AMENDED AND RESTATED MASTER SECURITY AGREEMENT

Exhibit 10.3

AMENDED AND RESTATED

MASTER SECURITY AGREEMENT

THIS AMENDED AND RESTATED MASTER SECURITY AGREEMENT (this " Agreemen t") dated as of the 29 ^th day of December, 2006, from GTC BIOTHERAPEUTICS, INC. (" Debtor ") in favor of GENERAL ELECTRIC CAPITAL CORPORATION (together with its successors and assigns, if any, " Secured Party "). Secured Party has an office at 83 Wooster Heights Road, Danbury, CT 06810. Debtor is a corporation organized and existing under the laws of the state of Massachusetts (the " State "). Debtor’s mailing address and chief place of business is 175 Crossing Blvd., Framingham, MA 01702.

RECITALS:

WHEREAS , Debtor has granted to Secured Party a security interest in certain of its property pursuant to that certain Master Security Agreement dated as of May 24, 2004 (the " Original Security Agreement "); and

WHEREAS , the Original Security Agreement secures the obligations of Debtor to Secured Party under, among other things, those certain Promissory Notes from Debtor to Secured Party dated (i) May 20, 2004 in the original principal amount of $10,000,000, (ii) February 25, 2005 in the original principal amount of $2,400,000.00 and (iii) December 29, 2005 in the original principal amount of $2,400,000 (collectively, the " Original Notes "); and

WHEREAS , Debtor and Secured Party have agreed to amend and restate the Original Security Agreement and the Original Notes on the terms and conditions set forth herein and in those certain Amended and Restated Promissory Notes from Debtor to Secured Party dated as of the date hereof in the original principal amounts of $8,000,000 and $2,000,000 (collectively, the " New Notes ").

NOW, THEREFORE , in consideration of the mutual covenants and undertakings herein contained, Debtor and Secured Party agree as follows:

A . AMENDMENT AND RESTATEMENT.

As of the date hereof, the terms, conditions, covenants, agreements, representations and warranties contained in the Original Security Agreement shall be deemed amended and restated in their entirety as follows and the Original Security Agreement shall be consolidated with and into and superseded by this Agreement; provided, however , that nothing contained in this Agreement shall impair, limit or affect the security interests heretofore granted, pledged and/or assigned to Secured Party as security for the Indebtedness (as defined in the Original Security Agreement ) under the Original Security Agreement.

1. CREATION OF SECURITY INTEREST.

Debtor grants to Secured Party, its successors and assigns, a continuing security interest in, to and against all property listed on any collateral schedule now or in the future annexed to or made a part of this Agreement (" Collateral Schedule "), whether now owned or existing or hereafter acquired or arising and wheresoever located, and in and against all additions, attachments, accessories and accessions to such property, all substitutions, replacements or exchanges therefor, and all proceeds or products thereof, in whatever form, including without limitation cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and/or tort claim proceeds (all such property is individually and collectively called the " Collateral "). This security interest is given to secure the payment and performance of all debts, obligations and liabilities of any kind whatsoever (including all interest (whether or not allowed or disallowed), charges, expenses, fees and other sums accruing after commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of Debtor) of Debtor to Secured Party, now existing or arising in the future, including but not limited to the payment and performance of the New Notes or other promissory notes from time to time identified on any Collateral Schedule (collectively " Notes " and each a " Note "), that certain Amended and Restated Mortgage, Security Agreement and Fixture Filing dated as of the date hereof from Debtor in favor of Secured Party (the " New Mortgage ") , that certain Master Lease Agreement dated as of July 23, 2004, between Debtor and Secured Party, together with all Schedules and attachments thereto (the " Lease ") and any renewals, extensions and modifications of such debts, obligations and liabilities (such Notes, New Mortgage, Lease, debts, obligations and liabilities are called the " Indebtedness ").

2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

Debtor represents, warrants and covenants as of the date of this Agreement and as of the date of each Collateral Schedule that:

• (a) Debtor’s exact legal name is as set forth in the preamble of this Agreement and Debtor is, and will remain, duly organized, existing and in good standing under the laws of the State set forth in the preamble of this Agreement, has its chief executive offices at the location specified in the preamble, and is, and will remain, duly qualified and licensed in every jurisdiction wherever necessary to carry on its business and operations;

  (b) Debtor has adequate power and capacity to enter into, and to perform its obligations under this Agreement, each Note and any other documents evidencing, or given in connection with, any of the Indebtedness (all of the foregoing are called the " Debt Documents ");

  (c) This Agreement and the other Debt Documents have been duly authorized, executed and delivered by Debtor and constitute legal, valid and binding agreements enforceable in accordance with their terms, except to the extent that the enforcement of remedies may be limited under applicable bankruptcy and insolvency laws and general principles of equity;

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• (d) No approval, consent or withholding of objections is required from any governmental authority or instrumentality with respect to the entry into, or performance by Debtor of any of the Debt Documents, except any already obtained;

  (e) The entry into, and performance by, Debtor of the Debt Documents will not (i) violate any of the organizational documents of Debtor or any judgment, order, law or regulation applicable to Debtor or (ii) result in any breach of or constitute a default under any contract or agreement to which Debtor is a party, or result in the creation any lien, claim or encumbrance on any of Debtor’s property (except for liens in favor of Secured Party) pursuant to any indenture, mortgage, deed of trust, bank loan, credit agreement or other agreement or instrument to which Debtor is a party;

  (f) Except as set forth on Schedule 2(f) attached hereto, there are no suits or proceedings pending in court or before any commission, board or other administrative agency against or affecting Debtor which could, in the aggregate, have a material adverse effect on Debtor, its business or operations, or its ability to perform its obligations under the Debt Documents, nor does Debtor have reason to believe that any such suits or proceedings are threatened;

  (g) All financial statements delivered to Secured Party in connection with the Indebtedness have been prepared in accordance with generally accepted accounting principles, except that quarterly financial statements will not provide footnotes and will be subject to normal year-end adjustments, and since the date of the most recent financial statement, there has been no material adverse change in Debtor’s financial condition;

  (h) The Collateral is not, and will not be, used by Debtor for personal, family or household purposes;

  (i) The Collateral is, and will remain, in good condition and repair (ordinary wear and tear excepted), and Debtor will not be negligent in its care and use;

  (j) Debtor is, and will remain, the sole and lawful owner, and in possession of (other than the Offsite Collateral (defined below) (solely with respect to possession)), the Collateral, and has the sole right and lawful authority to grant the security interest described in this Agreement;

  (k) The Collateral is, and will remain, free and clear of all liens, claims and encumbrances of any kind whatsoever, except for (i) liens in favor of Secured Party, (ii) liens existing as of the date of this Agreement and set forth on Schedule 2(k) attached hereto, (iii) liens for taxes not yet due or for taxes being contested in good faith and which do not involve, in the judgment of Secured Party, any risk of the sale, forfeiture or loss of any of the Collateral and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP, and (iv) inchoate materialmen’s, mechanic’s, repairmen’s and similar liens arising by operation of law in the normal course of business for amounts which are not delinquent (all of such liens are called " Permitted Liens ");

  (l) Debtor is and will remain in full compliance with all laws and regulations applicable to it including without limitation (i) ensuring that no person who owns a controlling interest in or otherwise controls Debtor is or shall be (A) listed on the

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• Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (" OFAC "), Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (B) a person designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other similar Executive Orders, and (ii) compliance with all applicable Bank Secrecy Act (" BSA ") laws, regulations and government guidance on BSA compliance and on the prevention and detection of money laundering violations;

  (m) Debtor’s and each Subsidiary’s (defined below) Intellectual Property (as defined in Section 7 below) is and will remain free and clear of all liens, claims and encumbrances of any kind whatsoever, except for Permitted Liens as defined in subsection (k) of this Section, the granting of licenses of Debtor’s Intellectual Property in the ordinary course of business and other licensing, partnership or joint ventures entered into in the ordinary course of Debtor’s business and permitted hereunder. For purposes of this Agreement, the term " Subsidiary " shall mean a corporation or other entity of which more than 50% of the outstanding stock or other ownership interests having ordinary voting power to elect a majority of the directors (or other persons performing similar functions) of such corporation is owned, directly or indirectly, by Debtor;

  (n) Debtor has not and will not, and will not permit any Subsidiary to, enter into any other agreement or financing arrangement in which it grants a negative pledge in Debtor’s or any Subsidiary’s Intellectual Property to any other party;

  (o) Debtor agrees that it shall not, and shall not allow any of its Subsidiaries to, directly or indirectly, create, incur, assume, permit to exist, guarantee or otherwise become or remain directly or indirectly liable with respect to, any Debt (as hereinafter defined), except for (i) Debt of Debtor to Secured Party, (ii) Debt existing on the date hereof and set forth on Schedule 2(o) to this Agreement, (iii) unsecured Debt incurred under and pursuant to that certain $2,558,650 Subordinated Convertible Note (the " Subordinated Note "), dated December 14 2006, from Debtor to LFB Biotechnologies (" Subordinated Debt ") and (iv) additional Debt in an amount up to $1,500,000. The term " Debt " shall mean, with respect to any person, at any date, without duplication, (A) all obligations of such person for borrowed money, (B) all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, or upon which interest payments are customarily made, (C) all obligations of such person to pay the deferred purchase price of property or services incurred in the ordinary course of business if the purchase price is due more than six (6) months from the date the obligation is incurred, (D) all capital lease obligations of such person, (E) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product, (F) all obligations of such person to purchase securities (or other property) which arise out of or in connection with the issuance or sale of the same or substantially similar securities (or property), (G) all contingent or non-contingent obligations of such person to reimburse any bank or other person in respect of amounts paid under a letter of credit or similar instrument, (H) all equity securities of such person subject to repurchase or redemption otherwise than at the sole option of such person, (I) all "amounts" and similar payment obligations of such person, (J) all Indebtedness secured by a lien on any asset of such person, whether or not such Debt is otherwise an obligation of such person, (K) all obligations of such person under any foreign

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• exchange contract, currency swap agreement, interest rate swap, cap or collar agreement or other similar agreement or arrangement designed to alter the risks of that person arising from fluctuations in currency values or interest rates, in each case whether contingent or matured, (L) all obligations or liabilities of other guaranteed by such person; and (M) all obligations of such person to trade creditors (other than Genzyme Corporation) incurred in the ordinary course of business and more than ninety (90) days past due;

  (p) Debtor agrees that it shall not, and shall not allow any of its Subsidiaries to, (i) make any payment in respect of any Subordinated Debt, except in accordance with that certain Subordination Agreement dated as of the date hereof between Secured Party and LFB Biotechnologies S.A.S.U. or (ii) amend, supplement, modify or waive any of the terms of any document governing any Subordinated Debt. Debtor further agrees to provide Secured Party copies of any notices, reports, financial statements, financial information or other information either delivered or received by Debtor in relation to the Subordinated Debt or pursuant to the Subordinated Note except to the extent that such information is to be provided to Secured Party under this Agreement or any of the other Debt Documents;

  (q) Debtor (i) shall, within 30 days after the initial funding of the Indebtedness secured hereby, cause each securities, depository or disbursement account of Debtor or any of its Subsidiaries (other than any tax or payroll account) to be subject to a control agreement satisfactory to Secured Party in its reasonable discretion and (ii) shall not and shall not allow any of its Subsidiaries to open or maintain any securities, depository or disbursement accounts except upon thirty (30) days’ prior written notice to Secured Party, and Debtor shall not, and shall not allow any Subsidiary to, use any such accounts until such time as the applicable securities intermediary or depository institution, as the case may be, Debtor or such subsidiary of Debtor, as the case may be, and Secured Party have entered into a control agreement satisfactory to Secured Party in its reasonable discretion and in any event sufficient to perfect a first priority lien and security interest in such account in favor of Secured Party. All funds in or transferred into such account on or after the effectiveness of this Agreement shall be subject to the security interest granted under this Agreement. Each control agreement entered into pursuant to (i) or (ii) above shall grant Secured Party control of such securities, depository or disbursement account and provide that the applicable securities intermediary or depository institution, as the case may be, will comply with instructions originated by the Secured Party directing disposition of the funds in such account without further consent by Debtor, provided, that Debtor shall have full access to such accounts and the funds therein until the earlier to occur of (A) an Event of Default or (B) Debtor shall have acted in a fraudulent manner or shall have committed an act of fraud; and

  (r) Debtor agrees that it shall not, and shall not allow any of its Subsidiaries to, without the prior written consent of Secured Party, which consent shall not be unreasonably withheld, purchase or acquire obligations or stock of, or any other interest in, any corporation or other entity (other than cash equivalents and equity investments in its Subsidiaries existing as of the date hereof), or form any Subsidiary or enter into any partnership, joint venture or similar arrangement.

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• (s) Debtor will not, and will not permit any Subsidiary to, directly or indirectly, engage in any transaction with any Affiliate, except where such transactions are (i) on terms that are no less favorable to the Debtor or such Subsidiary than those which might be obtained at the time from unaffiliated third parties and (ii) entered into in the ordinary course of business. As used herein, " Affiliate " of any person means (a) any person which, directly or indirectly, is in control of, is controlled by, or is under common control with such person, or (b) any person who is a partner, shareholder, director or officer (i) of such person, or (ii) of any person described in clause (a) above, and, for purposes of this definition, control of a person shall mean the power, direct or indirect, (x) to vote 10% or more of the voting equity interests of such person, or (y) to direct or cause the direction of the management and policies of such person whether by contract or otherwise.

3. COLLATERAL; SUBSIDIARIES.

(a) Until repossession of Collateral by Secured Party in the exercise of its remedies under Section 7 hereof, Debtor shall remain in possession of the Collateral, other than such portion of the Collateral as shall be located from time to time at the locations in connection with the purification, packaging and storage arrangements more fully described in Schedule 3 attached hereto (the " Offsite Collateral "); except that Secured Party shall have the right to possess (i) any chattel paper or instrument that constitutes a part of the Collateral, and (ii) any other Collateral in which Secured Party’s security interest may be perfected only by possession. Secured Party may inspect any of the Collateral during normal business hours after giving Debtor reasonable prior notice. If Secured Party asks, Debtor will promptly notify Secured Party in writing of the location of any Collateral. Debtor shall (A) within 45 days after the initial funding of the Indebtedness secured hereby, cause the Secured Party to be properly perfected in any portion of the Collateral held outside of the United States, (B) within 60 days after the initial funding of the Indebtedness secured hereby, use best efforts to cause each of Cambrex Bio Science MA, Inc.(" Cambrex ") and MedImmune, Inc. (" MedImmune ") to enter into a bailee acknowledgment with Secured Party and (C) within 60 days after any portion of the Collateral is located at the facilities of (I) Cardinal Health PTS, Inc. (" Cardinal Health ") or (II) Cryonix, Inc. (" Cryonix "), use best efforts to cause (in the case of (I)), Cardinal Health and (in the case of (II)), Cryonix) to enter into such acknowledgment. With respect to (B) and (C) above, the bailee acknowledgments shall be satisfactory to Secured Party in its reasonable discretion, and Secured Party agrees to negotiate the form of bailee acknowledgment in good faith with each bailee. In the event that Debtor is unable to cause any of Cambrex, MedImmune, Cardinal Health or Cryonix to enter into a bailee acknowledgment within the relevant time period set forth in (B) or (C) above, Debtor shall (from the day following the expiration of such time period until such bailee acknowledgment is entered into) be prohibited from acquiring, transferring or placing (or causing to be acquired, transferred or placed) or otherwise taking possession of or asserting control over any additional equipment (as such term is defined in the UCC (as defined in the Collateral Schedule)) at the location of such bailee without the prior written consent of Secured Party.

(b) Debtor shall (i) use the Collateral only in its trade or business, (ii) maintain all of the Collateral in good operating order and repair, normal wear and tear excepted, (iii) use and maintain the Collateral only in compliance with manufacturers recommendations and all applicable laws and (iv) keep all of the Collateral free and clear of all liens, claims and encumbrances (except for Permitted Liens).

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(c) Secured Party does not authorize and Debtor agrees it shall not, and shall not allow any of its Subsidiaries to, without the prior written consent of Secured Party, which consent shall not be unreasonably withheld:

(i) part with possession of any of its assets (including without limitation in respect of Debtor, the Collateral) (except for (A) the Offsite Collateral, (B) to Secured Party, (C) for maintenance and repair, (D) any sale or disposition of inventory in the ordinary course of business or the sale of equipment or other assets which are determined by the Debtor in good faith to be obsolete or no longer used or useful in Debtor’s business and (E) any licenses of Intellectual Property entered into in the ordinary course of business);

(ii) remove any of the Collateral from the continental United States (except for that portion of the Offsite Collateral which from time to time shall be located in Europe as set forth in Schedule 3 attached hereto or any sale or disposition of inventory in the ordinary course of business); or

(iii) sell, rent, lease, mortgage, license, grant a security interest in or otherwise transfer or encumber (except for Permitted Liens) any of its assets (including, without limitation, in respect of Debtor, the Collateral) (except for (A) any sale or disposition of inventory in the ordinary course of business, (B) the sale of equipment or other assets which are determined by the Debtor in good faith to be obsolete or no longer used or useful in Debtor’s business, (C) transfers of Intellectual Property expressly permitted under Section 2(m), and (D) liens on assets financed under capital leases, to the extent such the amount of related capital lease obligations together with other Debt permitted hereunder, do not violate the terms of Section 2(o).

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

(e) Debtor shall, at all times, keep accurate and complete records of the Collateral, and Secured Party shall have the right to inspect and make copies of all of Debtor’s books and records relating to the Collateral during normal business hours, after giving Debtor reasonable prior notice.

(f) Debtor agrees and acknowledges that any third person who may at any time possess all or any portion of the Collateral shall be deemed to hold, and shall hold, the Collateral as the agent of, and as pledge holder for, Secured Party. Secured Party may at any time give notice to any third person described in the preceding sentence that such third person is holding such Collateral as the agent of, and as pledge holder for, the Secured Party.

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(g) At the request of Secured Party, but no more frequently than once each fiscal year unless a default has occurred hereunder or Secured Party is otherwise insecure as to the value of the Collateral, upon reasonable notice to Debtor (unless a default has occurred hereunder), Debtor shall permit Secured Party or one or more agents to perform, at Debtor’s expense, appraisals of Collateral, field examinations, collateral analysis, monitoring or other business analysis as reasonably required by Secured party and shall provide Secured Party with access to all facilities and all books and records of Debtor reasonably required by Secured Party to conduct such audits.

(h) Within ninety (90) days after the initial funding of the Indebtedness secured hereby, Debtor shall provide to Secured Party an ALTA survey of the Land and Improvements, prepared by an engineer or surveyor registered in the Commonwealth of Massachusetts, and certified to Secured Party and Old Republic Title Insurance Company (the " Title Company "), in form sufficient to allow the Title Company to delete or omit the standard survey exception in Secured Party’s loan policy of title insurance, and otherwise in form and content satisfactory to Secured Party (the " Survey "); provided, however , that Secured Party shall not unreasonably withhold its consent to an extension of such 90-day period if Secured Party determines, in its reasonable judgment, that adverse weather conditions prevented Debtor’s surveyor from completing the Survey within such period. Debtor shall request an extension of such 90-day period in writing at least five (5) business days prior to the expiration of such 90-day period if adverse weather conditions have prevented Debtor’s surveyor from completing such Survey, and shall provide a proposed completion date with such notice, which proposed completion date shall be reasonably acceptable to Secured Party. If Secured Party consents to such extension and such proposed completion date, Debtor shall thereafter cause its surveyor to complete and deliver the Survey on or before such proposed completion date, the failure of which shall be an Event of Default without further notice, grace period or opportunity to cure. If the Survey reveals any defect, encumbrance, or other qualification unacceptable to Secured Party (whether one or more, a " Survey Defect "), Secured Party shall provide written notice thereof to Debtor, and Debtor shall cause such Survey Defect to be removed or eliminated, and an updated certified survey satisfactory to Secured Party to be provided to Secured Party and the Title Company within sixty (60) days after receipt of such written notice.

(i) Debtor will (i) deliver to Secured Party immediately upon execution of this Agreement the originals of all stock, certificated securities and other certificated investment property, and instruments constituting the membership or other equity interests in ATIII, LLC, a Delaware limited liability company (if any then exist) and (ii) hold in trust for Secured Party upon receipt and immediately thereafter deliver to Secured Party any such Collateral, in each case together with stock or similar powers executed in blank with respect to such Collateral in form and substance reasonably satisfactory to Secured Party. Debtor will permit Secured Party from time to time to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of investment property not represented by certificates which are Collateral owned by Debtor to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of investment property not represented by certificates and all rollovers and replacements therefor to reflect the lien of Secured Party granted pursuant to this

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Agreement. In addition, Debtor shall within 10 days of the initial funding of the Indebtedness secured hereby, deliver to Secured Party a stock pledge agreement with respect to the membership or other equity interests in ATIII LLC, substantially in the form of Exhibit "A" attached hereto.

(j) Debtor will (i) within 30 days of the initial funding of the Indebtedness secured hereby, deliver to Secured Party (A) that certain Confirmation of Landlord Subordination and Consent Agreement (together with copy of the lease identified therein) with respect to the NDNE lease, fully executed by the parties thereto (other than Secured Party), and (B) that certain Confirmation of Consent to Lease with respect to the Merrimack lease, fully executed by the parties thereto (other than Secured Party), and (ii) within 60 days of the initial funding of the Indebtedness secured hereby, (A) comply in all material respects with the Order of Conditions recorded in the Worcester County Registry of Deeds (the " Registry "), in Book 40117, at page 284 (the " Order of Conditions "), and, promptly after completion of the Proposed Upgrade Plan as described in the Order of Conditions, obtain a certificate of compliance from the Town of Charlton, cause such certificate to be recorded in the Registry and provide a copy of such recorded certificate of compliance to Secured Party and (B) deliver to Secured Party that certain Confirmation of Consent to Lease with respect to that certain Sublease Agreement dated July 16, 2002, between Antigenics, Inc., a Massachusetts corporation ("Antigenics"), and the Borrower, as amended by First Amendment to Sublease dated March 16, 2004, and that certain Antigenics Leasehold Lease between Antigenics and the Borrower, dated July 19, 2002, as amended by First Amendment to Leasehold Lease dated March 16, 2004, fully executed by the parties thereto (other than Secured Party).

4. INSURANCE.

(a) Debtor shall at all times bear the entire risk of any loss, theft, damage to, or destruction of, any of the Collateral from any cause whatsoever other than the gross negligence or willful misconduct of the Secured Party.

(b) Debtor agrees to keep the Collateral insured against loss or damage by fire and extended coverage perils, theft, burglary, and for any or all Collateral which are vehicles, for risk of loss by collision, and if requested by Secured Party, against such other risks as Secured Party may reasonably require. The insurance coverage shall be in an amount no less than the full replacement value of the Collateral, and deductible amounts, insurers and policies shall be acceptable to Secured Party. Debtor shall deliver to Secured Party policies or certificates of insurance evidencing such coverage. Each policy shall name Secured Party as additional insured and lender’s loss payee, shall provide for coverage to Secured Party regardless of the breach by Debtor of any warranty or representation made therein, shall not be subject to co-insurance and shall provide that coverage may not be canceled or altered by the insurer except upon thirty (30) days prior written notice to Secured Party. Debtor appoints Secured Party as its attorney-in-fact to make proof of loss, claim for insurance and adjustments with insurers and to receive payment of and execute or endorse all documents, checks or drafts in connection with insurance payments. Secured Party shall not act as Debtor’s attorney-in-fact unless Debtor is in default. Proceeds of insurance in excess of $100,000 per claim shall be applied, at the option of Secured Party, to repair or replace the Collateral or to reduce any of the Indebtedness. Proceeds of insurance below $100,000 per claim shall be applied, at the option of Debtor, to repair or replace the Collateral or to reduce any of the Indebtedness.

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5. REPORTS.

(a) Debtor shall promptly notify Secured Party of (i) any change in the name of Debtor, (ii) any change in the state of its incorporation, organization or registration, (iii) any relocation of its chief executive offices, (iv) any relocation of any of the Collateral, (v) any of the Collateral being lost, stolen, missing, destroyed, materially damaged or worn out or (vi) any lien, claim or encumbrance other than Permitted Liens attaching to or being made against any of the Collateral. Debtor shall promptly deliver to Secured Party, at Secured Party’s request, reports specifying the location and value of the Offsite Collateral.

(b) Debtor will deliver to Secured Party financial statements as follow: If Debtor is a privately held company, then Debtor agrees to provide monthly financial statements, certified by Debtor’s president or chief financial officer including a balance sheet, statement of operations and cash flow statement within 30 days of each month end and its complete audited annual financial statements, certified by a recognized firm of certified public accountants, within 120 days of fiscal year end or at such time as Debtor’s Board of Directors receives the audit. If Debtor is a publicly held company, then Debtor agrees to provide quarterly unaudited statements and annual audited statements, certified by a recognized firm of certified public accountants, within 10 days after the statements are provided to the Securities and Exchange Commission (" SEC "). All such statements are to be prepared using generally accepted accounting principles (" GAAP "), except that quarterly financial statements will not provide footnotes and will be subject to normal year-end adjustments and, if Debtor is a publicly held company, are to be in compliance with SEC requirements.

6. FURTHER ASSURANCES.

(a) Debtor shall upon request of Secured Party, furnish to Secured Party such further information, execute and deliver to Secured Party such documents and instruments (including, without limitation, Uniform Commercial Code financing statements) and shall do such other acts and things as Secured Party may at any time reasonably request relating to the perfection or protection of the security interest created by this Agreement or for the purpose of carrying out the intent of this Agreement. Without limiting the foregoing, Debtor shall cooperate and do all acts reasonably deemed necessary or advisable by Secured Party to continue in Secured Party a perfected first security interest in the Collateral, and shall use commercially reasonable efforts to obtain and furnish to Secured Party any subordinations, releases, landlord waivers, lessor waivers, mortgagee waivers, or control agreements, and similar documents as may be from time to time requested by, and in form and substance reasonably satisfactory to, Secured Party.

(b) Debtor authorizes Secured Party to file a financing statement and amendments thereto describing the Collateral and containing any other information required by the applicable Uniform Commercial Code. Debtor irrevocably grants to Secured Party the power to sign Debtor’s name and generally to act on behalf of Debtor to execute and file applications for title, transfers of title, financing statements, notices of lien and other documents pertaining to any or all of the Collateral; this power is coupled with Secured Party’s interest in the Collateral. Debtor shall, if any certificate of title be required or permitted by law for any of the Collateral,

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obtain and promptly deliver to Secured Party such certificate showing the lien of this Agreement with respect to the Collateral. Debtor ratifies its prior authorization for Secured Party to file financing statements and amendments thereto describing the Collateral and containing any other information required by the Uniform Commercial Code if filed prior to the date hereof.

7. DEFAULT AND REMEDIES.

(a) Debtor shall be in default under this Agreement and each of the other Debt Documents upon the occurrence and during the continuance of any of the following events or circumstances (each an "Event of Default"):

(i) Debtor breaches its obligation to pay when due any installment or other amount due or coming due under any of the Debt Documents and fails to cure the breach within three (3) days; provided , that prior to the delivery of the Survey as contemplated in Section 3(h) above, Debtor shall have no right to cure any such breach;

(ii) Debtor, without the prior written consent of Secured Party, (A) attempts to or does sell, rent, lease, license, mortgage, grant a security interest in, or otherwise transfer or encumber (except for Permitted Liens) any of the Collateral, except for any sale or disposition of inventory in the ordinary course of business, or the sale of equipment or other assets which are determined by the Debtor in good faith to be obsolete or no longer used or useful in Debtor’s business or (B) breaches any of its obligations under Sections 2(n), (o), (p), (q), (r) or (s) or 3(a), (h), (i) or (j) hereof;

(iii) Debtor breaches any of its insurance obligations under Section 4;

(iv) Debtor breaches any of its other obligations under any of the Debt Documents and fails to cure that breach within ten (10) days after written notice from Secured Party; provided , that prior to the delivery of the Survey as contemplated in Section 3(h) above, Debtor shall have no right to cure any such breach;

(v) Any warranty, representation or statement made by Debtor in any of the Debt Documents or otherwise in connection with any of the Indebtedness shall be false or misleading in any material respect when made;

(vi) Any of the Collateral is subjected to attachment, execution, levy, seizure or confiscation in any legal proceeding or otherwise and such attachment, seizure or levy is not removed in ten (10) days or if any legal or administrative proceeding is commenced against Debtor or any of the Collateral, which in the good faith judgment of Secured Party subjects any of the Collateral to a material risk of attachment, execution, levy, seizure or confiscation and no bond is posted or protective order obtained to negate such risk;

(vii) Debtor breaches or is in default under any other agreement between Debtor and Secured Party;

(viii) Debtor, any material Subsidiary (including without limitation ATIII, LLC, a Delaware limited liability company), or any guarantor or other obligor for any of the Indebtedness (collectively " Guarantor ") dissolves, terminates its existence, becomes insolvent or ceases to do business as a going concern;

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(ix) If Debtor, any Subsidiary, or any Guarantor is a natural person, Debtor or any such Guarantor dies or becomes incompetent;

(x) A receiver is appointed for all or of any part of the property of Debtor, any Subsidiary or any Guarantor, or Debtor, any Subsidiary or any Guarantor makes any assignment for the benefit of creditors;

(xi) Debtor, any Subsidiary or any Guarantor files a petition under any bankruptcy, insolvency or similar law, or any such petition is filed against Debtor, any Subsidiary or any Guarantor and is not dismissed within sixty (60) days;

(xii) Debtor’s improper filing of an amendment or termination statement relating to a filed financing statement describing the Collateral;

(xiii) There is a material adverse change in the Debtor’s financial condition and operations as determined in the commercially reasonable judgment of Secured Party; provided, however, that such a change will not be deemed to have occurred solely because of the occurrence of any of the following individual events: (a) negative responses from regulatory agencies; (b) negative clinical trial results; (c) a low cash position; (d) fluctuations in revenues; or (e) continuing losses from operations; provided, further, however, that (I) the occurrence of any of (a), (b) or (c) may form the basis on which the Secured Party reasonably determines that a material adverse change has occurred if any such event occurs in combination with one or more of the others of (a), (b) and (c) and (II) the occurrence of any of (a), (b), and (c), may form the basis on which the Secured Party reasonably determines that a material adverse change has occurred if any such event occurs with other adverse changes in Debtor’s financial condition;

(xiv) Any Guarantor revokes or attempts to revoke its guaranty of any of the Indebtedness or fails to observe or perform any covenant, condition or agreement to be performed under any guaranty or other related document to which it is a party;

(xv) Debtor defaults under any other obligation in excess of $100,000 for (A) borrowed money, including without limitation the Subordinated Debt, (B) the deferred purchase price of property or (C) payments due under any lease agreement;

(xvi) At any time during the term of this Agreement Debtor experiences a change in control such that any person or entity acquires either more than 50% of the voting stock of Debtor or sells all or substantially all of its assets, in either case, without Secured Party’s prior written consent; or

(xvii) Debtor or any Guarantor or other obligor for any of the Indebtedness sells, licenses, sublicenses, transfers, assigns, mortgages, pledges, leases, grants a security interest in or encumbers any or all of Debtor’s Intellectual Property now existing or hereafter acquired. " Intellectual Property " shall, with respect to Debtor or any Subsidiary, be defined as any and all copyright, trademark, servicemark, patent, design right, software, license, trade secret and intangible rights of such entity, any marketing rights

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granted by such entity, and any applications, registrations, claims, licenses, products, proceeds, awards, judgments, amendments, renewals, extensions, improvements, insurance claims related thereto. For purposes of this paragraph (xvii) only, licenses, sublicenses or marketing rights granted by the Debtor of its Intellectual Property pursuant to Section 2(m) shall be excluded from the definition of Intellectual Property. Debtor shall provide Secured Party with a listing of licenses, sublicenses and marketing rights granted to third parties within ten (10) days of receipt of written request.

(b) Upon the occurrence and during the continuance of any Event of Default (other than a default under Section 7(a)(viii), (x) or (xi) or if Debtor shall have acted in a fraudulent manner or shall have committed an act of fraud), the Secured Party, at its option, may declare any or all of the Indebtedness to be immediately due and payable, without demand or notice to Debtor or any Guarantor. If Borrower is in default under Section 7(a)(viii), (x) or (xi) or if Debtor shall have acted in a fraudulent manner or shall have committed an act of fraud, then the Indebtedness shall immediately become due and payable, without demand or notice to Debtor or any Guarantor. The accelerated obligations and liabilities shall bear interest (both before and after any judgment) until paid in full at the lower of eighteen percent (18%) per annum or the maximum rate not prohibited by applicable law.

(c) Upon the occurrence and during the continuance of any Event of Default or if Debtor shall have acted in a fraudulent manner or shall have committed an act of fraud, Secured Party shall have all of the rights and remedies of a Secured Party under the Uniform Commercial Code and under any other applicable law. Withou