Document:

Exhibit 10.23

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN
AND SECURITY AGREEMENT, dated as of December 31, 2007 (as
amended, restated, supplemented or otherwise modified from time to time (this “Agreement”))
is among GENERAL ELECTRIC CAPITAL CORPORATION (“GECC”), in its capacity as agent for Lenders (as defined below),
together with its successors and assigns in such capacity, “Agent”), the financial institutions who are or hereafter become parties
to this Agreement as lenders (together with GECC, collectively the “Lenders”, and each individually, a
“Lender”), HELICOS
BIOSCIENCES CORPORATION, a Delaware corporation (“Borrower”), and
the other entities or persons, if any, who are or hereafter become parties to
this Agreement as guarantors (each a “Guarantor” and collectively, the “Guarantors”,
and together with Borrower, each a “Loan Party” and collectively, “Loan
Parties”).

 

RECITALS

 

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

 

AGREEMENT

 

Loan Parties, Agent and
Lenders agree as follows:

 

1.             DEFINITIONS.

 

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

 

2.             LOANS AND TERMS OF PAYMENT.

 

2.1.    Promise to
Pay.  Borrower promises to pay
Agent, for the ratable accounts of Lenders, when due pursuant to the terms
hereof, the aggregate unpaid principal amount of all loans, advances and other
extensions of credit made severally by the Lenders to Borrower, together with
interest on the unpaid principal amount of such loans, advances and other
extensions of credit at the interest rates set forth herein.

 

2.2.    Term Loans.

 

(a)                         Commitment.  Subject to the terms and conditions hereof,
each Lender, severally, but not jointly, agrees to make term loans (each a “Term
Loan” and collectively, the “Term Loans”) to Borrower from time to time
on any Business Day (as defined below) during the period from the Closing Date
(as defined below) until June 30, 2008 (the “Commitment Termination
Date”) in an aggregate principal amount not to exceed such Lender’s
commitment as identified on Schedule A hereto (such commitment of each Lender
as it may be amended to

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

reflect assignments made in
accordance with this Agreement or terminated or reduced in accordance with this
Agreement, its “Commitment”, and the aggregate of all such commitments,
the “Commitments”). 
Notwithstanding the foregoing, the aggregate principal amount of the
Term Loans made hereunder shall not exceed $20,000,000 (the “Total
Commitment”).  Each Lender’s
obligation to fund a Term Loan shall be limited to such Lender’s Pro Rata Share
(as defined below) of such Term Loan. 
Subject to the terms and conditions hereof, the initial Term Loan shall
be made on the Closing Date in an aggregate principal amount equal to
$10,000,000 (the “Initial Term Loan”).  
After the Initial Term Loan, Borrower may request no more than one (1) additional
Term Loan and such subsequent Term Loan must be in an amount equal to
$10,000,000 (the “Subsequent Term Loan”).

 

(b)                         Method of Borrowing.  When Borrower desires the Subsequent Term
Loan, Borrower will notify Agent (which notice shall be irrevocable) by
facsimile (or by telephone, provided that such telephonic notice shall be
promptly confirmed in writing, but in any event on or before the following
Business Day) on the date that is five (5) Business Days prior to the day
the Term Loan is to be made (or such shorter period of time as Agent may
agree). Agent and Lenders may act without liability upon the basis of such
written or telephonic notice believed by Agent to be from any authorized
officer of Borrower.  Agent and Lenders
shall have no duty to verify the authenticity of the signature appearing on any
such written notice.

 

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

 

Bank Name:  RBS Citizens, National Association

Bank Address:  One Citizens Drive, Riverside, RI 02915

ABA#: 011 500 120

Account #: 1139857247

Account Name: Helicos
BioSciences Corporation

Ref: Helicos BioSciences
Corporation

 

(d)                         Notes.  The Term Loans of each Lender shall be
evidenced by a promissory note substantially in the form of Exhibit A
hereto (each a “Note” and, collectively, the “Notes”), and
Borrower shall execute and deliver a Note to each Lender.  Each Note shall represent the obligation of
Borrower to pay to such Lender the lesser of (a) the aggregate unpaid
principal amount of all Term Loans made by such Lender to or on behalf of
Borrower under this Agreement or (b) the amount of such Lender’s
Commitment, in each case together with interest thereon as prescribed in
Section 2.3(b).

 

2

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

(e)                         Agent May Assume
Funding.  Unless Agent shall have
received notice from a Lender prior to the date of any particular Term Loan
that such Lender will not make available to Agent such Lender’s Pro Rata Share
of such Term Loan, Agent may assume that such Lender has made such amount
available to it on the date of such Term Loan in accordance with subsection (c) of
this Section 2.2, and may (but shall not be obligated to), in reliance
upon such assumption, make available a corresponding amount for the account of
Borrower on such date.  If and to the
extent that such Lender shall not have so made such amount available to Agent,
such Lender and Borrower severally agree to repay to Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
day such amount is made available to Borrower until the day such amount is
repaid to Agent, at (i) in the case of Borrower, a rate per annum equal to
the interest rate applicable thereto pursuant to Section 2.3(a), and (ii) in
the case of such Lender, a floating rate per annum equal to, for each day from
the day such amount is made available to Borrower until such amount is
reimbursed to Agent, the weighted average of the rates on overnight federal
funds transactions among members of the Federal Reserve System, as determined
by Agent in its sole discretion (the “Federal Funds Rate”) for the first
Business Day and thereafter, at the interest rate applicable to such Term
Loan.  If such Lender shall repay such
corresponding amount to Agent, the amount so repaid shall constitute such
Lender’s loan included in such Term Loan for purposes of this Agreement.

 

2.3.    Interest
and Repayment.

 

(a)                         Interest.  Each Term Loan shall accrue
interest in arrears  from the date
made until such Term Loan is fully repaid at a fixed per annum rate
of interest equal to the sum of (i) the greater of (A) the
Treasury Rate (as defined below) in effect on the day that is
three (3) Business Days prior to the making of such Term Loan as
determined by Agent and (B) 3.84% plus (ii) 6.11%.   All computations of interest and fees
calculated on a per annum basis shall be made by Agent on the basis of a
360-day year, consisting of twelve 30-day months.  Each determination of an
interest rate or the amount of a fee hereunder shall be made by Agent and shall
be conclusive, binding and final for all purposes, absent manifest error.  As used herein, the term “Treasury
Rate” means a per annum rate of interest equal to the rate published by the
Board of Governors of the Federal Reserve System in Federal Reserve Statistical
Release H.15 entitled “Selected Interest Rates” under the heading “U.S.
Government Securities/Treasury Constant Maturities” as the three year
treasuries constant maturities rate.  In
the event Release H.15 is no longer published, Agent shall select a comparable
publication to determine the U.S. Treasury note yield to maturity.  Notwithstanding the
foregoing, to the extent the
Treasury Rate three (3) Business Days prior to funding the Subsequent Term
Loan is equal to or less than 2.84%, the Lenders, in their sole discretion, and
only if the Lenders economic return is not negatively affected, shall consider
(but shall have no obligation) reducing the Interest Rate on the Subsequent
Term Loan below 9.95%.

 

(b)                         Payments of Principal and
Interest.  For the
Initial Term Loan, Borrower shall pay to the Agent, for the ratable benefit of
the Lenders, (i) twelve (12) consecutive payments of interest only
(payable in arrears) at the rate of interest determined in accordance with Section 2.3(a) on
the first day of each calendar month (a “Scheduled Payment Date”) commencing on February 1,
2008 and (ii) twenty-four (24) equal consecutive payments of principal
and interest (payable in arrears) at the rate of interest determined in
accordance with Section 2.3(a) on each Scheduled Payment Date commencing on February 1,
2009.  For the Subsequent Term
Loan, Borrower shall pay to the Agent, for the ratable benefit of the Lenders, (i) nine
(9) consecutive

 

3

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

payments of interest only
(payable in arrears) at the rate of interest determined in accordance with Section 2.3(a) on
each Scheduled Payment Date commencing on the first day of the second
calendar month occurring after the month during which such Term Loan was made and (ii) twenty-seven
(27) equal consecutive payments of principal and interest (payable in arrears)
at the rate of interest determined in accordance with Section 2.3(a) on
each Scheduled Payment Date commencing on the first day of the eleventh
calendar month occurring after the month during which such Term Loan was made
(each such payment made pursuant to clauses (i) and (ii) of each of
the immediately preceding two sentences, a “Scheduled Payment”).  The amount of each such payment of principal
and interest shall be calculated by the Agent and shall be sufficient to fully
amortize the principal and interest due with respect to the applicable Term
Loan over such repayment period. 
Notwithstanding the foregoing, all unpaid principal and accrued interest
with respect to a Term Loan is due and payable in full to Agent, for the
ratable benefit of Lenders, on the earlier of (A) the first day of the
thirty-seventh month following the date such Term Loan was made or (B) the
date that such Term Loan otherwise becomes due and payable hereunder, whether
by acceleration of the Obligations pursuant to Section 8.2 or otherwise
(the earlier of (A) or (B), the “Applicable Term Loan Maturity Date”).
Each Scheduled Payment, when paid, shall be applied first to the payment of
accrued and unpaid interest on the applicable Term Loan and then to unpaid
principal balance of such Term Loan. 
Without limiting the foregoing, all Obligations shall be due and payable
on the Applicable Term Loan Maturity Date for the last Term Loan made.

 

(c)                         Interim Interest Payment.  For each Term Loan, Borrower shall make an
advance payment of interest on the date of funding such Term Loan for the
period from such date to and including the last day of the month in which such
Term Loan was so made.

 

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

 

(e)                         Payments.  All payments (including prepayments) to be
made by any Loan Party under any Debt Document shall be made in immediately
available funds in U.S. dollars, without setoff or counterclaim to the
Collection Account (as defined below) before 11:00 a.m. New York time on
the date when due.  All payments
received by Agent after 11:00 a.m. New York time on any Business Day or at
any time on a day that is not a Business Day shall be deemed to be received on
the next Business Day.  Whenever any
payment required under this Agreement would otherwise be due on a date that is
not a Business Day, such payment shall instead be due on the next Business Day,
and additional fees or interest, as the case may be, shall accrue and be
payable for the period of such extension. 
The payment of any Scheduled Payment prior to its due date shall be
deemed to have been received on such due date for purposes of calculating
interest hereunder.  All regularly
scheduled payments due to Agent and Lenders under Section 2.3(b) shall
be effected by automatic debit of the appropriate funds from Borrower’s
operating account specified on the EPS Setup Form (as defined below).  As used herein,
the term “Collection Account” means the following account of Agent (or
such other account as Agent shall identify to Borrower in writing):

 

Bank
Name: Deutsche Bank

Bank
Address: New York, NY

ABA Number: 021 001 033

Account
Number: 50271079

 

 

4

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

Account Name: GECC HH Cash
Flow Collections

Ref: Helicos Biosciences
Corporation/CFN #HFS2701

 

(f)                          Withholdings and Increased Costs.  All payments shall be made free and clear of
any taxes, withholdings, duties, impositions or other charges (other than taxes
on the overall net income of any Lender and comparable taxes), such that Agent
and Lenders will receive the entire amount of any Obligations (as defined
below), regardless of source of payment. 
If Agent or any Lender shall have reasonably determined that the
introduction of or any change in, after the date hereof, any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
reduces the rate of return on Agent or such Lender’s capital as a consequence
of its obligations hereunder or increases the cost to Agent or such Lender of
agreeing to make or making, funding or maintaining any Term Loan, then Borrower
shall from time to time upon written demand by Agent or such Lender (with a
copy of such demand to Agent) promptly pay to Agent for its own account or for
the account of such Lender, as the case may be, additional amounts sufficient
to compensate Agent or such Lender for such reduction or for such increased
cost.  A certificate as to the amount of
such reduction or such increased cost that shows the basis of the computation
thereof submitted by Agent or such Lender (with a copy to Agent) to Borrower
shall be conclusive and binding on Borrower, absent manifest error, provided
that,  neither Agent nor any Lender shall
be entitled to payment of any amounts under this Section 2.3(f) unless
it has delivered such certificate to Borrower within 180 days after the
occurrence of the changes or events giving rise to the increased costs to, or
reduction in the amounts received by, Agent or such Lender.  This provision shall survive the termination
of this Agreement.

 

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

 

2.4.    Prepayments.  Borrower can voluntarily
prepay, upon 5 Business Days’ prior written notice to Agent, any Term Loan in
full, but not in part.  Upon the date of (a) any
voluntary prepayment of a Term Loan in accordance with the immediately
preceding sentence or (b) any mandatory prepayment of a Term Loan required
under this Agreement (whether by acceleration of the Obligations pursuant to Section 8.2
or otherwise), Borrower shall pay to Agent, for the ratable benefit of the
Lenders, a sum equal to (i) all outstanding principal plus accrued
interest with respect to the such Term Loan, (ii) the Final Payment Fee
(as such term is defined in Section 2.7(b)) for such Term Loan, and (iii) a
prepayment premium (as yield maintenance for the loss of a bargain and
not as a penalty) equal to: (A) 8.00% of the outstanding
principal of such Term Loan, if such payment is made on or prior to the one
year anniversary of the date such Term Loan was made (the “Applicable First
Anniversary”), (B) 2.00% of the outstanding
principal amount of such Term Loan, if such prepayment is made after the
Applicable First Anniversary of such Term Loan but on or before the two year
anniversary of the date such Term Loan is made (the “Applicable Second
Anniversary”), and (C) 1.00% of the outstanding principal amount of
such Term 

 

5

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

Loan, if such prepayment is
made after the Applicable Second Anniversary but before the first day of the
thirty-seventh month following the date such Term Loan was made.

 

2.5.          Late Fees.  If Agent does not receive any Scheduled
Payment or other payment under any Debt Document from any Loan Party within 3
days after its due date, then, at Agent’s election, such Loan Party agrees to
pay to Agent for the ratable benefit of all Lenders, a late fee equal to (a) 5.00%
of the amount of such unpaid payment or (b) such lesser amount that, if
paid, would not cause the interest and fees paid by such Loan Party under this
Agreement to exceed the Maximum Lawful Rate (as defined below) (the “Late
Fee”).

 

2.6.    Default
Rate.  All Term Loans and
other Obligations shall bear interest, at the option of Agent or upon the
request of the Requisite Lenders (as defined below), from and after the
occurrence and during the continuation of an Event of Default (as defined
below), at a rate equal to the lesser of (a) 5.00% above the rate of
interest applicable to such Obligations as set forth in Section 2.3(a) immediately
prior to the occurrence of the Event of Default and (b) the Maximum Lawful
Rate (the “Default Rate”).  The
application of the Default Rate shall not be interpreted or deemed to extend
any cure period or waive any Default or Event of Default or otherwise limit the
Agent’s or any Lender’s right or remedies hereunder.  All interest payable at the Default Rate
shall be payable on demand.

 

2.7.    Lender
Fees.

 

(a)                         Upfront Payment.  In consideration for Agent’s agreement to
underwrite the transaction contemplated by this Agreement, Borrower has paid to
Agent, for the sole benefit of Agent, and Agent hereby acknowledges receipt of,
a payment in the amount of $100,000 (the “Upfront Payment”).  The Upfront Payment shall be fully earned by
Agent as a non-refundable underwriting fee.

 

(b)                         Final
Payment Fee. 
Upon the repayment in full of all outstanding principal amounts with
respect to any Term Loan (whether voluntarily, scheduled or mandatory or
otherwise), for each Term Loan Borrower shall pay to Agent, for the ratable
accounts of Lenders, a fee equal to 4.00% of the original principal amount of
such Term Loan (the “Final Payment Fee”).

 

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

 

6

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

3.             CREATION
OF SECURITY INTEREST.

 

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

 

All of such Loan Party’s personal property of every kind and nature (except for (a) Intellectual
Property, as defined in, and to the extent excluded pursuant to, Section 3.3
and (b) up to $500,000 held as letter of credit cash collateral in account
number 1170338428 with RBS Citizens, National Association) whether now owned or
hereafter acquired by, or arising in favor of, such Loan Party, and regardless
of where located, including, without limitation, all accounts, chattel paper
(whether tangible or electronic), commercial tort claims, deposit accounts,
documents, equipment, financial assets, fixtures, goods, instruments,
investment property (including, without limitation, all securities accounts),
inventory, letter-of-credit rights, letters of credit, securities, supporting
obligations, cash, cash equivalents, any other contract rights (including,
without limitation, rights under any license agreements), or rights to the
payment of money, and general intangibles, and all books and records of such
Loan Party relating thereto, and in and against all additions, attachments,
accessories and accessions to such property, all substitutions, replacements or
exchanges therefor, all proceeds, insurance claims, products, profits and other
rights to payments not otherwise included in the foregoing (with each of the
foregoing terms that are defined in the UCC having the meaning set forth in the
UCC).

 

Each Loan Party hereby represents and covenants that
such security interest constitutes a valid, and other than security interests
granted in favor of General Electric Capital Corporation pursuant to the GE
Equipment Loan, first priority security interest in the presently existing
Collateral, and will constitute a valid, and other than security interests
granted in favor of General Electric Capital Corporation pursuant to the GE
Equipment Loan, first priority security interest in Collateral acquired after
the date hereof.  Each Loan Party hereby
covenants that it shall give written notice to Agent promptly upon the
acquisition by such Loan Party or creation in favor of such Loan Party of any
commercial tort claim which could reasonably be expected to result in a
recovery in excess of $100,000 after the Closing Date.

 

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

 

7

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

3.3.    Grant of
Security Interest in Proceeds of Intellectual Property.  The Collateral shall not include any of
intellectual property of any Loan Party,
which shall be defined as any and all copyright, trademark, servicemark,
patent, design right, software, trade secret and intangible rights related
thereto of a Loan Party and any applications, registrations, claims, products,
awards, judgments, amendments, renewals, extensions, improvements, licenses and
insurance claims related thereto (collectively, “Intellectual Property”)
now owned or hereafter acquired, or any claims for damages by way of any
past, present or future infringement of any of the foregoing; provided  however, that the Collateral shall
include all cash, royalty fees, other proceeds, accounts and general
intangibles that consist of rights of payment to or on behalf of a Loan Party
or proceeds from the sale, licensing or other disposition of all or any part
of, or rights in, the Intellectual Property by or on behalf of a Loan Party (“Rights
to Payment”).  Notwithstanding the
foregoing, to the extent it is necessary under applicable law in any bankruptcy
or insolvency proceeding involving a Loan Party for Agent (on behalf of itself
and Lenders) to have a security interest in the underlying Intellectual
Property in order for Agent to have (i) a security interest in the Rights
to Payment and (ii) a security interest in any payments with respect to
Rights to Payment that are received after the commencement of such bankruptcy
or insolvency proceeding, then the Collateral shall automatically, and
effective as of the date hereof, include the Intellectual Property solely to
the extent necessary to permit attachment and perfection of Agent’s security
interest (on behalf of itself and Lenders) in the Rights to Payment and any
payments in respect thereof that are received after the commencement of any
bankruptcy or insolvency proceeding. 
Agent hereby agrees on behalf of itself and the Lenders that, if Agent
obtains a security interest in the Intellectual Property pursuant to the
immediately preceding sentence, Agent will not exercise any remedies (under the
UCC or otherwise) with respect to the Intellectual Property (other than
remedies with respect to Rights to Payment or any other proceeds of the
Intellectual Property).

 

3.4.    Termination
of Security Interest.  Subject
to Section 10.9, Agent’s lien on the Collateral (on behalf of itself and
Lenders) shall continue until all of the Obligations (other than contingent
indemnification obligations against which no claim shall have been asserted or
reasonably believed by Lenders to be pending) are indefeasibly repaid in full
in cash, all of the Commitments hereunder are terminated, and this Agreement
shall have been terminated (the “Termination Date”).  Upon the Termination Date, Agent shall, at
Loan Parties’ sole cost and expense and without any recourse, representation or
warranty, release its liens in the Collateral, and all rights remaining
therein, if any, shall revert to Loan Parties.

 

 

4.             CONDITIONS
OF CREDIT EXTENSIONS

 

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

 

(a)                         a counterpart of this Agreement duly
executed by each Loan Party;

 

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

 

8

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

(c)                         Notes duly executed by Borrower in favor of
each applicable Lender;

 

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

 

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

 

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

 

(g)                         [Reserved];

 

(h)                         an officer’s certificate in form and
substance satisfactory to Agent, executed by the chief executive officer or
chief financial officer of Borrower, certifying that, as of the Closing Date, (i) since
December 31, 2006, no Material Adverse Effect (as defined below) has
occurred, (ii) each of the Borrower and the Loan Parties is Solvent,
individually and on a consolidated basis, (iii) all of the representations
and warranties are true and correct and (iv) certifying to such other
matters as Agent deems reasonably appropriate;

 

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

 

(j)                          a landlord consent and/or bailee letter in
favor of Agent executed by the landlord or bailee, as applicable, for any third
party location where (a) any Loan Party’s principal place of business, (b) any
Loan Party’s books or records or (c) Collateral with an aggregate value in
excess of $250,000 is located, a form of which is attached hereto as Exhibit C-1
and Exhibit C-2, as applicable (“Access Agreement”);

 

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

 

(l)                          a completed EPS set-up form, a form of
which is attached hereto as Exhibit E (the “EPS Setup Form”);

 

(m)                              a completed perfection certificate,
duly executed by each Loan Party, a form of which Agent previously delivered to
Borrower (the “Perfection Certificate”; attached hereto as Exhibit G);

 

(n)                         one or more Account Control Agreements (as
defined below), in form and substance reasonably acceptable to Agent, duly
executed by the applicable Loan Parties and the applicable depository or
financial institution, for each deposit and securities account (other than
accounts used exclusively for payroll and withholding tax purposes) listed on
the Perfection Certificate;

 

9

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

(o)                               a pledge agreement, in form and
substance reasonably satisfactory to Agent, executed by each Loan Party and
pledging to Agent, for the benefit of itself and the Lenders, a security
interest in (a) 100% of the shares of the outstanding capital stock, of
any class, of each Subsidiary (as defined below) of each Loan Party that is
incorporated under the laws of any State of the United States or the District
of Columbia, (b) shares of the outstanding capital stock of any class of
each Subsidiary of such Loan Party that is not incorporated under the laws of
any State of the United States or the District of Columbia (a “Foreign
Subsidiary”) that constitute 65% of the total combined voting power of all
capital stock of all classes of such Foreign Subsidiary  (provided, that with respect to any Foreign Subsidiary, to
the extent that there is no 956 Impact (as defined below) such pledge shall be
for one-hundred percent (100%) of such Foreign Subsidiary’s outstanding voting
and non-voting capital stock and stock equivalents) and (c) any and
all Indebtedness (as defined below) owing to Loan Parties (the “Pledge
Agreement”). A “956 Impact” will
be deemed to exist to the extent the issuance of a guaranty by, grant of a Lien
by, or pledge of greater than two-thirds of the voting stock and stock
equivalents of, a Foreign Subsidiary, would result in material incremental
income tax liability under Section 956 of the U.S. Internal Revenue Code
of 1986 (the “Code”), taking into account actual anticipated
repatriation of funds, foreign tax credits and other relevant factors;

 

(p)                         a post closing letter
agreement, in form and substance satisfactory to Agent, executed by each Loan
Party and Agent (the “Post Closing Letter”);

 

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

 

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

 

(s)                         Borrower shall have
reimbursed Agent and Lenders for all fees, costs and expenses of closing
presented as of the date of this Agreement.

 

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

 

(a)                         (i) all representations and warranties
in Section 5 below shall be true in all material respects as of the date
of such Term Loan except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties were true in all material respects as of such earlier date, and
except where such representations and warranties have a material qualifier in
which case such representations and warranties shall be true and correct in all
respects; (ii) no Event of Default or any other event, which with the
giving of notice or the passage of time, or both, would constitute an Event of
Default (such event, a “Default”) has occurred and is continuing or will
result from the making of any Term Loan and (iii) Agent shall have
received a certificate from an authorized officer of each Loan Party confirming
each of the foregoing;

 

 

10

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

 

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

 

(c)                         with respect to the
Subsequent Term Loan only, Agent shall have received evidence satisfactory to
Agent that Borrower has [***] of  its
Helicos Genetic Analysis Systems, which include the HeliScope Single Molecule
Sequencer (the “Heliscope”), [***]; and

 

(d)                         Agent shall have received such other
documents, agreements, instruments or information as Agent shall reasonably
request.

 

5.             REPRESENTATIONS
AND WARRANTIES OF LOAN PARTIES.

 

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

 

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

 

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

 

5.3.    No
Conflicts.  The entry into,
and performance by each Loan Party of, the Debt Documents will not (a) violate
any of the organizational documents of such Loan Party, (b) violate any
law, rule, regulation, order, award or judgment applicable to such Loan Party,
or (c) result in any breach of or constitute a default under, or result in
the creation of any lien, claim or encumbrance on any of such Loan Party’s
property (except for liens in favor of Agent, on behalf of itself and Lenders)
pursuant to, any indenture, mortgage, deed of trust, bank loan, credit
agreement, or other Material Agreement (as defined below) to which such Loan
Party is a party.  As used herein, “Material
Agreement” shall mean any agreement or contract to which such Loan Party is
a party and involving the receipt or payment of amounts in the aggregate
exceeding $250,000 per year and (ii) any
agreement or contract to which such Loan Party is a party the termination of
which could reasonably be expected to have a Material Adverse Effect.  Subject to the Post Closing Letter, a
description of all Material Agreements as of the Closing Date is set forth on Schedule
B hereto and, as of the date of delivery of the updated Schedule B pursuant
to the Post Closing Letter, such updated Schedule B shall include a
description of all Material Agreements as of such date.

 

11

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

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

 

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

 

5.6.    Use of
Proceeds.  The proceeds of the
Term Loans shall be used for working capital, capital expenditures and general
corporate purposes.

 

5.7.    Collateral.  Each Loan Party is, and will remain, the sole
and lawful owner, and in possession of (either directly or indirectly through
one or more bailees to the extent that the Loan Parties are in compliance with Section 6.6
with respect to such bailee), the Collateral, and has the sole right and lawful
authority to grant the security interest described in this Agreement.  The Collateral is, and will remain, free and
clear of all liens, claims and encumbrances of any kind whatsoever, except for (a) liens
in favor of Agent, on behalf of itself and Lenders, to secure the Obligations, (b) liens
(i) with respect to the payment of taxes, assessments or other
governmental charges or (ii) of suppliers, carriers, materialmen,
warehousemen, workmen or mechanics and other similar liens, in each case
imposed by law and arising in the ordinary course of business, and securing
amounts that are not yet due or that are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves or other appropriate provisions are maintained on the books of the
applicable Loan Party in accordance with GAAP and which do not involve, in the
reasonable judgment of Agent, the likely risk of the sale, forfeiture or loss
of any portion of the Collateral in excess of $250,000 (a “Permitted Contest”),
(c) liens existing on the date hereof and set forth on Schedule B
hereto, (d) liens securing Indebtedness permitted under Section 7.2(c) below,
provided that (i) such liens exist prior to the acquisition of, or attach
substantially simultaneous with, or within 20 days after the, acquisition,
repair, improvement or construction of, such property financed by such
Indebtedness and (ii) such liens do not extend to any property of a Loan
Party other than the property (and proceeds thereof) acquired or built, or the
improvements or repairs, financed by such Indebtedness, (e) licenses
described in Section 7.3(c) and (d) below, and (f) liens
securing Indebtedness arising under the GE Equipment Loan (all of such liens
described in the foregoing clauses (a) through (f) are called  “Permitted Liens”).

 

12

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

 

5.8.    Compliance
with Laws.  Each Loan Party is
and will remain in compliance in all material respects with all laws, statutes,
ordinances, rules and regulations applicable to it including, without
limitation, (a) ensuring that no person who owns, directly or indirectly,
20% or more of the capital stock of a Loan Party is or shall be (i) listed
on the Specially Designated Nationals and Blocked Person List maintained by the
Office of Foreign Assets Control (“OFAC”), Department of Treasury,
and/or any other similar lists maintained by OFAC pursuant to any authorizing
statute, Executive Order or regulation or (ii) a person designated under Section 1(b),
(c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders, (b) compliance
with all applicable Bank Secrecy Act (“BSA”) laws, regulations and
government guidance on BSA compliance and on the prevention and detection of
money laundering violations, (c) meeting the minimum funding requirements
of the United States Employee Retirement Income Security Act of 1974 (as
amended, “ERISA”) with respect to any employee benefit plans subject to
ERISA, (d) no Loan Party is an “investment company” or a company “controlled”
by an “investment company” within the meaning of the Investment Company Act of
1940 and (e) no Loan Party is engaged principally, or as one of the
important activities, in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulations T, U and X of the
Board of Governors of the Federal Reserve System (the “Federal Reserve Board”).

 

5.9.    Intellectual
Property.  The Intellectual Property is and will remain free
and clear of all liens, claims and encumbrances of any kind whatsoever, except
for Permitted Liens described in clauses (b)(i) and (e) of Section 5.7.  No Loan Party has nor will it enter into any
other agreement or financing arrangement in which a negative pledge in such
Loan Party’s Intellectual Property is granted to any other party. As of the
Closing Date and each date a Term Loan is advanced to Borrower, no Loan Party
has any interest in, or title to any patents, trademarks or material licenses
that are registered or the subject of pending applications for registrations
except (i) as disclosed in the Perfection Certificate, and (ii) patents
which have not yet been licensed or published. 
Each Loan Party owns or has rights to use all Intellectual Property
material to the conduct of its business as now or heretofore conducted by it
without any actual or claimed infringement upon the rights of third parties.

 

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

 

5.11.        Taxes; Pension.  All tax returns, reports and statements,
including information returns, required by any governmental authority to be
filed by each Loan Party and its Subsidiaries have been

 

13

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

filed with the appropriate governmental
authority (other than those tax returns, reports and statements for which a
request for extension of the time in which to file has been timely filed by the
applicable Loan Party with the applicable governmental authority and such
extension has been granted by such governmental authority, in which case such
tax returns, reports and statements shall have been filed by such extension
date) all taxes, levies, assessments and similar charges have been paid prior
to the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof (or any such fine, penalty, interest, late
charge or loss has been paid), excluding taxes, levies, assessments and similar
charges or other amounts which are the subject of a Permitted Contest.  Proper and accurate amounts have been
withheld by each Loan Party from its respective employees for all periods in
compliance with applicable laws and such withholdings have been timely paid to
the respective governmental authorities. 
Each Loan Party has paid all amounts necessary to fund all present
pension, profit sharing and deferred compensation plans in accordance with
their terms, and no Loan Party has withdrawn from
participation in, or has permitted partial or complete termination of, or
permitted the occurrence of any other event with respect to, any such plan which
could reasonably be expected to result in any liability of a Loan Party in
excess of $250,000, including any liability to the Pension Benefit
Guaranty Corporation or its successors or any other governmental authority.

 

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

 

5.13.        Status of Helicos Biosciences Securities Corporation.  Borrower’s direct,
wholly-owned Subsidiary, Helicos Biosciences Securities Corporation, a
Massachusetts corporation (“HBSC”),  has not engaged in any business or own any
assets (other than to hold cash and Cash Equivalents in account number
1139758613  located at RBS Citizens, National Association), nor has
it incurred any Indebtedness, Liens or any other liabilities other
than liabilities associated solely with any taxes on HBSC and bank fees
associated with HBSC’s bank accounts.

 

6.             AFFIRMATIVE
COVENANTS.

 

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

 

14

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

6.2.    Notice to
Agent.  Loan Parties shall
provide Agent and each Lender that is a Lender on the Closing Date with (a) notice
of any change in the accuracy of the Perfection Certificate or any of the
representations and warranties provided in Section 5 above, promptly (but
in any event within 3 Business Days) upon the occurrence of any such change, (b) notice
of the occurrence of any Default or Event of Default, promptly (but in any
event within 3 days) after the date on which any officer of a Loan Party
obtains knowledge of the occurrence of any such event, (c) copies of all
statements, reports and notices made available generally by Borrower to its
securityholders or to any holders of Material Indebtedness (as defined below),
all notices sent to Borrower or any Loan Party by the holders of such Material
Indebtedness, and all documents filed with the Securities and Exchange
Commission (“SEC”) or any securities exchange or governmental authority
exercising a similar function, promptly, but in any event within 3 days of
delivering or receiving such information to or from such persons, (d) a
report of any legal actions pending or threatened against Borrower or any
Subsidiary that could result in damages or costs to Borrower or any Subsidiary
of $250,000 or more promptly, but in any event within 3 Business Days, upon
receipt of notice thereof, (e) any new applications or registrations that
Borrower has made or filed in respect of any Intellectual Property or a change
in status of any outstanding application or registration within 5 days of such
application, filing or change in status, and (f) copies of all statements,
reports and notices delivered to or by a Loan Party in connection with any
Material Agreement promptly (but in any event within 3 Business Days) upon
receipt thereof.

 

6.3.    Financial
Statements.  If Borrower is a
private company, it shall deliver to Agent and Lenders (a) unaudited
consolidated and, if available, consolidating balance sheets, statements of
operations and cash flow statements within 45 days of each month end, in a form
acceptable to Agent and certified by Borrower’s president, chief executive
officer or chief financial officer, and (b) its complete annual audited
consolidated and, if available, consolidating financial statements prepared
under GAAP and certified by an independent certified public accountant selected
by Borrower and satisfactory to Agent within 120 days of the fiscal year end
or, if sooner, at such time as Borrower’s Board of Directors receives the
certified audit.  If Borrower is a
publicly held company, it shall deliver to Agent and Lenders quarterly
unaudited consolidated and, if available, consolidating balance sheets, statements
of operations and cash flow statements and annual audited consolidated and, if
available, consolidating balance sheets, statements of operations and cash flow
statements, certified by a recognized firm of certified public accountants,
within 5 days after the statements are required to be provided to the SEC, and
if Agent requests, Borrower shall deliver to Agent and Lenders monthly
unaudited consolidated and, if available, consolidating balance sheets,
statements of operations and cash flow statements within 30 days after the end
of each month.  All such statements are
to be prepared using GAAP (subject, in the case of unaudited financial
statements, to the absence of footnotes and normal year end audit adjustments)
and, if Borrower is a publicly held company, are to be in compliance with
applicable SEC requirements.  All
financial statements delivered pursuant to this Section 6.3 shall be
accompanied by a compliance certificate, signed by the chief financial officer
of Borrower, in the form attached hereto as Exhibit D. Borrower
shall deliver to Agent and Lenders (i) as soon as available and in any
event not later than 30 days after the end of
each fiscal year of Borrower, an annual budget for Borrower, on a consolidated
and, if available, consolidating basis, approved by the Board of Directors of
Borrower, for the current fiscal year,
consistent with the past budgets previously provided to Agent and (ii) such
budgets, sales projections, or other financial information as Agent or any
Lender may reasonably request from time to time generally prepared by Borrower
in the ordinary course of business.

 

6.4.    Insurance.  Borrower, at its expense, shall maintain, and
shall cause each Subsidiary to maintain, insurance (including, without
limitation, comprehensive general liability, hazard, and business interruption
insurance) with respect to all of its properties and businesses (including, the
Collateral), in

15

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

 

such amounts and covering
such risks as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated and in any event with
deductible amounts, insurers and policies that shall be reasonably acceptable
to Agent.  Borrower shall deliver to
Agent certificates of insurance evidencing such coverage, together with
endorsements to such policies naming Agent as a lender loss payee or additional
insured, as appropriate, in form and substance reasonably satisfactory to
Agent.  Each policy shall provide that
coverage may not be canceled or altered by the insurer except upon 30 days  prior written notice to Agent and shall not
be subject to co-insurance, except in the event of cancellation for non-payment
of premium whereby 10 days advance notice will be provided.  Borrower appoints Agent as its
attorney-in-fact to make, settle and adjust all claims under and decisions with
respect to Borrower’s policies of insurance, and to receive payment of and
execute or endorse all documents, checks or drafts in connection with insurance
payments. Agent shall not act as Borrower’s attorney-in-fact unless an Event of
Default has occurred and is continuing. 
The appointment of Agent as Borrower’s attorney in fact is a power coupled
with an interest and is irrevocable until all of the Obligations are
indefeasibly paid in full. Proceeds of insurance shall be applied, at the
option of Agent, to repair or replace the Collateral or to reduce any of the
Obligations.

 

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

 

6.6.    Agreement
with Landlord/Bailee.  Each
Loan Party shall use commercially reasonable efforts to obtain and maintain
such Access Agreement(s) with respect to any real property on which (a) a
Loan Party’s principal place of business, (b) a Loan Party’s books or
records or (c) Collateral with an aggregate value in excess of $250,000 is
located (other than real property owned by such Loan Party) as Agent may
reasonably require provided, however, that the Agent shall not exercise any of
its rights under such Access Agreements unless entitled to do so pursuant to
this Agreement.

 

6.7.    Protection
of Intellectual Property. 
Each Loan Party shall take all necessary actions to: (a) protect,
defend and maintain the validity and enforceability of its Intellectual
Property to the extent material to the conduct of its business now or
heretofore conducted by it or proposed to be conducted by it, (b) promptly,
but in any event within 5 Business Days, advise Agent in writing of material
infringements of its Intellectual Property, (c) not allow any Intellectual
Property material to such Loan Party’s business to be abandoned, forfeited or
dedicated to the public without Agent’s written consent, and (d) notify
Agent promptly, but in any event within 3 days, if it knows or has reason to
know that any application or registration relating to any patent, trademark or
copyright (now or hereafter existing) material to its business may become
abandoned or dedicated, or if any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court) regarding such Loan Party’s ownership of any
Intellectual Property material to its business, its right to register the same,
or to keep and maintain the same.  Each
Loan Party shall remain liable under each of its Intellectual Property licenses
pursuant to which it is a licensee (“Licenses”) to observe and perform
all of the conditions and obligations to be observed and performed by it
thereunder.  None of Agent or any Lender
shall have any obligation or liability under any such License by reason of or
arising out of this Agreement, the granting of a lien, if any, in such License
or the receipt by Agent (on behalf of itself and Lenders) of any payment relating
to any such License.  None of Agent or
any Lender shall be required or obligated in any manner to perform or fulfill
any of the obligations of any Loan Party under or pursuant to

 

16

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

any License, or to make any
payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any License, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts which may have been
assigned to it or which it may be entitled at any time or times.

 

6.8.    Special
Collateral Covenants.

 

(a)                         Each Loan Party shall remain in possession
of its respective Collateral solely at the location(s) specified on the
Perfection Certificate; except that Agent, on behalf of itself and Lenders,
shall have the right to possess (i) any chattel paper or instrument that
constitutes a part of the Collateral, (ii) any other Collateral in which
Agent’s security interest (on behalf of itself and Lenders) may be perfected
only by possession and (iii) any Collateral after the occurrence of an
Event of Default in accordance with this Agreement and the other Debt
Documents.  Agent may inspect (and
representatives of any Lender may accompany Agent on any such inspection) any of
the Collateral during normal business hours, and in the absence of a Default or
an Event of Default, after giving Borrower reasonable prior notice; provided
however, (A) that so long as no Default shall have occurred and be
continuing, such inspections shall take place no more than twice per calendar
year and (B) that the aggregate cost to the Loan Parties for all such
inspections in any given calendar year shall not exceed $35,000.  If Agent asks, each Loan Party will promptly
notify Agent in writing of the location of any Collateral.

 

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

 

(c)                         Agent and Lenders do not authorize and each
Loan Party agrees it shall not (i) part with possession of any of the
Collateral (except (A) to Agent (on behalf of itself and Lenders), (B) for
maintenance and repair (C) or for a Permitted Disposition), or (ii) remove
any of the Collateral from the continental United States other than (x) Inventory
with a value not to exceed $1,000,000 and (y) cash not to exceed $100,000.

 

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

 

(e)                         Each Loan Party shall, at all times, keep
accurate and complete records of the Collateral, and Agent shall have the right
to inspect and make copies of all of Loan Parties’ books and records relating
to the Collateral during normal business hours, and in the absence of a Default
or an Event of Default, after giving the applicable Loan Parties  reasonable prior notice; provided,
however, that so long as no Default shall have occurred and be continuing, (i) such
inspections shall take place no more than twice per calendar year and (ii) that
the aggregate cost to the Loan Parties for all such inspections in any given
calendar year shall not exceed $35,000.

 

17

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

 

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

 

(g)                         Borrower agrees to maintain, at all times,
cash in account number 1300003445 of Borrower at RBS Citizens, National
Association (the “Cash Account”) equal to not less than the lesser of (i) the
aggregate outstanding amount of principal under the Term Loans and (ii) the
total amount of cash and Cash Equivalents of Borrower and it Subsidiaries on a
consolidated basis.  Borrower shall
provide Agent and each Lender with such information as Agent may reasonably
request from time to time to evidence compliance with this Section 6.8(g).  The Cash Account shall be subject to an
Account Control Agreement pursuant to Section 7.10.

 

6.9.    Further
Assurances; Supplemental Disclosure.  Each Loan Party shall, upon request of Agent,
furnish to Agent such further information, execute and deliver to Agent such
documents and instruments (including, without limitation, UCC financing
statements) and shall do such other acts and things as Agent may at any time
reasonably request relating to the perfection or protection of the security
interest created by this Agreement or for the purpose of carrying out the
intent of this Agreement and the other Debt Documents.  From time to time as may be reasonably
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of a Default), each Loan Party
shall supplement the Perfection Certificate any disclosure schedule hereto or
to any other Debt Document, or any representation herein or in any Debt
Document, with respect to any matter hereafter arising that, if existing or
occurring as of the date of this Agreement, would have been required to be set
forth or described in the Perfection Certificate, such disclosure schedules or
as an exception to such representation or that is necessary to correct any
information in the Perfection Certificate, such disclosure schedules or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to the Perfection Certificate or any disclosure schedules, the
Perfection Certificate or such disclosure schedules shall be appropriately
marked to show the changes made therein); provided, that (a) no
such supplement to the Perfection Certificate, such disclosure schedules or
representation shall amend, supplement or otherwise modify the Perfection
Certificate, such disclosure schedules or representation, or be deemed a waiver
of any Default resulting from the matters disclosed therein, except as
consented to by the Agent in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely
to the Closing Date.

 

6.10.  Additional
Subsidiaries. Simultaneously with the formation or acquisition of
any Subsidiary of any Loan Party, such Loan Party shall cause to be executed
and delivered to Agent the following: (i) by such new Subsidiary (other
than a Foreign Subsidiary to the extent that a 956 Impact exists), a Guaranty
pursuant to which such Subsidiary shall guarantee the payment and performance
of all of the Obligations and pursuant to which Agent, for the benefit of
itself and the Lenders, shall be granted a first priority and perfected
security interest (subject to Permitted Liens that solely by operation of law
would constitute Liens prior to Agent’s Liens hereunder) in all assets of such
Subsidiary of the same types constituting “Collateral” under Section 3.1
hereof to secure the Obligations, (ii) by the Loan Party that is such
Subsidiary’s direct parent company, an amendment to the Pledge Agreement
delivered on the Closing Date or a new Pledge Agreement substantially in the
form of the Pledge Agreement delivered on

 

18

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

the Closing Date (or otherwise in form and substance
reasonably satisfactory to Agent), as applicable, and pursuant to which either
(1) all of the capital stock of such new Subsidiary shall be pledged to
Agent, for the benefit of the Lenders, on a first priority and perfected basis
to secure the Obligations (provided, that with respect to any Foreign
Subsidiary, if a 956 Impact exists such pledge shall be limited to sixty-five
percent (65%) of such Foreign Subsidiary’s outstanding voting capital stock and
stock equivalents and one hundred percent (100%) of such Foreign Subsidiary’s
outstanding non-voting stock and stock equivalents) and (iii) such other
related documents (including closing certificates, legal opinions and other
similar documents) as Agent may reasonably request, all in form and substance
reasonably satisfactory to Agent. Notwithstanding the foregoing, (i) this Section 6.10
shall not operate as a consent to any formation or acquisition of a Subsidiary
that is not expressly permitted under this Agreement and (ii) HBSC shall
not be required to guaranty this Agreement or grant a lien in any of its
assets.

 

7.             NEGATIVE
COVENANTS

 

7.1.    Liens.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
lien, security interest, claim or encumbrance or grant any negative pledges on
any Collateral or Intellectual Property, except Permitted Liens.

 

7.2.    Indebtedness.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, directly or indirectly create, incur,
assume, permit to exist, guarantee or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness (as hereinafter defined),
except for (a) the Obligations, (b) Indebtedness existing on the date
hereof and set forth on Schedule B to this Agreement, (c) Indebtedness
consisting of capitalized lease obligations and purchase money Indebtedness, in
each case incurred by Borrower or any of its Subsidiaries to finance the
acquisition, repair, improvement or construction of fixed or capital assets of
such person, provided that (i) the aggregate outstanding principal amount
of all such Indebtedness does not exceed $250,000 at any time and (ii) the
principal amount of such Indebtedness does not exceed the lower of the cost or
fair market value of the property so acquired or built or of such repairs or
improvements financed with such Indebtedness (each measured at the time of such
acquisition, repair, improvement or construction is made), (d) Indebtedness
in favor of GECC pursuant to that certain Master Security Agreement, dated as
of June 9, 2006, together with all schedules thereto and all instruments,
agreements and other documents executed in connection therewith, in each case
as amended  (collectively, the “GE
Equipment Loan”) and (e) Indebtedness owing by any Loan Party to
another Loan Party, provided that (i) each Loan Party shall have executed
and delivered to each other Loan Party a demand note (each, an “Intercompany
Note”) to evidence such intercompany loans or advances owing at any time by
each Loan Party to the other Loan Parties, which Intercompany Note shall be in
form and substance reasonably satisfactory to Agent and shall be pledged and
delivered to Agent pursuant to the Pledge Agreement as additional Collateral
for the Obligations, (ii) any and all Indebtedness of any Loan Party to
another Loan Party shall be subordinated to the Obligations pursuant to the
subordination terms set forth in each Intercompany Note, (iii) no Default or
Event of Default would occur both before and after giving effect to any such
Indebtedness.  The term “Indebtedness”
shall mean, with respect to any person, at any date, without duplication, (i) all
obligations of such person for borrowed money, (ii) all obligations of
such person evidenced by bonds, debentures, notes or other similar instruments,
or upon which interest payments are customarily made, (iii) all
obligations of such person to pay the deferred purchase price of property or
services, but excluding obligations to trade creditors incurred in the ordinary
course of business and not past due by more than 90 days,  (iv) all capital lease obligations of
such person, (v) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product, (vi) all obligations of such person
to purchase securities (or other property) which arise out of or in connection 

 

19

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

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

 

7.3.    Dispositions.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, convey, sell, rent, lease, sublease,
mortgage, license, transfer or otherwise dispose of (collectively, “Transfer”)
any of the Collateral or any Intellectual Property, except for the following
(collectively, “Permitted Dispositions”): (a) sales of Inventory in
the ordinary course of business, (b) dispositions by a Loan Party or any
of its Subsidiaries of tangible assets for cash and fair value that are no
longer used or useful in the business of such Loan Party or such Subsidiary so
long as (i) no Default or Event of Default exists at the time of such
disposition or would be caused after giving effect thereto and (ii) the
fair market value of all such assets disposed of does not exceed $250,000 since
the Closing Date, (c) dispositions in the form of cash payments with
respect to (i) salaries of employees employed by and (ii) ordinary
course expenses of Foreign Subsidiaries permitted pursuant to Section 7.7(b) so
long as no Default or Event of Default exists at the time of such disposition
or would be caused after giving effect thereto, (d) non-exclusive licenses
for the use of Borrower’s Intellectual Property in the ordinary course of
business, (e) exclusive licenses for the use of Borrower’s Intellectual
Property in the ordinary course of business, so long as, with respect to each
such exclusive license, (i) no Default of Event of Default exists at the
time of such Transfer, (ii) the license constitutes an arms-length
transaction made in connection with a bona fide corporate collaboration in the
ordinary course of business and the terms of which, on their face, do not
provide for a sale or assignment of any Intellectual Property, (iii) Borrower
delivers 10 Business Days prior written notice and a brief summary of the terms
of the license to Agent, (iv) Borrower delivers to Agent copies of the
final executed licensing documents in connection with the license promptly upon
consummation of the license, and (v) all royalties, milestone payments or
other proceeds arising from the licensing agreement are paid to a deposit
account that is governed by an Account Control Agreement, and (f) dispositions
of cash to HBSC so long as (i) no Default or Event of Default exists at
the time or after giving effect thereto, and (ii) such cash shall be
comprised solely of net cash proceeds of a public offering of common stock or
other equity financing, in each case that takes place after the Closing Date (a
“New Equity Offering”).

 

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

 

7.5.    Mergers or
Acquisitions.  No Loan
Party shall merge or consolidate, and no Loan Party shall permit any of its
Subsidiaries to merge or consolidate, with or into any other person or entity
(other than mergers of a Subsidiary into Borrower in which Borrower is the
surviving entity) or acquire, or

 

20

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another person or entity. 
Notwithstanding the foregoing, a Loan Party may acquire all or
substantially all of the assets or stock of another person or entity (such
person or entity, the “Target”) so long as (a) Agent and each
Lender shall receive at least twenty (20) Business Days’ prior written notice
of such proposed acquisition, which notice shall include a reasonably detailed
description of such proposed acquisition; (b) such acquisition shall only
comprise a business, or those assets of a business, substantially of the type
engaged in by the Loan Parties as of the Closing Date; (c) such
acquisition shall be consensual and shall have been approved by Target’s board
of directors or similar governing body (as applicable); (d) the purchase
price paid and/or payable (whether in cash, stock or other form of
consideration) in connection with all acquisitions (including all transaction
costs and all Indebtedness, liabilities and contingent obligations incurred or
assumed in connection therewith or otherwise reflected in a consolidated
balance sheet of Borrower and Target) (i) together with any Investments
made pursuant to Section 7.7(a)(vi), shall not exceed $4,000,000 in the
aggregate for all acquisitions and (ii) if paid in cash, shall be paid
solely with the net cash proceeds of a New Equity Offering; (e) the
business and assets acquired in such permitted acquisition shall be free and
clear of all liens (other than Permitted Liens); (f) at or prior to the
closing of any permitted acquisition, Agent will be granted a first priority
perfected lien (subject to Permitted Liens) in all assets acquired pursuant
thereto or in the assets and stock of Target, and the Loan Parties and Target
shall have executed such documents and taken such actions as may be reasonably
required by Agent in connection therewith; (g) on or prior to the date of
such acquisition, Agent shall have received, in form and substance reasonably
satisfactory to Agent, copies of the acquisition agreement and related
agreements and instruments, and all opinions, certificates, lien search results
and other documents reasonably requested by Agent; (h) at the time of such
acquisition and after giving effect thereto, no Default or Event of Default has
occurred and is continuing; (i) the net worth of the Borrower after giving
effect to any such acquisition shall be equal to or better than Borrower’s net
worth prior to such acquisition; and (j) after giving pro forma effect to
such acquisition the Cash Burn Amount of Borrower and its Subsidiaries, on a
consolidated basis, shall not exceed the Cash Burn Amount of Borrower and its
Subsidiaries on a consolidated basis prior to giving effect to any such
acquisition by more than twenty percent (20%) (“Permitted Acquisitions”).

 

As used herein, “Cash
Burn Amount” means, with respect to Borrower and its consolidated
Subsidiaries, as of any date of determination and based on the financial
statements most recently delivered to Agent and the Lenders in accordance with
this Agreement, the difference between:

 

(1)                      the quotient of (i) the
sum of, without duplication, (A) net income (loss), plus (B) depreciation
and amortization, minus (C) non-financed capital expenditures, in each
case of clauses (A), (B) and (C), for the immediately preceding six (6) month
period on a trailing basis, divided by (ii) six (6),

 

minus

 

(2)                      the quotient of (i) the
current portion of interest bearing liabilities due and payable in the
immediately succeeding six (6) months divided by (ii) six (6).

 

7.6.    Restricted
Payments.  No Loan Party
shall, and no Loan Party shall permit any of its Subsidiaries to, (a) declare
or pay any dividends or make any other distribution or payment on account of or
redeem, retire, defease or purchase any capital stock (other than the payment
of dividends to Borrower, certain cash payments not to exceed $200,000 and
non-cash dividends, in each case solely in connection with equity award
agreements under the Borrower’s stock option plan), (b) make any payment
in respect of management fees or consulting fees (or similar fees) to any
equityholder or other affiliate of Borrower, 

 

21

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

 

or (c) be a party to or
bound by an agreement that restricts a Subsidiary from paying dividends or
otherwise distributing property to Borrower or (d) make any payments on
account of intercompany Indebtedness permitted under Section 7.2 (except
in accordance with the terms of the applicable Intercompany Note then in effect
with respect to such intercompany Indebtedness).

 

7.7.    Investments.  No Loan Party shall, and no Loan Party shall
permit any of its Subsidiaries to, directly or indirectly (a) acquire or
own, or make any loan, advance or capital contribution (an “Investment”)
in or to any person or entity other than (i) to another Loan Party to the
extent permitted under the terms and conditions set forth in Section 7.2(e),
(ii) Investments existing on the date hereof and set forth on Schedule B
to this Agreement, (iii) Investments in cash, Cash Equivalents (as defined
below) and Investments made pursuant to the Borrower’s Investment policy
attached hereto as Schedule C, (iv) loans or advances to employees
of Borrower or any of its Subsidiaries to finance travel, entertainment and
relocation expenses and other ordinary business purposes in the ordinary course
of business as presently conducted, provided that the aggregate outstanding
principal amount of all loans and advances permitted pursuant to this clause
shall not exceed $100,000 at any time, (v) cash contributions to Foreign
Subsidiaries permitted pursuant to Section 7.7(b) in the form
of and subject to the limitations set forth in Section 7.3(c), (vi) investments
in HBSC permitted pursuant to Section 7.3(f) and (vii) Investments
in the form of joint ventures, partnerships or equity investments so long as
such Investments (i) together with any Permitted Acquisitions pursuant to Section 7.5,
shall not exceed $4,000,000, (ii) shall be in businesses substantially of
the type engaged by such Loan Parties as of the Closing Date, (iii) if
paid in cash, shall be paid solely with the net cash proceeds of a New Equity
Offering, (iv) the net worth of the Borrower after giving effect to
any such Investment shall be equal to or better than Borrower’s net worth prior
to such Investment, and (v) after giving pro forma effect to such
Investment the Cash Burn Amount of Borrower and its Subsidiaries, on a
consolidated basis, shall not exceed the Cash Burn Amount of Borrower and its
Subsidiaries on a consolidated basis prior to giving effect to any such
Investment by more than twenty percent (20%) (collectively, the “Permitted
Investments”), (b) acquire or create any Subsidiary
other than (i) Foreign Subsidiaries of Borrower in jurisdictions where it
is necessary or desirable to form a Foreign Subsidiary to conduct business in
such jurisdiction and subject to the restrictions on investments in or
dispositions and contributions to such Foreign Subsidiary set forth in Sections
6.8(c), 7.3(c) and 7.7(a); provided, that (A) Borrower
shall provide Agent with 30 days prior written notice of the formation of any
such Foreign Subsidiary and (B) Borrower shall (and shall cause such
Foreign Subsidiary to) comply with Section 6.10, or (ii) pursuant
to an acquisition permitted pursuant to Section 7.5, or (c) engage
in any joint venture or partnership with any other person or entity other than
as permitted pursuant to Section 7.7(a)(vii) above. The term “Cash
Equivalents” means (v) any readily-marketable securities (i) issued
by, or directly, unconditionally and fully guaranteed or insured by the United
States federal government or (ii) issued by any agency of the United
States federal government the obligations of which are fully backed by the full
faith and credit of the United States federal government, (w) any
readily-marketable direct obligations issued by any other agency of the United
States federal government, any state of the United States or any political
subdivision of any such state or any public instrumentality thereof, in each
case having a rating of at least “A-1” from S&P or at least “P-1” from
Moody’s, (x) any commercial paper rated at least “A-1” by S&P
or “P-1” by Moody’s and issued by any entity organized under the laws of
any state of the United States, (y) any U.S. dollar-denominated time
deposit, insured certificate of deposit, overnight bank deposit or bankers’
acceptance issued or accepted by (i) Agent or (ii) any commercial
bank that is (A) organized under the laws of the United States, any state
thereof or the District of Columbia, (B) “adequately capitalized” (as
defined in the regulations of its primary federal banking regulators) and (C) has
Tier 1 capital (as defined in such regulations) in excess of $250,000,000 or (z) shares
of any United States money market fund that (i) has substantially all of
its assets invested continuously in the types of investments referred to in clause
(v),

 

22

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

(w), (x) or
(y) above with maturities as set forth in the proviso below, (ii) has
net assets in excess of $500,000,000 and (iii) has obtained from either
S&P or Moody’s the highest rating obtainable for money market funds in the
United States; provided, however, that the maturities of all
obligations specified in any of clauses (v), (w), (x) and
(y) above shall not exceed 365 days

 

7.8.    Transactions
with Affiliates.  No Loan
Party shall, and no Loan Party shall permit any of its Subsidiaries to,
directly or indirectly enter into or permit to exist any transaction with any
Affiliate (as defined below) of a Loan Party or any Subsidiary of a Loan Party
except for transactions that are in the ordinary course of such Loan Party’s or
such Subsidiary’s business, upon fair and reasonable terms that are no more
favorable to such Affiliate than would be obtained in an arm’s length
transaction.  As used herein, “Affiliate”
shall mean, with respect to a Loan Party or any Subsidiary of a Loan Party, (a) each
person that, directly or indirectly, owns or controls 5% or more of the stock
or membership interests having ordinary voting power in the election of
directors or managers of such Loan Party or such Subsidiary, and (b) each
person that controls, is controlled by or is under common control with such
Loan Party or such Subsidiary.

 

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

 

7.10.  Deposit
Accounts and Securities Accounts. 
No Loan Party shall directly or indirectly maintain or establish any
deposit account or securities account, unless Agent, the applicable Loan Party
or Loan Parties and the depository institution or securities intermediary at
which the account is or will be maintained enter into a deposit account control
agreement or securities account control agreement, as the case may be, in form
and substance satisfactory to Agent (an “Account Control Agreement”)
(which agreement shall provide that such depository institution or securities
intermediary shall comply with all instructions of Agent without further
consent of such Loan Party or Loan Parties, as applicable, including, without
limitation, an instruction by Agent to follow a notice of exclusive control or
similar notice (such notice, a “Notice of Exclusive Control”)), prior to
or concurrently with the establishment of such deposit account or securities
account (or in the case of any such deposit account or securities account
maintained as of the date hereof, prior to or concurrently with the entering
into this Agreement).  Agent may give a
Notice of Exclusive Control with respect to any deposit account or securities
account at any time at which a Default or Event of Default has occurred and is
continuing.

 

7.11.        Amendments to Other Agreements.  No Loan Party shall amend, modify or waive
any provision of (a) any Material Agreement (unless the net effect of such
amendment, modification of waiver is not adverse to any Loan Party, Agent or
Lenders) or (b) any document relating to any of the Material Indebtedness,
in each case, without the prior written consent of Agent and the Requisite
Lenders.

 

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

 

23

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

8.             DEFAULT
AND REMEDIES.

 

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

 

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

 

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

 

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

 

(d)                         any warranty, representation or statement
made or deemed made by or on behalf of any Loan Party in any of the Debt
Documents or otherwise in connection with any of the Obligations shall be false
or misleading in any material respect (provided, that if such representation or
warranty (i) relates to a specific date it shall be true and correct as of
such date and (ii) contains a materiality qualifier, it shall be true and
correct in all respects); and provided further that solely with respect to any
Loan Party’s breach of Section 5.1 solely as a result of such Loan
Party’s failure to be in good standing in its applicable jurisdiction of
incorporation or formation, such Loan Party shall have 5 Business Days in which
to cure such default (for the avoidance of doubt this cure period shall not
apply to any Loan Party’s representation with respect to existence or due
organization or any other representation or warranty in this Agreement).

 

(e)                         any portion of the Collateral in excess of
$250,000 is subjected to attachment, execution, levy, seizure or confiscation
in any legal proceeding or otherwise, or if any legal or administrative
proceeding is commenced against any Loan Party or any portion of the Collateral
in excess of $250,000, which in
the good faith judgment of Agent subjects any portion of the Collateral in
excess of $250,000 to a material risk of attachment, execution, levy, seizure
or confiscation and no bond is posted or protective order obtained to negate
such risk;

 

(f)                          one or more judgments, orders or decrees
shall be rendered against any Loan Party or any Subsidiary of a Loan Party that
exceeds by more than $250,000 any insurance coverage applicable thereto (to the
extent the relevant insurer has been notified of such claim and has not denied
coverage therefor) and either (i) enforcement proceedings shall have been
commenced by any creditor upon any such judgment, order or decree or (ii) such
judgment, order or decree shall not have been vacated or discharged for a
period of 20 consecutive days and there shall not be in effect (by reason of a
pending appeal or otherwise) any stay of enforcement thereof;

 

(g)                         (i)  any
Loan Party or any Subsidiary of a Loan Party shall generally not pay its debts
as such debts become due, shall admit in writing its inability to pay its debts
generally, shall make a general assignment for the benefit of creditors, or
shall cease doing business as a

 

24

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

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

 

(h)                         an event or development occurs which could
reasonably be expected to have a Material Adverse Effect;

 

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

 

(j)                          (i) any Loan Party or any Subsidiary
of a Loan Party defaults under any Material Agreement (after any applicable
grace period contained therein), (ii) (A) any Loan Party or any
Subsidiary of a Loan Party fails to make (after any applicable grace
period) any payment when due (whether due because of scheduled maturity,
required prepayment provisions, acceleration, demand or otherwise) on any
Indebtedness (other than the Obligations) of such Loan Party or such Subsidiary
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $250,000 (“Material Indebtedness”),
(B) any other event shall occur or condition shall exist under any
contractual obligation relating to any such Material Indebtedness, if the
effect of such event or condition is to accelerate, or to permit the
acceleration of (without regard to any subordination terms with
respect thereto), the maturity of such Material Indebtedness or (C) any
such Material Indebtedness shall become or be declared to be due and payable,
or be required to be prepaid, redeemed, defeased or repurchased (other than by
a regularly scheduled required prepayment), prior to the stated maturity
thereof, (iii) Borrower or any Subsidiary defaults under any obligation
for payments due under any lease agreement in excess of $50,000, or (iv) any
default under any agreement or document related to the GE Equipment Loan; or

 

(k)                         (i) any of the chief
executive officer, the chief financial officer, chief operating officer or the
vice president of product research and development of Borrower as of the date
hereof shall cease to be involved in the day to day operations or management of
the business of Borrower, and a successor or interim successor of such officer
is not appointed within 180 days of such cessation or involvement, (ii) the
acquisition, directly or indirectly, by any person or group (as such term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934) of
more 

 

25

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

than forty percent (40%) of
the voting power of the voting stock of Borrower by way of merger or
consolidation or otherwise, (iii) beginning on the earlier of 5 days
following the next annual meeting of the shareholders of the Borrower or June 30,
2008, during any
period of twelve consecutive calendar months, individuals who at the beginning
of such period constituted the board of directors of Borrower (together with
any new directors whose election by the board of directors of Borrower or whose
nomination for election by the stockholders of Borrower was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason other than death or
disability to constitute a majority of the directors then in office, or (iv) Borrower
ceases to own and control, directly or indirectly, all of the economic and
voting rights associated with the outstanding voting capital stock (or other
voting equity interest) of each of its Subsidiaries.

 

8.2.    Lender
Remedies.  Upon the occurrence
of any Event of Default, Agent may with the consent of the Requisite Lenders,
and at the written request of the Requisite Lenders shall, terminate the
Commitments and declare any or all of the Obligations to be immediately due and
payable, without demand or notice to any Loan Party and the accelerated
Obligations shall bear interest at the Default Rate pursuant to Section 2.6,
provided that, upon the occurrence of any Event of Default specified in Section 8.1(g) above,
the Obligations shall be automatically accelerated.  After the occurrence of an Event of Default,
Agent shall have (on behalf of itself and Lenders) all of the rights and
remedies of a secured party under the UCC, and under any other applicable law.  Without limiting the foregoing, Agent shall
have the right to, and at the written request of the Required Lenders
shall,  (a) notify any account
debtor of any Loan Party or any obligor on any instrument which constitutes
part of the Collateral to make payments to Agent (for the benefit of itself and
Lenders), (b) with or without legal process, enter any premises where the
Collateral may be and take possession of and remove the Collateral from the
premises or store it on the premises, (c) sell the Collateral at public or
private sale, in whole or in part, and have the right to bid and purchase at
such sale, or (d) lease or otherwise dispose of all or part of the
Collateral, applying proceeds from such disposition to the Obligations in
accordance with Section 8.4.  If
requested by Agent, Loan Parties shall promptly assemble the Collateral and
make it available to Agent at a place to be designated by Agent.  Agent may also render any or all of the
Collateral unusable at a Loan Party’s premises and may dispose of such
Collateral on such premises without liability for rent or costs.  Any notice that Agent is required to give to
a Loan Party under the UCC of the time and place of any public sale or the time
after which any private sale or other intended disposition of the Collateral is
to be made shall be deemed to constitute reasonable notice if such notice is
given in accordance with this Agreement at least 5 Business Days prior to such
action.  Effective only upon the
occurrence and during the continuance of an Event of Default, each Loan Party
hereby irrevocably appoints Agent (and any of Agent’s designated officers or
employees) as such Loan Party’s true and lawful attorney to: (i) take any
of the actions specified above in this paragraph; (ii) endorse such Loan
Party’s name on any checks or other forms of payment or security that may come
into Agent’s possession; (iii) settle and adjust disputes and claims
respecting the accounts directly with account debtors, for amounts and upon
terms which Agent determines to be reasonable; and (iv) do such other and
further acts and deeds in the name of such Loan Party that Agent may deem
necessary or desirable to enforce its rights in or to any of the Collateral or
to perfect or better perfect Agent’s security interest (on behalf of itself and
Lenders) in any of the Collateral.  The
appointment of Agent as each Loan Party’s attorney in fact is a power coupled
with an interest and is irrevocable until the Termination Date.

 

8.3.    Additional
Remedies. In addition to the remedies provided in Section 8.2
above, each Loan Party hereby grants to Agent (on behalf of itself and Lenders)
and any transferee of Collateral, solely for

 

26

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

purposes of exercising its
remedies as provided herein with respect to the Collateral, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to any Loan Party) to use, license or sublicense any Intellectual
Property now owned or hereafter acquired by such Loan Party, and wherever the
same may be located, and including in such license access to all media in which
any of the licensed items may be recorded or stored and to all computer
software and programs used for the compilation or printout thereof subject to
any exclusive license permitted pursuant to Section 7.3(e) and
to any restrictions on use, licensing or sublicensing contained in any Loan
Party’s licenses.

 

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

 

9.             THE
AGENT.

 

9.1.    Appointment
of Agent.

 

(a)                         Each Lender hereby appoints
GECC (together with any successor Agent pursuant to Section 9.9) as
Agent under the Debt Documents and authorizes the Agent to (a) execute and
deliver the Debt Documents and accept delivery thereof on its behalf from Loan
Parties, (b) take such action on its behalf and to exercise all rights,
powers and remedies and perform the duties as are expressly delegated to the
Agent under such Debt Documents and (c) exercise such powers as are
reasonably incidental thereto.  The
provisions of this Article 9 are solely for the benefit of Agent and
Lenders and none of Loan Parties nor any other person shall have any rights as
a third party beneficiary of any of the provisions hereof.  In performing its functions and duties under
this Agreement and the other Debt Documents, Agent shall act solely as an agent
of Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for any Loan Party
or any other person.  Agent shall have no
duties or responsibilities except for those expressly set forth in this
Agreement and the other Debt Documents. 
The duties of Agent shall be mechanical and administrative in nature and
Agent shall not have, or be deemed to have, by reason of this Agreement, any
other Debt Document or otherwise a fiduciary or trustee relationship in respect
of any Lender.  Except as expressly set
forth in this Agreement and the other Debt Documents, Agent shall not have any
duty to disclose, and shall not be liable for failure to disclose, any

 

27

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

information relating to
Borrower or any of its Subsidiaries that is communicated to or obtained by GECC
or any of its affiliates in any capacity.

 

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

 

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

 

28

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN
APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT; [***] DENOTES OMISSIONS.

 

 

 

(d)                         Notwithstanding any other term or provision
of this Agreement or any other Debt Document, Agent shall not be entitled
without the consent or direction of the Requisite Lenders to (i) except as
provided in Section 10.8(c), sell the Collateral at a public or
private sale, in whole or in part, (ii) lease or otherwise dispose of all
or part of the Collateral, (iii) enter into any forbearance agreement with
respect to this Agreement, or (iii) institute any action seeking to
adjudicate any Loan Party a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief,
composition of it or its debts or any similar order, in each case under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors or
seeking the entry of any order for relief or the appointment of a custodian,
receiver, trustee, conservator, liquidating agent, liquidator, other similar
official or other official with similar powers, in each case for it or for any
substantial part of its property.

 

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

 

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

 

29

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

the potential conflict of
interest between GECC as a Lender holding disproportionate interests in the
Term Loans and GECC as Agent, and expressly consents to, and waives, any claim
based upon, such conflict of interest.

 

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

 

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

 

9.6.    Successor
Agent.  Agent may resign at
any time by giving not less than 30 days’ prior written notice thereof to
Lenders and Borrower.  Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Agent.  If no successor Agent shall have
been so appointed by the Requisite Lenders and shall have accepted such
appointment within 30 days after the resigning Agent’s giving notice of
resignation, then the resigning Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a Lender, if a Lender is willing to accept such
appointment, or otherwise shall be a commercial bank or financial institution
or a subsidiary of a commercial bank or financial institution if such
commercial bank or financial institution is organized under the laws of the
United States of America or of any State thereof and has a combined capital and
surplus of at least $300,000,000.  If no
successor Agent has been appointed pursuant to the foregoing, within 30 days
after the date such notice of resignation was given by the resigning Agent,
such resignation shall become effective and the Requisite Lenders shall
thereafter perform all the duties of Agent hereunder until such time, if any,
as the Requisite Lenders appoint a successor Agent as provided above.  Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning Agent.  Upon the earlier of the
acceptance of any appointment as Agent hereunder by a successor Agent or the
effective date of the resigning Agent’s resignation, the resigning Agent shall
be discharged from its duties and obligations under this Agreement

 

30

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

 

 

and the other Debt
Documents, except that any indemnity rights or other rights in favor of such
resigning Agent shall continue.  After
any resigning Agent’s resignation hereunder, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was acting as Agent under this Agreement and the other Debt Documents.

 

9.7.    Setoff and
Sharing of Payments.  In
addition to any rights now or hereafter granted under applicable law and not by
way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default and subject to Section 9.8(e), each
Lender is hereby authorized at any time or from time to time upon the direction
of Agent, without notice to Borrower or any other person, any such notice being
hereby expressly waived, to offset and to appropriate and to apply any and all
balances held by it at any of its offices for the account of Borrower
(regardless of whether such balances are then due to Borrower) and any other
properties or assets at any time held or owing by that Lender or that holder to
or for the credit or for the account of Borrower against and on account of any
of the Obligations that are not paid when due. 
Each Lender hereby agrees to notify the Borrower promptly following any
such offset, appropriation or application. 
Any Lender exercising a right of setoff or otherwise receiving any
payment on account of the Obligations in excess of its Pro Rata Share thereof shall
purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender’s or holder’s Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
offset or otherwise received with each other Lender or holder in accordance
with their respective Pro Rata Shares of the Obligations.  Borrower agrees, to the fullest extent
permitted by law, that (a) any Lender may exercise its right to offset
with respect to amounts in excess of its Pro Rata Share of the Obligations and
may sell participations in such amounts so offset to other Lenders and holders
and (b) any Lender so purchasing a participation in the Term Loans made or
other Obligations held by other Lenders or holders may exercise all rights of
offset, bankers’ lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender or holder were a direct holder of the
Term Loans and the other Obligations in the amount of such participation.  Notwithstanding the foregoing, if all or any
portion of the offset amount or payment otherwise received is thereafter
recovered from the Lender that has exercised the right of offset, the purchase
of participations by that Lender shall be rescinded and the purchase price
restored without interest.  The term “Pro
Rata Share” means, with respect to any Lender at any time, the percentage
obtained by dividing (x) the Commitment of such Lender then in effect (or,
if such Commitment is terminated, the aggregate outstanding principal amount of
the Term Loans owing to such Lender) by (y) the Total Commitment then in
effect (or, if the Total Commitment is terminated, the outstanding principal
amount of the Term Loans owing to all Lenders).

 

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

 

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

 

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

34

 

(b)                         Return of Payments.

 

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

 

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

 

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

 

(d)                         Dissemination of Information.  Agent shall use reasonable efforts to provide
Lenders with any notice of Default or Event of Default received by Agent from,
or delivered by Agent to Borrower, with notice of any Event of Default of which
Agent has actually become aware and with notice of any action taken by Agent
following any Event of Default.  Lenders
acknowledge that Borrower is required to provide financial statements to
Lenders in accordance with Section 6.3  hereto
and agree that Agent shall have no duty to provide the same to Lenders.  Agent agrees that it shall provide reasonable
prior notice to each Lender that is a Lender on the Closing Date and an
opportunity for a representative of each such Lender to accompany Agent on any
inspection of the Collateral.

 

(e)                         Actions in Concert.  Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no
Lender shall take any 

 

 

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406
OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

35

 

action to protect or enforce
its rights arising out of this Agreement, the Notes or any other Debt Documents
(including exercising any rights of setoff) without first obtaining the prior
written consent of Agent and Requisite Lenders, it being the intent of Lenders
that any such action to protect or enforce rights under this Agreement and the
Notes shall be taken in concert and at the direction or with the consent of
Agent and Requisite Lenders; provided, however, nothing in this Section 9.8(e) shall
be deemed to prevent or restrict the right of any Lender from voting,
consenting or filing pleadings and motions in any bankruptcy, insolvency,
receivership or similar proceeding.

 

10.       MISCELLANEOUS.

 

10.1.        Assignment.  Subject to the terms of this Section 10.1,
any Lender may make an assignment to an assignee of, or sell participations in,
at any time or times, the Debt Documents, its Commitment, Term Loans or any
portion thereof or interest therein, including any Lender’s rights, title,
interests, remedies, powers or duties thereunder.  Any assignment by a Lender shall: (i) except
in the case of an assignment to a Qualified Assignee (as defined below),
require the consent of each Lender (which consent shall not be unreasonably
withheld, conditioned or delayed), (ii) require the execution of an
assignment agreement in form and substance reasonably satisfactory to, and
acknowledged by, Agent (an “Assignment Agreement”); (iii) be
conditioned on such assignee Lender representing to the assigning Lender and
Agent that it is purchasing the applicable Commitment and/or Term Loans to be
assigned to it for its own account, for investment purposes and not with a view
to the distribution thereof; (iv) be in an aggregate amount of not less
than $1,000,000, unless such assignment is made to an existing Lender or an
affiliate of an existing Lender or is of the assignor’s (together with its
affiliates’) entire interest of the Term Loans or is made with the prior
written consent of Agent; and (v) include a payment to Agent of an
assignment fee of $3,500.  In the case of
an assignment by a Lender under this Section 10.1, the assignee shall
have, to the extent of such assignment, the same rights, benefits and
obligations as all other Lenders hereunder. 
The assigning Lender shall be relieved of its obligations hereunder with
respect to its Commitment and Term Loans, as applicable, or assigned portion
thereof from and after the date of such assignment.  Borrower hereby acknowledges and agrees that
any assignment shall give rise to a direct obligation of Borrower to the
assignee and that the assignee shall be considered to be a “Lender”.  In the event any Lender assigns or otherwise
transfers all or any part of the Commitments and Obligations, Agent shall so
notify Borrower and Borrower shall, upon the request of Agent, execute new
Notes in exchange for the Notes, if any, being assigned.  Agent may amend Schedule A to this Agreement
to reflect assignments made in accordance with this Section.

 

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

 

 

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE
COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406
OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

36

 

10.2.        Notices.  All notices, requests or other communications
given in connection with this Agreement shall be in writing, shall be addressed
to the parties at their respective addresses set forth on the signature pages hereto
below such parties’ name or in the most recent Assignment Agreement executed by
any Lender (unless and until a different address may be specified in a written
notice to the other party delivered in accordance with this Section), and shall
be deemed given  (a) on the date of
receipt if delivered by hand, (b) on the date of sender’s receipt of
confirmation of proper transmission if sent by facsimile transmission, (c) on
the next Business Day after being sent by a nationally-recognized overnight
courier, and (d) on the fourth Business Day after being sent by registered
or certified mail, postage prepaid.  As
used herein, the term “Business Day” shall mean and include any day
other than Saturdays, Sundays, or other days on which commercial banks in New
York, New York are required or authorized to be closed.

 

10.3.        Correction of Debt Documents.  Agent may correct patent errors and fill in
all blanks in this Agreement or the Debt Documents consistent with the
agreement of the parties; provided, that Agent shall provide Borrower
with 3 Business Days prior written notice, after which, if no objection is made
by Borrower,  such change shall become
effective.

 

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

 

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

 

10.6.        Indemnity. Each Loan Party
shall and does hereby jointly and severally indemnify and defend Agent,
Lenders, and their respective successors and assigns, and their respective
directors, officers, employees, consultants, attorneys, agents and affiliates
(each an “Indemnitee”) from and against all liabilities, losses,
damages, expenses, penalties, claims, actions and suits (including, without
limitation, related reasonable out-of-pocket attorneys’ fees) of any kind
whatsoever arising, directly or indirectly, which may be imposed on, incurred
by or asserted against such Indemnitee as a result of or in connection with
this Agreement, the other Debt Documents or any of the transactions
contemplated hereby or thereby (the “Indemnified Liabilities”); provided
that, no Loan Party shall have any obligation to any Indemnitiee with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
from the gross negligence or willful misconduct of such Indemnitee as
determined by a final non-appealable judgment of a court of competent
jurisdiction.  This provision shall
survive the termination of this Agreement.

 

10.7.        Rights Cumulative.  Agent’s and Lenders’ rights and remedies
under this Agreement or otherwise arising are cumulative and may be exercised singularly
or concurrently.  Neither the failure nor
any delay on the part of Agent or any Lender to exercise any right, power or
privilege under this 

 

 

 

PORTIONS OF THIS EXHIBIT
WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE
SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

37

 

Agreement shall operate as a
waiver, nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise of that or any other right,
power or privilege.  NONE OF AGENT OR ANY
LENDER SHALL BE DEEMED TO HAVE WAIVED ANY OF ITS RESPECTIVE RIGHTS UNDER THIS
AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR PAPER SIGNED BY BORROWER
UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY AGENT, REQUISITE
LENDERS OR ALL LENDERS, AS APPLICABLE.  A
waiver on any one occasion shall not be construed as a bar to or waiver of any
right or remedy on any future occasion.

 

10.8.        Entire Agreement; Amendments, Waivers.

 

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

 

(b)                         Except for actions expressly permitted to be
taken by Agent, no amendment, modification, termination or waiver of any
provision of this Agreement or any other Debt Document, or any consent to any
departure by Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by Agent, Borrower and Lenders having more
than (x) 50%  of the aggregate
Commitments of all Lenders or (y) if such Commitments have expired or been
terminated, 50% of the aggregate outstanding principal amount of the Term Loans
(the “Requisite Lenders”). Except as set
forth in clause (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.

 

(c)                         No amendment, modification,
termination or waiver of any provision of this Agreement or any other Debt
Document shall, unless in writing and signed by Agent and each Lender directly
affected thereby: (i) increase or decrease any Commitment of any Lender or
increase or decrease the Total Commitment (which shall be deemed to affect all
Lenders), (ii) reduce the principal of or rate of interest on any
Obligation or the amount of any fees payable hereunder, (iii) postpone the
date fixed for or waive any payment of principal of or interest on any Term
Loan, or any fees hereunder, (iv) release all or substantially all of the
Collateral, or consent to a transfer of all or substantially all of the
Intellectual Property, in each case, except on the Termination Date or as
otherwise expressly permitted in the Debt Documents, (v) subordinate the
lien granted in favor of the Agent securing the Obligations, (vi) release
a Loan Party  from, or consent to a
Loan Party’s assignment or delegation of, such Loan Party’s obligations
hereunder and under the other Debt Documents  or
any Guarantor from its guaranty of the Obligations  or (vi) amend, modify, terminate or waive Section 8.4
or 10.8(b) or (c).

 

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

 

10.9.        Binding Effect.  This Agreement shall continue in full force
and effect until the  Termination Date; provided, however, that
the provisions of Sections 2.3(f), 9.5, 10.5 and 10.6 and the other indemnities
contained in the Debt Documents shall survive the Termination Date.  The surrender, upon payment or otherwise, of
any Note or any of the other Debt Documents evidencing any of the 

 

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

 

 

38

 

Obligations shall not affect
the right of Agent to retain the Collateral for such other Obligations as may
then exist or as it may be reasonably contemplated will exist in the future.  This Agreement and the grant of the security
interest in the Collateral pursuant to Section 3.1 shall automatically be
reinstated if Agent or any Lender is ever required to return or restore the
payment of all or any portion of the Obligations (all as though such payment
had never been made).

 

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

 

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

 

10.12.      Governing
Law.  THIS AGREEMENT, THE
OTHER DEBT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE
COLLATERAL.  

 

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

 

 

39

 

IF ANY ACTION ARISING OUT OF
THIS AGREEMENT OR ANY OTHER DEBT DOCUMENT IS COMMENCED BY AGENT IN THE STATE
COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR IN THE U.S.
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, EACH LOAN PARTY HEREBY
CONSENTS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION AND TO THE
LAYING OF VENUE IN THE STATE OF NEW YORK. 
ANY PROCESS IN ANY SUCH ACTION SHALL BE DULY SERVED IF MAILED BY
REGISTERED MAIL, POSTAGE PREPAID, TO LOAN PARTIES AT THEIR ADDRESS DESCRIBED IN
SECTION 10.2, OR IF SERVED BY ANY OTHER MEANS PERMITTED BY APPLICABLE LAW.

 

10.13.      Confidentiality.
Agent and each Lender agrees, as to itself, to use commercially
reasonable efforts (equivalent to the efforts Agent or such Lender, as the case
may be, applies to maintaining the confidentiality of its own confidential
information) to maintain as confidential all confidential information provided
to it by Borrower, except that Agent and Lenders may disclose such information (a) to
persons employed or engaged by Agent or a Lender who may have a need to know
such confidential information and then only on the condition that such
confidential information remain confidential; (b) to its
independent accountants and legal counsel (which persons shall be likewise
bound by the provisions of this Section 10.13), (c) pursuant to
statutory and regulatory requirements, (c) pursuant to any mandatory court
order or subpoena or in connection with any legal process, (d) pursuant to
any written agreement hereafter made between Agent, any Lender and Borrower to
which such information relates, which agreement permits such disclosure, (e) as
necessary in connection with the exercise of any remedy by Agent or any Lender
under the Debt Documents, (f) consisting of general portfolio information
that does not identify Borrower or any of its Subsidiaries, (g) which has
heretofore been publicly disclosed or is otherwise available to such Agent and/or
Lender on a non-confidential basis from a source that is not, to its knowledge,
subject to a confidentiality agreement with Borrower, (h) in connection
with any litigation to which Agent or any Lender or its affiliates is a party, (i) subject
to an agreement containing provisions substantially the same as those set forth
in this Section 10.13, to any 
assignee of or participant in, or prospective assignee of or participant
in, any of the Obligations, (j) to any bona fide assignee or
participant or potential assignee or participant that has agreed to comply with
the covenant contained in this Section 10.13 (and any such bona fide
assignee or participant or potential assignee or participant may disclose such
information to Persons employed or engaged by them as described in clause (a) above);
(k) as required or requested by any governmental authority or reasonably
believed by Agent or any Lender to be compelled by any court decree, subpoena
or legal or administrative order or process; (l) as, on the advice of
Agent’s or such Lender’s counsel, required by law; (m) in connection with
the exercise of any right or remedy under the Debt Documents or in connection
with any litigation to which Agent or such Lender is a party or bound; or (n) that
ceases to be confidential through no fault of Agent or such Lender.

 

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

 

[Signature Page Follows]

 

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

 

40

 

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

 

BORROWER:

 

HELICOS BIOSCIENCES CORPORATION

 

	
  By:

  	
  /s/ Stanley N. Lapidus

  	
   

  
	
   

  	
  Name: Stanley N. Lapidus

  	
   

  
	
   

  	
  Title: Chairman and CEO

  	
   

  

 

 

 

Address For Notices For All Loan Parties:

 

 

	
  c/o Helicos Biosciences Corporation

  	
   

  
	
  One Kendall Square, Building 700

  	
   

  
	
  Cambridge, MA 02139

  	
   

  
	
  Attention:

  	
   

  	
   

  
	
  Phone:

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  

 

 

 

41

 

AGENT AND LENDER:

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

	
  By:

  	
  /s/ Danijela Gjenero

  	
   

  
	
   

  	
  Name: Danijela Gjenero

  	
   

  
	
   

  	
  Title: Duly Authorized Signatory

  	
   

  

 

Address For Notices:

 

General Electric Capital Corporation

c/o GE Healthcare Financial Services, Inc., LSF

83 Wooster Heights Road, Fifth Floor

Danbury, Connecticut 06810

Attention: Senior Vice President of Risk

Phone: (203) 205-5200

Facsimile: (203) 205-2192

 

With a copy to:

 

General Electric Capital Corporation

c/o GE Healthcare Financial Services, Inc.

Two Bethesda Metro Center, Suite 600

Bethesda,  Maryland  20814

Attention: General Counsel

Phone: (301) 961-1640

Facsimile: 
(301) 664-9866

 

 

 

42

 

LENDER:

 

CIT HEALTHCARE LLC

 

	
  By:

  	
  /s/ Mark Esposito

  	
   

  
	
   

  	
  Name: Mark Esposito

  	
   

  
	
   

  	
  Title: Assistant Vice President

  	
   

  

 

Address For Notices:

 

CIT Healthcare LLC

305 Fellowship Road, Suite 300

Mount Laurel, New Jersey  08054

Attention:  Legal

Phone: (856) 813-2696

Facsimile: (856) 813-2996

 

 

 

 

 

 

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

43

 

SCHEDULE A

COMMITMENTS

 

	
  Name
  of Lender

  	
   

  	
  Commitment 

  of such Lender

  	
   

  	
  Pro Rata Share

  	
   

  
	
  General
  Electric Capital Corporation

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  	
  50

  	
  %

  
	
  CIT
  Healthcare LLC

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  	
  50

  	
  %

  
	
  TOTAL

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  100

  	
  %

  

 

 

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

 

 

44

 

SCHEDULE
B

DISCLOSURES

 

Existing
Liens

 

	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  Collateral

  	
   

  	
  State and Jurisdiction

  	
   

  	
  Filing Date and Number (include original file 

  date and continuations, 

  amendments, etc.)

  	
   

  
	
  Borrower

  	
   

  	
  General
  Electric Capital Corporation

  	
   

  	
  All
  equipment and other personal property now or hereafter finance under Master
  Security Agreement dated June 9, 2006 and all collateral schedules
  thereunder...

  	
   

  	
  Delaware-
  SOS

  	
   

  	
  06/19/06
  62094159 (O)

  	
   

  
	
  Borrower

  	
   

  	
  General
  Electric Capital Corporation

  	
   

  	
  Various
  equipment including all additions, attachments, accessories and accessions
  thereto, and any and all substitutions, replacements or exchanges therefore
  and all insurance and/or other proceeds thereof.

  	
   

  	
  Delaware-
  SOS

  	
   

  	
  06/20/06
  62176568 (O)

  	
   

  
	
  Borrower

  	
   

  	
  General
  Electric Capital Corporation

  	
   

  	
  Various
  equipment including all additions, attachments, accessories and accessions
  thereto, and any and all substitutions, replacements or exchanges therefore
  and all insurance and/or other proceeds thereof.

  	
   

  	
  Delaware-
  SOS

  	
   

  	
  12/01/06
  64291993 (O)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

 

 

45

 

Existing
Indebtedness

 

	
  Debtor

  	
   

  	
  Creditor

  	
   

  	
  Amount of Indebtedness 

  outstanding as of
            
      ,

  	
   

  	
  Maturity Date

  	
   

  
	
  Borrower

  	
   

  	
  General
  Electric Capital Corporation

  	
   

  	
  $1,028,390
  as of 6/19/06

  	
   

  	
  7/1/09

  	
   

  
	
  Borrower

  	
   

  	
  General
  Electric Capital Corporation

  	
   

  	
  $1,444,252
  as of 11/30/06

  	
   

  	
  10/30/09

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Existing
Investments

 

	
  Debtor

  	
   

  	
  Type of Investment

  	
   

  	
  Date

  	
   

  	
  Amount Outstanding as of           

  	
   

  
	
  Borrower

  	
   

  	
  Wholly
  Owned Subsidiary — Helicos Bioscience Securities Corporation

  	
   

  	
  Formed
  12/23/03

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Material
Agreements

 

1.  The RB Kendall Fee, LLC Lease with respect to
property located at One Kendall Square, Cambridge, Massachusetts

 

2.  General Electric Capital Corporation Master
Security Agreement and Notes dated 6/19/06 and 11/30/06

 

3.  License Agreement with Arizona Technology
Enterprises effective 3/16/05

 

4.  License Agreement with California Institute
of Technology effective 11/30/03

 

5.  License Agreement with Roche Diagnostics
Corporation effective 6/7/04

 

6.  License Agreement with PerkinElmer LAS, Inc.
effective 4/23/07

 

7.  Asset Purchase Agreement with Quiatech AB
dated June 30, 2006

 

8.  Optikos Purchase Order dated
9/18/07 in the amount of 1,572,008

 

 

46

 

 

SCHEDULE
C

BORROWER’S
INVESTMENT POLICY

 

Investment Policy Template

 

The guidelines and criteria set forth below are
examples of investment policy provisions, and are provided for informational
use only.  Your company should not adopt
any particular provision unless appropriate based upon its determination of its
particular needs, objectives and circumstances. 
Please refer to the accompanying Instructions and Definitions when using
this Template.

 

1.                                      Purpose.  This corporate investment
policy is designed to provide the operational guidelines for the management of
the                 company’s corporate
cash assets.

 

2.                                       Objectives.  

 

                                                A.  Preserve capital;

 

                                                B.  Provide sufficient liquidity to satisfy
operating requirements, working capital purposes and strategic initiatives;

 

                                                C. Capture a
market rate of return based on the company’s investment policy parameters and
market conditions.

 

3.                                       Eligible
Instruments.  Assets
subject to this investment policy may be invested only in the following U.S.
dollar                         denominated securities.

 

	
  ·                                          Money market
  mutual funds

  	
   

  	
  ·                                          Obligations
  issued by the U.S. Treasury

  
	
  ·                                          Obligations
  of a U.S. Federal Agency or U.S. 

  	
   

  	
  ·                                          Auction Rate
  Certificates

  
	
                 government sponsored
  enterprise

  	
   

  	
  ·                                          Auction
  Preferred Stock

  
	
  ·                                          Commercial
  Paper

  	
   

  	
  ·                                          Certificates
  of Deposit

  
	
  ·                                          Corporate
  Debt

  	
   

  	
  ·                                          Municipal
  Securities

  
	
  ·                                          Variable Rate
  Demand Obligations

  	
   

  	
  ·                                          Repurchase
  Transactions

  

 

 

4.                                       Final
Maturity.  No security
in the account may have a final maturity of more than 18 months. With respect
to any Eligible Instrument that has an auction or put feature, the next
auction, put or reset date, and not final maturity, should be used as the
instrument’s final maturity for all purposes hereunder including, but not
limited to, application of the weighted average maturity restriction below.

 

5.                                       Weighted
Average Maturity.  The
account’s weighted average maturity may not exceed 6 months.

 

6.                                       Credit
Rating Minimums.  Account
assets may be invested only in Eligible Instruments; (i) bearing a credit
rating of AI, PI or equivalent, or higher for short-term investments and; (ii)
bearing a credit rating of AA or higher for longer-term investments.

 

7.                                       Issuer
Concentration.  No more than
5% or the total portfolio per issuer [and] no more than 25% of the total issue
size outstanding, at the time of purchase. 
U.S. Govt or its sponsored agencies [list exempt security types] are
exempt from these concentration limits.

 

8.                                       Communication.  The investment provider will contact the
company’s Finance Department as soon as reasonable practicable upon the
occurrence of any of the following events:

 

	
   

  	
   

  	
  A.

  	
   

  	
  A security held in the account is downgraded;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
   

  	
  A security held in the account is downgraded causing the credit
  quality to fall below the minimum standards stated in this Investment Policy.

  

 

9.                                       Internal
Controls.  The CFO and
Controller [insert titles] of the company is/are responsible for ensuring that
the company’s investment portfolio is properly accounted for at all times. This
will include:

 

	
   

  	
   

  	
  A.

  	
   

  	
  The
  establishment and maintenance of files for all accounts with broker-dealers
  or asset managers and related transaction confirmations and periodic account
  statements

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
   

  	
  The preparation
  of journal entries on a monthly basis to accrue investment income earned on
  investments, amortization of premiums or discounts, cash receipts and fund
  transfers

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
   

  	
  The
  reconciliation of all period account statements received from the
  organizations investing the company’s cash, and from the company’s custodian,
  to the general ledger

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
   

  	
  The notification
  to an investment provider in the event of any change in the company’s
  investment policy objectives, authorized persons or income tax status

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E.

  	
   

  	
  Confirming that
  an account at a broker-dealer or asset manager conforms to the terms of this
  investment policy statement and notifying the investment provider in the
  event of non-conformance

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

                The company’s CFO
with approval of Audit Committee [insert titles] is/are authorized to amend
this IPS.

 

10.                                 Other.  List any other guidelines, limits or
restrictions applicable to the account.

 

The following investments
are deemed ineligible:

Derivatives

Short Sales or Margin
Purchases

Non-dollar Denominated
Securities

Structured Notes or “Range
Floaters”

 

(c) 2006 UBS Financial Services Inc. 
All rights reserved.  Member SIPC.

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

EXHIBIT A

 

FORM OF PROMISSORY NOTE

 

 [                    ,
        ]

 

FOR
VALUE RECEIVED, HELICOS BIOSCIENCES
CORPORATION, a Delaware corporation located at the address stated below
(“Borrower”), promises to
pay to the order of [Lender] or any subsequent holder hereof (each, a “Lender”),
the principal sum of
                          
and       /100 Dollars ($                                      )
or, if less, the aggregate unpaid principal amount of all Term Loans made by
Lender to or on behalf of Borrower pursuant to the Agreement (as hereinafter
defined).  All capitalized terms, unless
otherwise defined herein, shall have the respective meanings assigned to such
terms in the Agreement.

 

This
Promissory Note is issued pursuant to that certain Loan and Security Agreement,
dated as of
                      ,
20      , among Borrower, the guarantors from
time to time party thereto, General Electric Capital Corporation, as agent and
lender, the other lenders signatory thereto, and Lender (as amended, restated,
supplemented or otherwise modified from time to time, the “Agreement”),
is one of the Notes referred to therein, and is entitled to the benefit and
security of the Debt Documents referred to therein, to which Agreement
reference is hereby made for a statement of all of the terms and conditions
under which the loans evidenced hereby were made.

 

The
principal amount of the indebtedness evidenced hereby shall be payable in the
amounts and on the dates specified in the Agreement.  Interest thereon shall be paid until such
principal amount is paid in full at such interest rates and at such times as
are specified in the Agreement.  The
terms of the Agreement are hereby incorporated herein by reference.

 

All
payments shall be applied in accordance with the Agreement.  The acceptance by Lender of any payment which
is less than payment in full of all amounts due and owing at such time shall
not constitute a waiver of Lender’s right to receive payment in full at such
time or at any prior or subsequent time.

 

All amounts due hereunder and under the other Debt Documents are
payable in the lawful currency of the United States of America.  Borrower hereby expressly authorizes Lender
to insert the date value as is actually given in the blank space on the face
hereof and on all related documents pertaining hereto in accordance with Section 10.3
of the Agreement.

 

This Note is secured as provided in the Agreement and the other Debt
Documents.  Reference is hereby made to
the Agreement and the other Debt Documents for a description of the properties
and assets in which a security interest has been granted, the nature and extent
of the security interest, the terms and conditions upon which the security
interest was granted and the rights of the holder of the Note in respect
thereof.

 

Time is of the essence hereof. 
If Lender does not receive from Borrower payment in full of any
Scheduled Payment or any other sum due under this Note or any other Debt
Document within 3 days after its due date, Borrower agrees to pay the Late Fee
in accordance with the Agreement.  Such
Late Fee will be immediately due and payable, and is in addition to any other
costs, fees and expenses that Borrower may owe as a result of such late payment.

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

 

This
Note may be voluntarily prepaid only as permitted under Section 2.4 of the
Agreement.  After an Event of Default,
this Note shall bear interest at a rate per annum equal to the Default Rate
pursuant to Section 2.6 of the Agreement.

 

Borrower and all parties now or hereafter liable with respect to this
Note, hereby waive presentment, demand for payment, notice of nonpayment,
protest, notice of protest, notice of dishonor, and all other notices in
connection herewith, as well as filing of suit (if permitted by law) and
diligence in collecting this Note or enforcing any of the security hereof, and
agree to pay (if permitted by law) all expenses incurred in collection,
including reasonable out-of-pocket attorneys’ fees and expenses.

 

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

No variation or modification of this Note, or any waiver of any of its
provisions or conditions, shall be valid unless such variation or modification
is made in accordance with Section 10.8 of the Agreement.   Any such waiver, consent, modification or
change shall be effective only in the specific instance and for the specific
purpose given.

 

IN WITNESS
WHEREOF, Borrower has duly executed
this Note as of the date first above written.

 

	
   

  	
  HELICOS
  BIOSCIENCES CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Federal Tax ID#:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
							

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

EXHIBIT B

 

SECRETARY’S CERTIFICATE OF AUTHORITY

 

[DATE]

 

Reference is made to the Loan and Security Agreement, dated as of [              
      ,       ] (as amended, restated, supplemented or
otherwise modified from time to time, the “Agreement”), among [Borrower Name], a [                    ]  [corporation/limited
liability company/limited liability partnership/limited partnership] (the “Borrower”), the guarantors
from time to time party thereto, General Electric Capital Corporation, a
Delaware corporation (“GECC”), as a lender and as agent (in such
capacity, together with its successors and assigns in such capacity, “Agent”),
and the other lenders signatory thereto from time to time (GECC and such other
lenders, the “Lenders”).  Capitalized
terms used but not defined herein are used with the meanings assigned to such
terms in the Agreement.

 

I,
[                                                  ], do hereby certify that:

 

(i)            I am the duly elected, qualified and
acting [Assistant] Secretary of [INSERT NAME
OF LOAN PARTY] (the “Company”);

 

(ii)           attached hereto as Exhibit A
is a true, complete and correct copies of the Company’s [Certificate/Articles of Incorporation or
Articles of Organization/Certificate of Formation] and the [Bylaws/LLC
Agreement/Partnership Agreement],
each of which is in full force and effect on and as of the date hereof;

 

(iii)          each of the following named
individuals is a duly elected or appointed, qualified and acting officer of the
Company who holds the offices set opposite such individual’s name, and such
individual is authorized to sign the Debt Documents to which the Company is a
party and all other notices, documents, instruments and certificates to be
delivered pursuant thereto, and the signature written opposite the name and
title of such officer is such officer’s genuine signature:

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

(iv)          attached hereto as Exhibit B
are true, complete and correct copies of resolutions adopted by the Board of
Directors/Members of the Company (the “Board”) authorizing the
execution, delivery and performance of the Debt Documents to which the Company
is a party, which resolutions were duly adopted by the Board on [DATE]
and all such resolutions are in full force and effect on the date hereof in the
form in which adopted without amendment, modification, rescission or
revocation; and

 

(v)           the foregoing authority shall remain
in full force and effect, and Agent and each Lender shall be entitled to rely
upon same, until written notice of the modification, rescission or revocation
of same, in whole or in part, has been delivered to Agent and each Lender, but
no such modification, rescission or revocation shall, in any event, be
effective with respect to any documents executed or actions taken in reliance
upon the foregoing authority before said written notice is delivered to Agent
and each Lender.

 

 

[Signature Page Follows]

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

 

IN WITNESS WHEREOF, I have hereunto set my
hand as of the first date written above

 

 

	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
  [Assistant] Secretary

  

 

 

The undersigned does hereby certify on behalf of the Company that
he/she is the duly elected or appointed, qualified and acting [TITLE]
of the Company and that [NAME FROM
ABOVE] is the duly elected or
appointed, qualified and acting [Assistant] Secretary of the Company, and that the
signature set forth immediately above is his/her genuine signature.

 

 

	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

 

 

 

 

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

 

 

EXHIBIT B TO SECRETARY’S CERTIFICATE OF AUTHORITY

 

FORM OF
RESOLUTIONS

 

 

 

 

[TO ATTACH ACTUAL
RESOLUTIONS PREPARED BY COMPANY]

 

 

 

 

 

 

 

 

 

 

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

HELICOS BIOSCIENCES CORPORATION

 

UNANIMOUS WRITTEN CONSENT OF THE

BOARD OF DIRECTORS

 

                The undersigned,
being all the directors of Helicos
BioSciences Corporation, a Delaware corporation (the “Company”), hereby consent to and adopt the following
resolutions pursuant to Section 141 of the General Corporation Law of the
State of Delaware and agree that said resolutions shall have the same effect as
if duly adopted at a meeting of the Directors held for the purpose:

 

Loan Agreement

 

	
  RESOLVED:

  	
   

  	
  That it is appropriate and in the best interests of the Company to
  enter into, execute and consummate the transactions contemplated by the
  following documents, each to be executed on or about the date hereof:
  (i) the Loan and Security Agreement by and among the Company, Helicos
  BioSciences Securities Corporation (“Securities Corporation”),
  General Electric Capital Corporation, as agent (the “Agent”)
  and the lenders from time to time parties thereto (the “Lenders”)
  (the “Loan Agreement”), substantially in
  the form attached hereto as Exhibit A and on terms described in
  the Term Sheet attached hereto as Exhibit B in each case with
  such modifications thereto as any Authorized Officer (as defined below) shall
  in such person’s judgment deem to be necessary and appropriate, pursuant to
  which such lenders shall agree to make loans to the Company up to a principal
  amount of $20,000,000 at any time outstanding and (ii) the promissory
  note evidencing the loans made under the Loan Agreement (the “Note”); and further

  
	
   

  	
   

  	
   

  
	
  RESOLVED:

  	
   

  	
  That it is appropriate and in the best interests of the Company to
  enter into, execute and consummate the transactions contemplated by the
  following documents, each to be executed on or about the date hereof:
  (i) the Pledge Agreement by and among the Company and Securities
  Corporation in favor of the Agent (the “Pledge Agreement”)
  and (ii) all other agreements, instruments, documents and certificates
  prepared in connection therewith (the “Other Documents,”
  and together with the Loan Agreement and the Note the “Loan
  Documents”); and further

  
	
   

  	
   

  	
   

  
	
  RESOLVED:

  	
   

  	
  That the borrowing under the Loan Agreement is appropriate and in the
  best interests of the Company and is hereby authorized, approved and adopted
  in all respects; and further

  
	
   

  	
   

  	
   

  
	
  RESOLVED:

  	
   

  	
  That the grant of a continuing security interest in all personal
  property of the Company under Loan Agreement is hereby authorized, approved
  and adopted in all respects; and further

  

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF
THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

 

	
  RESOLVED:

  	
   

  	
  That the terms and provisions of, and the performance of the
  transactions contemplated by the Loan Agreement, the Note, the Pledge
  Agreement and the Guaranty Agreement are hereby authorized, approved and
  adopted in all respects and the Company is hereby authorized to
  (i) enter into the Loan Documents, (ii) perform its obligations
  thereunder and (iii) take all actions contemplated thereby; and further

  
	
   

  	
   

  	
   

  
	
  RESOLVED:

  	
   

  	
  That the Securities Corporation is hereby authorized to
  (i) guarantee all of the obligations under the Loan Documents and
  (ii) secure all of the obligations under the Loan Documents by entering
  into the Guaranty Agreement by the Securities Corporation in favor of the
  Agent; and further

  
	
   

  	
   

  	
   

  
	
  RESOLVED:

  	
   

  	
  That the Chief Executive Officer, President, any Vice President,
  Chief Financial Officer or Treasurer, or Secretary (“Authorized
  Officers”) at the time in office be, and they hereby are
  authorized, directed and empowered, for and on behalf of and in the name of
  the Company to make, execute and deliver the Loan Documents together with any
  and all amendments, supplements, modifications, extensions, restatements,
  renewals, replacements and any additional agreements, documents and
  instruments relating to the foregoing and all such agreements, documents and
  instruments shall contain such terms, conditions and waivers as such officer
  or agent deems necessary or desirable in the interest of the Company, and the
  execution of any such agreement, document or instrument by any such officer
  or agent shall be conclusive proof of the approval of all of the terms and
  conditions thereof for and on behalf of the Company.

  

 

General Authorizations

 

	
  RESOLVED:

  	
   

  	
  That the Authorized Officers be, and each of them hereby is,
  authorized, empowered and directed (i) to execute and deliver in the
  name of and on behalf of the Company any and all additional documents,
  agreements, certificates and other instruments to effectuate any of the
  foregoing resolutions or any of the transactions contemplated thereby, all
  with such changes therein as any said Authorized Officers may deem necessary
  or desirable, and (ii) to take such action (including without limitation
  the filing of any and all applications and the payment of any and all
  expenses), or to cause others to take such action in the name of and on
  behalf of the Company as may in the judgment of the Authorized Officer so
  acting be necessary or desirable in connection with, or in the furtherance
  of, any of the foregoing resolutions or any of the transactions contemplated
  thereby, the execution and delivery of any such document, agreement,
  certificate, or other instrument or the taking of any such action shall be
  conclusive evidence of such Authorized Officer’s authority hereunder to so
  act; and further

  
	
   

  	
   

  	
   

  
	
  RESOLVED:

  	
   

  	
  That the Company is hereby authorized and directed to pay all fees
  and expenses incurred in connection with the execution and performance of the
  Loan Documents; and further

  
	
   

  	
   

  	
   

  
	
  RESOLVED:

  	
   

  	
  That all actions previously taken by any officer or director of the
  Company in connection with any matter referred to in or contemplated by any
  of the foregoing resolutions are hereby ratified, confirmed and approved in
  all respects

  

 

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

as fully as if such actions had been presented to the Board of
Directors for its approval prior to such actions being taken; and further

 

RESOLVED:                               That this
consent be filed with the records of the meetings of the Board of Directors; and
further

 

RESOLVED:                               That this
consent may be executed in counterparts.

 

[Signature Page to Follow]

 

 

 

 

 

 

 

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

 

This Written Consent may be signed in two or
more counterparts, each of which shall be deemed and original but all of which
shall together be considered one and the same instrument.

 

The undersigned further
direct that this Consent shall take effect immediately as of the latest date

 

written below and shall be filed in the minute book
of the Corporation with the minutes of the meetings of

 

the Board of Directors.

 

	
  /s/ Noubar B. Afeyan

  	
   

  	
   

  	
   

  	
  12/20/2007

  	
   

  	
   

  
	
   Noubar B. Afeyan

  	
  Date

  
	
   

  	
   

  
	
  /s/ Stanley N. Lapidus

  	
   

  	
   

  	
   

  	
  12/21/2007

  	
   

  	
   

  
	
   Stanley N. Lapidus

  	
  Date

  
	
   

  	
   

  
	
  /s/ Brian G. Atwood

  	
   

  	
   

  	
   

  	
  Dec. 20, 2007

  	
   

  	
   

  
	
   Brian G. Atwood

  	
  Date

  
	
   

  	
   

  
	
  /s/ Peter Barrett

  	
   

  	
   

  	
   

  	
  12/21/2007

  	
   

  	
   

  
	
   Peter Barrett

  	
  Date

  
	
   

  	
   

  
	
  /s/ Claire M. Fraser-Liggett

  	
   

  	
   

  	
   

  	
  12/27/2007

  	
   

  	
   

  
	
   Claire M. Fraser-Liggett

  	
  Date

  
	
   

  	
   

  
	
  /s/ Robert F. Higgins

  	
   

  	
   

  	
   

  	
  12/27/2008

  	
   

  	
   

  
	
   Robert F. Higgins

  	
  Date

  
	
   

  	
   

  
	
  /s/ Ronald A. Lowy

  	
   

  	
   

  	
   

  	
  12/22/2007

  	
   

  	
   

  
	
   Ronald A. Lowy

  	
  Date

  
	
   

  	
   

  
	
  /s/ Theo Melas-Kyriazi

  	
   

  	
   

  	
   

  	
  December 20, 2007

  	
   

  	
   

  
	
   Theo Melas-Kyriazi

  	
  Date

  
	
   

  	
   

  
	
  /s/ Steven St. Peter

  	
   

  	
   

  	
   

  	
  12/20/2007

  	
   

  	
   

  
	
   Steven St. Peter

  	
  Date

  
												

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

EXHIBIT C-1

 

FORM OF
LANDLORD CONSENT

 

[Landlord]

[Address]

 

[                    ,
        ]

 

Ladies and Gentlemen:

 

General
Electric Capital Corporation (together with its successors and assigns,
if any, “Agent”) and
certain other lenders (the “Lenders”) have entered into, or is about to
enter into, a Loan and Security Agreement, dated as of [DATE]
(as amended, restated, supplemented or otherwise modified from time to time,
the “Agreement”) with [CUSTOMER
NAME] (“Borrower”) [and
                    
(“Company”)], pursuant to
which [Borrower] [Company] has granted, or will grant, to Agent, on behalf of itself
and the Lenders, a security interest in certain assets of [Borrower] [Company], including,
without limitation, all of [Borrower’s] [Company’s] cash, cash
equivalents, accounts, books and records, goods, inventory, machinery,
equipment, furniture and trade fixtures (such as equipment bolted to floors),
together with all addition, substitutions, replacements and improvements to,
and proceeds, including, insurance proceeds, of the foregoing, but excluding
building fixtures (such as plumbing, lighting and HVAC systems (collectively,
the “Collateral”).  Some or all of the Collateral is, or will be,
located at certain premises known as [                                    ] in the City or Town of [                          ,
County of                                                   
and State of               ] (“Premises”), and [Borrower] [Company] occupies the
Premises pursuant to a lease, dated as of [DATE], between [Borrower] [Company], as tenant,
and you, [NAME], as [owner/landlord/mortgagee/realty
manager] (as amended, restated,
supplemented or otherwise modified from time to time, the “Lease”).

 

By your signature below, you
hereby agree (and we shall rely on your agreement) that: (i) the Lease is
in full force and effect and you are not aware of any existing defaults
thereunder, (ii) the Collateral is, and shall remain, personal property
regardless of the method by which it may be, or become, affixed to the
Premises; (iii) you agree to use your best efforts to provide Agent with
written notice of any default by [Borrower] [Company] under the
Lease resulting in a termination of the Lease (“Default Notice”) and
Agent shall have the right, but not the obligation to cure such default within
15 days following Agent’s receipt of such Default Notice, (iv) your
interest in the Collateral and any proceeds thereof (including, without
limitation, proceeds of any insurance therefor) shall be, and remain, subject
and subordinate to the interests of Agent and you agree not to levy upon any
Collateral or to assert any landlord lien, right of distraint or other claim
against the Collateral for any reason; (v) Agent, and its employees and
agents, shall have the right, from time to time, to enter into the Premises for
the purpose of inspecting the Collateral; and (vi) Agent, and its
employees and agents, shall have the right, upon any default by [Borrower] [Company] under the Agreement, to enter into the Premises and to
remove or otherwise deal with the Collateral, including, without limitation, by
way of public auction or private sale (provided that, if Agent conducts a
public auction or private sale of the Collateral at the Premises, Agent shall
use reasonable efforts to notify Landlord first and to hold such auction or
sale in a manner that would not unduly disrupt Landlord’s or any other tenant’s
use of the Premises).  Agent agrees to
repair or reimburse you for any physical damage actually caused to the Premises
by Agent, or its employees or agents, during any such removal or inspection
(other than ordinary wear and tear), provided that it is understood by the
parties hereto that Agent shall not be liable for any diminution in value of
the Premises caused by the removal or absence of the Collateral therefrom.  You hereby acknowledge that Agent shall have
no obligation to remove or dispose of the Collateral from the Premises and no
action by Agent pursuant to this Consent shall be deemed to be an assumption by
Agent of any obligation under the Lease 

 

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

and,
except as provided in the immediately preceding sentence,
Agent shall not have any obligation to you.

 

You hereby acknowledge and
agree that [Borrower’s] [Company’s] granting of a security interest in the Collateral in favor
of Agent, on behalf of itself and the Lenders, shall not constitute a default
under the Lease nor permit you to terminate the Lease or re-enter or repossess
the Premises or otherwise be the basis for the exercise of any remedy available
to you.

 

This Consent and the
agreements contained herein shall be binding upon, and shall inure to the
benefit of, any successors and assigns of the parties hereto (including any
transferees of the Premises).  This
Consent shall terminate upon the indefeasible payment of Borrower’s
indebtedness in full in immediately available funds and the satisfaction in
full of Borrower’s [and Company’s] performance of its obligations under the Agreement and the
related documents.

 

This Consent and any
amendments, waivers, consents or supplements hereto or in connection herewith
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.  Delivery of an executed signature page of
this Consent or any delivery contemplated hereby by facsimile or electronic
transmission shall be as effective as delivery of a manually executed
counterpart thereof.

 

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

We appreciate your
cooperation in this matter of mutual interest.

 

	
   

  	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION, as Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  General Electric Capital Corporation

  	
   

  
	
   

  	
   

  	
  c/o GE Healthcare Financial Services, Inc., LSF

  	
   

  
	
   

  	
   

  	
  83 Wooster Heights Road, Fifth Floor

  	
   

  
	
   

  	
   

  	
  Danbury, Connecticut 06810

  	
   

  
	
   

  	
   

  	
  Attention: Senior Vice President of Risk

  	
   

  
	
   

  	
   

  	
  Phone: (203) 205-5200

  	
   

  
	
   

  	
   

  	
  Facsimile: (203) 205-2192

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  	
   

  
	
   

  	
   

  	
  General Electric Capital Corporation

  	
   

  
	
   

  	
   

  	
  c/o GE Healthcare Financial Services, Inc.

  	
   

  
	
   

  	
   

  	
  Two Bethesda Metro Center, Suite 600

  	
   

  
	
   

  	
   

  	
  Bethesda, Maryland 20814

  	
   

  
	
   

  	
   

  	
  Attention: General Counsel

  	
   

  
	
   

  	
   

  	
  Phone: (301) 961-1640

  	
   

  
	
   

  	
   

  	
  Facsimile:
  (301) 664-9866

  	
   

  
								

 

AGREED TO AND ACCEPTED BY:

 

[NAME], as [owner/landlord/mortgagee/realty manager]

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

Address:

 

AGREED TO AND ACCEPTED BY:

 

[NAME OF LOAN PARTY]

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

Interest in the Premises (check applicable box)

 

o            Owner

 

o            Mortgagee

 

o            Landlord

 

o            Realty Manager

 

Address:

 

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

EXHIBIT
C-2

 

FORM OF
BAILEE CONSENT

 

[Letterhead
of GE Capital]

 

          
      , 200   

 

	
  [NAME
  OF BAILEE]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

Dear
Sirs:

 

Re:  [Name of the Loan Party] (the “Company”)

 

Please accept this letter as
notice that we have entered into or may enter into financing arrangements with
the Company under which the Company has granted to us continuing security
interests in substantially all personal property and assets of the Company and
the proceeds thereof, including, without limitation, certain equipment owned by
the Company held by you at the manufacturing facility (the “Premises”)
owned by you and located at
[                            ](the
“Personal Property”).

 

Please acknowledge that as a
result of such arrangements, you are holding all of the Personal Property
solely for our benefit and subject only to the terms of this letter and our
instructions; provided, however, that until further written notice from
us, you are authorized to use and/or release any and all of the Personal
Property in your possession as directed by the Company in the ordinary course
of business. The foregoing instructions shall continue in effect until we
modify them in writing, which we may unilaterally do without any consent or
approval from the Company.  Upon receipt
of our instructions, you agree that (a) you will release the Personal
Property only to us or our designee; (b) you will cooperate with us in our
efforts to assemble, sell (whether by public or private sale), take possession
of, and remove all of the Personal Property located at the Premises; (c) you
will permit the Personal Property to remain on the Premises for forty-five (45)
days after your receipt of our instructions or at our option, to have the
Personal Property removed from the Premises within a reasonable time, not to
exceed forty-five (45) days after your receipt of our instructions; (d) you
will not hinder our actions in enforcing our liens on the Personal Property;
and (e) after receipt of our instructions, you will abide solely by our
instructions with respect to the Personal Property, and not those of the
Company.

 

You hereby waive and release in our favor: (a) any
contractual lien, security interest, charge or interest and any other lien
which you may be entitled to whether by contract, or arising at law or in
equity against any Personal Property; (b) any and all rights granted under
any present or future laws to levy or distrain for rent or any other charges
which may be due to you against the Personal Property; and (c) any and all
other claims, liens, rights of offset, deduction, counterclaim and demands of
every kind which you have or may hereafter have against the Personal Property.

 

 You agree that (i) you have not and will
not commingle the Personal Property with any other property of a similar kind
owned or held by you in any manner such that the Personal Property is not
readily identifiable, (ii) you have not and will not issue any negotiable
or non-negotiable documents or

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

 

instruments relating to the Personal Property, and (iii) the
Personal Property is not and will not be deemed to be fixtures.

 

Notwithstanding the
foregoing, all of your charges of any nature whatsoever shall continue to be
charged to and paid by the Company and we shall not be liable for such charges.

 

You
hereby authorize us to file at any time such financing statements naming you as
the debtor/bailee, Company as the secured party/bailor, and us as the Company’s
assignee, indicating as the collateral goods of the Company now or hereafter in
your custody, control or possession and proceeds thereof, and including any
other information with respect to the Company required under the Uniform
Commercial Code for the sufficiency of such financing statement or for it to be
accepted by the filing office of any applicable jurisdiction (and any
amendments or continuations with respect thereto).

 

The arrangement as outlined
herein is to continue without modification, until we have given you written
notice to the contrary.

 

EACH OF THE PARTIES HERETO
HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS LETTER.

 

Any
notice(s) required or desired to be given hereunder shall be directed to
the party to be notified at the address stated herein.

 

                The terms and
conditions contained herein are to be construed and enforced in accordance with
the laws of the State of New York.

 

This terms and conditions
contained herein shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.

 

 

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

 

The Company has signed below to indicate its consent to and agreement
with the foregoing arrangements, terms and conditions.  By your signature below, you hereby agree to
be bound by the terms and conditions of this letter.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
  Duly Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  General Electric Capital Corporation

  
	
   

  	
  c/o GE Healthcare Financial Services, Inc., LSF

  
	
   

  	
  83 Wooster Heights Road, Fifth Floor

  
	
   

  	
  Danbury, Connecticut 06810

  
	
   

  	
  Attention: Senior Vice President of Risk

  
	
   

  	
  Phone: (203) 205-5200

  
	
   

  	
  Facsimile: (203) 205-2192

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  General Electric Capital Corporation

  
	
   

  	
  c/o GE Healthcare Financial Services, Inc.

  
	
   

  	
  Two Bethesda Metro Center, Suite 600

  
	
   

  	
  Bethesda, Maryland 20814

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Phone: (301) 961-1640

  
	
   

  	
  Facsimile: (301) 664-9866

  
				

 

Agreed
to:

 

[NAME
OF LOAN PARTY]

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
					

 

[NAME
OF BAILEE]

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
					

 

 

 

PORTIONS
OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY
OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER
RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS.

 

 

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

[DATE]

 

Reference is made to the Loan and Security Agreement, dated as of [              
      ,       ] (as amended, restated, supplemented or
otherwise modified from time to time, the “Agreement”), among [Borrower Name], a [                    ]  [corporation/limited
liability company/limited liability partnership/limited partnership] (the “Borrower”), the guarantors
from time to time party thereto, General Electric Capital Corporation, a
Delaware corporation (“GECC”), in its capacity as agent (in such
capacity, together with its successors and assigns, in such capacity, the “Agent”)
and lender, and the other lenders signatory thereto (GECC and such other
lenders, the “Lenders”). 
Capitalized terms used but not defined herein are used with the meanings
assigned to such terms in the Agreement.

 

I,
[                                                  ], do hereby certify that:

 

(i)            I am the duly elected, qualified and
acting [TITLE] of Borrower;

 

(ii)           attached hereto as Exhibit A
are [the monthly financial
statements]/[annual audited financial statements]/[quarterly
financial statements] as required
under Section 6.3 of the Agreement and that such financial statements are
prepared in accordance with GAAP and are consistently applied from one period
to the next except as explained in an accompanying letter or footnotes;

 

(iii)          Borrower is in compliance with Section 6.8(g) of
the Agreement and attached hereto as Exhibit B is the latest [monthly] statements with respect to the Cash Account
evidencing such compliance;

 

(iv)          no Default or Event of Default has
occurred under the Agreement which has not been previously disclosed, in
writing, to Lender; and

 

(v)           all representations and warranties of
the Loan Parties stated in the Debt Documents are true and correct in all
respects on and as of the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties were true and correct in all respects
on and as of such earlier date.

 

IN WITNESS WHEREOF, I have hereunto set my
hand as of the first date written above

 

	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

 

 

 

 

 

EXHIBIT E

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EPS Setup Form

  	
   

  	
  Submit Via
  Fax:  

  ATTN: EPS
  Facilitator  

  (262) 798-4530

  	
   

  	
  GE Healthcare Financial Services  

  Phone: (262) 798-4494  

  Fax: (262) 798-4530

  
	
   

  	
   

  	
   

  	
   

  	
   

  

1.  Sender Information:                                                                              Instructions To Enroll In EPS Plan:

	
  Sender Name:

  	
   

  	
  A.                                   Complete
  sections 1 - 7 

  (signature and all other information is required)

  
	
  Sender
  Phone Number:

  	
   

  	
  B.                                     Include a
  copy of a voided check, on which is noted your bank, branch and account
  number

  
	
   

  	
   

  	
  C.                                     Please submit via Fax to: (262) 798-4530

  

 

2.  Authorization Agreement for
Pre-Arranged Payment Plan:

(a)                                                                        (“Borrower”) authorizes General
Electric Capital Corporation (“Agent”)
to initiate debit entries for payment becoming due pursuant to the terms and
conditions set forth in the Loan and Security Agreement, dated as of [DATE]
(as amended, restated, supplemented or otherwise modified from time to time,
the “Agreement”), among
Borrower, the guarantors form time to time party thereto, Agent and the lenders
signatory thereto.

 

(b)                     Borrower understands that
the basic term loan payment and all applicable taxes are solely its
responsibility.  If payment is not
satisfied due to account closure, insufficient funds, or cancellation of any
required automated payment services, Borrower agrees to remit payment plus any
applicable late charges, as set forth in the Agreement.

 

(c)                      It is incumbent upon
Borrower to give written notice to Agent of any changes to this authorization
or the below referenced bank account information 10 days prior to payment date;
Borrower may revoke this authorization by giving 10 days written notice to
Agent unless otherwise stipulated in the Agreement.

 

(d)                     If a deduction is made in
error, Borrower has the right to be paid within five business days by Agent the
amount of the erroneous deduction, provided Agent is notified in writing of
such error.

 

(e)                      Cosigner must also sign if
the account is a joint account.

 

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.

 

 

 

 

 

 

3.  Agent
Account Number(s): (Invoice Billing
ID, 10-digit number formatted: 1234567-001)

	
  Account:

  	
   

  	
   

  	
  Account:

  	
   

  	
   

  	
  Account:

  	
   

  	
   

  	
  Account:

  
	
  Account:

  	
   

  	
   

  	
  Account:

  	
   

  	
   

  	
  Account:

  	
   

  	
   

  	
  Account:

  

 

	
  4. First Payment Debit Date (mm/dd/yy)

  	
   

  	
   

  	
  First Payment:

  

 

5.  Complete ALL Bank and Borrower Information:

	
  BANK

  	
   

  	
   

  	
  Name of
  Bank or Financial Institution:

  

  	
   

  	
   

  	
  Bank
  Account Number:

  	
   

  	
   

  	
  ABA
  Routing Number (9-digit number)

  
	
  INFO

  	
   

  	
   

  	
  Address
  of Bank or Financial Institution:

  

  	
   

  	
   

  	
  City:

  	
   

  	
   

  	
  State:                   Zip Code:                   

  

 

 

	
   

  	
   

  	
   

  	
  Signatures

  	
   

  	
   

  	
  Company

  	
   

  	
   

  	
  Contact

  
	
   

  	
   

  	
   

  	
  Signature
  of Authorized Signer: Date:

  	
   

  	
   

  	
  Company
  Name:

  	
   

  	
   

  	
  Contact
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BORROWER

  	
   

  	
   

  	
  Name of
  Joint Account Holder: (Please Print)

  	
   

  	
   

  	
  Company
  Address:

  	
   

  	
   

  	
  Contact
  Phone Number:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INFO

  	
   

  	
   

  	
  Signature
  of Joint Account Holder: Date:

  	
   

  	
   

  	
  City:

  	
   

  	
   

  	
  Contact
  Fax Number:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name of Authorized Signer: (Please
  Print)

  	
   

  	
   

  	
  State:    Zip Code:    

  	
   

  	
   

  	
  Contact email address:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
														

 

6.  Would you like to have
property taxes paid via EPS on above accounts?  
                 Check (X):  YES: o            NO: o

 

7.  Would you like to receive a
complementary invoice?  
                 Check (X):  YES: o            NO: o

 

 

 

PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES
OMISSIONS.Exhibit 10.11

 

Dear Steven C. Oldham:

 

The Board of Directors of SureWest
Communications (“SureWest”) for and on behalf of SureWest and all of its
subsidiaries and affiliates has recently approved this contract to provide
enhanced severance payments and benefits to you in the event of certain
terminations of employment connected with a change in control of SureWest.  This Agreement (“Agreement”) sets forth your
rights and obligations under the Agreement.

 

Payments and benefits provided by this Agreement are in lieu of and not
in addition to any payments or benefits to which you may be otherwise entitled
under any other severance program. 
Furthermore, this is not a contract of employment and nothing contained
herein shall confer on you any right to be retained, in any position, as an
employee, consultant or officer of SureWest or any of its affiliates (the “Companies”),
and you shall remain an employee-at-will.

 

1.               Definitions.  As used in
this Agreement, the following terms shall have the meanings set forth below:

 

(a)          “Board” means the Board of Directors of SureWest.

 

(b)         “Cause” means your (i) conviction of, or
pleading nolo contendere to, a
felony; (ii) conviction of, or pleading nolo
contendere to any misdemeanor involving the purchase or sale or any
security, mail or wire fraud, theft, embezzlement, moral turpitude or property
of the Companies; (iii) material neglect of, willful misconduct in
connection with, or material breach of, your duties to the Companies as an
employee or officer including, without limitation, your obligations to protect
the confidentiality of material non-public information that you have obtained
in the course of your employment, as well as your material obligations under
The SureWest Code of Conduct, as may be amended from time to time, and (iv) any
material breach or violation of the Companies’ Code of Ethics.

 

(c)          “Change in Control” means the first to occur of any
one of the following events:

 

(i)                                     any “Person,”
as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934 (the “Exchange Act”) (other than (A) any of the Companies, (B) any
trustee or other fiduciary holding securities under an employee benefit plan of
any of the Companies, (C) any entity owned, directly or indirectly, by the
stockholders of SureWest in substantially the same proportions as their
ownership of Voting Securities or (D) any corporation or other entity of
which at least a majority of the combined voting power is owned directly or 

 

1

 

indirectly by SureWest) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly (not
including any securities acquired directly (or through an underwriter) from
SureWest or the Companies), of 50% or more of SureWest’s then outstanding
securities eligible to vote in the election of the Board (“Voting Securities”);

 

(ii)           the following
individuals cease for any reason to constitute a majority of the number of
directors then serving on the Board: individuals who, on the date hereof, were
members of the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of SureWest) whose appointment or election by the Board
or nomination for election by SureWest’s stockholders was approved or
recommended by a vote of a majority of the directors then still in office who
either were directors on the date hereof or whose appointment, election or
nomination for election was previously so approved or recommended;

 

(iii)          there is
consummated a merger or consolidation of SureWest with any other corporation or
entity or SureWest issues Voting Securities in connection with a merger or
consolidation of any direct or indirect subsidiary of SureWest with any other
corporation, other than (A) a merger or consolidation that would result in
the stockholders of SureWest immediately prior to such merger or consolidation
continuing to own directly or indirectly immediately after such merger or
consolidation more than 50% of SureWest’s then outstanding Voting Securities or
50% of the combined voting power of the surviving or parent entity in such
merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of SureWest (or similar transaction) in which no
Person, directly or indirectly, acquired 50% or more of SureWest’s then
outstanding Voting Securities (not including any securities acquired directly
(or through an underwriter) from SureWest or the Companies); or

 

(iv)                             the
consummation of a plan of complete liquidation of SureWest or the consummation
of the sale or disposition by SureWest of all or substantially all of SureWest’s
assets to an entity, other than a sale or disposition of all or substantially
all of SureWest’s assets to an entity at least 50% of the combined voting power
of the voting securities of which are owned directly or indirectly by (A) stockholders
of SureWest in substantially the same proportions as their ownership of
SureWest immediately prior to such sale or (B) SureWest.

 

2

 

(d)         “Disability” shall mean a disability that would
qualify as such under SureWest’s long term disability plan applicable to you at
the time of your termination.

 

(e)          “Good Reason” means, without your express consent: (i) material
reduction of your position authority, duties, or responsibilities as they
existed immediately prior to a Change in Control, (ii) material reduction
of your base salary, annual bonus opportunity or long-term incentive
opportunity as they existed immediately prior to a Change in Control, (iii) any
successor corporation or entity’s refusal to expressly assume the obligations
of the Agreement in connection with a Change in Control as required by Section 7
hereof, or (iv) relocation of your primary work location by more than
fifty (50) miles from SureWest’s headquarters. 
Before “Good Reason” has been deemed to have occurred, you must give
SureWest written notice detailing why you believe a Good Reason event has
occurred and such notice must be provided to SureWest within ninety days of the
initial occurrence of such alleged Good Reason event.  SureWest shall then have thirty days after
its receipt of written notice to cure the item cited in the written notice so
that “Good Reason” will have not formally occurred with respect to the event in
question.  This “Good Reason” definition
is intended to comply with Treasury Regulation Section 1.409A-1(n)(2)(i) and
shall be interpreted accordingly.

 

(f)            “Qualifying Termination”
means a termination of your employment (i) by SureWest other than for
Cause or (ii) by you for Good Reason. 
Termination of your employment on account of death, disability or
retirement shall not be  treated as a
Qualifying Termination.  In no event will
a termination of your employment by you for Good Reason constitute a Qualifying
Termination if it occurs more than two years following the initial existence of
a Good Reason event.

 

2.               Payments
Upon Termination of Employment following a Change in Control.  If, within the period beginning (i) on
the approval of a definitive agreement by the Board of Directors of SureWest
(the “Board”), which agreement, if consummated would result in a Change in
Control (ii) the approval by the Board of a transaction or series of
transactions, the consummation of which would result in a Change in Control or (iii) the
public announcement of a tender offer for SureWest’s voting stock, the
completion of which would result in a Change in Control, and ending one (1) year
following a Change in Control, your employment with SureWest terminates
pursuant to a Qualifying Termination, then contingent upon your executing and
not revoking of a release in favor of the Companies substantially in the form
annexed hereto as Exhibit A, you shall be entitled to the following
payments and benefits provided that you execute such release within 45 days
after your Qualifying Termination:

 

(a)          Severance.  On
the first day following expiration of the 7 days period to rescind or revoke
the release attached as Exhibit A following your Qualifying Termination,
SureWest shall pay you a lump sum cash payment equal to three times your annual
salary at the rate in effect on the date of your Qualifying Termination.

 

3

 

(b)         Incentive Compensation.  Notwithstanding any provision of any SureWest
plan to the contrary, SureWest shall pay you on the first day following expiration
of the 7 day period to rescind or revoke the release attached as Exhibit A
following your Qualifying Termination a lump sum cash payment equal to three
times your most recently established annual incentive target award.  In addition, all of your outstanding options
which have not vested as of the date of your Qualifying Termination shall
become immediately vested and remain exercisable for the longer of the period
provided in the applicable award agreement and plan pursuant to which such
options were granted or ninety (90) days, but in no event beyond the Expiration
Date of such option.  Similarly, any
outstanding restricted stock awards, restricted units, or performance grants,
any outstanding targeted long term incentive, or any grant to which you are
entitled under any program, plan, contract or arrangement in existence at the
time of your Qualifying Termination, shall become immediately vested and
nonforfeitable whether or not earned as of the date of the Qualifying
Termination.  Other than as provided in
this Section 2(b), options and other equity-based awards shall continue to
be subject to the applicable terms of the applicable plan and the agreements
pursuant to which they were granted.

 

(c)          Health and Welfare Benefits.

 

(i)            Provided that
you timely elect continuation coverage (as defined in the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”)) under SureWest’s
medical and dental plans as in effect at the time of your Qualifying
Termination, SureWest shall pay all COBRA premiums for you and your dependents
under such plans (or any successor plans) until the earliest of (x) the
termination of your COBRA termination coverage period or (y) the date you
secure subsequent employment with comparable medical and dental coverage.

 

(ii)           SureWest shall
continue to provide you, for 36 months following your Qualifying Termination,
with the same level of accident (AD&D) and life insurance benefits upon
substantially the same terms and conditions (including contributions required by
you for such benefits) as existed immediately prior to the date of your
Qualifying Termination (or, if more favorable to you, as such benefits and
terms and conditions existed immediately prior to the Change in Control);
provided, however, that these benefits shall only be provided to the extent
that the aggregate amount of taxable premiums that are paid by SureWest on your
behalf do not exceed the limit set forth in Section 402(g)(1)(B) of
the Internal Revenue Code of 1986, as amended (the “Code”) in effect for year
in which your separation from service (as defined in Section 409A of the
Code) occurs.

 

4

 

(d)         Retirement Benefits. Your vested accrued benefits
under any Retirement Plan shall be distributed in the time, form and manner as
you elect pursuant to the applicable provisions of such plans.

 

(e)          Outplacement Services.  SureWest shall provide you with reasonable
outplacement services suitable to your position for a period of 12 months
following your Qualifying Termination or, if earlier, until your first
acceptance of an offer of employment.

 

(f)            409A Short-Term
Deferral.  The payments described in
Sections 2(a) and (b) are intended to comply with the short-term
deferral exemption under Section 409A of the Code.  Accordingly, in no event shall such payments
be made later than March 15th following the calendar year in which the
Qualifying Termination occurs.

 

3.               Withholding
Taxes.  SureWest may withhold from all
payments or benefits due to you hereunder or under any other plan or
arrangement of the Companies all taxes which, by applicable federal, state,
local or other law, SureWest determines it is required to withhold therefrom.

 

4.               Certain Additional Payments by
the Company.  Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution to you or for your benefit (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 4)
(a “Payment”) would be subject to the excise tax imposed by Section 4999
of the Code (and/or any corresponding provisions of state or local tax laws) or
any interest or penalties with respect to such excise taxes (such excise taxes,
together with any such interest and penalties, are hereinafter collectively
referred to as “Excise Taxes”), then you shall be entitled to receive an
additional payment (a “Tax Restoration Payment”) in an amount such that after
your payment of all income and other taxes (and any interest or penalties
imposed with respect to such taxes) and Excise Taxes imposed upon the Tax
Restoration Payment, you retain an amount of the Tax Restoration Payment equal
to the Excise Taxes imposed upon the Payments. 
Such tax computations shall be performed applying the then highest
marginal tax rates.

 

All
determinations required to be made under this Section 4, including whether
and when a Tax Restoration Payment is required and the amount of such Tax
Restoration Payment shall be made by Ernst & Young LLP or such other
nationally recognized accounting firm as may be designated by you (the “Accounting
Firm).  Such payment shall be fully made
to you upon any determination that there are Excise Taxes owed but in no event
later than the end of the calendar year next following the calendar year in
which you remit the related taxes ; provided, however, that if you are a “specified
employee” (as defined in, and pursuant to, Treas. Reg. Section 1.409A-1(i) or
any successor regulation) on the date of your separation from service
hereunder, the Tax Restoration Payment shall be made to you no earlier than the
date which is six months after the date of such separation (or, if earlier, the
date of your death) to the

 

5

 

extent
required to avoid adverse tax treatment to you (including, without limitation,
the additional twenty percent (20%) tax for which you would otherwise be liable
under Section 409A(a)(1)(B) in the absence of such deferral).  You and SureWest shall furnish the Accountant
such documentation and documents as the Accountant may reasonably request in
order to make a determination.  SureWest
shall bear all costs that the Accountant may reasonably charge in connection
with performing any calculations contemplated by this Section 4.

 

5.               Covenant
and Conditions.  As a
condition precedent to and in consideration of your receipt of the payments and
benefits set forth above:

 

(a)          You agree to return all property of SureWest.  This includes (i) all documents, data,
materials, details, and copies thereof in any form (electronic or hard copy)
that are the property of SureWest or were created using SureWest resources or
during any hours worked for SureWest including, without limitation, any data
referred to in Section (e) and (ii) all other property of
SureWest including, without limitation, all computer equipment, and associated
passwords, property passes, keys, hardware keys, credit cards, and identification
badges.

 

(b)         You agree that you shall not directly recruit or
solicit any current employee of SureWest to leave the employ of SureWest for
one year following the date of your Qualifying Termination.  The term “directly” as used in this Section 5(b) shall
mean that you shall not initiate such discussions with a then current employee
of the Companies.

 

(c)          You agree to cooperate with SureWest and to provide
all information that SureWest may hereafter reasonably request with respect to
any matter involving your present or former relationship with SureWest, the
work you have performed, or present or former employees of SureWest so long as
such requests do not unreasonably interfere with any other job or important
personal activity in which you are engaged. 
SureWest agrees to reimburse you for all reasonable out-of-pocket costs
you incur in connection therewith.

 

(d)         You agree that, with regard to all confidential
technical, business, tax, financial or proprietary knowledge and information
you may have obtained while employed by SureWest (“Proprietary Information”),
you will not at any time disclose any such Proprietary Information to any
person, firm, corporation, association, governmental agency, employee, or
entity or use any such Proprietary Information for your own benefit or for the
benefit of any other person, firm, corporation, or other entity, except
SureWest and except as may be required by court order or subpoena.  You agree to notify the SureWest Office of
General Counsel at the address noted above as soon as practicable after your
receipt of such a court order or subpoena. 
For purposes of this Agreement, the term “Proprietary Information” does
not include information that is the public domain. For purposes of this
Agreement, the term “Proprietary Information” shall include,

 

6

 

but
not be limited to, non-public aspects of all information about or relating to
SureWest which:

 

(i)            relates to
specific matters such as trade secrets, pricing and advertising techniques or
strategies, research and development activities, software development, market
development, exchange registration, SureWest’s costs, expenses, human resources
or other employment issues, matters relating to pending litigation, any matters
pertaining to pending, past or future mergers, studies, market penetration
plans, listing retention plans and strategies, marketing plans and strategies,
financial information, communication and/or public relations products, plans,
programs, and strategies, financial formulas and methods relating to SureWest’s
business, computer software programs, accounting policies and practices, tax
information, information from and about tax returns, tax strategies, policies
and methods, and all strategic plans or other matters, strategies, and
financial or operating information pertaining to clients, lenders, customers,
counsel, or transactions as they may exist from time to time which you may have
acquired or obtained directly or indirectly by virtue or your employment with
SureWest; and/or,

 

(ii)           is known to you
from your confidential employment relationship with  SureWest.

 

The information described above shall be
presumed to constitute “Proprietary Information,” except to the extent that the
same information: (i) was known to you prior to your employment with
SureWest as evidenced by written records in your possession prior to such
disclosure; (ii) was lawfully disclosed to you following the end of your
employment with SureWest by a third party under no obligation of
confidentiality; or (iii) is generally known and available to all persons
in the securities industry.

 

(e)          You agree that you shall not
issue, circulate, publish or utter any false or disparaging, statement,
remarks, opinions or rumors about SureWest or its shareholders unless giving
truthful testimony under subpoena or court order.  Notwithstanding the preceding or any other
provision of this Agreement to the contrary, you may provide truthful
information to any government agency or self-regulatory organization with or
without subpoena or court order.

 

(f)            You agree to cancel,
terminate and rescind any previous contract or agreement which provides for any
benefits on a Change in Control and that your execution of this Agreement shall
effectuate a termination, cancellation and rescinding of such agreement.

 

6.               Breach of
Agreement.  If you
materially breach or threaten to materially breach this Agreement, including
but not limited to your obligations in Section 5 above and/or commence a
suit or action or complaint in contravention of the release attached as

 

7

 

Exhibit A, you acknowledge that SureWest’s
obligation to make the payments and/or provide the benefits referred to above
shall immediately cease, and that SureWest shall have, in addition to all other
rights or remedies provided in law or in equity by reason of your material
breach, the right to seek the return of all payments and benefits paid pursuant
to this Agreement unless prohibited by applicable law or regulation.  You specifically agree and acknowledge that
SureWest, after affording you reasonable, written notice of the material breach
or threatened material breach of this Agreement and of the reasonable opportunity
to cure, has the right to cease performing their obligations under this
Agreement in advance of any determination of material breach by a court of
competent jurisdiction.  If SureWest
ceases performing its obligations due to such material breach or threatened
material breach and a court of competent jurisdiction later determines that
such action was without right, SureWest agrees to promptly pay you all monies
thus withheld plus simple interest at the prime rate in effect at the time the
payments ceased and your reasonable costs and expenses incurred in such action
(including attorney fees).  If SureWest
ceases performing their obligations due to such material breach or threatened
material breach and a court of competent jurisdiction later determines that a
breach occurred and that such action was thus appropriate and permitted under
this Agreement, you agree to pay, in addition to such other costs as court may
direct, all of SureWest’s reasonable costs and expenses, including attorney’s
fees, unless prohibited by applicable law or regulation.

 

7.               Binding
Agreement; Successors. 
SureWest shall require any successor, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially all of
the business and/or assets of SureWest, by written agreement to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that SureWest would be required to perform it if no such succession had
taken place.  This Agreement shall inure
to the benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributes, devisees and
legatees.  If you die while any amounts
would be payable to you hereunder had you continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to such person or persons appointed in writing by you to receive
such amounts or, if no person is so appointed, to your estate.

 

8.               Governing
Law and Miscellaneous.  The
law of the State of California shall govern this Agreement without given effect
to its conflict of law principles. 
Should a court of competent jurisdiction find that any provision of this
Agreement is void, voidable, illegal, or unenforceable, no other provision
shall be affected thereby and the balance shall be interpreted in a manner that
gives effect to the intent of the parties. 
The parties agree that the normal rule of construction that holds
that all ambiguities are construed against the drafting party will not apply to
the interpretation of this Agreement. 
You and SureWest acknowledge that this, along with the release attached
as Exhibit A, and any award agreements you entered into under the Equity
Plan, is our entire agreement.  We
further acknowledge that the headings in this

 

8

 

Agreement are for
convenience only and have no bearing on the meaning of this Agreement.

 

	
  9.

  	
  Section 409A. This
  Agreement is intended to comply with the applicable requirements of
  Section 409A and shall be limited, construed and interpreted in a manner
  so as to comply therewith. Notwithstanding the foregoing, SureWest agrees to
  consent to any amendments that are reasonably necessary or advisable to
  comply with Section 409A or an exemption therefrom.

  

 

	
  10.

  	
  Term. This
  agreement shall terminate three years after the date of execution except on
  occurrence of a Change in Control or an event described in Section 2
  above, in which event, the Agreement shall expire on the later of
  (i) three years; (2) termination of an event described in
  Section 2 which, if consummated, would result in a Change in Control or;
  (iii) one year following a Change in Control.

  

 

Please sign and date this Agreement and return the signed copy to Darla
Yetter.

 

	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
  /s/ Kirk C. Doyle

  	
   

  	
   

  
	
  Kirk C. Doyle

  	
   

  
	
   

  	
   

  
	
  Agreed and Acknowledged:

  	
   

  
	
   

  	
   

  
	
  /s/ Steven C. Oldhamn

  	
  2/7/2008

  	
   

  	
   

  
	
  Steven C. Oldham

  	
  Date

  	
   

  
				

 

9

 

EXHIBIT A

 

GENERAL
RELEASE AND COVENANT NOT TO SUE

 

Reference is made to that certain Change in
Control Agreement (the “CIC Agreement”) entered into as of                               ,
by and between SureWest and you (“Employee”). 
Capitalized terms not defined herein shall have the meaning ascribed to
such terms in the CIC Agreement.

 

FOR GOOD
AND VALUABLE CONSIDERATION, as set forth in the CIC
Agreement (which is incorporated herein by reference as if set forth fully
herein and made a part hereof), the receipt, sufficiency and adequacy of which
is hereby acknowledged by Employee’s signature below, Employee agrees as
follows:

 

1.             Acknowledgement and Release.  Employee on behalf of Employee and Employee’s
heirs, successors and assigns, hereby fully and completely releases and waives
any and all claims, complaints, causes of action or demands of whatever kind
which Employee has or may have against SureWest (the “Company”) its
predecessors, successors, current and former parent entities, owners,
shareholders, subsidiaries and affiliates and all officers, employees, board
members and agents of those persons and companies (the “Released Parties”),
arising out of any employment or other matters between Employee and the Company
and/or its subsidiaries or affiliates occurring prior to Employee’s execution
of this release (“Release”) other than claims Employee may have (i) under
the CIC Agreement by and between Employee and the Company, dated [DATE], (ii) under
any other written agreement between Employee and the Company and/or its
subsidiaries or affiliates or (iii) claims for vested benefits accrued
under any employee benefit plan of the Company or its subsidiaries or
affiliates.  Notwithstanding anything
herein to the contrary, Employee does not release and discharge the Company
from any claims, rights, demands, actions, obligations and causes of action
arising from or in any way connected with Employee’s rights to receive
indemnification from the Company and/or its subsidiaries or affiliates, whether
pursuant to applicable law or contract, for acts, events, or omissions arising
during the term of Employee’s employment or service with the Company.

 

Employee understands and agrees that this
Release is a full and complete waiver of all claims including, without
limitation, claims to attorneys’ fees and costs, claims of wrongful discharge,
constructive discharge, breach of contract, breach of the covenant of good
faith and fair dealing, harassment, retaliation, discrimination, violation of
public policy, defamation, invasion of privacy, interference with a leave of
absence, personal injury or emotional distress and claims under Title VII of
the Civil Rights Act of 1964, the Fair Labor Standards Act, the Equal Pay Act
of 1963, the Americans With Disabilities Act, the Civil Rights Act of 1866, the
Age Discrimination in Employment Act of 1967 (ADEA), as amended by Older
Workers Benefit Protection Act of 1990, the California Labor Code, the
California Fair Employment and Housing Act, the California Family Rights Act,
the Family Medical Leave Act, the Employee Retirement Income Security Act of
1974, the National Labor Relations Act or any other federal or state law 

 

10

 

or regulation relating to employment or employment discrimination.  Employee further understands and agrees that
this waiver includes all claims, known and unknown, to the greatest extent
permitted by applicable law.

 

Employee also hereby agrees that nothing contained in
this Release shall constitute or be treated as an admission of liability or
wrongdoing by the parties.

 

In addition, Employee hereby expressly waives any and
all rights and benefits conferred upon Employee by the provisions of Section 1542
of the Civil Code of the State of California, which states as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

	
  2.

  	
  Covenant Not to Sue.

  	
   

  

 

(a)           To
the fullest extent permitted by law, except as set forth in Sections 2(b) and
(c) below, at no time subsequent to the date this Release becomes
effective shall Employee pursue or prosecute (or cause or knowingly permit the
pursuit or prosecution of) any claim released under this Release (a “Released
Claim”) in (1) any state, federal or foreign court, (2) any local,
state, federal or foreign administrative agency, or (3) any other
tribunal.

 

(b)           Section 2(a) shall not
prohibit Employee from filing a charge or complaint with the Equal Employment
Opportunity Commission (“EEOC”) or Department of Fair Employment and Housing
(DFEH) or participating in an investigation or proceeding conducted by the EEOC
or DFEH.  However, Employee understands
and agrees that while Employee may participate in such an investigation or proceeding,
Employee is waiving his right to recover in any such action Employee might
commence or that may be commenced on Employee’s behalf before the EEOC or DFEH.

 

(c)           Section 2(a) shall not
prohibit Employee from challenging whether any Released Claim covered by the
Age Discrimination in Employment Act of 1967 as amended by the Older Workers
Benefit Protection Act of 1990 was effectively released in accordance with the
requirements of such laws.  However,
Employee understands and agrees that while Employee may challenge the validity
of such release, unless such release is found to be invalid, Employee is
waiving her right to recover with respect to all Released Claims (including
those covered by the Age Discrimination in Employment Act of 1967 as amended by
the Older Workers Benefit Protection Act of 1990) under this Release.

 

(d)           If Employee breaches the provisions
of Section 2(a), Employee will pay for all costs incurred by the Released
Parties, including reasonable attorneys’ fees, in defending against such claim.

 

11

 

	
  3.

  	
  Other Provisions.

  	
   

  

 

(a)           If
any provision of this Release is found to be unenforceable, it shall not affect
the enforceability of the remaining provisions and the court shall enforce all
remaining provisions to the full extent permitted by law.

 

(b)           This
Release constitutes the entire agreement between Employee and the Company with
regard to the subject matter of this Release. 
It supersedes any other agreements, representations or understandings,
whether oral or written and whether express or implied, which relate to the
subject matter of this Release.  Employee
and the Company understand and agree that this Release may be modified only in
a written document signed by Employee and an authorized officer of the Company.

 

(c)           Employee
understands that Employee has the right to consult with an attorney before
signing this Release.  Employee also
understands that, as provided under ADEA, as amended by the Older Workers
Benefit Protection Act of 1990, Employee has at least 21 days after receipt of
this Release to review and consider this Release, discuss it with an attorney
of Employee’s own choosing, and decide to execute it or not execute it.  Employee also understands that Employee may
revoke this Release during a period of seven days after Employee signs it and
that this Release will not become effective for seven days after Employee signs
it (and then only if Employee does not revoke it).  In order to revoke this Release, within seven
days after Employee executes this Release, Employee must deliver to the Company
a letter stating that Employee is revoking it, in which case it will have no
effect.

 

(d)           Employee
agrees not to disclose to others the terms of this Release, except that Employee
may disclose such information to Employee’s spouse and Employee may disclose
such information to Employee’s attorneys or accountants in order for such
attorneys or accountants to render services to Employee related to this
Release.

 

12

 

(e)           Employee
states that before signing this Release, Employee:

 

	
  ·

  	
  Has read it,

  
	
   

  	
   

  
	
  ·

  	
  Understands it,

  
	
   

  	
   

  
	
  ·

  	
  Knows that he or she is giving up important rights,

  
	
   

  	
   

  
	
  ·

  	
  Is aware of his
  or her right to consult an attorney before signing it,and

  
	
   

  	
   

  
	
  ·

  	
  Has signed it knowingly and voluntarily.

  

 

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Steven C. Oldhamn

  
	
   

  	
  Steven C. Oldham

  
	
   

  	
   

  
	
   

  	
  Date:

  	
     2/7/2008

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUREWEST COMMUNICATIONS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
				

 

13

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