower in good faith and based on
reasonable assumptions are not viewed as facts and that the actual results during the period or
periods covered by such projections and forecasts may differ from the projected or forecasted
results).

     6. AFFIRMATIVE COVENANTS.

          Borrower covenants and agrees that, until payment in full of all outstanding Obligations
(other than the Warrant) , and for so long as Bank may have any commitment to make a Credit
Extension hereunder, Borrower shall do all of the following:

          6.1 Good Standing. Borrower shall maintain its and each of its Subsidiaries’
corporate existence and good standing in its jurisdiction of incorporation and maintain
qualification in each jurisdiction in which it is required under applicable law (except where
failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.
Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, in force all
licenses, approvals and agreements, the loss of which could reasonably be expected to have a
Material Adverse Effect

          6.2 Government Compliance. Borrower shall meet, and shall cause each Subsidiary to
meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject
to ERISA. Borrower shall comply, and shall cause each Subsidiary to comply, with all statutes,
laws, ordinances and

11

 

government rules and regulations to which it is subject, noncompliance with which could
reasonably be expected to have a Material Adverse Effect.

          6.3 Financial Statements, Reports, Certificates. Borrower shall deliver the following
to Bank in each case at both the Inglewood and the Boston addresses referenced in Section 10: (a)
as soon as available, but in any event within thirty (30) days after the end of each calendar
month, a company prepared consolidated balance sheet, income, and cash flow statement covering
Borrower’s consolidated operations during such period, prepared in accordance with GAAP,
consistently applied, in a form acceptable to Bank and certified by a Responsible Officer, (b) as
soon as available, but in any event within one hundred fifty (150) days after the end of Borrower’s
fiscal year, audited consolidated financial statements of Borrower prepared in accordance with
GAAP, consistently applied, together with an unqualified opinion on such financial statements of an
independent certified public accounting firm reasonably acceptable to Bank (provided such opinion
may contain a “going concern” qualification as long as the results of Borrower’s operations are
substantially in accordance with financial budgets submitted to Bank by each year within 60 days
after the close of each fiscal year and approved by Bank, which approval will not be unreasonably
withheld; (c) copies of all statements, reports and notices sent or made available generally by
Borrower to its security holders or to any holders of Subordinated Debt and, if applicable, all
reports on Forms 10-K and l0-Q filed with the Securities and Exchange Commission; (d) promptly upon
receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or
any Subsidiary that could reasonably be expected to result in damages or costs to Borrower or any
Subsidiary of Five Hundred Thousand Dollars ($500,000) or more; (e) such financial budgets or other
financial information as Bank may reasonably request from time to time; and (f) within one hundred
fifty (150) days after the end of Borrower’s fiscal year, a report signed by Borrower, in form
reasonably acceptable to Bank, listing any applications or registrations that Borrower has made or
filed in respect of any Patents, Copyrights or Trademarks and the status of any outstanding
applications or registrations, as well as any material change in Borrower’s intellectual property.

     Borrower shall deliver to Bank with the monthly financial statements, at both the Inglewood
and the Boston addresses referenced in Section 10, a Compliance Certificate signed by a Responsible
Officer in substantially the form of Exhibit C hereto.

     Bank shall have a right from time to time hereafter to audit Borrower’s Accounts and appraise
Collateral at Borrower’s expense, provided that such audits will be conducted no more often than
once per year unless an Event of Default has occurred and is continuing.

          6.4 Inventory; Returns. Borrower shall keep all Inventory in good and marketable
condition, free from all material defects except for Inventory for which adequate reserves have
been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on
the same basis and in accordance with the usual customary practices of Borrower, as they exist at
the time of the execution and delivery of this Agreement. Borrower shall promptly notify Bank of
all returns and recoveries and of all disputes and claims, where the return, recovery, dispute or
claim involves more than Five Hundred Thousand Dollars ($500,000).

          6.5 Taxes. Borrower shall make, and shall cause each Subsidiary to make, due and
timely payment or deposit of all material federal, state, and local taxes, assessments, or
contributions required of it by law, and will execute and deliver to Bank, on demand, appropriate
certificates attesting to the payment or deposit thereof; and Borrower will make, and will cause
each Subsidiary to make, timely payment or deposit of all material tax payments and withholding
taxes required of it by applicable laws, including, but not limited to, those laws concerning
F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon
request, furnish Bank with proof satisfactory to Bank indicating that Borrower or a Subsidiary has
made such payments or deposits; provided that Borrower or a Subsidiary need not make any payment if
the amount or validity of such payment is contested in good faith by appropriate proceedings and is
reserved against (to the extent required by GAAP) by Borrower.

          6.6 Insurance.

               (a) Borrower, at its expense, shall keep the Collateral (excluding the Intellectual Property
Collateral) insured against loss or damage by fire, theft, explosion, sprinklers, and all other
hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar
businesses conducted in the

12

 

locations where Borrower’s business is conducted on the date hereof. Borrower shall also
maintain insurance relating to Borrower’s business, ownership and use of the Collateral in amounts
and of a type that are customary to businesses similar to Borrower’s.

               (b) All such policies of insurance shall be in such form, with such companies, and in such
amounts as are reasonably satisfactory to Bank. All such policies of property insurance shall
contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an
additional loss payee thereof, and all liability insurance policies shall show the Bank as an
additional insured and shall specify that the insurer must give at least twenty (20) days notice to
Bank before canceling its policy for any reason. Upon Bank’s request, Borrower shall deliver to
Bank certified copies of such policies of insurance and evidence of the payments of all premiums
therefor. All proceeds payable under any such policy shall, at the option of Bank, be payable to
Bank to be applied on account of the Obligations.

          6.7 Accounts. Borrower shall maintain and shall cause each of its Subsidiaries to
maintain its primary depository, operating, and investment accounts with Bank and/or Comerica
Securities, Inc. Borrower may maintain up to fifteen percent (15%) of its cash outside Bank.
After Borrower receives at least $10,000,000 of proceeds from the sale or issuance of its Series B
Preferred Stock (or other financing subsequent or in addition to the $5,500,000 Series A Preferred
Stock sale or issuance) and/or from collaboration agreements or a combination of the foregoing,
Borrower may maintain up to thirty percent (30%) of its cash outside Bank.

          6.8 Intellectual Property Rights.

               (a) Borrower shall register or cause to be registered (to the extent not already registered)
with the United States Patent and Trademark Office or the United States Copyright Office, as the
case may be, those registerable intellectual property rights now owned or hereafter developed or
acquired by Borrower, to the extent that Borrower, in its reasonable business judgment, deems it
appropriate to so protect such intellectual property rights.

               (b) Borrower shall give Bank written notice of any applications or registrations of
intellectual property rights filed with the United States Patent and Trademark Office and the
United States Copyright Office, including the date of such filing and the registration or
application numbers, if any in accordance with the provisions at Section 6.3 hereof.

               (c) Borrower shall (i) protect, defend and maintain the validity and enforceability of the
trade secrets, Trademarks, Patents and Copyrights, (ii) use commercially reasonable efforts to
detect infringements of the Trademarks, Patents and Copyrights and promptly advise Bank in writing
of material infringements detected and (iii) not allow any material Trademarks, Patents or
Copyrights to be abandoned, forfeited or dedicated to the public unless Borrower, in its reasonable
business judgment, deems it appropriate to take such action or allow such to occur.

          6.9 Further Assurances. At any time and from time to time Borrower shall execute and
deliver such further instruments and take such further action as may reasonably be requested by
Bank to effect the purposes of this Agreement.

     7. NEGATIVE COVENANTS.

          Borrower covenants and agrees that, so long as any credit hereunder shall be available and
until payment in full of the outstanding Obligations (other than the warrant) or for so long as
Bank may have any commitment to make any Credit Extensions, Borrower will not do any of the
following:

          7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of
(collectively, a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its
business or property, other than: (i) Transfers of Inventory in the ordinary course of business;
(ii) Transfers of licenses, assignments and similar and other arrangements for the use of the
property of Borrower or its Subsidiaries in the ordinary course of business

13

 

(including, in connection with collaboration arrangements); or (iii) Transfers of excess,
worn-out or obsolete Equipment.

          7.2 Change in Business, Change in Control or Executive Office. Engage in any non-life
science business, or permit any of its Subsidiaries to engage in any non-Iife science business; or
suffer or permit a Change in Control; or without thirty (30) days prior written notification to
Bank, relocate its chief executive office or state of incorporation or change its legal name; or
without Bank’s prior written consent, which shall not be unreasonably withheld, change the date on
which its fiscal year ends.

          7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries
to merge or consolidate, with or into any other business organization, or acquire, or permit any of
its Subsidiaries to acquire, all or substantially all of the capital stock or property of another
Person without the consent of Bank, not to be unreasonably withheld, conditioned or delayed.

          7.4 Indebtedness. Create, incur, assume or be or remain liable with respect to any
Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness.

          7.5 Encumbrances. Create, incur, assume or suffer to exist any Lien with respect to
any of its property, or assign or otherwise convey any right to receive income, including the sale
of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens, or agree
with any Person other than Bank not to grant a security interest in, or otherwise encumber, any of
its property, or permit any Subsidiary to do so, other than in agreements entered into with
Strategic Partners with respect to Intellectual Property invested in, or generated by, joint
ventures, strategic alliances or collaborations entered into in the ordinary course of Borrower’s
business.

          7.6 Distributions. Pay any dividends or make any other distribution or payment on
account of or in redemption, retirement or purchase of any capital stock, or permit any of its
Subsidiaries to do so, except that Borrower may repurchase the stock of former employees,
consultants and service providers, pursuant to stock repurchase agreements as long as an Event of
Default does not exist prior to such repurchase or would not exist after giving effect to such
repurchase.

          7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or
to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments; or
except as permitted in section 6.7 hereof maintain or invest any of its Collateral with a Person
other than Bank or permit any of its Subsidiaries to do so unless such Person has entered into an
account control agreement with Bank in form and substance satisfactory to Bank; or suffer or permit
any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from
paying dividends or otherwise distributing property to Borrower.

          7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower except for transactions that are in
the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less
favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated
Person,

          7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt, or
permit any of its Subsidiaries to make any such payment, except in compliance with the terms of
such Subordinated Debt, or amend any provision contained in any documentation relating to the
Subordinated Debt without Bank’s prior written consent.

          7.10 Inventory and Equipment. Store the Inventory or the Equipment with a bailee,
warehouseman, or other third party unless the third party has been notified of Bank’s security
interest and Bank (a) has received an acknowledgment from the third party that it is holding or
will hold the Inventory or Equipment for Bank’s benefit or (b) is in pledge possession of the
warehouse receipt, where negotiable, covering such Inventory or Equipment, or store or maintain any
Equipment or Inventory at a location other than the location set forth in Section 10 of this
Agreement.

14

 

          7.11 Compliance. Become an “investment company” or be controlled by an “investment
company,” within the meaning of the Investment Company Act of 1940, or become principally engaged
in, or undertake as one of its important activities, the business of extending credit for the
purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for
such purpose. Fail to meet the minimum funding requirements of ERISA resulting in Borrower
incurring a material liability, permit a Reportable Event or Prohibited Transaction, as defined in
ERISA resulting in Borrower incurring a material liability, to occur, fail to comply with the
Federal Fair Labor Standards Act or violate any law or regulation, which violation could reasonably
be expected to have a Material Adverse Effect, or a material adverse effect on the Collateral or
the priority of Bank’s Lien on the Collateral, or permit any of its Subsidiaries to do any of the
foregoing.

     8. EVENTS OF DEFAULT.

          Any one or more of the following events shall constitute an Event of Default by Borrower under
this Agreement:

          8.1 Payment Default. If Borrower fails to pay, within three (3) Business Days of when
due, any of the Obligations, other than Bank Expenses, which shall be due and payable within thirty
(30) days of the date of invoice;

          8.2 Covenant Default.

               (a) If Borrower fails to perform any obligation under Article 6 within three (3) Business Days
of when due or violates any of the covenants contained in Article 7 of this Agreement; or

               (b) If Borrower fails or neglects to perform or observe any other material term, provision,
condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other
present or future material agreement between Borrower and Bank and as to any default under such
other term, provision, condition or covenant that can be cured, has failed to cure such default
within twenty days after Borrower receives notice thereof, provided, however, that if the default
cannot by its nature be cured within the twenty day period or cannot after diligent attempts by
Borrower be cured within such twenty day period, and such default is likely to be cured within a
reasonable time, then Borrower shall have an additional reasonable period (which shall not in any
case exceed 30 days) to attempt to cure such default, and within such reasonable time period the
failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions
will be made.

          8.3 Material Adverse Effect. If there occurs any circumstance or circumstances that
could reasonably be expected to have a Material Adverse Effect;

          8.4 Attachment. If any material portion of the Collateral is attached, seized,
subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any
trustee, receiver or person acting in a similar capacity, and such attachment, seizure, writ or
distress warrant or levy has not been removed, discharged or rescinded within thirty (30) days, or
if Borrower is enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or other claim in excess
of $500,000 becomes a lien or encumbrance upon any material portion of Borrower’s assets, or if a
notice of lien, levy, or assessment is filed of record with respect to any material portion of
Borrower’s assets by the United States Government, or any department, agency, or instrumentality
thereof, or by any state, county, municipal, or governmental agency, and the same is not paid
within twenty days after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an adequate bond has
been posted pending a good faith contest by Borrower (provided that no Credit Extensions will be
required to be made during such cure period);

          8.5 Insolvency. If Borrower becomes insolvent, or if an Insolvency Proceeding is
commenced by Borrower, or if an Insolvency Proceeding is commenced against Borrower and is not
dismissed or stayed within forty-five (45) days (provided that no Credit Extensions will be made
prior to the dismissal of such Insolvency Proceeding);

15

 

          8.6 Other Agreements. If there is a default or other failure to perform in any
agreement to which Borrower is a party or by which it is bound resulting in the acceleration of the
maturity of any Indebtedness for borrowed money in an amount in excess of Five Hundred Thousand
Dollars ($500,000);

          8.7 Subordinated Debt. If Borrower makes any payment on account of Subordinated Debt,
except to the extent such payment is allowed under any subordination agreement entered into with
Bank;

          8.8 Judgments. If a judgment or judgments for the payment of money in an amount,
individually or in the aggregate, of at least Five Hundred Thousand Dollars ($500,000) shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a period of thirty (30)
days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such
judgment); or

          8.9 Misrepresentations. If any material misrepresentation or material misstatement
exists now or hereafter in any warranty or representation set forth herein or in any certificate
delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter
into this Agreement or any other Loan Document.

     9. BANK’S RIGHTS AND REMEDIES.

          9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event
of Default, Bank may, at its election, without notice of its election and without demand, do any
one or more of the following, all of which are authorized by Borrower:

               (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event
of Default described in Section 8.5, all Obligations shall become immediately due and payable
without any action by Bank);

               (b) Cease advancing money or extending credit to or for the benefit of Borrower under this
Agreement or under any other agreement between Borrower and Bank;

               (c) Settle or adjust disputes and claims directly with account debtors for amounts, upon terms
and in whatever order that Bank reasonably considers advisable;

               (d) Make such payments and do such acts as Bank considers necessary or reasonable to protect
its security interest in the Collateral Borrower agrees to assemble the Collateral if Bank so
requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes
Bank to enter the premises where the Collateral is located, to take and maintain possession of the
Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which in Bank’s determination appears to be prior or superior to its security
interest and to pay all expenses incurred in connection therewith. With respect to any of
Borrower’s owned premises, Borrower hereby grants Bank a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or
remedies provided herein, at law, in equity, or otherwise;

               (e) Set off and apply to the Obligations any and all (i) balances and deposits of Borrower
held by Bank, or (ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by Bank;

               (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted a
license or other right, solely pursuant to the provisions of this Section 9.1, to use, without
charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade
names, trademarks, service marks, and advertising matter, or any property of a similar nature, as
it pertains to the Collateral, in completing production of, advertising for sale, and selling any
Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1, Borrower’s
rights under all licenses and all franchise agreements shall inure to Bank’s benefit;

16

 

     (g) Dispose of the Collateral by way of one or more contracts or transactions, for cash or on
terms, in such manner and at such places (including Borrower’s premises) as Bank determines is
commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order as
is appropriate;

     (h) Bank may credit bid and purchase at any public sale; and

     (i) Any deficiency that exists after disposition of the Collateral as provided above will be
paid immediately by Borrower.

          9.2 Power of Attorney. Effective only upon the occurrence and during the continuance
of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated
officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests for
verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b)
endorse Borrower’s name on any checks or other forrns of payment or security that may come into
Bank’s possession (c) sign Borrower’s name on any invoice or bill of lading relating to any
Account, drafts against account debtors, schedules and assignments of Accounts, verifications of
Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and
adjust all claims under and decisions with respect to Borrower’s policies of insurance; (f) settle
and adjust disputes and claims respecting the accounts directly with account debtors, for amounts
and upon terms which Bank determines to be reasonable; and (g) to file, in its sole discretion, one
or more financing or continuation statements and amendments thereto, relative to any of the
Collateral; provided Bank may exercise such power of attorney to sign the name of Borrower on any
of the documents described in Section 4.3 regardless of whether an Event of Default has occurred.
The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and
powers, being coupled with an interest, is irrevocable until all of the Obligations (other than the
Warrant) have been fully repaid and performed and Bank’s obligation to provide Credit Extensions
hereunder is terminated.

          9.3 Accounts Collection. At any time after the occurrence of an Event of Default,
Bank may notify any Person owing funds to Borrower of Bank’s security interest in such funds and
verify the amount of such Account. Borrower shall collect all amounts owing to Borrower for Bank,
receive in trust all payments as Bank’s trustee, and immediately deliver such payments to Bank in
their original form as received from the account debtor, with proper endorsements for deposit.

          9.4 Bank Expenses. If Borrower fails to pay any amounts or furnish any required proof
of payment due to third persons or entities, as required under the terms of this Agreement, then
Bank may do any or all of the following after reasonable notice to Borrower: (a) make payment of
the same or any part thereof; (b) set up such reserves under a loan facility in Section 2.1 as Bank
deems necessary to protect Bank from the exposure created by such failure; or (c) obtain and
maintain insurance policies of the type discussed in Section 6.6 of this Agreement, and take any
action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by
Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest
at the then applicable rate hereinabove provided, and shall be secured by the Collateral. Any
payments made by Bank shall not constitute an agreement by Bank to make similar payments in the
future or a waiver by Bank of any Event of Default under this Agreement.

          9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking
practices, Bank shall not in any way or manner be liable or responsible for: (a) the safekeeping of
the Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from
any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of loss, damage or
destruction of the Collateral shall be borne by Borrower.

          9.6 Remedies Cumulative. Bank’s rights and remedies undor this Agreement, the Loan
Documents, and all other agreements shall be cumulative. Bank shall have all other rights and
remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise
by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute
a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in a
written document signed on behalf of Bank and then shall be effective only in the specific instance
and for the specific purpose for which it was given.

17

 

          9.7 Demand; Protest. Except as otherwise provided herein, Borrower waives demand,
protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of
accounts, documents, instruments, chattel paper, and guarantees at any time held by Bank on which
Borrower may in any way be liable.

          9.8 Commercial Reasonableness. Bank acknowledges its obligation to exercise any and
all rights and remedies under this Agreement in a commercially reasonable manner.

     10. NOTICES.

          Unless otherwise provided in this Agreement, all notices or demands by any party relating to
this Agreement or any other agreement entered into in connection herewith shall be in writing and
(except for financial statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery
service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to Borrower
or to Bank, as the case may be, at its addresses set forth below:

	 	 	 	 	 
	 

	 	If to Borrower:
	 	Compound Therapeutics, Inc.
	 

	 	 	 	1365 Main Street
	 

	 	 	 	Waltham, MA 02451
	 

	 	 	 	Attn: Frank Lee, President and CEO
	 

	 	 	 	FAX: (781) 891-3843
	 
	 	 	 	 
	 

	 	With a copy to
	 	Hale and Don LLP
	 

	 	 	 	Bay Colony Corporate Center
	 

	 	 	 	1100 Winter Street Waltham, MA 02451
	 

	 	 	 	Phone: 781-966-2001
	 

	 	 	 	Fax: 781-966-2100
	 

	 	 	 	Attn: John H. Chory, Esq.
	 
	 	 	 	 
	 

	 	If to Bank
	 	Comerica Bank
	 

	 	 	 	9920 S. La Cienega Blvd., Suite 1401
	 

	 	 	 	Inglewood, CA 90301
	 

	 	 	 	Attn: Manager
	 

	 	 	 	FAX: (310) 338-6110
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Comerica Bank
	 

	 	 	 	100 Federal Street, 28th Floor
	 

	 	 	 	Boston, MA 02110
	 

	 	 	 	Attn: Kristen Kosofsky and Gauri Ponappa
	 

	 	 	 	FAX: (617) 757-6351

     Notwithstanding the foregoing, notice given to Borrower in accordance with this Section 10
shall be effective despite any failure to provide a copy of such notice to Borrower’s counsel. The
parties hereto may change the address at which they are to receive notices hereunder, by notice in
writing in the foregoing manner given to the other.

     11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

          This Agreement shall be governed by, and construed in accordance with, the internal laws of
the State of California, without regard to principles of conflicts of law. Each of Borrower and
Bank hereby submits to the exclusive jurisdiction of the state and Federal courts located in the
County of Santa Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR

18

 

STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT
IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

     12. GENERAL PROVISIONS.

          12.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of
the respective successors and permitted assigns of each of the parties; provided, however, that
neither this Agreement nor any rights hereunder may be assigned by Borrower without Bank’s prior
written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank shall
have the right without the consent of or notice to Borrower to sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits
hereunder.

          12.2 Indemnification. Borrower shall defend, indemnify and hold harmless Bank and its
officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities
claimed or asserted by any other party in connection with the transactions contemplated by this
Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank as a
result of or in any way arising out of, following, or consequential to transactions between Bank
and Borrower whether under this Agreement, or otherwise (including without limitation reasonable
attorneys’ fees and expenses), except for losses caused by Bank’s gross negligence or willful
misconduct.

          12.3 Time of Essence. Time is of the essence for the performance of all obligations
set forth in this Agreement.

          12.4 Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.

          12.5 Amendments in Writing, Integration. Neither this Agreement nor the Loan
Documents can be amended or terminated orally. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with respect to the
subject matter of this Agreement and the Loan Documents, if any, are merged into this Agreement and
the Loan Documents.

          12.6 Counterparts. This Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall constitute but one and the
same Agreement.

          12.7 Survival. All covenants, representations and warranties made in this Agreement
shall continue in full force and effect so long as any Obligations (other than the Warrant) remain
outstanding or Bank has any obligation to make Credit Extensions to Borrower. The obligations of
Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities
described in Section 12.2 shall survive until all applicable statute of limitations periods with
respect to actions that may be brought against Bank have run.

19

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first above written.

	 	 	 	 	 	 	 
	 	 	COMPUND THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/
 

	 	 
	 
	 	 	Title: CEO	 	 
	 
	 	 	 	 	 	 
	 

	 	COMERICA BANK
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/	 	 
	 

	 	 	 	 	 	 
	 
	 	 	Title: Sr. Vice President	 	 

20

 

	 	 	 
	DEBTOR

	 	Compound Therapeutics, Inc.
	 
	 	 
	SECURED PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO LOAN AND SECURITY AGREEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

               (a) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

               (b) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the forgoing, or any parts
thereof or any underlying or component elements of any of the forgoing, together with the right to
copyright and all rights to renew or extend such copyrights and the right (but not the obligation)
of Secured Party to sue in its own name and/or in the name of the Debtor for past, present and
future infringements of copyright;

               (c) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

               (d) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

               (e) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.99I (S.B. 45), Section
35, operative July 1, 2001.

               Notwithstanding anything to the contrary, the foregoing shall not include, and shall
specifically exclude the following: (i) assets that secure, or are intended to secure, or are
otherwise the subject of capital financing/lease arrangements in existence as of the Closing Date,
(ii) assets that are financed or refinanced under the provisions of clause (c) of the definition of
“Permitted Indebtedness”, (iii) “intent-to-use” trademarks at all times prior to the first use
thereof, whether by the actual use thereof in commerce, the recording of a statement of

21

 

use with the United States Patent and Trademark Office or otherwise, but only to the extent
the granting of a security interest in such “intent to use” trademarks would be contrary to
applicable law, (iv) Intellectual Property advanced, deposited, delivered or contributed to Debtor
by such a Strategic Partner, or developed by Borrower for such Strategic Partner, on terms
consented to by Bank, which consent shall not be unreasonably delayed or withheld, and (v) any
contract, instrument or chattel paper in which Borrower has any right, title or interest if and to
the extent such contract, instrument or chattel paper includes a provision containing a restriction
on assignment such that the creation of a security interest in the right, title or interest of
Borrower therein would be prohibited and would, in and of itself, cause or result in a default
thereunder enabling another person party to such contract, instrument or chattel paper to enforce
any remedy with respect thereto; provided, however, that the foregoing exclusion shall not apply if
(i) such prohibition has been waived or such other person has otherwise consented to the creation
hereunder of a security interest in such contract, instrument or chattel paper, or (ii) such
prohibition would be rendered ineffective pursuant to Section s 9-407(a) or 9-408(a) of Revised
Article 9 of the UCC, as applicable and as then in effect in any relevant jurisdiction, or any
other applicable law or principles of equity); provided further that immediately upon the
ineffectiveness, lapse or termination of any such provision, the foregoing shall include, and the
Borrower shall be deemed to have granted a security interest in, all its rights, title and
interests in and to such contract, instrument or chattel paper as if such provision had never been
in effect; and provided further that the foregoing exclusion shall in no way be construed so as to
limit, impair or otherwise affect Bank’s unconditional continuing security interest in and to all
rights, title and interests of Borrower in or to any payment obligations or other rights to receive
monies due or to become due under any such contract, instrument or chattel paper and in any such
monies and other proceeds of such contract, instrument or chattel paper.

22

 

23

 

EXHIBIT C

COMPLIANCE CERTIFICATE

	 	 	 
	TO:

	 	COMERICA BANK
	 
	 	 
	FROM:

	 	Compound Therapeutics, Inc.

     The undersigned authorized officer of Compound Therapeutics, Inc. hereby certifies in such
capacity that in accordance with the terms and conditions of the Loan and Security Agreement
between Borrower and Bank (the “Agreement’’), Borrower is in complete compliance for the period
ending ___with all required covenants except as noted below. Attached herewith are
the required documents supporting the above certification. The Officer further certifies in such
capacity that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP)
and are consistently applied from one period to the next except as explained in an accompanying
letter or footnotes.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	Monthly financial statements

	 	Monthly within 30 days
	 	Yes
	 	No
	Annual (CPA Audited)

	 	FYE within 150 days
	 	Yes
	 	No
	10K and 10Q

	 	(as applicable)
	 	Yes
	 	No
	Financial Budget

	 	FYE within 60 days
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	IP Report

	 	FYE within 150 days
	 	Yes
	 	No
	 
	 	 	 	 	 	 
	Information Disclosure
	 	 	 	 	 	 
	Total amount of Borrower’s cash and investments

	 	Amount: $                    	 	 	 	 
	Total amount of Borrower’s cash and investments

	 	Amount: $                    	 	 	 	 
	maintained with Bank
	 	 	 	 	 	 

	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	Actual	 	Complies
	 
	 	 	 	 	 	 
	None
	 	 	 	 	 	 

	 	 	 	 	 
	Comments Regarding Exceptions: See Attached	 	 
	 
	 	 	 	 
	Sincerely,	 	 
	 
	 	 	 	 
	Compound Therapeutics, Inc.	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	SIGNATURE	 	 
	 
	 	 	 	 
	 	 	 
	TITLE	 	 
	 
	 	 	 	 
	 	 	 
	DATE	 	 

	 	 	 	 	 
	BANK USE ONLY	 	 
	 
	 	 	 	 
	Received by:

	 	 	 	 
	 

	 	 	 	 
	 

	 	AUTHORIZED SIGNER	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Verified:
	 	 	 	 
	 

	 	 	 	 
	 

	 	AUTHORIZED SIGNER	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Compliance Status                      Yes           No	 	 

24

 

SCHEDULE OF EXCEPTIONS

Permitted Indebtedness

Indebtedness owed by Borrower to General Electric with respect to loans outstanding, commitments to
lend and amounts in connection with the acquisition of the assets of Phylos, not to exceed
$2,200,000 in principal amount.

Unsecured Indebtedness of a principal amount of up to $500,000 owing to one or more of Borrower’s
shareholders, which Indebtedness may be repaid upon Borrower’s receipt after the Closing Date of at
least $5,500,000 of proceeds from the sale or issuance of its equity securities.

Permitted Investments 

None.

Permitted Liens

Liens on Equipment (as defined in the Code), soft costs, third party software, leasehold
improvements, and the proceeds thereof securing any Indebtedness described on this Schedule above.
The property subject to such Lien shall not include any accounts; proprietary patents, copyrights,
trademarks; or payment intangibles.

Liens on assets currently owned by Phylos (and subject to a pledge in favor of General Electric) to
the extent such assets are acquired by Borrower and pledged as security under the General Electric
loans described above.

Names; Locations

128 Spring Street

Lexington, Massachusetts

Litigation and Environmental 

None

Accounts

Silicon Valley Bank Checking Account #3300377738

Silicon Valley Bank Investment Account #88602681

 

 

CORPORATE RESOLUTIONS TO BORROW

      

Borrower: Compound Therapeutics, Inc

      

     I, the undersigned Secretary or Assistant Secretary of Compound Therapeutics, Inc. (the
“Corporation”), HEREBY CERTIFY that the Corporation is organized and existing under and by virtue
of the laws of the State of Delaware.

     I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true and complete copies of
the Certificate of Incorporation, as amended, and the Bylaws of the Corporation, each of which is
in full force and effect on the date hereof.

     I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly called and held,
at which a quorum was present and voting (or by other duly authorized corporate action in lieu of a
meeting), the following resolutions (the “Resolutions”) were adopted.

     BE IT RESOLVED, that any one (1) of the following named officers, employees, or agents of this
Corporation, whose actual signatures are shown below:

	 	 	 	 	 
	NAMES	 	POSITION	 	ACTUAL SIGNATURES
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 

acting for and on behalf of this Corporation and as its act and deed be, and they hereby are,
authorized and empowered:

     Borrow Money. To borrow from time to time from Comerica Bank (“Bank”), on such terms as may
be agreed upon between the officers, employees, or agents of the Corporation and Bank, such sum or
sums of money as in their judgment should be borrowed, without limitation.

     Execute Loan Documents. To execute and deliver to Bank that certain Loan and Security
Agreement dated as of December 15, 2003 (the “Loan Agreement”) and any other agreement entered into
between Corporation and Bank in connection with the Loan Agreement, including any amendments, all
as amended or extended from time to time (collectively, with the Loan Agreement, the “Loan
Documents”), and also to execute and deliver to Bank one or more renewals, extensions,
modifications, refinancings, consolidations, or substitutions for the Loan Documents, or any
portion thereof.

     Grant Security. To grant a security interest to Bank in the Collateral described in the Loan
Documents, which security interest shall secure all of the Corporation’s Obligations, as described
in the Loan Documents.

     Negotiate Items. To draw, endorse, and discount with Bank all drafts, trade acceptances,
promissory notes, or other evidences of indebtedness payable to or belonging to the Corporation or
in which the Corporation may have an interest, and either to receive cash for the same or to cause
such proceeds to be credited to the account of the Corporation with Bank, or to cause such other
disposition of the proceeds derived therefrom as they may deem advisable.

     Warrants. To issue Bank warrants to purchase the Corporation’s capital stock.

1

 

     Further Acts. In the case of lines of credit, to designate additional or alternate
individuals as being authorized to request advances thereunder, and in all cases, to do and perform
such other acts and things, to pay any and all fees and costs, and to execute and deliver such
other documents and agreements as they may in their discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these Resolutions.

     BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these resolutions and
performed prior to the passage of these resolutions are hereby ratified and approved, that these
Resolutions shall remain in felt force and effect and Bank may rely on these Resolutions until
written notice of their revocation shall have been delivered to and received by Bank. Any such
notice shall not affect any of the Corporation’s agreements or commitments in effect at the time
notice is given.

     I FURTHER CERTIFY that the officers, employees, and agents named above are duly elected,
appointed, or employed by or for the Corporation, as the case may be, and occupy the positions set
forth opposite their respective names; that the foregoing Resolutions now stand of record on the
books of the Corporation; and that the Resolutions are in full force and effect and have not been
modified or revoked in any manner whatsoever.

     IN WITNESS WHEREOF, I have hereunto set my hand on December ___, 2003 and attest that the
signatures set opposite the names listed above are their genuine signatures.

	 	 	 	 	 	 	 
	 	 	CERTIFIED AND ATTESTED BY:	 	 
	 
	 	 	 	 	 	 
	 

	 	X
	 	 
 

	 	 

2

 

COMERICA BANK

Member FDIC

ITEMIZATION OF AMOUNT FINANCED

DISBURSEMENT INSTRUCTIONS

(Term Advance)

	 	 	 
	Name(s): Compound Therapeutics, Inc.

	 	Date:

	 	 	 
	$

	 	credited to deposit account No.                      when Advances are requested by Borrower
	 
	 	 
	Amounts paid to others on your behalf:
	 
	 	 
	$

	 	to Comerica Bank for Loan Fee
	 
	 	 
	$

	 	to                    
	$

	 	to                    
	$

	 	TOTAL (AMOUNT FINANCED)

Upon consummation of this transaction, this document will also serve as the authorization for
Comerica Bank to disburse the loan proceeds as stated above.

	 	 	 	 	 	 	 	 	 	 	 
	Compound Therapeutics, Inc.	 	 	 	Compound Therapeutics, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

Signature
	 	 	 	 	 	 

Signature
	 	 

3

 

AGREEMENT TO PROVIDE INSURANCE

	 	 	 
	TO: COMERICA BANK

	 	Date: December 15, 2003
	attn: Collateral Operations, M/C 4604
	 	 
	9920 South La Cienega Blvd, 14th Floor
	 	 
	Inglewood, CA 90301

	 	Borrower: Compound Therapeutics, Inc.

     In consideration of a loan in the amount of $2,000,000, secured by all tangible personal
property (excluding equipment secured or intended to be secured by Permitted Indebtedness)
including inventory and equipment.

     I/We agree to obtain adequate insurance coverage to remain in force during the term of the
loan.

     I/We also agree to advise the below named agent to add Comerica Bank as lender’s loss payable
on the new or existing insurance policy, and to furnish Bank at above address with a copy of said
policy/endorsements and any subsequent renewal policies.

     I/we understand that the policy must contain:

	 	1.	 	Fire and extended coverage in an amount sufficient to cover:

	 	(a)	 	The amount of the loan, OR
	 
	 	(b)	 	All existing encumbrances, whichever is greater,

     But not in excess of the replacement value of the improvements on the real property.

	 	2.	 	Lender’s “Loss Payable” Endorsement Form 438 BFU in favor of Comerica Bank, or any other
form acceptable to Bank.

INSURANCE INFORMATION

	 	 	 
	Insurance Co./Agent

	 	Telephone No.:
	 
	 	 
	Agent’s Address:
	 	 

Signature of Obligor:                                        

Signature of Obligor:                                        

FOR BANK USE ONLY

INSURANCE VERIFICATION: Date:                                        

Person Spoken to:                                                            

Policy Number.                                                            

Effective From:   
                
             To:    
                
               
      

Verified by:                                                            

4

 

	 	 	 
	COMERICA BANK

	 	AUTOMATIC DEBIT AUTHORIZATION
	Member FDIC
	 	 

To: Comerica Bank

Re: Loan#                                        

You are
hereby authorized and instructed to charge account No. _________ in
the name of Compound Therapeutics, Inc.

 

for principal, interest and other payments due on above referenced loan as set
forth below and credit the loan referenced above.

___Debit each interest payment as it becomes due according to the
terms of the Loan and Security Agreement and any renewals or
amendments thereof.

___Debit each principal payment as it becomes due according to the
terms of the Loan and Security Agreement and any renewals or
amendments thereof.

___Debit each payment for Bank Expenses as it becomes due according
to the terms of the Loan and Security Agreement and any renewals or
amendments thereof.

This Authorization is to remain in full force and effect until revoked in writing.

	 	 	 	 	 	 	 
	 

	 	Borrower
	 	Signature
	 	Date
	 
	 	 	 	 	 	 
	 

	 	Compound
	 	Therapeutics, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

5

 

COMERICA BANK

	 	 	 
	 

	 	COMERICA BANK
	Phone: (800) 413-4624

	 	CLIENT AUTHORIZATION
	Fax (617) 757-6310
	 	 

General Authorization

Compound Therapeutics, Inc. hereby authorizes Comerica Bank to use its name, logo, and information
relating to our banking relationship in its marketing and advertising campaigns which is intended
for Comerica Bank’s customers, prospects and shareholders.

Comerica Bank will forward any advertising or article including client for prior review and
approval.

Compound Therapeutics, Inc.

	 	 	 	 	 
	By:

	 	 
 

	 	 
	Signature	 	 
	 
	 	 	 	 
	 	 	 
	Printed Name                      Title	 	 
	 
	 	 	 	 
	 	 	 
	Company	 	 
	 
	 	 	 	 
	 	 	 
	Mailing Address	 	 
	 
	 	 	 	 
	 	 	 
	City, State, Zip Code	 	 
	 
	 	 	 	 
	 	 	 
	Phone Number	 	 
	 
	 	 	 	 
	 	 	 
	Fax Number	 	 
	 
	 	 	 	 
	 	 	 
	E-Mail	 	 
	 
	 	 	 	 
	 	 	 
	Date	 	 

6

 

FIRST AMENDMENT

TO

LOAN AND SECURITY AGREEMENT

This First Amendment to Loan and Security Agreement is entered into as of July 8, 2005 (the
“Amendment”), by and between COMERICA BANK (“Bank”) and COMPOUND THERAPEUTICS, INC. (“Borrower”).

RECITALS

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of December 16,
2003 (the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of
this Amendment.

NOW, THEREFORE, the parties agree as follows:

     1. Certain defined terms in Section 1.1 of the Agreement are hereby added or amended, as
applicable, to read as follows:

“Credit Extension” means the Equipment Term Loan, each Term Advance, or any other
extension of credit by Bank for the benefit of Borrower hereunder.

“Equipment Term Loan” means the cash advance made under Section 2.1(a).

“Term Advance(s)” means a cash advance or cash advances under Section 2.1(b).

     2. Section 2.1(a) of the Agreement is amended to read as follows:

(a) Equipment Term Loan. As of July 8, 2005, there is an aggregate
principal balance outstanding under the Agreement of $1,277,777.85 plus
accrued interest of $1739.20 for a total amount outstanding of
$1,279,517.05(the “Existing Debt”) on account of cash advances previously
made by Bank to Borrower. On or about July 8, 2005, Bank shall make one (1)
Equipment Term Loan in an amount of up to $1,500,000. Borrower shall use
the first proceeds of the Equipment Term Loan to repay the Existing Debt in
full. Borrower may use the remaining portion of the Equipment Term Loan to
purchase Equipment or for such other corporate purpose as Borrower
determines. The Equipment Term Loan shall bear interest at the rate
specified in Section 2.3(a), which interest shall be payable on the first
day of each month, beginning August 1, 2005, and continuing for so long as
any portion of the Equipment Term Loan remains outstanding. The portion of
the Equipment Term Loan that is outstanding on July 1, 2006 shall be payable
in forty-two (42) equal monthly installments of principal, plus all accrued
interest, beginning on August 1, 2006, and continuing on the same day of
each month thereafter through January 1, 2010, at which time all amounts
owing under this Section 2.1(a) shall be immediately due and payable.
Borrower may prepay all or any portion of the Equipment Term Loan without
penalty or premium, each prepayment to be applied first to interest, then to
principal installments, as directed by the Borrower.

7

 

     3. A new Section 2.1(b) is added to the Agreement to read as follows:

     (b) Term Advances.

          (i) Subject to and upon the terms and conditions of this Agreement, at any time from
the date hereof through April 1, 2006, Bank agrees to make Term Advances to Borrower in an
aggregate amount not to exceed Four Million Dollars ($4,000,000), provided that the
aggregate outstanding Credit Extensions shall at no time exceed Five Million Dollars
($5,000,000).

          (ii) Interest shall accrue from the date of each Term Advance at the rate specified in
Section 2.3(a), and shall be payable monthly on the first day of each month so long as any
Term Advances are outstanding. Any Term Advances that are outstanding on July 1, 2006 shall
be payable in forty-two (42) equal monthly installments of principal, plus all accrued
interest, beginning on August 1, 2006, and continuing on the same day of each month
thereafter through January 1, 2010, at which time all amounts owing under this Section
2.1(b) shall be immediately due and payable. Term Advances, once repaid, may not be
reborrowed. Borrower may prepay any Term Advances without penalty or premium, each
prepayment to be applied first to interest, then to principal installments, as directed by
the Borrower

          (iii) When Borrower desires to obtain a Term Advance, Borrower shall notify Bank (which
notice shall be irrevocable) by facsimile transmission to be received no later than 3:00
p.m. Eastern time three (3) Business Days before the day on which the Term Advance is to be
made. Such notice shall be substantially in the form of Exhibit B.

     4. Section 2.2 of the Agreement is amended to read as follows:

     2.2 Overadvances. If the outstanding Credit Extensions at any
time exceed Five Million Dollars ($5,000,000), Borrower shall immediately
pay to Bank, in cash, the amount of such excess.

     5. Section 2.3(a) of the Agreement is amended to read as follows:

     (a) Interest Rates. Except as set forth in Section 2.3(b), the
Credit Extensions shall bear interest, on the outstanding Daily Balance
thereof, at a fixed rate equal to seven and one quarter percent (7.25%) per
annum.

     6. In addition to the reports otherwise required under Section 6.3, within 30 days after the
last day of each fiscal year, Borrower shall deliver to Bank a month by month financial forecast
for the following year approved by Borrower’s board of directors.

     7. The contact information of the Borrower set forth in Section 10 of the Agreement is amended
to read as follows:

8

 

Compound Therapeutics, Inc.

100 Beaver Street

Suite 300

Waltham, MA 02453

Attn: President

FAX: (781) 891-3796

     8. Bank consents to Borrower’s delivery of its audited financial statements for fiscal years
2003 and 2004 by September 1, 2005, and waives any Event of Default caused by Borrower’s failure to
deliver such statements before such date.

     9. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as
defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and
effect in accordance with its respective terms and hereby is ratified and confirmed in all
respects. Except as expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms
the continuing effectiveness of all agreements entered into in connection with the Agreement.

     10. Borrower represents and warrants that the representations and warranties contained in the
Agreement are true and correct as of the date of this Amendment, and that, except as described in
paragraph 8 above, no Event of Default has occurred and is continuing.

     11. This Amendment may be executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one instrument.

     12. As a condition to the effectiveness of this Amendment, Bank shall have received, in form
and substance satisfactory to Bank, the following:

          (a) this Amendment, duly executed by Borrower;

          (b) a non-refundable loan fee of $2,500, plus all Bank Expenses incurred through the date of
this Amendment;

          (c) a warrant to purchase stock;

          (d) Corporate Resolutions to Borrow;

          (e) an agreement to provide insurance, an automatic debit authorization, and disbursement
instructions; and

          (f) such other documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate.

9

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above
written.

	 	 	 	 	 
	 	COMPOUND THERAPEUTICS, INC.

 	 
	 	By:  	John Edwards
 	 
	 
	 	 	 	 	 	 
	 	Title:	 COO 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	COMERICA BANK

 	 
	 	By:  	/s/
 	 
	 
	 	 	 	 	 	 
	 	Title:	 Vice President 	 
	 	 	 	 
	 

10

 

ITEMIZATION OF AMOUNT FINANCED

DISBURSEMENT INSTRUCTIONS

(Equipment Term Loan)

	 	 	 
	Name: COMPOUND THERAPEUTICS, INC.

	 	Date: July 8, 2005

     $217,982.95           credited to deposit account No.                      when Advances are requested by Borrower

     $1,279,517.05       applied in payment of Existing Debt

Amounts paid to others on your behalf:

	 	 	 	 	 
	 
	 	$2,500	 	to Comerica Bank for Loan Fee
	 
	 	 	 	 
	 
	 	$	 	to Bank counsel fees and expenses
	 
	 	 	 	 
	 
	 	$	 	to                     
	 
	 	 	 	 
	 
	 	$	 	to                     
	 
	 	 	 	 
	 
	 	$___	 	TOTAL (AMOUNT FINANCED)

Upon consummation of this transaction, this document will also serve as the authorization for
Comerica Bank to disburse the loan proceeds as stated above.

	 	 	 
	/s/ John Edwards
 

	 	  

	 
	 	 
	Signature

	 	Signature

11

 

COMERICA BANK

Member FDIC

ITEMIZATION OF AMOUNT FINANCED

DISBURSEMENT INSTRUCTIONS

(Term Advances)

      

	 	 	 
	Name(s): Compound Therapeutics, Inc.

	 	Date:

	 	 	 	 	 	 	 
	 

	 	$ 		 	 	credited to deposit account No.                      when Advances are requested or
disbursed to Borrower by cashiers check or wire transfer

Amounts paid to others on your behalf:

	 	 	 	 	 
	 

	 	$	 	 
	 
	 	 	 	 
	 

	 	$	 	 
	 
	 	 	 	 
	 

	 	$	 	 
	 
	 	 	 	 
	 

	 	$	 	 
	 
	 	 	 	 
	 

	 	$
	 	to                     
	 
	 	 	 	 
	 

	 	$
	 	to                     
	 
	 	 	 	 
	 

	 	$
	 	TOTAL (AMOUNT FINANCED)

Upon consummation of this transaction, this document will also serve as the authorization for
Comerica Bank to disburse the loan proceeds as stated above.

	 	 	 
	 

	 	 
	Signature

	 	Signature

12

 

Corporation Resolutions and Incumbency Certification

Authority to Procure Loans

I certify that I am the duly elected and qualified Secretary of Compound Therapeutics, Inc. (the
“Corporation”); that the following is a true and correct copy of resolutions duly adopted by the
Board of Directors of the Corporation in accordance with its bylaws and applicable statutes.

Copy of Resolutions:

Be it Resolved, That:

	1.	 	Any one (1) of the following
                                         (insert titles only) of the
Corporation are/is authorized, for, on behalf of, and in the name of the Corporation to:

	 	(a)	 	Negotiate and procure loans, letters of credit and other credit or financial
accommodations from Comerica Bank (“Bank”), a Michigan banking corporation, including,
without limitation, that certain Loan and Security Agreement dated as of December 16, 2003,
as may subsequently be amended from time to time.
	 
	 	(b)	 	Discount with the Bank, commercial or other business paper belonging to the Corporation
made or drawn by or upon third parties, without limit as to amount;
	 
	 	(c)	 	Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates
and/or instruments representing stocks, bonds, evidences of Indebtedness or other
securities owned by the Corporation, whether or not registered in the name of the
Corporation;
	 
	 	(d)	 	Give security for any liabilities of the Corporation to the Bank by grant, security
interest, assignment, lien, deed of trust or mortgage upon any real or personal property,
tangible or intangible of the Corporation;
	 
	 	(e)	 	Issue a warrant or warrants to purchase the Corporation’s capital stock; and
	 
	 	(f)	 	Execute and deliver in form and content as may be required by the Bank any and all
notes, evidences of Indebtedness, applications for letters of credit, guaranties,
subordination agreements, loan and security agreements, financing statements, assignments,
liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or
documents to carry out the purposes of these Resolutions, any or all of which may relate to
all or to substantially all of the Corporation’s property and assets.

	2.	 	Said Bank be and it is authorized and directed to pay the proceeds of any such loans or
discounts as directed by the persons so authorized to sign, whether so payable to the order of
any of said persons in their individual capacities or not, and whether such proceeds are
deposited to the individual credit of any of said persons or not;
	 
	3.	 	Any and all agreements, instruments and documents previously executed and acts and things
previously done to carry out the purposes of these Resolutions are ratified, confirmed and
approved as the act or acts of the Corporation.
	 
	4.	 	These Resolutions shall continue in force, and the Bank may consider the holders of said
offices and their signatures to be and continue to be as set forth in a certified copy of
these Resolutions delivered to the Bank, until notice to the contrary in writing is duly
served on the Bank (such notice to have no effect on any action previously taken by the Bank
in reliance on these Resolutions).

13

 

	5.	 	Any person, corporation or other legal entity dealing with the Bank may rely upon a
certificate signed by an officer of the Bank to effect that these Resolutions and any
agreement, instrument or document executed pursuant to them are still in full force and effect
and binding upon the Corporation.
	 
	6.	 	The Bank may consider the holders of the offices of the Corporation and their signatures,
respectively, to be and continue to be as set forth in the Certificate of the Secretary of the
Corporation until notice to the contrary in writing is duly served on the Bank.
	 
	 	 	I further certify that the above Resolutions are in full force and effect as of the date of this
Certificate; that these Resolutions and any borrowings or financial accommodations under these
Resolutions have been properly noted in the corporate books and records, and have not been
rescinded, annulled, revoked or modified; that neither the foregoing Resolutions nor any actions
to be taken pursuant to them are or will be in contravention of any provision of the articles of
incorporation or bylaws of the Corporation or of any agreement, indenture or other instrument to
which the Corporation is a party or by which it is bound; and that neither the articles of
incorporation nor bylaws of the Corporation nor any agreement, indenture or other instrument to
which the Corporation is a party or by which it is bound require the vote or consent of
shareholders of the Corporation to authorize any act, matter or thing described in the foregoing
Resolutions.

I further certify that the following named persons have been duly elected to the offices set
opposite their respective names, that they continue to hold these offices at the present time, and
that the signatures which appear below are the genuine, original signatures of each respectively:

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

	 	 	 	 	 
	NAME (Type or Print)	 	TITLE	 	SIGNATURE
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 

In Witness Whereof, I have affixed my name as Secretary and have caused the corporate seal (where
available) of said Corporation to be affixed
on July ___, 2005.

	 	 	 
	 
	 	 
	 
	 	Secretary

	 	 	 
	The Above Statements are Correct.
	 	 
	 

	 	 
	 

	 	signature of officer or director or, if none. a shareholder
other than secretary when secretary is authorized to sign
alone.

Failure to complete the above when the Secretary is authorized to sign alone shall constitute a
certification by the Secretary that the Secretary is the sole Shareholder, Director and Officer of
the Corporation.

14

 

AGREEMENT TO PROVIDE INSURANCE

	 	 	 	 	 
	TO:

	 	COMERICA BANK
	 	Date: July ___, 2005
	 

	 	Attn: Deni M. Snider, MC 4770	 	 
	 

	 	75 E. Trimble Road	 	 
	 

	 	San Jose, CA 95131
	 	Borrower: Compound Therapeutics, Inc.

	 	 	In consideration of a loan in the maximum amount of $5,000,000, secured by all tangible
personal property including inventory and equipment.
	 
	 	 	I/We agree to obtain adequate insurance coverage to remain in force during the term of the
loan.
	 
	 	 	I/We also agree to advise the below named agent to add Comerica Bank as lender’s loss
payable on the new or existing insurance policy, and to furnish Bank at above address with a
copy of said policy/endorsements and any subsequent renewal policies.
	 
	 	 	I/We understand that the policy must contain:

	 	1.	 	Fire and extended coverage in an amount sufficient to cover:

	 	(a)	 	The amount of the loan, OR
	 
	 	(b)	 	All existing encumbrances, whichever is greater,

	 	 	 	But not in excess of the replacement value of the improvements on the real property.
	 
	 	2.	 	Lender’s “Loss Payable” Endorsement Form 438 BFU in favor of Comerica Bank, or
any other form acceptable to Bank.

INSURANCE INFORMATION

	 	 	Insurance Co./Agent Telephone No.:
	 
	 	 	Agent’s Address:

	 	 	 
	 

	Signature of Obligor: /s/ John Edwards 	 
	 
	 	 
	 

	Signature of Obligor:         
                                                                        	 

	 
	FOR BANK USE ONLY

	 

	INSURANCE VERIFICATION: Date:                                                             

	 

	Person Spoken to:                                                                    
             

	 

	Policy Number:                                                                 
                

	 

	Effective From:                      To:                                           
                  

	 

	Verified by:                                                                  
               

 

COMERICA BANK

AUTOMATIC DEBIT AUTHORIZATION

Member FDIC

To: Comerica Bank

Re: Loan #                                                                 
                

You are
hereby authorized and instructed to charge account No.                                          in the
name of
Compound Therapeutics, Inc.
for principal, interest and other payments due on above referenced loan as set forth below and
credit the loan referenced above.

X Debit each interest payment as it becomes due according to the
terms of the Loan and Security Agreement and any renewals or
amendments thereof.

X Debit each principal payment as it becomes due according to the
terms of the Loan and Security Agreement and any renewals or
amendments thereof.

X Debit each payment for Bank Expenses as it becomes due according
to the terms of the Loan and Security Agreement and any renewals
or amendments thereof.

This Authorization is to remain in full force and effect until revoked in writing.

	 	 	 
	Borrower Signature

	 	Date
	 
	 	 
	/s/ John Edwards

	 	7/7/05

 

 

COMERICA BANK

AUTOMATIC DEBIT AUTHORIZATION

Member FDIC

To: Comerica Bank

Re: Loan #                                                             

You are
hereby authorized and instructed to charge account No.                                          in the
name of
Compound Therapeutics, Inc.
for principal, interest and other payments due on above referenced loan as set forth below and
credit the loan referenced above.

X Debit each interest payment as it becomes due according to the
terms of the Loan and Security Agreement and any renewals or
amendments thereof.

X Debit each principal payment as it becomes due according to the
terms of the Loan and Security Agreement and any renewals or
amendments thereof.

X Debit each payment for Bank Expenses as it becomes due according
to the terms of the Loan and Security Agreement and any renewals
or amendments thereof.

This Authorization is to remain in full force and effect until revoked in writing.

	 	 	 
	Borrower Signature

	 	Date
	 
	 	 
	/s/ John Edwards

	 	7/7/05

 

 

SCHEDULE OF EXCEPTIONS

Permitted Indebtedness

Indebtedness owed by Borrower to General Electric with respect to loans outstanding, commitments to
lend and amounts in connection with the acquisition of the assets of Phylos, not to exceed
$1,100,000 in principal amount.

Permitted Investments

None.

Permitted Liens

Liens on Equipment (as defined in the Code), soft costs, third party software, leasehold
improvements and the proceeds thereof securing any Indebtedness described on this Schedule above.
The property subject to such Liens shall not include any accounts, proprietary patents, copyrights,
trademarks or payment intangibles.

Liens on assets owned by Phylos (and subject to a pledge in favor of General Electric) to the
extent such assets were acquired by Borrower and pledged as security under the General Electric
loans described above.

Name; Location of Chief Executive Office

On a routine basis and in the ordinary course of business, laptops, portable computers, office
supplies, peripherals and similar equipment used by employees of the Borrower are located at the
residences of these employees and are used during employee travel.

Litigation

None.

No Material Adverse Change in Financial Statements

The carrying value of the assets acquired by the Borrower in connection with the Borrower’s
acquisition of Phylos will be written down in connection with the issuance of the Borrower’s annual
audited financial statements for fiscal years 2003 and 2004.

Environmental

None.

Taxes

The Borrower has not filed tax returns for fiscal years 2003 and 2004. These tax returns will be
filed in connection with the completion of audits of the financials statements of the Borrower for
such fiscal years.

Accounts

Silicon Valley Bank Checking Account #3300377738

Silicon Valley Bank Investment Account #88602681

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