Document:

EXHIBIT
10.7

 

EXECUTION
COPY

 

 

U.S.
$50,000,000

 

LOAN
AGREEMENT

 

Dated
as of March 5, 2003

 

Between

 

OSIRIS
ACQUISITION II, INC.,

 

as
Borrower

 

and

 

BOSTON
SCIENTIFIC CORPORATION,

 

as
Lender

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE
  I

  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01 Certain
  Defined Terms

  	
   

  	
  1

  
	
  SECTION 1.02 Other Defined
  Terms

  	
   

  	
  8

  
	
  SECTION 1.03
  Interpretation and Rules of Construction

  	
   

  	
  8

  
	
  SECTION 1.04 Accounting
  Terms

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  AMOUNTS AND TERMS OF THE ADVANCES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01 The Advances

  	
   

  	
  9

  
	
  SECTION 2.02 Making the
  Advances

  	
   

  	
  9

  
	
  SECTION 2.03 Repayment of
  Advances

  	
   

  	
  10

  
	
  SECTION 2.04 Interest

  	
   

  	
  11

  
	
  SECTION 2.05 Termination
  or Reduction of the Commitment

  	
   

  	
  11

  
	
  SECTION 2.06 Prepayments
  (Conversion)

  	
   

  	
  11

  
	
  SECTION 2.07 Payments and
  Computations

  	
   

  	
  13

  
	
  SECTION 2.08 Use of
  Proceeds

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  CONDITIONS TO EFFECTIVENESS AND LENDING

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01 Conditions
  Precedent to Effectiveness of Section 2.01

  	
   

  	
  13

  
	
  SECTION 3.02 Conditions
  Precedent to Each Advance

  	
   

  	
  13

  
	
  SECTION 3.03 Lender’s Option
  to Cease Making Advances

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01 Organization,
  Authority and Qualification of the Lender

  	
   

  	
  15

  
	
  SECTION 4.02 Capital Stock
  of the Borrower; Ownership of Shares

  	
   

  	
  15

  
	
  SECTION 4.03 Authority and
  Qualification of the Borrower

  	
   

  	
  15

  
	
  SECTION 4.04 No Conflict

  	
   

  	
  15

  
	
  SECTION 4.05 Full
  Disclosure

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  REPRESENTATIONS AND WARRANTIES OF THE LENDER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01 Organization
  and Authority of the Lender

  	
   

  	
  16

  

 

 

i

 

	
  SECTION 5.02 No Conflict

  	
   

  	
  16

  
	
  SECTION 5.03 Governmental
  Consents and Approvals

  	
   

  	
  17

  
	
  SECTION 5.04 Brokers

  	
   

  	
  17

  
	
  SECTION 5.05 Lender
  Qualifications

  	
   

  	
  17

  
	
  SECTION 5.06 No
  Governmental Endorsement

  	
   

  	
  17

  
	
  SECTION 5.07 Legends

  	
   

  	
  17

  
	
  SECTION 5.08 Compliance
  with Legal Obligations

  	
   

  	
  18

  
	
  SECTION 5.09 Full
  Disclosure

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  COVENANTS OF THE BORROWER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01 Affirmative
  Covenants

  	
   

  	
  18

  
	
  SECTION 6.02 Reporting
  Requirements

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01 Events of
  Default

  	
   

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  CONFIDENTIALITY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01
  Confidentiality

  	
   

  	
  21

  
	
  SECTION 8.02 Release from
  Restrictions

  	
   

  	
  22

  
	
  SECTION 8.03 Public Announcements
  and Publications

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01 Further
  Action

  	
   

  	
  23

  
	
  SECTION 9.02 Amendments,
  Etc.

  	
   

  	
  23

  
	
  SECTION 9.03 Notices

  	
   

  	
  23

  
	
  SECTION 9.04 No Waiver;
  Remedies

  	
   

  	
  24

  
	
  SECTION 9.05 Costs and
  Expenses

  	
   

  	
  24

  
	
  SECTION 9.06 Binding
  Effect

  	
   

  	
  25

  
	
  SECTION 9.07 Severability

  	
   

  	
  25

  
	
  SECTION 9.08 Entire
  Agreement

  	
   

  	
  25

  
	
  SECTION 9.09 No Third
  Party Beneficiaries

  	
   

  	
  25

  
	
  SECTION 9.10 Governing Law

  	
   

  	
  25

  
	
  SECTION 9.11 Counterparts

  	
   

  	
  25

  
	
  SECTION 9.12 Waiver of
  Jury Trial

  	
   

  	
  25

  

 

ii

 

	
  Exhibits

  	
   

  	
   

  
	
  Exhibit A - Form of
  Promissory Note

  	
   

  	
   

  
	
  Exhibit B - Form of Notice
  of Borrowing

  	
   

  	
   

  
	
  Exhibit C - Borrower
  Charter Documents

  	
   

  	
   

  

 

 

iii

 

LOAN
AGREEMENT

 

Dated
as of March 5, 2003

 

 

                LOAN
AGREEMENT (this “Loan Agreement” or “Agreement”) between OSIRIS ACQUISITION II, INC., a Delaware
corporation (the “Borrower”) as borrower
and BOSTON SCIENTIFIC CORPORATION, a Delaware corporation (the “Lender” and, together with the Borrower, the “Parties”) as lender.

 

                WHEREAS,
the Borrower and the Lender are as of the date hereof entering into the
Investment Agreement (as defined below) and the other Investment Agreements (as
defined below); and

 

                NOW,
THEREFORE, in consideration of the premises and the mutual representations and
warranties, agreements and covenants hereinafter set forth, the Parties hereby
agree as follows:

 

ARTICLE
I

 

DEFINITIONS
AND ACCOUNTING TERMS

 

                SECTION
1.01 Certain Defined Terms.

 

                As
used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms
of the terms defined):

 

                “Action” means any claim, action,
suit, arbitration, inquiry, proceeding or investigation by or before any
Governmental Authority.

 

                “Advance” means an advance by the
Lender to the Borrower pursuant to Article II.

 

                “Advance Date” shall have the meaning
specified in Section 2.02(a).

 

                “Affiliate” means, as to any Person,
any other Person that, directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such Person. For purposes of this definition, the term “control”
(including the terms “controlling”,
“controlled by” and “under common control with”) of a
Person means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of Voting Stock, by contract or otherwise.

 

 

                “Automatic Conversion” means the
occurrence of an automatic conversion of Preferred Stock into Common Stock as
provided under Section 3(a)(ii) of Article IV (or any successor provision)
of the Certificate of Amendment.

 

                “Average Selling Price” has the
meaning specified in the Development Agreement.

 

                “Board of Directors” means the board
of directors of the Borrower.

 

                “Borrower Charter Documents” means
the Certificate of Incorporation and the By-laws.

 

                “BSC Representative” shall have the
meaning specified in the Development Agreement.

 

                “Budget” shall have the meaning specified
in the Development Agreement.

 

                “Business Day” means any day that is
not a Saturday, a Sunday or any other day on which banks are required or
authorized by law to be closed in the City of New York.

 

                “By-laws” means by-laws of the
Borrower.

 

                “Capitalized Lease” means any
obligation owed by a person as lessee under leases that have been or should be,
in accordance with GAAP, recorded as capital leases.

 

                “Certificate of Amendment” shall have
the meaning specified in the Investment Agreement.

 

                “Certificate of Incorporation” means
the certificate of incorporation of the Borrower.

 

                “Clinical Development” shall have the
meaning specified in the Development Agreement.

 

                “Clinical Trial Costs” shall have the
meaning specified in the Development Agreement.

 

                “Commitment” means $50,000,000, as
such amount may be reduced from time to time pursuant to the terms of this
Agreement.

 

                “Common Shares” means shares of
Common Stock.

 

                “Common Stock” means the common stock
of the Borrower, par value $0.001 per share.

 

                “Confidential Information” means all
nonpublic proprietary information and materials (whether or not patentable),
disclosed by a Disclosing Party to a Receiving Party, irrespective of the
manner in which the Disclosing Party disclosed such information to the
Receiving Party, in furtherance of this Agreement, including, without

 

2

 

limitation, substances, formulations,
techniques, methodologies, equipment, data, reports, correspondence, know-how,
manufacturing documentation, financial information and sources of supply, as
well as the existence of this Agreement.

 

                “Consolidated” refers to the
consolidation of accounts in accordance with GAAP.

 

                “Contract Manufacturing Agreement”
means the Contract Manufacturing Agreement entered into as of the date hereof
between the Borrower and the Lender.

 

                “Controlled Group” means all members
of a controlled group of corporations and all members of a controlled group of
trades or businesses (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section 414(b)
or 414(c) of the Internal Revenue Code or Section 4001 of ERISA.

 

                “Conversion Date” means December 31,
2008, or if on or prior to December 31, 2008 the FDA has notified the Borrower
that it will require “survival endpoints” prior to approval of a particular
Product, then Conversion Date means December 31, 2009.

 

                “Deemed Advance” shall have the
meaning specified in Section 2.02(b).

 

                “Default” means any Event of Default
or any event that would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.

 

                “Development Agreement” means the
Development Agreement entered into as of the date hereof between the Borrower
and the Lender.

 

                “Disclosing Party” means a Party
disclosing Confidential Information.

 

                “Eligible Costs and Expenses” means
costs and expenses in connection with activities pursuant to the R&D Plan
and in accordance with the Budget, including, without limitation, (i) Clinical
Trial Costs incurred in connection with Pre-Clinical Development and Clinical Development
of the Products and (ii) costs and expenses of the Borrower incurred in
connection with Pre-Clinical Development of Products in the event that the BSC Representative
has final decision-making authority with respect to Pre-Clinical Development of
such Product.

 

                “Encumbrance” means any security
interest, pledge, hypothecation, mortgage, lien (including, without limitation,
environmental and tax liens) or other encumbrance.

 

                “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.

 

                “Events of Default” shall have the
meaning specified in Section 7.01.

 

                “Fair Market Value” means, at any
time, with respect to a date of determination: (i) with respect to any
specified number of Common Shares, (A) if the Common Shares

 

 

3

 

are then traded on a national securities
exchange or through the Nasdaq National Market or the Nasdaq Small Cap Market,
the average of the closing share price of one Common Share for the immediately
preceding 20 Business Day period on such exchange or market, (B) if
the Common Shares are not then traded on such an exchange or market, but are
traded on the over-the-counter market, the average of the closing bid and asked
prices of one Common Share for the immediately preceding 20 Business Day
period reported by such market, or (C) if the Common Shares are not then
traded on any recognized exchange or market, the value of one Common Share as
mutually agreed by the Borrower and the Lender, or, in the absence of such
agreement, as determined by an independent investment banking firm of national
reputation appointed by the Lender, the costs and expenses of which shall be
divided equally between the Borrower and the Lender, in each case multiplied by
such specified number of Common Shares; or (ii) with respect to any
specified number of Preferred Shares, the value of one Preferred Share as
mutually agreed by the Borrower and the Lender, or, in the absence of such
agreement, as determined by an independent investment banking firm of national
reputation appointed by the Lender, the costs and expenses of which shall be
divided equally between the Borrower and the Lender, multiplied by such
specified number of Preferred Shares.

 

                “FDA” means the United States Food
and Drug Administration.

 

                “GAAP” shall have the meaning
specified in Section 1.04.

 

                “Governmental Authority” means any
United States or non-United States federal, national, supranational, state,
provincial, local, or similar government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body.

 

                “Governmental Order” means any order,
writ, judgment, injunction, decree, stipulation, determination or award entered
by or with any Governmental Authority.

 

                “Indebtedness” means, with respect to
any Person, (a) all indebtedness of such Person, whether or not contingent, for
borrowed money, (b) all obligations of such Person for the deferred purchase
price of property or services, (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capitalized
Leases, (f) all obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, (g) all obligations of such
Person to purchase, redeem, retire, defease or otherwise acquire for value any
capital stock of such Person or any warrants, rights or options to acquire such
capital stock, valued, in the case of redeemable preferred stock, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends, (h) all indebtedness of others referred to in clauses (a)
through (g) above guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person through
an agreement (i) to pay or purchase such indebtedness or to advance or supply
funds for the payment or purchase of such indebtedness, (ii) to purchase, sell
or

 

4

 

lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the debtor to
make payment of such indebtedness or to assure the holder of such indebtedness
against loss, (iii) to supply funds to the debtor (including any agreement to
pay for property or services irrespective of whether such property is received
or such services are rendered) or (iv) otherwise to assure a creditor against
loss, and (i) all indebtedness referred to in clauses (a) through (g) above
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness.

 

                “Indemnified Party” shall have the
meaning specified in Section 9.05(b).

 

                “Investment Agreement” means the
Investment Agreement entered into as of the date hereof between the Borrower
and the Lender.

 

                “Investment Agreements” means the
Investment Agreement, this Agreement, the Note, the Investor Rights Agreement,
the License Agreement, the Development Agreement and the Contract Manufacturing
Agreement.

 

                “Investor Rights Agreement” means the
Investor Rights Agreement entered into as of the date hereof between the
Borrower and the Lender.

 

                “Joint Steering Committee” shall have
the meaning specified in the Development Agreement.

 

                “Law” means any United States or
non-United States federal, national, supranational, state, provincial, local or
similar statute, law, ordinance, regulation, rule, code, order, requirement or
rule of law.

 

                “Lender Account” means a bank account
to be designated by the Lender in a written notice to the Borrower no less than
two Business Days prior to the date the Lender is required to make the first
Advance to the Borrower hereunder.

 

                “License Agreement” means the License
Agreement entered into as of the date hereof between the Borrower and the
Lender.

 

                “Lien” means any security interest,
mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory or
otherwise), charge against or interest in property to secure payment or
performance of an obligation, interest of any vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement or
other priority or preferential arrangement of any kind or nature whatsoever.

 

                “Loan Documents” means this Agreement
and the Note.

 

                “Material Adverse Change” means any
circumstance, change or effect that, individually or in the aggregate with all
other circumstances, changes or effects: (a) is materially adverse to the business,
assets, results of operations or the financial condition

 

5

 

 

of the Borrower and any Subsidiaries of the
Borrower, taken as a whole, or (b) is materially adverse to the ability of the
Borrower to consummate the transactions contemplated by this Agreement, other
than, in each case, circumstances, changes or effects that (i) are or result
from occurrences relating to the economy in general or the Borrower’s industry
in general or (ii) are attributable to the announcement of the execution of any
of the Transaction Documents or the consummation of the transactions contemplated
thereby.

 

                “Note” means a promissory note of the
Borrower payable to the order of the Lender, in substantially the form of
Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to the
Lender resulting from the Advances made by the Lender to the Borrower, as
amended.

 

                “Notice of Borrowing” has the meaning
specified in Section 2.02(a).

 

                “Pension Plan” means a “pension
plan”, as such term is defined in Section 3(2) of ERISA, which is subject to
Title IV of ERISA, and to which the Borrower or any corporation, trade or
business that is, along with the Borrower, a member of a Controlled Group, may
have liability, including any liability by reason of having been a substantial
employer within the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under Section 4069 of ERISA.

 

                “Permitted Lien” means any: (i) Lien
securing purchase money Indebtedness under any lease of property that is
capitalized on the Borrower’s balance sheet in accordance with GAAP; (ii) Lien
with respect to the payment of Taxes that are not yet due or that are being
contested in good faith; (iii) statutory Lien of a landlord or Lien of a
supplier, mechanic, carrier, materialman, warehouseman or workman and any
similar Lien imposed by Law created in the ordinary course of business for
amounts that are not yet due or that are being contested in good faith; (iv) Lien
incurred or deposit made in the ordinary course of business in connection with
worker’s compensation, unemployment insurance or other types of social security
benefits; (v) Lien arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements, building
restrictions and other similar charges or encumbrances on the use of real
property; and (vi) any interest or title of a lessor in the property
subject to any operating lease entered into by the Borrower in the ordinary
course of business.

 

                “Person” means any individual,
partnership, firm, corporation, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.

 

                “Pre-Clinical Development” shall have
the meaning specified in the Development Agreement.

 

                “Preferred Shares” means shares of
Preferred Stock.

 

6

 

                “Preferred Stock” means the Series
2003 preferred stock of the Borrower, par value $0.001 per share, having the
designations, rights and preferences set forth in the Certificate of Amendment.

 

                “Product Commercialization” means the first sale of a
Product by the Lender pursuant to the Transaction Documents.

 

                “Product Sales” means, for any
period, the aggregate Average Selling Price from Products sold during such
period.

 

                “Products” shall have the meaning
specified in the Development Agreement, and “Product”
shall mean any one of the Products.

 

                “Receiving Party” means a Party receiving
Confidential Information.

 

                “R&D Plan” shall have the meaning
specified in the Development Agreement.

 

                “Rules and Regulations” shall have the meaning specified in
Section 5.05.

 

                “Securities” means any capital stock
or other equity interest or any securities convertible into or exchangeable for
capital stock or any other rights, warrants or options to acquire any of the
foregoing securities.

 

                “Securities Act” shall have the
meaning specified in Section 5.05.

 

                “Shares” means, prior to the
occurrence of an Automatic Conversion, Preferred Shares, and thereafter, Common
Shares.

 

                “Subsidiary” of any Person means any
corporation, partnership, joint venture, limited liability company, trust or
estate of which (or in which) more than 50% of (a) the issued and outstanding
capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time capital
stock of any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency), (b) the interest in the
capital or profits of such limited liability company, partnership, or joint
venture or (c) the beneficial interest in such trust or estate is at the time
directly or indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such Person’s other
Subsidiaries.

 

                “Tax” or “Taxes”
means all income, gross receipts, gains, sales, use, employment, franchise,
profits, excise, property, value added and other taxes, fees, stamp taxes and
duties, assessments or charges of any kind, together with any interest and
penalties, additions to tax or additional amounts imposed by any taxing
authority with respect thereto.

 

                “Termination Notice” shall have the
meaning specified in Section 3.03(a).

 

7

 

                “Transaction Documents” means, collectively,
the Investment Agreements, the Certificate of Amendment, and any other document
or agreement to be entered into, executed or delivered pursuant to an
Investment Agreement and any other document agreed in writing by the Borrower
and the Lender to be a Transaction Document.

 

                “Voting Stock” means capital stock
issued by a corporation, or equivalent interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar functions) of
such Person, even if the right so to vote has been suspended by the happening
of such a contingency.

 

                SECTION
1.02       Other Defined Terms.          Other capitalized terms used in this
Agreement but not defined in this Agreement shall have the meanings assigned to
such terms in the Investment Agreement.

 

                SECTION
1.03       Interpretation and Rules of
Construction.       In this Agreement,
except to the extent that the context otherwise requires:

 

                (i)            when
a reference is made in this Agreement to an Article, Section, Exhibit

or Schedule, such reference
is to an Article or Section of, or a Schedule to, this Agreement unless
otherwise indicated;

 

                (ii)           the
table of contents and headings for this Agreement are for reference

purposes only and do not
affect in any way the meaning or interpretation of this Agreement;

 

                (iii)          whenever
the words “include”, “includes” or “including” are used in this Agreement, they
are deemed to be followed by the words “without limitation”;

 

                (iv)          the
words “hereof”, “herein” and “hereunder” and words of similar import, when used
in this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;

 

                (v)           all
terms defined in this Agreement have such defined meanings when used in any
certificate or other document made or delivered pursuant hereto, unless
otherwise defined therein;

 

                (vi)          the
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms;

 

                (vii)         any
Law defined or referred to herein or in any agreement or instrument that is
referred to herein means such Law or statute as from time to time amended,
modified or supplemented, including by succession of comparable successor Laws;

 

                (viii)        references
in the Loan Documents to a Person are also to its permitted successors and
assigns;

 

 

8

 

                (ix)           the
use of “or” is not intended to be exclusive unless expressly indicated
otherwise;

 

                (x)            all
references in the Loan Documents to currency, monetary values and dollars shall
mean United States (U.S.) dollars and all payments hereunder shall be made in
United States dollars; and

 

                (xi)           references
in the Loan Documents to any agreement or contract “as amended” shall mean and
be a reference to such agreement or contract as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.

 

                SECTION
1.04       Accounting Terms.              All accounting terms not
specifically defined herein shall be construed in accordance with United States
generally accepted accounting principles (“GAAP”).

 

ARTICLE
II

 

AMOUNTS
AND TERMS OF THE ADVANCES

 

                SECTION
2.01       The Advances.     The Lender agrees, on the terms and
conditions hereinafter set forth, upon satisfaction of the conditions set forth
in Sections 3.01 and 3.02 hereto, and subject to Section 3.03, to make Advances
to the Borrower from time to time, but not more often that once per fiscal
quarter, on any Business Day during the period from January 1, 2005 until the
Conversion Date in an aggregate amount not to exceed at any time outstanding
the amount of the Commitment; provided, however, that the
aggregate amount of Advances at any time outstanding during the years 2005 and
2006 may not exceed $30,000,000, the aggregate amount of Advances at any time
outstanding during the year 2007 may not exceed $40,000,000 and the aggregate
amount of Advances at any time outstanding during the year 2008 may not exceed
$50,000,000; provided  further, that in the event that the Lender
is not required to make an Advance to the Borrower in any fiscal quarter solely
due to the non-satisfaction of the condition precedent set forth in Section
3.02(b), the Lender agrees, in the event that the applicable Default is cured
within the cure period specified therefor in Section 7.01, on the terms and
conditions hereinafter set forth, upon satisfaction of the conditions set forth
in Sections 3.01 and 3.02 hereto, and subject to Section 3.03, to make such
Advance to the Borrower in the next succeeding fiscal quarter, in addition to
any Advance that the Lender is required hereunder to make to the Borrower in
such succeeding fiscal quarter. Advances made hereunder and repaid or prepaid
may not be reborrowed.

 

                SECTION
2.02       Making the Advances.       (a) Each Advance shall be made on notice,
given not later than 3:00 P.M. (New York City time) on the fifteenth day next
preceding the date of the proposed Advance, by the Borrower to the Lender. Each
such notice of an Advance (a “Notice of Borrowing”)
shall be made by notice in writing, in substantially the form of Exhibit B
hereto, specifying therein the requested (i) date of such Advance (the “Advance Date”), and (ii) amount of
such Advance, and attaching a reasonably detailed list, duly certified

 

9

 

by the Joint Steering Committee, of the
Eligible Costs and Expenses expected to be incurred by the Borrower during the
next succeeding fiscal quarter, plus Eligible Costs and Expenses incurred by
the Borrower previously other than Eligible Costs and Expenses with respect to
which Advances have been made previously. The Lender shall, before 3:00 P.M.
(New York City time) on the Advance Date, make such funds available to the
Borrower as directed in the Notice of Borrowing. Funds received after such time
shall be deemed to have been received by the Borrower on the next succeeding
Business Day.

 

                (b)
To the extent the Lender has incurred Eligible Costs and. Expenses for which
the Lender has invoiced the Borrower and that are reimbursable to the Lender by
the Borrower pursuant to the terms of the Development Agreement, the Lender
may, at its sole option, upon notice to the Borrower, set off against such
reimbursable Eligible Costs and Expenses by making a deemed Advance to the
Borrower in the amount of the reimbursable Eligible Costs and Expenses to be so
set off against. Such deemed Advance shall be made by notice on the fifteenth
Business Day preceding the date of the proposed deemed Advance to the Borrower
specifying the date of such deemed Advance and the amount of such deemed
Advance and attaching a reasonably detailed list of the Eligible Costs and
Expenses incurred by the Lender with respect to which a Deemed Advance is
proposed to be made. An advance made pursuant to this clause (b) shall be a “Deemed Advance” for purposes of this Agreement. A Deemed
Advance shall not exceed the Commitment for the applicable period less any
Advances then outstanding.

 

                (c)
Each Deemed Advance made hereunder shall be considered an Advance to the
Borrower for all purposes under this Agreement; provided, however,
that the Lender shall not make funds available to the Borrower in respect of a
Deemed Advance.

 

                (d)
Each Notice of Borrowing shall be irrevocable and binding on the Borrower.

 

                SECTION
2.03       Repayment of Advances.   The Borrower shall repay to the Lender the
aggregate principal amount of the Advances as follows:

 

                (a)
The Borrower shall repay the Advances quarterly on each March 31, June 30,
September 30 and December 31 commencing on the last day of the first fiscal
quarter following Product Commercialization in an amount equal to 2.5% of
Product Sales for such fiscal quarter then ended after subtracting from such
amount the amount paid in respect of accrued interest on such date pursuant to
Section 2.04 below.

 

                (b)
If Product Commercialization has not occurred prior to the Conversion Date,
then portions of the Advances shall be prepaid by conversion of amounts owed
into Shares pursuant to Section 2.06 below. If any Advances shall remain
unconverted and unpaid on the fifth anniversary of the Conversion Date, at the
Lender’s option, such Advances shall be repaid in 12 equal quarterly payments
beginning on the March 31, June 30, September 30 or December 31 (whichever
occurs first) following the first two consecutive profitable fiscal quarters of
the Borrower, provided, however, that on the final such quarterly
payment, the Borrower shall in any case so repay the remainder of the Advances
outstanding on such date and all other amounts then outstanding.

 

 

10

 

                SECTION
2.04 Interest. The Borrower shall pay interest on the unpaid principal
amount of each Advance owing to the Lender from the date of such Advance until
such principal amount shall be paid in full, at the fixed rate of 8% per annum,
payable in arrears: (i) on any date with respect to which principal is
repayable in accordance with Section 2.03(a) above; provided, however,
that such amount together with the amount paid pursuant to Section 2.03 shall
not exceed 2.5% of Product Sales for the fiscal quarter then ended; provided
further, that the amount of interest in excess of such 2.5% of Product
Net Sales shall remain outstanding and thereafter be included in the aggregate
amount of the outstanding Advances hereunder and be repaid in accordance with
Section 2.03, but no interest shall accrue on such amount of excess interest;
or (ii) on any date with respect to which principal is repayable in accordance
with Section 2.03(b) above, in an amount equal to the total amount of accrued
and unpaid interest on the amount of principal being repaid on such date.

 

                SECTION
2.05       Termination or Reduction of
the Commitment.               (a) Optional.
The Borrower may, at any time upon at least five Business Days’ notice to the
Lender, terminate in whole or reduce in part the unused portions of the
Commitment; provided, however, that each partial reduction of the
Commitment shall be in an aggregate amount of $1,000,000 or an integral multiple
of $100,000 in excess thereof. In the event that the Borrower reduces the
Commitment to zero at any time, the Borrower shall have the option in its sole
discretion to terminate this Agreement automatically without penalty upon
notice to the Lender; provided, however, that this Agreement
shall not terminate until all amounts owed by the Borrower to the Lender
hereunder have been repaid in full. Without in any way limiting the foregoing,
the Borrower may automatically terminate this Agreement at any time without
penalty before the first Advance is made upon notice to the Lender.

 

                (b)           Permanent.            The Commitment shall be permanently reduced
to zero on the Conversion Date.

 

                SECTION
2.06       Prepayments (Conversion).                (a) Optional. The
Borrower may, upon at least two Business Days’ notice to the Lender stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding aggregate principal
amount of the Advances in whole or in part, together with accrued interest to
the date of such prepayment on the aggregate principal amount prepaid without
penalty or premium. No such optional prepayment of Advances shall relieve the
Borrower of its payment or mandatory prepayment obligations hereunder except to
the extent Advances and all accrued interest thereon have been prepaid.

 

                (b)           Mandatory Conversion.     (i) If Product Commercialization has not
occurred prior to the Conversion Date, subject to subclause (iii) below,
beginning on the Conversion. Date, and on each one-year anniversary thereafter,
the Borrower shall prepay 20% of the Advances outstanding as of the Conversion
Date, together with all unpaid interest as of each such date that has accrued
on the amount of Advances being so repaid on such date, by issuing to the
Lender a whole number of Shares obtained by dividing the dollar amount of such
Advances and interest being so prepaid by the Fair Market Value of one (1)
Share as of the date of such issuance, provided, however, that on
the fourth anniversary of the Conversion Date, the Borrower shall in any case
so prepay the remainder of the Advances outstanding on such date, together with
all accrued and unpaid interest and all other amounts then outstanding.

 

11

 

                (ii) If at any time the Development Agreement is termminated
pursuant to Section 7.02 or 7.05 thereof, or the License Agreement is
terminated pursuant to Section 7.02 or 7.03 thereof, or upon the
Lender declaring a mandatory conversion in accordance with Section 7.01,
in each case subject to subclause (iii) below, the Borrower shall prepay
the Advances in full, together with all accrued and unpaid interest and all
other amounts then outstanding under this Agreement, by issuing to the Lender a
whole number of Shares obtained by dividing the dollar amount of such Advances
and interest being so prepaid by the Fair Market Value of one (1) Share as of
the date of such issuance.

 

                (iii) Notwithstanding the foregoing subclause (i) and
(ii) or Section 3.03(d), the Borrower shall only prepay Advances (and interest
accrued thereon) with the issuance of Shares pursuant to this Section 2.06 so
long as the Lender’s and its Affiliates’ total ownership of Shares in the
Borrower, calculated on an as-converted and fully diluted basis, does not
exceed the lesser of (A) than 19.9% of the Borrower’s outstanding Voting Stock
and (B) in the event that the Shares are subject to Nasdaq Stock Market
Marketplace Rules or similar stockholder voting requirements that may be imposed
on the Borrower by any other established stock exchange or national market
system on which the Common Shares are traded or listed at the time of such
conversion, such number of Common Shares as would require the Borrower,
pursuant to such rules or similar requirements, to obtain shareholder approval
with respect to such issuance. Any portion of the Advances left unpaid as a
result of operation of this subclause (and not otherwise prepaid or repaid),
together with accrued and unpaid interest thereon, shall remain outstanding
until paid in accordance with Section 2.03(b).

 

                (iv) Shares issued to the Lender hereunder must be
duly and validly issued, fully paid and nonassessable, not subject to
preemptive or other similar rights, and upon registration of such Shares in the
name of the Lender (or its nominee) in the records of the Borrower, owned by
the Lender free and clear of all Liens, subject to any restrictions on transfer
under Federal or state securities laws, this Agreement or the Investor Rights Agreement.

 

                (v) No fractional Shares or scrip representing
fractional Shares shall be issued upon any conversion of amounts owing
hereunder, and no payment or adjustment shall be made upon any such conversion
on account of any cash dividends on Shares issued upon conversion, other than
as required under the Certificate of Incorporation. If a conversion of amounts
owing hereunder would result in the issuance of a fraction of a share, an
amount equal to such fraction multiplied by the Fair Market Value of a Share
then in effect shall be paid in cash to the Lender by the Borrower on the
applicable Conversion Date.

 

                (c)           Prepayment.          Each prepayment made pursuant to this
Section 2.06, whether optional or mandatory, shall be without premium or
penalty.

 

                (d)           No Rights as Shareholders.                Neither this Agreement nor the
Note shall entitle the Lender to any voting rights or other rights as a
stockholder of the Borrower prior to the time of any conversion into Shares of
amounts outstanding hereunder, other than such rights as the Lender may possess
as a holder of Shares issued other than under this Agreement.

 

 

12

 

                SECTION
2.07       Payments and Computations.            (a) The Borrower shall make each
payment to be made by it hereunder (other than pursuant to Section 2.06(b)) and
under the Note not later than 3:00 P.M. (New York City time) on the day when
due in U.S. dollars to the Lender by wire transfer in immediately available
funds to the Lender Account and without set-off or counterclaim. Funds received
after such time shall be deemed to have been received by the Lender on the next
succeeding Business Day.

 

                (b)
All computations of interest shall be made by the Lender on the basis of a year
of 365 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable.

 

                (c)
Whenever any payment hereunder or under the Note shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.

 

                (d)           The Borrower shall make each payment
by conversion to Shares to be made by it hereunder by delivery not later than 3:00
P.M. (New York City time) on the day when due to the Lender at One Boston
Scientific Place, Natick, MA of certificates evidencing the Shares to be issued
to the Lender on such date.

 

                SECTION
2.08       Use of Proceeds.  The Borrower shall use the proceeds of each
Advance solely to pay or reimburse itself for Eligible Costs and Expenses.

 

ARTICLE
III

 

CONDITIONS
TO EFFECTIVENESS AND LENDING

 

                SECTION
3.01       Conditions Precedent to
Effectiveness of Section 2.01.    Section 2.01 of this
Agreement shall become effective on and as of the first date on which the
Lender shall have received a Note for the account of the Lender, duly executed
by the Borrower, in the amount of $50,000,000.

 

                SECTION
3.02       Conditions Precedent to Each
Advance.         The obligation of the
Lender to make each Advance (other than Deemed Advances) shall be subject to
the conditions precedent that the condition set forth in Section 3.01 has
been satisfied or waived by the Lender and on the date of such Advance the
following statements shall be true (and each of the giving of the applicable
Notice of Borrowing and the acceptance by the Borrower of the proceeds of such
Advance shall constitute a representation and warranty by the Borrower that on
the date of such Advancee such statements are true):

 

                (a)
the representations and warranties contained in Article IV of this
Agreement are true and correct in all material respects on and as of the date
of such Advance, before and after giving effect to such Advance and to the
application of proceeds therefrom, as though made on and as of such date (it
being understood and agreed that any representation or warranty which expressly
refers by its terms to a specified date shall be required to be true and
correct in all material respects only as of such date);

 

 

13

 

                (b)
no event has occurred and is continuing, or would result from such Advance or
from the application of the proceeds therefrom, that constitutes a Default; and

 

                (c)
the schedule attached to such Notice of Borrowing and certified by the Joint
Steering Committee lists the Eligible Costs and Expenses expected to be
incurred during the relevant period in respect of which Advances are being
requested, the sum of which Eligible Costs and Expenses is no less than the
amount of the Proposed Advance plus the
positive difference between all Advances made under the Loan Agreement prior to
the date of such Notice of Borrowing and the aggregate amount of Eligible Costs
and Expenses actually incurred prior to such date, if any, and which Eligible
Costs and Expenses have not been included in any prior Notice of Borrowing.

 

                SECTION
3.03       Lender’s Option to Cease
Making Advances.    (a) In the event the Lender has
provided notice to the Borrower of an exercise of its rights under
Section 7.03 of the Development Agreement (a “Termination
Notice”) the Lender shall cease making any Advances hereunder
and the Lender shall have no further obligation to make any Advances and all
amounts outstanding hereunder shall be converted into Common Shares on and as
of the date 120 days following receipt of the Termination Notice by the
Borrower, and otherwise in accordance with Section 2.06(b) (except that,
notwithstanding anything to the contrary in Section 2.06(b), in all events
the conversion shall be into Common Shares), and each of the Investment
Agreements shall terminate on and as of the date 120 days following
receipt of the Termination Notice by the Borrower.

 

                (b)           In the event the Lender has received
a Notice of Borrowing prior to receipt by the Borrower of a Termination Notice,
the Lender will be required to make a corresponding Advance to the Borrower in
accordance with the provisions of Article II.

 

                (c)           During the 120 day period
preceding termination of the Investment Agreements pursuant to Section 3.03(a),
(i) no Deemed Advances shall be made and (ii) the Borrower may submit
to the Lender Notices of Borrowing solely in respect of Eligible Costs and
Expenses incurred by the Borrower prior to the commencement of such 120 day
period, and in the event the Lender has received such Notice of Borrowing prior
to the expiration of such 120 day period, the Lender shall make a
corresponding Advance to the Borrower in accordance with the provisions of
Article II.

 

                (d)           Any Advances made pursuant to
Section 3.03(b) or 3.03(c) shall, immediately following the expiration of
the 120 day period referred to in Section 3.03(a), be converted in Common
Shares otherwise in accordance with the provisions of Section 2.06(b)
(except that, notwithstanding anything to the contrary in Section 2.06(b),
in all events the conversion shall be into Common Shares) and, notwithstanding
Section 3.03(a), this Agreement shall not terminate until all such
Advances have been fully converted into Common Shares, or otherwise been repaid
by the Borrower.

 

ARTICLE
IV

 

REPRESENTATIONS
AND WARRANTIES OF THE BORROWER

 

                The
Borrower represents and warrants to the Lender as follows:

 

 

14

 

                SECTION
4.01       Organization, Authority and,
Qualification of the Lender.    The Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
authority to own, operate or lease the properties and assets now owned,
operated or leased by it and to carry on its business as it has been and is
currently conducted. The Borrower is duly licensed or qualified to do business
and is in good standing in each jurisdiction in which the properties owned or
leased by it or the operation of its business makes such licensing or
qualification necessary, except where the failure to be so licensed or
qualified would not materially adversely affect the condition of the business
of the Borrower.

 

                SECTION
4.02       Capital Stock of the
Borrower; Ownership of Shares.    As of the date
hereof, the authorized capital stock of the Borrower consists of (A) 60,000,000
shares of Common Stock, of which (y) 3,500,000 shares are reserved for
issuance upon the exercise of stock options issued or to be issued by the
Borrower and (z) 3,500,000 shares are reserved for issuance upon the
exercise of warrants issued by the Borrower under the terms of various warrant
agreements; and (B) 8,000,000 shares of Preferred Stock. All of the
outstanding shares of the Borrower’s capital stock are duly and validly issued,
fully paid and nonassessable. None of the issued and outstanding shares of
capital stock of the Borrower was issued in violation of any preemptive rights.
As of the date hereof, except as provided in the Investment Agreements and as
set forth in the first sentence of this Section 4.02, there are no
options, warrants, subscriptions, calls, convertible securities or other
rights, agreements, arrangements or commitments relating to the capital stock of
the Borrower or obligating the Borrower to issue or sell any shares of capital
stock of, or any other equity interest in, the Borrower. As of the date hereof,
there are no outstanding contractual obligations of the Borrower to repurchase,
redeem or otherwise acquire any shares of capital stock of the Borrower or make
any investment (in the form of a loan, capital contribution or otherwise) in
any other Person, except as may be provided in the Investor Rights Agreement.

 

                SECTION
4.03       Authority and Qualification
of the Borrower.    The Borrower has all necessary
corporate power and authority to enter into the Loan Documents, to carry out
its obligations thereunder and to consummate the transactions contemplated
thereby. The execution and delivery by the Borrower of the Loan Documents, the
performance by the Borrower of its obligations thereunder and the consummation
by the Borrower of the transactions contemplated thereby have been duly
authorized by all requisite action on the part of the Borrower. Each Loan
Document to which the Borrower is a party has been, or upon its execution shall
be, duly executed and delivered by the Borrower, and (assuming due execution
and delivery thereof by each other party thereto, if applicable) each Loan
Document constitutes, or upon its execution shall constitute, the legal, valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject to (a) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights and remedies generally, and (b) the
effect of general equitable principles, regardless of whether asserted in a
proceeding in equity or at law.

 

                SECTION
4.04       No Conflict.    The
execution, delivery and performance by the Borrower of the Loan Documents to
which it is a party does not (a) violate, conflict with or result in the breach
of any provision of the Borrower Charter Documents, (b) conflict with or
violate (or cause a Material Adverse Change as a result of) any Law or
Governmental Order

 

 

15

 

applicable to the Borrower, or any of its
assets, properties or businesses, or (c) conflict with, result in any
breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any
Encumbrance on any of the Securities of the Borrower pursuant to, any note,
bond, mortgage or indenture, contract, agreement, lease, sublease, license,
permit, franchise or other instrument or arrangement to which the Borrower is a
party or by which any of its Securities or any of such assets or properties is
bound or affected, except in the case of each of subsections (a) through (c)
above as would not materially adversely affect the financial condition of the
Borrower.

 

                4.05         Full Disclosure.    No representation or warranty of the
Borrower in any of the Loan Documents, nor any statement or certificate
furnished or to be furnished by the Borrower to the Lender pursuant to the Loan
Documents, or in connection with the transactions contemplated thereby,
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements contained therein not misleading.

 

ARTICLE
V

 

REPRESENTATIONS
AND WARRANTIES OF THE LENDER

 

                The
Lender hereby represents and warrants to the Borrower as follows:

 

                SECTION
5.01       Organization and Authority
of the Lender.    The Lender is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all necessary corporate power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery by the Lender of
this Agreement, the performance by the Lender of its obligations hereunder and the
consummation by the Lender of the transactions contemplated hereby have been
duly authorized by all requisite corporate action on the part of the Lender.
This Agreement has been, or upon its execution shall be, duly executed and
delivered by the Lender, and (assuming due execution and delivery thereof by
the Borrower) this Agreement constitutes, or upon its execution, shall
constitute, the legal, valid and binding obligation of the Lender, enforceable
against the Lender in accordance with its terms, subject to (a) the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium, and other
similar laws relating to or affecting creditors’ rights and remedies generally,
and (b) the effect of general equitable principles, regardless of whether asserted
in a proceeding in equity or at law.

 

                SECTION
5.02       No Conflict.    The
execution, delivery and performance by the Lender of this Agreement do not and
will not (a) violate, conflict with or result in the breach of any provision of
the certificate of incorporation or the by-laws of the Lender, (b) conflict
with or violate any Law or Governmental Order applicable to the Lender or any
of its assets, properties or businesses or (c) conflict with, or result in any
breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument or arrangement to which the Lender is a 

 

 

16

 

party, which would adversely affect the
ability of the Lender to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement.

 

                SECTION
5.03       Governmental Consents and
Approvals.    The execution, delivery and performance
by the Lender of this Agreement do not and will not require any consent,
approval, authorization or other order of, action by, filing with, or
notification to any Governmental Authority.

 

                SECTION
5.04       Brokers.    No
broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Lender.

 

                SECTION
5.05       Lender Oualifications.    The
Lender is knowledgeable, sophisticated and experienced in making, and is qualified
to make, decisions with respect to investments in shares representing an
investment decision like that involved in the conversion, if any, of the
Advances into Shares. The Lender would acquire the Shares in the ordinary
course of its business and for its own account for investment purposes only and
with no present intention of distributing any of such Shares, and no
arrangement or understanding exists with any other persons regarding the
distribution of such Shares. The Lender will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of the Shares
except in compliance with the Securities Act of 1933, as amended (the “Securities Act”), and the rules and
regulations promulgated thereunder (the “Rules and Regulations”)
nor will the Lender engage in any short sale that results in a disposition of
any of the Shares by the Lender in violation of the Securities Act or the Rules
and Regulations. The Lender is a corporation (a) which in the aggregate owns
and invests on a discretionary basis at least $100 million in securities, or
capital to be invested in securities, of issuers that are not affiliated with
it and is a “qualified institutional Lender” within the meaning of Rule 144A
promulgated under the Securities Act, or (b) is an “accredited Lender” as
defined in Rule 501 (a) of Regulation D of the Securities Act and is a
sophisticated Lender, experienced in investing in securities and non-public and
emerging growth companies and acknowledges that it is able to fend for itself,
can bear the economic risk of the investment and has such knowledge and
experience in financial matters that it is capable of evaluating the merits and
risks of the investment in the Shares. The Lender agrees to notify the Borrower
immediately of any change in any of the foregoing information prior to a
conversion, if any, of the Advances into Shares.

 

                SECTION
5.06       No Governmental Endorsement.    The
Lender understands that, at the time of conversion, if any, no Governmental
Authority has passed upon or made any recommendation or endorsement of the
Shares.

 

                SECTION
5.07       Legends.    The
Lender understands that, until such time as the Shares that the Lender may
obtain pursuant to Section 2.06(b) may be sold by non-affiliates of the
Borrower pursuant to Rule 144 under the Securities Act without any restriction
as to the number of securities as of a particular date that can then be
immediately sold, any Shares issued to the Lender pursuant to this Agreement
may bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the certificates for the
Shares):

 

17

 

                “The securities represented by this certificate have
not been registered under the Securities Act of 1933, as amended (the “Act”),
or under the securities laws of any other jurisdiction. The securities may not
be sold, transferred or assigned in the absence of an effective registration
statement for the securities under the Act and applicable state securities
laws, or an opinion of counsel, in form, substance and scope reasonably
acceptable to the Company, that registration is not required under the Act or
any applicable state securities laws or unless sold pursuant to Rule 144 under
the Act.”

 

                SECTION
5.08       Compliance with Legal
Obligations. The Lender understands
that, at the time of a conversion, if any, of the Advances into Shares, the
Shares will be offered and sold to it in reliance upon specific exemptions from
the registration requirements of the Securities Act, the Rules and Regulations
and state securities laws and that the Borrower is relying upon the truth and
accuracy of, and the Lender’s compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Lender set forth herein
in order to determine the availability of such exemptions and the eligibility
of the Lender to acquire the Shares.

 

                SECTION
5.09       Full Disclosure.    No representation or warranty of the Lender
in this Agreement, nor any statement or certificate furnished or to be
furnished by the Lender to the Borrower pursuant to this Agreement, or in
connection with the transactions contemplated thereby, contains any untrue
statement of a material fact, or omits to state a material fact necessary to
make the statements contained herein or therein not misleading.

 

ARTICLE
VI

 

COVENANTS
OF THE BORROWER

 

                SECTION
6.01       Affirmative Covenants.       So long as any Advance or any other
obligation of the Borrower under any Loan Document is outstanding and shall
remain unpaid, the Borrower will:

 

                (a)           Compliance with Statutes, Etc.    Comply,
and cause each of its Subsidiaries to comply, with all applicable laws,
statutes, regulations and orders of, and all applicable restrictions imposed
by, all Governmental Authorities, in respect of the conduct of its business and
the ownership of its property, except to the extent that such non-compliance
would not he likely to result in a Material Adverse Change.

 

                (b)           Use of Proceeds.    Apply
the proceeds of Advances solely in accordance with Section 2.08.

 

                (c)           Maintenance of Insurance.    Maintain,
and cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is appropriate in the industry in which the Borrower carries on its
business.

 

                (d)           Preservation of Corporate
Existence, Etc.    Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its legal existence and its
rights, franchises and

 

 

18

 

licenses, except to the extent that the
failure to do so would not materially adversely affect the financial condition
of the Borrower.

 

                (e)   Transactions
with Affiliates.    Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of its Affiliates on terms that are fair and reasonable and
no less favorable to the Borrower than it would obtain in a comparable
arm’s-length transaction with a Person not an Affiliate, other than as
contemplated under the Investment Agreement.

 

                SECTION
6.02   Reporting Requirements.    Commencing
on the date the first Notice of Borrowing is received by the Lender hereunder,
and so long as any Advance or any other obligation of the Borrower under any
Loan Document is outstanding and shall remain unpaid, or until the termination
of the Commitment hereunder, the Borrower will furnish to the Lender:

 

                (a)   Financial
Statements.    (i) as soon as available and in any
event within 45 days after the end of each of the first three quarters of each
fiscal year of the Borrower, Consolidated and consolidating balance sheets of
the Borrower and its Subsidiaries as of the end of such quarter and
Consolidated and consolidating statements of income and cash flows of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, duly certified by
the chief financial officer of the Borrower as having been prepared in
accordance with GAAP (subject to year-end audit adjustments and the addition of
and any changes to any notes thereto in connection with such year-end audit
adjustments);

 

                (ii)           as
soon as available and in any event within 120 days after the end of each fiscal
year of the Borrower and its Subsidiaries, a copy of the annual audit report
for such year for the Borrower, containing Consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as of the end of such
fiscal year and Consolidated and consolidating statements of income and cash
flows of the Borrower and its Subsidiaries for such fiscal year, in each case
accompanied by an opinion reasonably acceptable to the Lender by KPMG or, if
KPMG is no longer the Borrower’s auditor, other independent public accountants
reasonably acceptable to the Lender;

 

                (b)   Certain
Events.    Prompt (but in any event within five days
after any executive officer of the Borrower obtains actual knowledge thereof)
notice of (i) the occurrence of any Default set forth in Section 7.01(b),
7.01(d), 7.01(e), 7.01(f) or 7.01(g), (ii) the commencement of any Action
against the Borrower or any of its Subsidiaries or (iii) any governmental
proceeding against or investigation of the Borrower or any of its Subsidiaries.

 

                (c)   ERISA.    Furnish
to the Lender, immediately upon becoming aware of (i) the institution of any
steps by any Person to terminate any Pension Plan, (ii) the failure to make a
required contribution to any Pension Plan if such failure is sufficient to give
rise to a Lien under Section 302(f) of ERISA, (iii) the taking of any action
with respect to a Pension Plan which could result in the requirement that the
Borrower furnish a bond or other security to the Pension Benefit Guaranty
Corporation (or any Person succeeding to any or all of its functions under
ERISA) or such Pension Plan, or (iv) the occurrence of any event with respect
to any Pension

 

19

 

Plan which could result in the incurrence by
the Borrower of any material liability, fine or penalty, notice thereof and
copies of all documentation relating thereto.

 

                (d)   Certificate.    At
the time of the delivery of each of the financial statements referred to in
clauses (i) and (ii) of Section 6.02(a) above, a certificate (the statements
therein to be true and correct) signed by the Borrower’s chief financial
officer to the effect that, to the best knowledge of the Borrower after due
inquiry, no Event of Default has occurred and is continuing.

 

                (e)   Constituent
Documents.    Prompt (but in any event within 30 days)
notice of, together with copies of, any material amendment, supplement or other
modification to the Certificate of Incorporation or the By-laws.

 

                (f)   Other
Information.    With reasonable promptness, such other
information about the Borrower or any Subsidiary thereof as the Lender may
reasonably request from time to time; provided, however, that the
obligation of the Borrower to furnish such documents and information shall be
subject to the duty of the Borrower and its Subsidiaries, partners and
employees to preserve the confidence of clients and others in accordance with
applicable laws, rules of court and other requirements of this Agreement.

 

ARTICLE
VII

 

EVENTS
OF DEFAULT

 

                SECTION
7.01   Events of Default.    If any
of the following events (each, an “Event of Default”)
shall occur and be continuing:

 

                (a)
The Borrower shall fail to (i) pay any principal of any Advance made to the
Borrower, (ii) pay any interest on any Advance made to the Borrower or (iii) make
any other payment of other amounts payable by the Borrower under the Loan
Documents, in each case within five (5) Business Days after the same becomes
due and payable; or

 

                (b)
Any representation or warranty made by the Borrower in this Agreement shall
prove to have been incorrect in any material respect when made; or

 

                (c)
The Borrower shall fail to perform or observe any material term, covenant or
agreement contained in the Loan Documents on its part to be performed or
observed if such failure shall remain unremedied for thirty (30) days after
written notice thereof by the Lender; or

 

                (d)
The Borrower or any of its Subsidiaries shall generally not pay its debts as
such debts become due, or shall admit in writing its inability or unwillingness
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or

 

                (e)
Any proceeding shall be instituted by or against the Borrower or any of its
Subsidiaries seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any Federal, State or foreign
law relating to bankruptcy, insolvency, receivership or reorganization or
relief of debtors, or seeking the entry of an order for relief or the appointment

 

 

20

 

of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or unstayed for a period of 60
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Borrower or any of its
Subsidiaries shall take any corporate action to authorize any of the actions
set forth above in subsection (d) or in this subsection (e); or

 

                (f)
Any final judgment or order for the payment of money individually or in the
aggregate in excess of $5,000,000 (exclusive of any amounts fully covered by
insurance (less any applicable deductible) and as to which the insurer has
acknowledged its responsibility to cover such judgment or order) at any one
time in effect, shall be rendered against the Borrower or any of its
Subsidiaries and such judgment shall not have been satisfied, vacated or
discharged or stayed or bonded pending appeal within 30 days after the entry
thereof; or

 

                (g)
Any of the following events shall occur with respect to any Pension Plan; (i)
the institution of any steps by the Borrower or any other Person to terminate a
Pension Plan if, as a result of such termination, the Borrower could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, in excess of
$100,000; or (ii) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien (other than a Permitted Lien) under
Section 302(f) of ERISA; or

 

                (h)
Any of the Investment Agreements shall be terminated by the Lender for breach
thereof by the Borrower; 

 

                then,
and in any such event, the Lender may, at its option, by notice to the
Borrower, (i) declare the obligation of the Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) declare a
mandatory conversion into Shares of all amounts outstanding hereunder pursuant
to the terms of 2.06(b)(ii); provided, however, that upon the
occurrence of any Event of Default described in Section 7.01(e), the Lender
may, at its option, by notice to the Borrower, (y) declare the obligation of
the Lender to make Advances to be terminated, whereupon the same shall
forthwith terminate, and (z) declare the Note, all interest thereon and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Note, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower.
Upon the occurrence of an Event of Default, the Lender shall have no remedies
other than those specifically set forth for an Event of Default in this
Agreement.

 

ARTICLE
VIII

 

CONFIDENTIALITY

 

                SECTION
8.01   Confidentiality.    During the
term of this Agreement and for a period of three (3) years thereafter, the
Receiving Party shall maintain Confidential Information in confidence, and
shall not disclose, divulge or otherwise communicate such Confidential

 

 

21

 

Information to others, or use it for any
purpose, except pursuant to, and in order to carry out, the terms and
objectives of this Agreement. The Receiving Party hereby shall exercise every
reasonable precaution to prevent and restrain the unauthorized disclosure of
such Confidential Information by any of its directors, officers, employees,
consultants, subcontractors, or agents. Upon termination of this Agreement,
each Party hereby shall return to the other Party, upon demand, all
Confidential Information in its possession or, upon demand, to destroy such
Confidential Information and provide a certificate to the other Party of such
destruction signed by an officer of the destroying Party.

 

                SECTION
8.02.      Release from Restrictions.  The provisions of Section 8.01 shall not apply
to any Confidential Information disclosed hereunder that:

 

                (a)
is lawfully disclosed to the Receiving Party by an independent, unaffiliated
third Party rightfully in possession of the Confidential Information and under
no confidentiality or fiduciary obligation not to make disclosure;

 

                (b)
becomes published or generally known to the public through no fault or omission
on the part of the Receiving Party;

 

                (c)
is developed independently by the Receiving Party without access to the
Confidential Information of the Disclosing Party;

 

                (d)
is legally required to be disclosed to the FDA or any other Governmental
Authority; provided, however, the Receiving Party shall continue
to treat such Confidential Information as confidential pursuant to Section 8.01
unless and until such Confidential Information becomes published or generally
known to the public through no fault or omission on the part of the Receiving
Party;

 

                (e)
a Party is legally compelled to disclose; provided, however, that
the Receiving Party shall provide prompt written notice of such requirement to
the Disclosing Party so that the Disclosing Party may seek a protective order
or other remedy or waive compliance with Section 8.01; and provided  further
that in the event that such protective order or other remedy is not obtained or
the Disclosing Party waives compliance with Section 8.01, the Receiving Party
shall be permitted to furnish only that portion of such Confidential
Information that is legally required to be provided and the Receiving Party
shall exercise its reasonable best efforts to obtain assurances that
confidential treatment shall be accorded such information, including, without
limitation, specifically with respect to all information contained in any
Exhibit to this Agreement; or

 

                (f)
is disclosed by a Receiving Party in connection with an Action commenced by or
against such Receiving Party in connection with an alleged material breach of
any of the Transaction Documents (to the extent such Confidential Information
is utilized solely for the purpose of supporting such Receiving Party’s
allegations in such Action or disproving allegations made against such
Receiving Party).

 

                SECTION
8.03   Public Announcements and Publications.    Except
as required by Law or by the requirements of any securities exchange on which
the securities of a Party hereto are listed, no Party to this Agreement shall
make, or cause to be made, any press release or

 

22

 

public announcement in respect of this
Agreement or the transactions contemplated hereby or otherwise communicate with
any news media without the prior written consent of the other Party, and the
Parties shall cooperate as to the timing and contents of any such press release
or public announcement.

 

ARTICLE
IX

 

MISCELLANEOUS

 

                SECTION
9.01   Further Action.    Each of the
Parties shall use commercially reasonable efforts to take, or cause to be
taken, all appropriate action, do or cause to be done all things necessary,
proper or advisable under applicable Law, and to execute and deliver such
documents and other papers, as may be required to carry out the provisions of
the Loan Documents and consummate and make effective the transactions
contemplated by the Loan Documents.

 

                SECTION
9.02   Amendments, Etc.    No
amendment or waiver of any provision of the Loan Documents, nor consent to any
departure by the Borrower or the Lender therefrom, shall in any event be
effective unless the same shall be in writing and signed by the other Party,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

 

                SECTION
9.03   Notices.    All notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be given or made (and shall be deemed to have been duly given
or made upon receipt) by delivery in person, by an internationally recognized
overnight courier service, by telecopy or registered or certified mail (postage
prepaid, return receipt requested) to the respective Parties at the following
addresses (or at such other address for a Party as shall be specified in a
notice given in accordance with this Section 9.03):

 

                (a)                                  if to the
Borrower:

 

Osiris Acquisition II, Inc.

2001 Aliceanna Street

Baltimore, Maryland 21231-3043

Attention: Chief Executive Officer

Facsimile No: (410) 522-6999

 

with a copy to:

 

Wilmer, Cutler &
Pickering

2445 M Street, NW

Washington, D.C. 20037

Attention: Michael R. Klein, Esq.

Facsimile No: (202) 663-6000

 

 

23

 

                (b)                                 if to the
Lender:

 

Boston Scientific
Corporation

One Boston Scientific Place

Natick, MA 01760-1537

Telecopy: (508) 650-8956

Attention: General Counsel

 

with a copy to:

 

Shearman & Sterling

599 Lexington Ave.

New York, New York 10022-6069

Telecopy: (212) 848-7179

Attention: Clare O’Brien, Esq.

 

                Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
the confirmation of transmission thereof is received by the transmitter.

 

                SECTION
9.04   No Waiver; Remedies.    No
failure on the part of the Lender to exercise, and no delay in exercising, any
right hereunder or under the Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. Subject to Section 7.01,
the remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

 

                SECTION
9.05   Costs and Expenses.    (a)
Except as otherwise specified in this Agreement, all costs and expenses,
including, without limitation, fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the Party
incurring such costs and expenses.

 

                (b)
The Borrower agrees to indemnify and hold harmless the Lender and each of its
Affiliates and their officers, directors, employees, agents and advisors (each,
an “Indemnified Party”) from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of any of the Loan Documents or the actual or proposed use of the
proceeds of the Advances except, with respect to any Indemnified Party, to the
extent such claim, damage, loss, liability or expense (i) results from an
Indemnified Party’s gross negligence or willful misconduct as determined in a
final non-appealable judgment by a court of competent jurisdiction or (ii)
costs and expenses incurred by a Party in connection with the negotiation of
any of the Loan Documents.

 

                (c)
Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 9.05 shall

 

 

24

 

survive the payment in full of principal and
interest payable under the Loan Documents for a period of one (1) year
thereafter.

 

                SECTION
9.06   Binding Effect.    This
Agreement shall become effective when it shall have been executed by the
Borrower and the Lender and thereafter shall be binding upon and inure to the
benefit of the Borrower and the Lender and its respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lender.

 

                SECTION
9.07   Severability.    If any term
or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any Law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect for so long as the
economic or legal substance of the transactions contemplated by this Agreement
is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner in order that the transactions contemplated by
this Agreement are consummated as originally contemplated to the greatest
extent possible.

 

                SECTION
9.08   Entire Agreement.    The
Transaction Documents constitute the entire agreement of the Parties with
respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings, both written and oral, among the Parties with
respect to the subject matter hereof thereof.

 

                SECTION
9.09   No Third Party Beneficiaries.    This
Agreement shall be binding upon and inure solely to the benefit of the Parties
and their permitted assigns and nothing herein, express or implied, is intended
to or shall confer upon any other Person any legal or equitable right, benefit
or remedy of any nature whatsoever.

 

                SECTION
9.10   Governing Law.    This
Agreement and the Note shall be governed by, and construed in accordance with,
the Laws of the State of Delaware. Each of the Borrower and the Lender
unconditionally and irrevocably agree and consent to the exclusive jurisdiction
of the courts located in the State of Delaware and waive any objection with
respect thereto, for the purpose of any action, suit or proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby, and
further agree not to commence any such action, suit or proceeding except in any
such court.

 

                SECTION
9.11   Counterparts.    This
Agreement may be executed and delivered (including by facsimile transmission)
in one or more counterparts, and by the different Parties in separate
counterparts, each of which when executed shall be deemed to be an original,
but all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile shall be effective as delivery of a manually executed counterpart of
this Agreement.

 

                SECTION
9.12   Waiver of Jury Trial.    Each
of the Borrower and the Lender hereby knowingly, voluntarily and irrevocably
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or

 

 

25

 

relating to any of the Loan Documents or any
course of conduct, course of dealing or statements (whether oral or written) or
actions of the Lender in the negotiation, administration, performance or
enforcement thereof.

 

[Signature
Page Follows]

 

 

 

26

 

                IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

	
   

  	
  OSIRIS ACQUISITION II,
  INC., as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title: President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BOSTON SCIENTIFIC
  CORPORATION, as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title: Senior Vice
  President and Chief Financial Officer

  

 

 

 

 

 

EXHIBIT
A - FORM OF

PROMISSORY NOTE

 

	
  U.S. $50,000,000

  	
   

  	
  Dated:

  	
   

  	
  , 20

  

 

                FOR
VALUE RECEIVED, the undersigned, OSIRIS ACQUISITION II, INC. (the “Borrower”), HEREBY PROMISES TO PAY,
as and when specified in the Loan Agreement referred to below, to the order of
BOSTON SCIENTIFIC CORPORATION (the “Lender”)
the aggregate principal amount of the Advances made by the Lender to the
Borrower pursuant to the Loan Agreement dated as of           ,
2003, between the Borrower and the Lender (as amended or modified from time to
time, the “Loan Agreement”; the terms
defined therein being used herein as therein defined).

 

                The
Borrower promises, in accordance with the terms and conditions of the Loan
Agreement, to pay interest on the unpaid principal amount of each Advance from
the date of such Advance until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in the Loan
Agreement.

 

                Both
principal and interest are payable in lawful money of the United States of
America to the Lender, at the Lender Account, in same day funds. Each Advance
owing to the Lender by the Borrower pursuant to the Loan Agreement, and all
payments made on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached hereto which
is part of this Promissory Note.

 

                This
Promissory Note is the Note referred to in, and is entitled to the benefits of,
the Loan Agreement. The Loan Agreement, among other things, (i) provides for
the making of Advances by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from each
such Advance being evidenced by this Promissory Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of
certain stated events.

 

	
   

  	
  OSIRIS ACQUISITION II,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  

 

 

A-1

ADVANCES
AND PAYMENTS OF PRINCIPAL

 

	
  Date

  	
   

  	
  Amount of

  Advance

  	
   

  	
  Amount of

  Principal

  Paid

  	
   

  	
  Unpaid

  Principal

  Balance

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

 

 

A-2

 

EXHIBIT
B - FORM OF

NOTICE OF BORROWING

 

Boston Scientific Corporation

One Boston Scientific Place

Natick, MA 01760-1537                                                                       [Date]

 

 

Attention:

 

Ladies and Gentlemen:

 

                The
undersigned, OSIRIS ACQUISITION II, INC., refers to the Loan Agreement dated as
of           , 2003 (as
amended or modified from time to time, the “Loan
Agreement”, the terms defined therein being used herein as
therein defined), between the undersigned and Boston Scientific Corporation, as
Lender, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of
the Loan Agreement that the undersigned hereby requests an Advance under the
Loan Agreement, and in that connection sets forth below the information
relating to such Advance (the “Proposed Advance”)
as required by Section 2.02(a) of the Loan Agreement:

 

                (i)            The Business Day of the Proposed
Advance is                ,
200 .

 

                (ii)           The aggregate amount of the Proposed
Advance is $          .

 

                The
undersigned hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the Proposed Advance:

 

                (A)          the representations and warranties
contained in Article IV of the Loan Agreement are true and correct as of the
date hereof and as of the date of such Proposed Advance, before and after
giving effect to such Proposed Advance and to the application of the proceeds
therefrom, as though made on and as of such date (it being understood and
agreed that any representation or warranty which expressly refers by its terms
to a specified date shall be required to be true and correct in all material
respects only as of such date);

 

                (B)           no event has occurred and is
continuing, or would result from such Proposed Advance or from the application
of the proceeds therefrom, that constitutes an Event of Default; and

 

                (C)           attached is a schedule, duly
certified by the Joint Steering Committee, which lists the Eligible Costs and
Expenses expected to be incurred during the next succeeding fiscal quarter,
plus Eligible Costs and Expenses incurred by the Borrower previously other than
Eligible Costs and Expenses with respect to which Advances have previously been
made, all of which Eligible Costs and Expenses were incurred pursuant to the
R&D Plan and in accordance with the Budget; the sum of which Eligible Costs
and Expenses is no less than the amount of the Proposed Advance, plus the
positive difference between all Advances made under the Loan Agreement prior to
the date of such Notice of Borrowing and the aggregate amount of Eligible

 

 

 

B-1

 

Costs and Expenses actually incurred prior to
such date, if any, and which Eligible Costs and Expenses have not been included
in any prior Notice of Borrowing.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  OSIRIS ACQUISITION II,
  INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  

 

 

 

 

B-2

 

 

EXHIBIT
C - BORROWER

CHARTER DOCUMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B-3Exhibit
10.8

 

AMENDMENT
NO.1 TO THE LOAN AGREEMENT

 

Dated
as of March 12, 2004

 

Between

 

OSIRIS
THERAPEUTICS, INC.

 

as
Borrower

 

and

 

BOSTON
SCIENTIFIC CORPORATION,

 

as
Lender

 

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
  SECTION 1.

  	
  Amendments to Loan
  Agreement

  	
  1

  
	
  SECTION 2.

  	
  Conditions of
  Effectiveness

  	
  7

  
	
  SECTION 3.

  	
  Costs and Expenses

  	
  8

  
	
  SECTION 4.

  	
  Governing Law

  	
  8

  
	
  SECTION 5.

  	
  Execution in Counterparts

  	
  8

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
  Schedule I - Existing
  Liens (Schedule 4.01(v) to the Loan Agreement) 

  	
   

  
	
  Exhibits

  	
   

  
	
  Exhibit A - Form of
  Promissory Note (Exhibit A to the Loan Agreement) 

  	
   

  
	
  Exhibit B - Form of
  Security Agreement (Exhibit D to the Loan Agreement) 

  	
   

  
	
  Exhibit C - Filing
  Statements (Exhibit E to the Loan Agreement) 

  	
   

  
	
  Exhibit D - Form of
  Opinion of Counsel for the Borrower

  	
   

  

 

 

 

 

 

 

EXECUTION
COPY

AMENDMENT
NO. 1 TO THE LOAN AGREEMENT

 

Dated
as of March 12, 2004

 

                AMENDMENT NO. I TO THE LOAN AGREEMENT dated as of March 5,
2003 between OSIRIS THERAPEUTICS, INC., a Delaware corporation (formerly Osiris
Acquisition II, Inc.) (the “Borrower”)
as borrower and BOSTON SCIENTIFIC CORPORATION, a Delaware corporation (the “Lender”) as lender.

 

                PRELIMINARY
STATEMENTS:

 

                (1)
          The Borrower and the Lender have
entered into a Loan Agreement dated as of March 5, 2003 (the “Loan Agreement”). Capitalized terms
not otherwise defined in this Amendment have the same meanings as specified in
the Loan Agreement.

 

                (2)           The Borrower and the Lender, on the
terms and conditions stated below, have agreed to amend the Loan Agreement as
hereinafter set forth.

 

                SECTION
1. Amendments to Loan Agreement. The Loan Agreement is, effective as of
the date hereof and subject to the satisfaction of the conditions precedent set
forth in Section 2, hereby amended as follows:

 

                (a)           Section 1.01 is amended by adding the
following defined terms:

 

                                ““Collateral” means all “Collateral”
referred to in the Security Agreement.”

 

                                                                ““Collateral
Documents” means the Security Agreement and any other agreement
that creates or purports to create a Lien in favor of the Lender.”

 

                                                                ““Equity
Securities” shall have the meaning specified in Section 2.01.”

 

                                ““Initial Advance” shall have the
meaning specified in Section 2.01.”

 

                                                                ““Outstanding
Amount” shall have the meaning specified in Section 2.01.”

 

                                                                ““Security
Agreement” means the Security Agreement to be entered into
between the Borrower and the Lender, in substantially the form of Exhibit D
hereto, as amended.”

 

                                (b)           The definition of “Loan Documents” in
Section 1.01 is amended to read as follows:

 

 

                                ““Loan Documents” means this
Agreement, the Note and the Collateral Documents.”

 

                (c)           Section 2.01 is amended in full to
read as follows:

 

                                                                “SECTION 2.01 The Advances.
The Lender agrees, on the terms and conditions hereinafter set forth, upon
satisfaction of the conditions set forth in Sections 3.01 and 3,02 hereto, and
subject to Section 3.03, to make (a) an initial Advance in the amount of
$5,000,000 on March 12, 2004 (the “Initial Advance”)
and (b) Advances to the Borrower from time to time, but not more often than
once per fiscal quarter, on any Business Day during the period from January 1,
2005 until the Conversion Date in an aggregate amount not to exceed at any time
outstanding the amount of the Lender’s Commitment provided that the
aggregate amount of Advances at any time outstanding during the year 2005 may
not exceed $20,000,000, the aggregate amount of Advances at any time
outstanding during the year 2006 may not exceed $30,000,000, the aggregate
amount of Advances at any time outstanding during the year 2007 may not exceed
$40,000,000 and the aggregate amount of Advances at any time outstanding during
the year 2008 may not exceed $50,000,000 provided further, that in the
event that the Lender is not required to make an Advance to the Borrower in any
fiscal quarter solely due to the non-satisfaction of the condition precedent
set forth in Section 3.02(b), the Lender agrees, in the event that the
applicable Default is cured within the cure period specified therefore in
Section 7.01, on the terms and conditions hereinafter set forth, upon
satisfaction of the conditions set forth in Sections 3.01 and 3,02 hereto, and
subject to Section 3.03, to make such Advance to the Borrower in the next
succeeding fiscal quarter, in addition to any Advance that the Lender is
required hereunder to make to the Borrower in such succeeding fiscal quarter.
Advances made hereunder and repaid or prepaid may not be reborrowed, and any
such repaid or prepaid Advances shall be included for purposes of calculating total
amounts of Advances outstanding from time to time under this Section 2.01 as if
no such payment or prepayment had been made.”

 

                (d)
Section 2.05(b) is amended by inserting the words “or pursuant to Section 7.01.
The Commitment shall be also permanently reduced by the principal amount of any
Advances prepaid or converted pursuant to Section 2.06” immediately before the
period at the end of such clause.

 

                (e)           Section 2.06(a) is amended in full to
read as follows:

 

                                                                “(a) Optional. (i) Optional
Prepayment. The Borrower may, upon at least two Business Days’ notice to
the Lender stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances in whole or in part,
together with accrued interest to the date of such prepayment on the aggregate
principal amount prepaid, without penalty or premium. No such optional
prepayment of Advances shall relieve the Borrower of its payment or 

 

2

 

mandatory prepayment obligations hereunder except to the extent the Advances
and all accrued interest thereon have been prepaid.

 

                                                                (ii) Optional Conversion.
In the event that the Borrower shall, at any time and from time to time as of
and from March 12, 2004, issue equity securities in the capital stock of the
Borrower (“Equity Securities”) for an aggregate cash consideration of
$30,000,000 or greater, and provided that
no Default has occurred and is continuing, the Borrower may thereafter, one
time only, and upon at least two Business Days’ notice to the Lender stating
the proposed date, and if such notice is given the Borrower shall, prepay
$5,000,000 of the Advances outstanding as of such date, together with all
unpaid interest as of such date that has accrued on such amount of Advances being
so repaid on such date (the “Outstanding Amount”), by issuing to the
Lender a whole number of Equity Securities equal to the Outstanding Amount
divided by the lowest price per Equity Security paid for Equity Securities
issued by the Borrower from March 12, 2004 through the date of conversion. The
class and series (and all rights, privileges and other attributes) of the
Equity Securities issued to the Lender upon such optional conversion shall be
identical in all respects to the Equity Securities used to determine the
conversion price set forth above (or, if such Equity Securities issued by the
Borrower consisted of more than one class or series, then the class or series,
as applicable, of the Equity Securities to be issued to the Lender upon such
optional conversion shall consist of Equity Securities of the class or series,
as applicable, comprising the majority of such Equity Securities issued by the
Borrower, calculated based upon the cash consideration received by the Borrower
for such Equity Securities). Upon the successful completion of such optional
conversion, the Borrower may deliver a new Note to the Lender having a face
value equal to $5,000,000 less than the face value of the Note then held by the
Lender, executed by the Borrower and otherwise in form and substance
satisfactory to the Lender, in exchange for the Note then held by the Lender.
Such new Note may omit the sentence regarding Collateral set forth in Exhibit A
hereto.”

 

                (f)            Section 2.08 is amended in full to
read as follows:

 

                                                                “SECTION 2.08 Use of Proceeds.
The Borrower shall use the proceeds of the Initial Advance solely for general
corporate purposes of the Borrower. The Borrower shall use the proceeds of each
subsequent Advance solely to pay or reimburse itself for Eligible Costs and Expenses.”

 

 

                (g)           Section 3.02(c) is amended by adding
the following language in the first line thereof, immediately preceding “the
schedule attached”:

 

                "in
the case of an Advance other than the Initial Advance,''.

 

                (h)           Section 4.01 is retitled “Organization,
Authority and Qualification of the  Borrower."

 

 

3

 

                (i)            Section 4.03 is amended in full to
read as follows.

 

                                                “SECTION 4.03 Authority
and Qualification of the Borrower. The Borrower has all necessary corporate
power and authority to enter into the Loan Documents, to carry out its
obligations thereunder and to consummate the transactions contemplated thereby.
The execution and delivery by the Borrower of the Loan Documents, the
performance by the Borrower of its obligations thereunder, the consummation by
the Borrower of the transactions contemplated thereby, the grant by the
Borrower of the Liens granted by it pursuant to the Collateral Documents and
the perfection or maintenance of the Liens created under the Collateral
Documents (including the first priority nature thereof) have been duly
authorized by all requisite action on the part of the Borrower. Each Loan
Document to which the Borrower is a party has been, or upon its execution shall
be, duly executed and delivered by the Borrower, and (assuming due execution
and delivery thereof by each other party thereto, if applicable) each Loan
Document constitutes, or upon its execution shall constitute, the legal, valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject to (a) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights and remedies generally, and (b) the
effect of general equitable principles, regardless of whether asserted in a
proceeding in equity or at law.”

 

                (j)            Section 4.04 is amended by adding
the following clause the twelfth line following the word “except”:

 

                “for
the Liens created under the Collateral Documents or”.

 

                (k)           Article 4 is amended by adding
thereto a new Section 4.06, to read as

follows:

 

                                                                “SECTION 4.06 Perfection and
Protection of Security Interests. All filings and other actions necessary
or desirable to perfect and protect the security interest in the Collateral
created under the Collateral Documents have been duly made or taken and are in
full force and effect, and the Collateral Documents create in favor of the
Lender a valid and, together with such filings and other actions, perfected
first priority security interest in the Collateral, securing the payment of the
Secured Obligations, and all filings and other actions necessary or desirable
to perfect and protect such security interest have been duly taken, other than,
with respect to each of the forgoing clauses in this sentence for any date on
or prior to the date of the Initial Borrowing, the filing of the financing
statements listed in Exhibit E hereto. The Borrower is the legal and beneficial
owner of the Collateral free and clear of any Lien, except for the liens and
security interests created or permitted under the Loan Documents.”

 

                (1)           Section 6.01 is amended by adding new
paragraphs immediately at the end of such section, designated as Section
6.01(f) and (g), to read as follows:

 

4

 

                “(f)          Further Assurances, (i)
Promptly upon request by the Lender, correct any material defect error that may
be discovered in any Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and (ii) Promptly upon request by the Lender, do, execute,
acknowledge, deliver, re-record, file, re-file, register and re-register any
and all such further acts, deeds, conveyances, pledge agreements, mortgages,
deeds of trust, trust deeds, assignments, financing statements and
continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments as the Lender may
reasonably require from time to time in order to (A) carry out more effectively
the purposes of the Loan Documents, (B) to the fullest extent permitted by
applicable law, subject the Borrower’s properties, assets, rights or interests
to the Liens now or hereafter intended to be covered by the Security Agreement,
(C) perfect and maintain the validity, effectiveness and priority of any of the
Security Agreement any of the Liens intended to be created thereunder and (D)
assure, convey, grant, assign, transfer, preserve, protect and confirm more
effectively unto the Lender the rights granted or now or hereafter intended to
be granted to the Lender under any Loan Document or under any other instrument
executed in connection with any Loan Document.

 

                “(g)         Pre-Clinical Studies. Complete
pre-clinical studies associated with the cardiovascular program that are
currently scheduled to be accomplished in 2004 pursuant to Exhibit C to the
Development Agreement (General, IV-Specific, and Catheter-specific, in the
areas of dosing, engraftment, safety, toxicity, etc.) in a timely manner, and
in any event no later than March 31, 2005.”

 

                (m)          Article VI is further amended by
adding a new section immediately at the end of Section 6.02, designated as
Section 6.03, to read as follows:

 

                                “SECTION
6.03 Negative Covenants.

 

                                                                (a)           Liens, Etc. The Borrower will not create, incur,
assume or suffer to exist, or permit any of its Subsidiaries to create, incur,
assume or suffer to exist, any Lien on or with respect to any of the Collateral
of any character whether now owned or hereafter acquired, or sign or file or
suffer to exist, or permit any of its Subsidiaries to sign or file or suffer to
exist, under the Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any of its Subsidiaries as debtor, or sign
or suffer to exist, or permit any of its Subsidiaries to sign or suffer to
exist, any security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:

(i) Liens created under the Loan Documents:

(ii) Liens existing on the date hereof and described on Schedule 4.01(v)
hereto; and

(iii) Permitted Liens, excluding
Permitted Liens securing purchase money Indebtedness upon or in real property
or equipment acquired or held by the Borrower or any of its Subsidiaries to the
extent such Permitted Liens secure obligations other than (A) the purchase
price of such property or equipment, (B)

 

5

 

Indebtedness incurred solely for the purpose of filing the acquisition,
construction or improvement of any such property or equipment, (C) existing on
any such property or equipment at the time of acquisition (other than any such
Liens created in contemplation of such acquisition that do not secure the
purchase price), or (D) extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided, however, that no such Lien shall extend to or cover any
property other than the property or equipment being acquired, constructed or
improved, and no such extension, renewal or replacement shall extend to or
cover any property not theretofore subject to the Lien being extended, renewed
or replaced; and provided further that the aggregate
principal amount of the Indebtedness secured by Liens permitted by this clause
(iii) shall not exceed $100,000 at any time outstanding.

 

 

                                                                (b)           Mergers, Etc. The Borrower will not merge with or
sell all or substantially all of its assets to, any Person, or permit any of
its Subsidiaries to do so, except that any wholly-owned Subsidiary of the
Borrower may merge or consolidate with or into any other wholly-owned
Subsidiary, and except that any wholly-owned Subsidiary of the Borrower may
merge into the Borrower, provided, in
each case, that no Default shall have occurred and be continuing at the time of
such proposed transaction or would result therefrom.

 

                                                                (c)           Asset Dispositions. The Borrower will not, except
for any sale, assignment or transfer of Products in the ordinary course of
business, sell, assign or transfer any of its assets, or permit any of its
Subsidiaries to do so.

 

                                                                (d)           Negative Pledge. The Borrower will not enter into
or suffer to exist any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its or its Subsidiaries’ property or assets,
or permit any of its Subsidiaries to do so, except (i) in favor of the Lender,
or (ii) Capitalized Leases not to exceed in the aggregate $250,000 at any time
outstanding (solely to the extent that any such Capitalized Lease prohibits a
Lien on the property subject thereto).”

 

                (n)           Section 7.01(h) is amended by inserting
“or” immediately after “Borrower;” in the second line thereof and by adding
three new paragraphs immediately after such Section, to read as follows:

 

                                                “(i)          any Collateral Document or financing
statement after delivery thereof pursuant to Section 6.02(a) shall for any
reason (other than pursuant to the terms thereof) cease to create a valid and
perfected first priority lien on and security interest in the Collateral
purported to be covered thereby; or

 

                                                (j)            any Collateral Document shall be
terminated or any material provision of any of the Collateral Documents shall
cease for any reason to be in full force and effect or shall for any reason
cease to be the lawful, valid and binding obligation of or enforceable against
the Borrower or any other party thereto, or the Borrower

 

 

6

 

or any applicable
governmental authority shall so state in writing, or the validity or
enforceability of any such agreement is at any time contested by any of the parties
thereto; or the validity, priority or enforceability of the Liens or assignment
created in favor of the Lender under the Collateral Documents shall be
contested by any Person or the Lender shall cease to have a valid and perfected
first priority lien on and security interest in the collateral granted pursuant
to the Collateral Documents or the Borrower shall cease to own the Collateral
free and clear of all Liens other than the Lien or assignment created in favor
of the Lender pursuant to the Collateral Documents, in each case other than in
connection with a termination of the Security Agreement permitted by Section 19(b)
of the Security Agreement;”.

 

                (o)           Schedule I hereto is hereby incorporated
to the Loan Agreement as Schedule 4.01(v) thereto.

 

                (p)           The form of Notice of Borrowing
attached to the Loan Agreement as Exhibit B - Form of Notice of Borrowing is
hereby amended by inserting square brackets around paragraph (C) thereof and
inserting immediately thereafter:

 

                “[TO
BE INCLUDED IN ALL ADVANCES OTHER THAN THE INITIAL ADVANCE]”.

 

                (q)           Exhibit A to the Loan Agreement is
hereby replaced in its entirety by Exhibit A hereto,

 

                (r)            Exhibit B hereto is hereby
incorporated into the Loan Agreement as Exhibit D thereto.

 

                (s)           Exhibit C hereto is hereby
incorporated into the Loan Agreement as Exhibit E thereto.

 

                SECTION
2. Conditions of Effectiveness. This Amendment shall become effective on
and as of the date first above written when, and only when, the Lender shall
have received counterparts of this Amendment executed by the Borrower. The
effectiveness of this Amendment is conditioned upon the accuracy of the factual
matters described herein. This Amendment is subject to the provisions of
Section 9.02 of the Loan Agreement, and Section 1 hereof shall become effective
when, and only when, the Lender shall have received all of the following
documents, each such document (unless otherwise specified) dated the date
hereof, in form and substance satisfactory to the Lender:

 

                (a)           a Note for the account of the Lender,
duly executed by the Borrower, in the amount of $50,000,000.

 

                (b)           a counterpart of the Security
Agreement duly executed by the Borrower, together with evidence of the
completion of all recordings, filings and registrations of the Security
Agreement and other actions that the Lender may deem necessary or appropriate
in order to perfect and protect the Liens created thereby;

 

 

7

 

                (c)           certified copies of (i) the
resolutions of the Board of Directors of the Borrower approving this Amendment
and the matters contemplated hereby and (ii) all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
this Amendment and the matters contemplated hereby and thereby;

 

                (d)           a favorable opinion of Thomas &
Libowitz, P.A., counsel for the Borrower, in substantially the form of Exhibit
D hereto;

 

                (e)           a certificate of the Secretary or an
Assistant Secretary of the Borrower certifying the names and true signatories
of the officers of the Borrower authorized to sign this Amendment and the other
documents to be delivered hereunder, and

 

                (f)            a certificate signed by a duly
authorized officer of the Borrower stating that no event has occurred and is
continuing that constitutes a Default.

 

                SECTION
3. Costs and Expenses. Except as otherwise specified in this Amendment,
all costs and expenses, including, without limitation, fees and disbursements
of counsel, financial advisors and accountants, incurred in connection with
this Amendment and the transactions contemplated by this Amendment shall be
paid by the party incurring such costs and expenses.

 

                SECTION
4. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Delaware. Each of the Borrower and
the Lender unconditionally and irrevocably agree and consent to the exclusive
jurisdiction of the courts located in the State of Delaware and waive any
objection with respect thereto, for the purpose of any action, suit or
proceeding arising out of or relating to this Amendment or the transactions
contemplated hereby, and further agree not to commence any such action, suit or
proceeding in any such court.

 

                SECTION
5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of a signature page to this Amendment by telecopier
shall be effective as delivery of a manually executed counterpart of this
Amendment.

 

 

 

8

 

 

                IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

 

 

	
   

  	
  OSIRIS THERAPEUTICS, INC.,

  
	
   

  	
  as Borrower

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ illegible

  
	
   

  	
   

  	
  Title: Chairman of the
  Board

  
	
   

  	
   

  
	
   

  	
  BOSTON SCIENTIFIC
  CORPORATION,

  
	
   

  	
  as Lender

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  

 

 

 

9

SCHEDULE
I

 

SCHEDULE
4.01(v) TO THE LOAN AGREEMENT

 

Existing
Liens

 

	
  Secured
  Party

  	
   

  	
  Financing

  Statement

  	
   

  	
  Date

  	
   

  	
  State of
  Filing

  	
   

  	
  Status

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Active

  
	
  Hewlett-Packard1

  	
   

  	
  151458479

  	
   

  	
  05/25/1995

  	
   

  	
  Maryland

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signet

  	
   

  	
  151598020

  	
   

  	
  06/07/1995

  	
   

  	
  Maryland

  	
   

  	
  Active

  
	
  Bank/Maryland2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  151988438

  	
   

  	
  07/17/1995

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  152498447

  	
   

  	
  09/06/1995

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  152618333

  	
   

  	
  09/18/1995

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  153178488

  	
   

  	
  11/13/1995

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  153178773

  	
   

  	
  11/13/1995

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  153528309

  	
   

  	
  12/18/1995

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  153528349

  	
   

  	
  12/18/1995

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  153638516

  	
   

  	
  12/29/1995

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  160108494

  	
   

  	
  01/10/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  160168377

  	
   

  	
  01/16/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  160298286

  	
   

  	
  01/29/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  160718279

  	
   

  	
  03/11/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

1                  Hewlett-Packard
obligation has been satisfied and the Company is in the process of obtaining
and the appropriate release.

 

2                  Lien is on a
cash account that contains money covering debt service on the Signet loan.

 

3                  Dominion
obligations have been satisfied and the Company has been authorized to release
the Dominion liens. The Company is in the process of filing the appropriate
releases.

 

10

 

	
  Secured
  Party

  	
   

  	
  Financing

  Statement

  	
   

  	
  Date

  	
   

  	
  State of
  Filing

  	
   

  	
  Status

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  160788000

  	
   

  	
  03/18/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  160998323

  	
   

  	
  04/08/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion
  Ventures

  	
   

  	
  161008224

  	
   

  	
  04/09/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  163027014

  	
   

  	
  10/28/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  163028180

  	
   

  	
  10/28/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  163028599

  	
   

  	
  10/28/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dominion

  	
   

  	
  163027015

  	
   

  	
  10/28/1996

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Ventures

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General
  Electric

  	
   

  	
  000016941

  	
   

  	
  07/16/1998

  	
   

  	
  Maryland

  	
   

  	
  Released

  
	
  Capital
  Corporation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

11

 

EXHIBIT
A

 

FORM
OF

PROMISSORY
NOTE

 

	
  U.S.$50,000,000

  	
   

  	
  Dated:

  	
               ,
  20   

  

 

                FOR
VALUE RECEIVED, the undersigned, OSIRIS THERAPEUTICS, INC. (the "Borrower”), HEREBY PROMISES TO PAY,
as and when specified in the Loan Agreement referred to below, to the order of
BOSTON SCIENTIFIC CORPORATION (the “Lender”)
the aggregate principal amount of the Advances made by the Lender to the
Borrower pursuant to the Loan Agreement dated as of March 5, 2003, between the
Borrower and the Lender (as amended by Amendment No. 1 to the Loan Agreement
dated as of March 12, 2004 and as amended or modified from time to time, the “Loan Agreement”; the terms defined
therein being used herein as therein defined).

 

                The
Borrower promises, in accordance with the terms and conditions of the Loan
Agreement, to pay interest on the unpaid principal amount of each Advance from
the date of such Advance until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in the Loan
Agreement.

 

                Both
principal and interest are payable in lawful money of the United States of
America to the Lender, at the Lender Account, in same day funds. Each Advance
owing to the Lender by the Borrower pursuant to the Loan Agreement, and all
payments made on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the grid attached hereto which
is part of this Promissory Note.

 

                This
Promissory Note is the Note referred to in, and is entitled to the benefits of,
the Loan Agreement. The Loan Agreement, among other things, (i) provides for
the making of Advances by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from each
such Advance being evidenced by this Promissory Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of
certain stated events. The obligations of the Borrower under this Promissory
Note and the Loan Agreement are secured by the Collateral as provided in the
Loan Documents.

 

 

 

	
   

  	
  OSIRIS THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  

 

 

12

 

ADVANCES
AND PAYMENTS OF PRINCIPAL

 

	
   

  	
   

  	
   

  	
   

  	
  Amount of

  	
   

  	
  Unpaid

  	
   

  	
   

  
	
   

  	
   

  	
  Amount of

  	
   

  	
  Principal

  	
   

  	
  Principal

  	
   

  	
  Notation

  
	
  Date

  	
   

  	
  Advance

  	
   

  	
  Paid

  	
   

  	
  Balance

  	
   

  	
  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

13

EXHIBIT
B

 

EXHIBIT
D TO THE LOAN AGREEMENT

 

FORM
OF SECURITY AGREEMENT

 

 

 

 

EXHIBIT
C

 

EXHIBIT
E TO THE LOAN AGEEMENT

 

FILING
STATEMENTS

 

 

FILING
STATEMENTS RELATING TO THE COLLATERAL

 

1.
UCC-1 to be filed with the secretary of state of the state of Delaware, in the
form attached hereto.

 

 

 

EXHBIT
D

 

FORM
OF OPINION OF COUNSEL FOR THE BORROWER

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]