T2 Biosystems Annual Report 2017

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K(Mark One)☒☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the year ended December 31, 2017☐☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934For the transition period from to Commission File Number: 001-36571T2 Biosystems, Inc.(Exact name of registrant as specified in its charter) Delaware 20-4827488(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.) 101 Hartwell Avenue, Lexington, MA 02421(Address of principal executive offices) (Zip code) Registrant’s telephone number, including area code: 781-761-4646Securities registered pursuant to Section 12(b) of the Act Title of Each Class: Name of Each Exchange on which Registered:Common Stock, par value $0.001 per share The NASDAQ Stock Market LLC(NASDAQ Global Market) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933, as amended. YES ☐ NO ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended. YES ☐ NO ☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit andpost such files). Yes ☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.See definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☒Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☒ No ☐As of June 30, 2017, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held bynon-affiliates was approximately $58.6 million based on the closing price for the common stock of $3.21 on that date. Shares of common stock held by each executive officer,director, and their affiliated stockholders have been excluded from this calculation as such persons may be deemed to be affiliates. This determination of affiliate status is notnecessarily a conclusive determination for other purposes.The number of outstanding shares of the registrant’s common stock on March 14, 2018 was 36,019,800. The common stock is listed on the NASDAQ Global Market (tradingsymbol “TTOO”).DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year areincorporated by reference into Part III of this report. TABLE OF CONTENTS PagePART I. Item 1. Business 3 Item 1A. Risk Factors 28 Item 1B. Unresolved Staff Comments 51 Item 2. Property 51 Item 3. Legal Proceedings 51 Item 4. Mine Safety Disclosures 51 PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 52 Item 6. Selected Consolidated Financial Data 54 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 55 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 72 Item 8. Financial Statements and Supplementary Data 73 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 98 Item 9A. Controls and Procedures 98 Item 9B. Other Information 99 PART III. Item 10. Directors, Executive Officers and Corporate Governance 99 Item 11. Executive Compensation 99 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 99 Item 13. Certain Relationships and Related Transactions, and Director Independence 99 Item 14. Principal Accountant Fees and Services 99 Item 15. Exhibits, Financial Statement and Schedules 99 FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. Weintend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of theSecurities Act of 1933, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. All statements other thanstatements of historical facts contained in this Annual Report on Form 10-K, including statements regarding our future results of operations and financialposition, business strategy, prospective products and product candidates, their expected performance and impact on healthcare costs, marketing clearancefrom the U.S. Food and Drug Administration, or the FDA, regulatory clearance, reimbursement for our product candidates, research and development costs,timing of regulatory filings, timing and likelihood of success, plans and objectives of management for future operations and future results of anticipatedproducts, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause ouractual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by theforward-looking statements.In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,”“intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “forecast,” “predict,” “potential” or “continue” or the negative of these terms orother similar expressions. The forward-looking statements in this Annual Report on Form 10-K are only predictions. We have based these forward-lookingstatements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financialcondition and results of operations. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K and are subject to anumber of risks, uncertainties and assumptions described under the sections in this Annual Report on Form 10-K entitled “Item 1A.—Risk Factors”. Theseforward looking statements are subject to numerous risks, including, without limitation, the following: •our status as an early stage company;1 •our expectation to incur losses in the future; •the market acceptance of our T2MR technology; •our ability to timely and successfully develop and commercialize our existing products and future product candidates; •the length and variability of our anticipated sales cycle; •our limited sales history; •our ability to gain the support of leading hospitals and key thought leaders and publish the results of our clinical trials in peer-reviewedjournals; •our ability to successfully manage our growth; •our future capital needs and our ability to raise additional funds; •the performance of our diagnostics; •our ability to compete in the highly competitive diagnostics market; •our ability to obtain marketing clearance from the FDA or regulatory clearance for new product candidates in the United States or any otherjurisdiction; •federal, state, and foreign regulatory requirements, including diagnostic product reimbursements and FDA regulation of our productcandidates; •our ability to protect and enforce our intellectual property rights, including our trade secret-protected proprietary rights in T2MR; •our ability to recruit, train and retain key personnel; •our dependence on third parties; •our ability to continue as a going concern; •manufacturing and other product risks; •the impact of the adoption of new accounting standards; and •the Tax Cuts and Jobs Act of 2017 (Tax Reform)These forward-looking statements represent our estimates and assumptions only as of the date of this Annual Report on Form 10-K. Unless requiredby U.S. federal securities laws, we do not intend to update any of these forward-looking statements to reflect circumstances or events that occur after thestatement is made or to conform these statements to actual results. The following discussion should be read in conjunction with the financial statements andnotes thereto appearing elsewhere in this Annual Report on Form 10-K. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors.You should read the following discussion and analysis of our financial condition and results of operations together with our financial statementsand related notes thereto included elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or setforth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing,includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Item 1A.—RiskFactors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.2PART I.Item 1.BUSINESSOverviewWe are an in vitro diagnostics company that has developed an innovative and proprietary technology platform that offers a rapid, sensitive and simplealternative to existing diagnostic methodologies. We are using our T2 Magnetic Resonance technology, or T2MR, to develop a broad set of applicationsaimed at lowering mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medical professionals make targeted treatmentdecisions earlier. T2MR enables rapid detection of pathogens, biomarkers and other abnormalities in a variety of unpurified patient sample types, includingwhole blood, plasma, serum, saliva, sputum and urine, and can detect cellular targets at limits of detection as low as one colony forming unit per milliliter, orCFU/mL. Our initial development efforts target sepsis and Lyme disease, which are areas of significant unmet medical need in which existing therapies couldbe more effective with improved diagnostics.On September 22, 2014, we received market clearance from the U.S. Food and Drug Administration, or the FDA, for our first two products, the T2DxInstrument, or the T2Dx and the T2Candida Panel, which have the ability to rapidly identify the five clinically relevant species of Candida, a fungalpathogen known to cause sepsis. In the United States, we have built a direct sales force that is primarily targeting the top 1,200 hospitals with the highestconcentration of patients at risk for sepsis-related infections. Internationally, we have primarily partnered with distributors that target large hospitals in theirrespective international markets.Three additional diagnostic applications in development are called T2Bacteria, T2Resistance and T2Lyme, which are focused on bacterial sepsisinfections and Lyme disease, respectively. In late 2015 we initiated the collection of patient blood samples to support the clinical trial for T2Bacteria, and inearly 2017, we initiated a multi-site clinical trial for T2Bacteria. On September 8, 2017 the Company filed a 510(k) premarket submission for the T2BacteriaPanel with the FDA. We expect that existing reimbursement codes will support our sepsis and Lyme disease product candidates, and that the anticipatedeconomic savings associated with our sepsis products will be realized directly by hospitals.Sepsis is one of the leading causes of death in the United States, claiming more lives annually than breast cancer, prostate cancer, and AIDS combined,and it is the most expensive hospital-treated condition. Most commonly afflicting immunocompromised, critical care, and elderly patients, sepsis is a severeinflammatory response to a bacterial or fungal infection with a mortality rate of approximately 30%. Based on data published by the U.S. Department ofHealth and Human Services in 2017, the cost of sepsis was over $27 billion in the United States, building on data from 2013 demonstrating that sepsis wasresponsible for approximately 5% of the total aggregate costs associated with domestic hospital stays. Sepsis is typically caused by one or more of fiveCandida species or over 25 bacterial pathogens, and effective treatment requires the early detection and identification of these specific target pathogens in apatient’s bloodstream. Today, sepsis is typically diagnosed through a series of blood cultures followed by post-blood culture species identification if a bloodculture tests positive. These methods have substantial diagnostic limitations that lead to a high rate of false negative test results, a delay of up to several daysin administration of targeted treatment, and the incurrence of unnecessary hospital expense. In addition, the Survey of Physicians’ Perspectives andKnowledge About Diagnostic Tests for Bloodstream Infections in 2015 reported that negative blood culture results are only trusted by 36% of thosephysicians. Without the ability to rapidly identify pathogens, physicians typically start treatment of at-risk patients with broad-spectrum antibiotics andswitch therapies every 12 to 24 hours if a patient is not responding. These drugs, which can be costly, are often ineffective and unnecessary and havecontributed to the spread of antimicrobial resistance. The speed to getting the patient on the right targeted therapy is critical. According to a study publishedby Critical Care Medicine in 2006, in sepsis patients with documented hypotension, administration of effective antimicrobial therapy within the first hour ofdetection was associated with a survival rate of 79.9% and, over the ensuing six hours, each hour of delay in initiation of treatment was associated with anaverage decrease in survival of 7.6%.We believe our sepsis products, which include T2Candida and our product candidate, T2Bacteria, will redefine the standard of care in sepsismanagement while lowering healthcare costs by improving both the precision and the speed of detection of sepsis-causing pathogens. According to a studypublished in the Journal of Clinical Microbiology in 2010, targeted therapy for patients with bloodstream infections can be delayed up to 72 hours due to thewait time for blood culture results. In another study published in Clinical Infectious Diseases in 2012, the delayed administration of appropriate antifungaltherapy was associated with higher mortality among patients with septic shock attributed to Candida infection and, on that basis, the study concluded thatmore rapid and accurate diagnostic techniques are needed. Our pivotal clinical trial demonstrated that T2Candida can deliver actionable results in as few as three hours, with an average time to result during thetrial of 4.2 hours, compared to the average time to result of one to six or more days typically required for blood-culture-based diagnostics. We believe thespeed of the T2Candida test will enable physicians to potentially make treatment decisions and administer targeted treatment to patients in four to six hoursversus 24 to 144 hours for blood culture. We believe that our product candidate, T2Bacteria, will also deliver actionable results in similar timeframes becausethis diagnostic panel operates similarly to T2Candida and is designed to run on the same instrument as T2Candida.Data from our pivotal clinical trial for T2Bacteria was presented at the Association of Molecular Pathology annual meeting in November 2017. Resultsfrom the trial demonstrated that the T2Bacteria Panel can deliver actionable results in an average of 5.4 hours, compared to an average of 60 hours fordetecting the same species by blood culture. In addition, T2Bacteria identified 63 infected patients that were missed by the paired blood culture that wassimultaneously run. The reported sensitivity was 96%, compared to a sensitivity of 38% for the paired blood culture as measured by the total of 102 patientswith confirmed infections by any culture result. In November 2015, the Company presented preliminary data demonstrating the ability of our T2BacteriaPanel product candidate to provide the rapid and sensitive identification of certain sepsis-causing3bacteria included in the panel, directly from whole blood. The bacteria species included in the product candidate currently under review by the FDA areStaphylococcus aureus, Enterococcus faecium, Escherichia coli, Klebsiella pneumoniae, and Pseudomonas aeruginosa. The five bacteria species in ourT2Bacteria Panel are responsible for about half of all septic infections. Additionally, when combined with the use of T2Candida and the practice ofempirically administering broad spectrum antibiotics, the rapid detection of these bacteria may enable 90% of patients with sepsis to receive rapid andappropriate therapy. The T2Bacteria Panel that is CE Marked includes A. baumannii, which has an estimated incidence rate of 3.6% in Europe, far higherthan the 1% incidence rate in the United States.Candida is the fourth leading hospital-acquired bloodstream infection, afflicting more than 135,000 patients per year in the United States, and themost lethal form of common bloodstream infections that cause sepsis, with an average mortality rate of approximately 40%. This high mortality rate is largelydue to a delay in providing targeted therapy to the patient due to the elapsed time from Candida infection to positive diagnosis. According to a studypublished in Antimicrobial Agents and Chemotherapy, the Candida mortality rate can be reduced to 11% with the initiation of targeted therapy within 12hours of presentation of symptoms. Additionally, a typical patient with a Candida infection averages 40 days in the hospital, including nine days inintensive care, resulting in an average cost per hospital stay of more than $130,000 per patient. In a study published in the American Journal of Respiratoryand Critical Care Medicine, providing targeted antifungal therapy within 24 hours of the presentation of symptoms decreased the length of hospital stay byapproximately ten days and decreased the average cost of care by approximately $30,000 per patient. Furthermore, in April 2015, Future Microbiologypublished the results of an economic study regarding the use of T2Candida conducted by IMS Health, a healthcare economics agency. In that economicstudy, IMS demonstrated that an average hospital admitting 5,100 patients at risk for Candida infections could save approximately $5.8 million annuallydue to decreased hospital stays for patients, reduction in use of antifungal drugs and other associated savings. The economic study further showed T2Candidacan potentially reduce the costs of care by $26,887 per Candida patient and that rapid detection of Candida reduces patient deaths by 60.6%. Results from adata analysis of T2Candida for the detection and monitoring of Candida infection and sepsis were published comparing aggregated results from the use ofT2Candida to blood culture-based diagnostics for the detection of invasive candidiasis and candidemia. The analysis included samples acquired from morethan 1,900 patients. Out of 55 prospective patient cases that were tested with T2Candida and blood culture and determined to be positive or likely to bepositive for a Candida infection, T2Candida detected 96.4% of the patients (53 cases) compared to detection of 60% of the patients (33 cases) with bloodculture. During 2016, a number of T2Candida users presented data on their experiences with the T2Candida Panel which demonstrated both the clinical andeconomic benefits of use of the T2Candida Panel in the diagnostic regimen. The Henry Ford Health System in Detroit, Michigan reported data on a pre- andpost-T2Candida implementation analysis that covered 6 months of clinical experience. The data showed a statistically significant (p = 0.009) seven dayreduction in median Intensive Care Unit, or ICU, length of stay per positive patient that was identified as positive for Candida after implementation of theT2Candida test panel and a trend (p = 0.164) of total hospital length of stay reduction of four days. The data also showed significant reductions in use ofantifungal drugs for negative patients tested with T2Candida. The overall economic savings resulting from these clinical benefits was projected to beapproximately $2.3 million on an annualized basis. The Lee Health System in Fort Myers, Florida compared patient and economic experience before andafter T2Candida implementation. The data demonstrated that in the post-T2Candida cohort, median length of stay for patients with Candida infections wasreduced by 7 days when detected by T2Candida while unnecessary antifungal therapy was avoided in 41% of patients tested and was discontinued after onedose in another 15% of patients tested. The economic savings derived solely from reduction in antifungal drug use was $195 per patient tested, net of thecost of the T2Candida test panel. Huntsville Hospital in Huntsville, Alabama, reported that the use of the T2Candida test panel resulted in a reduction in theduration of therapy and time to de-escalation in patients that tested negative for Candida on the T2Candida test panel, yielding net pharmacy savings ofapproximately $280 per patient tested. T2Candida also detected 56% more positive patients than blood culture. Riverside Community Hospital inRiverside, California, demonstrated improvements in time to appropriate therapy, increased sensitivity, and rapid discontinuation of antifungal therapy whenusing T2Candida. Specifically, 83% of patients who tested positive with T2Candida received appropriate therapy within six hours of the blood draw and100% of patients received appropriate therapy in under nine hours. None of the patients who tested positive had been identified to have been treated withantifungals prior to T2Candida testing. In addition, antifungal therapy was discontinued for 100% of the patients who tested negative with T2Candida.Finally, data were presented at the Infectious Disease Society of America annual meeting, IDWeek, demonstrating that T2Candida is more sensitive and morerapid than blood culture for the identification of Candida. This study, the DIRECT2 study, also showed that T2Candida is superior to blood culture whendetecting patients with proven infection but are receiving antifungal therapy due to the corresponding suppression of growth in the blood culture system.T2Candida is uninhibited by antifungal therapy; thus, providing a sensitivity of 94.5% compared to blood culture, which was 49.3% sensitive in the study. We continue to see the clinical evidence of the benefits of the T2Candida test grow. Three recent, peer-reviewed studies further demonstrate the benefitof the T2Candida test. These studies present results of the high clinical sensitivity of T2Candida and that time to appropriate therapy may be greatly reducedwith T2Candida. Additionally, the studies show that the use of T2Candida may correspond to significant reductions in certain types of Candida infections.Study 1:The DIRECT2 study, published in Clinical Infectious Diseases, was a multi-center study involving 14 sites and evaluated the performance ofT2Candida and blood culture in N=152 candidemic patients. The T2Candida Panel detected 89% of infections across this patient population, validating the91.1% clinical sensitivity reported from the FDA pivotal study for the T2Candida in a much larger patient population. Additionally, the T2Candida Paneldetected almost twice as many confirmed infections as blood culture in patients receiving antifungal therapy. This indicates that the T2Candida Panel is amore effective diagnostic tool for patients treated with pre-emptive or empiric antifungal therapy. Consistent with other studies, the time savings afforded byT2Candida was significant. The median time to detection of Candida by diagnostic blood cultures and subsequent species identification was 3.4 days. Incomparison, the T2Candida Panel provides diagnostic results in an average time of 4.4 hours. The authors noted that the T2Candida Panel “ushers in a newera in which rapid molecular testing for invasive candidiasis will serve as an adjunct to microbiologic cultures.”4Study 2:The STAMP study, published in the Journal of Clinical Microbiology, compared blood culture to the T2Candida Panel for monitoring the clearanceof an infection when a patient is being treated with antifungal drugs. The study demonstrated that the T2Candida Panel can detect the ongoing presence of aCandida infection while blood culture often yields false negative test results because the administration of antifungal drugs can impede the growth of cellsthat blood culture requires to detect an infection. These observations are consistent with the DIRECT2 study. The authors concluded that the T2CandidaPanel can be an effective tool for reliably identifying patients that have cleared an infection, which can reduce the unnecessary and expensive antifungaltherapy. The STAMP study evaluated running multiple diagnostic tests for patients with confirmed Candida infections who were receiving antifungal drugs.The study demonstrated that the T2Candida Panel outperforms blood culture for monitoring the clearance of Candida infections. •The T2Candida Panel was positive in 23 patient samples, compared to only 7 for blood culture in cases of true infection. •The T2Candida Panel identified every infection that was detected by blood culture and provided actionable results 3 days earlier than bloodculture. •The T2Candida Panel detected a Candida infection that blood culture missed in one patient during the study. •The T2Candida Panel results were a better indicator of disease clearance than blood culture, as two consecutive T2Candida negative resultsindicated that the patient no longer had an active infection in the blood that required aggressive management. •STAMP study data suggest that serial testing of patients with the T2Candida Panel may enable more timely management of infections, de-escalation of therapy, better source control and overall reduced costs of care.Study 3:Another study published in The Journal of Antimicrobial Stewardship entitled “T2 Magnetic Resonance Assay Improves Timely Management ofCandidemia” compared the management of candidemic patients before and after the implementation of the T2Candida Panel and was designed to evaluatetime to appropriate therapy. Patients tested with the T2MR platform were treated in a median of 5 hours, a more than 8-fold reduction as compared to thatbased on blood culture, which delayed appropriate therapy by a median of 44 hours. This speed advantage demonstrates that the T2MR platform may be avaluable clinical tool to aid antifungal stewardship’s goal to deliver timely antifungal therapy for infected patients. In addition to speed, the use of the T2MRplatform provided increased identification of Candida infections. Consistent with the performance of blood culture and T2MR published in other studies, theCandida species was definitively identified in 93% of patients after implementation of T2MR and in only 57% of patients prior to implementation of T2MR.Prior to implementation of the T2Candida Panel, the only diagnostic tests used at Henry Ford Health System were blood culture and beta-D-glucan (BDG).The authors also identified an additional clinically relevant improvement in patient outcomes after the implementation of T2MR: a significant reduction ofCandida ocular involvement from 30% to 12% was observed. The authors point out this could be associated with improved sensitivity of T2MR or due toimproved timeliness of patient management by T2MR. Although the study was not adequately powered to evaluate reduction in patient mortality rates, theauthors note that appropriately treating patients within 24 hours of the onset of disease is proven to reduce mortality rates from 41% to below 16%. T2MR isthe only diagnostic method presented in this study with the speed and accuracy necessary to enable therapeutic decisions that achieve this reduction inmortality. Due to the high mortality rate associated with Candida infections, physicians often will place patients on antifungal drugs while they await bloodculture diagnostic results which generally take at least five days to generate a negative test result. Antifungal drugs are toxic and may result in side effectsand can cost over $50 per day. Our T2Candida Panel’s speed to result coupled with its superior sensitivity as compared to blood culture may help reduce theoveruse of ineffective, or even unnecessary, antimicrobial therapy which may reduce side effects for patients, lower hospital costs and potentially counteractthe growing resistance to antifungal therapy. The administration of inappropriate therapy is a driving force behind the spread of antimicrobial-resistantpathogens, which the United States Centers for Disease Control and Prevention, or the CDC, recently called “one of our most serious health threats.”Our StrategyT2MR enables rapid and sensitive direct detection of a range of targets, and we believe it can be used in a variety of diagnostic applications that willimprove patient outcomes and reduce healthcare costs. Our objective is to establish T2MR as a standard of care for clinical diagnostics. To achieve thisobjective, our strategy is to: •Drive Commercial Adoption of Our Sepsis Products by Demonstrating Their Value to Physicians, Laboratory Directors and Hospitals. Weexpect our sepsis products to meaningfully improve patient outcomes while reducing costs to hospitals. We have established a targeted, directsales force in the United States and have partnered with distributors internationally, all of whom are initially focused on educating physiciansand demonstrating our clinical and economic value proposition to hospitals that have the highest populations of at-risk critical care andimmunocompromised patients. We believe a sustained focus on these hospitals will drive adoption of the T2Dx, T2Candida, our productcandidate, T2Bacteria, and future T2MR-based diagnostics. As a part of this effort, we will continue to work with thought leaders, conductclinical and health economic studies and seek publication and presentation of these studies.5 •Establish a Recurring, Consumables-Based Business Model. We are pursuing a consumables-based business model for our products bysecuring placements of the T2Dx at hospitals and driving utilization of our diagnostic panels starting with T2Candida. We believe this strategywill foster a sustainable and predictable business model with recurring revenue streams. •Broaden Our Addressable Markets in Infectious Disease. Our product development pipeline includes additional diagnostic panels thatprovide near-term and complementary market expansion opportunities. Our next sepsis product candidate in the United States, T2Bacteria, willfocus on bacterial infections, will run on the T2Dx and is expected to address the same high-risk patients as T2Candida, while also expandingour reach to a new patient population at increased risk for bacterial sepsis infections. We will also expand our panels through partnershipssimilar to our agreement with Allergan, in which Allergan agreed to cover a portion of the costs of our development of certain additionalproducts, including antibiotic resistance tests. We also are utilizing T2MR to address the challenges of providing rapid and sensitive diagnosisof Lyme disease and expect to initiate a T2Lyme clinical trial in 2018. In early 2017 we initiated a multi-site clinical trial for T2Bacteria, inJuly 2017 received authorization to affix a CE Mark which clears the product for use in Europe and other countries that accept the CE mark andon September 8, 2017 the Company filed a 510(k) premarket submission for the T2Bacteria Panel with the FDA. We have launched T2Bacteriacommercially in Europe and other countries that accept the CE mark and will commercialize T2Bacteria and these product candidates in the USand other countries after obtaining appropriate marketing clearance or regulatory clearance. •Broaden Our Addressable Markets Beyond Infectious Disease. We intend to expand our product offerings by applying T2MR to newapplications beyond sepsis and Lyme disease. We plan to conduct internal development and to work with thought leaders, physicians, clinicalresearchers and business development partners to pursue new applications for T2MR. We believe the benefits of our proprietary technology,including the ability to rapidly and directly detect a broad range of targets, in a wide variety of sample types, will have potential applicationswithin and outside of the in vitro diagnostics market, including environmental, food safety, industrial and veterinary applications. •Drive International Expansion. We are commercializing T2Candida, T2Bacteria and the T2Dx internationally through distributors that targetlarge hospitals in their respective markets. We intend to continue to expand in international markets through similar distribution channels. Wehave received CE marking for T2Candida, T2Bacteria and the T2Dx. Our Technology PlatformT2 Magnetic Resonance Technology OverviewWe have built an innovative and proprietary technology platform that offers a rapid, sensitive and simple alternative to existing diagnosticmethodologies. T2MR is a miniaturized, magnetic resonance-based approach that measures how water molecules react in the presence of magnetic fields. Ourproprietary platform is capable of detecting a variety of targets, including: •molecular targets, such as DNA; •immunodiagnostics targets, such as proteins; and •a broad range of hemostasis measurements.For molecular and immunodiagnostics targets, T2MR utilizes advances in the field of magnetic resonance by deploying particles with magneticproperties that enhance the magnetic resonance signals of specific targets. When particles coated with target-specific binding agents are added to a samplecontaining the target, the particles bind to and cluster around the target. This clustering changes the microscopic environment of water in that sample, whichin turn alters the magnetic resonance signal, or the T2 relaxation signal that we measure, indicating the presence of the target.For hemostasis measurements, particles are not required because T2MR is highly sensitive to changes in viscosity in a blood sample, such as clotformation, stabilization or dissipation, which changes the T2 relaxation signal. This enables the rapid identification of clinically relevant hemostasischanges.We also believe T2MR is the first technology that can rapidly and accurately detect the presence of molecular targets within samples without the needfor time- and labor-intensive purification or extraction of target molecules from the sample, such as that required by traditional polymerase chain reaction, orPCR, where 90% or more of the target can be lost. We can eliminate these steps because the T2 relaxation signal is not compromised or disrupted by thesample background, even the highly complex sample background that is present after a target amplification process, such as thermocycling. This enablesT2MR’s low limit of detection, such as 1 CFU/mL, compared to the 100 to 1,000 CFU/mL typically required for PCR-based methods. Over 100 studiespublished in peer-reviewed journals have featured T2MR in a breadth of applications, including the direct detection and measurement of targets in varioussample types, such as whole blood, plasma, serum, saliva, sputum and urine. We believe our T2MR technology will have potential applications within andoutside of the in vitro diagnostics market, including environmental, food safety, industrial and veterinary applications.6Our InstrumentsUtilizing T2MR, we have developed and received FDA marketing clearance for the T2Dx, a bench-top instrument for detecting pathogens associatedwith sepsis and Lyme disease, as well as other applications, and we have developed the T2Plex Instrument, or the T2Plex, a compact, fully integratedinstrument for hemostasis applications.T2Dx The T2Dx is an easy-to-use, bench-top instrument that is capable of running a broad range of diagnostic tests and is fully automated from patientsample input to result, eliminating the need for manual work flow steps such as pipetting that can introduce risks of cross-contamination. To perform adiagnostic test, the patient sample tube is snapped onto our disposable test cartridge, which is pre-loaded with all necessary reagents. The cartridge is theninserted into the T2Dx, which automatically processes the sample and then delivers a diagnostic test result.The initial panels designed to run on the T2Dx are T2Candida and T2Bacteria, which are focused on identifying life-threatening pathogens associatedwith sepsis. In 2014 we received FDA marketing clearance for the T2Dx and T2Candida. In early 2017 we initiated a multi-site clinical trial for T2Bacteria, inJuly 2017 received authorization to affix a CE Mark and on September 8, 2017 the Company filed a 510(k) premarket submission for the T2Bacteria Panelwith the FDA.SepsisOverviewSepsis is an illness in which the body has a severe, inflammatory response to a bacterial or fungal infection. It is a life-threatening condition to whichindividuals with weakened immune systems or chronic illnesses are highly susceptible. Sepsis can lead to shock and organ failure, and is a leading cause ofdeath in the United States with a mortality rate of approximately 30%, almost double the mortality rate of acute myocardial infarction, or heart attack. Oneout of every two hospital deaths in the United States is attributable to sepsis.In 2016, the U.S. Department of Health and Human Services reported that sepsis is the most expensive hospital-treated condition in the United States,with an economic burden to hospitals exceeding $23 billion annually, almost double that of acute myocardial infarction. New data on the number of sepsiscases in the United States published by the U.S. Department of Health and Human Services in 2017 indicate that the economic burden now exceeds $27billion. The high cost of treating sepsis is primarily driven by the extended hospitalization of patients. We believe there are many effective, targetedtherapeutic choices that could reduce overall hospitalization costs if applied earlier, but clinicians need to more rapidly identify the specific sepsis-causingpathogens in order to make more informed, targeted treatment decisions. Today, the diagnostic standard to identify these pathogens is blood culture-based,despite typically requiring one to six or more days to generate species-specific results.The following table reflects key statistics from the 2016 U.S. Department of Health and Human Services study regarding the five most expensivehospital-treated conditions: U.S. hospital Percentage costs of total Rank Condition (in billions) inpatient costs 1 Sepsis $23.6 6.2%2 Osteoarthritis 16.5 4.3 3 Liveborn 13.3 3.5 4 Complication of device, implant or graft 12.4 3.3 5 Acute myocardial infarction (heart attack) 12.0 3.2 Over 1.6 million individuals are diagnosed with sepsis each year, 1.35 million of whom are at high risk for infection due to their suppressed immunesystem or their presence in critical care units. Virtually all of these patients are rapidly treated with broad-spectrum antibiotic drugs because there is nodiagnostic manner for determining the type of infection. Of these 1.35 million patients with sepsis and at high risk for7infection, approximately 40% do not respond to broad-spectrum antibiotic treatment. Of these patients that are non-responsive, approximately 25% of themhave a Candida infection, with the remaining patients having a bacterial infection. Broad-spectrum antibiotics do not treat these Candida and bacterialinfections; therefore more targeted drugs are required.We estimate that approximately 15 million patients are tested for bloodstream infections in the United States annually. Of these, approximately 6.75million are at high risk for a Candida infection and an additional two million, or approximately 8.75 million, in total are at high risk for a bacterial infection.We believe that our sepsis products have the potential to enable clinicians to make earlier therapeutic decisions that can reduce the mortality rate for sepsisby over 50% and save the hospitals an estimated $12 billion annually by testing all high risk patients with T2Candida and T2Bacteria.Each year, over 18 million cases of sepsis are diagnosed outside of the United States, with estimated mortalities exceeding five million patients,making sepsis a leading cause of death worldwide.Limitations of Traditional In Vitro Diagnostics for SepsisThe current standard for identifying bloodstream infections that cause sepsis requires a series of lengthy and labor-intensive analyses that begin withblood culture. Completing a blood culture requires a large volume of a patient’s blood, typically 20 mLs or more, which is obtained in two 10 mL draws andplaced into two blood culture bottles containing nutrients formulated to grow fungi and bacteria. Before blood culture indicates if a patient is infected,pathogens typically must reach a concentration of 1,000,000 to 100,000,000 CFU/mL. This growth process typically takes one to six or more days becausethe pathogen’s initial concentration in the blood specimen is often less than 10 CFU/mL. A negative test result always requires a minimum of five days. Apositive blood culture typically means that some pathogen is present, but additional steps must be performed to identify the specific pathogen in order toprovide targeted therapy. These additional steps, which typically must be performed by a highly trained technician, may involve any of (i) a stainingprocedure for inspection on a microscope slide, (ii) PCR amplification and (iii) mass spectrometry. These steps require a preceding positive blood culturespecimen because they need a high concentration of cells generated by the blood culture process for analysis.For most PCR-based diagnostics, nucleic acid extraction of target cells from the sample is performed to remove inhibitory substances that may interferewith the amplification reaction. While PCR amplifies the target signal, this loss of target cells impairs the ability to detect, resulting in typical limits ofdetection of 100 to 1,000 CFU/mL, which is insufficient for species-specific sepsis diagnostics.Blood culture-based diagnostics have substantial limitations, including: •Time to Result Delays Targeted Treatment. Blood culture-based diagnostics typically require a minimum of one and as many as six or moredays to identify a pathogen species, and blood culture always requires at least five days to generate a negative test result. •Antimicrobial Therapy Can Cause False Negative Results. Antimicrobial therapies may be administered to a patient prior to taking a bloodsample. As a result, the therapeutic agent is contained in the blood sample and its ability to stop or slow the growth of pathogens can delay orcompletely inhibit the growth of the pathogen during the blood culture process leading to time delays in detection or false negative results. •Slow-Growing Pathogens Can Cause False Negative Results. Some sepsis pathogens grow slowly or not at all and can require up to five ormore days to reach sufficient concentrations to be detected by blood culture-based diagnostics. Blood culture procedures are typically stoppedafter five days and declared negative. Often, pathogens that grow too slowly are not detected by blood culture during this time frame, leading toa false negative diagnosis. For example, C. glabrata, one of the most lethal species of Candida due to its growing resistance to antifungaltherapy, often requires more than five days of growth to reach a detectable concentration, and therefore is frequently undetected by bloodculture. •Labor-Intensive Workflow Increases Costs and May Delay Targeted Treatment. Blood culture is only the first step in identifying apathogen that causes sepsis. After a blood culture is determined to be positive, highly trained technicians are required to perform multiple post-culture procedures on the blood culture specimen to identify the specific pathogen. These additional procedures can be expensive and time-consuming and may delay targeted treatment.Given the typical one-to-six day time to result for blood culture-based diagnostics, the first therapy for a patient at risk of sepsis is often broad-spectrum antibiotics, which treat some but not all bacteria types and do not address fungal infections. Some physicians may use first-line, antifungal therapyfor patients at very high risk for fungal infection, or use antifungal therapy if the patient is not responding to broad-spectrum antibiotics while they are stillawaiting the blood culture-based result. This therapeutic approach may still not treat the growing number of patients infected with the antimicrobial-resistantspecies nor may it be the best choice, as the type of therapy is dependent on the specific pathogen causing the infection, which is unknown.This inefficient therapeutic approach has resulted in unnecessary treatment of a significant number of high-risk patients with expensive and often toxictherapies that can worsen a patient’s condition. Such treatments may extend for many days while clinicians await blood culture-based diagnostic results. Theoveruse of ineffective, or even unnecessary, antimicrobial therapy is also the driving force behind the spread of antimicrobial-resistant pathogens, which theCDC recently called “one of our most serious health threats.” The CDC has specifically noted increasing incidence of Candida infections due to azole- andechinocandin-resistant strains and considers it a “serious” threat level. According to the CDC, at least two million people in the United States acquire seriousinfections each year that are resistant to one or more of the antimicrobial8therapies used to treat these patients. At least 23,000 of these people are estimated to die as a direct result of the resistant infections and many more may diefrom other conditions that are complicated by a resistant infection. Further, antimicrobial-resistant infections add considerable and avoidable costs to thealready overburdened U.S. healthcare system, with the total economic cost estimated to be as high as $20 billion in excess of direct healthcare costs, withadditional costs to society as high as $35 billion, due to lost productivity.Our Sepsis SolutionWe believe our T2 Magnetic Resonance technology, or T2MR, delivers a rapid, sensitive and simple diagnostic platform to enable sepsis applicationsthat can identify specific sepsis pathogens directly from an unpurified blood sample in hours instead of days at a level of accuracy equal to or better thanblood culture-based diagnostics. The T2Sepsis Solution refers to the approach of combining the standard of care for the management of sepsis patients,including the T2Dx Instrument, or the T2Dx, and T2Candida Panel, and the T2Bacteria Panel, which is commercially available in Europe and other countriesthat accept the CE mark and currently available for research use only in the United States. Currently, initial empiric therapy typically only coversapproximately 60% of patients with sepsis infections. Of the remaining 40% of patients with sepsis infections, approximately 30% of the patients have abacterial infection and 10% have Candida infections. Test panels included in the T2Sepsis Solution are designed to identify pathogens commonly notcovered by initial empiric antimicrobial therapy, which we believe may enable physicians to effectively treat approximately 90% of the patients who are noton the right drugs.We believe the T2Sepsis Solution provides a pathway for more rapid and targeted treatment of infections, potentially reducing the mortality rate by asmuch as 50% if a patient is treated within 12 hours of suspicion of infection and significantly reducing the cost burden of sepsis. Each year, approximately500,000 patients in the United States die from sepsis. According to a study published by Critical Care Medicine in 2006, in sepsis patients with documentedhypotension, administration of effective antimicrobial therapy within the first hour of detection was associated with a survival rate of 79.9% and, over theensuing six hours, each hour of delay in initiation of treatment was associated with an average decrease in survival of 7.6%. According to such study, thesurvival rate for septic patients who remained untreated for greater than 36 hours was approximately 5%. The toll of sepsis on a patient’s health can be severe:more than one-in-five patients die within two years as a consequence of sepsis. Sepsis is also the most prevalent and costly cause of hospital readmissions.We believe the T2Sepsis Solution addresses a significant unmet need in in vitro diagnostics by providing: •Limits of Detection as Low as 1 CFU/mL. T2MR is the only technology currently available that can enable identification of sepsis pathogensdirectly from a patient’s blood sample at limits of detection as low as 1 CFU/mL. •Rapid and Specific Results in as Few as Three Hours. T2MR is the only technology that can enable species-specific results for pathogensassociated with sepsis, directly from a patient’s blood sample, without the need for blood culture, to deliver an actionable result in three hours. •Accurate Results Even in the Presence of Antimicrobial Therapy. T2MR is the only technology that can reliably detect pathogens associatedwith sepsis, including slow-growing pathogens, such as C. glabrata, directly from a patient’s blood sample, even in the presence of anantimicrobial therapy. •Easy-to-Use Platform. T2MR eliminates the need for sample purification or extraction of target pathogens, enabling sample- to-resultinstruments that can be operated on-site by hospital staff, without the need for highly skilled technicians.Our first U.S. Food and Drug Administration, or FDA-cleared products, the T2Dx and T2Candida, focus on the most lethal form of common bloodstream infections that cause sepsis, Candida, which has an average mortality rate of approximately 40%. According to a 2005 report published inAntimicrobial Agents and Chemotherapy, this high mortality rate can be reduced to 11% with the initiation of targeted therapy within 12 hours ofpresentation of symptoms. Currently, a typical patient with a Candida infection averages 40 days in the hospital, including nine days in intensive care,resulting in an average cost per hospital stay of over $130,000 per patient. In a study published in the American Journal of Respiratory and Critical CareMedicine in 2009, providing targeted antifungal therapy within 24 hours of the presentation of symptoms decreased the length of hospital stay byapproximately ten days and decreased the average cost of care by approximately $30,000 per patient. In addition, many hospitals initiate antifungal drugs,such as Caspofungin or Micafungin, while waiting for blood culture-based diagnostic results. We estimate this practice costs approximately $500 per patientand is currently in use for over 40% of high-risk patients on average and for all high-risk patients in some hospitals. A negative result from T2Candida canprovide timely data allowing physicians to avoid unnecessary antifungal treatment and potentially reduce the treatment cost further.We believe that by identifying the specific species of Candida, physicians can administer the most effective therapy, significantly improving patientoutcomes and reducing hospital costs. We further believe that the adoption of the T2Dx and T2Candida can decrease both the high mortality rate andexcessive costs of Candida infections because these products can enable clinicians to make earlier and more informed decisions by providing positive testresults to direct therapy and negative test results to reduce the use of antifungal drugs.T2Bacteria, a multiplex diagnostic panel that detects the major bacterial pathogens associated with sepsis that are frequently not covered by first-lineantibiotics, is CE-Marked and available commercially in Europe and other countries that accept the CE mark, as well as available as a research-use-onlyproduct in the United States. T2Bacteria runs on the T2Dx, and if cleared by the FDA for sale in the United States is expected to address the sameapproximately 6.75 million symptomatic high-risk patients as T2Candida while also expanding our reach to an additional two million people presentingwith symptoms of infection in the emergency room setting. We believe that these factors make the United States market9opportunity for T2Bacteria over $1.0 billion, and that T2Bacteria has the potential to achieve similar performance capabilities and provide similar benefits asT2Candida.To the extent that our T2Bacteria panel is performed on an outpatient basis, third-party payors may separately reimburse our customers using existingCPT codes. By way of example, Medicare payment for outpatient clinical laboratory services is the lesser of the amount billed, the local fee for a geographicarea, or the national limit established by the Centers for Medicare & Medicaid Services under the Clinical Laboratory Fee Schedule, or CLFS, on an annualbasis. For 2017, the national limit for the series of CPT codes used to bill the T2Bacteria panel is approximately $220. Effective January 1, 2018, CLFS rateswill be based on weighted median private payor rates as required by the Protecting Access to Medicare Act of 2014. We believe that additional state andfederal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay forhealthcare products and services, which could result in reduced demand for our diagnostic products or additional pricing pressures.Clinical UtilityT2CandidaDIRECT Clinical Trial—Clinical Infectious DiseaseIn 2013 and 2014, we conducted a pivotal clinical trial for our T2Dx Instrument and our T2Candida Panel, or the DIRECT trial. Our DIRECT trialconsisted of two patient arms. The first arm, known as the Prospective Arm, consisted of 1,501 samples from patients with a possible infection. The secondarm, known as the Contrived Arm, consisted of 300 samples, of which 250 patient specimens were labeled contrived because each contained a knownquantity of Candida CFUs that were manually added to each sample, or spiked, at clinically relevant concentrations, while the remaining 50 patientspecimens were specifically known not to contain Candida. The DIRECT trial was designed to evaluate the sensitivity and specificity of T2Candida on theT2Dx.Sensitivity is the percent concordance, or the percentage of sample results that agree with a reference, or comparative, method for positive results.Specificity is the percent concordance to a reference method for negative results. If a sample does not agree with the result of a referenced method, it isconsidered discordant. In our clinical trial, the Prospective Arm was compared to blood culture and the Contrived Arm was compared to the known state,which means that it was in the known presence or absence of added Candida organisms.The design of the DIRECT trial was reviewed by the FDA as part of pre-submission communications. The purpose of the DIRECT trial was todetermine the clinical performance of T2Candida running on the T2Dx by identifying the following: •clinical specificity of T2Candida results as compared to Candida negative blood culture results in specimens collected from patients in theProspective Arm; •clinical specificity of T2Candida results as compared to Candida negative samples collected from patients in the Contrived Arm; •clinical sensitivity of T2Candida results as compared to the known Candida-positive specimens collected from patients in the Contrived Arm;and •clinical sensitivity calculations of T2Candida results compared to the Candida-positive blood culture results in specimens collected frompatients in the Prospective Arm.50 known negative samples and 250 contrived samples (50 samples for each of the five Candida species included in the T2Candida Panel) wereprepared and run in a blinded manner at the same clinical sites used for processing the prospective samples. The positive contrived samples were prepared byspiking clinical isolates into individual patient specimens at concentrations determined through publications and discussions with the FDA to be equivalentto the clinical state of patients who presented with symptoms of a Candida infection. 20% of the positive contrived samples were spiked at concentrationslevels of less than 1 CFU/mL. The contrived samples were collected from patients referred for a diagnostic blood culture per routine standard of care — thesame population of patients from whom prospective samples were collected. Unique isolates of the species were used for each patient sample, which means atotal of 50 unique isolates were tested for each of the five species of Candida for a total of 250 unique isolates.In addition to the pivotal clinical trial data that we submitted to the FDA, we also provided data from an analytical verification study to determine thelimit of detection, or LoD, for each species identified by our T2Candida Panel. The LoD was defined as the lowest concentration of Candida that can bedetected in 95% of at least 20 samples tested at a single concentration.The T2Candida Panel reports three results, where species are grouped together according to their responsiveness to therapy. Candida albicans and/orCandida tropicalis are reported as a single result, Candida parapsilosis is a single result, and Candida krusei and/or Candida glabrata are reported as asingle result. Specificity and sensitivity are calculated for each reported result.There are five relevant species of Candida, each of which were analyzed in the DIRECT trial. Each are listed in abbreviated form in the tables below.These species are Candida albicans, Candida tropicalis, Candida parapsilosis, Candida krusei, and Candida glabrata. The typical naming convention for aspecies is to abbreviate by using the first letter of the first word and the full second word; for example, Candida krusei is10abbreviated as C. krusei. In the tables below, we also abbreviate each species name by the first letter of the second word; for example, Candida albicans andCandida tropicalis is A/T.The following tables illustrate the results of the DIRECT trial. The primary sensitivity and specificity analysis is presented in Table A, followed bysub-analyses in Tables B and C. Additional data on the LoD and the time to results of T2Candida and the T2Dx are included in the remaining tables.Table AT2Candida Performance Characteristics Overall Overall Sensitivity SpecificityNumber of Tests (%) 234/257 (91.1%) 5114/5146 (99.4%) Table BOverall Sensitivity and Specificity by Test 95% Confidence Interval Specificity: A/T (C. albicans/C. tropicalis ) 1679/1697 (98.9%) 98.3 - 99.4%P (C. parapsilosis) 1736/1749 (99.3%) 98.7 - 99.6%K/G (C. krusei/C. glabrata) 1699/1700 (99.9%) 99.7 - 100.0%Total: 5114/5146 (99.4%) 99.1 - 99.6%Sensitivity: A/T (C. albicans/C. tropicalis) 96/104 (92.3%) 85.4 - 96.6%P (C. parapsilosis) 49/52 (94.2%) 84.1 - 98.8%K/G (C. krusei/C. glabrata) 89/101 (88.1%) 80.2 - 93.7%Total: 234/257 (91.1%) 86.9 - 94.2%Table CStudy Arm Sensitivity and Specificity by Test 95% Confidence Interval Specificity (Prospective tests): A/T (C. albicans/C. tropicalis ) 1479/1497 (98.8%) 98.1 - 99.3%P (C. parapsilosis) 1487/1499 (99.2%) 98.6 - 99.6%K/G (C. krusei/C. glabrata) 1499/1500 (99.9%) 99.6 - 100.0%Total: 4465/4496 (99.3%) 99.0 - 99.5%Sensitivity (Prospective tests): A/T (C. albicans/C. tropicalis) 2/4 (50.0%) 6.8 - 93.2%P (C. parapsilosis) 2/2 (100.0%) 15.8 - 100.0%K/G (C. krusei/C. glabrata) 1/1 (100.0%) 2.5 - 100.0%Total: 5/7 (71.4%) 29.0 - 96.3%Specificity (Contrived tests): A/T (C. albicans/C. tropicalis) 200/200 (100.0%) 98.2 - 100.0%P ( C. parapsilosis) 249/250 (99.6%) 97.8 - 100.0%K/G (C. krusei/C. glabrata) 200/200 (100.0%) 98.2 - 100.0%Total: 649/650 (99.8%) 99.1 - 100.0%Sensitivity (Contrived tests): A/T (C. albicans/C. tropicalis) 94/100 (94.0%) 87.4 - 97.8%P (C. parapsilosis) 47/50 (94.0%) 83.5 - 98.7%K/G (C. krusei/C. glabrata) 88/100 (88.0%) 80.0 - 93.6%Total: 229/250 (91.6%) 87.4 - 94.7% 11Table DT2Candida Limit of Detection Final LoD Species CFU/mL C. albicans 2 C tropicalis 1 C. parapsilosis 3 C. glabrata 2 C. krusei 1 Table ESensitivity Sub-Analysis: Sensitivity by Species Relative to LoD > LoD < LoD LoD 95% Confidence 95% Confidence (CFU/ml) Sensitivity Interval Sensitivity Interval C. albicans 2 39/39 (100.0%) 91.0 - 100.0% 9/11 (81.8%) 48.2 - 97.7%C. glabrata 2 35/37 (94.6%) 81.8 - 99.3% 7/13 (53.8%) 25.1 - 80.8%C. krusei 1 40/40 (100.0%) 91.2 - 100.0% 6/10 (60.0%) 26.2 - 87.8%C. parapsilosis 3 32/32 (100.0%) 89.1 - 100.0% 15/18 (83.3%) 58.6 - 96.4%C. tropicalis 1 38/40 (95.0%) 83.1 - 99.4% 8/10 (80.0%) 44.4 - 97.5%Total: 184/188 (97.9%) 94.6 - 99.4% 45/62 (72.6%) 59.8 - 83.1% Table FSensitivity Sub-Analysis: Sensitivity by Titer Level 1 — 10 CFU/ml 11 — 30 CFU/ml 31 — 100 CFU/ml <1 CFU/ml Sensitivity Sensitivity Sensitivity SensitivityC. albicans 8/10 (80.0%) 18/18 (100.0%) 17/17 (100.0%) 5/5 (100.0%)C. glabrata 5/10 (50.0%) 16/18 (88.9%) 16/17 (94.1%) 5/5 (100.0%)C. krusei 6/10 (60.0%) 18/18 (100.0%) 17/17 (100.0%) 5/5 (100.0%)C. parapsilosis 8/10 (80.0%) 17/18 (94.4%) 17/17 (100.0%) 5/5 (100.0%)C. tropicalis 8/10 (80.0%) 16/18 (88.9%) 17/17 (100.0%) 5/5 (100.0%)Total: 35/50 (70.0%) 85/90 (94.4%) 84/85 (98.8%) 25/25 (100.0%) Table GSensitivity Sub-Analysis: Sensitivity by Species Relative to Clinically Relevant Concentrations Clinically Relevant Sensitivity < Sensitivity > Species Concentration Relevant CFU Relevant CFU C. tropicalis 1-10 CFU/mL 80% 95%C. krusei 11-30 CFU/mL 85.7% 100%C. glabrata 11-30 CFU/mL 75% 96%C. albicans 1-10 CFU/mL 80% 100%C. parapsilosis 11-30 CFU/mL 89.3% 100%Total 82.7% 98% 12Table HTime to species identification or negative result for T2MR and Blood Culture Blood Culture T2Dx Time to Results (hours) Mean ± SD (N) 126.5 ± 27.3 (1470) 4.2 ± 0.9 (1470) Median 121.0 4.1 (Min, Max) (12.4, 247.2) (3.0, 7.5) Time to Positive Results(1),(2) (hours) Mean ± SD (N) 43.6 ± 11.1 (4) 4.4 ± 1.0 (4) Median 46.1 4.6 (Min, Max) (28.1, 54.1) (3.2, 5.4) Time to Negative Results(1),(2) (hours) Mean ± SD (N) 126.7 ± 27.0 (1466) 4.2 ± 0.9 (1466) Median 121.1 4.1 (Min, Max) (12.4, 247.2) (3.0, 7.5) (1)Includes samples that are 100% concordant for both methods (i.e. does not include discordant results). We do not include discordant results because acomparison of the duration of time to positive result requires that both the blood culture result and the T2Candida result be positive for a givenspecimen. Similarly, a comparison of the duration of time to negative result requires that both the blood culture result and the T2Candida result benegative for a given specimen. We therefore would exclude any sample with a discordant result where blood culture yields one result and T2Candidayields the opposite result.(2)Refers to time to species identification or final negative result.Results from the study were published in Clinical Infectious Disease in 2015 in an article entitled: “T2 Magnetic Resonance Assay for the RapidDiagnosis of Candidemia in Whole Blood: A Clinical Trial.” The study findings include: •the overall sensitivity (Prospective and Contrived Arm combined) of T2Candida was 91.1%; •the average specificity of the three test results for the Prospective and Contrived Arms combined was 99.4% (see Table A) with the specificity bytest result ranging from 98.9% to 99.9% (see Table B); •in the Contrived Arm of the study, the average specificity was 99.8%, with the specificity by test result ranging from 99.6% to 100% (seeTable C); •in the Prospective Arm of the study, the average specificity was 99.3%, with the specificity by test result ranging from 98.8% to 99.9% (seeTable C); •in the Contrived Arm of the study, the average sensitivity was 91.6%, with the sensitivity by test result ranging from 88.0% to 94.0% (seeTable C); and •in the Prospective Arm of the study, the average sensitivity was 71.4% (see Table C).In this study, the following observations were reported: •within the Prospective Arm, T2Candida accurately detected a rare co-infection in one study patient with C. albicans and C. parapsilosis in theirbloodstream; •T2Candida detected at least one infection that was not identified by blood culture, which was determined to be a Candida infection seven daysafter the T2Candida result was obtained. This case is considered a discordant result for the purposes of the FDA filing because of thedisagreement between T2Candida and the blood culture-based results, despite the accurate identification by T2Candida. Along with ten otherpatients with clinical symptoms or microbiological evidence of infection, the study findings indicate that the true sensitivity and specificity ofT2Candida may be higher than the reported values; •the LoD of T2Candida was demonstrated to be 1 to 3 CFU/mL depending upon the species of Candida (see Table D). In the Contrived Arm ofthe study, T2Candida positively detected 97.9% of the samples spiked at and above the LoD while also detecting 72.6% of all samples spikedat concentration levels below the LoD (see Table E); •in the Contrived Arm of the study, T2Candida detected 97% of cases at or above 1 CFU/mL and 70% of cases below 1 CFU/mL (see Table F); •in the Contrived Arm of the study, T2Candida detected 98% of cases at or above clinically relevant concentrations of Candida , ranging from95% to 100% detection depending on the Candida species (see Table G); •T2Candida demonstrated an average time to positive result of 4.4 hours compared to blood culture average time to result of 129 hours;13 •T2Candida demonstrated an average time to negative result of 4.2 hours compared to blood culture average time to result of >120 hours; and •T2Candida has a negative predictive value of 99.8% in a standard population. Negative predictive value is the probability that subjects with anegative result truly do not have the disease.The authors of the study made the following conclusions based on the study results: •Because mortality due to invasive candidiasis has remained high and unchanged for the past two decades and early initiation of appropriateantifungal therapy has been reported to reduce mortality by at least two-thirds, the rapid and accurate diagnostic capability offered by this noveltechnology has the potential to change the management and prognosis of the disease. •The ability to rapidly and accurately exclude the possibility of candidemia can have significant implications in clinical practice, by decreasingthe number of patients who need to be on empiric antifungal therapy, and thus decreasing the incidence of resistant strains, the potential of sideeffects of antifungal treatment, and substantial healthcare costs. •A key advantage of T2MR over other biosensors is that it does not require culture and sample purification or preparation.Massachusetts General Hospital Study — Science Translational MedicineWe co-authored a study with investigators from Massachusetts General Hospital, or MGH, to evaluate the sensitivity and specificity of T2MR to detectCandida compared to blood culture-based diagnostics. Results from the study were published in an article entitled “T2 Magnetic Resonance EnablesNanoparticle-Mediated Rapid Detection of Candidemia in Whole Blood” in Science Translational Medicine in 2013. In this study: •T2MR was tested across 320 contrived whole blood samples, each containing one of the five clinically relevant species of Candida, and wasable to detect each of the species at a LoD ranging from 1 to 3 CFU/mL. •T2MR was tested across 24 whole blood specimens from patients exhibiting symptoms of sepsis, with eight Candida positive, eight bacteriapositive and eight negative samples. Results showed 100% sensitivity and 100% specificity of T2MR when compared with blood cultureresults for identification of Candida. •In patients with Candida treated with antifungal therapy, T2MR detected the presence of Candida in patient samples drawn up to four daysafter antifungal administration, while blood culture failed to identify the infection upon administration of antifungal therapy.University of Houston Study — Diagnostic Microbiology and Infectious DiseaseWe sponsored an independent study at the University of Houston to directly compare the sensitivity and time to result of T2Candida running on theT2Dx and blood culture-based diagnostics. In this study, contrived blood samples were split between T2Candida using the T2Dx and standard blood culture.The study showed improved performance of T2Candida over blood culture in terms of speed and sensitivity. The following findings were published in anarticle entitled “Comparison of the T2Dx Instrument with T2Candida Diagnostic Panel and Automated Blood Culture in the Detection of Candida SpeciesUsing Seeded Blood Samples” in Diagnostic Microbiology and Infectious Disease in 2013: •T2Candida detected all of the samples of C. glabrata at concentrations of 2.8 CFU/mL, while blood culture was not able to detect C. glabratain any of the samples, even at a higher concentration of 11 CFU/mL and with the standard five-day run time. •T2Candida detected all of the samples for all of the species of Candida at concentration levels of 3.1 to 11 CFU/mL. •The average time to species identification was approximately three hours for T2Candida, as opposed to over 60 hours for blood culture.The following table summarizes the results of our University of Houston study. The five relevant species of Candida were analyzed in the Universityof Houston study.Contrived blood samples at concentrations between 3.1 — 11 CFU/mL Blood Culture T2Candida (n=20 per species) (n=13-20 per species) Average time to positive result 63.23 ± 30.27 hours 3 hours C. albicans= 100% C. albicans= 100% C. tropicalis= 100% C. tropicalis= 100%Detection rate C. parapsilosis= 100% C. parapsilosis= 100% C. glabrata= 0% C. glabrata= 100% C. krusei= 100% C. krusei= 100%Sensitivity 100% Specificity 98% 14 Clinical Data Review of T2MR and T2Candida—Future MicrobiologyDr. Michael Pfaller (T2 Biosystems Chief Medical Officer), Donna Wolk, PhD (Geisinger Health System), and Tom Lowery, PhD (T2 Biosystems ChiefScientific Officer) collaborated to perform a meta-analysis of T2MR and T2Candida data that was published in Future Microbiology in 2015 with the titleT2MR and T2Candida: novel technology for the rapid diagnosis of candidemia and invasive candidiasis. The article had the following overall summarystatements and conclusions: •There is an urgent need to rapidly and accurately detect and identify fungal pathogens. Current culture-based methodologies are too slow and,with some organisms like C. glabrata, may fail altogether due to the insensitivity of some blood culture systems to detect this slow-growingspecies. •The development and FDA approval of the T2Candida Panel represents the advent of a new class of infectious disease diagnostics that enablerapid, direct detection and identification of pathogens in a culture-independent manner. The new panel will reduce the time to detection andspecies identification for common Candida species. •As of the date of publication of the article, the T2Candida Panel had identified over 31 cases of candidemia and 12 cases of candidiasis. In thelatter 12 cases, blood culture was unable to detect any of those proven infections. There were an additional ten patients with probable orsuspected invasive candidiasis, but patient record review was not available to include these cases. More specifically, across all studies to date,T2Candida had successfully detected 43 of 45 patients with confirmed candidemia (31/33) or candidiasis (12/12). When including patients withprobable candidiasis, T2Candida detected 10 of 10 patients, totaling 53 of 55 cases detected for candidemia or candidiasis. In this aggregatepopulation, blood culture only detected 33 of 55 patients. Table 7 from the article summarizes the data showing increases in sensitivity forT2Candida vs. blood culture. -Across all studies to date, T2Candida had an overall specificity of greater than 99.4% from more than 1,560 patients. -Application of the T2Candida Panel facilitates the diagnosis of candidemia and other forms of invasive candidiasis and promises to have majorclinical impact resulting from the diagnosis of previously unrecognized, deep-seated candidiasis as well as from the ‘real-time’ (hours) detectionof candidemia. The earlier species-level diagnosis provided by the T2Candida Panel will allow targeted pre-emptive antifungal therapy whichshould result in a decrease in Candida -associated morbidity, mortality, and excess length of stay in the hospital and at the same time reduceunnecessary empiric antifungal therapy. The T2Candida Panel provides breakthrough performance in the detection and identification ofCandida direct from patient samples and may significantly impact patient mortality and hospital costs.Customer PresentationsOver the past 12 to 18 months, customers have begun to report on their experiences with the T2Candida Panel at conferences and in publications.Below is a summary of some those reports. -Investigators at the Henry Ford Health System reported data that demonstrated that after the implementation of T2Candida in their hospitalsystem, the hospital system projected that it may save an estimated $2.3M annually, reduced median ICU length of stay by seven days perpatient (p=0.009), and reduced total length of stay by four days per patient (p=0.164). Additionally, 75% of negative patients had antifungalsdiscontinued or deescalated. -Investigators at the Lee Health System reported that after the implementation of T2Candida, they have experienced a reduction in the averagelength of stay per patient by 7 days, unnecessary antifungal therapy was avoided in 41% of patients, and unnecessary antifungal therapy wasdiscontinued after 1 dose in another 15% of patients, and the average net antifungal savings was $195 for every patient tested with T2Candida. -Investigators at Riverside Community Hospital reported that implementation of T2Candida led to therapy being discontinued for 100% ofpatients who tested negative, and for patients who tested positive and had not been on antifungals prior to testing, 83% of patients who testedpositive received appropriate therapy within six hours of blood drawing and 100% within nine hours of blood draw.15 -Investigators at Huntsville Hospital, showed that use of the T2Candida panel resulted in reduction in duration of therapy and time to de-escalation in negative patients. This yielded net pharmacy savings of approximately $280 per patient tested. T2Candida also detected 56%more positive patients than blood culture. -Investigators at the University Di Roma reported that T2Candida detected invasive candidiasis that were not identified by blood culture.T2Candida identified three cases of C. albicans and one case of C. glabrata that were proven accurate with additional in vitro diagnostictesting and diagnostic imaging.Candida AurisIn September 2017, we entered into an agreement with the CDC, pursuant to which the CDC agreed to utilize T2Dx in its laboratory for potentiallytesting and monitoring the emergence and outbreaks of the superbug Candida auris, which we expect to occur in hospitals around the United States.Candida auris is a multi-drug resistant pathogen recognized by the CDC as a serious global health threat because it can be resistant to all three majorclasses of antifungal drugs and is difficult to identify. The CDC has also reported that more than one-in-three patients with Candida auris infections havedied. Unlike most other species of Candida, Candida auris can spread quickly in a hospital making rapid identification and hospital environmentsurveillance a critical component of containing these outbreaks. Existing laboratory methods that detect Candida auris, including blood culture, suffer fromprolonged detection times and low accuracy, which exacerbates the challenge in the fight to contain the superbug. Recently, reported cases have surgedinternationally, and the CDC has reported a significant increase in infected patients in the United States. According to the European Centre for DiseasePrevention and Control, hospital outbreaks have occurred in the United Kingdom and Spain. Because Candida auris can be resistant to most treatmentoptions and can spread so quickly, these hospital outbreaks have been difficult to contain by even the most enhanced control measures.The goals of the CDC collaboration are to use the T2Dx Instrument to (i) validate the detection of Candida auris from patient skin samples andhospital environmental samples, (ii) validate a process for surveillance of Candida auris in healthcare facilities from skin and environmental samples, and(iii) assist state and local public health labs in combating the outbreak.T2BacteriaT2Bacteria Panel Pivotal Clinical Study InformationOn August 4, 2017, T2 Biosystems, Inc. completed a pivotal clinical study of the T2Bacteria® Panel, run on the T2Dx® Instrument (T2Dx), which is aqualitative T2 Magnetic Resonance (T2MR®) assay designed for the direct detection of bacterial species in EDTA human whole blood specimens frompatients with suspected bacteremia. The T2Bacteria Panel is designed to identify species of bacteria directly from human whole blood specimens: Enterococcus faecium, Escherichia coli, Klebsiella pneumoniae, Pseudomonas aeruginosa, and Staphylococcus aureus. Outside of the United States, theCE marked T2Bacteria panel identifies all 5 of these species along with a 6th species, Acinetobacter BaumanniiThe performance characteristics of the T2Bacteria Panel were evaluated through a series of analytical studies as well as a multi-center clinical study. The clinical study evaluated the performance of the T2Bacteria Panel in comparison to the current standard of care, blood culture. All of the data generatedin the analytical studies and the clinical study were submitted to the United States Food and Drug Administration, or FDA, in a 510(k) premarket notificationon September 8, 2017.The clinical study consisted of two arms, a prospective arm and a seeded arm. In the prospective arm, a total of 1,427 subjects were tested at elevengeographically dispersed and demographically diverse sites in the United States. In the seeded arm, 300 specimens of known bacterial composition wereevaluated at three sites. Seeded specimens were prepared by spiking whole blood with multiple strains of the bacterial species detected by the T2BacteriaPanel at defined concentrations (CFU/mL). Fifty negative blood samples also were evaluated as part of the seeded arm of the study. In total, 1,777 (1,427prospective specimens and 350 seeded and negative) clinical samples were tested to evaluate the clinical performance of the T2Bacteria Panel.The study findings submitted to the FDA include: •The overall sensitivity for the prospective and seeded arms combined was 95.8% (see Table I below); •In the seeded arm of the study, the average sensitivity was 96.8% (see Table K), with the sensitivity by bacterial target ranging from90.9% to 100.0% (see Table L); •In the prospective arm of the study, the average sensitivity was 89.7% (see Table M), with the sensitivity by bacterial target rangingfrom 81.3%% to 100.0% (see Table N);16 •The average specificity for the prospective and seeded arms combined was 98.1% (see Table I); •In the seeded arm of the study, the average specificity of the test was 99.0% (see Table K), with the specificity by bacterial targetranging from 97.3% to 100.0% (see Table L); •In the prospective arm of the study the average specificity of the test was 97.9% (see Table M), with the specificity by bacterial targetranging from 95.0% to 99.4% (see Table N); •In the prospective arm of the study, results that were identified as positive by the T2Bacteria Panel but negative by blood culture were evaluatedby looking at additional blood culture results obtained +/- 14 days of the paired T2 / blood culture draw. 36% of the T2 positive / blood culturenegative results were found to be culture positive for the organism identified by the T2Bacteria Panel within the defined 14 day window (TableN). •In the prospective arm of the study, four specimens that were identified as negative by the T2Bacteria Panel but positive by blood culture wereevaluated by running a second archived blood sample. Two of the four samples generated positive results by the T2Bacteria Panel that were inagreement with blood culture, one for S. aureus and the other for E.coli.Table I: T2Bacteria Panel Overall Performance for Prospective and Seeded Arms Sensitivity 95% CI Specificity 95% CI95.4% (209 / 219) 91.8%-97.5% 97.9% (8,416/8,596) 97.6%-98.2% Table J: T2Bacteria Panel Combined Performance for Prospective and Seeded Arms Sensitivity (PPA) Specificity (NPA)Species Sensitivity 95% CI Specificity 95% CIE. coli 90.9% (30/33) 76.4% - 96.9% 95.4% (1637/1716) 94.3% - 96.3%E. faecium 100.0% (41/41) 91.4% - 100.0% 99.5% (1717/1726) 99.0% - 99.7%K. pneumoniae 100.0% (46/46) 92.3% - 100.0% 98.6% (1697/1721) 97.9% - 99.1%P. aeruginosa 97.7% (43/44) 88.2% - 99.6% 97.7% (1682/1722) 96.9% - 98.3%S. aureus 89.1% (49/55) 78.2% - 94.9% 98.4% (1683/1711) 97.6% - 98.9% •PPA (sensitivity) calculated against samples with titer levels at or above limit of detection (LoD) in Seeded Arm and blood culture positives inProspective Arm •NPA (specificity) calculated from all samples (including below LoD and unspiked negative samples) as the total number of negative channelsdivided by total number of non-spiked channels in Seeded Arm and blood culture negatives in Prospective Arm. Table K: T2Bacteria Panel Seeded Sample Performance Sensitivity 95% CI Specificity 95% CI96.7% (174 / 180) 92.9%-98.5% 98.9% (1,483/1,500) 98.2%-99.3% •PPA (sensitivity) calculated against samples with titer levels at or above limit of detection (LoD) Table L: T2Bacteria Panel Seeded Sample Performance Sensitivity (PPA) Specificity (NPA)Species PPA 95% CI NPA 95% CIE. coli 90.9% (20/22) 72.2 - 97.5% 97.3% (292/300) 94.8 - 98.6%E. faecium 100% (40/40) 91.2 - 100% 100% (300/300) 98.7 - 100%K. pneumoniae 100% (40/40) 91.2 - 100% 99.3% (298/300) 97.6 - 99.8%P. aeruginosa 97.4% (38/39) 86.8 - 99.5% 97.7% (293/300) 95.3 - 98.9%S. aureus 92.3% (36/39) 79.7 - 97.3% 100% (300/300) 98.7 - 100% •PPA (sensitivity) calculated against samples with titer levels at or above limit of detection (LoD) Table M: T2Bacteria Panel Overall Performance for Prospective Arm Sensitivity 95% CI Specificity 95% CI89.7% (35/39) 76.4%-95.9% 97.7% (6,933/7,096) 97.3%-98.0% 17Table N: T2Bacteria Panel Performance as Compared to Blood Culture — Prospective Arm Sensitivity (PPA) Specificity (NPA)Species Sensitivity 95% CI Specificity 95% CIE. coli 90.9% (10/11) 62.3 - 98.4% 95.0% (1345/1416) 93.7 - 96.0%E. faecium 100.0% (1/1) 20.7 - 100% 99.4% (1417/1426) 98.8 - 99.7%K. pneumoniae 100.0% (6/6) 61.0 - 100% 98.5% (1399/1421) 97.7 - 99.0%P. aeruginosa 100.0% (5/5) 56.6 - 100% 97.7% (1389/1422) 96.8 - 98.3%S. aureus 81.3% (13/16) 57.0 - 93.4% 98.0% (1383/1411) 97.1 - 98.6% Table N: Percentage of Positive results with negative paired Blood Cultures that were Found to be Culture Positive +/- 14 Days of Paired T2/BloodCulture Draw Bacteria Percentage of T2(+)/BC(-) resultswith other Positive Cultures*E.coli 23/70 (33%)E. faecium 4/9 (44%)K. pneumoniae 8/21 (38%)P. aeruginosa 7/32 (22%)S. aureus 21/28 (75%)Total 63/173 (36%) Customer PresentationsIn 2017, two customers reported on their experiences with the T2Bacteria Panel. Below is a summary of those reports. •Investigators at the Catholic University School of Medicine in Rome, Italy, presented interim data from a study in which T2Bacteria achieved100% sensitivity and 97% specificity in analytical studies, and in clinical studies, it identified patients with infection in as fast as four hours,while blood culture took up to five days, inclusive of multiple cases where T2Bacteria identified patients missed by blood culture with proveninfections. •Investigators at Northwestern University in Chicago, Illinois, presented data demonstrating that the T2Bacteria Panel had 89% sensitivity forbacterial infections while blood culture only detected 68% of infections, and positive T2Bacteria Panel results for patients on antibiotic therapycorrelated to more serious and poorly controlled infections. Lyme DiseaseWe believe that T2MR can also address the significant unmet need associated with Lyme disease, a tick-borne illness that can cause prolongedneurological disease and musculoskeletal disease. For patients with Lyme disease, early diagnosis and appropriate treatment significantly reduces both thelikelihood of developing neurological and musculoskeletal disorders, as well as the significant costs associated with treating these complications. Multiplediagnostic methods are used to test for Lyme disease today, which are labor-intensive, can take weeks to process, and are subject to high false negative ratesdue to their inability to detect the disease, making each method unreliable in the diagnosis of the condition. Because of these limitations, patients arefrequently misdiagnosed or are delayed in the diagnosis of this disease.According to the CDC, Lyme disease affects approximately 30,000 people in the U.S. each year, but the CDC also estimates that the actual number iscloser to 360,000 due to under-reporting because of poor diagnostic methods. Approximately 3.4 million tests are run for Lyme disease each year, includingserology testing, PCR techniques and blood culture, which has low sensitivity and takes approximately two to three weeks to provide results. Inadequateidentification of Lyme disease may lead to antibiotic resistance, significant costs, and transmission of the disease through healthcare procedures such asblood transfusion. The misdiagnosis of Lyme disease has been reported to have an annual cost of more than $10,000 per patient in the United States,representing over $3 billion per year.Our product candidate, T2Lyme is designed to identify the bacteria that cause Lyme disease directly from the patient’s blood, without the need forblood culture which, for the bacteria associated with Lyme disease, can take several weeks. The test panel is expected to be run on the T2Dx Instrument, thesame instrument currently used to run our T2Candida test panel and in the future, our T2Bacteria Panel product candidate. We anticipate the T2Lyme testpanel to benefit from similar advantages provided by T2MR as the T2Candida Panel, including high sensitivity, high specificity, ease of use and rapid timeto result. T2Lyme may provide accurate and timely diagnosis of Lyme disease and may prevent the evolution of the disease to its later stages with associatedneurological and musculoskeletal diseases. We expect to initiate a T2Lyme clinical trial in 2018.We expect that existing CPT codes will be used to facilitate reimbursement of our T2Lyme diagnostic panel.The T2Lyme Panel identifies the microorganisms responsible for most cases of Lyme disease in North America and Europe and are detected directly inwhole blood using T2MR and the same methodology used in the T2Candida and T2Bacteria tests. Preliminary data18demonstrate that the detection of three species of Borrelia at limits of detection as low as 10 cells/mL was achieved in spiked whole blood and detection ofspirochetes in clinical samples from patients with early stage Lyme disease has been demonstrated using T2MR. In 2016 Dr. Tom Lowery, our Chief Scientific Officer, presented on the T2Lyme Panel at a forum titled “Diagnostic Tests for Lyme Disease: AReassessment” held at the Banbury Center of the Cold Spring Harbor Laboratory. In this presentation he reported preliminary T2Lyme limit of detection datathat consisted of N=60 replicates for each target species consisting of three spike preparations of N=20 across three successive days prepared with aquantitative spiking method. Positivity rates were ≥95% for B. afzelii and B. burgdorferi at 5 cells/mL and B. garinii at 8 cells/mL. Additionally, Dr. Loweryshared data from initial clinical samples. Samples were frozen, ethylenediaminetetraacetic acid whole blood samples from patients diagnosed with EarlyStage Lyme disease at the Gunderson Clinic in Wisconsin. All 21 samples had confirmed Erythema multiforme lesions and were tested with a GundersonClinic PCR test and the T2Lyme T2MR test. Only one sample tested positive by PCR, which was confirmed by T2MR. Seven additional samples were testednegative by PCR but were tested positive by T2MR. Of the 21 samples, 8 were positive for B. burgdorferi by T2MR, demonstrating that T2MR can detectBorrelia cells in blood samples from infected patients.Sales, Marketing and DistributionWe are working to drive awareness and adoption of our T2MR technology and related products by building a direct sales force in the United States,initially targeting high-volume hospitals, and continuing to educate physicians, key decision makers and thought leaders through publishing scientific datain peer-reviewed journals, presenting at major industry conferences and conducting and supporting clinical studies. We have added a small team ofemployees in Europe primarily to support our network of European distributors.At the end of 2017, our direct sales force consisted of 17 people, excluding managers. Our sales team, employing a clinical data-driven sales approach,focus on the clinical performance of our products, the improved outcomes for patients and the economic value for hospitals, including providing hospitalswith customized budget impact analysis. They demonstrate the ease-of-use of our products and the advantages of our products over existing diagnostics andempiric therapy practices. We plan to continue to invest in our direct sales force as we expand both the array of diagnostic panels and our customer reach.Today, our sales force markets the T2Dx and T2Candida directly to hospitals in the United States, targeting 1,200 hospitals treating the largest numberof high-risk patients. The same sales force will market T2Bacteria to those same hospitals after FDA clearance. We estimate that these 1,200 hospitalsannually see an average of over 3,400 symptomatic patients at high risk for a Candida infection. If these institutions adopt our technology, we expect apositive network effect in the hospital community, accelerating adoption of T2Candida and T2Bacteria. We believe key aspects of healthcare reform,including the focus on cost containment, risk-sharing, and outcomes-based treatment and reimbursement, align with the value proposition of our sepsisproducts, contributing positively to their adoption. We believe the key decision-makers at hospitals are infectious disease and critical care physicians,laboratory directors, the hospital pharmacy and hospital administrators. In response to the severity and complexity of managing bloodstream infections, agrowing number of hospitals have instituted antimicrobial stewardship committees to control hospital practices related to infections, including the use ofantibiotic and antifungal therapy. These committees typically include key decision-makers, and we believe they can provide a central forum to present thebenefits of our products. In addition, we plan to continue to publish scientific data in peer-reviewed journals, present at major industry conferences andconduct and support clinical trials to provide additional data relative to the performance of T2Candida and T2Bacteria to these decision-makers. For the yearended December 31, 2017, the Company derived approximately 19% of its total revenue from one customer and 10% of its total revenue from a secondcustomer.Outside of the United States, we have received regulatory approvals in Europe and expect to seek regulatory approvals in other international markets.We market our platform primarily through distributor partners who deploy a similar model to our sales approach in the United States. In July 2014, wereceived CE marking for T2Candida and the T2Dx and in September 2017 we received CE marking for T2Bacteria. As of the end of 2017, we had distributorswith territories in Italy, Spain, Portugal, Germany, France, Denmark, Sweden, Norway, Poland, the Czech Republic, Austria, Slovenia, Slovakia, Hungary,Romania, Croatia, Bulgaria, Serbia and Kuwait. These distributors have knowledge of infectious diseases and/or microbiology. They typically have strong,existing relationships with international thought leaders in these areas and have good relationships with important hospitals in their respective countries. Wecontinue to develop partner relationships in other key international markets and will further investigate potential distribution channels in other key marketsaround the world. We have employed a small team of direct sales/marketing and field service personnel primarily to support the efforts of our distributors inthe European Union, or the EU. ManufacturingWe manufacture our proprietary T2Dx at our manufacturing facility in Lexington, Massachusetts and our T2Candida and T2Bacteria reagent trays atour manufacturing facility in Wilmington, Massachusetts. We perform all instrument and tray manufacturing and packaging of final components inaccordance with applicable guidelines for medical device manufacturing. We outsource manufacturing of our T2Candida and T2Bacteria consumablecartridge to a contract manufacturing organization. Our particles are supplied by a sole source supplier, GE Healthcare. We believe we can securearrangements with other suppliers on commercially reasonable terms for the products and parts we outsource.We have implemented a quality management system designed to comply with FDA regulations and International Standards Organization, or ISO,standards governing medical device products. These regulations govern the design, manufacture, testing, release and service of diagnostic products as well asraw material receipt and control. We have received ISO 13485:2012 registration from the National Standards Authority of Ireland. Our key outsourcingpartners are ISO-certified.19We plan to continue to manufacture components that we determine are proprietary or require special processes to produce, while outsourcing themanufacture of more commodity-like components. We expect to establish additional outsourcing partnerships as we manufacture more products. We believeour facility in Wilmington, Massachusetts is adequate to meet our current manufacturing needs and that additional manufacturing space is readily availablefor future expansion.Intellectual PropertyWe strive to protect and enhance the proprietary technologies that we believe are important to our business, and seek to obtain and maintain patentsfor any patentable aspects of our product and product candidates, including their methods of use and any other inventions that are important to thedevelopment of our business. Our success will depend significantly on our ability to obtain and maintain patent and other proprietary protection forcommercially important proprietary technology, inventions and know-how related to our business, including our methods, processes and product candidatedesigns, and our ability to defend and enforce our patents, maintain our licenses to use intellectual property owned by third parties, preserve theconfidentiality of our trade secrets and operate without infringing the valid and enforceable patents and other proprietary rights of third parties. We also relyon trademarks, copyrights, know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen, and maintain ourproprietary position in the fields targeted by our products and product candidates. Protecting these rights is a primary focus in our relationships with otherparties, and we seek to protect such rights, in part, by entering into confidentiality and non-disclosure agreements with such third parties and includingprotections for such proprietary information and intellectual property rights in our other contracts with such third parties, including material transferagreements, licenses and research agreements.We are the owner or licensee of over 60 patents and over 40 patent applications and possess substantial know-how and trade secrets which protectvarious aspects of our business and products. The patent families comprising our patent portfolio are primarily focused on protection of a range of generaland specific attributes of our proprietary assay architecture and assay instrumentation for our T2Candida product and our T2Bacteria and T2Lyme productcandidates, as well as protection of certain aspects of the conduct of the assays and detection of analytes. We also own several patent families coveringvarious aspects of our T2HemoStat assay, including the assay architecture and conduct of the analysis. The issued patents in our patent families that coverT2Candida and T2Bacteria are expected to expire between 2023 and 2034, while additional pending applications covering T2Candida and T2Bacteriawould be expected, if issued, to expire as late as 2037. The issued patents in our patent families that cover T2HemoStat are expected to expire between 2029and 2032, while additional pending applications covering T2HemoStat, if issued, will be expected to expire as late as 2037. The issued patents in our patentfamilies that cover T2Lyme are expected to expire between 2023 and 2034, while additional pending applications covering T2Lyme would be expected, ifissued, to expire as late as 2037. In all cases, the expiration dates are subject to any extension that may be available under applicable law.Proprietary Rights and ProcessesWe rely, in some circumstances, on proprietary technology and processes (including trade secrets) to protect our technology. However, these can bedifficult to protect. We require all full-time and temporary employees, scientific advisors, contractors and consultants working for us who have access to ourconfidential information to execute confidentiality agreements in order to safeguard our proprietary technologies, methods, processes, know-how, and tradesecrets. We also seek to preserve the integrity and confidentiality of our proprietary technology and processes by maintaining physical security of ourpremises and physical and electronic security of our information technology systems. All of our full-time and temporary employees and independentcontractors and consultants are also bound by invention assignment obligations, pursuant to which rights to all inventions and other types of intellectualproperty conceived by them during the course of their employment are assigned to us.While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not haveadequate remedies for any breach. To the extent that our employees, consultants, scientific advisors, contractors, or any future collaborators use intellectualproperty owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Further, any of ourintellectual property and proprietary rights could be challenged, invalidated, circumvented, infringed or misappropriated, or such intellectual property andproprietary rights may not be sufficient to provide competitive advantages. For more information, please see “Risks Related to Intellectual Property.”TrademarksWe seek trademark and service mark protection in key markets to safeguard our brand and the brands of our products and product candidates. Weintend to file trademark registration applications in the U.S. and foreign jurisdictions to continue to strengthen our brand.License AgreementsLicense Agreement with Massachusetts General HospitalIn 2006, we entered into an exclusive license agreement with MGH, pursuant to which MGH granted to us an exclusive, worldwide, sublicensablelicense under certain patent rights to make, use, import and commercialize products and processes for diagnostic, industrial and research and developmentpurposes. In 2008 and 2011, we amended our agreement with MGH to add patent rights and to modify, among other things, our diligence and paymentobligations.20We are required to use reasonable commercial efforts to develop and make available to the public products and processes covered by the agreement,and to achieve specified organizational, development and commercialization milestones by specified dates. To date, we have met all of our diligenceobligations pursuant to this agreement.We paid MGH an upfront fee and issued to MGH shares of our common stock equal to a low single-digit percentage of our then-outstanding commonstock, subject to limited adjustments to prevent dilution in certain circumstances. In addition, we are responsible for reimbursing MGH’s costs associatedwith prosecution and maintenance of the patent rights licensed to us under the agreement. We will also be required to make payments for achievement ofspecified regulatory milestones with respect to products and processes covered by the agreement. In addition, we are required to pay an annual licensemaintenance fee, which is creditable against any royalty payments we are obligated to make to MGH under the agreement.We are required to pay royalties to MGH on net sales of products and processes that are covered by patent rights licensed to us under the agreement atpercentages in the low single digits, subject to reductions and offsets in specified circumstances. The products and processes covered by the agreementinclude T2Candida, T2Bacteria and other particle-based T2MR panels that we may develop in the future. Our royalty obligations, if any, and their duration,will depend on the specific patent rights covering the product or process being sold, and the particular category of product or process, as noted above. Withrespect to T2Candida and T2Bacteria and other potential particle-based T2MR panels we may develop in the future, our obligation to pay royalties to MGHwill expire upon the later of ten years after the first commercial sale of the first product or process in the particular category and the expiration of the patentrights licensed to us under the agreement. We will also be required to pay to MGH a low double-digit percentage of specified gross revenue that we receivefrom our sublicensees. In addition, we will be required to pay royalties to MGH of less than one percent on net sales of specified products and processes thatare not covered by the patent rights licensed to us under the agreement. Our obligation to pay royalties to MGH with respect to such products and processeswill expire upon the earlier of 12 years after the first commercial sale of the first such product or process and the termination by MGH of all of the licensesgranted to us under the agreement.We have the right to terminate our agreement with MGH for any reason upon 90 days’ written notice to MGH. MGH may terminate our agreement in itsentirety if we fail to make a payment required under the agreement and do not cure such failure within a specified time period, if we fail to maintain adequateinsurance coverage or if we become insolvent. MGH may also terminate our agreement, with respect to a given category of products or processes, on 60 days’notice for our uncured breach with respect to such category of products or processes. Absent earlier termination, our agreement with MGH will remain in forceuntil the later of the expiration or abandonment of the licensed patents and patent applications, and the expiration of our obligations under the agreement.Supply Agreement with SMC Ltd.We are currently party to a supply agreement with SMC Ltd. for the supply and manufacture of products related to plastic injection molding, includingthe consumable cartridge used in connection with the T2Candida Panel. The agreement contains other terms and conditions generally consistent with anagreement for the manufacture and supply of materials or products for use in the development and commercialization of biotechnology products such as ourproducts and product candidates, including with respect to ordering, supply of such product in accordance with specifications, and quality assurance andquality control activities.The supply agreement may be terminated prior to the end of its term upon the occurrence of certain specified events and further provides that upontermination, including upon the expiration of the term, SMC shall continue to manufacture and ship products subject to outstanding purchase orders and theCompany shall be responsible for purchasing finished products, inventory, raw materials and work-in-progress held by SMC to the extent SMC, after the useof commercially reasonable efforts to use such inventory, cannot use such inventory in a financially viable way.CompetitionWhile we believe that we are currently the only diagnostic company developing products with the potential to identify pathogens associated withbloodstream infections in a variety of unpurified patient sample types at limits of detection as low as 1 CFU/mL, we compete with commercial diagnosticscompanies for the limited resources of our customers. Our principal competition is from a number of companies that offer platforms and applications in ourtarget sepsis markets, most of which are more established commercial organizations with considerable name recognition and significant financial resources.Companies that currently provide traditional blood culture-based diagnostics include Becton Dickinson & Co. and bioMerieux, Inc. In addition,companies offering post-culture species identification using both molecular and non-molecular methods include bioMerieux, Inc. (and its affiliate, BioFireDiagnostics, Inc.), Bruker Corporation, Accelerate Diagnostics, Luminex, Genmark, Cepheid and Beckman Coulter, a Danaher company. These post-culturecompetitors rely on a positive result from blood culture in order to perform their tests, significantly prolonging their results when compared to T2MR. Someof the products offered by our competitors require hours of extensive hands-on labor by an operator, while some rely on high concentrations of pathogenspresent in a positive blood culture, which can require a final concentration of at least 1,000,000 CFU/mL. In addition, there may be a number of new marketentrants in the process of developing other post-blood culture diagnostic technologies that may be perceived as competitive with our technology.21We believe that we have a number of competitive advantages, including: •T2MR’s ability to detect targets directly in complex and high volume samples, eliminating the need for sample extraction and purification; •T2MR’s ability to detect a broad range of targets, providing a wide variety of potential applications both within and outside of the in vitrodiagnostics market; •T2MR’s ability to provide rapid and highly-sensitive diagnostic results, which can provide timely information to assist physicians andhospitals to make therapeutic decisions that can improve patient outcomes and reduce healthcare costs; •our ability to develop easily operable products for end users; •our initial applications in the field of sepsis that we believe will not require separate reimbursement codes due to the established payment andreimbursement structure in place; and •our initial applications may provide substantial economic benefits to hospitals that can accrue the savings related to the rapid treatment ofsepsis patients.Government RegulationOur products under development and our operations are subject to significant government regulation. In the United States, our products are regulatedas medical devices by the FDA and other federal, state, and local regulatory authorities.FDA Regulation of Medical DevicesThe FDA and other U.S. and foreign governmental agencies regulate, among other things, with respect to medical devices: •design, development and manufacturing; •testing, labeling, content and language of instructions for use and storage; •clinical trials; •product safety; •marketing, sales and distribution; •pre-market clearance and approval; •record keeping procedures; •advertising and promotion; •recalls and field safety corrective actions; •post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death orserious injury; •post-market approval studies; and •product import and export.In the United States, numerous laws and regulations govern all the processes by which medical devices are brought to market and marketed. Theseinclude the Federal Food, Drug and Cosmetic Act, or FDCA, and the FDA’s implementing regulations, among others.FDA Pre-market Clearance and Approval RequirementsEach medical device we seek to commercially distribute in the United States must first receive 510(k) clearance, de novo down classification, or pre-market approval from the FDA, unless specifically exempted by the FDA. The FDA classifies all medical devices into one of three classes. Devices deemed topose the lowest risk are categorized as either Class I or II, which requires the manufacturer to submit to the FDA a 510(k) pre-market notification submissionrequesting clearance of the device for commercial distribution in the United States. Some low risk devices are exempted from this requirement. Devicesdeemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalentto a previously 510(k) cleared device are categorized as Class III. These devices require submission and approval of a premarket approval, or PMA,application.510(k) Clearance ProcessTo obtain 510(k) clearance, we must submit a pre-market notification to the FDA demonstrating that the proposed device is substantially equivalent toa previously-cleared 510(k) device, a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet22called for the submission of pre-market approval applications, or is a device that has been reclassified from Class III to either Class II or I. In rare cases,Class III devices may be cleared through the 510(k) process. The FDA’s 510(k) clearance process usually takes from three to 12 months from the date theapplication is submitted and filed with the FDA, but may take significantly longer and clearance is never assured. Although many 510(k) pre-marketnotifications are cleared without clinical data, in some cases, the FDA requires significant clinical data to support substantial equivalence. In reviewing a pre-market notification submission, the FDA may request additional information, including clinical data, which may significantly prolong the reviewprocess. Based on non-binding communications from the FDA, we expect our T2Bacteria Panel to be eligible for a 510(k) submission.After a device receives 510(k) clearance, any subsequent modification of the device that could significantly affect its safety or effectiveness, or thatwould constitute a major change in its intended use, will require a new 510(k) clearance or could require pre-market approval. The FDA requires eachmanufacturer to make this determination initially, but the FDA may review any such decision and may disagree with a manufacturer’s determination. If theFDA disagrees with a manufacturer’s determination, the FDA may require the manufacturer to cease marketing and/or recall the modified device until510(k) clearance or approval of a PMA is obtained. Under these circumstances, the FDA may also subject a manufacturer to significant regulatory fines orother penalties. In addition, the FDA is currently evaluating the 510(k) process and may make substantial changes to industry requirements, including whichdevices are eligible for 510(k) clearance, the ability to rescind previously granted 510(k)s and additional requirements that may significantly impact theprocess.Pre-market Approval ProcessA PMA application must be submitted if the medical device is in Class III (although the FDA has the discretion to continue to allow certain pre-amendment Class III devices to use the 510(k) process) or cannot be cleared through the 510(k) process. A PMA application must be supported by, amongother things, extensive technical, preclinical, and clinical trials, as well as manufacturing and labeling data to demonstrate to the FDA’s satisfaction the safetyand effectiveness of the device.After a PMA application is submitted and filed, the FDA begins an in-depth review of the submitted information, which typically takes between oneand three years, but may take significantly longer. During this review period, the FDA may request additional information or clarification of informationalready provided. Also during the review period, an advisory panel of experts from outside the FDA will usually be convened to review and evaluate theapplication and provide recommendations to the FDA as to the approvability of the device. In addition, the FDA will conduct a pre-approval inspection ofthe manufacturing facility to ensure compliance with Quality System Regulation, or QSR, which imposes elaborate design development, testing, control,documentation and other quality assurance procedures in the design and manufacturing process. The FDA may approve a PMA application with post-approval conditions intended to ensure the safety and effectiveness of the device including, among other things, restrictions on labeling, promotion, sale anddistribution and collection of long-term follow-up data from patients in the clinical study that supported approval. Failure to comply with the conditions ofapproval can result in materially adverse enforcement action, including the loss or withdrawal of the approval. New PMA applications or supplements arerequired for significant modifications to the manufacturing process, labeling of the product and design of a device that is approved through the PMA process.PMA supplements often require submission of the same type of information as an original PMA application, except that the supplement is limited toinformation needed to support any changes from the device covered by the original PMA application, and may not require as extensive clinical data or theconvening of an advisory panel.De novo Classification ProcessMedical device types that the FDA has not previously classified as Class I, II, or III are automatically classified into Class III regardless of the level ofrisk they pose. The Food and Drug Administration Modernization Act of 1997 established a new route to market for low to moderate risk medical devices thatare automatically placed into Class III due to the absence of a predicate device, called the “Request for Evaluation of Automatic Class III Designation,” or thede novo classification procedure. This procedure allows a manufacturer whose novel device is automatically classified into Class III to request down-classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring the submission andapproval of a PMA application. Prior to the enactment of the Food and Drug Administration Safety and Innovation Act, or FDASIA, in July 2012, a medicaldevice could only be eligible for de novo classification if the manufacturer first submitted a 510(k) premarket notification and received a determination fromthe FDA that the device was not substantially equivalent. FDASIA streamlined the de novo classification pathway by permitting manufacturers to request denovo classification directly without first submitting a 510(k) premarket notification to the FDA and receiving a not substantially equivalent determination.Under FDASIA, FDA is required to classify the device within 120 days following receipt of the de novo application. If the manufacturer seeks reclassificationinto Class II, the manufacturer must include a draft proposal for special controls that are necessary to provide a reasonable assurance of the safety andeffectiveness of the medical device. In addition, the FDA may reject the reclassification petition if it identifies a legally marketed predicate device that wouldbe appropriate for a 510(k) or determines that the device is not low to moderate risk or that general controls would be inadequate to control the risks andspecial controls cannot be developed. We utilized the de novo classification process to obtain marketing clearance for our T2Dx and T2Candida devices,which were given a Class II designation. We received marketing clearance for these devices from the FDA on September 22, 2014.Clinical TrialsA clinical trial is typically required to support a PMA application and is sometimes required for a 510(k) pre-market notification. Clinical trialsgenerally require submission of an application for an Investigational Device Exemption, or IDE, to the FDA. The IDE application must be23supported by appropriate data, such as animal and laboratory testing results, showing that it is safe to test the device in humans and that the investigationalprotocol is scientifically sound. The IDE application must be approved in advance by the FDA for a specified number of patients, unless the product isdeemed a non-significant risk device and eligible for more abbreviated IDE requirements. Clinical trials for a significant risk device may begin once the IDEapplication is approved by the FDA as well as the appropriate institutional review boards, or IRBs, at the clinical trial sites, and the informed consent of thepatients participating in the clinical trial is obtained. After a trial begins, the FDA may place it on hold or terminate it if, among other reasons, it concludesthat the clinical subjects are exposed to an unacceptable health risk. Any trials we conduct must be conducted in accordance with FDA regulations as well asother federal regulations and state laws concerning human subject protection and privacy. Moreover, the results of a clinical trial may not be sufficient toobtain clearance or approval of the product.Pervasive and Continuing U.S. Food and Drug Administration RegulationAfter a medical device is placed on the market, numerous FDA regulatory requirements apply, including, but not limited to the following: •the Quality System Regulation, or QSR, which requires manufacturers to follow design, testing, control, documentation and other qualityassurance procedures during the manufacturing process; •establishment registration, which requires establishments involved in the production and distribution of medical devices, intended forcommercial distribution in the United States, to register with the FDA; •medical device listing, which requires manufacturers to list the devices they have in commercial distribution with the FDA; •labeling regulations, which prohibit “misbranded” devices from entering the market, as well as prohibit the promotion of products forunapproved or “off-label” uses and impose other restrictions on labeling; and •post-market surveillance including Medical Device Reporting, which requires manufacturers report to the FDA if their device may have causedor contributed to a death or serious injury, or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it wereto recur.The FDA enforces these requirements by inspection and market surveillance. Failure to comply with applicable regulatory requirements may result inenforcement action by the FDA, which may include one or more of the following sanctions: •untitled letters or warning letters; •fines, injunctions and civil penalties; •mandatory recall or seizure of our products; •administrative detention or banning of our products; •operating restrictions, partial suspension or total shutdown of production; •refusing our request for 510(k) clearance or pre-market approval of new product versions; •revocation of 510(k) clearance or pre-market approvals previously granted; and •criminal prosecution and penalties.International RegulationSales of medical devices outside the United States are subject to foreign government regulations, which vary substantially from country to country. Inorder to market our products in other countries, we must obtain regulatory approvals and comply with extensive safety and quality regulations in othercountries. The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA clearance or approval, and therequirements may differ significantly.In the European Economic Area, or EEA, which comprises the 28 Member States of the EU plus Liechtenstein, Norway and Iceland, in vitro medicaldevices are required to conform with the essential requirements of the EU Directive on in vitro diagnostic medical devices (Directive 98/79/EC, as amended).To demonstrate compliance with the essential requirements, the manufacturer must undergo a conformity assessment procedure. The conformity assessmentvaries according to the type of medical device and its classification. For low-risk devices, the conformity assessment can be carried out internally, but forhigher risk devices (self-test devices and those included in List A and B of Annex II of Directive 98/79/EC) it requires the intervention of an accredited EEANotified Body. If successful, the conformity assessment concludes with the drawing up by the manufacturer of an EC Declaration of Conformity entitling themanufacturer to affix the CE mark to its products and to sell them throughout the EEA. We concluded an assessment of the conformity of the T2Dx andT2Candida with the EU in vitro diagnostic medical devices directive in late 2014, based upon an EC Declaration of Conformity dated July 7, 2014 andupdated on September 9, 2015 and May 26, 2016, allowing us to affix the CE mark to these products.24Other Healthcare LawsOur current and future business activities are subject to healthcare regulation and enforcement by the federal government and the states and foreigngovernments in which we conduct our business. These laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, privacyand security and physician sunshine laws and regulations.The federal Anti-Kickback Statute prohibits, among other things, any person from knowingly and willfully offering, soliciting, receiving or providingremuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce either the referral of an individual, for an item or service or thepurchasing, leasing, ordering, or arranging for or recommending the purchase, lease or order of any good, facility, item or service, for which payment may bemade, in whole or in part, under federal healthcare programs such as the Medicare and Medicaid programs. Although there are a number of statutoryexceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practicesthat involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do notqualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does notmake the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on acumulative review of all its facts and circumstances. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of anarrangement involving remuneration is to induce referrals of federal healthcare covered business, the Anti-Kickback Statute has been violated.Further, the recently enacted Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, orcollectively, the Affordable Care Act, among other things, amends the intent requirement of the federal Anti-Kickback Statute and certain criminal statutegoverning healthcare fraud statutes to a stricter standard. A person or entity no longer needs to have actual knowledge of these statutes or specific intent toviolate them. In addition, the Affordable Care Act codifies case law that the government may assert that a claim including items or services resulting from aviolation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act. The majority of states alsohave anti-kickback laws which establish similar prohibitions and in some cases may apply to items or services reimbursed by any third-party payor, includingcommercial insurers.Additionally, the civil False Claims Act prohibits, among other things, knowingly presenting or causing the presentation of a false or fraudulent claimfor payment to, or approval by, the U.S. government. In addition to actions initiated by the government itself, the statute authorizes actions to be brought onbehalf of the federal government by a private party having knowledge of the alleged fraud. Because the complaint is initially filed under seal, the action maybe pending for some time before the defendant is even aware of the action. If the government intervenes and is ultimately successful in obtaining redress inthe matter, or if the plaintiff succeeds in obtaining redress without the government’s involvement, then the plaintiff will receive a percentage of the recovery.The federal government is using the False Claims Act, and the accompanying threat of significant liability, in its investigation and prosecution of lifesciences companies throughout the country, for example, in connection with the promotion of products for unapproved uses and other sales and marketingpractices. The government has obtained multi-million and multi-billion dollar settlements under the False Claims Act in addition to individual criminalconvictions under applicable criminal statutes. Given the significant size of actual and potential settlements, it is expected that the government will continueto devote substantial resources to investigating healthcare providers’ and manufacturers’ compliance with applicable fraud and abuse laws.The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created new federal criminal statutes that prohibit, among otheractions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-partypayors, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement inconnection with the delivery of or payment for healthcare benefits, items or services. Like the Anti-Kickback Statute, the Affordable Care Act amended theintent standard for certain healthcare fraud under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specificintent to violate it in order to have committed a violation.The civil monetary penalties statute imposes penalties against any person or entity that, among other things, is determined to have presented or causedto be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is falseor fraudulent.Also, as stated above, many states have similar fraud and abuse laws that may be broader in scope and may apply regardless of payor.Moreover, Section 6002 of the Affordable Care Act included new requirements for device manufacturers, among others, to report certain payments or“transfers of value” provided to physicians and teaching hospitals, and to report ownership and investment interests held by physicians and their immediatefamily members during the preceding calendar year. Section 6002 of the Affordable Care Act includes in its reporting requirements a broad range of transfersof value including, but not limited to, consulting fees, speaker honoraria, charitable contributions, research payments and grants. We collect data annuallyand report it to the Centers for Medicare & Medicaid Services, or CMS, no later than the last day of March each year. Failure to report could subjectcompanies to significant financial penalties. Tracking and reporting the required payments and transfers of value may result in considerable expense andadditional resources. Several states currently have similar laws and more states may enact similar legislation, some of which may be broader in scope. Forexample, certain states require the implementation of compliance programs, compliance with industry ethics codes, implementation of gift bans and spendinglimits, and/or reporting of gifts, compensation and other remuneration to healthcare professionals.25We also may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementingregulations, including the final omnibus rule published on January 25, 2013, imposes specified requirements relating to the privacy, security andtransmission of individually identifiable health information. Among other things, HITECH, through its implementing regulations, makes certain of HIPAA’sprivacy and security standards directly applicable to business associates, defined as a person or organization, other than a member of a covered entity’sworkforce, that creates, receives, maintains or transmits protected health information for or on behalf of a covered entity for a function or activity regulated byHIPAA. In addition to HIPAA criminal penalties, HITECH created four new tiers of civil and monetary penalties and gave state attorneys general newauthority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated withpursuing federal civil actions. In addition, state laws govern the privacy and security of health information in certain circumstances, many of which differfrom each other in significant ways and may not have the same effect, thus complicating compliance efforts.The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with differentcompliance and/or reporting requirements in multiple jurisdictions increase the possibility that a healthcare company may violate one or more of therequirements. If our future operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may besubject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, exclusionfrom participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to operate our business and ourfinancial results.Coverage and ReimbursementMaintaining and growing sales of our products and product candidates depends in large part on the availability of adequate coverage andreimbursement from third-party payors, including government programs such as Medicare and Medicaid, private insurance plans and managed care programs.These third-party payors are increasingly limiting coverage and reducing reimbursement for medical products and services. In addition, the U.S. government,state legislatures and foreign governments have continued implementing cost-containment programs, including price controls and restrictions on coverageand reimbursement. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existingcontrols and measures, could further limit our net revenue and results. Decreases in third-party reimbursement for our products and/or product candidates or adecision by a third-party payor to not cover our products and/or product candidates could reduce physician utilization of our products, if approved, and havea material adverse effect on our sales, results of operations and financial condition.Hospitals, clinical laboratories and other healthcare provider customers that may purchase our products and/or product candidates generally billvarious third-party payors to cover all or a portion of the costs and fees associated with diagnostic tests, including the cost of the purchase of our productsand/or product candidates. We currently expect that the majority of our diagnostic tests will be performed in a hospital inpatient setting, where governmentalpayors, such as Medicare, generally reimburse hospitals with a single bundled payment that is based on the patients’ diagnosis under a classification systemknown as the Medicare severity diagnosis-related groups, or MS-DRGs, classification for all items and services provided to the patient during a singlehospitalization, regardless of whether our diagnostic tests are performed during such hospitalization. To the extent that our diagnostic tests will be performedin an outpatient setting, our products and/or product candidates may be eligible for separate payment using existing Current Procedural Terminology, orCPT, codes. Third-party payors may deny coverage, however, if they determine that our products are not cost-effective as determined by the payor, or aredeemed by the third-party payor to be experimental or medically unnecessary. We are unable to predict at this time whether our products and/or productcandidates, if approved, will be covered by third-party payors. Nor can we predict at this time the adequacy of payments, whether made separately in anoutpatient setting or with a bundled payment amount in an inpatient setting. Our customers’ access to adequate coverage and reimbursement for our productsand/or product candidates by government and private insurance plans is central to the acceptance of our products. We may be unable to sell our products on aprofitable basis if third-party payors deny coverage or reduce their current levels of payment, or if our costs of production increase faster than increases inreimbursement levels.Healthcare ReformIn the United States and foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changesto the healthcare system seeking, among other things, to reduce healthcare costs that could affect our future results of operations as we begin to directlycommercialize our products.By way of example, in the United States, the Affordable Care Act which was signed into law in March 2010, substantially changed the way healthcareis delivered and financed by both governmental and private insurers. Among other things, the Affordable Care Act: •established a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness researchin an effort to coordinate and develop such research;26 •implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and otherproviders to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models; and •created an independent payment advisory board that will submit recommendations to reduce Medicare spending if projected Medicarespending exceeds a specified growth rate.In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. On August 2, 2011, the Presidentsigned into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend toCongress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013through 2021, triggering the legislation’s automatic reduction to several government programs. On January 2, 2013, President Obama signed into law theAmerican Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several providers, including hospitals.We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federaland state governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressure.Research and DevelopmentWe have committed, and expect to commit, significant resources to developing new technologies and products, improving product performance andreliability and reducing costs. We have assembled an experienced research and development team with the scientific, engineering, software and process talentthat we believe is required to successfully grow our business. We are currently focused on several product candidates and enhancements utilizing our T2MRplatform. We incurred research and development expenses of $23.7 million for the year ended December 31 2017, $24.0 million for the year ended December31, 2016 and $25.4 million for the year ended December 31, 2015. Research and development expenses represented 41% of our total costs and expenses forthe year ended December 31, 2017, 44% of our total costs and expenses for the year ended December 31, 2016 and 55% of our total costs and expenses forthe year ended December 31, 2015. Major components of the research and development expenses were salaries and benefits, research-related facility andoverhead costs, laboratory supplies, equipment and contract services.We continuously seek to improve T2MR, including improvements in its technology and accessibility. As we make improvements, we anticipate wewill make available new and improved generations of our diagnostic instruments and panels. Our technology developmental efforts are focused on applyingT2MR to additional potential applications in the in vitro diagnostics area. We believe that technical advantage is important to sustain a competitiveadvantage, and therefore our research and development efforts are focused on the continued enhancement of our T2MR platform. We are dedicated toongoing innovation to T2MR and expanding our pipeline of product candidates. Our goal is for T2MR to become a standard of care by providingtechnology that offers a rapid, sensitive and simple diagnostic alternative to existing methodologies for identifying sepsis, with a long-term objective oftargeting the broader in vitro diagnostics market.EmployeesAs of December 31, 2017, we had 161 full-time employees, of which 73 work in operations (which includes manufacturing, service and support,clinical and regulatory support, quality control and quality assurance), 40 in research and development, 21 in general and administrative and 27 in sales andmarketing.FacilitiesOur corporate headquarters is located in Lexington, Massachusetts, where we currently lease approximately 31,300 square feet of office space, 20,500square feet of laboratory space and 3,400 square feet of manufacturing space in various facilities. Our base rent, for leases at our corporate headquarters, is$2.1 million annually. We also lease approximately 7,600 square feet in Wilmington, Massachusetts for our manufacturing facility, for $0.1 million annually.Corporate and Available InformationWe were incorporated under the laws of the state of Delaware in 2006. Our principal corporate offices are located at 101 Hartwell Avenue, Lexington,MA 02421.We make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendmentsto those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission, orthe SEC. We also make these documents and certain public financial information available on our website, which is www.t2biosystems.com. Our SEC reportsand other financial information can be accessed through the investor relations section of our website. Some of the information found on our website is notpart of this or any other report we file with or furnish to the SEC.27Item 1A.RISK FACTORSInvesting in our common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the otherinformation in this prospectus, including our financial statements and the related notes and “Management’s Discussion and Analysis of Results ofOperations and Financial Condition,” before deciding whether to invest in our common stock. The occurrence of any of the events or developmentsdescribed below could harm our business, financial condition, results of operations and growth prospects. In such an event, the market price of our commonstock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deemimmaterial also may impair our business operations.Risks Related to our Business and StrategyWe have identified conditions and events that raise substantial doubt about our ability to continue as a going concern, which may hinder our ability toobtain future financing.As of December 31, 2017, we had cash and cash equivalents of $41.8 million, which we believe that, together with the additional remaining liquidityremaining on our Term Loan with CRG, should be sufficient to fund our operating expenses through March 2019. We have based this estimate onassumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. Pursuant to the requirements of AccountingStandards Codification (ASC) 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, and as a result of our financialcondition and other factors described herein, there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a goingconcern will depend on our ability to obtain additional funding, as to which no assurances can be given. Our future success depends on our ability to raisecapital and/or execute our current operating plan. However, we cannot be certain that these initiatives or raising additional capital, whether through sellingadditional debt or equity securities or obtaining a line of credit or other loan, will be available to us or, if available, will be on terms acceptable to us. If weissue additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of our common stock, and our currentshareholders may experience dilution. If we are unable to obtain funds when needed or on acceptable terms, we may be required to curtail our currentdevelopment programs, cut operating costs, forego future development and other opportunities or even terminate our operations, which may involve seekingbankruptcy protection. We have incurred significant losses since inception and expect to incur losses in the future. We cannot be certain that we will achieve or sustainprofitability.We have incurred significant losses since inception through December 31, 2017 and expect to incur losses in the future. Our accumulated deficit as ofDecember 31, 2017 was $266.1 million and we incurred net losses of $62.4 million for the year ended December 31, 2017, and $54.8 million and $45.3million for the years ended December 31, 2016 and 2015, respectively. We expect that our losses will continue for at least the next few years as we will berequired to invest significant additional funds toward the continued development and commercialization of our technology. We also expect that our selling,general and administrative expenses will continue to increase due to the additional costs associated with growing our sales and marketing infrastructure, andobtaining regulatory clearance or approval for our products currently under development. Our ability to achieve or sustain profitability depends on numerousfactors, many of which are beyond our control, including the market acceptance of our products and future product candidates, future product development,our ability to achieve marketing clearance from the FDA and international regulatory clearance for future product candidates, our ability to competeeffectively against an increasing number of competitors and new products, and our market penetration and margins. We may never be able to generatesufficient revenue to achieve or sustain profitability. As noted above, we and our auditors have identified conditions and events that raise doubt about ourability to continue as a going concern.We have a limited operating history and may face difficulties encountered by companies early in their commercialization in competitive and rapidlyevolving markets.We received marketing clearance from the FDA for the T2Dx Instrument and the T2Candida Panel on September 22, 2014 and began commercializingthese products in the fourth quarter of 2014. Accordingly, we have a limited operating history upon which to evaluate our business and forecast our futuresales and operating results. In assessing our business prospects, you should consider the various risks and difficulties frequently encountered by companiesearly in their commercialization in competitive and rapidly evolving markets, particularly companies that develop and sell medical devices. These risksinclude our ability to: •implement and execute our business strategy; •expand and improve the productivity of our sales and marketing infrastructure to grow sales of our products and product candidates; •increase awareness of our brand; •manage expanding operations; •expand our manufacturing capabilities, including increasing production of current products efficiently while maintaining quality standards andadapting our manufacturing facilities to the production of new product candidates; •respond effectively to competitive pressures and developments; •enhance our existing products and develop new products;28 •obtain and maintain regulatory clearance or approval to commercialize product candidates and enhance our existing products; •effectively perform clinical trials with respect to our proposed products; •attract, retain and motivate qualified personnel in various areas of our business; and •implement and maintain systems and processes that are compliant with applicable regulatory standards.We may not have the institutional knowledge or experience to be able to effectively address these and other risks that may face our business. Inaddition, we may not be able to develop insights into trends that could emerge and negatively affect our business and may fail to respond effectively to thosetrends. As a result of these or other risks, we may not be able to execute key components of our business strategy, and our business, financial condition andoperating results may suffer.Until we achieve scale in our business model our revenue will be primarily generated from research revenue and the T2Dx Instrument and the T2CandidaPanel, and any factors that negatively impact sales of these products may adversely affect our business, financial condition and operating results.We began to offer our initial sepsis products for sale in the fourth quarter of 2014 and expect that we will be dependent upon the sales of theseproducts for the majority of our revenue until we receive regulatory clearance or approval for our other product candidates currently indevelopment. Because we currently rely on a limited number of products to generate a significant portion of our revenue, any factors that negatively impactsales of these products, or result in sales of these products increasing at a lower rate than expected, could adversely affect our business, financial conditionand operating results and negatively impact our ability to successfully launch future product candidates currently under development.If T2MR, our T2Dx and T2Candida products or any of our other product candidates, including T2Bacteria, fail to achieve and sustain sufficient marketacceptance, we will not generate expected revenue and our growth prospects, operating results and financial condition may be harmed.The commercialization of T2MR, our T2Dx and T2Candida products and the future commercialization of our other product candidates, includingT2Bacteria, in the United States and other jurisdictions in which we intend to pursue marketing clearance are key elements of our strategy. If we are notsuccessful in conveying to hospitals that our current products and future product candidates provide equivalent or superior diagnostic information in ashorter period of time compared to existing technologies, or that these products and future product candidates improve patient outcomes or decreasehealthcare costs, we may experience reluctance, or refusal, on the part of hospitals to order, and third-party payors to pay for performing a test in which ourproduct is utilized. For example, the T2Candida Panel is labeled for the presumptive diagnosis of candidemia. The results of the web-based survey weconducted of decision makers involved with laboratory purchasing may not be indicative of the actual adoption of T2Candida. In addition, our expectationsregarding cost savings from using our products may not be accurate.These hurdles may make it difficult to demonstrate to physicians, hospitals and other healthcare providers that our current diagnostic products andfuture product candidates are appropriate options for diagnosing sepsis and impaired hemostasis, may be superior to available tests and may be more cost-effective than alternative technologies. Furthermore, we may encounter significant difficulty in gaining inclusion in sepsis and hemostasis treatmentguidelines, gaining broad market acceptance by healthcare providers, third-party payors and patients using T2MR and our related products and productcandidates. Furthermore, healthcare providers may have difficulty in maintaining adequate reimbursement for sepsis treatment, which may negatively impactadoption of our products.If we fail to successfully commercialize our products and product candidates, we may never receive a return on the significant investments in productdevelopment, sales and marketing, regulatory, manufacturing and quality assurance we have made and further investments we intend to make, and may fail togenerate revenue and gain economies of scale from such investments.If T2Lyme does not successfully identify Lyme disease in clinical patients, our future revenue could be negatively impacted.If T2Lyme does not successfully identify Lyme disease in clinical patients with adequate clinical sensitivity and specificity, the revenue opportunityfor this product candidate could be limited or not realized at all.We have limited experience in marketing and selling our products, and if we are unable to expand, manage and maintain our direct sales and marketingorganizations, or otherwise commercialize our products, our business may be adversely affected.Because we received FDA clearance to sell our initial sepsis products in the third quarter of 2014, we have limited experience marketing and sellingour products. As of December 31, 2017, our direct sales organization, including marketing, consisted of 27 employees. Our financial condition and operatingresults are highly dependent upon the sales and marketing efforts of our sales and marketing employees. If our sales and marketing efforts fail to adequatelypromote, market and sell our products, our sales may not increase at levels that are in line with our forecasts.Our future sales growth will depend in large part on our ability to successfully expand the size and geographic scope of our direct sales force in theUnited States. Accordingly, our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled sales and marketingpersonnel. Because the competition for their services is high, there is no assurance we will be able to hire and retain additional29personnel on commercially reasonable terms. If we are unable to expand our sales and marketing capabilities, we may not be able to effectivelycommercialize our products and our business and operating results may be adversely affected.Outside of the United States, we sell our products through distribution partners and there is no guarantee that we will be successful in attracting orretaining desirable distribution partners for these markets or that we will be able to enter into such arrangements on favorable terms. Distributors may notcommit the necessary resources to market and sell our products effectively or may choose to favor marketing the products of our competitors. If distributorsdo not perform adequately, or if we are unable to enter into effective arrangements with distributors in particular geographic areas, we may not realizeinternational sales and growth.Our sales cycle is lengthy and variable and we have a limited sales history, which makes it difficult for us to forecast revenue and other operating results. Our sales process involves numerous interactions with multiple individuals within an organization and often includes in-depth analysis by potentialcustomers of our products, performance of proof-of-principle studies, preparation of extensive documentation and a lengthy review process. As a result ofthese factors and the budget cycles of our potential customers, the time from initial contact with a potential customer to our receipt of a purchase order fromsuch potential customer, varies significantly and can be up to 12 months or longer. Given the length and uncertainty of our anticipated sales cycle, we likelywill experience fluctuations in our product sales on a period-to-period basis. Expected revenue streams are highly dependent on hospitals’ adoption of ourconsumables-based business model, and we cannot assure you that our potential hospital clients will follow a consistent purchasing pattern. Moreover, it isdifficult for us to forecast our revenue as it is dependent upon our ability to convince the medical community of the clinical utility and economic benefits ofour products and their potential advantages over existing diagnostic tests, the willingness of hospitals to utilize our products and the cost of our products tohospitals. In addition, we started selling the T2Dx and T2Candida products in the fourth quarter of 2014 and have a limited sales history to rely on whenforecasting revenue and other operating results.We may not be able to gain and retain the ongoing support of leading hospitals and key thought leaders, or to continue the publication of the results ofnew clinical trials in peer-reviewed journals, which may make it difficult to establish T2MR as a standard of care and may limit our revenue growth andability to achieve profitability. Our strategy includes developing relationships with leading hospitals and key thought leaders in the industry. If these hospitals and key thoughtleaders determine that T2MR and related products are not clinically effective or that alternative technologies are more effective, or if we encounter difficultypromoting adoption or establishing T2MR as a standard of care, our revenue growth and our ability to achieve profitability could be significantly limited.We believe that the publication of scientific and medical results in peer-reviewed journals and presentation of data at leading conferences are criticalto the broad adoption of T2MR. Publication in leading medical journals is subject to a peer-review process, and peer reviewers may not consider the results ofstudies involving T2MR sufficiently novel or worthy of publication.If we are unable to successfully manage our growth, our business will be harmed. During the past few years, we have significantly expanded our operations. We expect this expansion to continue to an even greater degree as wecontinue to commercialize our initial sepsis products, build a targeted sales force, and seek marketing clearance from the FDA and international regulatorybodies for our future product candidates. Our growth has placed, and will continue to place, a significant strain on our management, operating and financialsystems and our sales, marketing and administrative resources. As a result of our growth, operating costs may escalate even faster than planned, and some ofour internal systems and processes, including those relating to manufacturing our products, may need to be enhanced, updated or replaced. Additionally, ouranticipated growth will increase demands placed on our suppliers, resulting in an increased need for us to manage our suppliers and monitor for qualityassurance. If we cannot effectively manage our expanding operations, manufacturing capacity and costs, including scaling to meet increased demand andproperly managing suppliers, we may not be able to continue to grow or we may grow at a slower pace than expected and our business could be adverselyaffected.Our future capital needs are uncertain, and we may need to raise additional funds in the future.We believe that our existing cash and cash equivalents will be sufficient to meet our anticipated cash requirements for at least the next 12 months fromthe date of issuance of these consolidated financial statements. However, we may need to raise substantial additional capital to: •expand our product offerings; •expand our sales and marketing infrastructure; •increase our manufacturing capacity; •fund our operations; and •continue our research and development activities.30Our future funding requirements will depend on many factors, including: •our ability to obtain marketing clearance from the FDA and international regulatory clearance to market our future product candidates; •market acceptance of our products and product candidates; •the cost and timing of establishing sales, marketing and distribution capabilities; •the cost of our research and development activities; •the ability of healthcare providers to obtain coverage and adequate reimbursement by third-party payors for procedures using our products andproduct candidates; •the cost and timing of marketing clearance or regulatory clearances; •the cost of goods associated with our products and product candidates; •the effect of competing technological and market developments; and •the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaborationarrangements for products or technology.We cannot assure you that we will be able to obtain additional funds on acceptable terms, or at all. If we raise additional funds by issuing equity orequity-linked securities, our stockholders may experience dilution. Debt financing, if available, may involve covenants restricting our operations or ourability to incur additional debt. Any debt or additional equity financing that we raise may contain terms that are not favorable to us or our stockholders. If weraise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights to our technologiesor our products, or grant licenses on terms that are not favorable to us. If we are unable to raise adequate funds, we may need to liquidate some or all of ourassets or delay, reduce the scope of or eliminate some or all of our development programs.If we do not have, or are not able to obtain, sufficient funds, we may be required to delay development or commercialization of our product candidatesor license to third parties the rights to commercialize our product candidates or technologies that we would otherwise seek to commercialize ourselves. Wealso may need to reduce marketing, customer support or other resources devoted to our products or cease operations. Any of these factors could harm ouroperating results.Our future success is dependent upon our ability to create and expand a customer base for our products in large hospitals.We market our initial sepsis products to the approximately 1,200 leading hospitals in the United States. We are also targeting the top-tier hospitals ineach of the European markets where we currently sell our products. We may not be successful in promoting adoption of our technologies in those targetedhospitals, which may make it difficult for us to achieve broader market acceptance of these products.We utilize third-party, single-source suppliers for some components and materials used in our products and product candidates, and the loss of any of thesesuppliers could have an adverse impact on our business.We rely on single-source suppliers for some components and materials used in our products and product candidates. Our ability to supply our productscommercially and to develop any future products depends, in part, on our ability to obtain these components in accordance with regulatory requirements andin sufficient quantities for commercialization and clinical testing. We have entered into supply agreements with most of our suppliers to help ensurecomponent availability and flexible purchasing terms with respect to the purchase of such components. While our suppliers have generally met our demandfor their products on a timely basis in the past, we cannot assure that they will in the future be able to meet our demand for their products, either because wedo not have long-term agreements with those suppliers, our relative importance as a customer to those suppliers, or their ability to produce the componentsused in our products.While we believe replacement suppliers exist for all components and materials we obtain from single sources, establishing additional or replacementsuppliers for any of these components or materials, if required, may not be accomplished quickly. Even if we are able to find a replacement supplier, thereplacement supplier would need to be qualified and may require additional regulatory authority approval, which could result in further delay. While we seekto maintain adequate inventory of the single-source components and materials used in our products in the event of disruption, those inventories may not besufficient.If our third-party suppliers fail to deliver the required commercial quantities of materials on a timely basis and at commercially reasonable prices, andwe are unable to find one or more replacement suppliers capable of production at a substantially equivalent cost in substantially equivalent volumes andquality on a timely basis, the continued commercialization of our products, the supply of our products to customers and the development of any futureproducts would be delayed, limited or prevented, which could have an adverse impact on our business.If we are unable to recruit, train and retain key personnel, we may not achieve our goals.Our future success depends on our ability to recruit, train, retain and motivate key personnel, including our senior management, research anddevelopment, science and engineering, manufacturing and sales and marketing personnel. In particular, we are highly dependent on the31management and business expertise of John McDonough, our President and Chief Executive Officer. We do not maintain fixed-term employment contracts orkey man life insurance with any of our employees. Competition for qualified personnel is intense, particularly in the Boston, Massachusetts area. Our growthdepends, in particular, on attracting, retaining and motivating highly trained sales personnel with the necessary scientific background and ability tounderstand our systems at a technical level. In addition, we may need additional employees at our manufacturing facilities to meet demand for our productsas we scale up our sales and marketing operations. Because of the complex and technical nature of our products and the dynamic market in which wecompete, any failure to attract, train, retain and motivate qualified personnel could materially harm our operating results and growth prospects.If our diagnostics do not perform as expected, our operating results, reputation and business will suffer.Our future success will depend on the market’s confidence that our technologies can provide reliable, high-quality diagnostic results. We believe thatour customers are likely to be particularly sensitive to any defects or errors in our products. If our technology fails to detect the presence of Candida oranother bacterial pathogen and a patient subsequently suffers from sepsis, or if our technology fails to detect impaired hemostasis and a patient faces adverseconsequences from the misdiagnosis, then we could face claims against us or our reputation could suffer as a result of such failures. The failure of our currentproducts or planned diagnostic product candidates to perform reliably or as expected could significantly impair our reputation and the public image of ourproducts, and we may be subject to legal claims arising from any defects or errors.The diagnostics market is highly competitive. If we fail to compete effectively, our business and operating results will suffer.While the technology of our products and product candidates is different than other products currently available, we compete with commercialdiagnostics companies for the limited resources of our customers. In this regard, our principal competition is from a number of companies that offer platformsand applications in our target sepsis and hemostasis markets, most of which are more established commercial organizations with considerable namerecognition and significant financial resources.We compete with companies that currently provide traditional blood culture-based diagnostics, including Becton Dickinson & Co. and bioMerieux,Inc. In addition, companies offering post-culture species identification using both molecular and non-molecular methods include bioMerieux, Inc. (and itsaffiliate, BioFire Diagnostics, Inc.), Bruker Corporation, Accelerate Diagnostics, Luminex, Genmark, Cepheid and Beckman Coulter, a Danaher company. Most of our expected competitors are either publicly traded, or are divisions of publicly traded companies, and have a number of competitiveadvantages over us, including: •greater name and brand recognition, financial and human resources; •established and broader product lines; •larger sales forces and more established distribution networks; •substantial intellectual property portfolios; •larger and more established customer bases and relationships; and •better established, larger scale and lower-cost manufacturing capabilities.We believe that the principal competitive factors in all of our target markets include: •impact of products on the health of the patient; •impact of the use of products on the cost of treating patients in the hospital; •cost of capital equipment; •reputation among physicians, hospitals and other healthcare providers; •innovation in product offerings; •flexibility and ease-of-use; •speed, accuracy and reproducibility of results; and •ability to implement a consumables-based model for panels.We believe that additional competitive factors specific to the diagnostics market include: •breadth of clinical decisions that can be influenced by information generated by diagnostic tests; •volume, quality and strength of clinical and analytical validation data;32 •availability of adequate reimbursement for testing services and procedures for healthcare providers using our products; and •economic benefit accrued to hospitals based on the total cost to treat a patient for a health condition.We cannot assure you that we will effectively compete or that we will be successful in the face of increasing competition from new products andtechnologies introduced by our existing competitors or new companies entering our markets. In addition, we cannot assure you that our future competitors donot have or will not develop products or technologies that enable them to produce competitive products with greater capabilities or at lower costs than ourproducts and product candidates. Any failure to compete effectively could materially and adversely affect our business, financial condition and operatingresults.Undetected errors or defects in our products or product candidates could harm our reputation, decrease market acceptance of our products or expose us toproduct liability claims.Our products or product candidates may contain undetected errors or defects. Disruptions or other performance problems with our products or productcandidates may damage our customers’ businesses and could harm our reputation. If that occurs, we may incur significant costs, the attention of our keypersonnel could be diverted or other significant customer relations problems may arise. We may also be subject to warranty and liability claims for damagesrelated to errors or defects in our products or product candidates. A material liability claim or other occurrence that harms our reputation or decreases marketacceptance of our products or product candidates could harm our business and operating results.The sale and use of products or product candidates or services based on our technologies, or activities related to our research and clinical studies,could lead to the filing of product liability claims if someone were to allege that one of our products contained a design or manufacturing defect. A productliability claim could result in substantial damages and be costly and time consuming to defend, either of which could materially harm our business orfinancial condition. We cannot assure you that our product liability insurance would adequately protect our assets from the financial impact of defending aproduct liability claim. Any product liability claim brought against us, with or without merit, could increase our product liability insurance rates or preventus from securing insurance coverage in the future.We may not be able to develop new product candidates or enhance the capabilities of our systems to keep pace with our industry’s rapidly changingtechnology and customer requirements, which could have a material adverse impact on our revenue, results of operations and business.Our industry is characterized by rapid technological changes, frequent new product introductions and enhancements and evolving industry standards.Our success depends on our ability to develop new product candidates and applications for our technology in new markets that develop as a result oftechnological and scientific advances, while improving the performance and cost-effectiveness of our existing product candidates. New technologies,techniques or products could emerge that might offer better combinations of price and performance than the products and systems that we plan to sell.Existing markets for our intended diagnostic product candidates are characterized by rapid technological change and innovation. It is critical to our successthat we anticipate changes in technology and customer requirements and physician, hospital and healthcare provider practices and successfully introducenew, enhanced and competitive technologies to meet our prospective customers’ needs on a timely and cost-effective basis. At the same time, however, wemust carefully manage our introduction of new products. If potential customers believe that such products will offer enhanced features or be sold for a moreattractive price, they may delay purchases until such products are available. We may also have excess or obsolete inventory of older products as we transitionto new products, and we have no experience in managing product transitions. If we do not successfully innovate and introduce new technology into ouranticipated product lines or manage the transitions of our technology to new product offerings, our revenue, results of operations and business will beadversely impacted.Competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customerrequirements. We anticipate that we will face strong competition in the future as expected competitors develop new or improved products and as newcompanies enter the market with new technologies and products.We are developing additional product candidates that we intend to be used with the T2Dx, including T2Bacteria for the detection of certain strains ofsepsis-causing bacteria and T2Lyme for the detection of certain strains of Lyme disease-causing bacteria. We may have problems applying our technologiesto these other areas and our new applications may not be as effective in detection as our initial applications. Any failure or delay in creating a customer baseor launching new applications may compromise our ability to achieve our growth objectives.Manufacturing risks may adversely affect our ability to manufacture products and could reduce our gross margins and negatively affect our operatingresults.Our business strategy depends on our ability to manufacture and assemble our current and proposed products in sufficient quantities and on a timelybasis so as to meet consumer demand, while adhering to product quality standards, complying with regulatory requirements and managing manufacturingcosts. We are subject to numerous risks relating to our manufacturing capabilities, including: •quality or reliability defects in product components that we source from third party suppliers; •our inability to secure product components in a timely manner, in sufficient quantities or on commercially reasonable terms; •our failure to increase production of products to meet demand;33 •the challenge of implementing and maintaining acceptable quality systems while experiencing rapid growth; •our inability to modify production lines to enable us to efficiently produce future products or implement changes in current products inresponse to regulatory requirements; and •difficulty identifying and qualifying alternative suppliers for components in a timely manner.As demand for our products increases, we will need to invest additional resources to purchase components, hire and train employees, and enhance ourmanufacturing processes and quality systems. If we fail to increase our production capacity efficiently while also maintaining quality requirements, our salesmay not increase in line with our forecasts and our operating margins could fluctuate or decline. In addition, although we expect some of our productcandidates to share product features and components with the T2Dx and the T2Candida panel, manufacturing of these products may require the modificationof our production lines, the hiring of specialized employees, the identification of new suppliers for specific components, or the development of newmanufacturing technologies. It may not be possible for us to manufacture these products at a cost or in quantities sufficient to make these productscommercially viable. Any future interruptions we experience in the manufacturing or shipping of our products could delay our ability to recognize revenuesin a particular quarter and could also adversely affect our relationships with our customers.We currently develop, manufacture and test our products and product candidates and some of their components in two facilities. If these or any futurefacility or our equipment were damaged or destroyed, or if we experience a significant disruption in our operations for any reason, our ability to continueto operate our business could be materially harmed.We currently develop our diagnostic products exclusively in a facility in Lexington, Massachusetts and manufacture and test some components of ourproducts and product candidates in, both, Wilmington and Lexington, Massachusetts. If these or any future facility were to be damaged, destroyed orotherwise unable to operate, whether due to fire, floods, hurricanes, storms, tornadoes, other natural disasters, employee malfeasance, terrorist acts, poweroutages, or otherwise, or if our business is disrupted for any other reason, we may not be able to develop or test our products and product candidates aspromptly as our potential customers expect, or possibly not at all.The manufacture of components of our products and product candidates at our Wilmington facility involves complex processes, sophisticatedequipment and strict adherence to specifications and quality systems procedures. Any unforeseen manufacturing problems, such as contamination of ourfacility, equipment malfunction, or failure to strictly follow procedures or meet specifications, could result in delays or shortfalls in production of ourproducts. Identifying and resolving the cause of any manufacturing issues could require substantial time and resources. If we are unable to keep up withfuture demand for our products by successfully manufacturing and shipping our products in a timely manner, our revenue growth could be impaired andmarket acceptance of our product candidates could be adversely affected.We maintain insurance coverage against damage to our property and equipment, subject to deductibles and other limitations that we believe isadequate. If we have underestimated our insurance needs with respect to an interruption, or if an interruption is not subject to coverage under our insurancepolicies, we may not be able to cover our losses.We may be adversely affected by fluctuations in demand for, and prices of, rare earth materials.T2MR relies, in part, on rare earth materials and products. For example, the T2Dx utilizes magnets which are extracted from the earth. Although thereare currently multiple suppliers for these rare earth materials, changes in demand for, and the market price of, these magnets could significantly affect ourability to manufacture our T2MR-based instruments and, consequently, our profitability. Rare earth minerals and product prices may fluctuate and areaffected by numerous factors beyond our control such as interest rates, exchange rates, inflation or deflation, global and regional supply and demand for rareearth minerals and products, and the political and economic conditions of countries that produce rare earth minerals and products.Provisions of our debt instruments may restrict our ability to pursue our business strategies.Our credit facilities require us, and any debt instruments we may enter into in the future may require us, to comply with various covenants that limitour ability to, among other things: •convey, lease, sell, transfer, assign or otherwise dispose of assets; •change the nature or location of our business; •complete mergers or acquisitions; •incur indebtedness; •encumber assets; •pay dividends or make other distributions to holders of our capital stock (other than dividends paid solely in common stock); •make specified investments;34 •change certain key management personnel; and •engage in material transactions with our affiliates.These restrictions could inhibit our ability to pursue our business strategies. If we default, which includes a material adverse change, under our creditfacilities, and such event of default was not cured or waived, the lenders could terminate commitments to lend and cause all amounts outstanding with respectto the debt to be due and payable immediately, which in turn could result in cross defaults under other debt instruments. Our assets and cash flow may not besufficient to fully repay borrowings under all of our outstanding debt instruments if some or all of these instruments are accelerated upon a default.We may incur additional indebtedness in the future. The debt instruments governing such indebtedness could contain provisions that are as, or more,restrictive than our existing debt instruments. If we are unable to repay, refinance or restructure our indebtedness when payment is due, the lenders couldproceed against the collateral granted to them to secure such indebtedness or force us into bankruptcy or liquidation.As part of our current business model, we will seek to enter into strategic relationships with third parties to develop and commercialize diagnosticproducts.We intend to enter into strategic relationships with third parties for future diagnostic products. However, there is no assurance that we will besuccessful in doing so. Establishing strategic relationships can be difficult and time-consuming. Discussions may not lead to agreements on favorable terms,if at all. To the extent we agree to work exclusively with a party in a given area, our opportunities to collaborate with others or develop opportunitiesindependently could be limited. Potential collaborators or licensors may elect not to work with us based upon their assessment of our financial, regulatory orintellectual property position. Even if we establish new strategic relationships, they may never result in the successful development or commercialization offuture products.Acquisitions or joint ventures could disrupt our business, cause dilution to our stockholders and otherwise harm our business.We may acquire other businesses, products or technologies as well as pursue strategic alliances, joint ventures, technology licenses or investments incomplementary businesses. We have not made any acquisitions to date, and our ability to do so successfully is unproven. Any of these transactions could bematerial to our financial condition and operating results and expose us to many risks, including: •disruption in our relationships with future customers or with current or future distributors or suppliers as a result of such a transaction; •unanticipated liabilities related to acquired companies; •difficulties integrating acquired personnel, technologies and operations into our existing business; •diversion of management time and focus from operating our business to acquisition integration challenges; •increases in our expenses and reductions in our cash available for operations and other uses; •possible write-offs or impairment charges relating to acquired businesses; and •inability to develop a sales force for any additional product candidates.Foreign acquisitions involve unique risks in addition to those mentioned above, including those related to integration of operations across differentcultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries.Also, the anticipated benefit of any acquisition may not materialize. Future acquisitions or dispositions could result in potentially dilutive issuancesof our equity securities, the incurrence of debt, contingent liabilities or amortization expenses or write-offs of goodwill, any of which could harm ourfinancial condition. We cannot predict the number, timing or size of future joint ventures or acquisitions, or the effect that any such transactions might haveon our operating results.If treatment guidelines for sepsis change, or the standard of care evolves, we may need to redesign and seek new marketing clearance from the FDA for ourproducts.If treatment guidelines for sepsis change, or the standard of care evolves, we may need to redesign and seek new marketing clearance from the FDA forour products. For example, current treatment recommendations for Candida infections, including those published by the Infectious Diseases Society ofAmerica , call for identical treatment for two species of Candida, C. albicans and C. tropicalis , and identical treatment for two other species, C. glabrata andC. krusei . Although our T2Candida test is technically capable of distinguishing among these species, we have designed it based on current treatmentguidelines and therefore it does not distinguish between two species if they are subject to the same recommended treatment. Our FDA clearance to market theT2Dx and T2Candida in the United States is also based on current treatment guidelines. If treatment guidelines change so that different treatments becomedesirable for the two species currently subject to the same recommended treatment, the clinical utility of our T2Candida test could be diminished and wecould be required to seek marketing clearance from the FDA for a revised test that would distinguish between the two species.35Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.As of December 31, 2017, we had federal net operating loss carryforwards, or NOLs, to offset future taxable income of $229.1 million, which areavailable to offset future taxable income, if any, through 2037. Under Section 382 of the Internal Revenue Code, a corporation that undergoes an “ownershipchange” is subject to limitations on its ability to utilize its NOLs to offset future taxable income. We may have already experienced one or more ownershipchanges. Depending on the timing of any future utilization of our carryforwards, we may be limited as to the amount that can be utilized each year as a resultof such previous ownership changes. In addition, future changes in our stock ownership, as well as other changes that may be outside of our control, couldresult in additional ownership changes under Section 382 of the Internal Revenue Code. Our NOLs may also be impaired under similar provisions of statelaw. We have recorded a full valuation allowance related to our NOLs and other deferred tax assets due to the uncertainty of the ultimate realization of thefuture benefits of those assets.We face risks related to handling hazardous materials and other regulations governing environmental safety.Our operations are subject to complex and stringent environmental, health, safety and other governmental laws and regulations that both publicofficials and private individuals may seek to enforce. Our activities that are subject to these regulations include, among other things, our use of hazardousmaterials and the generation, transportation and storage of waste. We may not be in material compliance with these regulations. Existing laws and regulationsmay also be revised or reinterpreted, or new laws and regulations may become applicable to us, whether retroactively or prospectively, that may have anegative effect on our business and results of operations. It is also impossible to eliminate completely the risk of accidental environmental contamination orinjury to individuals. In such an event, we could be liable for any damages that result, which could adversely affect our business.We generate a portion of our revenue internationally and are subject to various risks relating to our international activities which could adversely affectour operating results.A portion of our revenue comes from international sources, and we anticipate that we will continue to expand overseas operations. Engaging ininternational business involves a number of difficulties and risks, including: •required compliance with existing and changing foreign healthcare and other regulatory requirements and laws, such as those relating to patientprivacy or handling of bio-hazardous waste; •required compliance with anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act and U.K. Bribery Act, data privacy requirements,labor laws and anti-competition regulations; •export or import restrictions; •various reimbursement and insurance regimes; •laws and business practices favoring local companies; •longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; •political and economic instability; •potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements and other trade barriers; •foreign exchange controls; •difficulties and costs of staffing and managing foreign operations; and •difficulties protecting or procuring intellectual property rights.As we expand internationally, our results of operations and cash flows will become increasingly subject to fluctuations due to changes in foreigncurrency exchange rates. Our expenses are generally denominated in the currencies in which our operations are located, which is in the United States. If thevalue of the U.S. dollar increases relative to foreign currencies in the future, in the absence of a corresponding change in local currency prices, our futurerevenue could be adversely affected as we convert future revenue from local currencies to U.S. dollars.If we dedicate resources to our international operations and are unable to manage these risks effectively, our business, operating results and prospectswill suffer.Our employees, independent contractors, principal investigators, consultants, commercial partners, distributors and vendors may engage in misconduct orother improper activities, including non-compliance with regulatory standards and requirements.We are exposed to the risk of fraud or other misconduct by our employees, independent contractors, principal investigators, consultants, commercialpartners, distributors and vendors. Misconduct by these parties could include intentional, reckless or negligent failures to: comply with the regulations of theFDA and other similar foreign regulatory bodies; provide true, complete and accurate information to the FDA and other similar regulatory bodies; complywith manufacturing standards we have established; comply with healthcare fraud and abuse laws and regulations in the United States and similar foreignfraudulent misconduct laws; or report financial information or data accurately, or disclose unauthorized activities to us. These laws may impact, among otherthings, our activities with principal investigators and research subjects, as well36as our sales, marketing and education programs. In particular, the promotion, sales, marketing and business arrangements in the healthcare industry aresubject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws may restrictor prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.Such misconduct could also involve the improper use of information obtained in the course of clinical studies, which could result in regulatory sanctions andcause serious harm to our reputation. We currently have a code of conduct applicable to all of our employees, but it is not always possible to identify anddeter employee misconduct, and our code of conduct and the other precautions we take to detect and prevent this activity may not be effective in controllingunknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to complywith these laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, thoseactions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines,disgorgement, individual imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractualdamages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could adversely affect our ability tooperate our business and our results of operations. Any of these actions or investigations could result in substantial costs to us, including legal fees, anddivert the attention of management from operating our business.We depend on our information technology systems, and any failure of these systems could harm our business.We depend on information technology systems for significant elements of our operations, including the storage of data and retrieval of criticalbusiness information. We have installed, and expect to expand, a number of enterprise software systems that affect a broad range of business processes andfunctional areas, including systems handling human resources, financial controls and reporting, contract management, regulatory compliance, salesmanagement and other infrastructure operations. These information technology systems may support a variety of functions, including laboratory operations,test validation, quality control, customer service support, billing and reimbursement, research and development activities and general administrativeactivities. Our clinical trial data is currently stored on a third party’s servers.Information technology systems are vulnerable to damage from a variety of sources, including network failures, malicious human acts and naturaldisasters. Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins,computer viruses and similar disruptive problems. Despite the precautionary measures we have taken to prevent unanticipated problems that could affect ourinformation technology systems, failures or significant downtime of our information technology systems or those used by our third-party service providerscould prevent us from conducting our general business operations. Any disruption or loss of information technology systems on which critical aspects of ouroperations depend could have an adverse effect on our business. Further, we store highly confidential information on our information technology systems,including information related to clinical data, product designs and plans to create new products. If our servers or the servers of the third party on which ourclinical data is stored are attacked by a physical or electronic break-in, computer virus or other malicious human action, our confidential information couldbe stolen or destroyed.Our internal computer systems, or those used by our third-party research institution collaborators, vendors or other contractors or consultants, may fail orsuffer security breaches. Despite the implementation of security measures, our internal computer systems and those of our vendors and other contractors and consultants maybe vulnerable to damage from computer viruses and unauthorized access. Although to our knowledge we have not experienced any such material systemfailure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of ourbusiness operations. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriatedisclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidatescould be delayed, which could adversely affect our business, results of operations and financial condition.Risks Related to Government Regulation and Diagnostic Product ReimbursementApproval and clearance by the FDA and foreign regulatory authorities for our diagnostic tests takes significant time and requires significant research,development and clinical study expenditures and ultimately may not succeed.The medical device industry is regulated extensively by governmental authorities, principally the FDA and corresponding state regulatory agencies.The regulations are very complex and are subject to rapid change and varying interpretations. Regulatory restrictions or changes could limit our ability tocarry on or expand our operations or result in higher than anticipated costs or lower than anticipated sales. The FDA and other U.S. governmental agenciesregulate numerous elements of our business, including: •product design and development; •pre-clinical and clinical testing and trials; •product safety; •establishment registration and product listing; •labeling and storage;37 •marketing, manufacturing, sales and distribution; •pre-market clearance or approval; •servicing and post-market surveillance; •advertising and promotion; and •recalls and field safety corrective actions.Before we begin to label and market our product candidates for use as clinical diagnostics in the United States, we are required to obtain clearancefrom the FDA under Section 510(k) of the Federal Food, Drug and Cosmetic Act, approval of a de novo reclassification petition for our product, or approval ofpre-market approval, or PMA, application from the FDA, unless an exemption from pre-market review applies. In the 510(k) clearance process, the FDA mustdetermine that a proposed device is “substantially equivalent” to a device legally on the market, known as a “predicate” device, with respect to intended use,technology and safety and effectiveness, in order to clear the proposed device for marketing. Clinical data is sometimes required to support substantialequivalence. The PMA pathway requires an applicant to demonstrate the safety and effectiveness of the device based, in part, on extensive data, including,but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data. The PMA process is typically required for devices that are deemed topose the greatest risk, such as life-sustaining, life-supporting or implantable devices. However, some devices are automatically subject to the PMA pathwayregardless of the level of risk they pose because they have not previously been classified into a lower risk class by the FDA. Manufacturers of these devicesmay request that FDA review such devices in accordance with the de novo classification procedure, which allows a manufacturer whose novel device wouldotherwise require the submission and approval of a PMA prior to marketing to request down-classification of the device on the basis that the device presentslow or moderate risk. If the FDA agrees with the down-classification, the applicant will then receive approval to market the device. This device type can thenbe used as a predicate device for future 510(k) submissions. The process of obtaining regulatory clearances or approvals, or completing the de novoclassification process, to market a medical device can be costly and time consuming, and we may not be able to successfully obtain pre-market reviews on atimely basis, if at all.We received pre-market clearance for our T2Dx Instrument and T2Candida panel under the de novo application procedure in September 2014. Fromtime to time, we may make modifications to these products that may require a new 510(k). On September 8, 2017 the Company filed a 510(k) premarketsubmission for the T2Bacteria Panel with the FDA.If the FDA requires us to go through a lengthier, more rigorous examination for our future product candidates than we had expected, our productintroductions or modifications could be delayed or canceled, which could cause our launch to be delayed or, in the future, our sales to decline. In addition,the FDA may determine that our product candidates require the more costly, lengthy and uncertain PMA process.The FDA can delay, limit or deny clearance or approval of a device for many reasons, including: •we may not be able to demonstrate to the FDA’s satisfaction that our product candidates are safe and effective, sensitive and specific diagnostictests, for their intended users; •the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required; and •the manufacturing process or facilities we use may not meet applicable requirements.In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actionswhich may prevent or delay approval or clearance of our products under development or impact our ability to modify our currently approved or clearedproducts on a timely basis. For example, in response to industry and healthcare provider concerns regarding the predictability, consistency and rigor of the510(k) regulatory pathway, the FDA initiated an evaluation of the program, and in January 2011, announced several proposed actions intended to reform thereview process governing the clearance of medical devices. The FDA intends these reform actions to improve the efficiency and transparency of the clearanceprocess, as well as bolster patient safety. In addition, as part of the Food and Drug Administration Safety and Innovation Act, or FDASIA, Congressreauthorized the Medical Device User Fee Amendments with various FDA performance goal commitments and enacted several “Medical Device RegulatoryImprovements” and miscellaneous reforms which are further intended to clarify and improve medical device regulation both pre- and post-approval.Any delay in, or failure to receive or maintain, clearance or approval for our product candidates could prevent us from generating revenue from theseproduct candidates and adversely affect our business operations and financial results. Additionally, the FDA and other regulatory authorities have broadenforcement powers. Regulatory enforcement or inquiries, or other increased scrutiny on us, could affect the perceived safety and efficacy of our products andproduct candidates and dissuade our customers from using our products and product candidates.Obtaining FDA clearance, de novo down classification, or approval for diagnostics can be expensive and uncertain, and generally takes from severalmonths to several years, and generally requires detailed and comprehensive scientific and clinical data. Notwithstanding the expense, these efforts may neverresult in FDA clearance. Even if we were to obtain regulatory clearance, it may not be for the uses we believe are important or commercially attractive, inwhich case we would not be permitted to market our product for those uses.Even if granted, a 510(k) clearance, de novo down classification, or PMA approval for any future product would likely place substantial restrictions onhow our device is marketed or sold, and the FDA will continue to place considerable restrictions on our products and operations.38For example, the manufacture of medical devices must comply with the FDA’s Quality System Regulation, or QSR. In addition, manufacturers must registertheir manufacturing facilities, list the products with the FDA, and comply with requirements relating to labeling, marketing, complaint handling, adverseevent and medical device reporting, reporting of corrections and removals, and import and export. The FDA monitors compliance with the QSR and theseother requirements through periodic inspections. If our facilities or those of our manufacturers or suppliers are found to be in violation of applicable laws andregulations, or if we or our manufacturers or suppliers fail to take satisfactory corrective action in response to an adverse inspection, the regulatory authoritycould take enforcement action, including any of the following sanctions: •untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; •customer notifications or repair, replacement, refunds, detention or seizure of our products; •operating restrictions or partial suspension or total shutdown of production; •refusing or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products; •withdrawing 510(k) marketing clearances or PMA approvals that have already been granted; •refusing to provide Certificates for Foreign Government; •refusing to grant export approval for our products; or •pursuing criminal prosecution.Any of these sanctions could impair our ability to produce our products and product candidates in a cost-effective and timely manner in order to meetour customers’ demands, and could have a material adverse effect on our reputation, business, results of operations and financial condition. We may also berequired to bear other costs or take other actions that may have a negative impact on our future sales and our ability to generate profits.Sales of our diagnostic products and product candidates outside the United States are subject to foreign regulatory requirements governing clinicalstudies, vigilance reporting, marketing approval, manufacturing, product licensing, pricing and reimbursement. These regulatory requirements vary greatlyfrom country to country. As a result, the time required to obtain approvals outside the United States may differ from that required to obtain FDA clearance andwe may not be able to obtain foreign regulatory approvals on a timely basis or at all. Clearance by the FDA does not ensure approval by regulatoryauthorities in other countries, and approval by one foreign regulatory authority does not ensure clearance or approval by regulatory authorities in othercountries or by the FDA. Foreign regulatory authorities could require additional testing. Failure to comply with these regulatory requirements, or to obtainrequired clearances or approvals, could impair our ability to commercialize our diagnostic products and product candidates outside of the United States.Modifications to our products, if cleared or approved, may require new 510(k) clearances or pre-market approvals, or may require us to cease marketingor recall the modified products until clearances are obtained.Any modification to a device authorized for marketing that could significantly affect its safety or effectiveness, or that would constitute a majorchange in its intended use, design or manufacture, requires a new 510(k) clearance or, possibly, approval of a PMA. The FDA requires every manufacturer tomake this determination in the first instance, but the FDA may review any manufacturer’s decision. The FDA may not agree with our decisions regardingwhether new clearances or approvals are necessary. If the FDA disagrees with our determination and requires us to submit new 510(k) notifications or PMAsfor modifications to previously cleared products for which we conclude that new clearances or approvals are unnecessary, we may be required to ceasemarketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties.Furthermore, the FDA’s ongoing review of the 510(k) program may make it more difficult for us to make modifications to any products for which weobtain clearance, either by imposing more strict requirements on when a manufacturer must submit a new 510(k) for a modification to a previously clearedproduct, or by applying more onerous review criteria to such submissions. For example, in accordance with FDASIA, the FDA was obligated to prepare areport for Congress on the FDA’s approach for determining when a new 510(k) will be required for modifications or changes to a previously cleared device.The FDA recently issued this report and indicated that manufacturers should continue to adhere to the FDA’s 1997 Guidance on this topic when making adetermination as to whether or not a new 510(k) is required for a change or modification to a device. However, the practical impact of the FDA’s continuingscrutiny of the 510(k) program remains unclear.A recall of our products, either voluntarily or at the direction of the FDA, or the discovery of serious safety issues with our products that leads to correctiveactions, could have a significant adverse impact on us.The FDA and similar foreign governmental authorities have the authority to require the recall of commercialized products in the event of materialdeficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health. Manufacturers may, undertheir own initiative, recall a product if any material deficiency in a device is found. A government-mandated or voluntary recall by us or one of ourdistributors could occur as a result of an unacceptable risk to health, component failures, manufacturing errors, design or labeling defects or other deficienciesand issues. Under the FDA’s medical device reporting regulations, we are required to report to the FDA any incident in which our product may have caused orcontributed to a death or serious injury or in which our product malfunctioned and, if39the malfunction were to recur, would likely cause or contribute to death or serious injury. Repeated product malfunctions may result in a voluntary orinvoluntary product recall. Recalls of any of our products would divert managerial and financial resources and have an adverse effect on our reputation,results of operations and financial condition, which could impair our ability to produce our products in a cost-effective and timely manner in order to meetour customers’ demands. Depending on the corrective action we take to redress a product’s deficiencies or defects, the FDA may require, or we may decide,that we will need to obtain new approvals or clearances for the device before we may market or distribute the corrected device. Seeking such approvals orclearances may delay our ability to replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with ourdevices, we may face additional regulatory enforcement action, including FDA warning letters, product seizure, injunctions, administrative penalties, or civilor criminal fines. We may also be required to bear other costs or take other actions that may have a negative impact on our sales as well as face significantadverse publicity or regulatory consequences, which could harm our business, including our ability to market our products in the future.Any adverse event involving our products could result in future voluntary corrective actions, such as recalls or customer notifications, or agencyaction, such as inspection, mandatory recall or other enforcement action. Any corrective action, whether voluntary or involuntary, as well as defendingourselves in a lawsuit, would require the dedication of our time and capital, distract management from operating our business and may harm our reputationand financial results.We may rely on third parties to conduct future studies of our product candidates that may be required by the FDA or other regulatory authorities, andthose third parties may not perform satisfactorily.We may rely on third parties, including medical investigators, to conduct such studies. Our reliance on these third parties for clinical developmentactivities will reduce our control over these activities. These third parties may not complete activities on schedule or conduct studies in accordance withregulatory requirements or our study design. If applicable, our reliance on third parties that we do not control will not relieve us of any applicablerequirement to prepare, and ensure compliance with, various procedures required under good clinical practices. If these third parties do not successfully carryout their contractual duties or regulatory obligations or meet expected deadlines, if the third parties need to be replaced or if the quality or accuracy of thedata they obtain is compromised due to their failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our studies may beextended, delayed, suspended or terminated, and we may not be able to obtain marketing clearance from the FDA or regulatory clearance for our productcandidates.Our customers are highly dependent on payment from third-party payors, and inadequate coverage and/or inadequate reimbursement for diagnostic testsusing our technology or for procedures using our products and product candidates and the commercial success of our diagnostic products and productcandidates would be compromised.Successful commercialization of our diagnostic products and product candidates depends, in large part, on the extent to which the costs of ourproducts and product candidates purchased by our customers are reimbursed, either separately or through bundled payment, by third-party private andgovernmental payors, including Medicare, Medicaid, managed care organizations and private insurance plans. There is significant uncertainty surroundingthird-party coverage and reimbursement for the use of tests that incorporate new technology, such as T2MR. There may be significant delays in obtainingcoverage and reimbursement for newly approved products, and coverage may be more limited than the purposes for which the product is approved by theFDA or comparable foreign regulatory authorities.Hospitals, clinical laboratories and other healthcare provider customers that may purchase our products and product candidates, if approved, generallybill various third-party payors to cover all or a portion of the costs and fees associated with diagnostic tests, including the cost of the purchase of our productsand product candidates. We currently expect that the majority of our diagnostic tests will be performed in a hospital inpatient setting, where governmentalpayors, such as Medicare, generally reimburse hospitals a single bundled payment that is based on the patients’ diagnosis under a classification systemknown as the Medicare severity diagnosis-related groups, classification for all items and services provided to the patient during a single hospitalization,regardless of whether our diagnostic tests are performed during such hospitalization. To the extent that our diagnostic tests will be performed in an outpatientsetting, our products and product candidates may be eligible for separate payment, for example, under the Clinical Laboratory Fee Schedule using existingCurrent Procedural Terminology codes. Third-party payors may deny coverage, however, if they determine that the diagnostic tests using our products are notcost-effective compared to the use of alternative testing methods as determined by the payor, or is deemed by the third-party payor to be experimental ormedically unnecessary. Even if third-party payors make coverage and reimbursement available, such reimbursement may not be adequate or these payors’reimbursement policies may have an adverse effect on our business, results of operations, financial condition and cash flows. In the United States, no uniformpolicy of coverage and reimbursement for products exists among third-party payors. Therefore, coverage and reimbursement for products can differsignificantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to providescientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursementwill be obtained.Government authorities and other third-party payors are developing increasingly sophisticated methods of controlling healthcare costs, such as bylimiting coverage and the amount of reimbursement for various products. Our customers’ access to adequate coverage and reimbursement for inpatientprocedures using our products and product candidates by government and private insurance plans is central to the acceptance of our products. We cannotpredict at this time the adequacy of payments, whether made separately in an outpatient setting or with a bundled payment amount in an inpatient setting.We may be unable to sell our products on a profitable basis if third-party payors deny coverage or reduce their current levels of payment, or if our costs ofproduction increase faster than increases in reimbursement levels.40In many countries outside of the United States, various coverage, pricing and reimbursement approvals are required. We expect that it will take severalyears to establish broad coverage and reimbursement for testing services based on our products with payors in countries outside of the United States, and ourefforts may not be successful.We may be subject to federal and state healthcare fraud and abuse laws and other federal and state healthcare laws applicable to our business activities. Ifwe are unable to comply, or have not complied, with such laws, we could face substantial penalties.Our operations are, and will continue to be, directly or indirectly subject to various federal and state fraud and abuse laws, including, withoutlimitation, the federal and state anti-kickback statutes, physician payment transparency laws and false claims laws. These laws impact, among other things,our sales and marketing and education programs and require us to implement additional internal systems for tracking certain marketing expenditures andreporting them to government authorities. In addition, we may be subject to patient data privacy and security regulation by both the federal government andthe states in which we conduct our business. The healthcare laws and regulations that may affect our ability to operate include: •the federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly or willfully soliciting, receiving,offering or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in return for or to induce either the referral ofan individual for, or the purchase, lease, order or recommendation of, any good, facility, item or services for which payment may be made, inwhole or in part, under a federal healthcare program such as the Medicare and Medicaid programs; •federal false claims laws, including the federal civil False Claims Act, which prohibit, among other things, individuals or entities fromknowingly presenting, or causing to be presented, claims for payment from or approval by a governmental payor program that are false orfraudulent; •the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which established additional federal crimes for, among otherthings, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making materiallyfalse statements in connection with the delivery of or payment for healthcare benefits, items or services; •HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certainelectronic healthcare transactions and imposes obligations, including mandatory contractual terms, on certain types of people and entitiesregarding the security and privacy of protected health information; •the Physician Payments Sunshine Act under the Affordable Care Act, which requires manufacturers of drugs, devices, biologicals, and medicalsupplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, toreport annually to the CMS information related to payments and other transfers of value to physicians and teaching hospitals, and ownershipand investment interests held by physicians and their immediate family members; and •state or foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items orservices reimbursed by any third-party payor, including commercial insurers; state laws that require device companies to comply with theindustry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government, or otherwiserestrict payments that may be made to healthcare providers and other potential referral sources; state laws that require manufacturers to reportinformation related to payments and other transfers of value to physicians, hospitals and other healthcare providers or marketing expenditures;and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other insignificant ways, thus complicating compliance efforts.Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our businessactivities could be subject to challenge under one or more of such laws. In addition, recent healthcare reforms have strengthened these laws. For example, theAffordable Care Act, among other things, amends the intent requirement of the federal anti-kickback statute. A person or entity no longer needs to haveactual knowledge of the statute or specific intent to violate it in order to commit a violation. The Affordable Care Act also codified case law by amending theFalse Claims Act, such that violations of the federal Anti-Kickback Statute are now deemed violations of the False Claims Act.If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may besubject to penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, contractual damages, reputational harm, thecurtailment or restructuring of our operations, the exclusion from participation in federal and state healthcare programs and individual imprisonment, any ofwhich could adversely affect our ability to operate our business and our results of operations.Healthcare policy changes, including legislation reforming the United States healthcare system, may have a material adverse effect on our financialcondition and results of operations.The Affordable Care Act, enacted in March 2010, made changes that significantly impacted the pharmaceutical and medical device industries andclinical laboratories. Beginning in 2013, certain medical device manufacturers were to be required to pay a medical device excise tax in an amount equal to2.3% of the price for which such manufacturer sells its medical devices. The excise tax applies to our T2Dx Instrument and T2Candida Panel, and we expectthat it will apply to some or all of our product candidates. The Consolidated Appropriations Act of 2016, signed into law on December 18, 2015, temporarilysuspended the 2.3% medical device excise tax for a two-year period from January 1, 2016 through December 31, 2017. In early 2018, the implementation ofthis excise tax was once again temporarily suspended until January 1, 2020.41The Affordable Care Act also mandated a reduction in payments for clinical laboratory services paid under the Medicare Clinical Laboratory FeeSchedule, or CLFS, of 1.75% for the years 2011 through 2015 and a productivity adjustment to the CLFS, further reducing payment rates. Some commercialpayors are guided by the CLFS in establishing their reimbursement rates. Clinicians may decide not to order clinical diagnostic tests if third-party paymentsare inadequate, and we cannot predict whether third-party payors will offer adequate reimbursement for procedures utilizing our products and productcandidates to make them commercially attractive. To the extent that the diagnostic tests using our products and product candidates are performed on anoutpatient basis, these or any future proposed or mandated reductions in payments under the CLFS may apply to some or all of the clinical laboratory teststhat our diagnostics customers may use our technology to deliver to Medicare beneficiaries and may indirectly reduce demand for our diagnostic productsand product candidates.Other significant measures for our industry contained in the Affordable Care Act included coordination and promotion of research on comparativeclinical effectiveness of different technologies and procedures; initiatives to revise Medicare payment methodologies, such as bundling of payments acrossthe continuum of care by providers and physicians; and initiatives to promote quality indicators in payment methodologies. The Affordable Care Act alsoincludes significant fraud and abuse measures, including required disclosures of certain financial arrangements with physician customers, lower thresholds forviolations and increasing potential penalties for such violations. In addition, the Affordable Care Act established an Independent Payment Advisory Board,or IPAB, to reduce the per capita rate of growth in Medicare spending. The IPAB has broad discretion to propose policies to reduce healthcare expenditures,which may have a negative impact on payment rates for services, including our tests. The IPAB proposals may impact payments for clinical laboratoryservices that our diagnostics customers use our technology to deliver, and for hospital services beginning in 2020, and may indirectly reduce demand for ourdiagnostic products and product candidates. To the extent that the reimbursement amounts for sepsis decrease, it could adversely affect the marketacceptance and hospital adoption of our technologies.In addition, other legislative changes have been proposed and adopted in the United States since the Affordable Care Act was enacted. On August 2,2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on DeficitReduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach requiredgoals, thereby triggering the legislation’s automatic reduction to several government programs, including reductions of Medicare payments to providers ofup to 2% per fiscal year effective April 1, 2013. Due to subsequent legislative amendments, these reductions will stay in effect through 2024 unlessadditional congressional action is taken. Further, on January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among otherthings, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statuteof limitations period for the government to recover overpayments to providers from three to five years.The current presidential administration and U.S. Congress has sought to modify, repeal, or otherwise invalidate all, or certain provisions of, theAffordable Care Act. Since taking office, President Trump has continued to support the repeal of all or portions of the Affordable Care Act. There is stilluncertainty with respect to the impact President Trump’s administration and the U.S. Congress may have, if any, and any changes will likely take time tounfold, and could have an impact on coverage and reimbursement for healthcare items and services covered by plans that were authorized by the AffordableCare Act. However, we cannot predict the ultimate content, timing or effect of any healthcare reform legislation or the impact of potential legislation on us.We cannot predict whether future healthcare initiatives will be implemented at the federal or state level or in countries outside of the United States inwhich we may do business, or the effect any future legislation or regulation will have on us. The taxes imposed by the new federal legislation and theexpansion in government’s effect on the United States healthcare industry may result in decreased profits to us, lower reimbursements by payors for ourproducts and product candidates or reduced medical procedure volumes, any of which may adversely affect our business, financial condition and results ofoperations.Risks Related to Intellectual PropertyIf we are unable to protect our intellectual property effectively, our business would be harmed.We rely on patent protection as well as trademark, copyright, trade secret protection and confidentiality agreements to protect the intellectual propertyrights related to our proprietary technologies. The strength of patents in our field involves complex legal and scientific questions. Uncertainty created bythese questions means that our patents may provide only limited protection and may not adequately protect our rights or permit us to gain or keep anycompetitive advantage. We own or exclusively license over 35 issued U.S. patents and over 15 pending U.S. patent applications, including provisional andnon-provisional filings. We also own or license over 50 pending or granted counterpart applications worldwide. If we fail to protect our intellectual property,third parties may be able to compete more effectively against us and we may incur substantial litigation costs in our attempts to recover or restrict use of ourintellectual property.We cannot assure you that any of our currently pending or future patent applications will result in issued patents with claims that cover our productsand technologies in the United States or in other foreign countries, and we cannot predict how long it will take for such patents to be issued. Further, issuanceof a patent is not conclusive as to its inventorship or scope, and there is no guarantee that our issued patents will include claims that are sufficiently broad tocover our technologies or to provide meaningful protection of our products from our competitors. Further, we cannot be certain that all relevant prior artrelating to our patents and patent applications has been found. Accordingly, there may be prior art that can invalidate our issued patents or prevent a patentfrom issuing from a pending patent application, at all or with claims that have a scope broad enough to provide meaningful protection from our competitors.42Even if patents do successfully issue and even if such patents cover our products and technologies, we cannot assure you that other parties will notchallenge the validity, enforceability or scope of such issued patents in the United States and in foreign countries, including by proceedings such as re-examination, inter-partes review, interference, opposition, or other patent office or court proceedings. Moreover, we cannot assure you that if such patentswere challenged in court or before a regulatory agency that the patent claims will be held valid, enforceable, or be sufficiently broad to cover ourtechnologies or to provide meaningful protection from our competitors. Nor can we assure you that the applicable court or agency will uphold our ownershiprights in such patents. Accordingly, we cannot guarantee that we will be successful in defending challenges made against our patents and patent applications.Any successful third-party challenge to our patents could result in the unenforceability or invalidity of such patents, or narrowing of claim scope, such thatwe could be deprived of patent protection necessary for the successful commercialization of our products and technologies, which could adversely affect ourbusiness.Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property, provideexclusivity for our products and technologies or prevent others from designing around our claims. Others may independently develop similar or alternativeproducts and technologies or duplicate any of our products and technologies. These products and technologies may not be covered by claims of issuedpatents owned by our company. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impacton our business. In addition, competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from ourdevelopment efforts, willfully infringe our intellectual property rights, design around our protected technology or develop their own competitivetechnologies that fall outside of the protections provided by our intellectual property rights. If our intellectual property, including licensed intellectualproperty, does not adequately protect our market position against competitors’ products and methods, our competitive position could be adversely affected,as could our business.Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product or product candidate under patentprotection could be reduced. Since patent applications in the United States and most other countries are confidential for a period of time after filing, andsome remain so until issued, we cannot be certain that we were the first to make the inventions covered by our pending patent applications, or that we werethe first to file any patent application related to a product or product candidate. Furthermore, if third parties have filed such patent applications, aninterference proceeding in the United States can be initiated by a third party to determine who was the first to invent any of the subject matter covered by thepatent claims of our applications. In addition, patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years afterit is filed. Various extensions may be available; however the life of a patent, and the protection it affords, is limited.Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States.As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we areunable to prevent material disclosure of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee that wewill have any such enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our market, which couldmaterially adversely affect our business, results of operations and financial condition.We depend on certain technologies that are licensed to us. We do not control the intellectual property rights covering these technologies and any loss ofour rights to these technologies or the rights licensed to us could prevent us from selling our products.We are a party to a number of license agreements under which we are granted rights to intellectual property that is important to our business and weexpect that we may need to enter into additional license agreements in the future. We rely on these licenses in order to be able to use various proprietarytechnologies that are material to our business, including an exclusive license to patents and patent applications from Massachusetts General Hospital, orMGH, and non-exclusive licenses from other third parties related to materials used currently in our research and development activities, and which we use inour commercial activities. Our rights to use these technologies and employ the inventions claimed in the licensed patents are subject to the continuation ofand our compliance with the terms of those licenses. Our existing license agreements impose, and we expect that future license agreements will impose on us,various diligence obligations, payment of milestones or royalties and other obligations. If we fail to comply with our obligations under these agreements, orwe are subject to a bankruptcy, the licensor may have the right to terminate the license, in which event we would not be able to market products covered bythe license.As we have done previously, we may need to obtain licenses from third parties to advance our research or allow commercialization of our products andtechnologies, and we cannot provide any assurances that third-party patents do not exist which might be enforced against our current products andtechnologies or future products in the absence of such a license. We may fail to obtain any of these licenses on commercially reasonable terms, if at all. Evenif we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In that event, wemay be required to expend significant time and resources to develop or license replacement technology. If we are unable to do so, we may be unable todevelop or commercialize the affected products and technologies, which could materially harm our business and the third parties owning such intellectualproperty rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties or other forms ofcompensation.In some cases, we do not control the prosecution, maintenance, or filing of the patents that are licensed to us, or the enforcement of these patentsagainst infringement by third parties. Some of our patents and patent applications were not filed by us, but were either acquired by us or are licensed fromthird parties. Thus, these patents and patent applications were not drafted by us or our attorneys, and we did not control or have any input into theprosecution of these patents and patent applications either prior to our acquisition of, or entry into a license with respect to, such patents and patentapplications. With respect to the patents we license from MGH, although we have rights under our agreement to provide input into prosecution andmaintenance activities, and are actively involved in such ongoing prosecution, MGH retains ultimate control over such43prosecution and maintenance. We therefore cannot be certain that the same attention was given, or will continue to be given, to the drafting and prosecutionof these patents and patent applications as we may have exercised if we had control over the drafting and prosecution of such patents and patent applications,or that we will agree with decisions taken by MGH in relation to ongoing prosecution activities. We also cannot be certain that drafting or prosecution of thepatents and patent applications licensed to us have been or will be conducted in compliance with applicable laws and regulations or will result in valid andenforceable patents. Further, as MGH retains the right to enforce these patents against third-party infringement, we cannot be certain that MGH will elect toenforce these patents to the extent that we would choose to do so, or in a way that will ensure that we retain the rights we currently have under our licensewith MGH. If MGH fails to properly enforce the patents subject to our license in the event of third-party infringement, our ability to retain our competitiveadvantage with respect to our products and product candidates may be materially affected.In addition, certain of the patents we have licensed relate to technology that was developed with U.S. government grants. Federal regulations imposecertain domestic manufacturing requirements and other obligations with respect to some of our products embodying these patents.Licensing of intellectual property is of critical importance to our business and involves complex legal, business and scientific issues. Disputes mayarise between us and our licensors regarding intellectual property subject to a license agreement, including: •the scope of rights granted under the license agreement and other interpretation-related issues; •whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to thelicensing agreement; •our right to sublicense patent and other rights to third parties under collaborative development relationships; •our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of ourproducts and technologies, and what activities satisfy those diligence obligations; and •the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and ourpartners.If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptableterms, we may be unable to successfully develop and commercialize the affected products and technologies.We may be involved in lawsuits to protect or enforce our patents and proprietary rights, to determine the scope, enforceability and validity of others’proprietary rights, or to defend against third-party claims of intellectual property infringement, any of which could be time-intensive and costly and mayadversely impact our business or stock price.Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. There is a substantialamount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the medical device and diagnosticsindustries, including patent infringement lawsuits, interferences, oppositions and inter partes review proceedings before the U.S. Patent and Trademark Office,or U.S. PTO, and corresponding foreign patent offices. While we have not received notices of claims of infringement or misappropriation or misuse of otherparties’ proprietary rights in the past, we may from time to time receive such notices in the future. Some of these claims may lead to litigation. Third partiesmay assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims tomaterials, methods of manufacture or methods of use of our products and technologies. Because patent applications can take many years to issue, third partiesmay have currently pending patent applications which may later result in issued patents that our products and technologies may infringe, or which such thirdparties claim are infringed by the use of our technologies. We cannot assure you that we will prevail in such actions, or that other actions allegingmisappropriation or misuse by us of third-party trade secrets or infringement by us of third-party patents, trademarks or other rights, or challenging thevalidity of our patents, trademarks or other rights, will not be asserted against us.Litigation may be necessary for us to enforce our patent and proprietary rights or to determine the scope, enforceability or validity of the proprietaryrights of others. There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the medical diagnosticsindustry. Third parties may assert that we are employing their proprietary technology without authorization. Many of our competitors have significantlylarger and more mature patent portfolios than we currently have. In addition, future litigation may involve patent holding companies or other adverse patentowners who have no relevant product revenue and against whom our own patents may provide little or no deterrence or protection. Parties making claimsagainst us for infringement of their intellectual property rights may obtain injunctive or other equitable relief, which could effectively block our ability tofurther develop and commercialize one or more of our products and technologies. Further, defense of such claims in litigation, regardless of merit, couldresult in substantial legal fees and could adversely affect the scope of our patent protection, and would be a substantial diversion of employee, managementand technical personnel resources from our business. The outcome of any litigation or other proceeding is inherently uncertain and might not be favorable tous. In the event of a successful claim of infringement against us, we could be required to redesign our infringing products or obtain a license from such thirdparty to continue developing and commercializing our products and technology. However, we may not be able to obtain any required license oncommercially reasonable terms, or at all. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the sametechnologies licensed to us. We could therefore incur substantial costs for licenses obtained from third parties, if such licenses were available at all, whichcould negatively affect our gross margins, or prevent us from commercializing our products and technologies. Further, we could encounter delays44in product introductions, or interruptions in product sales, as we develop alternative methods or products to avoid infringing third-party rights. In addition, ifwe resort to legal proceedings to enforce our intellectual property rights or to determine the validity, enforceability or scope of the intellectual property orother proprietary rights of others, the proceedings could be burdensome and expensive, even if we were to prevail. Any litigation that may be necessary in thefuture could result in substantial costs and the diversion of our resources and could have a material adverse effect on our business, operating results orfinancial condition. Further, if the scope of protection provided by our patents or patent applications is threatened or reduced as a result of litigation, it coulddiscourage third parties from entering into collaborations with us that are important to the commercialization of our products.We cannot guarantee that we have identified all relevant third-party intellectual property rights that may be infringed by our technology, nor is thereany assurance that patents will not issue in the future from currently pending applications that may be infringed by our technology or products or productcandidates. We are aware of third parties that have issued patents and pending patent applications in the United States, Europe, Canada, and otherjurisdictions in the field of magnetic resonance devices and methods for analyte detection, including the preparation and use of reagents. While we continueto evaluate third-party patents in this area on an ongoing basis, we cannot guarantee that patents we currently are aware of will be found invalid or notinfringed if we are accused of infringing them, or if our products are found to infringe, that we will be able to modify our products to cause them to be non-infringing on a timely or cost-effective basis, or at all. We currently monitor the intellectual property positions of some companies in this field that arepotential competitors or are conducting research and development in areas that relate to our business, and will continue to do so as we progress thedevelopment and commercialization of our products or product candidates. While we continue to evaluate third-party patents in this area on an ongoingbasis, we cannot assure you that third parties do not currently have or will not in the future have issued patents or other intellectual property rights that maybe infringed by the practice of our technology or the commercialization of our products or product candidates.Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of ourconfidential information could be compromised by disclosure during this type of litigation. In addition, during the course of this kind of litigation, therecould be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or you perceive theseresults to be negative, it could have a substantial adverse effect on the price of our common stock.In addition, certain of our agreements with suppliers, distributors, customers and other entities with whom we do business require us to defend orindemnify these parties to the extent they become involved in infringement claims relating to our technologies or products, or rights licensed to them by us.We could also voluntarily agree to defend or indemnify third parties in instances where we are not obligated to do so if we determine it would be important toour business relationships. If we are required or agree to defend or indemnify any of these third parties in connection with any infringement claims, we couldincur significant costs and expenses that could adversely affect our business, operating results, or financial condition.If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.In addition to pursuing patents on our technology, we also rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our products andtechnologies and discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents, inorder to maintain our competitive position. We take steps to protect our intellectual property, proprietary technologies and trade secrets, in part, by enteringinto confidentiality agreements with our employees, consultants, corporate partners, advisors and other third parties. We also enter into confidentiality andinvention or patent assignment agreements with our employees and consultants that obligate them to assign to us any inventions developed in the course oftheir work for us. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises andphysical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise becomeknown or be independently discovered by competitors. Our agreements may not be enforceable or may not provide meaningful protection for our tradesecrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements, and we may not be able to preventsuch unauthorized disclosure. Monitoring unauthorized disclosure is difficult, and we do not know whether the steps we have taken to prevent suchdisclosure are, or will be, adequate. If we were to enforce a claim that a third party had illegally obtained and was using our trade secrets, it would beexpensive and time consuming, and the outcome would be unpredictable. Enforcing a claim that a party illegally disclosed or misappropriated a trade secretis difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, courts outside the United States may be less willing to protecttrade secrets. If any of the technology or information that we protect as trade secrets were to be lawfully obtained or independently developed by acompetitor, we would have no right to prevent them from using that technology or information to compete with us. Misappropriation or unauthorizeddisclosure of our trade secrets could impair our competitive position and may have a material adverse effect on our business. Additionally, if the steps takento maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. In addition,others may independently discover our trade secrets and proprietary information. For example, the FDA, as part of its Transparency Initiative, is currentlyconsidering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets orother proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.45We may be subject to damages resulting from claims that we or our employees, consultants or independent contractors have wrongfully used or disclosedconfidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.Many of our employees were previously employed at universities or other medical device companies, including our competitors or potentialcompetitors. Although we seek to protect our ownership of intellectual property rights by ensuring that our agreements with our employees, collaborators andother third parties with whom we do business include provisions requiring such parties to assign rights in inventions to us, we may also be subject to claimsthat former employees, collaborators or other third parties have an ownership interest in our patents or other intellectual property. Although no claims againstus are currently pending, we may be subject to claims that these employees or we have inadvertently or otherwise used or disclosed trade secrets or otherproprietary information of our employees’ former employers, or we may be subject to ownership disputes in the future arising, for example, from conflictingobligations of consultants or others who are involved in developing our products and technologies. Litigation may be necessary to defend against theseclaims. If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, whichcould hamper our ability to commercialize certain potential products, which could severely harm our business. Even if we are successful in defending againstthese claims, litigation could result in substantial costs and be a distraction to management.We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.We may also be subject to claims that former employees, collaborators or other third parties have an ownership interest in our patents or otherintellectual property. We may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others whoare involved in developing our products and technologies. Litigation may be necessary to defend against these and other claims challenging inventorship orownership. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such asexclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we aresuccessful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement ordefense of our issued patents.On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a numberof significant changes to U.S. patent law, including provisions that affect the way patent applications will be prosecuted and may also affect patent litigation.The U.S. PTO is currently developing regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes topatent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, were enacted March 16, 2013. However, it is not clear what, ifany, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase theuncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have amaterial adverse effect on our business and financial condition.Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and otherrequirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with theserequirements.Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and applications will be due to be paid to theU.S. PTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and applications. We havesystems in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these fees due to non-U.S. patentagencies. The U.S. PTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment andother provisions during the patent process. We employ reputable law firms and other professionals to help us comply, and in many cases, an inadvertent lapsecan be cured by payment of a late fee or by other means in accordance with the applicable rules, however there are situations in which noncompliance canresult in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such anevent, competitors might be able to enter the market earlier than would otherwise have been the case.If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest, and our businessmay be adversely affected.We have not yet registered certain of our trademarks, including T2HemoStat, T2Bacteria and T2Lyme, in all of our potential markets, including ininternational markets. If we apply to register these trademarks, our applications may not be allowed for registration, and our registered trademarks may not bemaintained or enforced. In addition, opposition or cancellation proceedings may be filed against our trademark applications and registrations, and ourtrademarks may not survive such proceedings. If we do not secure registrations for our trademarks, we may encounter more difficulty in enforcing themagainst third parties than we otherwise would. Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented ordeclared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we needto build name recognition by potential partners or customers in our markets of interest. Over the long term, if we are unable to establish name recognitionbased on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected.46We may not be able to protect our intellectual property rights throughout the world.The laws of some non-U.S. countries do not protect intellectual property rights to the same extent as the laws of the United States, and many companieshave encountered significant problems in protecting and defending such rights in foreign jurisdictions. The legal systems of certain countries, particularlycertain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to technologiesrelating to biotechnology, which could make it difficult for us to stop the infringement of our patents. Proceedings to enforce our patent rights in foreignjurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business. Also, because we have not pursued patentsin all countries, there exist jurisdictions where we are not protected against third parties using our proprietary technologies. Further, compulsory licensinglaws or limited enforceability of patents against government agencies or contractors in certain countries may limit our remedies or reduce the value of ourpatents in those countries.We use third-party software that may be difficult to replace or cause errors or failures of our products that could lead to lost customers or harm to ourreputation.We use software licensed from third parties in our products. In the future, this software may not be available to us on commercially reasonable terms, orat all. Any loss of the right to use any of this software could result in delays in the production of our products until equivalent technology is either developedby us, or, if available, is identified, obtained and integrated with our technologies and products, which could harm our business. In addition, any errors ordefects in, or failures of, such third-party software could result in errors or defects in the operation of our products or cause our products to fail, which couldharm our business and reputation and be costly to correct. Many of the licensors of the software we use in our products attempt to impose limitations on theirliability for such errors, defects or failures. If enforceable, such limitations would require us to bear the liability for such errors, defects or failures, which couldharm our reputation and increase our operating costs.Intellectual property rights do not necessarily address all potential threats to our competitive advantage.The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and maynot adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative: •others may be able to make diagnostic products and technologies that are similar to our products or product candidates but that are not coveredby the claims of the patents that we own or have exclusively licensed; •we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patentapplication that we own or have exclusively licensed; •we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; •others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectualproperty rights; •it is possible that our pending patent applications will not lead to issued patents; •issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by ourcompetitors; •our competitors might conduct research and development activities in countries where we do not have patent rights and then use theinformation learned from such activities to develop competitive products for sale in our major commercial markets; •we may not develop additional proprietary technologies that are patentable; and •the patents of others may have an adverse effect on our business.Should any of these events occur, they could significantly harm our business, results of operations and prospects.Risks Related to Our Common StockOur executive officers, directors and principal stockholders, if they choose to act together, have the ability to control all matters submitted to stockholdersfor approval.Our executive officers, directors and stockholders who own more than 5% of our outstanding common stock and their respective affiliates, in theaggregate, hold shares representing a significant amount of our outstanding voting stock. As a result, if these stockholders were to choose to act together,they would be able significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs. For example, thesepersons, if they choose to act together, would significantly influence the election of directors and approval of any merger, consolidation or sale of all orsubstantially all of our assets. This concentration of ownership control may: •delay, defer or prevent a change in control; •entrench our management and the board of directors; or •impede a merger, consolidation, takeover or other business combination involving us that other stockholders may desire.47An active trading market for our common stock may not continue to develop or be sustained.Since our initial listing on The NASDAQ Global Market in August 2014, the trading market in our common stock has been extremely limited. Thelisting of our common stock on The NASDAQ Global Market does not assure that a meaningful, consistent and liquid trading market currently exists. Wecannot predict whether a more active market for our common stock will develop or be sustained in the future.Our executive officers, directors and 5% stockholders and their respective affiliates in the aggregate own a significant percentage of our outstandingshares of common stock, which may adversely affect the liquidity of the trading market for our common stock. If these stockholders continue to hold theirshares of common stock, there will be limited trading volume in our common stock, which may make it more difficult for investors to sell their shares andmay increase the volatility of our stock price. The absence of an active trading market could adversely affect our stockholders’ ability to sell our commonstock at current market prices in short time periods, or possibly at all. Additionally, market visibility for our common stock may be limited and such lack ofvisibility may have a depressive effect on the market price for our common stock.The price of our common stock has been volatile and is likely to continue to be volatile, which could result in substantial losses for purchasers of ourcommon stock.Our stock price has been and is likely to continue be volatile. The stock market in general has experienced extreme volatility that has often beenunrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above thecurrent market price. The market price for our common stock may be influenced by many factors, including: •actual or anticipated fluctuations in our financial condition and operating results; •announcements by us relating to the timing of regulatory clearance for our product candidates; •actual or anticipated changes in our growth rate relative to our competitors; •competition from existing products or new products that may emerge; •development of new technologies that may address our markets and may make our technology less attractive; •changes in physician, hospital or healthcare provider practices that may make our products or product candidates less useful; •announcements by us, our partners or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capitalcommitments; •developments or disputes concerning patent applications, issued patents or other proprietary rights; •the recruitment or departure of key personnel; •failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; •actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; •variations in our financial results or those of companies that are perceived to be similar to us; •changes to reimbursement levels by commercial third-party payors and government payors, including Medicare, and any announcementsrelating to reimbursement levels; •general economic, industry and market conditions; and •the other factors described in this “Risk Factors” section.We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stockless attractive to investors.We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerginggrowth company for up to five years following the IPO. For so long as we remain an emerging growth company, we are permitted and intend to rely onexemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptionsinclude: •not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting; •not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regardingmandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financialstatements; •reduced disclosure obligations regarding executive compensation; and •exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any goldenparachute payments not previously approved.48We have taken advantage of reduced reporting burdens in this annual report. In particular, we may not include all of the executive compensationrelated information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock lessattractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for ourcommon stock and our stock price may be reduced or more volatile. In addition, the JOBS Act provides that an emerging growth company can takeadvantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay theadoption of these accounting standards until they would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of thisexemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growthcompanies.We will continue to incur significant costs as a result of operating as a public company, and our management will continue to devote substantial time tocompliance initiatives and corporate governance practices. As a public company, and particularly after we are no longer an emerging growth company, we will continue to incur significant legal, accounting andother expenses. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The NASDAQGlobal Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment andmaintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to continue todevote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will continue to increase our legal and financialcompliance costs and will make some activities more time-consuming and costly.We continue to be subject to applicable securities rules and regulations. These rules and regulations are often subject to varying interpretations, inmany cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory andgoverning bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosureand governance practices.Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our management on our internalcontrol over financial reporting. However, while we remain an emerging growth company, we are not required to include an attestation report on internalcontrol over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribedperiod, we are engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In thisregard, we will need to continue to dedicate internal resources, engage outside consultants and adopt a detailed work plan to assess and document theadequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls arefunctioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Identifying amaterial weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding ourstock, our stock price and trading volume could decline.The trading market for our common stock is influenced by the research and reports that industry or securities analysts publish about us or our business.In the event any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stockperformance, or if our regulatory clearance timelines, clinical trial results or operating results fail to meet the expectations of analysts, our stock price wouldlikely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets,which in turn could cause our stock price or trading volume to decline.Provisions in our restated certificate of incorporation and amended and restated bylaws and under Delaware law could make an acquisition of ourcompany, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our currentmanagement.Provisions in our restated certificate of incorporation and our amended and restated bylaws may discourage, delay or prevent a merger, acquisition orother change in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive a premium foryour shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, therebydepressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our managementteam, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult forstockholders to replace members of our board of directors. Among other things, these provisions include those establishing: •a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of amajority of our board of directors; •no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; •the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or theresignation, death or removal of a director, which prevents stockholders from filling vacancies on our board of directors;49 •the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the terms of those shares, includingpreferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; •the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; •the required approval of the holders of at least two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal ouramended and restated bylaws or repeal the provisions of our restated certificate of incorporation regarding the election and removal of directors; •a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of ourstockholders; •the requirement that a special meeting of stockholders may be called only by the chief executive officer, the president or the board of directors,which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and •advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters tobe acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to electthe acquirer’s own slate of directors or otherwise attempting to obtain control of us.Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State ofDelaware, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three yearsafter the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approvedin a prescribed manner.Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole sourceof gain.We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance thegrowth and development of our business. Our ability to pay cash dividends is prohibited by the terms of our existing credit facility. Any future debtagreements may also preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for theforeseeable future.We could be subject to securities class action litigation.In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. If weface such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, whichcould harm our operating results, our ability to operate our business and investors’ views of us. We are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act, subject to certain exceptions.Section 404 of the Sarbanes-Oxley Act requires public companies to conduct an annual review and evaluation of their internal controls and to obtainattestations of the effectiveness of internal controls by independent auditors. However, as discussed in detail below, as an emerging growth company, we arenot required to obtain an auditor attestation. Under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, issuers that qualify as “emerging growth companies” under the JOBS Act will not berequired to provide an auditor’s attestation report on internal controls for so long as the issuer qualifies as an emerging growth company. We currently qualifyas an emerging growth company under the JOBS Act, and we may choose not to provide an auditor’s attestation report on internal controls. However, if wecannot favorably assess the effectiveness of our internal control over financial reporting, or if we require an attestation report from our independent registeredpublic accounting firm in the future and that firm is unable to provide an unqualified attestation report on the effectiveness of our internal controls overfinancial reporting, investor confidence and, in turn, our stock price could be materially adversely affected. Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on atimely basis is a costly and time-consuming effort that will need to be evaluated frequently. Our failure to remediate our material weakness in internalcontrols and thereafter to maintain the effectiveness of our internal controls in accordance with the requirements of the Sarbanes-Oxley Act could have amaterial adverse effect on the tradability of our common stock, which in turn would negatively impact our business. We could lose investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the50price of our common stock. In addition, if our efforts to comply with new or changed laws, regulations, and standards differ from the activities intended byregulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business maybe harmed.Based on our assessment under the [COSO Internal Control-Integrated Framework], management believes that, as of December 31, 2017, our internal controlover financial reporting was not effective, as described below in “Management’s Annual Report on Internal Control over Financial Reporting”. Item 1B.UNRESOLVED STAFF COMMENTSNone.Item 2.PROPERTYOur corporate headquarters is located in Lexington, Massachusetts, where we currently lease approximately 31,300 square feet of office space, 20,500square feet of laboratory space and 3,400 square feet of manufacturing space. Our base rent, for leases at our corporate headquarters, is approximately $2.1million annually. In addition, we lease approximately 7,600 square feet in Wilmington, Massachusetts for our manufacturing facility, under a lease thatexpires in 2018 for $0.1 million of base rent annually. Item 3.LEGAL PROCEEDINGSWe are not party to any material legal proceedings.Item 4.MINE SAFETY DISCLOSURESNot applicable.51PART II.Item 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIESMarket InformationOur common stock has been quoted on The NASDAQ Global Market under the symbol “TTOO” and has been trading since August 7, 2014. Thefollowing table sets forth, for the periods indicated, the quarterly high and low sales prices per share of our common stock as reported on The NASDAQGlobal Market. Year ended December 31, 2017 High Low First Quarter $6.42 $4.95 Second Quarter $5.40 $3.02 Third Quarter $6.99 $2.50 Fourth Quarter $4.86 $3.60 Year ended December 31, 2016 High Low First Quarter $11.20 $7.45 Second Quarter $11.30 $7.65 Third Quarter $8.12 $4.92 Fourth Quarter $7.46 $4.89 Dividend PolicyWe have never declared or paid any cash dividends on our common stock and do not expect to pay any dividends for the foreseeable future. Wecurrently intend to retain any future earnings to fund the operation, development and expansion of our business. Any future determination to pay dividendswill be at the sole discretion of our Board of Directors and will depend upon a number of factors, including our results of operations, capital requirements,financial condition, future prospects, contractual arrangements, restrictions imposed by applicable law, any limitations on payments of dividends present inour current and future debt arrangements, and other factors our Board of Directors may deem relevant.52Stock Performance GraphThe graph below compares the cumulative total stockholder returns on our common stock for the period indicated with the cumulative totalstockholder returns on the NASDAQ Composite Index for the same period. The graph assumes that $100 was invested on August 7, 2014 in our commonstock in each index and that all dividends were reinvested. No cash dividends have been declared on our common stock. Stockholder returns over theindicated period should not be considered indicative of future stockholder returns. StockholdersThe last reported sale price of common stock on March 15, 2018 as reported on the NASDAQ Global Market was $6.38. As of March 15, 2018, therewere 12 holders of record of our common stock.Equity Compensation Plan InformationFor information regarding securities authorized for issuance under equity compensation plans, see Part III “Item 12 — Security Ownership of CertainBeneficial Owners and Management and Related Stockholder Matters.”Issuer Purchases of Equity Securities by the Issuer and Affiliated PurchasersNone.53Item 6.SELECTED CONSOLIDATED FINANCIAL DATAThe following tables set forth, for the periods and as of the dates indicated, our selected financial data. The consolidated statement of operations datafor the years ended December 31, 2017, 2016, and 2015 and consolidated balance sheet data as of December 31, 2017 and 2016 are derived from our auditedfinancial statements in this Annual Report on Form 10-K. We have derived the consolidated statement of operations data for the year ended December 31,2014 and 2013 and the consolidated balance sheet data as of December 31, 2015, 2014 and 2013 from our audited financial statements not included in thisAnnual Report on Form 10-K. Our historical results are not necessarily indicative of our future results. Year ended December 31, Consolidated Statement of Operations Data: 2017 2016 2015 2014 2013 (in thousands) Revenue: Product revenue $3,440 $1,747 $599 $— $— Research revenue 1,226 2,333 2,214 119 266 Total revenue 4,666 4,080 2,813 119 266 Costs and expenses: Cost of product revenue 12,028 6,872 1,740 — — Research and development 23,733 24,009 25,362 19,782 14,936 Selling, general and administrative 22,757 24,077 19,094 11,018 5,022 Total costs and expenses 58,518 54,958 46,196 30,800 19,958 Loss from operations (53,852) (50,878) (43,383) (30,681) (19,692)Interest expense, net (8,907) (4,098) (1,967) (721) (403)Other income (expense), net 331 172 60 12 (515)Net loss (62,428) (54,804) (45,290) (31,390) (20,610)Accretion of redeemable convertible preferred stock to redemption value — — — (4,570) (6,908)Net loss applicable to common stockholders $(62,428) $(54,804) $(45,290) $(35,960) $(27,518)Net loss per share applicable to common stockholders — basic and diluted $(1.94) $(2.11) $(2.21) $(4.15) $(19.72)Weighted-average number of common shares used in computing net loss per share applicable to common stockholders — basic and diluted (1)(2)(4)(6)(7) 32,131,512 26,015,751 20,501,748 8,674,931 1,395,562 As of December 31, Consolidated Balance Sheet Data: 2017 2016 2015 2014 2013 (in thousands) Cash and cash equivalents (1)(2)(3)(4)(5)(7) $41,799 $73,488 $73,662 $73,849 $30,198 Total assets 54,861 89,568 86,825 78,978 31,837 Current liabilities(8) 51,197 9,885 12,253 5,179 4,060 Notes payable, net of current portion (3)(5) 1,008 39,504 26,121 20,809 3,333 Warrants to purchase redeemable securities (6) — — — — 1,225 Total liabilities 53,521 50,230 39,886 26,289 8,663 Redeemable convertible preferred stock (6) — — — — 112,813 Total stockholders’ equity (deficit) (6) 1,340 39,338 46,939 53,001 (89,543) (1)On December 9, 2015 and December 21, 2015, we issued 3,500,000 shares and 191,049 shares of common stock, respectively, in connection with oursecondary public offering at $9.75 per share. We raised approximately $33.3 million in net proceeds.(2)On August 12, 2014, we issued 5,980,000 shares of common stock in connection with our IPO at $11.00 per share. We raised approximately $58.1million in net proceeds.(3)On July 11, 2014, December 30, 2014 and December 28, 2015, we received net proceeds of $9.7 million, $10.0 million and $10.0 million,respectively, from our loan and security agreement with Solar Capital, Ltd.(4)On September 21, 2016, we sold 6,055,341 shares of common stock at $6.56 per share to Canon U.S.A, Inc., for an aggregate cash purchase price of$39.7 million.(5)On December 30, 2016, we received net proceeds of $39.2 million from our term loan agreement with CRG Servicing LLC and used $28.0 millionfrom the net proceeds to primarily repay the outstanding balance on our loan and security agreement with Solar Capital, Ltd.(6)In connection with the closing of our IPO on August 12, 2014, all warrants were net settled into shares of common stock and all shares of redeemableconvertible preferred stock were converted into common stock.(7)On September 15, 2017, the Company sold 5,031,250 shares of its common stock in a CMPO at $4.00 per share, for an aggregate gross cash purchaseprice of $20.1 million, or proceeds of $18.8 million after underwriters discount and expenses(8)Current liabilities, as of December 31, 2017, includes a derivative liability of $2.2 million and $39.2 million of CRG debt that was classified as currentbased on the probability of violating a minimum liquidity covenant included in the debt agreement.54Item 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThis Annual Report on Form 10-K contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. Weintend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of theSecurities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts contained in this Annual Report on Form 10-K,including statements regarding our future results of operations and financial position, business strategy, prospective products and product candidates,their expected performance and impact on healthcare costs, marketing clearance from the U.S. Food and Drug Administration, or the FDA, regulatoryclearance, reimbursement for our product candidates, research and development costs, timing of regulatory filings, timing and likelihood of success, plansand objectives of management for future operations and future results of anticipated products, are forward-looking statements. These statements involveknown and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materiallydifferent from any future results, performance or achievements expressed or implied by the forward-looking statements.In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,”“intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similarexpressions. The forward-looking statements in this Annual Report on Form 10-K are only predictions. We have based these forward-looking statementslargely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial conditionand results of operations. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K and are subject to a number ofrisks, uncertainties and assumptions described under the sections in this Annual Report on Form 10-K entitled “Item 1A.—Risk Factors” and“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K. Theseforward looking statements are subject to numerous risks, including, without limitation, the following: •our status as an early stage company; •our expectation to incur losses in the future; •the market acceptance of our T2MR technology; •our ability to timely and successfully develop and commercialize our existing products and future product candidates; •the length and variability of our anticipated sales cycle; •limited sales history; •our ability to gain the support of leading hospitals and key thought leaders and publish the results of our clinical trials in peer-reviewedjournals; •our ability to successfully manage our growth; •our future capital needs and our ability to raise additional funds; •the performance of our diagnostics; •our ability to compete in the highly competitive diagnostics market; •our ability to obtain marketing clearance from the FDA or regulatory clearance for new product candidates in the United States or any otherjurisdiction; •federal, state, and foreign regulatory requirements, including FDA regulation of our product candidates; •our ability to protect and enforce our intellectual property rights, including our trade secret-protected proprietary rights in T2MR; •our ability to recruit, train and retain key personnel; •our dependence on third parties; •our ability to continue as a going concern; •manufacturing and other product risks; •the impact of adoption of new accounting standards; and •the Tax Cuts and Jobs Act of 2017 (Tax Reform).These forward-looking statements represent our estimates and assumptions only as of the date of this Annual Report on Form 10-K. Unless requiredby U.S. federal securities laws, we do not intend to update any of these forward-looking statements to reflect circumstances or events that occur after thestatement is made or to conform these statements to actual results. The following discussion should be read in conjunction with the financial statements andnotes thereto appearing elsewhere in this Annual Report on Form 10-K. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 1A. Risk Factors” in this Annual Report on Form 10-K, and elsewherein this Annual Report on Form 10-K.55You should read the following discussion and analysis of our consolidated financial condition and results of operations together with ourconsolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. Some of the information contained inthis discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for ourbusiness and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factorsset forth in the “Item 1A.—Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described inor implied by the forward-looking statements contained in the following discussion and analysis.Business OverviewWe are an in vitro diagnostics company that has developed an innovative and proprietary technology platform that offers a rapid, sensitive and simplealternative to existing diagnostic methodologies. We are using our T2 Magnetic Resonance technology (“T2MR”) to develop a broad set of applicationsaimed at lowering mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medical professionals make targeted treatmentdecisions earlier. T2MR enables rapid detection of pathogens, biomarkers and other abnormalities in a variety of unpurified patient sample types, includingwhole blood, plasma, serum, saliva, sputum and urine, and can detect cellular targets at limits of detection as low as one colony forming unit per milliliter(“CFU/mL”). Our initial development efforts target sepsis and Lyme disease, which are areas of significant unmet medical need in which existing therapiescould be more effective with improved diagnostics.On September 22, 2014, we received market clearance from the FDA for our first two products, the T2Dx Instrument (the “T2Dx”) and the T2CandidaPanel (“T2Candida”), which have the ability to rapidly identify the five clinically relevant species of Candida, a fungal pathogen known to cause sepsis. Inthe United States, we have built a direct sales force that is primarily targeting the top 1,200 hospitals with the highest concentration of patients at risk forsepsis-related infections. Outside of the United States, we have primarily partnered with distributors that target large hospitals in their respective markets.Four additional diagnostic applications in various stages of development are called T2Bacteria, T2Candida-auris, T2GNR and T2Lyme, which are focused onbacterial and fungal infections and Lyme disease, respectively. In late 2015, we initiated the collection of patient blood samples to support the clinical trialin the United States for T2Bacteria, and in early 2017, we initiated a multi-site clinical trial for T2Bacteria. The T2Bacteria Panel received authorization toaffix a CE mark in July 2017 and is being commercially marketed in Europe and other countries that accept the CE mark. The multi-site clinical study wascompleted in the United States in August 2017. On September 8, 2017, we filed a 510(k) premarket submission with the FDA requesting market clearance toenable commercial launch of T2Bacteria for clinical use in the United States. T2 Bacteria is currently available in the United States for Research Use Only(RUO). We believe that we may receive a determination from the FDA on our application for the T2Bacteria possibly as early as the second quarter of 2018,although it may take longer for the FDA to reach a decision and there can be no assurance of such a determination within this timeframe or at all. We believethat T2Bacteria, if approved, may expand the number of high risk patients who could be candidates for testing with T2Bacteria. We expect that existingreimbursement codes will support our sepsis and Lyme disease products and product candidates, and that the anticipated economic savings associated withtesting of hospital inpatients in the United States with our sepsis products will be realized directly by hospitals.We believe our sepsis products, which include T2Candida and our product candidate, T2Bacteria, will redefine the standard of care in sepsismanagement while lowering healthcare costs by improving both the precision and the speed of detection of sepsis-causing pathogens. According to a studypublished in the Journal of Clinical Microbiology in 2010, targeted therapy for patients with bloodstream infections can be delayed up to 72 hours due to thewait time for blood culture results. In another study published in Clinical Infectious Diseases in 2012, the delayed administration of appropriate antifungaltherapy was associated with higher mortality among patients with septic shock attributed to Candida infection and, on that basis, the study concluded thatmore rapid and accurate diagnostic techniques are needed. Due to the high mortality rate associated with Candida infections, physicians often will placepatients on antifungal drugs while they await blood culture diagnostic results which generally take at least five days to generate a negative test result.Antifungal drugs are toxic and may result in side effects and can cost over $50 per day. T2Candida’s speed to result coupled with its superior sensitivity ascompared to blood culture may help reduce the overuse of ineffective, or even unnecessary, antimicrobial therapy which may reduce side effects for patients,lower hospital costs and potentially counteract the growing resistance to antifungal therapy. The administration of inappropriate therapy is a driving forcebehind the spread of antimicrobial resistant pathogens, which the CDC recently called “one of our most serious health threats.” The T2Sepsis Solution refersto the approach of combining the standard of care for the management of sepsis patients with our products, including the T2Dx Instrument, or the T2Dx,T2Candida, and T2Bacteria, which is commercially available in Europe and other countries that accept the CE mark and available for research use only in theUnited States. The T2Sepsis Solution is designed to enable clinicians to potentially treat 90% of septic patients within the first twelve hours of developingthe symptoms of disease. Currently, high risk patients are typically initially treated with broad spectrum antibiotic drugs that typically cover approximately60% of patients with infections. Of the remaining 40% of patients, approximately 30% of the patients typically have a bacterial infection and 10% typicallyhave Candida infections. T2Candida and our product candidate, T2Bacteria are designed to identify pathogens commonly not covered by broad spectrumantibiotic drugs, which we believe may enable physicians to effectively treat an additional 30% of patients with sepsis related infections beyond the 60% ofpatients covered by broad spectrum antibiotic drugs.We compete with traditional blood culture-based diagnostic companies, including Becton Dickinson & Co. and bioMerieux, Inc., as well ascompanies offering post-culture species identification using both molecular and non-molecular methods, including bioMerieux, Inc. (and its affiliate, BioFireDiagnostics, Inc.), Bruker Corporation, Accelerate Diagnostics, Luminex, Genmark, Cepheid and Beckman Coulter, a Danaher company.We have never been profitable and have incurred net losses in each year since inception. Our accumulated deficit at December 31, 2017 was $266.1million. Substantially all of our net losses resulted from costs incurred in connection with our research and development programs and56from selling, general and administrative costs associated with our operations. We have incurred significant commercialization expenses related to productsales, marketing, manufacturing and distribution of our FDA-cleared T2Dx and T2Candida. In addition, we will continue to incur significant costs andexpenses as we continue to develop other product candidates, improve existing products and maintain, expand and protect our intellectual propertyportfolio. We may seek to fund our operations through public equity or private equity or debt financings, as well as other sources. However, we may beunable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into suchother arrangements if and when needed would have a negative impact on our business, results of operations and financial condition and our ability todevelop, commercialize and drive adoption of the T2Dx, T2Candida, our product candidate, T2Bacteria, and future T2MR-based diagnostics.Pursuant to the requirements of Accounting Standards Codification (ASC) 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue asa Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about theCompany’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does nottake into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements areissued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviatessubstantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered ifboth (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it isprobable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continueas a going concern within one year after the date that the financial statements are issued.Management believes that its existing cash and cash equivalents at December 31, 2017, together with the remaining liquidity on the Term LoanAgreement with CRG, will be sufficient to allow the Company to fund its current operating plan through March 2019. However, because certain elements ofthe Company’s operating plan are outside of the Company’s control, including the approval of the Company’s T2Bacteria Panel and receipt of certaindevelopment and regulatory milestone payments under the Company’s Co-Development agreements, they cannot be considered probable according toaccounting standards. Under ASC 205-40, the future receipt of potential funding from the Company’s Co-Development partners and other resources cannotbe considered probable at this time because none of the plans are entirely within the Company’s control. In addition, the Company is required to maintain aminimum cash balance under its Term Loan Agreement with CRG (Note 6).These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date that thefinancial statements are issued. Management's plans to alleviate the conditions, should it be necessary, include raising additional funding, earning milestonepayments pursuant the Company’s Co- Development agreements, delaying certain research projects and capital expenditures and eliminating certain futureoperating expenses in order to fund operations at reduced levels for the Company to continue as a going concern for a period of 12 months from the date thefinancial statements are issued. Management has concluded the likelihood that its plan to obtain sufficient funding from one or more of these sources oradequately reduce expenditures will be successful, while reasonably possible, is less than probable.Our Commercial Products and the Unmet Clinical NeedOur initial FDA-cleared products, the T2Dx and T2Candida, utilize T2MR to detect species-specific Candida directly from whole blood in as few asthree hours versus the one to six or more days typically required by blood culture-based diagnostics. This allows the patient to potentially receive the correcttreatment in four to six hours versus 24 to 144 hours for blood culture. The T2Candida runs on the T2Dx and provides high sensitivity with a limit ofdetection as low as 1 CFU/mL, even in the presence of antimicrobial therapy.Our T2Candida PanelOur direcT2 pivotal clinical trial was designed to evaluate the sensitivity and specificity of T2Candida on the T2Dx. The direcT2 trial consisted of twopatient arms: a prospective arm with 1,501 samples from patients with a possible infection and a seeded arm with 300 samples, also obtained from patientswith a possible infection. T2Candida and the T2Dx demonstrated a sensitivity of 91.1 percent and a specificity of 99.4 percent. In addition, the speed to aspecies-specific positive result with T2Candida was 4.4 hours versus 129 hours with blood culture. A negative result from T2Candida was obtained in just 4.2hours versus greater than 120 hours with blood culture. The data and other information from the direcT2 pivotal clinical trial was published in January 2015in Clinical Infectious Diseases.Sepsis is one of the leading causes of death in the United States, claiming more lives annually than breast cancer, prostate cancer, and AIDS combined,and it is the most expensive hospital-treated condition. Most commonly afflicting immunocompromised, critical care, and elderly patients, sepsis is a severeinflammatory response to a bacterial or fungal infection with a mortality rate of approximately 30%. According to data published by the U.S. Department ofHealth and Human Services for 2016, the cost of sepsis was over $23 billion in the United States, or approximately 5% of the total aggregate costs associatedwith domestic hospital stays. Sepsis is typically caused by one or more of five Candida species or over 25 bacterial pathogens, and effective treatmentrequires the early detection and identification of these specific target pathogens in a patient’s bloodstream. Today, sepsis is typically diagnosed through aseries of blood cultures followed by post-blood culture species identification. These methods have substantial diagnostic limitations that lead to a high rateof false negative test results, a delay of up to several days in administration of targeted treatment, and the incurrence of unnecessary hospital expense. Inaddition, the Survey of Physicians’ Perspectives and Knowledge About Diagnostic Tests for Bloodstream Infections in 2015 reported that negative bloodculture results are only57trusted by 36% of those physicians. Without the ability to rapidly identify pathogens, physicians typically start treatment of at-risk patients with broad-spectrum antibiotics, which can be ineffective and unnecessary and have contributed to the spread of antimicrobial resistance. According to a studypublished by Critical Care Medicine in 2006, in sepsis patients with documented hypotension, administration of effective antimicrobial therapy within thefirst hour of detection was associated with a survival rate of 79.9% and, over the ensuing six hours, each hour of delay in initiation of treatment wasassociated with an average decrease in survival of 7.6%.We believe our sepsis products, which include T2Candida and our United States product candidate, T2Bacteria, will redefine the standard of care insepsis management while lowering healthcare costs by improving both the precision and the speed of detection of sepsis-causing pathogens. According to astudy published in the Journal of Clinical Microbiology in 2010, targeted therapy for patients with bloodstream infections can be delayed up to 72 hours dueto the wait time for blood culture results. In another study published in Clinical Infectious Diseases in 2012, the delayed administration of appropriateantifungal therapy was associated with higher mortality among patients with septic shock attributed to Candida infection and, on that basis, the studyconcluded that more rapid and accurate diagnostic techniques are needed. Our pivotal clinical trial demonstrated that T2Candida can deliver actionableresults in as few as three hours, with an average time to result during the trial of 4.2 hours, compared to the average time to result of one to six or more daystypically required for blood-culture-based diagnostics, which we believe will potentially enable physicians to make treatment decisions and administertargeted treatment to patients in four to six hours versus 24 to 144 hours for blood culture. We believe that T2Bacteria will also deliver actionable results insimilar timeframes because this diagnostic panel operates similarly to T2Candida and is designed to run on the same instrument as T2Candida.Candida is the fourth leading hospital-acquired bloodstream infection, afflicting more than 135,000 patients per year in the United States, and themost lethal form of common bloodstream infections that cause sepsis, with an average mortality rate of approximately 40%. This high mortality rate is largelydue to a delay in providing targeted therapy to the patient due to the elapsed time from Candida infection to positive diagnosis. According to a studypublished in Antimicrobial Agents and Chemotherapy, the Candida mortality rate can be reduced to 11% with the initiation of targeted therapy within 12hours of presentation of symptoms. Additionally, a typical patient with a Candida infection averages 40 days in the hospital, including nine days inintensive care, resulting in an average cost per hospital stay of more than $130,000 per patient. In a study published in the American Journal of Respiratoryand Critical Care Medicine, providing targeted antifungal therapy within 24 hours of the presentation of symptoms decreased the length of hospital stay byapproximately ten days and decreased the average cost of care by approximately $30,000 per patient. Furthermore, in April 2015, Future Microbiologypublished the results of an economic study regarding the use of T2Candida conducted by IMS Health, a healthcare economics agency. In that economicstudy, IMS demonstrated that an average hospital admitting 5,100 patients at risk for Candida infections could save approximately $5.8 million annuallydue to decreased hospital stays for patients, reduction in use of antifungal drugs and other associated savings. The economic study further showed T2Candidacan potentially reduce the costs of care by $26,887 per Candida patient and that rapid detection of Candida reduces patient deaths by 60.6%. Results from adata analysis of T2Candida for the detection and monitoring of Candida infection and sepsis were published comparing aggregated results from the use ofT2Candida to blood culture-based diagnostics for the detection of invasive candidiasis and candidemia. The analysis included samples acquired from morethan 1,900 patients. Out of 55 prospective patient cases that were tested with T2Candida and blood culture and determined to be positive or likely to bepositive for a Candida infection, T2Candida detected 96.4% of the patients (53 cases) compared to detection of 60% of the patients (33 cases) with bloodculture. During 2016, a number of T2Candida users presented data on their experiences with the T2Candida Panel which demonstrated both the clinical andeconomic benefits of use of the T2Candida Panel in the diagnostic regimen. The Henry Ford Health System in Detroit, Michigan reported data on a pre- andpost-T2Candida implementation analysis that covered 6 months of clinical experience. The data showed a statistically significant (p = 0.009) seven dayreduction in median Intensive Care Unit (“ICU”) length of stay per positive patient that was identified as positive for Candida after implementation of theT2Candida test panel and a trend (p = 0.164) of total hospital length of stay reduction of four days. The data also showed significant reductions in use ofantifungal drugs for negative patients tested with T2Candida. The overall economic savings resulting from these clinical benefits was projected to beapproximately $2.3 million on an annualized basis. The Lee Health System in Fort Myers, Florida compared patient and economic experience before andafter T2Candida implementation. The data demonstrated that in the post-T2Candida cohort, median length of stay for patients with Candida infections wasreduced by 7 days when detected by T2Candida while unnecessary antifungal therapy was avoided in 41% of patients tested and was discontinued after onedose in another 15% of patients tested. The average economic savings derived solely from reduction in antifungal drug use was $195 per patient tested, net ofthe cost of the T2Candida test panel. Huntsville Hospital in Huntsville, Alabama, reported that the use of the T2Candida test panel resulted in a reduction inthe duration of therapy and time to de-escalation in patients that tested negative for Candida on the T2Candida test panel, yielding net pharmacy savings ofapproximately $280 per patient tested. T2Candida also detected 56% more positive patients than blood culture. Finally, Riverside Community Hospital inRiverside, California, demonstrated improvements in time to appropriate therapy, increased sensitivity, and rapid discontinuation of antifungal therapy whenusing T2Candida. Specifically, 83% of patients who tested positive with T2Candida received appropriate therapy within six hours of the blood draw and100% of patients received appropriate therapy in under nine hours. None of the patients who tested positive had been identified to have been treated withantifungals prior to T2Candida testing. In addition, antifungal therapy was discontinued for 100% of the patients who tested negative with T2Candida.Due to the high mortality rate associated with Candida infections, physicians often will place patients on antifungal drugs while they await bloodculture diagnostic results which generally take at least five days to generate a negative test result. Antifungal drugs are toxic and may result in side effectsand can cost over $50 per day. T2Candida’s speed to result coupled with its superior sensitivity as compared to blood culture may help reduce the overuse ofineffective, or even unnecessary, antimicrobial therapy which may reduce side effects for patients, hospital costs and potentially, the growing resistance toantifungal therapy. This inappropriate therapy is a driving force behind the spread of antimicrobial-resistant pathogens, which the CDC recently called “oneof our most serious health threats.”58Our T2Candida auris PanelOn September 6, 2017, we announced that the CDC has agreed to validate the T2Dx Instrument and the T2Cauris investigational use only panel intheir laboratory for potentially testing and monitoring the emergence and outbreaks of the superbug Candida auris in hospitals around the country. Candidaauris is a multi-drug resistant pathogen recognized by the CDC as a “serious global health threat” because it can be resistant to “all three major classes ofantifungal drugs” and difficult to identify. The CDC has also reported that more than one in three patients with Candida auris infections have died. Unlikemost other species of Candida, Candida auris can spread quickly in a hospital making rapid identification and hospital environment surveillance a criticalcomponent of containing these outbreaks. Existing laboratory methods that detect Candida auris, including blood culture, suffer from prolonged detectiontimes and low accuracy, which exacerbates the challenge in the fight to contain the superbug. Recently, reported cases have surged internationally, and theCDC has reported a significant increase in infected patients in the United States. According to the European Centre for Disease Prevention and Control,hospital outbreaks have occurred in the United Kingdom and Spain. Because Candida auris can be resistant to most treatment options and can spread soquickly, these hospital outbreaks have been difficult to contain by even the most enhanced control measures. We are also conducting a study in Europe thathas demonstrated the ability to detect Candida auris directly in patient blood specimens.Our T2Bacteria PanelWe have also developed a product candidate named T2Bacteria, a multiplex diagnostic panel that detects five major bacterial pathogens associatedwith sepsis and, in conjunction with T2Candida and standard empiric therapy regimens, may enable the early, appropriate treatment of 90% of sepsispatients. T2Bacteria, which will also run on the T2Dx, is expected to address the same approximately 6.75 million symptomatic high-risk patients asT2Candida and also a new population of patients who are at increased risk for bacterial infections, including an additional two million patients presentingwith symptoms of infection in the emergency room setting. The T2Bacteria Panel received authorization to affix a CE mark in July 2017 and is beingcommercially marketed in Europe and other countries that accept the CE mark.On August 4, 2017 we completed a pivotal clinical study of the T2Bacteria® Panel, run on the T2Dx® Instrument (T2Dx), which is a qualitative T2Magnetic Resonance (T2MR®) assay designed for the direct detection of bacterial species in EDTA human whole blood specimens from patients withsuspected bacteremia. The T2Bacteria Panel is designed to identify five species of bacteria directly from human whole blood specimens: Enterococcusfaecium, Escherichia coli, Klebsiella pneumoniae, Pseudomonas aeruginosa, and Staphylococcus aureus. Outside of the United States, the CE markedT2Bacteria panel identifies all 5 of these species along with a 6th species, Acinetobacter Baumannii.The performance characteristics of the T2Bacteria Panel were evaluated through a series of analytical studies as well as a multi-center clinical study.The clinical study evaluated the performance of the T2Bacteria Panel in comparison to the current standard of care, blood culture. All of the data generated inthe analytical studies and the clinical study were submitted to the United States Food and Drug Administration, or FDA, in a 510(k) premarket submission onSeptember 8, 2017.The clinical study consisted of two arms, a prospective arm and a seeded arm. In the prospective arm, a total of 1,427 subjects were tested at elevengeographically dispersed and demographically diverse sites in the United States. In the seeded arm, 300 specimens of known bacterial composition wereevaluated at three sites. Seeded specimens were prepared by spiking whole blood with multiple strains of the bacterial species detected by the T2BacteriaPanel at defined concentrations (CFU/mL). Fifty negative blood samples also were evaluated as part of the seeded arm of the study. In total, 1,777 (1,427prospective specimens and 350 seeded and negative) clinical samples were tested to evaluate the clinical performance of T2Bacteria Panel.T2Bacteria is currently available in the United States for RUO and is CE marked and available in Europe and other countries that accept the CE Mark.Our Sepsis SolutionWe believe our T2 Magnetic Resonance technology, or T2MR, delivers what no conventional technology currently available can: a rapid, sensitiveand simple diagnostic platform to enable sepsis applications that can identify specific sepsis pathogens directly from an unpurified blood sample in hoursinstead of days at a level of accuracy equal to or better than blood culture-based diagnostics. The T2Sepsis Solution refers to the approach of combining thestandard of care for the management of sepsis patients with our products, including the T2Dx Instrument, or the T2Dx, T2Candida, and T2Bacteria, which iscommercially available in Europe and other countries that accept the CE mark and available for research use only in the United States. The T2Sepsis Solutionis designed to enable clinicians to potentially treat 90% of septic patients within the first twelve hours of developing the symptoms of disease. Currently,high risk patients are typically initially treated with broad spectrum antibiotic drugs that typically cover approximately 60% of patients with infections. Ofthe remaining 40% of patients, approximately 30% of the patients have a bacterial infection and 10% have Candida infections. T2Candida and productcandidate, T2Bacteria are designed to identify pathogens commonly not covered by broad spectrum antibiotic drugs, which we believe may enablephysicians to effectively treat an additional 30% of septic patients beyond the 60% of patients covered by broad spectrum antibiotic drugs.We believe the T2Sepsis Solution provides a pathway for more rapid and targeted treatment of infections, potentially reducing the mortality rate by asmuch as 75% if a patient is treated within 12 hours of suspicion of infection and significantly reducing the cost burden of sepsis. Each year, approximately500,000 patients in the United States die from sepsis. According to a study published by Critical Care Medicine in 2006, in sepsis patients with documentedhypotension, administration of effective antimicrobial therapy within the first hour of detection was associated59with a survival rate of 79.9% and, over the ensuing six hours, each hour of delay in initiation of treatment was associated with an average decrease in survivalof 7.6%. According to such study, the survival rate for septic patients who remained untreated for greater than 36 hours was approximately 5%. The toll ofsepsis on a patient’s health can be severe: more than one-in-five patients die within two years as a consequence of sepsis. Sepsis is also the most prevalent andcostly cause of hospital readmissions.We believe the T2Sepsis Solution addresses a significant unmet need in in vitro diagnostics by providing: •Limits of Detection as Low as 1 CFU/mL. T2MR is the only technology currently available that can enable identification of sepsis pathogensdirectly from a patient’s blood sample at limits of detection as low as 1 CFU/mL. •Rapid and Specific Results in as Few as Three Hours. T2MR is the only technology that can enable species-specific results for pathogensassociated with sepsis, directly from a patient’s blood sample, without the need for blood culture, to deliver an actionable result in three hours. •Accurate Results Even in the Presence of Antimicrobial Therapy. T2MR is the only technology that can reliably detect pathogens associatedwith sepsis, including slow-growing pathogens, such as C. glabrata, directly from a patient’s blood sample, even in the presence of anantimicrobial therapy. •Easy-to-Use Platform. T2MR eliminates the need for sample purification or extraction of target pathogens, enabling sample- to-resultinstruments that can be operated on-site by hospital staff, without the need for highly skilled technicians.Our T2Dx InstrumentOur FDA-cleared T2Dx is an easy-to-use, fully-automated, benchtop instrument utilizing T2MR for use in hospitals and labs for a broad range ofdiagnostic tests. To operate the system, a patient’s sample tube is snapped onto a disposable test cartridge, which is pre-loaded with all necessary reagents.The cartridge is then inserted into the T2Dx, which automatically processes the sample and then delivers a diagnostic test result. Test results are displayed onscreen or directly through the lab information system.By utilizing our proprietary T2MR technology for direct detection, the T2Dx eliminates the need for sample purification and analyte extraction, whichare necessary for other optical-detection devices. Eliminating these sample processing steps increases diagnostic sensitivity and accuracy, enables a broadmenu of tests to be run on a single platform, and greatly reduces the complexity of the consumables. The T2Dx incorporates a simple user interface and isdesigned to efficiently process up to seven specimens simultaneously.Our T2MR PlatformT2MR is a miniaturized, magnetic resonance-based approach that measures how water molecules react in the presence of magnetic fields. Formolecular and immunodiagnostics targets, T2MR utilizes advances in the field of magnetic resonance by deploying particles with magnetic properties thatenhance the magnetic resonance signals of specific targets. When particles coated with target-specific binding agents are added to a sample containing thetarget, the particles bind to and cluster around the target. This clustering changes the microscopic environment of water in that sample, which in turn altersthe magnetic resonance signal, or the T2 relaxation signal that we measure, indicating the presence of the target.We believe that T2MR can also address the significant unmet need associated with Lyme disease, a tick-borne illness that can cause prolongedneurological disease and musculoskeletal disease. For patients with Lyme disease, early diagnosis and appropriate treatment significantly reduces both thelikelihood of developing neurological and musculoskeletal disorders, as well as the significant costs associated with treating these complications. Ourproduct candidate, T2Lyme, will identify the bacteria that cause Lyme disease directly from the patient’s blood, without the need for blood culture which, forthe bacteria associated with Lyme disease, can take several weeks. Our Lyme product candidate is currently in pre-clinical development and we expect toinitiate a T2Lyme clinical trial in 2018.We believe T2MR is the first technology with the ability to detect directly from a clinical sample of whole blood, plasma, serum, saliva, sputum orurine, saving time and potentially improving sensitivity by eliminating the need for purification or the extraction of target pathogens. T2MR has beendemonstrated to detect cellular targets at limits of detection as low as one colony-forming unit per milliliter (CFU/mL). More than 100 studies published inpeer reviewed journals have featured T2MR in a breadth of applications.Financial OverviewRevenueWe generate revenue from the sale of our products and from activities performed pursuant to research and development agreements.Revenue earned from activities performed pursuant to research and development agreements is reported as research revenue using the proportionalperformance method as the work is completed, limited to payments earned, and the related costs are expensed as incurred as research and developmentexpense.Product revenue is derived from the sale of our instruments and related consumable diagnostic tests, predominantly through our direct sales force inthe United States, and distributors in geographic regions outside the United States. We do not offer product return or exchange rights60(other than those relating to defective goods under warranty) or price protection allowances to our customers, including our distributors. Payment termsgranted to distributors are the same as those granted to end-user customers and payments are not dependent upon the distributors’ receipt of payment fromtheir end-user customers. We recognize product revenue from the sale of our instruments as soon as all applicable revenue recognition criteria have been met.We expect to continue to place our instruments under reagent rental agreements, in hospitals, certain of which may include minimum commitments and/or anincremental charge on the purchase of our consumable diagnostic tests. Under this business model, we believe we will recover the cost of placing ourinstruments in hospitals through the margins realized from our consumable diagnostic tests. Our consumable diagnostic tests can only be used with ourinstruments, and accordingly, as the installed base of our instruments grows, we expect the following to occur: •recurring revenue from our consumable diagnostic tests will increase and become subject to less period-to-period fluctuation; •consumable revenue will become an increasingly predictable and important contributor to our total revenue; and •we will gain economies of scale through the growth in our sales, resulting in improving gross margins and operating margins.Revenue from consumables is based on the volume of tests sold and the price of each consumable unit.Cost of Product RevenueCost of product revenue includes the cost of materials, direct labor and manufacturing overhead costs used in the manufacture of our consumablediagnostic tests sold to customers and related license and royalty fees. Cost of product revenue also includes depreciation on the revenue-generating T2DxInstruments that have been placed with our customers under reagent rental agreements; costs of materials, direct labor and manufacturing overhead costs onthe T2Dx Instruments sold to customers; and other costs such as customer support costs, warranty and repair and maintenance expense on the T2DxInstruments that have been placed with our customers under reagent rental agreements. We manufacture the T2Dx Instruments and part of our consumablediagnostic tests in our facilities. We outsource the manufacturing of components of our consumable diagnostic tests to contract manufacturers. We expect cost of product revenue to continue to represent a high percentage of our product revenue as we continue to invest in our manufacturingcapabilities, infrastructure and customer service organization and grow our installed customer base. We plan to continue to expand our capacity to supportour growth, which will result in higher cost of revenue in absolute dollars. However, we expect cost of product revenue, as a percentage of revenue, to declineas revenue grows in the future.Research and development expensesOur research and development expenses consist primarily of costs, incurred for the development of our technology and product candidates, technologyimprovements and enhancements, clinical trials to evaluate the clinical utility of our product candidates, and laboratory development and expansion, andinclude salaries and benefits, including stock-based compensation, research-related facility and overhead costs, laboratory supplies, equipment and contractservices. Research and development expenses also include costs of delivering products or services associated with research revenue. We expense all researchand development costs as incurred.We anticipate our overall research and development expenses to continue to be flat to down over the next several quarters in part due to thecompletion of our T2Bacteria clinical trial. Research and development costs include costs to support research partnerships, clinical trials and new productdevelopment. We have committed, and expect to commit, significant resources toward developing additional product candidates, improving existingproducts, conducting ongoing and new clinical trials and expanding our laboratory capabilities.Selling, general and administrative expensesSelling, general and administrative expenses consist primarily of costs for our sales and marketing, finance, legal, human resources, businessdevelopment and general management functions, as well as professional services, such as legal, consulting and accounting services. We expect selling,general and administrative expenses to increase in future periods as we commercialize products and future product candidates and as our needs for sales,marketing and administrative personnel grow. Other selling, general and administrative expenses include facility-related costs, fees and expenses associatedwith obtaining and maintaining patents, clinical and economic studies and publications, marketing expenses, and travel expenses. We expense all selling,general and administrative expenses as incurred.Interest expense, netInterest expense, net, consists primarily of interest expense on our notes payable, changes in fair value of our derivative liability and the amortizationof deferred financing costs, partially offset by interest earned on our cash and cash equivalents.Other income, netOther income, net, consists of dividend and other investment income, government grant income and the gain or loss associated with the change in thefair value of our liability for warrants to purchase redeemable securities. 61Results of Operations for the Years Ended December 31, 2017 and 2016 Year ended December 31, 2017 2016 Change (in thousands) Revenue: Product revenue $3,440 $1,747 $1,693 Research revenue 1,226 2,333 (1,107)Total revenue 4,666 4,080 586 Costs and expenses: Cost of product revenue 12,028 6,872 5,156 Research and development 23,733 24,009 (276)Selling, general and administrative 22,757 24,077 (1,320)Total costs and expenses 58,518 54,958 3,560 Loss from operations (53,852) (50,878) (2,974)Interest expense, net (8,907) (4,098) (4,809)Other income, net 331 172 159 Net loss $(62,428) $(54,804) $(7,624) Product revenueDuring the year ended December 31, 2017, product revenue totaled $3.4 million, compared to $1.7 million for the year ended December 31, 2016, anincrease of $1.7 million. The increase was driven by higher comparable sales of T2Candida consumables and instruments of $1.0 million and $0.7 million,respectively. Higher sales were the result of increased usage of diagnostic tests in the installed base and growth in our installed T2Dx Instrument base, as wellas international sales of T2Dx Instruments.Research revenueWe recorded research revenue totaling $1.2 million for the year ended December 31, 2017, compared to $2.3 million for the year ended December 31,2016, a decrease of $1.1 million. The decrease is due to $1.5 million less revenue recognized under our Co-Development Agreement with Canon US LifeSciences and $0.5 million less revenue recognized for projects completed in 2016. The decrease in revenue under our agreement with Canon US LifeSciences is related to differences in timing between work performed and achievement of milestones and related payments. Decreases in research revenue werepartially offset by $0.9 million of revenue recognized under our Co-Development Agreement with Allergan Sales. Cost of product revenueDuring the year ended December 31, 2017, cost of product revenue associated with the sale of our T2Candida Panels and T2Dx Instruments tocustomers totaled $12.0 million, compared to $6.9 million for the year ended December 31, 2016, an increase of $5.2 million. Cost of product revenueincludes a $2.6 million impairment charge related to T2-owned instruments and components. During the fourth quarter of 2017, the Company receivedcommunication from the FDA that suggested the approval timeline could be longer than the company initially anticipated. We assessed the recoverability ofT2-owned instruments based on delayed T2Bacteria cash flows and recorded the impairment charge. Other increases to the cost of product revenue include$0.4 million of depreciation related to T2 owned instruments, $0.6 million related to idle capacity, $1.1 million of costs related to increased sales of T2Dxinstruments and $0.5 million of costs related to increase consumables sales.Research and development expenses Research and development expenses were $23.7 million for the year ended December 31, 2017, compared to $24.0 million for the year endedDecember 31, 2016, a decrease of approximately $0.3 million. The decrease was primarily due to idle capacity of $1.0 million, related to increasedmanufacturing production associated with consumables utilized in the T2Bacteria study, decreased pre-clinical expenses of $0.6 million and lower payrolland related expenses of $0.3 million. The decreases in research and development expenses were partially offset by an increase in clinical trial relatedexpenses of $0.9 million, and travel and related expenses of $0.3 million. Increases in these areas were related to the T2Bacteria clinical trial. Decreases inresearch and development expenses were further offset by a $0.4 million increase in facilities and related costs which include higher depreciation, lab relatedand engineering prototype expenses. Selling, general and administrative expenses Selling, general and administrative expenses were $22.8 million for the year ended December 31, 2017, compared to $24.1 million for the year endedDecember 31, 2016. The decrease of $1.3 million was due primarily to lower payroll and related expenses of approximately $1.6 million, due to attrition, anddecreased travel expenses of $0.3 million related to headcount reductions. The decreases in selling, general and62administrative expenses were partially offset by increased outside services expenditures of $0.3 million and increased facility and other selling, general andadministrative expenses of $0.4 million.Interest expense, netInterest expense, net, was $8.9 million for the year ended December 31, 2017, compared to $4.1 million for the year ended December 31, 2016. Interestexpense, net, increased by $4.8 million due to $2.6 million higher non-cash interest and $2.2 million related to the change in fair value the derivativeliability related to the CRG Term Loan Agreement.Other income, netOther income, net, was $0.3 million of net income for the year ended December 31, 2017, compared to $0.2 million of net income for the year endedDecember 31, 2016. Other income, net, increased $0.1 million due primarily to increased dividend and other investment income.Results of Operations for the Years Ended December 31, 2016 and 2015 Year ended December 31, 2016 2015 Change (in thousands) Revenue: Product revenue $1,747 $599 $1,148 Research revenue 2,333 2,214 119 Total revenue 4,080 2,813 1,267 Costs and expenses: Cost of product revenue 6,872 1,740 5,132 Research and development 24,009 25,362 (1,353)Selling, general and administrative 24,077 19,094 4,983 Total costs and expenses 54,958 46,196 8,762 Loss from operations (50,878) (43,383) (7,495)Interest expense, net (4,098) (1,967) (2,131)Other income, net 172 60 112 Net loss $(54,804) $(45,290) $(9,514) Product revenueDuring the year ended December 31, 2016, product revenue totaled $1.7 million, compared to $0.6 million for the year ended December 31, 2015, anincrease of $1.1 million. The increase was driven by an increase in sales volume of our products, primarily the sale of T2Candida consumable diagnostictests, driven from increased usage of consumable diagnostic tests in the installed base and growth in our installed T2Dx Instrument base, as well asinternational sales of the T2Dx Instruments, which was 14% of product revenue.Research revenueWe recorded research revenue totaling $2.3 million for the year ended December 31, 2016, compared to $2.2 million for the year ended December 31,2015, an increase of $0.1 million. The increase was driven by from activities performed pursuant to the research and development agreement with Canon USLife Sciences, partially offset by decreased revenue from research and development agreements utilizing T2MR technology with other third parties. Cost of product revenueDuring the year ended December 31, 2016, cost of product revenue associated with the sale of our T2Candida Panels and T2Dx Instruments tocustomers totaled $6.9 million, compared to $1.7 million for the year ended December 31, 2015, an increase of $5.1 million. The increase was due tocontinued expansion of manufacturing activities. Cost of product revenue for the year ended December 31, 2016 also included $2.4 million of cost toprovide maintenance and technical support services to customers, approximately $1.3 million of costs not allocable to inventory, and $0.6 million ofdepreciation related to the T2Dx Instruments placed at customer locations pursuant to reagent rental agreements, as compared to $0.8 million, $0.1 million,and $0.1 million, respectively, for the year ended December 31, 2015.Research and development expensesResearch and development expenses were $24.0 million for the year ended December 31, 2016, compared to $25.4 million for the year endedDecember 31, 2015, a decrease of approximately $1.4 million. The decrease was primarily due to decreased payroll, payroll-related and63subcontracted research and development expenses of $1.1 million, lower prototype development expenses of $0.4 million, lower travel costs of $0.1 million,and decreased other research and development costs of $0.8 million, which includes lower consulting, facility and lab expenses. Partially offsetting thedecrease was an increase of $1.0 million in clinical expenses, primarily related to the T2Bacteria clinical trial.Selling, general and administrative expensesSelling, general and administrative expenses were $24.1 million for the year ended December 31, 2016, compared to $19.1 million for the year endedDecember 31, 2015. The increase of approximately $5.0 million was due primarily to increased payroll and related expenses of $3.4 million as we expandedour sales personnel, including $0.6 million of increased stock compensation expense, increased consulting, audit, public relations and patent fees of $0.8million, increased travel expenses of $0.5 million related to increased sales personnel, increased other selling, general and administrative expenses of $0.2million, and increased marketing program expenditures of $0.1 million.Interest expense, netInterest expense, net, was $4.1 million for the year ended December 31, 2016, compared to $2.0 million for the year ended December 31, 2015. Interestexpense, net, increased by $2.1 million due to higher borrowing levels on our notes payable and a $0.9 million loss on extinguishment of debt resulting fromour debt refinancing during the fourth quarter of 2016.Other income, netOther income, net, was $0.2 million for the year ended December 31, 2016, compared to $0.1 for the year ended December 31, 2015. Other income, net,increased $0.1 million due primarily to increased dividend and other investment income.Liquidity and Capital Resources We have incurred losses and cumulative negative cash flows from operations since our inception, and as of December 31, 2017, we had anaccumulated deficit of $266.1 million. Having obtained clearance from the FDA and a CE mark in Europe to market the T2Dx and T2Candida, the Companyhas incurred significant commercialization expenses related to product sales, marketing, manufacturing and distribution. In addition, the Companyanticipates costs and expenses may increase as the Company continues to develop other product candidates, improve existing products and maintain, expandand protect its intellectual property portfolio. The Company may seek to fund its operations through public equity or private equity or debt financings, aswell as other sources. However, the Company may be unable to raise additional funds or enter into such other arrangements when needed on favorable termsor at all. The Company’s failure to raise capital or enter into such other arrangements if and when needed would have a negative impact on the Company’sbusiness, results of operations and financial condition and the Company’s ability to develop and commercialize T2Dx, T2Candida, T2Bacteria, and otherproduct candidates. Historically, the Company has funded its operations primarily through its August 2014 initial public offering, its December 2015 confidentiallymarketed public offering (“CMPO”), its September 2016 private investment in public equity (“PIPE”) financing, its September 2017 CMPO, privateplacements of redeemable convertible preferred stock and debt financing arrangements.Plan of operations and future funding requirements As of December 31, 2017 we had cash and cash equivalents of $41.8 million. Currently, our funds are primarily held in money market funds investedin U.S. government agency securities. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, costs related toour products, clinical trials, laboratory and related supplies, supplies and materials used in manufacturing, legal and other regulatory expenses and generaloverhead costs. Until such time as we can generate substantial product revenue, we expect to finance our cash needs, beyond what is currently available or on hand,through a combination of equity offerings, debt financings and revenue from existing and potential research and development and other collaborationagreements. If we raise additional funds in the future, we may need to relinquish valuable rights to our technologies, future revenue streams or grant licenseson terms that may not be favorable to us.Going ConcernOur ability to continue operations after December 31, 2018 will depend on our ability to obtain additional funding, as to which no assurances can begiven. These conditions raise substantial doubt about our ability to continue as a going concern. There can be no assurance that any financing by us can berealized, or if realized, what the terms of any such financing may be, or that any amount that we are able to raise will be adequate.Management believes that the existing cash and cash equivalents at December 31, 2017, together with the additional remaining liquidity on our TermLoan Agreement of up to an additional $10.0 million, will be sufficient to fund our current operating plan through March 2019. The borrowing on the TermLoan Agreement is available at any time through September 27, 2018, and is subject to certain conditions including that we receive 510(k) clearance for themarketing of T2BacteriaTM by the FDA by June 30, 2018. Should our current operating plan not materialize Management's plans include raising additionalfunding, earning milestone payments pursuant the Company’s Co- Development agreements,64delaying certain research projects and capital expenditures and eliminating certain future operating expenses in order to fund operations at reduced levels forthe Company to continue as a going concern for a period of 12 months from the date the financial statements are issued. Management has concluded thelikelihood that its plan to obtain sufficient funding from one or more of these sources or adequately reduce expenditures will be successful, while reasonablypossible, is less than probable. The Term Loan Agreement also requires us to achieve certain annual revenue targets, whereby we are required to pay doublethe amount of any shortfall as an acceleration of principal payments, and maintain a minimum liquidity amount. Should we fall short of the revenue targetwe would seek a waiver of this provision. There can be no assurances that we would be successful in obtaining a waiver.Cash flowsThe following is a summary of cash flows for each of the periods set forth below: Year ended December 31, 2017 2016 2015 (in thousands) Net cash (used in) provided by: Operating activities $(47,718) $(46,442) $(37,465)Investing activities (2,476) (5,487) (7,894)Financing activities 18,505 51,755 45,172 Net (decrease) increase in cash and cash equivalents $(31,689) $(174) $(187) Net cash used in operating activitiesNet cash used in operating activities was $47.7 million for the year ended December 31, 2017, and consisted primarily of a net loss of $60.6 millionadjusted for non-cash items including depreciation and amortization expense of $2.9 million, stock-based compensation expense of $4.8 million, non-cashinterest expense of $2.7 million, change in fair value of a derivative instrument of $2.2 million and an impairment charge of $2.6 million, partially offset bydeferred rent of $0.1 million and a net change in operating assets and liabilities of $0.1 million. The net change in operating assets and liabilities wasprimarily driven by a $0.7 million increase in deferred revenue, $0.3 million decrease in accounts payable, $0.1 increase in accounts receivable and $0.1million increase in inventory, offset by an increase of $0.7 million in accrued expenses and other liabilities.Net cash used in operating activities was $46.4 million for the year ended December 31, 2016, and consisted primarily of a net loss of $54.8 millionadjusted for non-cash items including depreciation and amortization expense of $2.3 million, stock-based compensation expense of $4.8 million, a netchange in operating assets and liabilities of $0.8 million, non-cash interest expense of $0.6 million and non-cash charge on extinguishment of debt of $0.1million, partially offset by deferred rent of $0.3 million. The net change in operating assets and liabilities was primarily driven by a $0.3 million increase indeferred revenue and an increase of $0.5 million in accounts payable and accrued expenses related to growth in the business.Net cash used in operating activities was $37.5 million for the year ended December 31, 2015, and consisted primarily of a net loss of $45.3 millionadjusted for non-cash items including depreciation and amortization expense of $1.5 million, stock-based compensation expense of $4.2 million and non-cash interest expense of $0.4 million, partially offset by a net change in operating assets and liabilities of $2.0 million and deferred rent of $0.1 million. Thenet change in operating assets and liabilities was primarily driven by a $2.1 million increase in deferred revenue resulting from payment from our Co-Development Agreement with Canon US Life Sciences, an increase of $0.4 million in accounts payable and accrued expenses related to growth in thebusiness, partially offset by purchases of inventory of $0.6 million and increased accounts receivable of $0.2 million related to research and product revenue.Net cash used in investing activitiesNet cash used in investing activities was $2.5 million for the year ended December 31, 2017, and consisted of $2.5 million of purchases of propertyand equipment, including $1.8 million of costs to purchase materials and manufacture T2 owned instruments and components and $0.7 million of purchasesof lab equipment, manufacturing equipment and other property and equipment.Net cash used in investing activities was $5.5 million for the year ended December 31, 2016, and consisted of $5.5 million of purchases of propertyand equipment, including $4.2 million of costs to purchase materials and manufacture T2 owned instruments and components and $1.3 million of purchasesof lab equipment, manufacturing equipment and other property and equipment.Net cash used in investing activities was $7.9 million for the year ended December 31, 2015, and consisted of $8.0 million of purchases of propertyand equipment, including $4.4 million of costs to purchase materials and manufacture T2 owned instruments and components, $2.6 million of leaseholdimprovements and $1.0 million of purchases of lab equipment, manufacturing equipment and other property and equipment. Partially offsetting theseoutflows was $0.1 million of proceeds from restricted cash accounts related to an operating lease agreement.65Net cash provided by financing activitiesNet cash provided by financing activities was $18.5 million for the year ended December 31, 2017, and consisted of $18.6 million of net proceedsfrom our September 15, 2017 Confidentially Marketed Public Offering (“CMPO”), in which we sold 5,031,250 shares of common stock at the closing price of$4.00 per share and $1.1 million of proceeds from the exercise of stock options and sale of common stock under our 2014 Employee Stock PurchasePlan. Partially offsetting these sources of cash were $1.2 million of repayments of notes payable.Net cash provided by financing activities was $51.8 million for the year ended December 31, 2016, and consisted of $39.7 million of net proceedsfrom our September 21, 2016 PIPE financing with Canon, in which we sold 6,055,341 shares of common stock at the closing price of $6.56 per share, $39.2million of net proceeds from our December 30, 2016 term loan agreement with CRG Servicing LLC, $4.6 million of proceeds under the Facility with Essex,and $1.0 million of proceeds from the exercise of stock options and sale of common stock under our 2014 Employee Stock Purchase Plan. Partially offsettingthese sources of cash were $32.4 million of repayments of notes payable and $0.4 million of payments of issuance costs from our December 2015 secondaryoffering.Net cash provided by financing activities was $45.2 million for the year ended December 31, 2015, and consisted of $33.7 million of proceeds fromthe sale of common stock in a public offering, $10.0 million of proceeds from borrowing from our loan agreement with Solar Capital, Ltd., $1.8 million ofproceeds from the issuance of common stock from our stock incentive plans, partially offset by repayments of notes payable of $0.3 million.Borrowing ArrangementsTerm Loan AgreementIn December 2016, the Company entered into a Term Loan Agreement (the “Term Loan Agreement”) with CRG Servicing LLC (“CRG”). TheCompany initially borrowed $40.0 million pursuant to the Term Loan Agreement and may borrow up to an additional $10.0 million at any time through andincluding July 27, 2018, provided that, among other conditions, the Company receives 510(k) clearance for the marketing of T2BacteriaTM by the U.S. Foodand Drug Administration (“FDA”) on or before April 30, 2018 (the “Approval Milestone”). The Term Loan Agreement has a six-year term with three years(through December 30, 2019) of interest-only payments, which period shall be extended to four years (through December 30, 2020) if the Company achievesthe Approval Milestone, after which quarterly principal and interest payments will be due through the December 30, 2022 maturity date. Interest on theamounts borrowed under the Term Loan Agreement accrues at an annual fixed rate of (a) prior to the Approval Milestone, 12.50%, 4.0% of which may bedeferred during the interest-only period by adding such amount to the aggregate principal loan amount and (b) following the Approval Milestone, 11.50%,3.5% of which may be deferred during the interest-only period by adding such amount to the aggregate principal loan amount. In addition, if the Companyachieves certain financial performance metrics, the loan will convert to interest-only until the December 30, 2022 maturity, at which time all unpaid principaland accrued unpaid interest will be due and payable. The Company is required to pay CRG a financing fee based on the loan principal amount drawn. TheCompany is also required to pay a final payment fee of 8% of the principal outstanding upon repayment. In March 2018 the Term Loan Agreement wasamended to extend the Approval Milestone to June 30, 2018, the additional $10.0 million funding through September 27, 2018 and reduce the fiscal year2018 revenue target to $7.0 million.The Company may prepay all or a portion of the outstanding principal and accrued unpaid interest under the Term Loan Agreement at any time uponprior notice subject to a certain prepayment fee during the first five years of the term and no prepayment fee thereafter. As security for its obligations underthe Term Loan Agreement the Company entered into a security agreement with CRG whereby the Company granted a lien on substantially all of its assets,including intellectual property. The Loan Agreement also contains customary affirmative and negative covenants for a credit facility of this size and type.The Loan Agreement also requires the Company to achieve certain revenue targets, whereby the Company is required to pay double the amount of anyshortfall as an acceleration of principal payments, and maintain a minimum liquidity amount. The Loan Agreement includes customary events of default thatcould result in the acceleration of the obligations under the Loan Agreement. Under certain circumstances, a default interest rate of an additional 4.00% perannum will apply at the election of CRG on all outstanding obligations during the occurrence and continuance of an event of default. The Term LoanAgreement is classified as a current liability on the balance sheet at December 31, 2017, based on the Company’s consideration of the probability ofviolating a minimum liquidity covenant included in the Term Loan Agreement. On December 18, 2017, the Term Loan Agreement was amended and the2017 minimum revenue target was reduced to $3.0 million from $5.0 million.The Company assessed the terms and features, including the interest-only period dependent on the achievement of the Approval Milestone by April30, 2018, and acceleration of the obligations under the Loan Agreement under an event of default, of the Term Loan Agreement in order to identify anypotential embedded features that would require bifurcation. In addition, under certain circumstances, a default interest rate of an additional 4.0% per annumwill apply at the election of CRG on all outstanding obligations during the occurrence and continuance of an event of default. The Company concluded thatthese features are not clearly and closely related to the host instrument, and represent a single compound derivative and is required to be re-measured at fairvalue on a quarterly basis.During the fourth quarter of 2017, the Company received communication from the FDA that suggested the approval timeline of T2Bacteria would belonger than the Company initially anticipated. The delay resulted in an increase in the probability of not achieving the Approval Milestone by April 30,2018, as well an increase in the probability of the payment of contingent interest in future periods, based on the contractual payments requirements that existas of December 31, 2017. As such, in the fourth quarter, the Company recorded a derivative liability related to the Company’s debt agreement with CRG of$2.2 million.66In December 2016, pursuant to the Term Loan Agreement, the Company made an initial draw of $39.2 million, net of financing fees. The Companyused approximately $28.0 million of the initial proceeds to repay approximately $27.5 million of outstanding debt pursuant to the Loan and SecurityAgreement and to repay approximately $0.5 million of outstanding debt pursuant to the Promissory Note. Upon the repayment of all amounts owed by theCompany under these agreements, all commitments were terminated and all security interests granted by the Company were released. The Company intendsto retain the remainder of the initial net proceeds of approximately $11.2 million for general corporate purposes and working capital. As of December 31,2017, we were in compliance with all covenants.Equipment Lease Credit FacilityIn October 2015, the Company signed the $10.0 million Credit Facility (the “Credit Facility”) with Essex Capital Corporation (“Essex”) to fundcapital equipment needs. As one of the conditions of the Term Loan Agreement, the Credit Facility is capped at a maximum of $5.0 million. Under the CreditFacility, Essex will fund capital equipment purchases presented by the Company. The Company will repay the amounts borrowed in 36 equal monthlyinstallments from the date of the amount funded. At the end of the 36 month lease term, the Company has the option to (a) repurchase the leased equipment atthe lesser of fair market value or 10% of the original equipment value, (b) extend the applicable lease for a specified period of time, which will not be lessthan one year, or (c) return the leased equipment to the Lessor.In April 2016 and June 2016, the Company completed the first two draws under the Credit Facility of $2.1 million and $2.5 million, respectively. TheCompany will make monthly payments of $67,000 under the first draw and $79,000 under the second draw. The borrowings under the Credit Facility aretreated as capital leases. The amortization of the assets conveyed under the Credit Facility is included as a component of depreciation expense. Contractual Obligations and Contingent LiabilitiesThe following summarizes our significant contractual obligations as of the date of issuance of this annual report on Form 10-K: Payments Due by Fiscal Year Ended December 31, Total 2018 2019-2020 2021-2022 Thereafter (in thousands) Operating leases (1) $8,449 $2,173 $4,350 $1,926 $— Notes payable (2)(3)(4) 68,322 67,266 1,056 - — Total obligations $76,771 $69,439 $5,406 $1,926 $— (1)Represents the leases of approximately 62,800 square feet for office, laboratory and manufacturing space in Lexington and Wilmington, Massachusettsunder noncancelable operating leases, which includes the lease amendment entered into on March 7, 2017 for office and laboratory space at ourheadquarters in Lexington, MA.(2)Represents borrowing under our Term Loan Agreement, which currently bears interest at an annual rate of 12.5% and has principal repayment datesthrough September 2022, and our Credit Facility, which has principal repayment dates through May 2019. The balance for these debt instrumentsincludes estimated interest payment obligations.(3)This does not include prepayment penalties.(4)The Term Loan Agreement with CRG is classified as a current liability on the balance sheet at December 31, 2017, based on the Company’sconsideration of the probability of violating a minimum liquidity covenant included in the Term Loan Agreement. The contractual terms of theagreement require payments of $3.5 million, $13.4 million and $48.6 million during the years ended December 31, 2018, 2019-2020 and 2021-2022,respectively.Contingent Liabilities and Commitments, Including Tax MattersWe have net deferred tax assets of $77.7 million as of December 31, 2017, which have been fully offset by a valuation allowance due to uncertaintiessurrounding our ability to realize these tax benefits. The deferred tax assets are primarily composed of federal net operating loss (“NOL”), tax carryforwardsand research and development tax credit carryforwards. As of December 31, 2017, we had federal NOL carryforwards of $229.1 million available to reducefuture taxable income, if any. These federal NOL carryforwards are available to offset future taxable income, if any, through 2037. In general, if weexperience, or have experienced, a greater than 50% aggregate change in ownership of certain significant stockholders over a three-year period, or aSection 382 ownership change, utilization of our pre-change NOL carryforwards are subject to an annual limitation under Section 382 of the InternalRevenue Code of 1986, as amended. Such limitations may result in expiration of a portion of the NOL carryforwards before utilization and may besubstantial. If we experience a Section 382 ownership change in connection as a result of future changes in our stock ownership, some of which changes areoutside of our control, the tax benefits related to the NOL carryforwards may be limited or lost. We have not conducted an assessment to determine whetherthere may have been a Section 382 or 383 ownership change.67Off-Balance Sheet ArrangementsWe did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.Critical Accounting Policies and Significant JudgementsThis management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have beenprepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these financial statements requiresus to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at thedate of the financial statements, as well as the reported revenue and expenses during the reporting periods. These items are monitored and analyzed by us forchanges in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience and onvarious other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carryingvalue of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in whichthey become known. Actual results may differ materially from these estimates under different assumptions or conditions.While our significant accounting policies are more fully described in the notes to our consolidated financial statements included elsewhere in thisAnnual Report on Form 10-K, we believe that the following accounting policies are critical to the process of making significant judgments and estimates inthe preparation of our financial statements and understanding and evaluating our reported financial results.Revenue RecognitionWe generate revenue from product sales, which includes the sale of instruments, consumable diagnostic tests and related services, and research anddevelopment agreements with third parties. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services havebeen rendered, the price is fixed or determinable and collection is reasonably assured. If any of the revenue recognition criteria described have not been met,we defer revenue until such time each of the revenue recognition criteria have been satisfied.Product revenue is generated by the sale of instruments and consumable diagnostic tests. We either directly sell instruments to customers andinternational distributors or retain title and place the instrument at the customer site pursuant to a reagent rental agreement. When the instrument is directlypurchased by a customer, we recognize revenue when all applicable revenue recognition criteria are met. When the instrument is placed under a reagent rentalagreement, our customers generally agree to fixed term agreements, which can be extended, minimum purchase commitments and/or pay an incrementalcharge on each consumable diagnostic test purchased, which varies based on the volume of test cartridges purchased. Revenue from the sale of consumablediagnostic tests, which includes the incremental charge, is generally recognized upon shipment as a component of product revenue in our consolidatedstatements of operations and comprehensive loss.Direct sales of instruments include warranty, maintenance and technical support services for one year following the installation of a purchasedinstrument (“Maintenance Services”). After the completion of the initial Maintenance Services period, customers have the option to renew the MaintenanceServices for additional one year periods in exchange for additional consideration. In addition, we may provide training to customers. We defer revenue fromthe initial sale of the instrument equal to the relative fair value of other deliverables, including one year of Maintenance Services, and recognize the amountsratably over the service delivery period.We warrant that consumable diagnostic tests will be free from defects, when handled according product specifications, for the stated life of the product.To fulfill valid warranty claims, we provide replacement product. Accordingly, we accrue warranty costs associated with the estimated defect rates of theconsumable diagnostic tests.We do not offer rights of return for instruments or consumable diagnostic tests.For multiple-element arrangements, we identify the deliverables included within each agreement and evaluate which deliverables represent separateunits of accounting. The determination that multiple elements in an arrangement meet the criteria for separate units of accounting requires us to exercise ourjudgment. We account for those components as separate elements when the following criteria are met: (1) the delivered items have value to the customer on astand-alone basis; and, (2) if there is a general right of return relative to the delivered items, delivery or performance of the undelivered items is consideredprobable and within its control.The consideration received is allocated among the separate units of accounting based on a selling price hierarchy. The selling price hierarchy is basedon: (1) vendor specific objective evidence (“VSOE”), if available; (2) third party evidence of selling price if VSOE is not available; or (3) best estimatedselling price (“BESP”) if neither VSOE nor third party evidence is available. We generally expect that we will not be able to establish selling price usingthird-party evidence due to the nature of our products and the markets in which we compete, and, as such, we typically will determine selling price usingVSOE or BESP.When we establish selling price using BESP, consideration is given to both market and Company-specific factors, including the cost to produce thedeliverable and the anticipated margin on that deliverable, as well as the characteristics of markets in which the deliverable is sold.68Revenue earned from activities performed pursuant to research and development agreements is reported as research revenue in the consolidatedstatements of operations and comprehensive loss, and is recognized using the proportional performance method as the work is completed, limited topayments earned, and the related costs are expensed as incurred as research and development expense. The timing of receipt of cash from our research anddevelopment agreements generally differs from when revenue is recognized.Stock-based compensationWe issue stock-based awards to employees and non-employees, generally in the form of stock options and restricted stock awards. We account for ourstock-based awards in accordance with FASB ASC Topic 718, Compensation — Stock Compensation, or ASC 718. ASC 718 requires all stock-basedpayments to employees, including grants of employee stock options and modifications to existing stock options, to be recognized in the consolidatedstatements of operations and comprehensive loss based on their grant date fair values. We account for stock-based awards to non-employees in accordancewith FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees, which requires the fair value of the award to be remeasured at fair value as theaward vests. We recognize the compensation cost of stock-based awards to employees and non-employees on a straight-line basis over the vesting period. Seebelow for a detailed description of how we estimate fair value for purposes of option grants and the methodology used in measuring stock-basedcompensation expense.We estimate the fair value of our stock-based awards to employees and non-employees using the Black-Scholes-Merton option pricing model, whichrequires the input of highly subjective assumptions, including (a) the expected volatility of our stock, (b) the expected term of the award, (c) the risk-freeinterest rate and (d) expected dividends. Due to the lack of company specific historical and implied volatility data resulting from our limited public markettrading history, we have based our estimate of expected volatility primarily on the historical volatility of a group of similar companies that are publiclytraded. For these analyses, we have selected companies with comparable characteristics to ours, including enterprise value, risk profiles and position withinthe industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. We compute the historical volatilitydata using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of our stock-based awards.We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own stock price becomes available.We have estimated the expected life of our employee stock options using the “simplified” method, whereby the expected life equals the average of thevesting term and the original contractual term of the option. The risk-free interest rates for periods within the expected life of the option are based on the U.S.Treasury yield curve in effect during the period in which the options were granted.We are also required to estimate forfeitures at the time of grant, and revise those estimates in subsequent periods if actual forfeitures differ from ourestimates. We use historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that areexpected to vest. To the extent that actual forfeitures differ from our estimates, the difference is recorded as a cumulative adjustment in the period theestimates were revised. Stock-based compensation expense recognized in the financial statements is based on awards that are ultimately expected to vest. Ifour actual forfeiture rate is materially different from the estimate, our stock-based compensation expense could be different from what we have recorded in thecurrent period.These assumptions used to determine stock compensation expense represent our best estimates, but the estimates involve inherent uncertainties andthe application of our judgment. As a result, if factors change and we use significantly different assumptions or estimates, our stock-based compensationexpense could be materially different.InventoriesInventories are stated at the lower of cost or net realizable value. The Company determines the cost of its inventories, which includes amounts relatedto materials, direct labor, and manufacturing overhead, on a first-in, first-out basis. We perform an assessment of the recoverability of capitalized inventoryduring each reporting period, and writes down any excess and obsolete inventories to their realizable value in the period in which the impairment is firstidentified. Shipping and handling costs incurred for inventory purchases are capitalized and recorded upon sale in cost of product revenues in theconsolidated statements of operations and comprehensive loss or are included in the value of T2-owned instruments and components, a component ofproperty and equipment, net, and depreciated.We capitalize inventories in preparation for sales of products when the related product candidates are considered to have a high likelihood ofregulatory clearance, which for the T2Dx Instrument and T2Candida Panel was upon the achievement of regulatory clearance, and the related costs areexpected to be recoverable through sales of the inventories. In addition, the Company capitalizes inventories related to the manufacture of instruments thathave a high likelihood of regulatory clearance, which for the T2Dx Instrument was upon the achievement of regulatory clearance, and will be retained as theCompany’s assets, upon determination that the instrument has alternative future uses. In determining whether or not to capitalize such inventories, theCompany evaluates, among other factors, information regarding the product candidate’s status of regulatory submissions and communications withregulatory authorities, the outlook for commercial sales and alternative future uses of the product candidate. Costs associated with development productsprior to satisfying the inventory capitalization criteria are charged to research and development expense as incurred.We classify inventories related to instruments that are Company-owned, as a component of property and equipment. Raw material and work-in-processinventories that are expected to be used to produce Company-owned instruments, based on our business model and forecast, are also classified as propertyand equipment. Company-owned instruments are instruments that are manufactured and placed with customers in connections with rental agreements, or areused for internal purposes.69Income TaxesDuring 2017 we recorded no income tax benefit due to the full valuation allowance recorded against the Company’s deferred tax assets. The Tax Cutsand Jobs Act reduced the federal tax rate from 35% to 21% and we re-measured certain deferred tax assets and liabilities based on the rates at which they areanticipated to reverse in the future. The provisional amount recorded related to the re-measurement of our deferred tax balance was a tax expense of $32.9million which was offset by an adjustment to the valuation allowance against our deferred taxes of $32.9 million.During 2016 and 2015 we recorded no income tax benefit due to the full valuation allowance recorded against the Company’s deferred tax assets.Impairment of Long Lived AssetsWe review long‑lived assets, including capitalized T2 owned instruments and components, for impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not be recoverable. If indications of impairment exist, projected future undiscounted cashflows associated with the asset or asset group are compared to the carrying amount to determine whether the asset’s value is recoverable. During this review,we reevaluate the significant assumptions used in determining the original cost and estimated lives of long‑lived assets. Although the assumptions may varyfrom asset to asset, they generally include operating results, changes in the use of the asset, cash flows and other indicators of value. Management thendetermines whether the remaining useful life continues to be appropriate or whether there has been an impairment of long‑lived assets based primarily uponwhether expected future undiscounted cash flows are sufficient to support the assets’ recovery. If impairment exists, we would adjust the carrying value of theasset to fair value, generally determined by a discounted cash flow analysis. If the carrying value of the asset exceeds such projected undiscounted cashflows, the asset will be written down to its estimated fair value. We recorded an impairment expense of $2.6 million during the year ended December 31,2017. Fair Value of Derivative Our Term Loan Agreement with CRG contains certain provisions that change the underlying cash flows of the instrument, including an interest-onlyperiod dependent on the achievement of the Approval Milestone by April 30, 2018, and acceleration of the obligations under the Loan Agreement under anevent of default. In addition, under certain circumstances, a default interest rate of an additional 4.0% per annum will apply at the election of CRG on alloutstanding obligations during the occurrence and continuance of an event of default. We concluded that these features are not clearly and closely related tothe host instrument, and represent a single compound derivative and is required to be re-measured at fair value on a quarterly basis. During the fourth quarter of 2017, we received communication from the FDA that suggested the approval timeline of T2Bacteria might be longer thanwe initially anticipated. The delay resulted in an increase in the probability of not achieving the Approval Milestone by April 30, 2018, as well an increase inthe probability of the payment of contingent interest in future periods, based on the contractual payments requirements that exist as of December 31, 2017.As such, in the fourth quarter, we recorded a derivative liability related to the Company’s debt agreement with CRG of $2.2 million. The estimated fair valueof the derivative liability was determined using a probability-weighted discounted cash flow model that includes principal and interest payments under thefollowing scenarios: FDA approval by April 30, 2017 (40%), FDA approval after April 30, 2017 (20%) and no FDA approval (40%). Should our assessment ofthese probabilities change, including amendments of projected revenue targets, there could be a change to the fair value of the derivative liability. Recent Accounting StandardsFrom time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by us as of the specifiedeffective date. Unless otherwise discussed we believe that the impact of recently issued standards that are not yet effective will not have a material impact onour financial position or results of operations upon adoption.Accounting Standards AdoptedIn July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). The standardsimplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value for entities using thefirst-in-first out method of valuing inventory. ASU 2015-11 eliminates other measures required by current guidance to determine net realizable value. ASU2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years and early adoption is permitted. TheCompany’s adoption of this standard did not have a material effect on its consolidated financial statements.In March 2016, the FASB released ASU No. 2016-09 Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) which isintended to simplify income tax accounting for excess tax benefits, accounting for forfeitures, and employer statutory withholding. Under the currentguidance, excess tax benefits that result from an award vesting or settling are recognized in additional paid-in capital in the70period that they reduce cash taxes payable. This requires the provision to be computed on a with and without option basis and may result in net operatingloss and credit carryforwards on the balance sheet being less than what is available on the tax return. Under the new guidance, the income tax effects ofawards will be recognized as a component of income tax expense when the awards vest or are settled (regardless if cash taxes are reduced). For interimreporting purposes, companies will account for excess tax benefits and tax deficiencies as discrete items in the period during which they occurred. Theguidance is effective for public entities for fiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption ispermitted, however all of the guidance included in the update must be applied when adopted. The Company must use a modified retrospective transitionmethod for adopting and record the cumulative effect of all unrecognized benefits and any change in valuation allowances at the end of the prior tax periodas an adjustment to retained earnings. The Company’s adoption of this standard did not have a material effect on its consolidated financial statements andprior periods have not been adjusted. As a result, the Company established a net operating loss deferred tax asset of $1.2 million to account for prior periodexcess tax benefits through retained earnings, however an offsetting valuation allowance of $1.2 million will also be established through retained earningsbecause it is not more likely than not that the deferred tax asset will be realized due to historical and expected future losses, such that there is no impact onthe Company’s consolidated financial statements. The Company also elected to maintain the use of estimated forfeitures in the calculation of stock basedcompensation.In March 2016, the FASB issued ASU No. 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (“ASU2016-06”), which applies to all issuers of or investors in debt instruments with embedded call or put options. ASU 2016-06 clarifies the requirements forassessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debthosts. Entities performing the assessment under the guidance of ASU 2016-06 are required to assess the embedded call or put options solely in accordancewith the four-step decision process. In addition, ASU 2016-06 clarifies what steps are required when assessing whether the economic characteristics and risksof call or put options are clearly and closely related to the economic characteristics and risks of their debt hosts. ASU 2016-06 is effective for financialstatements issued for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years using the modified retrospective method forexisting debt instruments. The Company’s adoption of this standard did not have a material effect on its consolidated financial statements.Accounting Standards Issued, Not AdoptedIn August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments(“ASC 2016-15”), which provides guidance on the classification of certain specific cash flow issues including debt prepayment or extinguishment costs,settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certaininsurance claims and distributions received from equity method investees. The standard requires the use of a retrospective approach to all periods presented,but may be applied prospectively if retrospective application would be impracticable. The guidance is effective for public entities for fiscal years beginningafter December 15, 2017, and interim periods within those years, and early application is permitted. The Company is currently evaluating the impact of itspending adoption of ASU 2016-15 on the Company’s consolidated financial statements.In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which applies to all leases. Under ASU 2016-02, a right-of-use assetand lease obligation will be recorded for all leases, whether operating or financing leases, while the statement of operations will reflect lease expense foroperating leases and amortization and interest expense for financing leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 andinterim periods within those years, which is the year ended December 31, 2019 for the Company. Entities are required to use a modified retrospectiveapproach of adoption for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Fullretrospective application is prohibited. The Company is evaluating the new guidance and the expected effect on the Company’s consolidated financialstatements. In June 2014, the FASB issued amended guidance, ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which is applicableto revenue recognition that will be effective for the Company for the year ending December 31, 2018, as a result of the deferral of the effective date adoptedby the FASB in July 2015. The new guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospectiveapproach. Early adoption prior to the original adoption date (annual reporting periods beginning after December 15, 2016) of ASU 2014-09 is not permitted.The new guidance applies a more principles-based approach to revenue recognition. The Company will adopt the new standard, effective January 1, 2018,under the modified retrospective method. The Company established an implementation team to assess the potential impacts of the new standard and prepare for adoption. The implementationteam has reviewed current accounting policies and practices and identified potential differences resulting from the application of the new standard. Findingsand progress of the project have been regularly communicated to the Audit Committee and senior management. The qualitative assessment of the standard provided below are estimates of the expected effects of the adoption of ASC 606. This represents our bestestimate of the effects of adopting ASC 606 at the time of the preparation of this Annual Report on Form 10-K. The actual impact of ASC 606 is subject tochange from these estimates and such change may be significant, pending the completion of our assessment in the first quarter of 2018. 71The implementation team is in the process of completing an analysis of our revenue generating arrangements, including direct sales of instruments andconsumables, sales of instruments and consumables to distributors, reagent rental agreements and research agreements. A detailed policy for each revenuestream has been drafted. The Company is in the process of implementing appropriate changes to controls, processes, and systems to support recognition anddisclosure under the new standard. In addition, the Company continues to monitor changes, modifications, clarifications or interpretations, which may impactthe results of adoption, undertaken by the FASB. The impact of adopting the new standard is not expected to be material to 2017 and 2016 revenue. The most significant impacts of the new standard,upon adoption, are expected to be around the timing of revenue recognition. Specifically, under the new standard: •Consideration allocated to the instrument in a direct sale will be recognized upon shipment and consideration allocated to installation will berecognized upon installation. Currently, revenue recognition for both obligations occurs upon installation. •Revenue recognition on sales to distributors may be accelerated based on management’s judgement regarding use of the sell-in or sell-throughmethod. Currently, the Company recognizes revenue with new distributors based on the sell-through method, which requires deferral of revenueuntil product is sold to an end customer.The Company does not expect the adoption of the new standard to a have material impact on our consolidated balance sheet. The Company doesexpect significant changes to its financial statement disclosures.Emerging Growth Company StatusIn April 2012, the Jumpstart Our Business Startups Act, or the JOBS Act, was enacted in the United States. Section 107 of the JOBS Act provides thatan “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, as amended, forcomplying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until thosestandards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result,we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKWe are exposed to market risk related to changes in interest rates. As of December 31, 2017, we had cash and cash equivalents of $41.8 million heldprimarily in money market funds consisting of U.S. government agency securities. Our primary exposure to market risk is interest rate sensitivity, which isaffected by changes in the general level of U.S. interest rates, particularly because our investments are in short-term securities. Due to the short-term durationof our investment portfolio and the low risk profile of our investments, an immediate one percent change in interest rates would not have a material effect onthe fair market value of our portfolio. As of December 31, 2017, we had no outstanding debt exposed to variable interest rates.72Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAReport of Independent Registered Public Accounting Firm The Stockholders and the Board of Directors of T2 Biosystems, Inc.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of T2 Biosystems, Inc. (the Company) as of December 31, 2017 and 2016, and the relatedconsolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows for each of the three years in the period endedDecember 31, 2017, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financialstatements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations andits cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles. The Company's Ability to Continue as a Going ConcernThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note1 to the financial statements, the Company has suffered recurring losses from operations, will require additional capital to fund its current operating plan, andhas stated that substantial doubt exists about the Company’s ability to continue as a going concern. In addition, the Company has classified certain debtobligations with long-term contractual maturities as current liabilities due to likely future debt covenant violations. Management’s evaluation of the eventsand conditions and management’s plans regarding these matters are also described in Note 1. The 2017 consolidated financial statements do not include anyadjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that mayresult from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financialstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations ofthe Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, norwere we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding ofinternal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financialreporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures inthe financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2008Boston, MassachusettsMarch 19, 2018 73T2 Biosystems, Inc.Consolidated Balance Sheets(In thousands, except share and per share data) December 31, December 31, 2017 2016 Assets Current assets: Cash and cash equivalents $41,799 $73,488 Accounts receivable 467 327 Prepaid expenses and other current assets 708 820 Inventories 1,344 803 Total current assets 44,318 75,438 Property and equipment, net 10,015 13,589 Restricted cash 260 260 Other assets 268 281 Total assets $54,861 $89,568 Liabilities and stockholders’ equity Current liabilities: Accounts payable $648 $962 Accrued expenses and other current liabilities 6,218 4,908 Derivative liability 2,238 — Notes payable 40,696 1,269 Deferred revenue 1,736 2,445 Current portion of lease incentives 246 301 Total current liabilities 51,782 9,885 Notes payable, net of current portion 1,008 39,504 Lease incentives, net of current portion 731 792 Other liabilities — 49 Commitments and contingencies (see Note 12) Stockholders’ equity: Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding — — Common stock, $0.001 par value; 200,000,000 shares authorized; 35,948,900 and 30,482,712 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively 36 30 Additional paid-in capital 267,421 242,997 Accumulated deficit (266,117) (203,689)Total stockholders’ equity 1,340 39,338 Total liabilities and stockholders’ equity $54,861 $89,568 See accompanying notes to financial statements.74T2 Biosystems, Inc.Consolidated Statements of Operations and Comprehensive Loss(In thousands, except share and per share data) Year ended December 31, 2017 2016 2015 Revenue: Product revenue $3,440 $1,747 $599 Research revenue 1,226 2,333 2,214 Total revenue 4,666 4,080 2,813 Costs and expenses: Cost of product revenue 12,028 6,872 1,740 Research and development 23,733 24,009 25,362 Selling, general and administrative 22,757 24,077 19,094 Total costs and expenses 58,518 54,958 46,196 Loss from operations (53,852) (50,878) (43,383)Interest expense, net (8,907) (4,098) (1,967)Other income, net 331 172 60 Net loss and comprehensive loss (62,428) (54,804) (45,290)Net loss per share — basic and diluted $(1.94) $(2.11) $(2.21)Weighted-average number of common shares used in computing net loss per share — basic and diluted 32,131,512 26,015,751 20,501,748 See accompanying notes to financial statements. 75T2 Biosystems, Inc.Consolidated Statements of Stockholders’ Equity(In thousands, except share and per share data) Common Additional Total Stock Paid-In Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance at December 31, 2014 20,041,645 $20 $156,576 $(103,595) $53,001 Stock-based compensation expense — — 4,168 — 4,168 Issuance of common stock from secondary public offering, net of offering costs of $2,732 3,691,049 4 33,252 — 33,256 Issuance of common stock from exercise of stock options and employee stock purchaseplan 442,687 — 1,804 — 1,804 Net loss — — — (45,290) (45,290)Balance at December 31, 2015 24,175,381 24 195,800 (148,885) 46,939 Stock-based compensation expense — — 4,848 — 4,848 Offering costs on issuance of common stock from secondary public offering — — (215) — (215)Issuance of common stock from exercise of stock options and employee stock purchaseplan 251,990 — 1,018 — 1,018 Issuance of common stock for private investment 6,055,341 6 39,717 — 39,723 Issuance of warrants — — 1,829 — 1,829 Net loss — — — (54,804) (54,804)Balance at December 31, 2016 30,482,712 30 242,997 (203,689) 39,338 Stock-based compensation expense — — 4,790 — 4,790 Issuance of common stock from vesting of restricted stock, exercise of stock options andemployee stock purchase plan 434,938 1 1,058 — 1,059 Issuance of common stock from secondary public offering, net of offering costs of $252 5,031,250 5 18,576 — 18,581 Net loss — — — (62,428) (62,428)Balance at December 31, 2017 35,948,900 $36 $267,421 $(266,117) $1,340 See accompanying notes to financial statements. 76T2 Biosystems, Inc.Consolidated Statements of Cash Flows(In thousands) Year ended December 31, 2017 2016 2015 Operating activities Net loss $(62,428) $(54,804) $(45,290)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 2,940 2,280 1,465 Stock-based compensation expense 4,790 4,848 4,168 Noncash interest expense 2,710 564 354 Loss on extinguishment of debt — 112 — Impairment of T2 owned instruments and components 2,571 — — Change in fair value of derivative instrument 2,238 — — Deferred rent (115) (250) (119)Changes in operating assets and liabilities: Accounts receivable (140) 42 (168)Prepaid expenses and other assets 125 68 190 Inventories, net (110) (120) (568)Accounts payable (314) (61) 177 Accrued expenses and other liabilities 724 580 260 Deferred revenue (709) 299 2,066 Net cash used in operating activities (47,718) (46,442) (37,465)Investing activities Purchases and manufacture of property and equipment (2,476) (5,487) (7,974)Decrease in restricted cash — — 80 Net cash used in investing activities (2,476) (5,487) (7,894)Financing activities Proceeds from issuance of common stock in public offering, net of offering costs 18,640 (385) 33,677 Proceeds from issuance of common stock and stock options exercises, net 1,059 1,018 1,804 Proceeds from private investment in public equity — 39,723 — Proceeds from notes payable, net of issuance costs — 43,803 10,000 Repayments of note payable (1,194) (32,404) (309)Net cash provided by financing activities 18,505 51,755 45,172 Net decrease in cash and cash equivalents (31,689) (174) (187)Cash and cash equivalents at beginning of period 73,488 73,662 73,849 Cash and cash equivalents at end of period $41,799 $73,488 $73,662 See accompanying notes to financial statements. 77T2 Biosystems, Inc.Consolidated Statements of Cash Flows (Continued)(In thousands) Year ended December 31, 2017 2016 2015 Supplemental disclosures of cash flow information Cash paid for interest $3,959 $2,732 $1,506 Supplemental disclosures of noncash activities Accrued property and equipment $189 $82 $247 Transfer from T2 owned equipment to inventory $431 $— $— Leasehold improvements paid by landlord $— $— $1,268 Transfer from other liabilities to accrued expenses and other current liabilities $585 $— $— Public offering costs unpaid at year end $59 $— $420 See accompanying notes to financial statements.78T2 Biosystems, Inc.Notes to Consolidated Financial Statements1. Nature of BusinessT2 Biosystems, Inc. (the “Company”) was incorporated on April 27, 2006 as a Delaware corporation with operations based in Lexington,Massachusetts. The Company is an in vitro diagnostics company that has developed an innovative and proprietary technology platform that offers a rapid,sensitive and simple alternative to existing diagnostic methodologies. The Company is using its T2 Magnetic Resonance technology, or T2MR, to develop abroad set of applications aimed at lowering mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medical professionalsmake targeted treatment decisions earlier. T2MR enables rapid detection of pathogens, biomarkers and other abnormalities in a variety of unpurified patientsample types, including whole blood, plasma, serum, saliva, sputum and urine, and can detect cellular targets at limits of detection as low as one colonyforming unit per milliliter, or CFU/mL. The Company’s initial development efforts target sepsis and Lyme disease, which are areas of significant unmetmedical need in which existing therapies could be more effective with improved diagnostics. On September 22, 2014, the Company received marketclearance from the U.S. Food and Drug Administration (“FDA”) for its first two products, the T2Dx Instrument (the “T2Dx”) and T2Candida Panel(“T2Candida”). On June 30, 2017, the Company received a CE Mark for its T2Bacteria Panel (“T2Bacteria”). On September 8, 2017, the Company filed a510(k) premarket submission for the T2Bacteria Panel with the U.S. Food and Drug Administration (FDA).The Company has devoted substantially all of its efforts to research and development, business planning, recruiting management and technical staff,acquiring operating assets, raising capital, and, most recently, the commercialization and improvement of its existing products.Liquidity and Going ConcernAt December 31, 2017, the Company has cash and cash equivalents of $41.8 million and an accumulated deficit of $266.1 million. The future successof the Company is dependent on its ability to successfully commercialize its products, obtain regulatory clearance for and successfully launch its futureproduct candidates, obtain additional capital and ultimately attain profitable operations. Historically, the Company has funded its operations primarilythrough its August 2014 initial public offering, its December 2015 confidentially marketed public offering (“CMPO”), its September 2016 private investmentin public equity (“PIPE”) financing, its September 2017 CMPO, private placements of redeemable convertible preferred stock and debt financingarrangements. The Company is subject to a number of risks similar to other newly commercial life science companies, including, but not limited to commerciallylaunching the Company’s products, development and market acceptance of the Company’s product candidates, development by its competitors of newtechnological innovations, protection of proprietary technology, and raising additional capital.Having obtained clearance from the FDA and a CE mark in Europe to market the T2Dx and T2Candida, the Company has incurred significantcommercialization expenses related to product sales, marketing, manufacturing and distribution. In addition, the Company anticipates costs and expenses toincrease as the Company continues to develop other product candidates, improve existing products and maintain, expand and protect its intellectual propertyportfolio. The Company may seek to fund its operations through public equity or private equity or debt financings, as well as other sources. However, theCompany may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. The Company’s failure toraise capital or enter into such other arrangements if and when needed would have a negative impact on the Company’s business, results of operations andfinancial condition and the Company’s ability to develop and commercialize T2Dx, T2Candida, T2Bacteria, and other product candidates.Pursuant to the requirements of Accounting Standards Codification (ASC) 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continueas a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about theCompany’s ability to continue as a going concern within one year after the date that the financial statements are issued. This evaluation initially does nottake into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements areissued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviatessubstantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered ifboth (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it isprobable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continueas a going concern within one year after the date that the financial statements are issued.Management believes that its existing cash and cash equivalents at December 31, 2017, together with funding available under the Term LoanAgreement, will be sufficient to allow the Company to fund its current operating plan through March 2019. However, as certain elements of the Company’soperating plan are outside of the Company’s control, including the approval of the Company’s T2Bacteria Panel and receipt of certain development andregulatory milestone payments under the Company’s Co-Development agreements, they cannot be considered probable. Under ASC 205-40, the futurereceipt of potential funding from the Company’s Co-Development partners and other resources cannot be considered probable at this time because none ofthe plans are entirely within the Company’s control. In addition, the Company is required to maintain a minimum cash balance under its Term LoanAgreement with CRG Servicing LLC (“CRG”) (Note 6).79These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date that thefinancial statements are issued. Management's plans to alleviate the conditions that raise substantial doubt include raising additional funding, earningmilestone payments pursuant the Company’s Co- Development agreements, delaying certain research projects and capital expenditures and eliminatingcertain future operating expenses in order to fund operations at reduced levels for the Company to continue as a going concern for a period of 12 months fromthe date the financial statements are issued. Management has concluded the likelihood that its plan to obtain sufficient funding from one or more of thesesources or adequately reduce expenditures will be successful, while reasonably possible, is less than probable. Accordingly, the Company has concluded thatsubstantial doubt exists about the Company’s ability to continue as a going concern for a period of at least twelve months from the date of issuance of theseconsolidated financial statements.The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction ofliabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification ofrecorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. 2. Summary of Significant Accounting PoliciesBasis of Presentation and ConsolidationThe Company’s financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America(“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles asfound in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board(“FASB”). The Company’s consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, T2 BiosystemsSecurities Corporation. All intercompany balances and transactions have been eliminated.Use of EstimatesThe preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates andassumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company utilizes certain estimates in thedetermination of the fair value of its stock options, deferred tax valuation allowances, revenue recognition, to record expenses relating to research anddevelopment contracts, accrued expenses, the fair value of a derivative liability and to classify the value of instrument raw material and work-in-processinventory between inventory and property and equipment. The Company bases its estimates on historical experience and other market‑specific or otherrelevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates.Segment InformationOperating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chiefoperating decision maker, or decision‑making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operatingdecision maker is the Chief Executive Officer. The Company views its operations and manages its business in one operating segment, which is the business ofdeveloping and, upon regulatory clearance, launching commercially its diagnostic products aimed at lowering mortality rates, improving patient outcomesand reducing the cost of healthcare by helping medical professionals make targeted treatment decisions earlier.Off‑‑Balance Sheet Risk and Concentrations of Credit RiskThe Company has no significant off-balance sheet risks, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.Cash and cash equivalents are financial instruments that potentially subject the Company to concentrations of credit risk. At December 31, 2017 and 2016,substantially all of the Company’s cash was deposited in accounts at one financial institution, with a significant amount invested in money market funds thatare invested in short-term U.S. government agency securities. The Company maintains its cash deposits, which at times may exceed the federally insuredlimits, with a large financial institution and, accordingly, the Company believes such funds are subject to minimal credit risk.For the year ended December 31, 2017, the Company derived approximately 19% of its total revenue from one customer and 10% of its total revenuefrom a second customer. For the year ended December 31, 2016, the Company derived approximately 45% of its total revenue from one customer and 10% ofits total revenue from a second customer. For the year ended December 31, 2015, the Company derived approximately 50% of its total revenue from onecustomer and 25% of its total revenue from a second customer. Cash EquivalentsCash equivalents include all highly liquid investments maturing within 90 days from the date of purchase. Cash equivalents consist of money marketfunds invested in short-term U.S. government agency securities as of December 31, 2017 and 2016.80Accounts ReceivableThe Company’s accounts receivable consists of amounts due from commercial customers and from research and development arrangements withpartners. At each reporting period, management reviews all outstanding balances to determine if the facts and circumstances of each customer relationshipindicate the need for a reserve. The Company does not require collateral and did not have an allowance for doubtful accounts at December 31, 2017 or 2016.InventoriesInventories are stated at the lower of cost or net realizable value. The Company determines the cost of its inventories, which includes amounts relatedto materials, direct labor, and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalizedinventory during each reporting period, and writes down any excess and obsolete inventories to their realizable value in the period in which the impairmentis first identified. Shipping and handling costs incurred for inventory purchases are capitalized and recorded upon sale in cost of product revenues in theconsolidated statements of operations and comprehensive loss or are included in the value of T2-owned instruments and components, a component ofproperty and equipment, net, and depreciated.The Company capitalizes inventories in preparation for sales of products when the related product candidates are considered to have a high likelihoodof regulatory clearance, which for the T2Dx Instrument and T2Candida Panel was upon the achievement of regulatory clearance, and the related costs areexpected to be recoverable through sales of the inventories. In addition, the Company capitalizes inventories related to the manufacture of instruments thathave a high likelihood of regulatory clearance, which for the T2Dx Instrument was upon the achievement of regulatory clearance, and will be retained as theCompany’s assets, upon determination that the instrument has alternative future uses. In determining whether or not to capitalize such inventories, theCompany evaluates, among other factors, information regarding the product candidate’s status of regulatory submissions and communications withregulatory authorities, the outlook for commercial sales and alternative future uses of the product candidate. Costs associated with development productsprior to satisfying the inventory capitalization criteria are charged to research and development expense as incurred.The Company classifies instruments that are Company-owned, as a component of property and equipment. Raw material and work-in-processinventories that are expected to be used to produce Company-owned instruments, based on our business model and forecast, are also classified as propertyand equipment. Company-owned instruments are instruments that are manufactured and placed with customers in connection with reagent rental agreements,or are used for internal purposes.The components of inventory consist of the following (in thousands): December 31, December 31, 2017 2016 Raw materials $539 $389 Work-in-process 562 351 Finished goods 243 63 Total inventories, net $1,344 $803 Fair Value MeasurementsThe Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used indetermining the reported fair values. ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes a hierarchy of inputs used in measuringfair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used whenavailable.Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sourcesindependent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use inpricing the asset or liability, and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to thevaluation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy definesthree levels of valuation inputs:Level 1 — Quoted unadjusted prices for identical instruments in active markets.Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are notactive, and model‑derived valuations in which all observable inputs and significant value drivers are observable in active markets.Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable, includingassumptions developed by the Company.The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. Assets and liabilities measured at fair value areclassified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment81of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific tothe asset or liability (Note 3).For certain financial instruments, including accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses,the carrying amounts approximate their fair values as of December 31, 2017 and 2016 because of their short-term nature. At December 31, 2017 and 2016, thecarrying value of the Company’s debt approximated fair value, which was determined using Level 3 inputs, using market quotes from brokers and is based oncurrent rates offered for similar debt (Note 6).Property and EquipmentProperty and equipment are recorded at cost and depreciated over their estimated useful lives using the straight‑line method. Property and equipmentincludes raw materials, work-in-process and finished instruments that are Company-owned or expected to remain Company-owned when placed in service.Company-owned instruments are instruments that are manufactured and placed with customers in connection with reagent rental agreements, or are used forinternal purposes. Repairs and maintenance costs are expensed as incurred, whereas major improvements are capitalized as additions to property andequipment.Revenue RecognitionThe Company generates revenue from product sales, which includes the sale of instruments, consumable diagnostic tests and related services, andresearch and development agreements with third parties. The Company recognizes revenue in accordance with FASB ASC Topic 605, Revenue Recognition(“ASC 605”). Accordingly, the Company recognizes revenue when all of the following criteria have been met:i. Persuasive evidence of an arrangement existsii. Delivery has occurred or services have been renderediii. The seller’s price to the buyer is fixed or determinableiv. Collectability is reasonably assuredIf any of the above criteria have not been met, the Company defers revenue until such time each of the criteria have been satisfied.Product revenue is generated by the sale of instruments and consumable diagnostic tests predominantly through its direct sales force in the UnitedStates, and distributors in geographic regions outside the United States. The Company does not offer product return or exchange rights (other than thoserelating to defective goods under warranty) or price protection allowances to its customers, including its distributors. Payment terms granted to distributorsare the same as those granted to end-user customers and payments are not dependent upon the distributors’ receipt of payment from their end-user customers.The Company either sells instruments to customers and international distributors, or retains title and places the instrument at the customer site pursuant to areagent rental agreement. When the instrument is directly purchased by a customer, the Company recognizes revenue when all applicable revenuerecognition criteria are met. When the instrument is placed under a reagent rental agreement, the Company’s customers generally agree to fixed termagreements, which can be extended, certain of which may include minimum purchase commitments and/or incremental charges on each consumablediagnostic test purchased, which varies based on the volume of test cartridges purchased. Revenue from the sale of consumable diagnostic tests, whichincludes the incremental charge, is recognized upon delivery as a component of product revenue in the Company’s consolidated statements of operations andcomprehensive loss.Direct sales of instruments to U.S. customers include warranty, maintenance and technical support services for one year following the installation ofthe purchased instrument (“Maintenance Services”). After the completion of the initial Maintenance Services period, customers have the option to renew theMaintenance Services for additional one year periods in exchange for additional consideration. In addition, the Company may provide training to customers.The Company defers revenue from the initial sale of the instrument equal to the contract value of the one year of Maintenance Services and recognizes theamounts ratably over the service delivery period.The Company warrants that consumable diagnostic tests will be free from defects, when handled according to product specifications, for the stated lifeof the product. To fulfill valid warranty claims, the Company provides replacement product free of charge. Accordingly, the Company accrues warrantyexpense associated with the estimated defect rates of the consumable diagnostic tests.The Company does not offer rights of return for instruments or consumable diagnostic tests.Shipping and handling costs incurred associated with products sold to customers are recorded as a cost of product revenue in the consolidatedstatement of operations and comprehensive loss. Shipping and handling costs billed to customers in connection with a product sale are recorded as acomponent of product revenue in the consolidated statements of operations and comprehensive loss.For multiple-element arrangements, the Company identifies the deliverables included within each agreement and evaluates which deliverablesrepresent separate units of accounting. The determination that multiple elements in an arrangement meet the criteria for separate units of accounting requiresthe Company’s management to exercise judgment. The Company accounts for those components as separate elements82when the following criteria are met: (1) the delivered items have value to the customer on a stand-alone basis; and, (2) if there is a general right of returnrelative to the delivered items, delivery or performance of the undelivered items is considered probable and within its control.The consideration received is allocated among the separate units of accounting based on a selling price hierarchy. The selling price hierarchy is basedon: (1) vendor specific objective evidence (“VSOE”), if available; (2) third party evidence of selling price if VSOE is not available; or (3) best estimatedselling price (“BESP”) if neither VSOE nor third party evidence is available. The Company generally expects that it will not be able to establish selling priceusing third-party evidence due to the nature of our products and the markets in which the Company competes, and, as such, the Company typically willdetermine selling price using VSOE or BESP. When the Company establishes selling price using BESP, consideration is given to both market and Company-specific factors, including the cost toproduce the deliverable and the anticipated margin on that deliverable, as well as the characteristics of markets in which the deliverable is sold.Revenue earned from activities performed pursuant to research and development agreements is reported as research revenue in the consolidatedstatements of operations and comprehensive loss, using the proportional performance method as the work is completed, limited to payments earned, and therelated costs are expensed as incurred as research and development expense. The timing of receipt of cash from the Company’s research and developmentagreements generally differs from when revenue is recognized.Product RecallIn July 2016, the Company initiated a voluntary recall and replacement of its T2Candida cartridges at certain customer sites because T2Candida wasexperiencing higher than normal invalid test rates as the T2Candida cartridges aged. As of June 30, 2016, as a result of this voluntary recall, the Companydeferred revenue totaling $149,000 and recorded additional costs of product revenue of $41,000 related to returned products, which are no longer usable. Asof December 31, 2017 there were no balances remaining related to this voluntary recall. As of December 31, 2016, the Company had approximately $37,000of deferred revenue and $3,000 of warranty reserve remaining, both related to this voluntary recall. The impact of the voluntary recall on T2Candidacartridges in inventory was not material to the consolidated financial statements.Cost of Product RevenueCost of product revenue includes the cost of materials, direct labor and manufacturing overhead costs used in the manufacture of consumablediagnostic tests sold to customers and related license and royalty fees. Cost of product revenue also includes depreciation on revenue generating T2Dx thathave been placed with customers under reagent rental agreements; costs of materials, direct labor and manufacturing overhead costs on the T2Dx sold tocustomers; and other costs such as customer support costs, royalties and license fees, warranty and repair and maintenance expense on the T2Dx that havebeen placed with customers under reagent rental agreements.Research and Development CostsCosts incurred in the research and development of the Company’s product candidates are expensed as incurred. Research and development expensesconsist of costs incurred in performing research and development activities, including activities associated with performing services under research revenuearrangements, costs associated with the manufacture of developed products and include salaries and benefits, stock compensation, research‑related facilityand overhead costs, laboratory supplies, equipment and contract services.Impairment of Long Lived AssetsThe Company reviews long‑lived assets, including capitalized T2 owned instruments and components, for impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not be recoverable. If indications of impairment exist, projected future undiscounted cashflows associated with the asset or asset group are compared to the carrying amount to determine whether the asset’s value is recoverable. During this review,the Company reevaluates the significant assumptions used in determining the original cost and estimated lives of long‑lived assets. Although theassumptions may vary from asset to asset, they generally include operating results, changes in the use of the asset, cash flows and other indicators of value.Management then determines whether the remaining useful life continues to be appropriate or whether there has been an impairment of long‑lived assetsbased primarily upon whether expected future undiscounted cash flows are sufficient to support the assets’ recovery. If impairment exists, the Companywould adjust the carrying value of the asset to fair value, generally determined by a discounted cash flow analysis. If the carrying value of the asset exceedssuch projected undiscounted cash flows, the asset will be written down to its estimated fair value.Comprehensive LossComprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstancesfrom non‑owner sources. Comprehensive loss consists of net loss and other comprehensive loss, which includes certain changes in equity that are excludedfrom net loss. The Company’s comprehensive loss equals reported net loss for all periods presented.83Stock-Based CompensationThe Company has a stock‑based compensation plan which is more fully described in Note 8. The Company records stock‑based compensation foroptions granted to employees and to members of the board of directors for their services on the board of directors, based on the grant date fair value of awardsissued, and the expense is recorded on a straight‑line basis over the applicable service period, which is generally four years. The Company accounts fornon‑employee stock‑based compensation arrangements based upon the fair value of the consideration received or the equity instruments issued, whichever ismore reliably measurable. The measurement date for non‑employee awards is generally the date that the performance of services required for thenon‑employee award is complete. Stock‑based compensation costs for non‑employee awards is recognized as services are provided, which is generally thevesting period, on a straight‑line basis.The Company records the expense for stock option grants that vest upon achievement of performance-based milestones using the acceleratedattribution method over the remaining service period when management determines that achievement of the milestone is probable. Management evaluateswhen the achievement of a performance-based milestone is probable based on the relative satisfaction of the performance conditions as of the reporting date.The Company expenses restricted stock awards based on the fair value of the award on the date of issuance, on a straight‑line basis over the associatedservice period of the award.The Company uses the Black‑Scholes‑Merton option pricing model to determine the fair value of stock options. The use of the Black‑Scholes‑Mertonoption‑pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stockconsistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. The expected term was determinedaccording to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historicaland implied volatility data resulting from our limited public market trading history, we have based our estimate of expected volatility primarily on thehistorical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected,including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the stock‑basedawards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period ofthe calculated expected term of its stock‑based awards. The risk‑free interest rate is determined by reference to U.S. Treasury zero‑coupon issues withremaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares ofcommon stock; therefore, the expected dividend yield is assumed to be zero. The Company has elected an accounting policy to estimate forfeitures at thetime of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates.Income TaxesThe Company provides for income taxes using the liability method. The Company provides deferred tax assets and liabilities for the expected futuretax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax basis of assets and liabilities usingenacted tax rates expected to be in effect in the years in which the differences are expected to reverse. A valuation allowance is provided to reduce thedeferred tax assets to the amount that will more likely than not be realized.The Company applies ASC 740 Income Taxes (“ASC 740”) in accounting for uncertainty in income taxes. The Company does not have any materialuncertain tax positions for which reserves would be required. The Company will recognize interest and penalties related to uncertain tax positions, if any, inincome tax expense.The Tax Cuts and Jobs Act (“the Act”) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%,requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes oncertain foreign sourced earnings. On December 22, 2017, the Securities and Exchange Commission issued guidance under Staff Accounting Bulletin No.118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing taxpayers to consider the impact of the U.S. legislation as“provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete itsaccounting for the change in tax law.GuaranteesAs permitted under Delaware law, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is, orwas, serving at the Company’s request in such capacity. The term of the indemnification is for the officer’s or director’s lifetime. The maximum potentialamount of future payments the Company could be required to make is unlimited; however, the Company has directors’ and officers’ insurance coverage thatlimits its exposure and enables it to recover a portion of any future amounts paid.The Company leases office, laboratory and manufacturing space under noncancelable operating leases. The Company has standard indemnificationarrangements under the leases that require it to indemnify the landlord against all costs, expenses, fines, suits, claims, demands, liabilities, and actionsdirectly resulting from any breach, violation or nonperformance of any covenant or condition of the Company’s leases.84In the ordinary course of business, the Company enters into indemnification agreements with certain suppliers and business partners where theCompany has certain indemnification obligations limited to the costs, expenses, fines, suits, claims, demands, liabilities and actions directly resulting fromthe Company’s gross negligence or willful misconduct, and in certain instances, breaches, violations or nonperformance of covenants or conditions under theagreements.As of December 31, 2017 and 2016, the Company had not experienced any material losses related to these indemnification obligations, and nomaterial claims with respect thereto were outstanding. The Company does not expect significant claims related to these indemnification obligations and,consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established.Net Loss Per ShareBasic net loss per share is calculated by dividing net loss applicable to common stockholders by the weighted‑average number of shares outstandingduring the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted‑average number ofshares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury‑stock method. For purposesof the diluted net loss per share calculation warrants to purchase common stock, stock options and unvested restricted stock are considered to be commonstock equivalents, but have been excluded from the calculation of diluted net loss per share, as their effect would be anti‑dilutive for all periods presented.Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented.Recent Accounting StandardsFrom time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of thespecified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not havea material impact on its financial position or results of operations upon adoption.Accounting Standards AdoptedIn July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). The standardsimplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value for entities using thefirst-in-first out method of valuing inventory. ASU 2015-11 eliminates other measures required by current guidance to determine net realizable value. ASU2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years and early adoption is permitted. TheCompany’s adoption of this standard did not have a material effect on its consolidated financial statements.85In March 2016, the FASB released ASU No. 2016-09 Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) which isintended to simplify income tax accounting for excess tax benefits, accounting for forfeitures, and employer statutory withholding. Under the currentguidance, excess tax benefits that result from an award vesting or settling are recognized in additional paid-in capital in the period that they reduce cashtaxes payable. This requires the provision to be computed on a with and without option basis and may result in net operating loss and credit carryforwards onthe balance sheet being less than what is available on the tax return. Under the new guidance, the income tax effects of awards will be recognized as acomponent of income tax expense when the awards vest or are settled (regardless if cash taxes are reduced). For interim reporting purposes, companies willaccount for excess tax benefits and tax deficiencies as discrete items in the period during which they occurred. The guidance is effective for public entities forfiscal years beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted, however all of the guidance included inthe update must be applied when adopted. The Company must use a modified retrospective transition method for adopting and record the cumulative effectof all unrecognized benefits and any change in valuation allowances at the end of the prior tax period as an adjustment to retained earnings. The Company’sadoption of this standard did not have a material effect on its consolidated financial statements and prior periods have not been adjusted. As a result, theCompany established a net operating loss deferred tax asset of $1.2 million to account for prior period excess tax benefits through retained earnings, howeveran offsetting valuation allowance of $1.2 million will also be established through retained earnings because it is not more likely than not that the deferred taxasset will be realized due to historical and expected future losses, such that there is no impact on the Company’s consolidated financial statements. TheCompany also elected to maintain the use of estimated forfeitures in the calculation of stock based compensation.In March 2016, the FASB issued ASU No. 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (“ASU2016-06”), which applies to all issuers of or investors in debt instruments with embedded call or put options. ASU 2016-06 clarifies the requirements forassessing whether contingent call or put options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debthosts. Entities performing the assessment under the guidance of ASU 2016-06 are required to assess the embedded call or put options solely in accordancewith the four-step decision process. In addition, ASU 2016-06 clarifies what steps are required when assessing whether the economic characteristics and risksof call or put options are clearly and closely related to the economic characteristics and risks of their debt hosts. ASU 2016-06 is effective for financialstatements issued for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years using the modified retrospective method forexisting debt instruments. The Company’s adoption of this standard did not have a material effect on its consolidated financial statements.Accounting Standards Issued, Not AdoptedIn August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments(“ASC 2016-15”), which provides guidance on the classification of certain specific cash flow issues including debt prepayment or extinguishment costs,settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certaininsurance claims and distributions received from equity method investees. The standard requires the use of a retrospective approach to all periods presented,but may be applied prospectively if retrospective application would be impracticable. The guidance is effective for public entities for fiscal years beginningafter December 15, 2017, and interim periods within those years, and early application is permitted. The Company is currently evaluating the impact of itspending adoption of ASU 2016-15 on the Company’s consolidated financial statements.In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which applies to all leases. Under ASU 2016-02, a right-of-use assetand lease obligation will be recorded for all leases, whether operating or financing leases, while the statement of operations will reflect lease expense foroperating leases and amortization and interest expense for financing leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 andinterim periods within those years, which is the year ended December 31, 2019 for the Company. Entities are required to use a modified retrospectiveapproach of adoption for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Fullretrospective application is prohibited. The Company is evaluating the new guidance and the expected effect on the Company’s consolidated financialstatements. In June 2014, the FASB issued amended guidance, ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which is applicableto revenue recognition that will be effective for the Company for the year ending December 31, 2018, as a result of the deferral of the effective date adoptedby the FASB in July 2015. The new guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospectiveapproach. Early adoption prior to the original adoption date (annual reporting periods beginning after December 15, 2016) of ASU 2014-09 is not permitted.The new guidance applies a more principles-based approach to revenue recognition. The Company will adopt the new standard, effective January 1, 2018,under the modified retrospective method. The Company established an implementation team to assess the potential impacts of the new standard and prepare for adoption. The implementationteam has reviewed current accounting policies and practices and identified potential differences resulting from the application of the new standard. Findingsand progress of the project have been regularly communicated to the Audit Committee and senior management. The qualitative assessment of the standard provided below are estimates of the expected effects of the adoption of ASC 606. Thisrepresents our best estimate of the effects of adopting ASC 606 at the time of the preparation of this Annual Report on Form 10-K. The actualimpact of ASC 606 is subject to change from these estimates and such change may be significant, pending the completion of our assessment inthe first quarter of 2018.86 The implementation team is in the process of completing an analysis of our revenue generating arrangements, including direct sales of instruments andconsumables, sales of instruments and consumables to distributors, reagent rental agreements and research agreements. A detailed policy for each revenuestream has been drafted. The Company is in the process of implementing appropriate changes to controls, processes, and systems to support recognition anddisclosure under the new standard. In addition, the Company continues to monitor changes, modifications, clarifications or interpretations, which may impactthe results of adoption, undertaken by the FASB. The impact of adopting the new standard is not expected to be material to 2017 and 2016 revenue. The most significant impacts of the new standard,upon adoption, are expected to be around the timing of revenue recognition. Specifically, under the new standard: •Consideration allocated to the instrument in a direct sale will be recognized upon shipment and consideration allocated to installation will berecognized upon installation. Currently, revenue recognition for both obligations occurs upon installation. •Revenue recognition on sales to distributors may be accelerated based on management’s judgement regarding use of the sell-in or sell-throughmethod. Currently, the Company recognizes revenue with new distributors based on the sell-through method, which requires deferral of revenueuntil product is sold to an end customer.The Company does not expect the adoption of the new standard to a have material impact on our consolidated balance sheet. The Company doesexpect significant changes to its financial statement disclosures. 3. Fair Value MeasurementsThe Company measures the following financial assets at fair value on a recurring basis. There were no transfers between levels of the fair valuehierarchy during any of the periods presented. The following tables set forth the Company’s financial assets and liabilities carried at fair value categorizedusing the lowest level of input applicable to each financial instrument as of December 31, 2017 and 2016 (in thousands): Quoted Prices in Active Significant Markets for Other Significant Balance at Identical Observable Unobservable December 31, Assets Inputs Inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Cash $3,463 $3,463 $— $— Money market funds 38,336 38,336 — — Restricted cash 260 260 — — $42,059 $42,059 $— $— Liabilities: Derivative liability $2,238 $— $— $2,238 $2,238 $— $— $2,238 Quoted Prices in Active Significant Markets for Other Significant Balance at Identical Observable Unobservable December 31, Assets Inputs Inputs 2016 (Level 1) (Level 2) (Level 3) Assets: Cash $16,887 $16,887 $— $— Money market funds 56,601 56,601 — — Restricted cash 260 260 — — $73,748 $73,748 $— $— The Company’s Term Loan Agreement with CRG (Note 6) contains certain provisions that change the underlying cash flows of the instrument,including an interest-only period dependent on the achievement of the Approval Milestone by April 30, 2018, and acceleration of the obligations under theLoan Agreement under an event of default. In addition, under certain circumstances, a default interest rate of an additional 4.0% per annum will apply at theelection of CRG on all outstanding obligations during the occurrence and continuance of an event of default. The Company concluded that these features arenot clearly and closely related to the host instrument, and represent a single compound derivative and is required to be re-measured at fair value on aquarterly basis.87During the fourth quarter of 2017, the Company received communication from the FDA that suggested the approval timeline of T2Bacteria could belonger than the Company initially anticipated. The delay resulted in an increase in the probability of not achieving the Approval Milestone by April 30,2018, as well an increase in the probability of the payment of contingent interest in future periods, based on the contractual payments that exist as ofDecember 31, 2017. As such, in the fourth quarter, the Company recorded a derivative liability related to the Company’s debt agreement with CRG of $2.2million. The estimated fair value of the derivative liability was determined using a probability-weighted discounted cash flow model that includes principaland interest payments under the following scenarios: FDA approval by April 30, 2017 (40%), FDA approval after April 30, 2017 (20%) and no FDA approval(40%). Should the Company’s assessment of these probabilities change, including amendments of certain revenue targets, there could be a change to the fairvalue of the derivative liability. The following table provides a roll-forward of the fair value of the derivative liability (in thousands): Balance at December 31, 2016 $— Change in fair value of derivative liability, recorded as interest expense 2,238 Balance at December 31, 2017 $2,238 4. Restricted CashThe Company is required to maintain a security deposit for its operating lease agreement for the duration of the lease agreement and for its credit cardsas long as they are in place. At both December 31, 2017 and 2016, the Company had certificates of deposit for $260,000, which represented collateral assecurity deposits for its operating lease agreement for its facility and its credit card.5. Supplemental Balance Sheet InformationProperty and EquipmentProperty and equipment consists of the following (in thousands) Estimated Useful December 31, December 31, Life (Years) 2017 2016 Office and computer equipment 3 $409 $409 Software 3 743 708 Laboratory equipment 5 4,224 4,516 Furniture 5-7 200 200 Manufacturing equipment 5 910 897 Manufacturing tooling and molds 0.5 255 154 T2-owned instruments and components 5 7,370 9,119 Leasehold improvements Lesser of useful lifeor lease term 3,437 3,353 Construction in progress n/a 1,591 1,299 19,139 20,655 Less accumulated depreciation and amortization (9,124) (7,066)Property and equipment, net $10,015 $13,589 Construction in progress is primarily comprised of equipment and leasehold improvement construction projects that have not been placed in service.T2-owned instruments and components is comprised of raw materials and work-in-process inventory that are expected to be used or used to produceCompany-owned instruments, based on our business model and forecast, and completed instruments that will be used for internal research and developmentor reagent rental agreements with customers. Completed T2-owned instruments are placed in service once installation procedures are completed and aredepreciated over five years. Depreciation expense for T2-owned instruments placed at customer sites pursuant to reagent rental agreements is recorded as acomponent of cost of product revenue and totaled $1.0 million and $0.6 million for the years ended December 31, 2017 and December 31, 2016,respectively. Depreciation expense for T2-owned instruments used for internal research and development is recorded as a component of research anddevelopment expense.Depreciation and amortization expense of $2.9 million, $2.3 million and $1.5 million was charged to operations for the years ended December 31,2017, 2016 and 2015, respectively.During the fourth quarter of 2017, the Company received communication from the FDA that suggested the approval timeline would be longer than thecompany initially anticipated. The Company assessed the recoverability of T2-owned instruments based on delayed T2Bacteria cash flows and recorded animpairment charge of $2.6 million, related to T2-owned instruments and components, which is recorded in the cost of product revenue in the ConsolidatedStatements of Operations and Comprehensive Loss. The fair value used in the impairment calculation was based on the best estimated selling price of theunderlying T2-owned instruments, less the estimated cost to sell the instruments. 88Accrued ExpensesAccrued expenses consist of the following (in thousands): December 31, December 31, 2017 2016 Accrued payroll and compensation $2,793 $2,479 Accrued research and development expenses 818 846 Accrued professional services 1,018 884 Other accrued expenses 1,589 699 Total accrued expenses $6,218 $4,908 The Company classified $0.6 million, related to a fee associated with the Company’s Term Loan Agreement (Note 6), from other liabilities to accruedexpenses and other current liabilities, as of December 31, 2017, to match the classification of the associated debt.6. Notes PayableFuture principal payments on the notes payable as of December 31, 2017 are as follows (in thousands): Year ended December 31, 2018 $47,483 2019 1,015 2020 - 2021 - 2022 - Total before unamortized discount and issuance costs 48,498 Less: paid-in-kind interest (4,347)Less: unamortized discount and issuance costs (2,448)Total notes payable $41,703 The Term Loan Agreement with CRG is classified as a current liability on the balance sheet at December 31, 2017, based on the Company’sconsideration of the probability of violating a minimum liquidity covenant included in the Term Loan Agreement. The contractual terms of the agreementrequire payments of $5.8 million, $23.0 million and $17.2 million during the years ended December 31, 2020, 2021 and 2022, respectively.Term Loan AgreementIn December 2016, the Company entered into a Term Loan Agreement (the “Term Loan Agreement”) with CRG. The Company initially borrowed$40.0 million pursuant to the Term Loan Agreement and may borrow up to an additional $10.0 million at any time through and including July 27, 2018,provided that, among other conditions, the Company receives 510(k) clearance for the marketing of T2BacteriaTM by the U.S. Food and DrugAdministration (“FDA”) on or before April 30, 2018 (the “Approval Milestone”). The Term Loan Agreement has a six-year term with three years (throughDecember 30, 2019) of interest-only payments, which period shall be extended to four years (through December 30, 2020) if the Company achieves theApproval Milestone, after which quarterly principal and interest payments will be due through the December 30, 2022 maturity date. Interest on the amountsborrowed under the Term Loan Agreement accrues at an annual fixed rate of (a) prior to the Approval Milestone, 12.50%, 4.0% of which may be deferredduring the interest-only period by adding such amount to the aggregate principal loan amount and (b) following the Approval Milestone, 11.50%, 3.5% ofwhich may be deferred during the interest-only period by adding such amount to the aggregate principal loan amount. In addition, if the Company achievescertain financial performance metrics, the loan will convert to interest-only until the December 30, 2022 maturity, at which time all unpaid principal andaccrued unpaid interest will be due and payable. The Company is required to pay CRG a financing fee based on the loan principal amount drawn. TheCompany is also required to pay a final payment fee of 8% of the principal outstanding upon repayment. In March 2018 the Term Loan Agreement wasamended to extend the Approval Milestone to June 30, 2018, the additional $10.0 million funding through September 27, 2018 and reduce the fiscal year2018 revenue target to $7.0 million.The Company may prepay all or a portion of the outstanding principal and accrued unpaid interest under the Term Loan Agreement at any time uponprior notice subject to a certain prepayment fee during the first five years of the term and no prepayment fee thereafter. As security for its obligations underthe Term Loan Agreement the Company entered into a security agreement with CRG whereby the Company granted a lien on substantially all of its assets,including intellectual property. The Loan Agreement also contains customary affirmative and negative covenants for a credit facility of this size and type,including a requirement to maintain a minimum cash balance. The Loan Agreement also requires the Company to achieve certain revenue targets, wherebythe Company is required to pay double the amount of any shortfall as an acceleration of principal payments. The revenue target for fiscal year 2018 is $7.0million. The Loan Agreement includes a subjective acceleration clause whereby an event of default, including a material adverse change in the business,operations, or conditions (financial or otherwise), could result in the acceleration of the obligations under the Loan Agreement. Under certain circumstances,a default interest rate of an additional 4.00% per annum will apply at the election of CRG on all outstanding obligations during the occurrence andcontinuance of an event of default. CRG has89not exercised its right under this clause, as there have been no such events. On December 18, 2017, the Term Loan Agreement was amended and the 2017minimum revenue target was reduced to $3.0 million from $5.0 million.The Company assessed the terms and features of the Term Loan Agreement, including the interest-only period dependent on the achievement of theApproval Milestone by April 30, 2018, and acceleration of the obligations under the Loan Agreement under an event of default, of the Term Loan Agreementin order to identify any potential embedded features that would require bifurcation. In addition, under certain circumstances, a default interest rate of anadditional 4.0% per annum will apply at the election of CRG on all outstanding obligations during the occurrence and continuance of an event of default.The Company concluded that these features are not clearly and closely related to the host instrument, and represent a single compound derivative and isrequired to be re-measured at fair value on a quarterly basis.During the fourth quarter of 2017, the Company received communication from the FDA that suggested the approval timeline of T2Bacteria would belonger than the Company initially anticipated. The delay resulted in an increase in the probability of not achieving the Approval Milestone by April 30,2018, as well an increase in the probability of the payment of contingent interest in future periods, based on the contractual payments requirements that existas of December 31, 2017. As such, in the fourth quarter, the Company recorded a derivative liability related to the Company’s debt agreement with CRG of$2.2 million (Note 3). In December 2016, pursuant to the Term Loan Agreement, the Company made an initial draw of $39.2 million, net of financing fees. The Companyused approximately $28.0 million of the initial proceeds to repay approximately $27.5 million of outstanding debt pursuant to the Loan and SecurityAgreement and to repay approximately $0.5 million of outstanding debt pursuant to the Promissory Note. Upon the repayment of all amounts owed by theCompany under these agreements, all commitments were terminated and all security interests granted by the Company were released.In connection with the Term Loan Agreement entered into in December 2016, the Company issued to CRG four separate warrants to purchase a total of528,958 shares of the Company’s common stock. The warrants are exercisable any time prior to December 30, 2026 at a price of $8.06 per share, with typicalprovisions for termination upon a change of control or a sale of all or substantially all of the assets of the Company. The warrants are classified withinstockholders’ equity, and the proceeds were allocated between the debt and warrants based on their relative fair value. The fair value of the warrants wasdetermined by the Black Scholes Merton option pricing model. The fair value of the warrants at December 30, 2016 was $1.8 million.Equipment Lease Credit FacilityIn October 2015, the Company signed the $10.0 million Credit Facility (the “Credit Facility”) with Essex Capital Corporation (“Essex”) to fundcapital equipment needs. As one of the conditions of the Term Loan Agreement, the Credit Facility is capped at a maximum of $5.0 million. Under the CreditFacility, Essex will fund capital equipment purchases presented by the Company. The Company will repay the amounts borrowed in 36 equal monthlyinstallments from the date of the amount funded. At the end of the 36 month lease term, the Company has the option to (a) repurchase the leased equipment atthe lesser of fair market value or 10% of the original equipment value, (b) extend the applicable lease for a specified period of time, which will not be lessthan one year, or (c) return the leased equipment to the Lessor.In April 2016 and June 2016, the Company completed the first two draws under the Credit Facility of $2.1 million and $2.5 million, respectively. TheCompany will make monthly payments of $67,000 under the first draw and $79,000 under the second draw. The borrowings under the Credit Facility aretreated as capital leases. The amortization of the assets conveyed under the Credit Facility is included as a component of depreciation expense. 7. Stockholders’ EquityCommon StockEach share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legallyavailable and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. As of December 31, 2017, atotal of 3,785,083 shares and 1,207,825 shares of common stock were reserved for issuance upon (i) the exercise of outstanding stock options and (ii) theissuance of stock awards under the Company’s 2014 Incentive Award Plan and 2014 Employee Stock Purchase Plan, respectively.Private Investment in Public Equity FinancingOn September 21, 2016, Canon U.S.A., Inc. (“Canon”) became a related party when the Company sold 6,055,341 shares of its common stock (the“Canon Shares”) to Canon at $6.56 per share, the closing price on this date, for an aggregate cash purchase price of $39.7 million. As of September 21, 2016,the Canon Shares represented 19.9% of the outstanding shares of common stock of the Company. In connection with the director to the Company’s board ofdirectors. On March 20, 2017, the Company filed with the SEC a registration statement on Form S-3 for purposes of registering the resale of the CanonShares.90Confidentially Marketed Public OfferingOn September 15, 2017, the Company sold 5,031,250 shares of its common stock in a CMPO at $4.00 per share, for an aggregate gross cash purchaseprice of $20.1 million, or proceeds of $18.8 million after underwriters discount and expenses 8. Stock-Based CompensationStock Incentive Plans2006 Stock Incentive PlanThe Company’s 2006 Stock Option Plan (the “2006 Plan”) was established for granting stock incentive awards to directors, officers, employees andconsultants to the Company. Upon closing of the Company’s Initial Public Offering (“IPO”) in August 2014, the Company ceased granting stock incentiveawards under the 2006 Plan. The 2006 Plan provided for the grant of incentive and non-qualified stock options and restricted stock grants as determined bythe Board of Directors. Under the 2006 Plan, stock options were generally granted with exercise prices equal to or greater than the fair value of the commonstock as determined by the board of directors, expired no later than 10 years from the date of grant, and vest over various periods not exceeding 4 years.2014 Stock Incentive PlanThe Company’s 2014 Plan (the “2014 Plan” and, together with the 2006 Plan, the “Stock Incentive Plans”) provides for the issuance of shares ofcommon stock in the form of stock options, awards of restricted stock, awards of restricted stock unit awards, performance awards, dividend equivalentawards, stock payment awards and stock appreciation rights to directors, officers, employees and consultants of the Company. Since the establishment of the2014 Plan, the Company has only granted stock options and restricted stock units. Generally, stock options are granted with exercise prices equal to orgreater than the fair value of the common stock on the date of grant, expire no later than 10 years from the date of grant, and vest over various periods notexceeding 4 years.The number of shares reserved for future issuance under the 2014 Plan is the sum of (1) 823,529, (2) any shares that were granted under the 2006 Planwhich are forfeited, lapse unexercised or are settled in cash subsequent to the effective date of the 2014 Plan and (3) an annual increase on the first day ofeach calendar year beginning January 1, 2015 and ending on January 1, 2024, equal to the lesser of (A) 4% of the shares outstanding on the final day of theimmediately preceding calendar year and (B) such smaller number of shares determined by the Board of Directors. As of December 31, 2017 there were1,026,422 shares available for future grant under the Plan.Stock OptionsDuring the years ended December 31, 2017, 2016, and 2015, the Company granted options with an aggregate fair value of $2.7 million and $7.0million, and $10.1 million, respectively, which are being amortized into compensation expense over the vesting period of the options as the services arebeing provided.The following is a summary of option activity under the Plan (in thousands, except share and per share amounts): Weighted-Average Weighted-Average Remaining Number of Exercise Price Per Contractual Term Aggregate Intrinsic Shares Share (In years) Value Outstanding at December 31, 2016 4,042,627 $8.20 7.05 $4,091 Granted 903,200 5.07 Exercised (223,352) 2.36 553 Forfeited (587,040) 9.12 Canceled (350,352) 11.96 Outstanding at December 31, 2017 3,785,083 7.31 6.88 1,989 Exercisable at December 31, 2017 2,327,392 7.19 5.75 1,923 Vested or expected to vest at December 31, 2017 3,598,126 7.35 6.77 1,977 Included in the stock options outstanding at December 31, 2016 are 146,066 options to purchase common stock granted to certain executive officersof the Company that vest upon the achievement of certain performance conditions, which include the attainment of specified operating result and regulatorytargets, by December 31, 2017. Included in the stock options forfeited during the year ended December 31, 2017 are 40,000 options to purchase commonstock upon the achievement of certain performance conditions. There are 106,066 performance based options included in the outstanding balance atDecember 31, 2017. The operating results and regulatory target were not achieved by December 31, 2017, so no expense was recorded.91The weighted‑average fair values of options granted in the years ended December 31, 2017, 2016, and 2015 were $2.95, $4.68, and $8.42 per share,respectively, and were calculated using the following estimated assumptions: Year ended December 31, 2017 2016 2015 Weighted-average risk-free interest rate 1.99% 1.42% 1.69%Expected dividend yield 0.00% 0.00% 0.00%Expected volatility 60% 61% 56%Expected terms 6.0 years 6.0 years 6.0 years The total fair values of stock options that vested during the years ended December 31, 2017, 2016, and 2015 were $3.5 million, $4.9 million, and $4.0million, respectively.As of December 31, 2017, there was $5.3 million of total unrecognized compensation cost related to non‑vested stock options granted under the StockIncentive Plans. Total unrecognized compensation cost will be adjusted for future changes in the estimated forfeiture rate. The Company expects to recognizethat cost over a remaining weighted‑average period of 2.3 years as of December 31, 2017.Restricted Stock UnitsDuring the year ended December 31, 2017 the Company awarded shares of restricted stock units to certain employees at no cost to them, which cannotbe sold, assigned, transferred or pledged during the restriction period. The restricted stock and restricted stock units vest through the passage of time,assuming continued employment. Restricted stock units are not included in issued and outstanding common stock until the shares are vested and released.The fair value of the award at the time of the grant is expensed on a straight line basis. The granted restricted stock units had an aggregate fair value of $2.9million, which are being amortized into compensation expense over the vesting period of the options as the services are being provided.The following is a summary of restricted stock unit activity under the Plan (in thousands, except share and per share amounts): Weighted-Average Number of Grant Date Fair Shares Value Nonvested at December 31, 2016 272,195 $5.83 Granted 552,925 5.17 Exercised (116,173) 5.83 Forfeited (102,450) 5.79 Canceled — — Nonvested at December 31, 2017 606,497 5.23 During the year ended December 31, 2017, 116,173 restricted stock units vested.As of December 31, 2017, there was $2.5 million of total unrecognized compensation cost related to non‑vested stock options granted under the StockIncentive Plans. Total unrecognized compensation cost will be adjusted for future changes in the estimated forfeiture rate. The Company expects to recognizethat cost over a remaining weighted‑average period of 1.4 years as of December 31, 2017.Employee Stock Purchase PlanThe 2014 Employee Stock Purchase Plan (the “2014 ESPP”) period is semi-annual and allows participants to purchase the Company’s common stockat 85% of the lower of (i) the market value per share of common stock on the first day of the offering period or (ii) the market value per share of the commonstock on the purchase date. Each participant can purchase up to a maximum of $25,000 per calendar year in fair market value. The first plan period began onAugust 7, 2014. Stock-based compensation expense from the 2014 ESPP for the years ended December 31, 2017, 2016 and 2015 was approximately $0.2million, $0.3 million and $0.2 million, respectively.92The fair value of the purchase rights granted under this plan was estimated on the date of grant that uses the following weighted-average assumptions,which were derived in a manner similar to those discussed in Note 2 relative to stock options: Year ended December 31, 2017 2016 2015 Weighted-average risk-free interest rate 1.03% 0.50% 0.19%Expected dividend yield 0.00% 0.00% 0.00%Expected volatility 68% 67% 57%Expected terms 0.5 years 0.5 years 0.5 years The 2014 ESPP provides initially for the granting of up to 220,588 shares of the Company’s common stock to eligible employees. In addition, on thefirst day of each calendar year beginning January 1, 2015 and ending on January 1, 2024, the number of common shares available under the Plan shall beincreased by the number of shares equal to the lesser of (1) 1% of the common shares outstanding on the final day of the immediately preceding calendar yearand (2) such smaller number of common shares as determined by the Board of Directors. At December 31, 2017, there were 181,403 shares available under the2014 ESPP.Stock‑Based Compensation ExpenseThe following table summarizes the stock-based compensation expense for stock options granted to employees and non-employees, as well as stock-compensation expense for the 2014 ESPP that was recorded in the Company’s results of operations for the years presented (in thousands): Year ended December 31, 2017 2016 2015 Cost of product revenue $125 $123 $— Research and development 1,384 1,127 1,213 Selling, general and administrative 3,196 3,480 2,840 Total stock-based compensation expense $4,705 $4,730 $4,053 For the years ended December 31, 2017 and December 31, 2016, $0.1 million and $0.1 million of stock-based compensation expense was capitalized,respectively, as part of inventory or T2-owned instruments and components.9. WarrantsIn connection with the Term Loan Agreement entered into in December 2016, the Company issued to CRG four separate warrants to purchase a total of528,958 shares of the Company’s common stock. The warrants are exercisable any time prior to December 30, 2026 at a price of $8.06 per share, with typicalprovisions for termination upon a change of control or a sale of all or substantially all of the assets of the Company. The warrants are classified withinstockholders’ equity, and the proceeds were allocated between the debt and warrants based on their relative fair value. The fair value of the warrants wasdetermined by the Black‑Scholes‑Merton option pricing model. The fair value of the warrants at date of issuance was $1.8 million. 10. Net Loss Per ShareThe following table presents the calculation of basic and diluted net loss per share applicable to common stockholders (in thousands, except share andper share data): Year ended December 31, 2017 2016 2015 Numerator: Net loss $(62,428) $(54,804) $(45,290)Denominator: Weighted-average number of common shares outstanding — basic and diluted 32,131,512 26,015,751 20,501,748 Net loss per share applicable to common stockholders — basic and diluted $(1.94) $(2.11) $(2.21) 93The following shares were excluded from the calculation of diluted net loss per share applicable to common stockholders, prior to the application ofthe treasury stock method, because their effect would have been anti‑dilutive for the periods presented: Year ended December 31, 2017 2016 2015 Options to purchase common shares 3,785,083 4,042,627 3,484,298 Restricted stock units 606,497 272,195 — Warrants to purchase common stock 528,958 528,958 — Total 4,920,538 4,843,780 3,484,298 11. Income TaxesThe reconciliation of the U.S. federal statutory rate to the Company’s effective tax rate is as follows: Year Ended December 31, 2017 2016 2015 Tax at statutory rates 35.0% 35.0% 35.0%State income taxes 6.5 5.2 6.6 Permanent differences (2.5) (1.2) (1.3)Research and development credits 1.5 1.3 1.5 US tax rate change (52.7) — — Change in valuation allowance 12.2 (40.3) (41.8)Effective tax rate 0.0% 0.0% 0.0% The significant components of the Company’s deferred tax asset consist of the following at December 31, 2017 and 2016 (in thousands): December 31, 2017 2016 Deferred tax assets: Net operating loss carryforwards $62,670 $69,411 Tax credits 6,924 5,269 Other temporary differences 2,723 1,636 Start-up expenditures 3,214 5,088 Stock option expenses 2,127 2,779 Total deferred tax assets 77,658 84,183 Deferred tax asset valuation allowance (77,546) (83,924)Net deferred tax assets 112 259 Deferred tax liabilities: Prepaid expenses (112) (259)Net deferred taxes $— $— The Tax Cuts and Jobs Act was enacted in the United States on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxeson certain foreign sourced earnings. In December 2017, the SEC issued SAB 118, which directs taxpayers to consider the impact of the U.S. legislation as“provisional” when it does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete itsaccounting for the change in tax law. As of December 31, 2017, we recognized a provisional amount of $0 for the transition tax. We re-measured certain deferred tax assets and liabilities based on the rates at which they are anticipated to reverse in the future, which is generally21%. However, we are still examining certain aspects of the Act and refining our calculations, which could potentially affect the measurement of thesebalances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the re-measurement of our deferred tax balance wasa tax expense of $32.9 million which was offset by an adjustment to the valuation allowance against our deferred taxes of $32.9 million. In 2017 and 2016, the Company did not record a benefit for income taxes related to its operating losses incurred. ASC 740 requires a valuationallowance to reduce the deferred tax assets reported if, based on the weight of available evidence, it is more likely than not that some portion or all of thedeferred tax assets will not be realized. Based upon the level of historical U.S. losses and future projections over the period in which the net deferred taxassets are deductible, at this time, management believes it is more likely than not that the Company will not realize the benefits of these deductibledifferences, and as a result the Company continues to maintain a valuation allowance for the full amount of the 2017 deferred tax assets. The valuationallowance decreased $6.4 million, and increased $22.1 million and $18.9 million for the years ended December9431, 2017, 2016 and 2015, respectively. The decrease in the 2017 valuation allowance is primarily attributable to the reduction in the US corporate tax rateenacted in Q4 2017. The increase in 2016 and 2015 is primarily related to each year’s taxable loss.As of December 31, 2017, the Company had federal and state net operating losses of $229.1 million and $237.9 million, respectively, which areavailable to offset future taxable income, if any, through 2037. The Company also had federal and state research and development tax credits of $4.4 millionand $3.2 million, respectively, which expire at various dates through 2037. Under the provisions of the Internal Revenue Code, the net operating loss and taxcredit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax creditcarryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholdersover a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar stateprovisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of theannual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may furtheraffect the limitation in future years. The Company has completed several financings since its inception which may have resulted in a change in control asdefined by Sections 382 and 383 of the Internal Revenue Code, or could result in a change in control in the future. The Company has not conducted anassessment to determine whether there may have been a Section 382 or 383 ownership change.The Company has no unrecognized tax benefits. Interest and penalty charges, if any, related to uncertain tax positions would be classified as incometax expenses in the accompanying consolidated statements of operations. At December 31, 2017 and 2016, the Company had no accrued interest or penaltiesrelated to uncertain tax positions.The Company files income tax returns in the U.S. federal tax jurisdiction and various state jurisdictions. Since the Company is in a loss carryforwardposition, the Company is generally subject to examination by the U.S. federal, state and local income tax authorities for all tax years in which a losscarryforward is available. The Company does not have any international operations as of December 31, 2017. The statute of limitations for assessment byfederal and state tax jurisdictions in which the Company has business operations is open for tax years ending December 31, 2014, 2015, and 2016. The taxyears under examination vary by jurisdiction.12. Commitments and ContingenciesOperating LeasesIn August 2010, the Company entered into a five-year, non-cancelable operating lease for office and laboratory space at its headquarters in Lexington,MA. The lease commenced on January 1, 2011, with the Company providing a security deposit of $400,000. In accordance with the operating leaseagreement, the Company reduced its security deposit to $240,000 in May 2015, which is recorded as restricted cash in the consolidated balance sheets. InJuly 2014, the Company entered into an amendment to expand the office and laboratory space leased. In May 2015, the Company entered into anamendment to extend the term from December 31, 2015 to December 31, 2017. In March 2017, the Company entered into an amendment to extend the termfrom December 31, 2017 to December 31, 2021. The rent expense, inclusive of the escalating rent payments, is recognized on a straight-line basis over thelease term.In May, 2013, the Company entered into a two-year operating lease for additional office, laboratory and manufacturing space in Wilmington, MA. TheCompany entered into an amendment in September 2015 to extend this lease term through December 31, 2017. In August 2017, the Company entered into anamendment to extend the term from December 31, 2017 to December 31, 2018In November, 2014 the Company entered into an agreement to rent additional office space in Lexington, MA. The term of the agreement is two years,commencing December 2014. In April 2015, the Company entered into an amendment to extend the term of this agreement. The amendment extends theagreement term from December 31, 2016 to December 31, 2017. In connection with this agreement, the Company paid a security deposit totaling $50,000,which is recorded as a component of prepaid assets in the consolidated balance sheets. In May 2015, the Company entered into an amendment to expandexisting manufacturing facilities in Lexington, MA. The lease amendment term is June 1, 2015 to December 31, 2017. In September 2017, the Companyentered into an amendment to extend the term from December 31, 2017 to December 31, 2021In November, 2014, the Company entered into a lease for additional laboratory space in Lexington, MA. The lease term commenced April 1, 2015 andextends for six years. The rent expense, inclusive of the escalating rent payments, is recognized on a straight-line basis over the lease term. As an incentive toenter into the lease, the landlord paid approximately $1.4 million of the $2.2 million space build-out costs. The incentive is recorded as a component of leaseincentives on the consolidated balance sheets and is amortized as a reduction in rent expense on a straight-line basis over the term of the lease. In connectionwith this lease agreement, the Company paid a security deposit of $281,000, which is recorded as a component of other assets in the consolidated balancesheets.95Future minimum non-cancelable lease payments under the Company’s operating leases as of December 31, 2017 are as follows (in thousands): Year ending December 31, 2018$2,173 2019 2,149 2020 2,201 2021 1,926 $8,449 Rent expense for the years ended December 31, 2017, 2016, and 2015 was $1.9 million, $1.8 million, and $1.6 million, respectively.License AgreementIn 2006, the Company entered into a license agreement with a third party, pursuant to which the third party granted the Company an exclusive,worldwide, sublicenseable license under certain patent rights to make, use, import and commercialize products and processes for diagnostic, industrial andresearch and development purposes. The Company agreed to pay an annual license fee ranging from $5,000 to $25,000 for the royalty‑bearing license tocertain patents. For the years ended December 31, 2017, 2016 and 2015, the Company incurred $30,000, $31,000 and $34,000, respectively, for regulatorymilestones, license fees and reimbursed patent costs under the agreement. The Company also issued a total of 84,678 shares of common stock pursuant to theagreement in 2006 and 2007, which were recorded at fair value at the date of issuance.The Company is required to pay royalties on net sales of products andprocesses that are covered by patent rights licensed under the agreement at a percentage ranging in the low single digits, subject to reductions and offsets incertain circumstances, as well as a royalty on net sales of products that the Company sublicenses at a low double‑digit percentage of specified gross revenue.Royalties that became due under this agreement for the years ended December 31, 2017 and 2016 were immaterial.13. 401(k) Savings PlanIn March, 2008, the Company established a retirement savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The401(k) Plan covers substantially all employees of the Company who meet minimum age and service requirements, and allows participants to defer a portionof their annual compensation on a pretax basis. Company contributions to the 401(k) Plan may be made at the discretion of the board of directors. Companycontributions to the 401(k) Plan were $190,000 and $237,000 for the years ended December 31, 2017 and 2016, respectively. No contributions were madeduring the year ended December 31, 2015.14. Co-Development AgreementsCanon US Life SciencesOn September 21, 2016, Canon became a related party when the Company sold the Canon Shares for an aggregate cash purchase price of $39.7million, which represented 19.9% of the outstanding shares of common stock of the Company. On February 3, 2015, the Company entered into a Co-Development Partnership Agreement (the “Co-Development Agreement”) with Canon U.S. Life Sciences, Inc. (“Canon US Life Sciences”) to develop adiagnostic test panel to rapidly detect Lyme disease. Under the terms of the Co-Development Agreement, the Company received an upfront payment of $2.0million from Canon US Life Sciences and the agreement includes an additional $6.5 million of consideration upon achieving certain development andregulatory milestones for total aggregate payments of up to $8.5 million. In October 2015, the Company achieved a specified technical requirement andreceived $1.5 million related to the achievement of the milestone. The Company is eligible to receive an additional $5.0 million under the arrangement, intwo milestone payments of $2.0 million and $3.0 million, related to the achievement of additional development and regulatory milestones. All paymentsunder the Co-Development Agreement are non-refundable once received. The Company will retain exclusive worldwide commercialization rights of anyproducts developed under the Co-Development Agreement, including sales, marketing and distribution and Canon US Life Sciences will not receive anycommercial right and will be entitled to only receive royalty payments on the sales of all products developed under the Co-Development Agreement. Eitherparty may terminate the Co-Development Agreement upon the occurrence of a material breach by the other party (subject to a cure period).The Company evaluated the deliverables under the Co-Development Agreement and determined that the Co-Development Agreement included oneunit of accounting, the research and development services, as the joint research and development committee deliverable was deemed to be de minimus . TheCompany is recognizing revenue for research and development services as a component of research revenue in the consolidated financial statements as theservices are delivered using the proportional performance method of accounting, limited to payments earned. Costs incurred to deliver the services under theCo-Development Agreement are recorded as research and development expense in the consolidated financial statements.The Company recorded revenue of $0.3 million, $1.8 million and $1.4 million for the years ended December 31, 2017, 2016, and 2015, respectively,under the Co-Development Agreement, and expects to record revenue over the next two years, provided development and regulatory milestones are achieved.96Allergan Sales, LLCOn November 1, 2016, the Company entered into a Co-Development, Collaboration and Co-Marketing Agreement (the “Allergan Agreement”) withAllergan Sales, LLC (“Allergan Sales”) to develop (1) a direct detection diagnostic test panel that adds one additional bacteria species to the existingT2Bacteria product candidate (the “T2Bacteria II Panel”), and (2) a direct detection diagnostic test panel for testing drug resistance directly in whole blood(the “T2GNR Panel” and, together with the T2Bacteria II Panel, the “Developed Products”). In addition, both the Company and Allergan Sales willparticipate in a joint research and development committee and Allergan Sales will receive the right to cooperatively market the T2Candida, T2Bacteria, andthe Developed Products under the Allergan Agreement to certain agreed-upon customers.Under the terms of the Allergan Agreement, the Company received an upfront payment of $2.0 million from Allergan Sales and will receive additionalmilestone payments upon achieving certain developmental milestones for total aggregate payments of up to $4.0 million. All payments under the AllerganAgreement are non-refundable once received. The Company will retain exclusive worldwide commercialization rights of any products developed under theAllergan Agreement, including distribution, subject to Allergan Sales’ right to co-market the Developed Products. Allergan Sales, at its election, may co-market T2Candida, T2Bacteria and the Developed Products worldwide to certain agreed-upon customers and will receive royalty based on its sales for aperiod of time.The Company evaluated the deliverables under the Allergan Agreement and determined that the Allergan Agreement included two units ofaccounting, the research and development services for the T2Bacteria II Panel and the research and development services for the T2GNR Panel, as the jointresearch and development committee and right to cooperatively market deliverables were deemed to be de minimus . The Company is recognizing revenuefor research and development services as a component of research revenue in the consolidated financial statements as the services are delivered using theproportional performance method of accounting, limited to payments earned. Costs incurred to deliver the services under the Allergan Agreement arerecorded as research and development expense in the consolidated financial statements.The Company recorded revenue of $0.9 million during the year ended December 31, 2017 under the Allergan Agreement and expects to recordrevenue over the next two years, provided development and regulatory milestones are achieved. The Company did not record revenue during the year endedDecember 31, 2016 under the Allergan Agreement.15. Quarterly Financial Data (unaudited) Year ended December 31, 2017 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue: Product revenue $631 $735 $739 $1,335 Research revenue 310 221 369 326 Total revenue $941 $956 $1,108 $1,661 Costs and expenses: Cost of product revenue 1,627 1,989 2,106 6,306 Research and development 6,585 7,112 5,880 4,156 Selling, general and administrative 5,874 5,759 5,559 5,565 Total costs and expenses 14,086 14,860 13,545 16,027 Loss from operations $(13,145) $(13,904) $(12,437) $(14,366)Net loss $(14,703) $(15,456) $(14,076) $(18,193)Per share data: Net loss per common share—basic and diluted $(0.48) $(0.50) $(0.45) $(0.51) Year ended December 31, 2016 (In thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue: Product revenue $437 $151 $580 $579 Research revenue 659 839 504 331 Total revenue $1,096 $990 $1,084 $910 Costs and expenses: Cost of product revenue 1,026 1,781 1,894 2,171 Research and development 6,589 6,369 5,200 5,851 Selling, general and administrative 6,204 6,143 5,935 5,795 Total costs and expenses 13,819 14,293 13,029 13,817 Loss from operations $(12,723) $(13,303) $(11,945) $(12,907)Net loss $(13,426) $(14,046) $(12,783) $(14,549)Per share data: Net loss per common share—basic and diluted $(0.55) $(0.58) $(0.51) $(0.48)97 Item 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.Item 9A.CONTROLS AND PROCEDURESEvaluation of Disclosure Controls and ProceduresManagement conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer(our principal executive officer and principal financial officer, respectively), of the effectiveness of the design and operation of our disclosure controls andprocedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of December 31, 2017. Based on theevaluation of our disclosure controls and procedures as December, 2017, our Chief Executive Officer and Chief Financial Officer concluded that, as of suchdate, the Company’s disclosure controls and procedures were not effective due to a material weaknesses in our internal control over financial reporting asdescribed below in Management’s Annual Report on Internal Control over Financial Reporting.Management’s Annual Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financialreporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, ourprincipal executive and principal financial officers and effected by our board of directors, management and other personnel to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles and includes those policies and procedures that: •pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of theCompany; •provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; andBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systemsdetermined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degreeof compliance with the policies or procedures may deteriorate.Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2017. In making this assessment,management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control—Integrated Framework (2013). Based on our assessment, the Company's management identified a material weakness in our internal control over financialreporting relating to the accounting for instruments which are classified as either inventory and property and equipment depending on their future use.Specifically, the Company concluded that a deficiency exists in the design and execution of the review control over the accounting of instrument valuation,including the recoverability analyses for the Company’s instruments. Management determined that its accounting process for the review of these accountslacked adequate levels of monitoring and review to appropriately identify and correct errors in the calculation in a timely manner. The control deficiency described above resulted in certain material and immaterial misstatements in the preliminary financial statement accounts thatwere corrected prior to the issuance of the annual consolidated financial statements. The errors noted were all related to and corrected in the fourthquarter. The control deficiency creates a possibility that a material misstatement to our consolidated financial statements will not be prevented or detectedon a timely basis, and therefore we concluded that the deficiency represents a material weakness in our internal control over financial reporting and ourinternal control over financial reporting for instruments in inventory and fixed assets is not effective as of December 31, 2017.We are developing and implementing new control processes and procedures to address this weakness. We are undertaking steps to design andimplement sufficient controls over accounting for inventory. These steps include increasing oversight by our management in the calculation and reporting ofinstrument valuation, including the recoverability analyses related to instruments reported in the Company’s balance sheet in both inventory and propertyand equipment. 98Changes in Internal Control Over Financial ReportingExcept as noted above, during the quarter ended December 31, 2017, there have been no changes in our internal control over financial reporting, assuch term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Securities Exchange Act of 1934, that have materially affected, or arereasonably likely to materially affect, our internal control over financial reporting.Item 9B.OTHER INFORMATIONNone.PART III.Item 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information required by this Item is incorporated in this Annual Report by reference from the information under the captions “Board of DirectorsInformation,” “Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” contained in the Proxy Statement to be filed inconnection with our 2018 Annual Meeting of Stockholders, or the Proxy Statement.Code of Business Conduct and EthicsWe have adopted a code of business conduct and ethics for our directors, officers and employees, which is available on our website atwww.t2biosystems.com in the Investor Relations section under “Corporate Governance.” If we make any substantive amendments to the code of businessconduct and ethics or grant any waiver from a provision of the code of business conduct and ethics to any executive officer or director, we will promptlydisclose the nature of the amendment or waiver on our website. The information on, or that can be accessed from, our website is not incorporated by referenceinto this Annual Report.Item 11.EXECUTIVE COMPENSATIONThe information required by this Item is incorporated in this Annual Report by reference from the information under the captions “ExecutiveCompensation,” “Compensation Committee Interlocks and Insider Participation” and “Report of the Compensation Committee” contained in the ProxyStatement.Item 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIA L OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSThe information required by this Item is incorporated in this Annual Report by reference from the information under the captions “Security Ownershipof Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” contained in the Proxy Statement.Item 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information required by this Item is incorporated in this Annual Report by reference from the information under the captions “CertainRelationships and Related Transactions,” and “Board of Directors Information” contained in the Proxy Statement.Item 14.PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information required by this Item is incorporated in this Annual Report by reference from the information under the captions “PrincipalAccountant Fees and Services” and “Report of the Audit Committee” contained in the Proxy Statement.Item 15.EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULESa.Documents filed as part of this Annual Report.1.The following financial statements of T2 Biosystems, Inc. and Report of Independent Registered Public Accounting Firm, are included in this report:Report of Ernst & Young LLP, Independent Registered Public Accounting FirmConsolidated Balance Sheets as of December 31, 2017 and 2016Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2017, 2016 and 2015Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017, 2016 and 2015Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015Notes to Consolidated Financial Statements992.List of financial statement schedules. All schedules are omitted because they are not applicable or the required information is shown in the financialstatements or notes thereto.1003.List of Exhibits required by Item 601 of Regulation S-K. See Item 15(b) below.b.Exhibits.INDEX TO EXHIBITS Exhibit Number Description of Exhibit 3.1*Restated Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K(File No. 001-36571) filed on August 12, 2014) 3.2*Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K (File No. 001-36571) filed on August 12, 2014) 4.1*Form of Common Stock Certificate of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statementon Form S-1/A (File No. 333-197193) filed on July 28, 2014) 4.2*Fourth Amended and Restated Investors’ Rights Agreement, dated as of March 22, 2013, as amended (incorporated by reference toExhibit 4.2 of the Company’s Registration Statement on Form S-1/A (File No. 333-197193) filed on July 28, 2014 10.1#*Amended and Restated 2006 Employee, Director and Consultant Stock Plan, as amended, and form of option agreements thereunder(incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-197193 filed on July 2,2014) 10.2#Amended and Restated 2014 Incentive Award Plan and form of option agreements thereunder 10.3#*Non-Employee Director Compensation Program, as amended (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q(File No. 001-36571) filed on August 5, 2015) 10.4#*Form of Indemnification Agreement for Directors and Officers (incorporated by reference to Exhibit 10.4 to the Company’s RegistrationStatement on Form S-1/A (File No. 333-197193 filed on July 28, 2014) 10.5#*Employment Letter Agreement, dated as of March 14, 2008, by and between the Company and John McDonough, as amended(incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-1/A (File No. 333-197193) filed on July28, 2014) 10.6#*Employment Letter Agreement, dated as of July 22, 2014, by and between the Company and Tom Lowery, Jr. (incorporated by referenceto Exhibit 10.9 to the Company’s Registration Statement on Form S-1/A (File No. 333-197193) filed on July 28, 2014) 10.7#*Consulting Agreement, dated as of July 20, 2006 by and between the Company and Robert S. Langer, as amended on March 20, 2013and July 24, 2014 (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1/A (File No. 333-197193) filed on July 28, 2014) 10.8*†Exclusive License Agreement, dated as of November 7, 2006, as amended on December 2, 2008 and February 21, 2011, by and betweenThe General Hospital Corporation d/b/a Massachusetts General Hospital and the Company (incorporated by reference to Exhibit 10.13to the Company’s Registration Statement on Form S-1 (File No. 333-197193) filed on July 2, 2014) 10.9*Commercial Lease, dated as of May 6, 2013, as amended on September 24, 2013, by and between the Company and Columbus DayRealty, Inc. (incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (File No. 333-197193)filed on July 2, 2014) 10.10*Lease, dated as of August 6, 2010, by and between the Company and King 101 Hartwell LLC, as amended by the First Amendment toLease on November 30, 2011 and the Second Amendment to Lease on July 11, 2014 (incorporated by reference to Exhibit 10.17 to theCompany’s Registration Statement on Form S-1/A (File No. 333-197193) filed on July 16, 2014) 10.11#*2014 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-1/A (File No. 333-197193) filed on July 28, 2014) 10.12*†Supply Agreement by and between the Company and SMC Ltd., effective as of October 10, 2014 (incorporated by reference to Exhibit10.1 of the Company’s Form 8-K/A (File No. 001-36571) filed on January 21, 2015) 10.13*†Co-Development Partnership Agreement by and between the Company and Canon U.S. Life Sciences, Inc., dated as of February 3, 2015(incorporated by reference to Exhibit 10.22 of the Company’s Form 10-K (File No. 001-36571) filed on March 4, 2015)101 10.14*Third Amendment to Lease with King 101 Hartwell LLC on May 27, 2015 (incorporated by referenced to Exhibit 10.1 of theCompany’s Form 8-K (File No. 001-36571) filed on May 29, 2015) 10.15*†Master Lease Agreement and between the Company and Essex Capital Corporation, dated as of October 31, 2015 (incorporated byreference to Exhibit 10.27 of the Company’s Form 10-K (File No. 001-36571) filed on March 9, 2016) 10.16#*Employment Letter Agreement, dated June 30, 2016, by and between the Company and Dr. Joanne Spadoro, Ph. D. (incorporated byreference to Exhibit 10.1 of the Company’s Form 10-Q (File No. 001-36571) filed on November 8, 2016) 10.17#*Change of Control Severance Agreement, dated July 7, 2016, by and between the Company and Dr. Joanne Spadoro, Ph. D.(incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q (File No. 001-36571) filed on November 8, 2016) 10.18*Stock Purchase Agreement, dated September 21, 2016, by and among Canon U.S.A., Inc. and the Company (incorporated by referenceto Exhibit 10.1 of the Company’s Form 8-K (File No. 001-36571) filed on September 22, 2016) 10.19*Voting and Standstill Agreement, dated September 21, 2016, by and among Canon U.S.A., Inc. and the Company (incorporated byreference to Exhibit 10.2 of the Company’s Form 8-K (File No. 001-36571) filed on September 22, 2016) 10.20*Registration Rights Agreement, dated September 21, 2016, by and among Canon U.S.A., Inc. and the Company (incorporated byreference to Exhibit 10.3 of the Company’s Form 8-K (File No. 001-36571) filed on September 22, 2016) 10.21†Co-Development, Collaboration and Co-Marketing Agreement, dated November 1, 2016, by and between the Company and AllerganSales, LLC 10.22†Term Loan Agreement, dated December 30, 2016, by and among the Company, CRG Servicing LLC, as administrative and collateralagent, and the lenders from time to time party thereto and the subsidiary guarantors from time to time party thereto 10.23* Security Agreement, dated December 30, 2016, by and among the Company, the other grantors from time to time party thereto and CRGServicing LLC, as administrative and collateral agent 10.24* Warrant to Purchase Shares of Common Stock of T2 Biosystems, Inc., dated December 30, 2016, by and between the Company andCRG Partners III (Cayman) L.P. 10.25* Warrant to Purchase Shares of Common Stock of T2 Biosystems, Inc., dated December 30, 2016, by and between the Company andCRG Partners III - Parallel Fund “A” L.P. 10.26* Warrant to Purchase Shares of Common Stock of T2 Biosystems, Inc., dated December 30, 2016, by and between the Company andCRG Partners III L.P. 10.27 *Warrant to Purchase Shares of Common Stock of T2 Biosystems, Inc., dated December 30, 2016, by and between the Company andCRG Partners III Parallel Fund “B” (Cayman) L.P. 10.28*Fourth Amendment to Lease, dated March 2, 2017, by and between the Company and King 101 Harwell LLC (incorporated by referenceto Exhibit 10.1 of the Company’s Form 8-K (File No. 001-36571) filed on March 3, 2017) 10.29*Amendment No. 1 to Term Loan Agreement, dated March 1, 2017, by and among the Company, CRG Servicing LLC, as administrativeand collateral agent, and the lenders party thereto (incorporated by reference to Exhibit 10.3 of the Company’s Form 10-Q (File No.001-36571) filed on May 8, 2017) 10.30*Amendment to Co-Development, Collaboration and Co-Marketing Agreement, by and between the Company and Allergan Sales, LLC,dated June 1, 2017 (incorporated by reference to Exhibit 10.3 of the Company’s Form 10-Q (File No. 001-36571) filed on August 4,2017) 10.31*†Amendment to Supply Agreement, by and between the Company and SMC Ltd., dated August 29, 2017 (incorporated by reference toExhibit 10.1 of the Company’s Form 8-K (File No. 001-36571) filed on August 29, 2017) 10.32*Second Amendment to Supply Agreement, by and between the Company and SMC Ltd., dated December 22, 2017 (incorporated byreference to Exhibit 10.1 of the Company’s Form 8-K (File No. 001-36571) filed on December 27, 2017) 10.33*Lease Indenture Agreement, dated September 21, 2017, by and between 91 Hartwell Ave. Trust and the Company (incorporated byreference to Exhibit 10.1 of the Company’s Form 10-Q (File No. 001-36571) filed on November 3, 2017) 10.34*#T2 Biosystems, Inc. Inducement Award Plan and form of stock option agreement, form of restricted stock agreement and form ofrestricted stock unit agreement thereunder (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K (File No. 001-36571)filed on March 7, 2018) 10.35#Employment Offer Letter, dated as of March 7, 2016, by and between the Company and Alex Barclay 10210.36#Change of Control Severance Agreement, dated February 1, 2017, as amended on March 6, 2018, by and between the Company andAlex Barclay 10.37#Amendment to Change of Control Severance Agreement, by and between the Company and Alex Barclay, dated March 6, 2018 10.38#Employment Offer Letter, dated as of January 30, 2018, by and between the Company and John M. Sprague 10.39#Change of Control Severance Agreement, dated January 30, 2018, by and between the Company and John M. Sprague 10.40 Amendment No. 2 to Commercial Lease, dated as of September 21, 2015,, by and between the Company and Columbus Day Realty, Inc. 10.41 Amendment No. 3 to Commercial Lease, dated as of August 10, 2017, by and between the Company and Columbus Day Realty, Inc. 10.42 Amendment No. 2 to Term Loan Agreement, dated December 18, 2017, by and among the Company, CRG Servicing LLC, asadministrative and collateral agent, and the lenders party thereto 10.43 Amendment No. 3 to Term Loan Agreement, dated March 16, 2018, by and among the Company, CRG Servicing LLC, asadministrative and collateral agent, and the lenders party thereto 10.44#Amendment Number Three to Consulting Agreement, by and between the Company and Robert S. Langer, dated as of October 13, 2017 10.45#Employment Offer Letter, dated as of April 16, 2017, by and between the Company and Darlene Deptula-Hicks 10.46#Change of Control Severance Agreement, dated April 16, 2017, by and between the Company and Darlene Deptula-Hicks 21.1 Subsidiaries of the Registrant 23.1 Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm 24.1 Power of Attorney (included on the signature page hereto). 31.1 Certification of principal executive officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, asamended. 31.2 Certification of principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, asamended. 32.1 Certification of the principal executive and financial officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, asamended, and 18 U.S.C. section 1350. 101 Interactive Data Files regarding (a) our Consolidated Balance Sheets as of December 31, 2016 and 2015 (b) our ConsolidatedStatements of Operations and Comprehensive Loss for the Years Ended December 31, 2016, 2015 and 2014, (c) our ConsolidatedStatements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Years Ended December 31, 2016,2015 and 2014, (d) our Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014 and (e) theNotes to such Consolidated Financial Statements. *Previously filed.#Indicates management contract or compensatory plan.†Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment pursuant to Rule 406 under theSecurities Act of 1933, or the Securities Act.**As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act andSection 18 of the Securities Exchange Act of 1934.The exhibits listed in the accompanying “Exhibit Index” are filed, furnished or incorporated by reference as part of this Annual Report, as indicated.103SIGNATURESPursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Reportto be signed on its behalf by the undersigned, thereunto duly authorized, on March 19, 2018. T2 BIOSYSTEMS, INC. By:/S/ JOHN MCDONOUGH Name:John McDonough Title:President, Chief Executive Officer and Director (principal executive officer) March 19, 2018 By:/S/ JOHN M. SPRAGUE Name:John M. Sprague Title:Chief Financial Officer (principal financial officer and principal accounting officer) March 19, 2018104POWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John McDonough and JohnSprague, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments tothis Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and ExchangeCommission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes may do or cause to be done by virtuehereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the followingpersons on behalf of the registrant in the capacities and on the dates indicated. Signature Title Date / S / JOHN MCDONOUGH President, Chief Executive Officer and Director (principal executive officer) March 19, 2018John McDonough / S / JOHN M. SPRAGUE Chief Financial Officer (principal accounting officer) March 19, 2018John M. Sprague / S / STANLEY N. LAPIDUS Director March 19, 2018Stanley N. Lapidus / S / ADRIAN M. JONES Director March 19, 2018Adrian M. Jones / S / MICHAEL J. CIMA, PH.D. Director March 19, 2018Michael J. Cima, Ph.D. / S / JOHN W. CUMMING Director March 19, 2018John W. Cumming / S / DAVID B. ELSBREE Director March 19, 2018David B. Elsbree / S / SEYMOUR LIEBMAN Director March 19, 2018Seymour Liebman 105EXHIBIT 10.2T2 BIOSYSTEMS, INC.2014 INCENTIVE AWARD PLAN(as amended and restated effective June 17, 2016) ARTICLE 1.PURPOSEThe purpose of the T2 Biosystems, Inc. 2014 Incentive Award Plan (as it may be amended or restated from time to time, the“Plan”) is to promote the success and enhance the value of T2 Biosystems, Inc. (the “Company”) by linking the individual interests ofthe members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with anincentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provideflexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, andConsultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.This Plan constitutes an amendment and restatement of the T2 Biosystems, Inc. 2014 Incentive Award Plan (the “Original Plan”).ARTICLE 2.DEFINITIONS AND CONSTRUCTIONWherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearlyindicates otherwise. The singular pronoun shall include the plural where the context so indicates.2.1“Administrator” shall mean the entity that conducts the general administration of the Plan as provided inArticle 12. With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant toSection 12.6, or as to which the Board has assumed, the term “Administrator” shall refer to such person(s) unless the Committee or theBoard has revoked such delegation or the Board has terminated the assumption of such duties.2.2“Applicable Accounting Standards” shall mean Generally Accepted Accounting Principles in theUnited States, International Financial Reporting Standards or such other accounting principles or standards as may apply to theCompany’s financial statements under United States federal securities laws from time to time.2.3“Applicable Law” shall mean any applicable law, including without limitation: (i) provisions of theCode, the Securities Act, the Exchange Act and any rules or regulations thereunder; (ii) corporate, securities, tax or other laws, statutes,rules, requirements or regulations, whether federal, state, local or foreign; and (iii) rules of any securities exchange or automatedquotation system on which the Shares are listed, quoted or traded.2.4“Automatic Exercise Date” shall mean, with respect to an Option or a Stock Appreciation Right, thelast business day of the applicable Option Term or Stock Appreciation Right Term that was established by the Administrator for such Option or Stock Appreciation Right (e.g., the last business day priorto the tenth anniversary of the date of grant of such Option or Stock Appreciation Right if the Option or Stock Appreciation Rightinitially had a ten-year Option Term or Stock Appreciation Right Term, as applicable); provided that with respect to an Option orStock Appreciation Right that has been amended pursuant to this Plan so as to alter the applicable Option Term or StockAppreciation Right Term, “Automatic Exercise Date” shall mean the last business day of the applicable Option Term or StockAppreciation Right Term that was established by the Administrator for such Option or Stock Appreciation Right as amended.2.5“Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a PerformanceAward, a Dividend Equivalents award, a Stock Payment award or a Stock Appreciation Right, which may be awarded or grantedunder the Plan (collectively, “Awards”).2.6“Award Agreement” shall mean any written notice, agreement, terms and conditions, contract or otherinstrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditionswith respect to an Award as the Administrator shall determine consistent with the Plan.2.7“Award Limit” shall mean with respect to Awards that shall be payable in Shares or in cash, as the casemay be, the respective limit set forth in Section 3.4.2.8“Board” shall mean the Board of Directors of the Company.2.9“Change in Control” shall mean and includes each of the following:(a)A transaction or series of transactions (other than an offering of Common Stock to thegeneral public through a registration statement filed with the Securities and Exchange Commission or a transaction or series oftransactions that meets the requirements of clause (i) and (ii) of paragraph (c) below) whereby any “person” or related “group” of“persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of itsSubsidiaries, an employee benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to suchtransaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectlyacquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessingmore than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or(b)During any period of two consecutive years, individuals who, at the beginning of suchperiod, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have enteredinto an agreement with the Company to effect a transaction described in Section 2.9(a) or Section 2.9(c)) whose election by the Boardor nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then still inoffice who either were Directors at the beginning of the two-year period or whose election or nomination for election was previouslyso approved, cease for any reason to constitute a majority thereof; or2 (c)The consummation by the Company (whether directly involving the Company orindirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or businesscombination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series ofrelated transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:(i)which results in the Company’s voting securities outstandingimmediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securitiesof the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly orindirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or suchperson, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’soutstanding voting securities immediately after the transaction, and(ii)after which no person or group beneficially owns voting securitiesrepresenting 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall betreated for purposes of this Section 2.9(c)(ii) as beneficially owning 50% or more of the combined voting power of the SuccessorEntity solely as a result of the voting power held in the Company prior to the consummation of the transaction.In addition, if a Change in Control constitutes a payment event with respect to any portion of an Award that provides for the deferral ofcompensation and is subject to Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) withrespect to such Award (or portion thereof) must also constitute a “change in control event,” as defined in Treasury Regulation Section1.409A-3(i)(5) to the extent required by Section 409A.The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether aChange in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change inControl and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination ofwhether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall beconsistent with such regulation.2.10“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, together withthe regulations and official guidance promulgated thereunder.2.11“Committee” shall mean the Compensation Committee of the Board, or another committee orsubcommittee of the Board or the Compensation Committee, appointed as provided in Section 12.1.2.12“Common Stock” shall mean the common stock of the Company, par value $0.001 per share.2.13“Company” shall have the meaning set forth in Article 1.3 2.14“Consultant” shall mean any consultant or adviser engaged to provide services to the Company or anySubsidiary that qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of shareson a Form S-8 Registration Statement.2.15“Covered Employee” shall mean any Employee who is, or could become, a “covered employee”within the meaning of Section 162(m) of the Code.2.16“Director” shall mean a member of the Board, as constituted from time to time.2.17“Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) ofdividends paid on Shares, awarded under Section 9.2.2.18“DRO” shall mean a domestic relations order as defined by the Code or Title I of the EmployeeRetirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.2.19“Effective Date” shall mean the day prior to the Public Trading Date.2.20“Eligible Individual” shall mean any person who is an Employee, a Consultant or a Non-EmployeeDirector, as determined by the Committee.2.21“Employee” shall mean any officer or other employee (as determined in accordance with Section3401(c) of the Code) of the Company or of any Subsidiary.2.22“Equity Restructuring” shall mean a nonreciprocal transaction between the Company and itsstockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cashdividend, that affects the number or kind of Shares (or other securities of the Company) or the share price of Common Stock (or othersecurities) and causes a change in the per share value of the Common Stock underlying outstanding Awards.2.23“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.2.24“Expiration Date” shall have the meaning given to such term in Section 13.1.2.25“Fair Market Value” shall mean, as of any given date, the value of a Share determined as follows:(a)If the Common Stock is listed on any (i) established securities exchange (such as theNew York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) national market system or(iii) automated quotation system, its Fair Market Value shall be the closing sales price for a Share as quoted on such exchange orsystem for such date or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on thelast preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administratordeems reliable;4 (b)If the Common Stock is not listed on an established securities exchange, national marketsystem or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair MarketValue shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a Shareon such date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported inThe Wall Street Journal or such other source as the Administrator deems reliable; or(c)If the Common Stock is neither listed on an established securities exchange, nationalmarket system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall beestablished by the Administrator in good faith.Notwithstanding the foregoing, with respect to any Award granted after the effectiveness of the Company’s registrationstatement relating to its initial public offering and prior to the Public Trading Date, the Fair Market Value shall mean the initial publicoffering price of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with the Securities andExchange Commission.2.26“Greater Than 10% Stockholder” shall mean an individual then owning (within the meaning of Section424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any subsidiarycorporation (as defined in Section 424(f) of the Code) or parent corporation thereof (as defined in Section 424(e) of the Code).2.27“Holder” shall mean a person who has been granted an Award.2.28“Incentive Stock Option” shall mean an Option that is intended to qualify as an incentive stock optionand conforms to the applicable provisions of Section 422 of the Code.2.29“Non-Employee Director” shall mean a Director of the Company who is not an Employee.2.30“Non-Employee Director Equity Compensation Policy” shall have the meaning set forth in Section4.5.2.31“Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option.2.32“Option” shall mean a right to purchase Shares at a specified exercise price, granted under Article 6.An Option shall be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Options granted toNon-Employee Directors and Consultants shall only be Non-Qualified Stock Options.2.33“Option Term” shall have the meaning set forth in Section 6.6.2.34“Parent” shall mean any entity (other than the Company), whether domestic or foreign, in an unbrokenchain of entities ending with the Company if each of the entities other than the Company beneficially owns, at the time of thedetermination, securities or interests5 representing at least fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the otherentities in such chain.2.35“Performance Award” shall mean a cash bonus award, stock bonus award, performance award orother incentive award that is paid in cash, Shares or a combination of both, awarded under Section 9.1.2.36“Performance-Based Compensation” shall mean any compensation that is intended to qualify as“performance-based compensation” as described in Section 162(m)(4)(C) of the Code.2.37“Performance Criteria” shall mean the criteria (and adjustments) that the Committee selects for anAward for purposes of establishing the Performance Goal or Performance Goals for a Performance Period, determined as follows:(a)The Performance Criteria that shall be used to establish Performance Goals are limitedto: (i) net earnings (either before or after one or more of (A) interest, (B) taxes, (C) depreciation, (D) amortization and (E) non-cashequity-based compensation expense); (ii) gross or net sales or revenue; (iii) net income (either before or after taxes); (iv) adjusted netincome; (v) operating earnings or profit (either before or after taxes); (vi) cash flow (including, but not limited to, operating cash flowand free cash flow) and cash flow return on capital; (vii) return on assets; (viii) return on capital (or invested capital) and cost ofcapital); (ix) return on stockholders’ equity; (x) total stockholder return; (xi) return on sales; (xii) gross or net profit or operating margin;(xiii) costs, reductions in costs and cost control measures; (xiv) expenses; (xv) working capital; (xvi) earnings or loss per share; (xvii)adjusted earnings or loss per share; (xviii) price per share or dividends per share (or appreciation in and/or maintenance of such price ordividends); (xix) regulatory achievements or compliance (including, without limitation, regulatory body approval for commercializationof a product); (xx) implementation, completion or attainment of objectives relating to research, development, regulatory, commercial, orstrategic milestones or developments of critical projects; (xxi) market share; (xxii) economic value; (xxiii) revenue; (xxiv) revenuegrowth; (xxv) productivity; (xxvi) operating efficiency; (xxvii) economic value-added; (xxviii) return on net assets; (xxix) funds fromoperations; (xxx) funds available for distributions; (xxxi) sales unit volume; (xxxii) licensing revenue; (xxxiii) brand recognition andacceptance; (xxxiv) inventory, inventory turns or cycle time; (xxxv) market penetration and geographic business expansion; (xxxvi)customer satisfaction/growth and customer service; (xxxvii) employee satisfaction, recruitment and maintenance of personnel, andhuman resources management; (xxxviii) supervision of litigation and other legal matters; (xxxix) strategic partnerships and transactions;(xxxx) financial ratios (including those measuring liquidity, activity, profitability or leverage); (xxxxi) supply chain achievements;(xxxxii) debt levels or reductions; (xxxxiii) sales-related goals; (xxxxiv) financing and other capital raising transactions; (xxxxv) year-end cash; (xxxxvi) acquisition activity; (xxxxvii) investment sourcing activity; and (xxxxiii) marketing initiatives, any of which may bemeasured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group orto market performance indicators or indices.(b)The Committee, in its discretion, may provide that one or more objectively determinableadjustments shall be made to one or more of the Performance Goals. Such6 adjustments may include, but are not limited to, one or more of the following: (i) items related to a change in Applicable AccountingStandards; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operatingitems; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company duringthe Performance Period; (vii) items related to the sale or disposition of a business or segment of a business; (viii) items related todiscontinued operations that do not qualify as a segment of a business under Applicable Accounting Standards; (ix) items attributableto any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) any other items ofsignificant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinarycorporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that areoutside the scope of the Company’s core, on-going business activities; (xiv) items related to acquired in-process research anddevelopment; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) itemsrelating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; (xix)items attributable to expenses incurred in connection with a reduction in force or early retirement initiative; (xx) items relating toforeign exchange or currency transactions and/or fluctuations; or (xxi) items relating to any other unusual or nonrecurring events orchanges in Applicable Law, Applicable Accounting Standards or business conditions. For all Awards intended to qualify asPerformance-Based Compensation, such determinations shall be made within the time prescribed by, and otherwise in compliancewith, Section 162(m) of the Code.2.38“Performance Goals” shall mean, for a Performance Period, one or more goals established in writingby the Administrator for the Performance Period based upon one or more Performance Criteria. Depending on the PerformanceCriteria used to establish Performance Goals, Performance Goals may be expressed in terms of overall Company performance or theperformance of a Subsidiary, division, business unit, or an individual. The achievement of each Performance Goal shall be determined,to the extent applicable, with reference to Applicable Accounting Standards.2.39“Performance Period” shall mean one or more periods of time, which may be of varying andoverlapping durations, as the Administrator may select, over which the attainment of one or more Performance Goals will be measuredfor the purpose of determining a Holder’s right to, and the payment of, an Award.2.40“Performance Stock Unit” shall mean a Performance Award awarded under Section 9.1 which isdenominated in units of value including dollar value of Shares.2.41“Permitted Transferee” shall mean, with respect to a Holder, any “family member” of the Holder, asdefined in the instructions to use the Form S-8 Registration Statement under the Securities Act, or any other transferee specificallyapproved by the Administrator after taking into account Applicable Law.2.42 “Plan” shall have the meaning set forth in Article 1.7 2.43“Prior Plan” shall mean the T2 Biosystems, Inc. Amended and Restated 2006 Employee, Director andConsultant Stock Plan, as such plan may be amended from time to time.2.44“Public Trading Date” shall mean the first date upon which Common Stock is listed (or approved forlisting) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as anational market security on an interdealer quotation system.2.45“Restricted Stock” shall mean Common Stock awarded under Article 7 that is subject to certainrestrictions and may be subject to risk of forfeiture or repurchase.2.46“Restricted Stock Unit” shall mean the right to receive Shares awarded under Article 8.2.47“Securities Act” shall mean the Securities Act of 1933, as amended.2.48“Shares” shall mean shares of Common Stock.2.49“Stock Appreciation Right” shall mean a stock appreciation right granted under Article 10.2.50“Stock Appreciation Right Term” shall have the meaning set forth in Section 10.4.2.51“Stock Payment” shall mean (a) a payment in the form of Shares, or (b) an option or other right topurchase Shares, as part of a bonus, deferred compensation or other arrangement, awarded under Section 9.3.2.52“Subsidiary” shall mean any entity (other than the Company), whether domestic or foreign, in anunbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chainbeneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting powerof all classes of securities or interests in one of the other entities in such chain.2.53“Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or insubstitution for, outstanding equity awards granted by a company or other entity in connection with a corporate transaction, such as amerger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “SubstituteAward” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock AppreciationRight.2.54“Termination of Service” shall mean:(a)As to a Consultant, the time when the engagement of a Holder as a Consultant to theCompany or a Subsidiary is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge,death, disability or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employmentor service with the Company or any Subsidiary.8 (b)As to a Non-Employee Director, the time when a Holder who is a Non-EmployeeDirector ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death,disability or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or servicewith the Company or any Subsidiary.(c)As to an Employee, the time when the employee-employer relationship between aHolder and the Company or any Subsidiary is terminated for any reason, including, without limitation, a termination by resignation,discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains inemployment or service with the Company or any Subsidiary.The Administrator, in its discretion, shall determine the effect of all matters and questions relating to any Termination ofService, including, without limitation, the question of whether a Termination of Service resulted from a discharge for cause and allquestions of whether particular leaves of absence constitute a Termination of Service; provided, however, that, with respect toIncentive Stock Options, unless the Administrator otherwise provides in the terms of the Award Agreement or otherwise, or asotherwise required by Applicable Law, a leave of absence, change in status from an employee to an independent contractor or otherchange in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave ofabsence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code. For purposes of thePlan, a Holder’s employee-employer relationship or consultancy relations shall be deemed to be terminated in the event that theSubsidiary employing or contracting with such Holder ceases to remain a Subsidiary following any merger, sale of stock or othercorporate transaction or event (including, without limitation, a spin-off).ARTICLE 3.SHARES SUBJECT TO THE PLAN3.1Number of Shares.(a)Subject to Sections 3.1(b) and 13.2, the aggregate number of Shares which may beissued or transferred pursuant to Awards under the Plan is the sum of: (i) 823,529 Shares, (ii) any Shares which as of the EffectiveDate are subject to awards granted under the Prior Plan which are forfeited, lapse unexercised or are settled in cash and whichfollowing the Effective Date are not issued under the Prior Plan; and (iii) an annual increase on the first day of each calendar yearbeginning January 1, 2015 and ending on and including January 1, 2026, equal to the lesser of (A) 4% of the Shares outstanding (onan as-converted basis) on the final day of the immediately preceding calendar year and (B) such smaller number of Shares asdetermined by the Board; provided, however, no more than 8,235,294 Shares may be issued upon the exercise of Incentive StockOptions. From and after the Effective Date, no awards shall be granted under the Prior Plan. Any award outstanding under the PriorPlan as of the Effective Date shall continue to be subject to the terms and conditions of the Prior Plan. (b)To the extent all or a portion of an Award is forfeited, expires, lapses for any reason, oris settled for cash without the delivery of Shares to the Holder, any Shares subject9 to such Award or portion thereof shall, to the extent of such forfeiture, expiration, lapse or cash settlement, again be available for thegrant of an Award under the Plan. Any Shares repurchased by or surrendered to the Company under Section 7.4 so that such Sharesare returned to the Company shall again be available for the grant of an Award under the Plan. The payment of Dividend Equivalentsin cash in conjunction with any outstanding Awards shall not be counted against the Shares available for issuance under the Plan.Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action wouldcause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.(c)To the extent permitted by Applicable Law, Substitute Awards shall not reduce theShares authorized for grant under the Plan.3.2Stock Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, ofauthorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market.3.3Limitation on Awards to Non-Employee Directors. Notwithstanding any provision to the contrary in thePlan, the Administrator may establish compensation for Non-Employee Directors from time to time, subject to the limitations in thePlan. The Administrator will from time to time determine the terms, conditions and amounts of all such Non-Employee Directorcompensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances andconsiderations as it shall deem relevant from time to time, provided that the sum of any cash compensation, or other compensation, andthe value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting StandardsCodification Topic 718, or any successor thereto) of Awards granted to a Non-Employee Director as compensation for services as aNon-Employee Director during any fiscal year of the Company may not exceed $600,000, increased to $900,000 in the fiscal year of aNon-Employee Director’s initial service as a Non-Employee Director. The Administrator may make exceptions to this limit forindividual Non-Employee Directors in extraordinary circumstances, as the Administrator may determine in its discretion, provided thatthe Non-Employee Director receiving such additional compensation may not participate in the decision to award such compensation orin other contemporaneous compensation decisions involving Non-Employee Directors.3.4Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in the Plan to thecontrary, and subject to Section 13.2, the maximum aggregate number of Shares that may be issued with respect to Awards granted toany one person during a given calendar year shall be 1,000,000 and the maximum aggregate amount of cash that may be paid withrespect to Awards granted to any one person during a given calendar year shall be $2,000,000. To the extent required by Section162(m) of the Code, Shares subject to Awards which are canceled shall continue to be counted against the Award Limit.ARTICLE 4.GRANTING OF AWARDS10 4.1Participation. The Administrator may, from time to time, select from among all Eligible Individuals,those to whom an Award shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistentwith the requirements of the Plan. Except as provided in Section 4.5 regarding the grant of Awards pursuant to the Non-EmployeeDirector Equity Compensation Policy, no Eligible Individual shall have any right to be granted an Award pursuant to the Plan.4.2Award Agreement. Each Award shall be evidenced by an Award Agreement that sets forth the terms,conditions and limitations for such Award, which may include the term of the Award, the provisions applicable in the event of theHolder’s Termination of Service, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescindan Award. Award Agreements evidencing Awards intended to qualify as Performance-Based Compensation shall contain such termsand conditions as may be necessary to meet the applicable provisions of Section 162(m) of the Code. Award Agreements evidencingIncentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422of the Code.4.3Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, thePlan, and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject toany additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b‑3 of theExchange Act and any amendments thereto) that are requirements for the application of such exemptive rule. To the extent permittedby Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conformto such applicable exemptive rule.4.4At-Will Employment; Voluntary Participation. Nothing in the Plan or Award Agreement shall conferupon any Holder any right to continue in the employ of, or as a Director or Consultant for, the Company or any Subsidiary, or shallinterfere with or restrict in any way the rights of the Company and any Subsidiary, which rights are hereby expressly reserved, todischarge any Holder at any time for any reason whatsoever, with or without cause, and with or without notice, or to terminate orchange all other terms and conditions of employment or engagement, except to the extent expressly provided otherwise in a writtenagreement between the Holder and the Company or any Subsidiary. Participation by each Holder in the Plan shall be voluntary andnothing in the Plan shall be construed as mandating that any Eligible Individual shall participate in the Plan.4.5Non-Employee Director Awards. The Administrator, in its discretion, may provide that Awards grantedto Non-Employee Directors shall be granted pursuant to a written nondiscretionary formula established by the Administrator (the“Non-Employee Director Equity Compensation Policy”), subject to the limitations of the Plan. The Non-Employee Director EquityCompensation Policy shall set forth the type of Award(s) to be granted to Non-Employee Directors, the number of Shares to be subjectto Non-Employee Director Awards, the conditions on which such Awards shall be granted, become exercisable and/or payable andexpire, and such other terms and conditions as the Administrator shall determine in its discretion. The Non-Employee Director EquityCompensation Policy may be modified by the Administrator from time to time in its discretion.11 4.6Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the discretion of theAdministrator, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awardsgranted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant ofsuch other Awards.ARTICLE 5.PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS PERFORMANCE-BASEDCOMPENSATION5.1Purpose. The Committee may, in its discretion, (a) determine whether an Award is intended to qualify asPerformance-Based Compensation and (b) at any time after any such determination, alter such intent for any or no reason. If theCommittee, in its discretion, decides to grant an Award that is intended to qualify as Performance-Based Compensation (other than anOption or Stock Appreciation Right), then the provisions of this Article 5 shall control over any contrary provision contained in thePlan; provided that, if after such decision the Committee alters such intention for any reason, the provisions of this Article 5 shall nolonger control over any other provision contained in the Plan. The Committee, in its discretion, may (i) grant Awards to EligibleIndividuals that are based on Performance Criteria or Performance Goals or any such other criteria and goals as the Committee shallestablish, but that do not satisfy the requirements of this Article 5 and that are not intended to qualify as Performance-BasedCompensation and (ii) subject any Awards intended to qualify as Performance-Based Compensation to additional conditions andrestrictions unrelated to any Performance Criteria or Performance Goals (including, without limitation, continued employment orservice requirements) to the extent such Awards otherwise satisfy the requirements of this Article 5 with respect to the PerformanceCriteria and Performance Goals applicable thereto. Unless otherwise specified by the Committee at the time of grant, the PerformanceCriteria with respect to an Award intended to be Performance-Based Compensation payable to a Covered Employee shall bedetermined on the basis of Applicable Accounting Standards.5.2Procedures with Respect to Performance-Based Awards. To the extent necessary to comply with therequirements of Section 162(m)(4)(C) of the Code, with respect to any Award which is intended to qualify as Performance-BasedCompensation, no later than 90 days following the commencement of any Performance Period or any designated fiscal period orperiod of service (or such earlier time as may be required under Section 162(m) of the Code), the Committee shall, in writing, (a)designate one or more Eligible Individuals, (b) select the Performance Criteria applicable to the Performance Period, (c) establish thePerformance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period based on thePerformance Criteria, and (d) specify the relationship between Performance Criteria and the Performance Goals and the amounts ofsuch Awards, as applicable, to be earned by each Covered Employee for such Performance Period. Following the completion of eachPerformance Period, the Committee shall certify in writing whether and the extent to which the applicable Performance Goals havebeen achieved for such Performance Period. In determining the amount earned under such Awards, the Committee (i) shall, unlessotherwise provided in an Award Agreement, have the right to reduce or eliminate the amount payable at a given level of performanceto take into account additional factors that the Committee may deem relevant, including the assessment of12 individual or corporate performance for the Performance Period, but (ii) shall in no event have the right to increase the amount payablefor any reason.5.3Payment of Performance-Based Awards. Unless otherwise provided in the applicable AwardAgreement and only to the extent otherwise permitted by Section 162(m) of the Code, as to an Award that is intended to qualify asPerformance-Based Compensation, the Holder must be employed by the Company or a Subsidiary throughout the Performance Period.Unless otherwise provided in the applicable Award Agreement, a Holder shall be eligible to receive payment pursuant to such Awardsfor a Performance Period only if and to the extent the Performance Goals for such Performance Period are achieved.5.4Additional Limitations. Notwithstanding any other provision of the Plan and except as otherwisedetermined by the Administrator, any Award which is granted to an Eligible Individual and is intended to qualify as Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code or any regulations or rulingsissued thereunder that are requirements for qualification as Performance-Based Compensation, and the Plan and the applicable AwardAgreement shall be deemed amended to the extent necessary to conform to such requirements.ARTICLE 6.OPTIONS6.1Granting of Options to Eligible Individuals. The Administrator is authorized to grant Options to EligibleIndividuals from time to time, in its discretion, on such terms and conditions as it may determine, which shall not be inconsistent withthe Plan.6.2Option Exercise Price. The exercise price per Share subject to each Option shall be set by theAdministrator, but shall not be less than 100% of the Fair Market Value of a Share on the date the Option is granted (or, as to IncentiveStock Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) unless otherwisedetermined by the Administrator. In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, suchprice shall not be less than 110% of the Fair Market Value of a Share on the date the Option is granted (or the date the Option ismodified, extended or renewed for purposes of Section 424(h) of the Code).6.3Option Vesting.(a)The period during which the right to exercise, in whole or in part, an Option vests in theHolder shall be set by the Administrator and the Administrator may determine that an Option may not be exercised in whole or in partfor a specified period after it is granted. Such vesting may be based on service with the Company or any Subsidiary or any othercriteria selected by the Administrator, including Performance Goals or Performance Criteria. At any time after the grant of an Option,the Administrator, in its discretion and subject to whatever terms and conditions it selects, may accelerate the period during which anOption vests.(b)No portion of an Option which is unexercisable at a Holder’s Termination of Serviceshall thereafter become exercisable, except as may be otherwise provided by the13 Administrator either in the Award Agreement evidencing the grant of an Option or by action of the Administrator following the grantof the Option. Unless otherwise determined by the Administrator in the Award Agreement or by action of the Administrator followingthe grant of the Option, the portion of an Option that is unexercisable at a Holder’s Termination of Service shall automatically expirethirty (30) days following such Termination of Service.6.4Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon deliveryof all of the following to the Secretary of the Company, the stock administrator of the Company or such other person or entitydesignated by the Administrator, or his, her or its office, as applicable:(a)A written or electronic notice complying with the applicable rules established by theAdministrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person thenentitled to exercise the Option or such portion of the Option.(b)Such representations and documents as the Administrator, in its discretion, deemsnecessary or advisable to effect compliance with Applicable Law. The Administrator may, in its discretion, also take whateveradditional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates andissuing stop-transfer notices to agents and registrars.(c)In the event that the Option shall be exercised by any person or persons other than theHolder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the discretion of theAdministrator.(d)Full payment of the exercise price and applicable withholding taxes for the shares withrespect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 11.1 and Section 11.2.6.5Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shallnot be exercisable with respect to fractional Shares unless otherwise determined by the Administrator and the Administrator mayrequire that, by the terms of the Option, a partial exercise must be with respect to a minimum number of shares.6.6Option Term. The term of each Option (the “Option Term”) shall be set by the Administrator in itsdiscretion; provided, however, that the Option Term shall not be more than ten (10) years from the date the Option is granted, or five(5) years from the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder. The Administrator shall determinethe time period, including the time period following a Termination of Service, during which the Holder has the right to exercise thevested Options, which time period may not extend beyond the last day of the Option Term. Except as limited by the requirements ofSection 409A of the Code or the first sentence of this Section 6.6, the Administrator may extend the Option Term of any outstandingOption, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Serviceof the Holder, and may amend, subject to Section 13.1, any other term or condition of such Option relating to such a Termination ofService.14 6.7Expiration of Option Term: Automatic Exercise of In-The-Money Options. Unless otherwisedetermined by the Administrator (in an Award Agreement or otherwise) or as otherwise directed by an Option Holder in writing to theCompany, each Option outstanding on the Automatic Exercise Date with an exercise price per share that is less than the Fair MarketValue per share of Common Stock as of such date shall automatically and without further action by the Option Holder or the Companybe exercised on the Automatic Exercise Date. In the discretion of the Administrator, payment of the exercise price of any such Optionshall be made pursuant to Section 11.1(b) or Section 11.1(c) and the Company or any Subsidiary shall deduct or withhold an amountsufficient to satisfy all taxes associated with such exercise in accordance with Section 11.2. Unless otherwise determined by theAdministrator, this Section 6.7 shall not apply to an Option if the Holder of such Option incurs a Termination of Service on or beforethe Automatic Exercise Date. For the avoidance of doubt, no Option with an exercise price per share that is equal to or greater than theFair Market Value per share of Common Stock on the Automatic Exercise Date shall be exercised pursuant to this Section 6.7.6.8Notification Regarding Disposition. The Holder shall give the Company prompt written or electronicnotice of any disposition of Shares acquired by exercise of an Incentive Stock Option which occurs within (a) two years from the dateof granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Optionto such Holder, or (b) one year after the transfer of such Shares to such Holder.ARTICLE 7.RESTRICTED STOCK7.1Award of Restricted Stock.(a)The Administrator is authorized to grant Restricted Stock to Eligible Individuals, andshall determine the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms andconditions shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deemsappropriate.(b)The Administrator shall establish the purchase price, if any, and form of payment forRestricted Stock; provided, however, that if a purchase price is charged, such purchase price shall be no less than the par value, if any,of the Shares to be purchased, unless otherwise permitted by Applicable Law. In all cases, legal consideration shall be required foreach issuance of Restricted Stock.7.2Rights as Stockholders. Subject to Section 7.4, upon issuance of Restricted Stock, the Holder shall have,unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said Shares, subject to the restrictions ineach individual Award Agreement, including the right to receive all dividends and other distributions paid or made with respect to theShares; provided, however, that, in the discretion of the Administrator, any extraordinary distributions with respect to the Shares shallbe subject to the restrictions set forth in Section 7.3.15 7.3Restrictions. All shares of Restricted Stock (including any shares received by Holders thereof withrespect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in the termsof each individual Award Agreement, be subject to such restrictions and vesting requirements as the Administrator shall provide. Suchrestrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions may lapseseparately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by theAdministrator, including, without limitation, criteria based on the Holder’s duration of employment, directorship or consultancy withthe Company, Performance Goals, Performance Criteria, Company performance, individual performance or other criteria selected bythe Administrator. By action taken after the Restricted Stock is issued, the Administrator may, on such terms and conditions as it maydetermine to be appropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by theterms of the applicable Award Agreement. Unless otherwise determined by the Administrator, Restricted Stock may not be sold orencumbered until all restrictions are terminated or expire.7.4Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by the Administrator atthe time of the grant of the Award or thereafter, (a) if no price was paid by the Holder for the Restricted Stock, upon a Termination ofService during the applicable restriction period, the Holder’s rights in unvested Restricted Stock then subject to restrictions shall lapse,and such Restricted Stock shall be surrendered to the Company and cancelled without consideration, and (b) if a price was paid by theHolder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Company shall have theright to repurchase from the Holder the unvested Restricted Stock then subject to restrictions at a cash price per share equal to the pricepaid by the Holder for such Restricted Stock or such other amount as may be specified in the applicable Award Agreement.7.5Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be evidenced insuch manner as the Administrator shall determine. Certificates or book entries evidencing shares of Restricted Stock shall include anappropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. The Company, in itsdiscretion, may (a) retain physical possession of any stock certificate evidencing shares of Restricted Stock until the restrictions thereonshall have lapsed and/or (b) require that the stock certificates evidencing shares of Restricted Stock be held in custody by a designatedescrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed and that the Holder deliver astock power, endorsed in blank, relating to such Restricted Stock.7.6Section 83(b) Election. If a Holder makes an election under Section 83(b) of the Code to be taxed withrespect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which theHolder would otherwise be taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy of such election tothe Company promptly after filing such election with the Internal Revenue Service.16 ARTICLE 8.RESTRICTED STOCK UNITS8.1Grant of Restricted Stock Units. The Administrator is authorized to grant Awards of Restricted StockUnits to any Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions as determinedby the Administrator.8.2Purchase Price. The Administrator shall specify the purchase price, if any, to be paid by the Holder tothe Company with respect to any Restricted Stock Unit award; provided, however, that value of the consideration shall not be less thanthe par value of a Share, unless otherwise permitted by Applicable Law.8.3Vesting of Restricted Stock Units. At the time of grant, the Administrator shall specify the date or dateson which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as itdeems appropriate, including, without limitation, vesting based upon the Holder’s duration of service to the Company or anySubsidiary, Company performance, individual performance or other specific criteria, in each case on a specified date or dates or overany period or periods, as determined by the Administrator.8.4Maturity and Payment. At the time of grant, the Administrator shall specify the maturity date applicableto each grant of Restricted Stock Units, which shall be no earlier than the vesting date or dates of the Award and may be determined atthe election of the Holder (if permitted by the applicable Award Agreement); provided that, except as otherwise set forth in anapplicable Award Agreement, the maturity date relating to each Restricted Stock Unit shall not occur following the later of (a) the 15thday of the third month following the end of the calendar year in which the applicable portion of the Restricted Stock Unit vests; or (b)the 15th day of the third month following the end of the Company’s fiscal year in which the applicable portion of the Restricted StockUnit vests. On the maturity date, the Company shall, subject to Section 11.4, transfer to the Holder one unrestricted, fully transferableShare for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or in the discretion of theAdministrator, an amount in cash equal to the Fair Market Value of such Shares on the maturity date or a combination of cash andCommon Stock as determined by the Administrator.8.5No Rights as a Stockholder. Unless otherwise determined by the Administrator, a Holder of RestrictedStock Units shall possess no incidents of ownership with respect to the Shares represented by such Restricted Stock Units, unless anduntil such Shares are transferred to the Holder pursuant to the terms of this Plan and the Award Agreement.ARTICLE 9.PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS9.1Performance Awards. The Administrator is authorized to grant Performance Awards, includingAwards of Performance Stock Units and other Awards determined in the Administrator’s discretion from time to time, to anyEligible Individual. The value of Performance Awards, including Performance Stock Units, may be linked to the attainment of thePerformance Goals or other specific criteria, whether or not objective, determined by the17 Administrator, in each case on a specified date or dates or over any period or periods and in such amounts as may be determined bythe Administrator.9.2Dividend Equivalents.(a)Dividend Equivalents may be granted by the Administrator based on dividends declaredon the Common Stock, to be credited as of dividend payment dates with respect to dividends with record dates that occur during theperiod between the date an Award is granted to a Holder and the date such Award vests, is exercised, is distributed or expires, asdetermined by the Administrator. Such Dividend Equivalents shall be converted to cash or additional Shares by such formula and atsuch time and subject to such restrictions and limitations as may be determined by the Administrator.9.3Stock Payments. The Administrator is authorized to make Stock Payments to any Eligible Individual.The number or value of Shares of any Stock Payment shall be determined by the Administrator and may be based upon one or morePerformance Goals or any other specific criteria, including service to the Company or any Subsidiary, determined by theAdministrator. Shares underlying a Stock Payment which is subject to a vesting schedule or other conditions or criteria set by theAdministrator shall not be issued until those conditions have been satisfied. Unless otherwise provided by the Administrator, a Holderof a Stock Payment shall have no rights as a Company stockholder with respect to such Stock Payment until such time as the StockPayment has vested and the Shares underlying the Award have been issued to the Holder. Stock Payments may, but are not requiredto, be made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to such Eligible Individual.9.4Purchase Price. The Administrator may establish the purchase price of a Performance Award or Sharesdistributed as a Stock Payment award; provided, however, that value of the consideration shall not be less than the par value of aShare, unless otherwise permitted by Applicable Law.ARTICLE 10.STOCK APPRECIATION RIGHTS10.1Grant of Stock Appreciation Rights.(a)The Administrator is authorized to grant Stock Appreciation Rights to EligibleIndividuals from time to time, in its discretion, on such terms and conditions as it may determine, which shall not be inconsistent withthe Plan.(b)A Stock Appreciation Right shall entitle the Holder (or other person entitled to exercisethe Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extentthen exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtainedby subtracting the exercise price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of theStock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right shall have been exercised,subject to any limitations the Administrator may impose. Unless otherwise determined by the Administrator, the exercise price18 per Share subject to each Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of the Fair MarketValue on the date the Stock Appreciation Right is granted.10.2Stock Appreciation Right Vesting.(a)The period during which the right to exercise, in whole or in part, a Stock AppreciationRight vests in the Holder shall be set by the Administrator, and the Administrator may determine that a Stock Appreciation Right maynot be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Companyor any Subsidiary, Performance Criteria, Performance Goals or any other criteria selected by the Administrator. At any time after grantof a Stock Appreciation Right, the Administrator, in its discretion and subject to whatever terms and conditions it selects, mayaccelerate the period during which a Stock Appreciation Right vests.(b)No portion of a Stock Appreciation Right which is unexercisable at a Holder’sTermination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator in an AwardAgreement or by action of the Administrator following the grant of the Stock Appreciation Right. Unless otherwise determined by theAdministrator in the Award Agreement or by action of the Administrator following the grant of the Stock Appreciation Right, theportion of a Stock Appreciation Right which is unexercisable at a Holder’s Termination of Service shall automatically expire thirty (30)days following such Termination of Service.10.3Manner of Exercise. All or a portion of an exercisable Stock Appreciation Right shall be deemedexercised upon delivery of all of the following to the Secretary of the Company, the stock administrator of the Company, or such otherperson or entity designated by the Administrator, or his, her or its office, as applicable:(a)A written or electronic notice complying with the applicable rules established by theAdministrator stating that the Stock Appreciation Right, or a portion thereof, is exercised. The notice shall be signed by the Holder orother person then entitled to exercise the Stock Appreciation Right or such portion of the Stock Appreciation Right.(b)Such representations and documents as the Administrator, in its discretion, deemsnecessary or advisable to effect compliance with Applicable Law. The Administrator, in its discretion, may also take whateveradditional actions it deems appropriate to effect such compliance, including, without limitation, placing legends on share certificatesand issuing stop-transfer notices to agents and registrars.(c)In the event that the Stock Appreciation Right shall be exercised by any person orpersons other than the Holder, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right, asdetermined in the discretion of the Administrator.(d)Full payment of the exercise price and applicable withholding taxes for the Shares withrespect to which the Stock Appreciation Right, or portion thereof, is exercised, in a manner permitted by Section 11.1 and Section11.2.19 10.4Stock Appreciation Right Term. The term of each Stock Appreciation Right (the “Stock AppreciationRight Term”) shall be set by the Administrator in its discretion; provided, however, that the Stock Appreciation Right Term shall notbe more than ten (10) years from the date the Stock Appreciation Right is granted. The Administrator shall determine the time period,including the time period following a Termination of Service, during which the Holder has the right to exercise the vested StockAppreciation Rights, which time period may not extend beyond the last day of the Stock Appreciation Right Term applicable to suchStock Appreciation Right. Except as limited by the requirements of Section 409A of the Code or the first sentence of this Section 10.4,the Administrator may extend the Stock Appreciation Right Term of any outstanding Stock Appreciation Right, and may extend thetime period during which vested Stock Appreciation Rights may be exercised, in connection with any Termination of Service of theHolder, and may amend, subject to Section 14.1, any other term or condition of such Stock Appreciation Right relating to such aTermination of Service.10.5Payment. Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to thisArticle 10 shall be in cash, Shares (based on Fair Market Value as of the date the Stock Appreciation Right is exercised), or acombination of both, as determined by the Administrator.10.6Expiration of Stock Appreciation Right Term: Automatic Exercise of In-The-Money StockAppreciation Rights. Unless otherwise determined by the Administrator (in an Award Agreement or otherwise) or as otherwisedirected by a Stock Appreciation Right Holder in writing to the Company, each Stock Appreciation Right outstanding on theAutomatic Exercise Date with an exercise price per share that is less than the Fair Market Value per share of Common Stock as of suchdate shall automatically and without further action by the Stock Appreciation Right Holder or the Company be exercised on theAutomatic Exercise Date. In the discretion of the Administrator, the Company or any Subsidiary shall deduct or withhold an amountsufficient to satisfy all taxes associated with such exercise in accordance with Section 11.2. Unless otherwise determined by theAdministrator, this Section 10.6 shall not apply to a Stock Appreciation Right if the Holder of such Stock Appreciation Right incurs aTermination of Service on or before the Automatic Exercise Date. For the avoidance of doubt, no Stock Appreciation Right with anexercise price per share that is equal to or greater than the Fair Market Value per share of Common Stock on the Automatic ExerciseDate shall be exercised pursuant to this Section 10.6.ARTICLE 11.ADDITIONAL TERMS OF AWARDS11.1Payment. The Administrator shall determine the methods by which payments by any Holder withrespect to any Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, inthe case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) held for such period oftime as may be required by the Administrator in order to avoid adverse accounting consequences, in each case, having a Fair MarketValue on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Holder hasplaced a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise or vesting of anAward, and that the broker has been directed to pay a sufficient portion of the net proceeds of20 the sale to the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to theCompany upon settlement of such sale, or (d) any other form of legal consideration acceptable to the Administrator in its discretion.The Administrator shall also determine the methods by which Shares shall be delivered or deemed to be delivered to Holders.Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an “executive officer” of the Companywithin the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards grantedunder the Plan, or continue any extension of credit with respect to such payment, with a loan from the Company or a loan arranged bythe Company in violation of Section 13(k) of the Exchange Act.11.2Tax Withholding. The Company or any Subsidiary shall have the authority and the right to deduct orwithhold, or require a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (includingthe Holder’s FICA, employment tax or other social security contribution obligation) required by law to be withheld with respect to anytaxable event concerning a Holder arising as a result of the Plan. The Administrator, in its discretion and in satisfaction of the foregoingrequirement, may withhold, or allow a Holder to elect to have the Company withhold, Shares otherwise issuable under an Award (orallow the surrender of Shares). Unless otherwise determined by the Administrator, the number of Shares which may be so withheld orsurrendered shall be limited to the number of Shares which have a Fair Market Value on the date of withholding or repurchase equal tothe aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign incometax and payroll tax purposes that are applicable to such supplemental taxable income. The Administrator shall determine the fair marketvalue of the Shares, consistent with applicable provisions of the Code, for tax withholding obligations due in connection with a broker-assisted cashless Option or Stock Appreciation Right exercise involving the sale of Shares to pay the Option or Stock AppreciationRight exercise price or any tax withholding obligation.11.3Transferability of Awards.(a)Except as otherwise provided in Section 11.3(b):(i)No Award under the Plan may be sold, pledged, assigned ortransferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator,pursuant to a DRO, unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and allrestrictions applicable to such Shares have lapsed;(ii)No Award or interest or right therein shall be liable for the debts,contracts or engagements of the Holder or the Holder’s successors in interest or shall be subject to disposition by transfer, alienation,anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntaryor by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy),and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted bySection 11.3(a)(i); and(iii)During the lifetime of the Holder, only the Holder may exercise anAward (or any portion thereof) granted to such Holder under the Plan, unless it has been disposed21 of pursuant to a DRO; after the death of the Holder, any exercisable portion of an Award may, prior to the time when such portionbecomes unexercisable under the Plan or the Award Agreement, be exercised by the Holder’s personal representative or by any personempowered to do so under the deceased Holder’s will or under the then-applicable laws of descent and distribution.(b)Notwithstanding Section 11.3(a), the Administrator, in its discretion, may determine topermit a Holder to transfer an Award other than an Incentive Stock Option to any one or more Permitted Transferees, subject to thefollowing terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by thePermitted Transferee other than by will or the laws of descent and distribution; (ii) an Award transferred to a Permitted Transferee shallcontinue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to furthertransfer the Award); and (iii) the Holder and the Permitted Transferee shall execute any and all documents requested by theAdministrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfyany requirements for an exemption for the transfer under Applicable Law and (C) evidence the transfer.(c)Notwithstanding Section 11.3(a), a Holder may, in the manner determined by theAdministrator, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Awardupon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan issubject to all terms and conditions of the Plan and any Award Agreement applicable to the Holder, except to the extent the Plan andAward Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If theHolder is married or a domestic partner in a domestic partnership qualified under Applicable Law and resides in a community propertystate, a designation of a person other than the Holder’s spouse or domestic partner, as applicable, as the Holder’s beneficiary withrespect to more than 50% of the Holder’s interest in the Award shall not be effective without the prior written or electronic consent ofthe Holder’s spouse or domestic partner. If no beneficiary has been designated or survives the Holder, payment shall be made to theperson entitled thereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiarydesignation may be changed or revoked by a Holder at any time; provided that the change or revocation is filed with the Administratorprior to the Holder’s death.11.4Conditions to Issuance of Shares.(a)Notwithstanding anything herein to the contrary, the Company shall not be required toissue or deliver any certificates or make any book entries evidencing Shares issuable pursuant to any Award, unless and until the Boardor the Committee has determined, with advice of counsel, that the issuance of such Shares is in compliance with Applicable Law andthe Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms andconditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements andrepresentations as the Board or the Committee, in its discretion, deems advisable in order to comply with Applicable Law.22 (b)All Share certificates delivered pursuant to the Plan and all Shares issued pursuant tobook entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisableto comply with Applicable Law. The Administrator may place legends on any Share certificate or book entry to reference restrictionsapplicable to the Shares.(c)The Administrator shall have the right to require any Holder to comply with any timingor other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as maybe imposed in the discretion of the Administrator.(d)No fractional Shares shall be issued and the Administrator, in its discretion, shalldetermine whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by roundingdown.(e)Notwithstanding any other provision of the Plan, unless otherwise determined by theAdministrator or required by Applicable Law, the Company shall not deliver to any Holder certificates evidencing Shares issued inconnection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agentor stock plan administrator).11.5Forfeiture and Claw-Back Provisions. Pursuant to its general authority to determine the terms andconditions applicable to Awards under the Plan, the Administrator shall have the right to provide, in an Award Agreement orotherwise, or to require a Holder to agree by separate written or electronic instrument, that:(a)(i) Any proceeds, gains or other economic benefit actually or constructively received bythe Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, shall be paidto the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall beforfeited, if (x) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exerciseof the Award, or (y) the Holder at any time, or during a specified time period, engages in any activity in competition with theCompany, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (z) theHolder incurs a Termination of Service for “cause” (as such term is defined in the discretion of the Administrator, or as set forth in awritten agreement relating to such Award between the Company and the Holder); and(b)All Awards (including any proceeds, gains or other economic benefit actually orconstructively received by the Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlyingthe Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, anyclaw-back policy adopted to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules orregulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.23 11.6Repricing. Subject to Section 13.2, the Administrator shall have the authority, without the approval ofthe stockholders of the Company, to amend any outstanding Option or Stock Appreciation Right to reduce its price per share or cancelany Option or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock Appreciation Right priceper share exceeds the Fair Market Value of the underlying Shares.ARTICLE 12.ADMINISTRATION12.1Administrator. The Committee (or another committee or a subcommittee of the Board assuming thefunctions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted herein) and, unless otherwisedetermined by the Board, shall consist solely of two or more Non-Employee Directors, each of whom is intended to qualify as both a“non-employee director” as defined by Rule 16b-3 of the Exchange Act or any successor rule, an “outside director” for purposes ofSection 162(m) of the Code and an “independent director” under the rules of any securities exchange or automated quotation systemon which the Shares are listed, quoted or traded. Notwithstanding the foregoing, any action taken by the Committee shall be valid andeffective, whether or not members of the Committee at the time of such action are later determined not to have satisfied therequirements for membership set forth in this Section 12.1 or otherwise provided in any charter of the Committee. Except as mayotherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance ofappointment. Committee members may resign at any time by delivering written or electronic notice to the Board. Vacancies in theCommittee may only be filled by the Board. Notwithstanding the foregoing, (a) the full Board, acting by a majority of its members inoffice, shall conduct the general administration of the Plan with respect to Awards granted to Non-Employee Directors and, withrespect to such Awards, the terms “Administrator” and “Committee” as used in the Plan shall be deemed to refer to the Board and (b)the Board or Committee may delegate its authority hereunder to the extent permitted by Section 12.6.12.2Duties and Powers of Committee . It shall be the duty of the Committee to conduct the generaladministration of the Plan in accordance with its provisions. The Committee shall have the power to interpret the Plan and AwardAgreements, and to adopt such rules for the administration, interpretation and application of the Plan as are not inconsistent therewith,to interpret, amend or revoke any such rules and to amend any Award Agreement; provided that the rights or obligations of the Holderof the Award that is the subject of any such Award Agreement are not affected adversely by such amendment, unless the consent ofthe Holder is obtained or such amendment is otherwise permitted under Section 11.5 or Section 13.10. Any such grant or award underthe Plan need not be the same with respect to each Holder. Any such interpretations and rules with respect to Incentive Stock Optionsshall be consistent with the provisions of Section 422 of the Code. In its discretion, the Board may at any time and from time to timeexercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b‑3 under theExchange Act or any successor rule, or any regulations or rules issued thereunder, or the rules of any securities exchange or automatedquotation system on which the Shares are listed, quoted or traded are required to be determined in the discretion of the Committee.24 12.3Action by the Committee. Unless otherwise established by the Board or in any charter of theCommittee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting atwhich a quorum is present, and acts approved in writing by all members of the Committee in lieu of a meeting, shall be deemed theacts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other informationfurnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certifiedpublic accountants, or any executive compensation consultant or other professional retained by the Company to assist in theadministration of the Plan.12.4Authority of Administrator. Subject to the Company’s Bylaws, the Committee’s Charter and anyspecific designation in the Plan, the Administrator has the exclusive power, authority and sole discretion to:(a)Designate Eligible Individuals to receive Awards;(b)Determine the type or types of Awards to be granted to Eligible Individuals;(c)Determine the number of Awards to be granted and the number of Shares to which anAward will relate;(d)Determine the terms and conditions of any Award granted pursuant to the Plan,including, but not limited to, the exercise price, grant price, purchase price, any Performance Goals or Performance Criteria, any reloadprovision, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on theexercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gainon an Award, based in each case on such considerations as the Administrator in its sole discretion determines;(e)Determine whether, to what extent, and pursuant to what circumstances an Award maybe settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may becanceled, forfeited, or surrendered;(f)Prescribe the form of each Award Agreement, which need not be identical for eachHolder;(g)Decide all other matters that must be determined in connection with an Award;(h)Establish, adopt or revise any rules and regulations as it may deem necessary oradvisable to administer the Plan;(i)Interpret the terms of, and any matter arising pursuant to, the Plan or any AwardAgreement;(j)Make all other decisions and determinations that may be required pursuant to the Plan oras the Administrator deems necessary or advisable to administer the Plan; and25 (k)Accelerate wholly or partially the vesting or lapse of restrictions of any Award orportion thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects.12.5Decisions Binding. The Administrator’s interpretation of the Plan, any Awards granted pursuant to thePlan, and any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, bindingand conclusive on all parties.12.6Delegation of Authority. To the extent permitted by Applicable Law, the Board or Committee mayfrom time to time delegate to a committee of one or more members of the Board or one or more officers of the Company the authorityto grant or amend Awards or to take other administrative actions pursuant to this Article 12; provided, however, that in no event shallan officer of the Company be delegated the authority to grant awards to, or amend awards held by, the following individuals: (a)individuals who are subject to Section 16 of the Exchange Act, (b) Covered Employees with respect to Awards intended to constitutePerformance-Based Compensation, or (c) officers of the Company (or Directors) to whom authority to grant or amend Awards hasbeen delegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent it ispermissible under Applicable Law. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committeespecifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee.At all times, the delegatee appointed under this Section 12.6 shall serve in such capacity at the pleasure of the Board and theCommittee.ARTICLE 13.MISCELLANEOUS PROVISIONS13.1Amendment, Suspension or Termination of the Plan. Except as otherwise provided in this Section13.1, the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time bythe Board or the Committee. However, without approval of the Company’s stockholders given within twelve (12) months before orafter the action by the Administrator, no action of the Administrator may, except as provided in Section 13.2, increase the limitsimposed in Section 3.1 on the maximum number of Shares which may be issued under the Plan. Except as provided in Section 13.10,no amendment, suspension or termination of the Plan shall, without the consent of the Holder, impair any rights or obligations underany Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides. No Awards may be granted orawarded during any period of suspension or after termination of the Plan, and in no event may any Award be granted under the Planafter April 28, 2026 (the “Expiration Date”). Any Awards that are outstanding on the Expiration Date shall remain in force accordingto the terms of the Plan and the applicable Award Agreement.13.2Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Companyand Other Corporate Events.(a)In connection with the occurrence of any Equity Restructuring, and notwithstandinganything to the contrary in this Section 13.2, the Administrator shall equitably adjust each outstanding Award, which adjustments mayinclude adjustments to the number and26 type of securities subject to each outstanding Award and/or the exercise price or grant price thereof, if applicable, the grant of newAwards, and/or the making of a cash payment, as the Administrator deems appropriate to reflect such Equity Restructuring. Theadjustments provided under this Section 13.2(a) shall be nondiscretionary and shall be final and binding on the affected Holder and theCompany; provided that whether an adjustment is equitable shall be determined in the discretion of the Administrator.(b)In the event that the Administrator determines that any dividend or other distribution(whether in the form of cash, Common Stock, other securities, or other property), Change in Control, reorganization, merger,amalgamation, consolidation, combination, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or otherdisposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of theCompany, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similarcorporate transaction or event, as determined by the Administrator, affects the Common Stock such that an adjustment is determined bythe Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by theCompany to be made available under the Plan or with respect to any Award, the Administrator may make equitable adjustments, ifany, to reflect such change with respect to: (i) the aggregate number and kind of shares that may be issued under the Plan (including,but not limited to, adjustments of the limitations in Sections 3.1, 3.3 and 3.3 on the maximum number and kind of shares which may beissued under the Plan); (ii) the number and kind of Shares (or other securities or property) subject to outstanding Awards; (iii) thenumber and kind of Shares (or other securities or property) for which automatic grants are subsequently to be made to new andcontinuing Non-Employee Directors pursuant to Section 4.5; (iv) the terms and conditions of any outstanding Awards (including,without limitation, any applicable performance targets or criteria with respect thereto); and (v) the grant or exercise price per share forany outstanding Awards under the Plan. Any adjustment affecting an Award intended as Performance-Based Compensation shall bemade consistent with the requirements of Section 162(m) of the Code unless otherwise determined by the Administrator.(c)In the event of any transaction or event described in Section 13.2(b) or any unusual ornonrecurring transactions or events affecting the Company, any Subsidiary of the Company, or the financial statements of theCompany or any Subsidiary, or of changes in Applicable Law or accounting principles, the Administrator, in its discretion, and onsuch terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of suchtransaction or event and either automatically or upon the Holder’s request, is hereby authorized to take any one or more of thefollowing actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement ofthe benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitatesuch transactions or events or to give effect to such changes in laws, regulations or principles:(i)To provide for either (A) termination of any such Award in exchangefor an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of theHolder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section13.2 the Administrator determines in good faith that no amount would have been attained upon the exercise27 of such Award or realization of the Holder’s rights, then such Award may be terminated by the Company without payment) or (B) thereplacement of such Award with other rights or property selected by the Administrator, in its discretion, having an aggregate value notexceeding the amount that could have been attained upon the exercise of such Award or realization of the Holder’s rights had suchAward been currently exercisable or payable or fully vested;(ii)To provide that such Award be assumed by the successor or survivorcorporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of thesuccessor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of sharesand prices;(iii)To make adjustments in the number and type of shares of theCompany’s stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding RestrictedStock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards andAwards which may be granted in the future;(iv)To provide that such Award shall be exercisable or payable or fullyvested with respect to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable AwardAgreement; and(v)To provide that the Award will terminate and cannot vest, beexercised or become payable after such event.(d)The Administrator, in its discretion, may include such further provisions and limitationsin any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent withthe provisions of the Plan.(e)Unless otherwise determined by the Administrator, no adjustment or action described inthis Section 13.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment would (i) with respect toAwards granted to Covered Employees and intended to qualify as Performance-Based Compensation, cause such Award to fail to soqualify or (ii) cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be authorized tothe extent such adjustment or action would result in short-swing profits liability under Section 16 of the Exchange Act or violate theexemptive conditions of Rule 16b-3 of the Exchange Act unless the Administrator determines that the Award is not to comply withsuch exemptive conditions.(f)The existence of the Plan, the Award Agreement and the Awards granted hereundershall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize anyadjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger orconsolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferredor prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into orexchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assetsor business, or any other corporate act or proceeding, whether of a similar character or otherwise.28 (g)No action shall be taken under this Section 13.2 which shall cause an Award to fail tocomply with Section 409A of the Code, to the extent applicable.(h)In the event of any pending stock dividend, stock split, combination or exchange ofshares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any otherchange affecting the Shares or the share price of the Common Stock including any Equity Restructuring, for reasons of administrativeconvenience, the Company, in its discretion, may refuse to permit the exercise of any Award during a period of up to thirty (30) daysprior to the consummation of any such transaction.13.3Approval of Plan by Stockholders. This amended and restated Plan shall be submitted for the approvalof the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption hereof. Notwithstanding theforegoing, the Original Plan shall remain in effect on its existing terms unless and until this amended and restated Plan is approved bythe Company’s stockholders.13.4No Stockholders Rights. Except as otherwise provided herein, a Holder shall have none of the rights ofa stockholder with respect to Shares covered by any Award until the Holder becomes the record owner of such Shares.13.5Paperless Administration. In the event that the Company establishes, for itself or using the services of athird party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website orinteractive voice response, then the paperless documentation, granting or exercise of Awards by a Holder may be permitted through theuse of such an automated system.13.6Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not affect any othercompensation or incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be construed to limit the rightof the Company or any Subsidiary: (a) to establish any other forms of incentives or compensation for Employees, Directors orConsultants of the Company or any Subsidiary, or (b) except as otherwise provided in the penultimate sentence of Section 3.1(a), togrant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purposeincluding without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger,consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm orassociation.13.7Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuanceand delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject tocompliance with all Applicable Law (including but not limited to state, federal and foreign securities law and margin requirements),and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, benecessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and theperson acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company asthe Company may deem necessary or desirable to assure compliance with all Applicable Law. To the extent permitted by ApplicableLaw, the Plan and Awards granted or29 awarded hereunder shall be deemed amended to the extent necessary to conform to Applicable Law.13.8Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings ofthe Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than suchtitles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successorthereto.13.9Governing Law. The Plan and any agreements hereunder shall be administered, interpreted andenforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction.13.10Section 409A. To the extent that the Administrator determines that any Award granted under the Planis subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditionsrequired by Section 409A of the Code. To the extent applicable, the Plan and any Award Agreements shall be interpreted inaccordance with Section 409A of the Code, including without limitation any such regulations or other guidance that may be issuedafter the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date theAdministrator determines that any Award may be subject to Section 409A of the Code (including Department of Treasury guidance asmay be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the applicable AwardAgreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take anyother actions, that the Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Codeand/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements ofSection 409A of the Code and thereby avoid the application of any penalty taxes under such Section.13.11No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted anyAward pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or anyother persons or Awards (or portions thereof) uniformly.13.12Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentivecompensation. With respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or anyAward Agreement shall give the Holder any rights that are greater than those of a general creditor of the Company or any Subsidiary.13.13Indemnification. To the extent allowable pursuant to Applicable Law, each member of the Committeeor of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposedupon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he orshe may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against andfrom any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; providedhe or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she30 undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any otherrights of indemnification to which such persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as amatter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.13.14Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account indetermining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of theCompany or any Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreementthereunder.13.15Expenses. The expenses of administering the Plan shall be borne by the Company and itsSubsidiaries.* * * * * 31 T2 BIOSYSTEMS, INC.2014 INCENTIVE AWARD PLANSTOCK OPTION GRANT NOTICET2 Biosystems, Inc., a Delaware corporation, (the “Company”), pursuant to its 2014 Incentive Award Plan, as amended fromtime to time (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase the number of shares ofCommon Stock (“Stock”) set forth below (the “Option”). The Option is subject to the terms and conditions set forth in this StockOption Grant Notice (the “Grant Notice”) and the Stock Option Agreement attached hereto as Exhibit A (the “Agreement”) and thePlan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the samedefined meanings in the Grant Notice and the Agreement.Participant: Grant Date: Exercise Price per Share:$Total Exercise Price:$Total Number of SharesSubject to the Option:sharesExpiration Date: Vesting Commencement Date Vesting Schedule:[To be specified in individual agreements.]Type of Option:☐ Incentive Stock Option ☐ Non-Qualified Stock OptionBy Participant’s signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement andthe Grant Notice. Participant has reviewed the Agreement, the Plan and the Grant Notice in their entirety, has had an opportunity toobtain the advice of counsel prior to executing the Grant Notice and fully understands all provisions of the Grant Notice, the Agreementand the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administratorupon any questions arising under the Plan, the Grant Notice or the Agreement. T2 BIOSYSTEMS, INC.HOLDER:PARTICIPANT By: By: PrintName: PrintName: Title: EXHIBIT ATO STOCK OPTION GRANT NOTICESTOCK OPTION AGREEMENTPursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant an Option underthe Plan to purchase the number of shares of Stock set forth in the Grant Notice.ARTICLE 1.GENERAL1.1Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in thePlan or the Grant Notice.1.2Incorporation of Terms of Plan. The Option is subject to the terms and conditions set forth in thisAgreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and thisAgreement, the terms of the Plan shall control.ARTICLE 2.GRANT OF OPTION2.1Grant of Option. In consideration of Participant’s past and/or continued employment with or service to theCompany or a Subsidiary and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the“Grant Date”), the Company has granted to Participant the Option to purchase any part or all of an aggregate of the number of shares ofStock set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject toadjustments as provided in Section 12.2 of the Plan.2.2Exercise Price. The exercise price per share of the shares of Stock subject to the Option (the “ExercisePrice”) shall be as set forth in the Grant Notice. 2.3Consideration to the Company. In consideration of the grant of the Option by the Company, Participantagrees to render faithful and efficient services to the Company or any Subsidiary. Nothing in the Plan, the Grant Notice or thisAgreement shall confer upon Participant any right to continue in the employ or service of the Company or any Subsidiary or shallinterfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, todischarge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extentexpressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.ARTICLE 3.PERIOD OF EXERCISABILITY3.1Commencement of Exercisability.(a)Subject to Sections 3.2, 3.3, 5.9 and 5.14 hereof, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.(b)Unless otherwise determined by the Administrator, any portion of the Option that hasnot become vested and exercisable on or prior to the date of the Participant’s Termination of Service shall be forfeited on the date ofthe Participant’s Termination of Service and shall not thereafter become vested or exercisable.3.2Duration of Exercisability. The installments provided for in the vesting schedule set forth in the GrantNotice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in theGrant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3 hereof. Once the Option becomesunexercisable, it shall be forfeited immediately.3.3Expiration of Option. The Option may not be exercised to any extent by anyone after the first to occur ofthe following events:(a)The expiration date set forth in the Grant Notice;(b)Except as the Administrator may otherwise approve, in the event of Participant’sTermination of Service other than for Cause or by reason of Participant’s death or disability, the expiration of three (3) months fromthe date of Participant’s Termination of Service;(c)Except as the Administrator may otherwise approve, the expiration of one (1) yearfrom the date of Participant’s Termination of Service by reason of Participant’s death or disability; or(d)Except as the Administrator may otherwise approve, upon Participant’s Termination ofService for Cause.As used in this Agreement, “Cause” shall mean (a) the Board’s determination that Participant failed to substantially performParticipant’s duties (other than any such failure resulting from Participant’s disability); (b) the Board’s determination that Participantfailed to carry out, or comply with any lawful and reasonable directive of the Board or Participant’s immediate supervisor; (c)Participant’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony, indictableoffense or crime involving moral turpitude; (d) Participant’s unlawful use (including being under the influence) or possession of illegaldrugs on the premises of the Company or any of its Subsidiaries or while performing Participant’s duties and responsibilities; or (e)Participant’s commission of an act of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary duty against theCompany of any of its Subsidiaries. Notwithstanding the foregoing, if Participant is a party to a written employment or consultingagreement with the Company (or its Subsidiary) in which the term “cause” is defined, then “Cause” shall be as such term is defined inthe applicable written employment or consulting agreement.3.4Tax Withholding. Notwithstanding any other provision of this Agreement:(a)The Company and its Subsidiaries have the authority to deduct or withhold, or requireParticipant to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local andforeign taxes (including the employee portion of any FICA obligation) required by law to be withheld with respect to any taxableevent arising pursuant to this Agreement. The Company and its Subsidiaries may withhold or Participant may make such payment inone or more of the forms specified below:(i)by cash or check made payable to the Company or the Subsidiary with respect to which the withholding obligation arises;(ii)by the deduction of such amount from other compensation payable toParticipant;(iii)with respect to any withholding taxes arising in connection with theexercise of the Option, with the consent of the Administrator, by requesting that the Company withhold a net number of shares of Stockissuable upon the exercise of the Option having a then current Fair Market Value not exceeding the amount necessary to satisfy thewithholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal,state, local and foreign income tax and payroll tax purposes;(iv)with respect to any withholding taxes arising in connection with theexercise of the Option, with the consent of the Administrator, by tendering to the Company shares of Stock having a then current FairMarket Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based onthe minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;(v)with respect to any withholding taxes arising in connection with theexercise of the Option, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to theCompany with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay asufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the withholding obligationarises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the Company or the applicableSubsidiary at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or(vi)in any combination of the foregoing.(b)With respect to any withholding taxes arising in connection with the Option, in theevent Participant fails to provide timely payment of all sums required pursuant to Section 3.4(a), the Company shall have the rightand option, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant’srequired payment obligation pursuant to Section 3.4(a)(ii) or Section 3.4(a)(iii) above, or any combination of the foregoing as theCompany may determine to be appropriate. The Company shall not be obligated to deliver any certificate representing shares ofStock issuable with respect to the exercise of the Option to Participant or his or her legal representative unless and until Participant orhis or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxesapplicable with respect to the taxable income of Participant resulting from the exercise of the Option or any other taxable eventrelated to the Option.(c)In the event any tax withholding obligation arising in connection with the Option willbe satisfied under Section 3.4(a)(iii) above, then the Company may elect to instruct any brokerage firm determined acceptable to theCompany for such purpose to sell on Participant’s behalf a whole number of shares from those shares of Stock that are issuable uponexercise of the Option as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the taxwithholding obligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which thewithholding obligation arises. Participant’s acceptance of this Award constitutes Participant’s instruction and authorization to theCompany and such brokerage firm to complete the transactions described in this Section 3.4(c), including the transactions describedin the previous sentence, as applicable. The Company may refuse to issue any shares of Stock to Participant until the foregoing taxwithholding obligations are satisfied.(d)Participant is ultimately liable and responsible for all taxes owed in connection withthe Option, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise inconnection with the Option. Neither the Company nor any Subsidiary makes any representation or undertaking regarding thetreatment of any tax withholding in connection with the awarding, vesting or exercise of the Option or the subsequent sale ofStock. The Company and the Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminateParticipant’s tax liability.ARTICLE 4.EXERCISE OF OPTION4.1Person Eligible to Exercise. During the lifetime of Participant, only Participant may exercise the Option orany portion thereof. After the death of Participant, any exercisable portion of the Option may, prior to the time when the Optionbecomes unexercisable under Section 3.3 hereof, be exercised by Participant’s personal representative or by any person empowered todo so under the deceased Participant’s will or under the then applicable laws of descent and distribution.4.2Partial Exercise. Subject to Section 5.2, any exercisable portion of the Option or the entire Option, if thenwholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomesunexercisable under Section 3.3 hereof.4.3Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by deliveryto the Secretary of the Company (or any third party administrator or other person or entity designated by the Company), during regularbusiness hours, of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section3.3 hereof.(a)An exercise notice in a form specified by the Administrator, stating that the Option orportion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator;(b)The receipt by the Company of full payment for the shares of Stock with respect towhich the Option or portion thereof is exercised, in such form of consideration permitted under Section 4.4 hereof that is acceptableto the Administrator;(c)The payment of any applicable withholding tax in accordance with Section 3.4;(d)Any other written representations or documents as may be required in theAdministrator’s sole discretion to effect compliance with Applicable Law; and(e)In the event the Option or portion thereof shall be exercised pursuant to Section 4.1hereof by any person or persons other than Participant, appropriate proof of the right of such person or persons to exercise theOption.Notwithstanding any of the foregoing, the Administrator shall have the right to specify all conditions of the manner of exercise, whichconditions may vary by country and which may be subject to change from time to time. 4.4Method of Payment. Payment of the exercise price shall be by any of the following, or a combinationthereof, at the election of Participant:(a)Cash or check;(b)With the consent of the Administrator, surrender of shares of Stock (including, withoutlimitation, shares of Stock otherwise issuable upon exercise of the Option) held for such period of time as may be required by theAdministrator in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to theaggregate exercise price of the Option or exercised portion thereof;(c)Through the delivery of a notice that Participant has placed a market sell order with abroker acceptable to the Company with respect to shares of Stock then issuable upon exercise of the Option, and that the broker hasbeen directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price;provided that payment of such proceeds is then made to the Company at such time as may be required by the Administrator, but inany event not later than the settlement of such sale; or(d)Any other form of legal consideration acceptable to the Administrator.4.5Conditions to Issuance of Stock. The Company shall not be required to issue or deliver any shares ofStock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: (A) theadmission of such shares of Stock to listing on all stock exchanges on which such Stock is then listed, (B) the completion of anyregistration or other qualification of such shares of Stock under any state or federal law or under rulings or regulations of the Securitiesand Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deemnecessary or advisable, (C) the obtaining of any approval or other clearance from any state or federal governmental agency which theAdministrator shall, in its absolute discretion, determine to be necessary or advisable, (D) the receipt by the Company of full paymentfor such shares of Stock, which may be in one or more of the forms of consideration permitted under Section 4.4 hereof, and (E) thereceipt of full payment of any applicable withholding tax in accordance with Section 3.4 by the Company or its Subsidiary with respectto which the applicable withholding obligation arises.4.6Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will haveany of the rights or privileges of a stockholder of the Company in respect of any shares of Stock purchasable upon the exercise of anypart of the Option unless and until certificates representing such shares of Stock (which may be in book-entry form) will have beenissued and recorded on the records of the Company or its transfer agents or registrars and delivered to Participant (including throughelectronic delivery to a brokerage account). No adjustment will be made for a dividend or other right for which the record date is priorto the date of such issuance, recordation and delivery, except as provided in Section 12.2 of the Plan. Except as otherwise providedherein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect tosuch shares of Stock, including, without limitation, the right to receipt of dividends and distributions on such shares. ARTICLE 5.OTHER PROVISIONS5.1Administration. The Administrator shall have the power to interpret the Plan, the Grant Notice and thisAgreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules. All actionstaken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company andall other interested persons. To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will bepersonally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.5.2Whole Shares. The Option may only be exercised for whole shares of Stock.5.3Option Not Transferable. Subject to Section 4.1 hereof, the Option may not be sold, pledged, assigned ortransferred in any manner other than by will or the laws of descent and distribution, unless and until the shares of Stock underlying theOption have been issued, and all restrictions applicable to such shares of Stock have lapsed. Neither the Option nor any interest or righttherein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall besubject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether suchdisposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal orequitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except tothe extent that such disposition is permitted by the preceding sentence.5.4Adjustments. The Administrator may accelerate the vesting of all or a portion of the Option in suchcircumstances as it, in its sole discretion, may determine. In addition, upon the occurrence of certain events relating to the Stockcontemplated by Section 12.2 of the Plan (including, without limitation, an extraordinary cash dividend on such Stock), theAdministrator may make such adjustments as the Administrator deems appropriate in the number of shares of Stock subject to theOption, the exercise price of the Option and the kind of securities that may be issued upon exercise of the Option. Participantacknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement andthe Plan, including Section 12.2 of the Plan.5.5Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed tothe Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to Participant shallbe addressed to Participant (or, if Participant is then deceased, to the person entitled to exercise the Option pursuant to Section 4.1) atParticipant’s last address reflected on the Company’s records. By a notice given pursuant to this Section 5.5, either party may hereafterdesignate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email (if toParticipant) or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch postoffice regularly maintained by the United States Postal Service.5.6Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation orconstruction of this Agreement.5.7Governing Law. The laws of the State of Delaware shall govern the interpretation, validity, administration,enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts oflaws.5.8Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and thisAgreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of theSecurities Act and the Exchange Act and any and all regulations and rules promulgated thereunder by the Securities and ExchangeCommission and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered,and the Option is granted and may be exercised, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform toApplicable Law.5.9Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may bewholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator orthe Board, provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination ofthis Agreement shall adversely affect the Option in any material way without the prior written consent of Participant. 5.10Successors and Assigns. The Company may assign any of its rights under this Agreement to single ormultiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to therestrictions on transfer set forth in Section 5.3 and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs,legatees, legal representatives, successors and assigns of the parties hereto.5.11Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or thisAgreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option, the Grant Notice and this Agreement shallbe subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including anyamendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extentpermitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicableexemptive rule.5.12Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer upon Participantany right to continue to serve as an employee or other service provider of the Company or any Subsidiary or shall interfere with orrestrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminatethe services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly providedotherwise in a written agreement between the Company or a Subsidiary and Participant.5.13Entire Agreement. The Plan, the Grant Notice and this Agreement (including any exhibit hereto)constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company andParticipant with respect to the subject matter hereof. 5.14Section 409A. This Award is not intended to constitute “nonqualified deferred compensation” within themeaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issuedthereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section409A”). However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time theAdministrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have theright in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adoptsuch amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments,policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriatefor this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A. 5.15Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is heldinvalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to haveany effect on, the remaining provisions of the Grant Notice or this Agreement. 5.16Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than asherein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall notbe construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant shall haveonly the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, withrespect to the Option, and rights no greater than the right to receive the Stock as a general unsecured creditor with respect to options, asand when exercised pursuant to the terms hereof.5.17Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of anyelectronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute oneinstrument.5.18Broker-Assisted Sales. In the event of any broker-assisted sale of shares of Stock in connection with thepayment of withholding taxes as provided in Section 3.4(a)(v) or Section 3.4(c) or the payment of the exercise price as provided inSection 4.4(c): (A) any shares of Stock to be sold through a broker-assisted sale will be sold on the day the tax withholding obligationor exercise of the Option, as applicable, occurs or arises, or as soon thereafter as practicable; (B) such shares of Stock may be sold aspart of a block trade with other participants in the Plan in which all participants receive an average price; (C) Participant will beresponsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Company harmless from anylosses, costs, damages, or expenses relating to any such sale; (D) to the extent the proceeds of such sale exceed the applicable taxwithholding obligation or exercise price, the Company agrees to pay such excess in cash to Participant as soon as reasonablypracticable; (E) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at anyparticular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation orexercise price; and (F) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation,Participant agrees to pay immediately upon demand to the Company or its Subsidiary with respect to which the withholding obligationarises, an amount sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.5.19Incentive Stock Options. Participant acknowledges that to the extent the aggregate Fair Market Value ofshares of Stock (determined as of the time the option with respect to the shares is granted) with respect to which Incentive StockOptions, including this Option (if applicable), are exercisable for the first time by Participant during any calendar year exceeds$100,000 or if for any other reason such Incentive Stock Options do not qualify or cease to qualify for treatment as “incentive stockoptions” under Section 422 of the Code, such Incentive Stock Options shall be treated as Non-Qualified Stock Options. Participantfurther acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other stock options intoaccount in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulationsthereunder. Participant also acknowledges that an Incentive Stock Option exercised more than three (3) months after Participant’sTermination of Service, other than by reason of death or disability, will be taxed as a Non-Qualified Stock Option.5.20Notification of Disposition. If this Option is designated as an Incentive Stock Option, Participant shallgive prompt written notice to the Company of any disposition or other transfer of any shares of Stock acquired under this Agreement ifsuch disposition or transfer is made (a) within two (2) years from the Grant Date or (b) within one (1) year after the transfer of suchshares of Stock to Participant. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash,other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer. * * * * * T2 BIOSYSTEMS, INC.2014 INCENTIVE AWARD PLAN RESTRICTED STOCK UNIT GRANT NOTICE T2 Biosystems, Inc., a Delaware corporation (the “Company”), pursuant to its 2014 Incentive Award Plan, as amended fromtime to time (the “Plan”), hereby grants to the holder listed below (“Participant”) the number of Restricted Stock Units (the “RSUs”) setforth below. The RSUs are subject to the terms and conditions set forth in this Restricted Stock Unit Grant Notice (the “Grant Notice”)and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, which are incorporated hereinby reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in the Grant Noticeand the Agreement.Participant: Grant Date: Number of RSUs: Type of Shares Issuable:Common StockVesting Schedule: By Participant’s signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement andthe Grant Notice. Participant has reviewed the Agreement, the Plan and the Grant Notice in their entirety, has had an opportunity toobtain the advice of counsel prior to executing the Grant Notice and fully understands all provisions of the Grant Notice, the Agreementand the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administratorupon any questions arising under the Plan, the Grant Notice or the Agreement. T2 BIOSYSTEMS, INC.HOLDER:PARTICIPANTBy: By: PrintName: Print Name: Title: US-DOCS\73598639.2 EXHIBIT ATO RESTRICTED STOCK UNIT GRANT NOTICERESTRICTED STOCK UNIT AGREEMENTPursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant the number ofRSUs set forth in the Grant Notice. ARTICLE 1.GENERAL1.1Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in thePlan or the Grant Notice.1.2Incorporation of Terms of Plan. The RSUs and the shares of Common Stock (“Stock”) issued toParticipant hereunder (“Shares”) are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporatedherein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control, exceptas provided in Section 2.3(c), 2.4(b) or 3.13.ARTICLE 2.AWARD OF RESTRICTED STOCK UNITS AND DIVIDENDEQUIVALENTS2.1Award of RSUs and Dividend Equivalents. (a)In consideration of Participant’s past and/or continued employment with or service tothe Company or a Subsidiary and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice(the “Grant Date”), the Company has granted to Participant the number of RSUs set forth in the Grant Notice, upon the terms andconditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustment as provided in Section 12.2 of thePlan. Each RSU represents the right to receive one Share or, at the option of the Company, an amount of cash as set forth in Section2.3(b), in either case, at the times and subject to the conditions set forth herein. However, unless and until the RSUs have vested,Participant will have no right to the payment of any Shares subject thereto. Prior to the actual delivery of any Shares, the RSUs willrepresent an unsecured obligation of the Company, payable only from the general assets of the Company. (b)The Company hereby grants to Participant an Award of Dividend Equivalents withrespect to each RSU granted pursuant to the Grant Notice for all ordinary cash dividends which are paid to all or substantially allholders of the outstanding shares of Stock between the Grant Date and the date when the applicable RSU is distributed or paid toParticipant or is forfeited or expires. The Dividend Equivalents for each RSU shall be equal to the amount of cash which is paid as adividend on one share of Stock. All such Dividend Equivalents shall be credited to Participant and retained by the Company (withoutinterest) or, at the Company’s option, may be deemed to be reinvested in additional RSUs as of the date of payment of any suchdividend based on the Fair Market Value of a share of Stock on such date. Each Dividend Equivalent (including any additional RSUwhich results from the deemed reinvestment of Dividend Equivalents granted hereunder, if applicable) shall be subject to the samevesting, distribution or US-DOCS\73598639.2 payment, adjustment and other provisions which apply to the underlying RSU to which such Dividend Equivalent relates.2.2Vesting of RSUs and Dividend Equivalents. (a)Subject to Participant’s continued employment with or service to the Company or aSubsidiary on each applicable vesting date and subject to the terms of this Agreement, the RSUs shall vest in such amounts and at suchtimes as are set forth in the Grant Notice. Each Dividend Equivalent (including any additional RSU which results from deemedreinvestments of Dividend Equivalents pursuant to Section 2.1(b) hereof, if applicable) shall vest whenever the underlying RSU towhich such Dividend Equivalent relates vests.(b)In the event Participant incurs a Termination of Service, except as may be otherwiseprovided by the Administrator or as set forth in a written agreement between Participant and the Company, Participant shall immediatelyforfeit any and all RSUs and Dividend Equivalents (including any additional RSU which results from deemed reinvestments ofDividend Equivalents pursuant to Section 2.1(b) hereof, if applicable) granted under this Agreement which have not vested or do notvest on or prior to the date on which such Termination of Service occurs, and Participant’s rights in any such RSUs and DividendEquivalents which are not so vested shall lapse and expire.2.3Distribution or Payment of RSUs. (a)Participant’s vested RSUs and Dividend Equivalents will be distributed in Shares(either in book-entry form or otherwise) or, at the option of the Company, paid in an amount of cash as set forth in Section 2.3(b), ineither case, on the earliest to occur of the following dates:(i)the date that is 14 months after the date upon which the applicable RSUor Dividend Equivalent vested under Section 2.2, provided that the Participant’s “separation from service” (within the meaning ofSection 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”), and Treasury Regulation Section 1.409A-1(h)) from the Company (“Separation from Service”) has not occurred prior to such date;(ii)the date of the occurrence of a Change in Control that constitutes a“change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5), provided that the Participant’s Separation fromService has not occurred prior to such date; or(iii)in the seventh (7th) month following the date of Participant’sSeparation from Service.(b)In the event that the Company elects to make payment of Participant’s RSUs in cash,the amount of cash payable with respect to each RSU shall be equal to the Fair Market Value of a Share on the day immediatelypreceding the applicable distribution or payment date set forth in Section 2.3(a). All distributions made in Shares shall be made by theCompany in the form of whole Shares, and any fractional share shall be distributed in cash in an amount equal to the value of suchfractional share determined based on the Fair Market Value as of the date immediately preceding the date of such distribution.(c)Notwithstanding any provisions of this Agreement or the Plan to the contrary, the timeof distribution of the RSUs under this Agreement may not be changed except as may be permitted by the Administrator in accordancewith Section 409A of the Code and the applicable Treasury Regulations promulgated thereunder.12 2.4Conditions to Issuance of Certificates. (a)The Company shall not be required to issue or deliver any certificate or certificates forany Shares prior to the fulfillment of all of the following conditions: (A) the admission of the Shares to listing on all stock exchangeson which such Shares are then listed, (B) the completion of any registration or other qualification of the Shares under any state orfederal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, whichthe Administrator shall, in its absolute discretion, deem necessary or advisable, and (C) the obtaining of any approval or other clearancefrom any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary oradvisable. In the event that the Company delays a distribution or payment in settlement of RSUs because it determines that the issuanceof shares of Stock in settlement of such RSUs will violate federal securities laws or any other Applicable Law, such distribution orpayment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or paymentwill not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii).(b)Notwithstanding Section 2.4(a), no payment shall be delayed under this Section 2.4 ifsuch delay would result in a violation of Section 409A of the Code.2.5Tax Withholding. Notwithstanding any other provision of this Agreement:(a)The Company and its Subsidiaries have the authority to deduct or withhold, or requireParticipant to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local andforeign taxes (including the employee portion of any FICA obligation) required by law to be withheld with respect to any taxable eventarising pursuant to this Agreement. The Company and its Subsidiaries may withhold or Participant may make such payment in one ormore of the forms specified below:(i)by cash or check made payable to the Company or the Subsidiary withrespect to which the withholding obligation arises;(ii)by the deduction of such amount from other compensation payable toParticipant;(iii)with respect to any withholding taxes arising in connection with thedistribution of the RSUs, with the consent of the Administrator, by requesting that the Company and its Subsidiaries withhold a netnumber of vested shares of Stock otherwise issuable pursuant to the RSUs having a then current Fair Market Value not exceeding theamount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutorywithholding rates for federal, state, local and foreign income tax and payroll tax purposes;(iv)with respect to any withholding taxes arising in connection with thedistribution of the RSUs, with the consent of the Administrator, by tendering to the Company vested shares of Stock having a thencurrent Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiariesbased on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;(v)with respect to any withholding taxes arising in connection with thedistribution of the RSUs, through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to theCompany with respect to shares of Stock then issuable to Participant13 pursuant to the RSUs, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company orthe Subsidiary with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that paymentof such proceeds is then made to the Company or the applicable Subsidiary at such time as may be required by the Administrator, but inany event not later than the settlement of such sale; or(vi)in any combination of the foregoing.(b)With respect to any withholding taxes arising in connection with the RSUs, in theevent Participant fails to provide timely payment of all sums required pursuant to Section 2.5(a), the Company shall have the right andoption, but not the obligation, to treat such failure as an election by Participant to satisfy all or any portion of Participant’s requiredpayment obligation pursuant to Section 2.5(a)(ii) or Section 2.5(a)(iii) above, or any combination of the foregoing as the Company maydetermine to be appropriate. The Company shall not be obligated to deliver any certificate representing shares of Stock issuable withrespect to the RSUs to Participant or his or her legal representative unless and until Participant or his or her legal representative shallhave paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxableincome of Participant resulting from the vesting or settlement of the RSUs or any other taxable event related to the RSUs.(c)In the event any tax withholding obligation arising in connection with the RSUs willbe satisfied under Section 2.5(a)(iii), then the Company may elect to instruct any brokerage firm determined acceptable to the Companyfor such purpose to sell on Participant’s behalf a whole number of shares from those shares of Stock then issuable to Participantpursuant to the RSUs as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholdingobligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which the withholding obligationarises. Participant’s acceptance of this Award constitutes Participant’s instruction and authorization to the Company and suchbrokerage firm to complete the transactions described in this Section 2.5(c), including the transactions described in the previoussentence, as applicable. The Company may refuse to issue any shares of Stock in settlement of the RSUs to Participant until theforegoing tax withholding obligations are satisfied, provided that no payment shall be delayed under this Section 2.5(c) if such delaywill result in a violation of Section 409A of the Code.(d)Participant is ultimately liable and responsible for all taxes owed in connection withthe RSUs, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise inconnection with the RSUs. Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatmentof any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares. TheCompany and the Subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s taxliability.2.6Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will haveany of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and untilcertificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of theCompany or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerageaccount). Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of astockholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributionson such Shares.14 ARTICLE 3.OTHER PROVISIONS3.1Administration. The Administrator shall have the power to interpret the Plan, the Grant Notice and thisAgreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and thisAgreement as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations anddeterminations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons. Tothe extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action,determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.3.2RSUs Not Transferable. The RSUs may not be sold, pledged, assigned or transferred in any manner otherthan by will or the laws of descent and distribution, unless and until the Shares underlying the RSUs have been issued, and allrestrictions applicable to such Shares have lapsed. No RSUs or any interest or right therein or part thereof shall be liable for the debts,contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation,anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or byoperation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), andany attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by thepreceding sentence.3.3Adjustments. The Administrator may accelerate the vesting of all or a portion of the RSUs in suchcircumstances as it, in its sole discretion, may determine. Participant acknowledges that the RSUs and the Shares subject to the RSUsare subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including Section12.2 of the Plan.3.4Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed tothe Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to Participant shallbe addressed to Participant at Participant’s last address reflected on the Company’s records. By a notice given pursuant to this Section3.4, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed dulygiven when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post officeor branch post office regularly maintained by the United States Postal Service.3.5Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation orconstruction of this Agreement.3.6Governing Law. The laws of the State of Delaware shall govern the interpretation, validity,administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied underprinciples of conflicts of laws.3.7Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and thisAgreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of theSecurities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and ExchangeCommission, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered,and the RSUs are granted, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, thePlan and this Agreement shall be deemed amended to the extent necessary to conform15 to Applicable Law.3.8Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may bewholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator orthe Board, provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination ofthis Agreement shall adversely affect the RSUs in any material way without the prior written consent of Participant.3.9Successors and Assigns. The Company may assign any of its rights under this Agreement to single ormultiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to therestrictions on transfer set forth in Section 3.2 and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs,legatees, legal representatives, successors and assigns of the parties hereto.3.10Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or thisAgreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the RSUs, the Dividend Equivalents (including RSUswhich result from deemed reinvestments of Dividend Equivalents pursuant to Section 2.1(b) hereof, if applicable), the Grant Notice andthis Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of theExchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of suchexemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary toconform to such applicable exemptive rule.3.11Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer upon Participantany right to continue to serve as an employee or other service provider of the Company or any Subsidiary or shall interfere with orrestrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminatethe services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly providedotherwise in a written agreement between the Company or a Subsidiary and Participant.3.12Entire Agreement. The Plan, the Grant Notice and this Agreement (including any exhibit hereto)constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company andParticipant with respect to the subject matter hereof.3.13Section 409A. The intent of the parties is that the payments and benefits under the Grant Notice and thisAgreement comply with Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issuedthereunder, and, accordingly, to the maximum extent permitted, the Grant Notice and this Agreement shall be interpreted to be incompliance therewith.3.14Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is heldinvalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to haveany effect on, the remaining provisions of the Grant Notice or this Agreement.3.15Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than asherein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall notbe construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant shall haveonly the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, withrespect to the RSUs and Dividend Equivalents.16 3.16Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of anyelectronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute oneinstrument.3.17Broker-Assisted Sales. In the event of any broker-assisted sale of shares of Stock in connection with thepayment of withholding taxes as provided in Section 2.5(a)(iii) or Section 2.5(a)(v): (A) any shares of Stock to be sold through abroker-assisted sale will be sold on the day the tax withholding obligation arises or as soon thereafter as practicable; (B) such shares ofStock may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (C)Participant will be responsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Companyharmless from any losses, costs, damages, or expenses relating to any such sale; (D) to the extent the proceeds of such sale exceed theapplicable tax withholding obligation, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable;(E) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price,and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation; and (F) in the event theproceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upondemand to the Company or its Subsidiary with respect to which the withholding obligation arises an amount in cash sufficient to satisfyany remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.* * * * * 17 Exhibit 10.21ConfidentialCO-DEVELOPMENT, COLLABORATION AND CO-MARKETING AGREEMENTThis Co-Development, Collaboration and Co-Marketing Agreement (the “ Agreement ”) is entered into on November 1, 2016 (the “ Effective Date ”) by and between T2 Biosystems, Inc. , a Delaware corporation (“ T2 Bio ”), having its principal officesat 101 Hartwell Avenue, Lexington, Massachusetts 02421, and Allergan Sales, LLC , a Delaware limited liability company (“Allergan ”), having its principal offices at Morris Corporate Center III, 400 Interpace Parkway, Parsippany, NJ 07054. T2 Bio andAllergan are each a “ Party ” and together the “ Parties ” to this Agreement.RECITALSWHEREAS , T2 Bio agrees to develop, in collaboration with Allergan, (1) a direct detection diagnostic test panel of [***]directly in whole blood (the “ T2GNR Panel ” and together with the T2Bacteria II Panel, the “ Developed Products ”), as furtherdescribed below in this Agreement; andWHEREAS , T2 Bio desires to give Allergan the right to co-market certain T2 Bio products and Allergan desires to co-market certain T2 Bio products.NOW, THEREFORE , in consideration of the mutual promises contained herein, the Parties agree as follows:1. DEFINITIONS1.1 “Affiliate” means with respect to either Party, any person or entity controlling, controlled by, or under common controlwith such Party, where “control” means (a) the possession, directly or indirectly, of the power to direct the management or policies of aperson or entity, whether through the ownership of voting securities, by contract, or otherwise, or (b) the ownership, directly orindirectly, of at least 50% of the voting securities or other ownership interest of a person or entity. 1.2 “ Allergan Management Representative ” shall mean its Chief Commercial Officer or a designee thereof and anysuccessor thereto.1.3 “Background IP” of a Party means any and all technology and Intellectual Property Rights that are owned, whethersolely or jointly with others, or controlled by or licensed to such Party upon the Effective Date, or that are developed by, acquired byor licensed to such Party after the Effective Date independent of this Agreement.1.4 “Developed Products” means collectively, (1) the T2Bacteria II Panel and (2) the T2GNR Panel, eachdeveloped pursuant to the Project Plan. 1.5 “ Improvements ” means any improvements, enhancements, modifications or derivative works, whether or not patentable.1.6 “Intellectual Property Rights” means (a) any rights with respect to inventions, discoveries, or improvements, includingpatents, patent applications, and certificates of invention; trade secrets, know-how, or similar rights, (b) any rights with respect torecognizable sign s, design s, or expression s which identify products or services of a particular source, including trademark, (c) theprotection of works of authorship or expression, including copyrights and future copyright as it arises under this Agreement, and (d)similar rights under any laws or international[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential conventions throughout the world, including the right to apply for registrations, certificates, or renewals with respect thereto, the rightsto prosecute, enforce, and obtain damages.1.7 “Jointly Developed IP” means the Inventions (as defined below) jointly conceived, developed, reduced to practice orotherwise created jointly by the personnel of (or Third Parties working on behalf of) both Parties under this Agreement (i.e., Inventionsare Jointly Developed IP if at least one inventor from each Party is, or is required under U.S. patent law to be, identified on theapplicable patent application), but in each case excluding Allergan Improvements, T2 Bio Improvements, Allergan Inventions and T2Bio Inventions.1.8 “ Net Sales ” means, with respect to any T2 Bio Co-Marketed Product, the gross amounts invoiced for sales or otherdispositions of such products, less the following deductions as determined in accordance with U.S. GAAP:(a) customary trade, cash and quantity discounts;(b) amounts repaid or credits or allowances given or made for rejection, defect, recall or return of product or forretroactive price reductions and billing errors;(c) price reductions, rebates and chargeback provisions granted to direct and indirect customers; (d) if included in the aggregate gross invoice price of such product, sales or excise taxes, duties or other similargovernmental charges (including any tax such as a value added or similar tax, and excluding any taxes based on, or in lieu of, income)relating to the sale of such product, as adjusted for rebates and refunds;(e) the portion of administrative fees paid during the relevant time period to group purchasing organizations orpharmaceutical benefit managers relating to such product;(f) any invoiced amounts that are not collected by T2 Bio or its Affiliates or licensees, including bad debts (providedthat any such amounts subsequently collected shall be included in Net Sales for the period in which collected);(g) fees or other discounts to distributors and wholesalers; (h) one-half (1/2) of the amounts actually paid by T2 Bio for licenses to Intellectual Property Rights owned by ThirdParties necessary to make, use or sell the T2 Bio Co-Marketed Product not to exceed a maximum deduction pursuant to this clause (h)of three percent (3%) of the gross sale prices of the applicable T2 Bio Co-Marketed Product; and (i) any other similar and customary deductions (including accrued provisions) that are consistent with U.S. GAAP,consistently applied.In no event shall any particular amount identified above be deducted more than once in calculating Net Sales. For purposes ofdetermining Net Sales, a sale or other disposition shall not include sales, transfers or dispositions of products for research or clinicalpurposes or as samples.1.9 “Project” means the development of the Developed Products to be performed in accordance with the Project Plan.2[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential 1.10 “ T2 Bio Management Representative ” shall mean its Chief Commercial Officer or a designee thereof and anysuccessor thereto.1.11 “T2Bacteria Panel” means a direct detection diagnostic test panel of bacterial sepsis, E .coli, K, pneumonia, P.aureginosa, S. aureus, E. faecium, and A. baumanii directly in whole blood. 1.12 “T2Candida Panel” means a direct detection diagnostic test panel of C. albicans, C. tropicalis, C. parapsilosis, C. kruseiand C. glabrata directly in whole blood. 1.13 “T2Dx Instrument” means a fully-automated, benchtop diagnostics system capable of running diagnostic tests directlyfrom whole blood utilizing T2MR Technology. 1.14 “T2MR Technology” means magnetic resonance-based diagnostic technology or any element thereof that enables themeasurement of how water molecules react in the presence of magnetic fields and is capable of detecting a variety of targets.1.15 “Third Party” means any entity other than T2 Bio or Allergan or an Affiliate of T2 Bio or Allergan.2. PROJECT PLAN2.1 Project Plan. The Parties shall form a Joint Research & Development Committee (the “ JRDC ”) promptly after theEffective Date to oversee and manage all activities under the Project Plan (the “ Project Plan ”), excluding any dispute that may ariseunder this Agreement and intellectual property matters. Each Party will use commercially reasonable efforts to perform the obligationsassigned to such Party in the Project Plan. The Project Plan shall at a minimum set forth: (i) certain tasks to be performed under theProject, (ii) the Project schedule, and (iii) each Party’s obligations with respect to the Project. Any changes to the Project Plan mustfollow the Joint Research & Development Committee process as outlined in Section 2.2(d) below. The Project Plan is, and anychanges thereto shall be, attached as Exhibit A and incorporated by reference into this Agreement. No changes to the Project Planshall become effective until executed by T2 Bio and Allergan. 2.2 Joint Research & Development Committee.(a) Joint Research & Development Committee. The JRDC shall initially be composed of three representatives fromeach of T2 Bio and Allergan, including each Party’s Project Lead (as defined below). The number of representatives comprising theJRDC may be changed upon mutual agreement of the Parties. The initial representatives of each Party on the JRDC will be specifiedin the Project Plan. Either Party may, upon written notice to the other Party, change its representatives to the JRDC.(b) Meetings of the JRDC. The JRDC shall hold meetings at least once every calendar quarter, unless mutuallyagreed by the Parties, at such times and places as mutually determined by the Parties, including by teleconference. At least onerepresentative from Allergan and T2 Bio shall attend each meeting. The meetings may be by telephone, video conference or othermutually accepted means. The meetings will focus on: (i) the progress made during the period since the previous JRDC meeting,including with respect to development and regulatory approval of the Developed Products, (ii) review and approval of the Project Planfor the following calendar quarter (iii) newly set objectives and performance goals, (iv) issues requiring resolution and resolutions ofpreviously reported issues, and (v)3[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential review of the Project Plan and review and approval of any amendments to the Project Plan proposed by either Party. Each Party isresponsible for its own costs in connection with preparing for and attending the meetings.(c) Limitations. The JRDC shall have no power to amend, modify or grant any waivers under this Agreement;provided, however, the JRDC may make changes to the Project Plan, which is incorporated by reference into this Agreement. Anyamendment or modification of this Agreement or waiver granted hereunder must be made in accordance with Section 12.13 of thisAgreement.(d) Decisions of the JRDC. All decisions of the JRDC shall require a unanimous vote of each Party’s representativesin attendance at the applicable meeting. In the event that any matter submitted to a vote of the representatives in attendance at ameeting does not receive unanimous approval, such matter shall be submitted to the T2 Bio Management Representative and theAllergan Management Representative promptly following the meeting. The T2 Bio Management Representative and the AllerganManagement Representative shall use reasonable efforts to reach agreement on the matter; provided, however, if after thirty (30)calendar days following the original meeting date they have not reached agreement on the matter, the matter shall be decided by T2Bio, in its sole discretion, except for changes to the Project Plan, which can only be approved in writing by consensus of the membersof the JRDC. (e) Project Leads. The JRDC shall appoint a principal point of contact for each Party to act as such Party’s projectlead (each, a “ Project Lead ”) and coordinate and act as a liaison with the other Party with respect to this Agreement. The ProjectLeads’ responsibilities shall generally include overseeing and supervising its Party’s fulfillment of its obligations under the Project Plan,understanding the obligations of the other Party under the Project Plan, and discussing the progress of the Project Plan and barriers tosuccess, key issues and issues-resolution options with the other Party’s Project Lead and the JRDC.2.3 Regulatory Approval and Commercialization. T2 Bio shall use commercially reasonable efforts to seek regulatoryapproval of the Developed Products from the United States Food and Drug Administration (FDA), the European Medicines Agency(EMA) and the applicable regulatory authority in all other jurisdictions identified in the Project Plan. Upon receiving regulatoryapproval for a Developed Product, T2 Bio shall promptly notify Allergan in writing of such approval and use commercially reasonableefforts to commercialize such Developed Product in such jurisdictions where such approval has been obtained. In connection withseeking regulatory approval of the Developed Products and upon T2 Bio’s reasonable request, Allergan shall provide T2 Bioreasonable access to data generated in Allergan-sponsored clinical trials in which a Developed Product has been used. 3. COMPENSATION 3.1 Initial Payment. Allergan shall pay T2 Bio an up-front non-refundable payment in the amount of $2,000,000 within five(5) calendar days of the Effective Date. 3.2 Milestone Payments. Upon the achievement of a milestone described in clause (a) or (b) of this Section 3.2, T2 Bio shallprovide to Allergan written notification of and supporting documentation for the achievement of the applicable milestone. In addition,in connection with the delivery of a panel cartridge described in clause (c) or (d) of this Section 3.2, T2 Bio shall provide supportingdocumentation demonstrating that such panel cartridge meets the applicable specifications set forth in the Project Plan. Allergan shallmake the following non-refundable payments to T2 Bio within forty-five (45) calendar days of receipt of notice of the achievementof the milestone described in clause (a) or (b) or receipt of the panel cartridges described in clauses (c) or (d); provided, however, thatAllergan shall within twenty (20) calendar days of receiving such notice or panel cartridges, as applicable, and supporting4[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential documentation from T2 Bio notify T2 Bio in writing in the event Allergan believes that such milestone has not been achieved, inwhich case the Parties shall discuss in good faith whether such milestone has been met and, if the Parties cannot reach agreement onsuch matter, the question of whether such milestone has been achieved shall be decided by a Third Party with relevant expertiseselected by mutual agreement of the Parties, with the costs of such Third Party being borne by the Party against which thedetermination of such Third Party has been made. (a) $500,000 upon achievement of [***] ; (b) $500,000 upon achievement of [***] ; (c) $500,000 upon delivery to Allergan of [***] in accordance with the Project Plan; and(d) $500,000 upon delivery to Allergan of [***] in accordance with the Project Plan.3.3 Purchase of Certain T2 Bio Products for Clinical Trials. (a) T2 Bio agrees to sell the T2Bacteria II Panel, the T2GNR Panel and the T2Dx Instrument to Allergan or to anycontract research organization or clinical trial site designated by Allergan for an Allergan–sponsored clinical trial at which a DevelopedProduct is to be used (a “ Designee ”) at [***] % of T2 Bio’s fully burdened cost (but, in any event, less than the retail list pricetherefor) for use by Allergan or its Designee in Allergan-sponsored clinical trials. Any such product sold to Allergan or its Designeeunder this Section 3.3 shall not be resold; provided, however, that Allergan may transfer or otherwise distribute any such product foruse in clinical trials; provided, further, however, that Allergan shall provide commercially reasonable efforts to ensure that no Designeeuses any such product outside of the applicable Allergan-sponsored clinical trial. (b) On the first business day of the first calendar quarter in which Allergan anticipates ordering a T2Dx Instrumentand on each calendar quarter thereafter in which Allergan anticipates ordering a T2Dx Instrument, Allergan shall deliver to T2 Bio inwriting a rolling, nonbinding forecast detailing Allergan’s anticipated requirement of T2Dx Instruments for the next three (3) calendarmonths. T2 Bio shall deliver, and in the case of a T2Dx Instrument install, any products purchased under this Section 3.3 to Allerganor its Designee within thirty (30) calendar days of T2 Bio’s receipt of a purchase order for such products; provided, however, if ten(10) or more T2Dx Instruments are included in a purchase order delivered by Allergan or its Designee to T2 Bio, T2 Bio shallhave sixty (60) calendar days from T2 Bio’s receipt of such purchase order to deliver and install such T2Dx Instruments. Only one(1) purchase order will be submitted per month, and no purchase order will exceed twenty (20) T2Dx Instruments. For the avoidanceof doubt, (x) in the event of any conflict between this Agreement and such purchase order, this Agreement will control, and (y) nosubstantive term of such purchase order not set forth in this Agreement shall be binding on the Parties. Allergan or its Designee shallpay T2 Bio on a time and materials basis for the installation, support and maintenance of any T2Dx Instrument purchased under thisSection 3.3 initially at the standard rates customarily charged by T2 Bio to research customers substantially similar to Allergan and anyDesignee as of the Effective Date, which initial rates are subject to annual increases based on T2 Bio’s then standard rates, providedthat such rates may not be increased by more than 3% annually. Allergan shall pay T2 Bio for such products and services withinforty-five (45) calendar days of receiving the applicable invoice from T2 Bio. (c) T2 Bio shall assume all risk of loss, damage or destruction to any products sold to Allergan or its Designee underthis Section 3.3 from initial shipment until delivery and installation of such products; provided, however, that Allergan, or its Designee,as applicable, shall reimburse T2 Bio for all shipping and freight costs related5[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential to such shipment and delivery of such products under this Section 3.3. In the event T2 Bio delivers a T2Dx Instrument at a Designee’sfacility but is not permitted by the Designee to install the T2Dx Instrument at the time of delivery, Allergan will provide T2 Bio withinstruction as to whether T2 Bio should (x) return the T2Dx Instrument to T2 Bio’s facility for future delivery, in which case T2 Bioshall assume all risk of loss, damage or destruction to the T2Dx Instrument until its future delivery and installation, or (y) deliver theT2Dx Instrument to the Designee’s facility for installation at a later date, in which case, as between the Parties, Allergan shall assumeall risk of loss, damage or destruction to the T2Dx Instrument. 3.4 Allergan Commission for Co-Marketing Sales. T2 Bio shall pay Allergan an amount equal to (A) [***]% of the NetSales of T2 Bio Co-Marketed Products to Joint Accounts (as defined below) and (B) [***]% of the Net Sales of T2 Bio Co-MarketedProducts to Open Accounts (as defined below), (the “ Commission ”). Notwithstanding anything to the contrary contained herein, T2Bio shall pay the Commission, if any, to Allergan within forty five (45) calendar days following the end of each calendar quarter.3.5 T2 Bio Financial Obligations. T2 Bio shall be responsible for and shall pay all remaining development costs relating tothe Developed Products, including costs related to regulatory approval and clearance of the Developed Products not otherwise madeby Allergan in accordance with Sections 3.1 and 3.2 of this Agreement. 3.6 Payments. (a) Mode of Payment. All payments are non-refundable and shall be made in U.S. Dollars, which payment shall bemade by wire transfer of immediately available funds to a bank account designated in writing by the receiving Party or in such othermanner as may be agreed by the Parties. (b) Currency Conversion. For the purpose of calculating Net Sales expressed in currencies other than U.S. Dollars,a Party shall convert any amount expressed in a foreign currency into U.S. Dollar equivalents using its, its Affiliate’s or sublicensee’sstandard conversion methodology consistent with U.S. GAAP. (c) Interest on Late Payments. Any amount required to be paid by a Party under this Agreement which is not paidon the date due shall bear interest at an annual rate equal to two (2) percentage points above the U.S. prime interest rate, as reported byThe Wall Street Journal (New York edition) for the first business day of such month. Such interest shall be accrued daily. 3.7 Taxes.(a) Each Party is responsible for its own taxes, duties, levies, imposts, assessments, deductions, fees, withholdings orsimilar charges imposed on or measured by net income or overall gross income (including branch profits), gross receipts, capital, abilityor right to do business, property, and franchise or similar taxes pursuant to applicable law. (b) The payments pursuant to this Agreement (each, a “ Payment ”) shall be paid free and clear of any and all taxes,except for the deduction or withholding of any and all taxes and other similar charges required by applicable law, other than VAT (asdefined below) (“ Withholding Taxes ”). Where Withholding Taxes are required by applicable law on any Payment, the Parties shalluse their commercially reasonable efforts to do all such acts and things and to sign all such documents as will enable them to report,withhold and lawfully minimize such Withholding Taxes. Where Withholding Taxes are required by applicable law on any Payment,the payor shall pay such6[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential Withholding Taxes to the appropriate government authority, deduct the amount paid from the amount due to payee and remit to payeethe net amount due after such deduction of withholding taxes, and secure and send to payee reasonable available evidence of suchpayment within a reasonable period of time, and such Withholding Taxes shall be treated for all purposes of this Agreement as havingbeen paid to the payee hereunder.(c) All Payments are exclusive of value added tax, ad valorem, goods and services or similar tax chargeable on thesupply or deemed supply of goods or services, sales and use taxes, consumption taxes and other similar taxes required by applicablelaw, including interest, penalties or other additions thereto (“ VAT ”). If any VAT is required in respect of any Payments underapplicable law, the payor shall pay VAT at the applicable rate in respect of any such Payments following the receipt of a valid VATinvoice in the appropriate form issued by the payee in respect of those Payments, such VAT to be payable forty-five (45) calendardays after the receipt by the payor of the applicable valid VAT invoice relating to that VAT payment. The payor shall not beresponsible for any penalties and interest resulting from the failure by the payee to collect (if not included on a valid VAT invoice) orremit any such VAT. The Parties shall reasonably cooperate to eliminate or minimize the amount of any such VAT imposed on thetransactions contemplated in this agreement. 3.8 Costs and Expenses. Except as otherwise provided in the Project Plan or otherwise in this Agreement, neither Party shallbe entitled to any payment, cost reimbursement, or other compensation from the other Party, and each Party will be responsible for itsown costs and expenses incurred in rendering performance of its obligations under this Agreement. 4. INTELLECTUAL PROPERTY RIGHTS AND LICENSES4.1 Ownership of Intellectual Property. (a) Background IP. As between the Parties, each Party shall own and retain all right, title and interest in and to itsBackground IP.(b) Inventions. For purposes of this Agreement, the term “ Inventions ” shall mean any works of authorship,inventions, methods, processes, materials, and other intellectual property, whether or not patentable, made by a Party in the course ofperformance under this Agreement. Except as otherwise set forth in clauses (c) and (d) below, each Party shall own any Inventionscreated by such Party’s or its Affiliates’ employees or contractors as determined in accordance with U.S. patent law. If any suchInventions are Jointly Developed IP, each Party shall have the right to use, license and exploit such Jointly Developed IP, subject toSection 5, without the consent of, or accounting to, the other Party.(c) T2 Bio Inventions. T2 Bio shall own all right, title and interest in and to (x) all Improvements to T2 Bio’stechnology, instruments, primers, probes, sequences, algorithms or reagents and (y) all Inventions that primarily relate to (A) diagnosticinstruments, including T2MR Technology, primers, probes, sequences, algorithms or reagents or (B) the Developed Products, in eachcase including all Intellectual Property Rights therein, conceived, developed, reduced to practice or otherwise created pursuant to aProject Plan or otherwise in connection with this Agreement, regardless of the inventing or creating Party (collectively, the “T2 BioInventions” ). Allergan hereby assigns to T2 Bio all of Allergan’s right, title and interest in and to the T2 Bio Inventions. (d) Allergan Inventions. Allergan shall own all right, title and interest in and to (x) all Improvements to Allergan’stherapeutics or therapeutic compounds and (y) all Inventions that primarily relate to therapeutics or7[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential therapeutic compounds, in each case including all Intellectual Property Rights therein, conceived, developed, reduced to practice orotherwise created pursuant to a Project Plan or otherwise in connection with this Agreement, regardless of the inventing or creatingParty (collectively, the “ Allergan Inventions ”). T2 Bio hereby assigns to Allergan all of T2 Bio’s right, title and interest in and tothe Allergan Inventions.(e) Trademarks. As between the Parties, each Party shall own and retain all right, title and interest in and to alltrademarks and trademark applications covering such Party’s products. For the avoidance of doubt, T2 Bio shall own all trademarkscovering the Developed Products, and Allergan shall not apply for any trademarks covering the Developed Products. Prior tosubmitting any trademark application for the Developed Products, T2 Bio shall provide the proposed trademarks and/or trade namesfor the Developed Products to Allergan, and Allergan shall have fifteen (15) calendar days to provide comments to T2 Bio concerningsuch proposed trademarks and trade names.4.2 Licenses. (a) License to Allergan. Subject to the terms and conditions of this Agreement, T2 Bio hereby grants Allergan a [***] license, with right of sublicense with T2 Bio’s prior consent, not to be unreasonably withheld, to use T2 Bio’s Background IP,T2 Bio Inventions, and any other intellectual property developed by T2 Bio or its Affiliates under this Agreement (excludingtrademarks which are addressed in Section 4.1(e) and Section 6) during the Term (as defined below) solely to the extent required forAllergan to (x) perform its obligations under this Agreement, including Section 6.3, and (y) to use the Developed Products to conductinternal research, develop, optimize and improve its anti-infective therapeutic compounds and anti-infective therapeutic products. (b) License to T2 Bio. Subject to the terms and conditions of this Agreement, Allergan hereby grants T2 Bio a non-exclusive, non-transferable (except as set forth in Section 12.2), fully-paid, royalty-free license, without right of sublicense, touse Allergan’s Background IP, Allergan Inventions, and any other intellectual property developed by Allergan or its Affiliates underthis Agreement (excluding trademarks which are addressed in Section 4.1(e) and Section 6) during the Term solely to the extentrequired for T2 Bio to perform its obligations under this Agreement, including Section 6.3. 4.3 License Restrictions. Neither Party may use the technology or intellectual property of the other Party except asspecifically authorized under this Agreement. Neither Party shall cause or permit the reverse engineering, disassembly, ordecompilation of the other Party’s technology, nor undertake any analysis of the design or construction of such technology (includinginstruments, devices, algorithms and reagents); provided the foregoing shall not apply to the extent such a restriction is expresslyprohibited by applicable law. Other than the express licenses granted by this Agreement, neither Party grants any right or license tothe other party, by implication, estoppel or otherwise, to any Party’s Intellectual Property Rights. Allergan agrees that it shall not useany T2 Bio Inventions in connection with the development of a diagnostic instrument. T2 Bio agrees that it shall not use any AllerganInventions in connection with the development of a therapeutic or therapeutic compounds. 4.4 Data Ownership. Notwithstanding anything to the contrary contained herein, any Party that conducts or sponsors aclinical trial or other activity involving the Developed Products that generates data shall own such data; provided, however, that (x)such Party hereby grants to the other Party hereto a perpetual, fully-paid, non-exclusive, worldwide license to such data for the purposeof seeking regulatory approval of the Developed Products, conducting internal research or optimizing and improving the DevelopedProducts, and (y) in the case of data generated by T2 Bio, T2 Bio hereby grants to Allergan a perpetual, fully-paid, non-exclusive,worldwide license to such data for the purpose of developing, optimizing or improving anti-infective therapeutic compounds and anti-infective products. 8[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential 4.5 Assistance. Each Party (each, an “ Assisting Party ”) agrees to execute all papers, including patent applications, inventionassignments and copyright assignments, and otherwise agrees to assist the other Party (the “ Owning Party ”) as reasonably required atthe Owning Party’s reasonable expense to perfect in the Owning Party the right, title and other interest in the Inventions expresslygranted to the Owning Party under this Agreement. No Implied Rights. Except for the licenses that are expressly granted by thisAgreement, nothing in this Agreement or any course of dealing between the Parties will be deemed to create a license from either Partyto the other of any Intellectual Property Right, whether by estoppel, implication, or otherwise. 5. PROSECUTION AND ENFORCEMENT5.1 Patent Prosecution for Jointly Developed IP. Unless otherwise agreed on a case-by-case basis, T2 Bio shall have thefirst right, but not the obligation, using outside legal counsel reasonably acceptable to Allergan, to conduct and control prosecution(including any opposition, re-examination or similar proceedings), maintenance, challenges against validity and unenforceability orpatentability with respect to any patent applications and patents resulting from the Jointly Developed IP, and all costs, fees andexpenses therefor shall be borne by T2 Bio. T2 Bio shall reasonably consider all comments made by Allergan with respect to filingor prosecuting such patent applications and maintaining such patents. In the event T2 Bio does not file an initial patent applicationon an Invention included in the Jointly Developed IP, Allergan may proceed with filing and prosecution at its own expense. Further,in the event T2 Bio elects not to pursue or elects to abandon the ongoing prosecution of any patent application resulting from theJointly Developed IP, participate in the filing of any continuation or continuation in part or foreign counterpart to a patent application,or pay any annuity or other patent maintenance fee as it becomes due, T2 Bio shall give Allergan at least one (1) month’s noticebefore any relevant deadline and Allergan shall have the right to pursue, at its expense, the ongoing prosecution and maintenance ofsuch patent application. In such event, T2 Bio shall not be entitled to any refund of prosecution fees previously paid.5.2 Enforcement of IP. If either Party should become aware of any actual or threatened infringement or misappropriation by aThird Party of any Intellectual Property Rights in the Jointly Developed IP (a “ Joint IP Infringement ”), it shall promptly notify theother Party in writing, and provide any available information relating to such alleged Joint IP Infringement. The Parties shall promptlydiscuss whether to bring an enforcement action relating to such Joint IP Infringement prior to either Party (or both Parties) bringingsuch action. Unless otherwise agreed on a case-by-case basis, T2 Bio shall have the first right, but not the obligation, using outsidelegal counsel reasonably acceptable to Allergan, to bring an enforcement action relating to such Joint IP Infringement. The costs ofsuch enforcement shall be borne by T2 Bio and any recovery shall be apportioned as agreed by the Parties in advance on a case-by-case basis. In the event that, after the Parties discuss whether to bring an enforcement action, T2 Bio decides not to bring such action,Allergan shall have the right to unilaterally bring an enforcement action with respect to such Joint IP Infringement, in which caseAllergan shall bear all of the costs related thereto and shall also receive any and all recovery related thereto. Neither Party is obligatedto enforce its Intellectual Property Rights in the event of Joint IP Infringement. 6. MANUFACTURING, MARKETING AND DISTRIBUTION6.1 Manufacturing. T2 Bio shall have the exclusive right and shall use commercially reasonable efforts during the Term tomanufacture (x) the T2Dx Instrument and (y) each of the Developed Products upon a Developed Product receiving regulatoryapproval from the FDA, EMA, or other regulatory body. 6.2 Distribution. T2 Bio shall have the exclusive right, subject to Section 6.3, and shall use commercially reasonable effortsduring the Term, to sell and distribute the Developed Products worldwide, including through its9[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential direct sales force or through Third Party distributors following receipt of regulatory approval from the FDA, EMA, or other regulatorybody. In the event a Joint Account or Allergan Account does not have a T2Dx Instrument and wishes to purchase a DevelopedProduct, T2 Bio shall offer to sell and, if applicable, sell a T2Dx Instrument to such account on T2 Bio’s customary terms. 6.3 Co-Marketing of the Developed Products and Certain T2 Bio Products.(a) Notwithstanding the foregoing, and subject to the terms and conditions contained in this Section 6.3, Allerganshall have the right to market and sell (the “ Co-Marketing Right ”) the products set forth on Exhibit B attached hereto (the “ T2 BioCo-Marketed Products ”) to certain customers including, but not limited to, clinicians, hospitals, institutions and universities, as furtherdescribed below. Additional products may be added to Exhibit B upon the mutual agreement of the Parties in accordance withSection 12.13. (b) Within thirty (30) calendar days following (A) in the case of the Developed Products, the date that any of theDeveloped Products receives regulatory approval by the FDA, EMA, or other regulatory body, (B) in the case of the T2CandidaPanel, the date Allergan delivers written notice to T2 Bio of Allergan’s intent to exercise the Co-Marketing Right for such product, (C) in the case of the T2Bacteria Panel, the date Allergan delivers written notice to T2 Bio of Allergan’s intent to exercise the Co-Marketing Right for such product, which notice may only be delivered after the T2Bacteria Panel receives regulatory approval by theFDA, EMA or other regulatory body, or (D) in the case of any T2 Bio product other than the Developed Products, the T2CandidaPanel, or the T2Bacteria Panel, the date that the Parties mutually agree to add a T2 Bio product to Exhibit B (each such date, a “ Co-Marketing Eligibility Date ”), T2 Bio shall deliver to Allergan a list of customers and institutional accounts covered by T2 Bio for theapplicable T2 Bio Co-Marketed Products in the United States as of the applicable Co-Marketing Eligibility Date (the “ T2 BioAccounts ”) and will indicate on such list any accounts that T2 Bio proposes to be covered by both T2 Bio and Allergan (the “ JointAccounts ”). Allergan shall not market or sell any T2 Bio Co-Marketed Products to any T2 Bio Accounts that are not Joint Accounts. Any accounts that are not listed as T2 Bio Accounts (such accounts, the “ Open Accounts ”) will be eligible as targets of Allerganmarketing efforts for the T2 Bio Co-Marketed Products in accordance with a mutually agreed commercial strategy approved by theJCC (as defined below) pursuant to the terms below. Promptly following the applicable Co-Marketing Eligibility Date, T2 Bio shalluse good faith efforts to negotiate with its international distributors in the United Kingdom, France, Spain, Germany, Italy, and Japanthe terms and conditions upon which they will agree to allow Allergan to market and sell the T2 Bio Co-Marketed Products in theirrespective territories. If T2 Bio is able, as a result of such negotiations, to allow Allergan to market and sell the T2 Bio Co-MarketedProducts in any of such territories, then, within thirty (30) days following such negotiations with the applicable T2 Bio internationaldistributor, T2 Bio shall deliver to Allergan a list of customers and institutional accounts covered by T2 Bio for the applicable T2 BioCo-Marketed Products in the relevant territory, which list shall be added to and included in the T2 Bio Accounts, and will indicate onsuch list any accounts that T2 Bio proposes to be covered by both T2 Bio and Allergan, which list shall be added to and included inthe Joint Accounts. (c) Within forty-five (45) calendar days following the applicable Co-Marketing Eligibility Date, Allergan mayexercise its Co-Marketing Right for the applicable T2 Bio Co-Marketed Products by delivery of written notification to T2 Bio that it isexercising such right. 10[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential (d) If Allergan elects to exercise its Co-Marketing Right, within seventy-five (75) calendar days following theapplicable Co-Marketing Eligibility Date: (I) Allergan shall present T2 Bio with a list of accounts to which Allergan proposes to market and sell theapplicable T2 Bio Co-Marketed Products (the “ Allergan Accounts ”) and Joint Accounts to which it proposes to market and sell suchT2 Bio Co-Marketed Products, and(II) the Parties shall establish a, or hold a meeting of the, Joint Commercialization Committee (the “ JCC ”)comprised of two representatives from each Party to coordinate the Parties’ co-marketing and sales efforts. The JCC’s responsibilitiesshall include, but not be limited to: review, at the discretion of T2 Bio, of the T2 Bio pipeline and upcoming product launches; initialapproval of the Allergan Accounts and review of any proposed changes to the T2 Bio Accounts, Allergan Accounts, or JointAccounts; review of any proposed changes to the countries in which accounts are located; the creation of a commercial and brandingstrategy (including marketing materials) for the joint marketing of the T2 Bio Co-Marketed Products; review of Allergan’s sales andmarketing plan for the T2 Bio Co-Marketed Products; review of the training plan for Allergan’s sales representatives; review of the co-marketing and sales responsibilities of the Parties; coordination of joint press releases, joint public statements, and joint presentations attrade shows; review of the presentation of the joint marketing of the T2 Bio Co-Marketed Products on the Parties’ respectivewebsites. The JCC shall hold meetings at least once every calendar quarter, unless mutually agreed by the Parties, at such times andplaces as mutually determined by the Parties, including by teleconference. The Parties shall identify a primary representative to theJCC (each, a “ JCC Representative ”) to act as the point of contact for all matters, including the coordination of field sales activitiesduring the period between JCC meetings and any other matters that arise between the quarterly meetings of the JCC. (e) All decisions to be made at meetings of the JCC shall be made by the unanimous vote of the members of theJCC. In the event that any matter submitted to a vote of the JCC representatives in attendance at a meeting does not receive unanimousapproval, such matter shall be submitted to the T2 Bio Management Representative and the Allergan Management Representativepromptly following the meeting. The T2 Bio Management Representative and the Allergan Management Representative shall usereasonable efforts to reach agreement on the matter; provided, however, if after thirty (30) calendar days following the original meetingdate they have not reached agreement on the matter, the matter shall be decided by T2 Bio, in its sole discretion.(f) In the event that Allergan desires to add additional Open Accounts to the Allergan Accounts, Allergan shallcommunicate the identity of the account and any applicable facts and details regarding such account to the T2 Bio JCC Representativewho will promptly discuss the request with the Allergan JCC Representative, and the addition of such account to the AllerganAccounts shall be subject to the mutual agreement of the JCC Representatives.(g) The JCC shall also establish, by mutual agreement of the Parties, quarterly and annual sales and productivity goalsfor Allergan with respect to the Allergan Accounts. If, at any time after a Developed Product’s commercial launch date in theapplicable jurisdiction, T2 Bio desires to convert an Allergan Account to a T2 Bio Account, T2 Bio shall provide written noticethereof to Allergan. Such account will convert to a T2 Bio Account eighteen (18) months following the date T2 Bio delivers suchnotice; provided, however, that if Allergan has not (A) within six months of the applicable Developed Product’s commercial launchdate in the applicable jurisdiction, conducted a sales presentation of the T2 Bio Co-Marketed Products in accordance with thisAgreement to such Allergan Account or (B) within twelve (12) months of such commercial launch, generated a sale from suchAllergan Account, such Allergan Account will convert to a T2 Bio Account forty-five (45) calendar days following the date that T2Bio delivers notice of such conversion to Allergan. On a product-by-product basis at any time during the11[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential Term upon 30 calendar days’ prior written notice, Allergan may cease its marketing and sales efforts (I) to any Allergan Account orJoint Account, and/or (II) for any T2 Bio Co-Marketed Product.(h) All sales agreements for the T2 Bio Co-Marketed Products will be entered into between T2 Bio and the applicableaccount (regardless of whether the account is an Allergan Account, T2 Bio Account, or Joint Account). T2 Bio shall be solelyresponsible for the maintenance and service of all T2Dx Instruments located at any accounts. At mutually agreed times, T2 Bio shallprovide sales and product training to Allergan employees on any T2 Bio Co-Marketed Products; provided, that each Party shall beartheir respective expenses related to attending such training. (i) In the event Allergan exercises its Co-Marketing Right, during the Term Allergan shall, in good faith and at its ownexpense:(I) market, advertise, promote, and sell the applicable T2 Bio Co-Marketed Products to customers consistentwith Allergan’s Code of Conduct;(II) observe all reasonable directions and instructions given to it by T2 Bio in relation to the marketing,advertisement, and promotion of the applicable T2 Bio Co-Marketed Products, including T2 Bio’s sales, marketing, and merchandisingpolicies as they exist at the time Allergan exercises its Co-Marketing Right or as they may thereafter be changed by T2 Bio to theextent that these marketing materials, advertisements or promotions refer to such T2 Bio Co-Marketed Products or otherwise use T2Bio’s trademarks and are disclosed to Allergan; provided, however, that (x) Allergan is not required to observe any such directions orinstructions that Allergan reasonably believes violates applicable law, and (y) T2 Bio shall be liable for any Third Party claims, actionsor suits arising out of Allergan’s conformance with T2 Bio directions and instructions provided by T2 Bio to Allergan inwriting; and(III) promptly notify T2 Bio of any complaint or adverse claim about any T2 Bio Co-Marketed Product or itsuse of which Allergan becomes aware .(j) T2 Bio Trademarks.(I) T2 Bio hereby grants to Allergan a fully-paid, royalty-free, non-exclusive, non-transferable, and non-sublicensable license to use T2 Bio trademarks during the Term solely on or in connection with the promotion, advertising, and resaleof the T2 Bio Co-Marketed Products in accordance with the terms and conditions of this Agreement. When requested by T2 Bio,Allergan will promptly discontinue the display or use of any trademark to change the manner in which a trademark is displayed or usedwith regard to the T2 Bio Co-Marketed Products. (II) During the Term, Allergan shall not: (a) register or apply for registrations, anywhere in the world, for T2Bio’s trademarks or any other trademark that is confusingly similar to T2 Bio’s trademarks or that incorporates T2 Bio’s trademarks inwhole or in confusingly similar part; (b) use any trademark that is confusingly similar to T2 Bio’s trademarks; or (c) engage in anyaction that dilutes or negatively affects, in any material respect, the value of the goodwill pertaining to the T2 Bio trademarks. 7. ADDITIONAL ALLERGAN ACTIVITIES7.1 Discussions. The Parties will discuss in good faith opportunities for Allergan and T2 Bio to collaborate in areas such asdevelopment of additional tests, and manufacturing and distribution of the Developed Products. Notwithstanding the foregoing,Allergan acknowledges and agrees that T2 Bio is not obligated to collaborate with Allergan to develop12[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential additional tests or have Allergan manufacture or distribute the Developed Products, and that these good faith discussions do notconstitute a right of first refusal or a right of first negotiation with respect to any of the foregoing.8. CONFIDENTIALITY8.1 Confidential Information. Each Party (each, a “ Receiving Party ”) acknowledges that such Receiving Party may receivenon-public information, including technical, financial, operational and other business information of the other Party (the “ DisclosingParty ”) and related materials, items, and documents in connection with this Agreement whether disclosed verbally, in writing, inelectronic form or by any other means (“ Confidential Information ”), but excluding information that: (a) is approved in writing bythe Disclosing Party for release by the Receiving Party without restrictions, (b) the Receiving Party can demonstrate by writtenrecords was previously known to the Receiving Party, (c) is now public knowledge, or becomes public knowledge in the future, otherthan through acts or omissions of the Receiving Party, (d) is lawfully obtained by the Receiving Party from sources independent of theDisclosing Party who have a lawful right to disclose such Confidential Information, as demonstrated by competent written records, or(e) is independently developed by the Receiving Party without use of, or reference to, the Disclosing Party’s Confidential Information,as demonstrated by competent written records prepared contemporaneously with such independent development.8.2 General Restrictions on Use and Disclosure. The Receiving Party shall not use the Confidential Information of theDisclosing Party except for the purpose of performing its obligations or exercising its rights under this Agreement. The ReceivingParty shall take all reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Disclosing Party’sConfidential Information. Without limiting the foregoing, the Receiving Party shall implement at least those protections forConfidential Information that the Receiving Party takes to protect its own confidential information of a similar nature, but in any casenot less than reasonable protection. The Receiving Party agrees not to distribute, disclose or disseminate in any way or form anyConfidential Information to Third Parties or to employees of the Receiving Party, except that the Receiving Party may allow access tothe Disclosing Party’s Confidential Information to those of its employees and subcontractors who are required to have the informationto provide services under this Agreement; provided, however, that such employees and subcontractors have signed or are otherwisesubject to an agreement imposing upon such person restrictions on use and disclosure of the Disclosing Party’s ConfidentialInformation that are at least as restrictive as those in this Agreement, prior to any disclosure of the Disclosing Party’s ConfidentialInformation to such employees or subcontractors. Upon the request of the Disclosing Party, and upon any expiration or termination ofthis Agreement, the Receiving Party shall promptly return all copies and embodiments of the Disclosing Party’s ConfidentialInformation in its possession or control, or destroy it, at the Disclosing Party’s option, and shall make reasonable efforts to insure thatno further use thereof is made by such Receiving Party’s employees or subcontractors.8.3 Legal Obligation to Disclose; Permitted Disclosure. Notwithstanding the foregoing, the Receiving Party may disclosethe Disclosing Party’s Confidential Information to the extent required by an applicable court order or by applicable law; provided,however, that, if the Receiving Party is so required to disclose any of the Disclosing Party’s Confidential Information, it shall give theDisclosing Party reasonable advance notice of such disclosure and use reasonable efforts to secure confidential treatment of suchConfidential Information (whether through protective order or otherwise). The Receiving Party shall not reverse engineer,disassemble, decompile, or determine the composition of any formulations, prototypes, software or other tangible objects that embodyany of the Disclosing Party’s Confidential Information and that are provided to the Receiving Party hereunder. The Receiving Partyshall reproduce the Disclosing Party’s proprietary rights notices on any copies of the Disclosing Party’s Confidential Information, inthe same manner in which such notices were set forth in or on the original. The Receiving Party shall immediately notify theDisclosing Party in the event it becomes aware of any unauthorized use or disclosure of the Disclosing Party’s ConfidentialInformation.13[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential 8.4 Confidentiality of Agreement and Project. The existence and the terms of this Agreement and the informationconcerning the Project shall be treated by the Parties as confidential and only disclosed in accordance with this section and Section12.3 below.9. LIMITATION OF LIABILITYEXCEPT IN CONNECTION WITH CLAIMS RESULTING FROM (A) BREACH OF THE LICENSE RESTRICTIONSHEREUNDER, (B) BREACH OF THE CONFIDENTIALITY OBLIGATIONS HEREUNDER, (C) GROSS NEGLIGENCEOR WILLFUL MISCONDUCT BY T2 BIO, ALLERGAN OR THEIR AFFILIATES, OR (D) ANY AMOUNTS PAID TOTHIRD PARTIES BY T2 BIO, ALLERGAN OR THEIR AFFILIATES IN CONNECTION WITH ANY THIRD PARTYCLAIM (OTHER THAN A CLAIM FOR LATE FEES (BUT NOT OTHER AMOUNTS) PAYABLE TO THIRD PARTIESWITH RESPECT TO LATE DELIVERY OF THE DEVELOPED PRODUCTS TO THE RELEVANT THIRD PARTY)ARISING OUT OF ANY BREACH OF THIS AGREEMENT BY THE OTHER PARTY (WHICH AMOUNTS, FOR THEAVOIDANCE OF DOUBT, SHALL NOT BE DEEMED TO BE INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY ORCONSEQUENTIAL DAMAGES NO MATTER HOW CHARACTERIZED IN ANY ACTION OR SUIT RESULTING FROMSUCH CLAIM): (X) IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER, FOR ANY LOSTPROFITS OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OFANY KIND IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT AND HOWEVER CAUSED ANDUNDER ANY THEORY OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCHDAMAGES, AND (Y) IN NO EVENT SHALL EITHER PARTY’S CUMULATIVE LIABILITY ARISING OUT OF THISAGREEMENT EXCEED $[***]. 10. REPRESENTATIONS AND WARRANTIES10.1 Representations and Warranties. Each Party represents and warrants that: (a) it is duly authorized to execute anddeliver this Agreement and to perform its obligations hereunder, (b) the performance of its obligations under this Agreement shall notconflict with any other agreements, obligations or duties of such Party, and (c) it shall perform its obligations specified in thisAgreement in a professional and workmanlike manner consistent with industry standards and in compliance with all applicable laws. T2 Bio represents that as of the Effective Date, (x) to T2 Bio’s knowledge after inquiring of its members of management and outsidelegal counsel, including intellectual property counsel (a “ Reasonable Inquiry ”), the use of T2 Bio Inventions in the development,manufacturing, marketing, and distribution of Developed Products or any T2 Bio Co-Marketed Products in the manner contemplatedunder this Agreement will not infringe or misappropriate the intellectual property rights of any Third Party, nor has T2 Bio receivedwritten notice from a Third Party alleging any such infringement or misappropriation, and (y) to T2 Bio’s knowledge afterReasonable Inquiry, no Third Party is infringing or misappropriates T2 Bio Intellectual Property Rights or T2 Bio Inventions. 10.2 Disclaimer. EXCEPT AS STATED IN SECTION 10.1, EACH PARTY DISCLAIMS ALL REPRESENTATIONSAND WARRANTIES IN CONNECTION WITH THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTIES OFTITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT OFINTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. 14[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential 11. TERM AND TERMINATION11.1 Term. This Agreement shall become effective on the Effective Date and, unless terminated earlier as permitted herein oras otherwise agreed by the Parties in writing, shall remain in effect until the fifth anniversary of the Effective Date (the “ Initial Term”) and shall automatically renew for additional one (1) year periods thereafter (each, a “ Renewal Term ” and together with the InitialTerm, the “ Term ”); provided, that either Party shall have the right to terminate this Agreement (x) at the expiration of the Initial Termupon delivery of written notice of such termination at least sixty (60) calendar days prior to the end of the Initial Term, or (y) after theexpiration of the Initial Term on any twelve (12) month anniversary of the Effective Date upon delivery of written notice of suchtermination at least ninety (90) calendar days prior to any such anniversary. In the event that notice of termination is not delivered inaccordance with this section, this Agreement shall automatically renew. 11.2 Termination for Cause. A Party may terminate this Agreement if the other Party materially breaches its obligationsunder this Agreement and does not cure such breach within thirty (30) calendar days after receipt of a written notice identifying suchbreach from non-breaching Party. 11.3 Effect of Termination. Upon termination or expiration of this Agreement, except as otherwise expressly stated herein,all obligations of each Party hereunder to the other shall terminate. The following articles and sections shall survive any expiration ortermination of this Agreement: Sections 1, 4.1, 4.2(a)(y), 4.3, 4.4, 4.5, 4.6, 5, 6.1, 6.2, 8, 9, 10, 11.3, and 12.12. MISCELLANEOUS12.1 Relationship. The Parties agree that neither Party is the agent, representative or partner of the other and neither Party hasthe authority or power to bind or contract in the name of or to create any liability against the other Party in any way or for anypurpose. The Parties agree that each Party is an independent contractor and that the relationship between the two Parties shall notconstitute a partnership, joint venture, or agency, including for all tax purposes.12.2 Assignment. This Agreement shall not be assigned by either Party to any other entity without the prior written consent ofthe other Party. Notwithstanding the foregoing, each Party may assign this Agreement to an Affiliate or to an acquirer or successor ininterest upon a merger, reorganization, change of control, acquisition or sale of all or substantially all of the assets of such Party towhich this Agreement relates and any such assignment shall not require the consent of the other Party. This Agreement shall inure tothe benefit of and be binding on the Parties’ successors and assigns. Any attempted assignment in violation of this Section 12.2 shallbe null and void from the beginning.12.3 Publicity. Attached hereto as Exhibit C is a mutually agreed upon press release that may be issued by T2 Bio followingthe Effective Date. Other than the press release attached hereto , neither Party shall issue any press release, nor any public disclosureor publication, except to the extent that a disclosure is required by law, concerning this Agreement or conduct of the Project, or exceptfor any disclosure that does not contain any additional information beyond that contained in the attached press release. Except asagreed by the Parties, any such required disclosure shall contain only the minimum disclosure required by such law. Allerganacknowledges and agrees that T2 Bio may be required to issue a press release or otherwise disclose information related to thiscollaboration due to T2 Bio’s public company disclosure obligations. In such event, Allergan shall review such press release ordisclosure and be given an opportunity to comment in advance of any such disclosure and, except as otherwise agreed by the Parties,such press release shall contain only the minimum disclosure concerning this Agreement and the Project required by such obligationsas agreed by the Parties, or, in the absence of agreement, as determined based on the reasonable opinion of15[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential T2 Bio’s outside securities counsel. Otherwise, the Parties may issue individual press releases about the existence of this Agreement, if,and only if, mutually agreed by both Parties. For the avoidance of doubt, but without limiting T2 Bio’s right to disclose informationas required by law, T2 Bio shall not disclose any non-public information related to the Allergan Inventions and Allergan shall notdisclose any non-public information related to the T2 Bio Inventions. Notwithstanding the foregoing, Allergan and T2 Bio agree that,upon execution of this Agreement, they shall issue a mutually agreed press release announcing the existence and purpose of theAgreement. 12.4 Waiver. Failure or neglect by either Party to enforce at any time any of the provisions hereof shall not be construed norshall be deemed to be a waiver of such Party’s rights hereunder nor in any way affect the validity of the whole or any part of thisAgreement nor prejudice such Party’s rights to take subsequent action.12.5 Notices. All notices required or permitted hereunder shall be given in writing, and shall be deemed to have been dulygiven when delivered by hand, posted by registered first class mail (airmail if international) or sent via recognized overnight couriers(e.g., Federal Express) or sent by email to the Party to which such notice is required to be given at the business address or emailaddresses stated in this Agreement or to such other address or email address as such Party may have specified to the other inwriting. Notices shall be deemed received on the earlier of the following: (a) notices sent by email shall be deemed received on thesame day of such sending, (b) notices delivered by hand shall be deemed received the first business day following such delivery, and(c) notices which have been posted or sent via overnight courier shall be deemed received on the second business day followingposting.If to T2 Bio, then addressed to:T2 Biosystems, Inc.101 Hartwell Ave. Lexington, MA 02421Attn: Legal DepartmentEmail: mgibbs@t2biosystems.com and rdhanda@t2biosystems.com andjmcdonough@t2biosystems.comIf to Allergan, then addressed to:Allergan Sales, LLCMorris Corporate Center III400 Interpace ParkwayParsippany, NJ 07054Attn: Chief Legal OfficerEmails: robert.bailey@allergan.com and david.nicholson@allergan.com12.6 Severability. In the event that any clause, sub-clause or other provision contained in this Agreement shall be determinedby any competent authority to be invalid, unlawful, or unenforceable to any extent, such clause, sub-clause or other provision shall tothat extent be severed from the remaining clauses and provisions, or the remaining part of the clause in question, which shall continueto be valid and enforceable to the fullest extent permitted by law. 12.7 Governing Law. The rights, obligations and remedies of the Parties under this Agreement shall be governed in allrespects by the laws of the State of New York without regard to its conflicts of law principles.16[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential 12.8 Dispute Resolution. The Parties shall use reasonable efforts to resolve in good faith any claims, controversies ordisagreements between the Parties arising from or related to this Agreement (each, a “ Claim ”) as promptly as practicable after a Partynotifies the other Party in writing of any such Claim (the “ Notice ”). If the Parties are unable to resolve a Claim in accordance withthis previous sentence within thirty (30) calendar days after the other Party’s receipt of the Notice, the Parties agree that suchClaim shall be referred to and finally resolved by binding arbitration under the rules of the International Chamber of Commerce (“ ICC”), which are deemed incorporated into this Section 12.8 (the “ Rules ”) by three arbitrators, of which each Party shall appoint one (1),the arbitrators so appointed will select the third and final arbitrator. The arbitrators shall have experience in pharmaceutical licensingdisputes. Such arbitration shall be conducted in New York, New York, in the English language. The arbitration proceedingsincluding any outcome shall be confidential. Nothing in this Section 12.8 will preclude either Party from seeking equitable interim orprovisional relief from a court of competent jurisdiction including a temporary restraining order, preliminary injunction or other interimequitable relief, concerning a Claim either prior to or during any arbitration if necessary to protect the interests of such Party or topreserve the status quo pending the arbitration proceeding. This Section 12.8 shall not apply to disputes regarding the ownership orinfringement of Intellectual Property Rights.12.9 Headings; Construction. The headings to the clauses, sub-clauses, and parts of this Agreement are inserted forconvenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. Anyambiguity in this Agreement shall be interpreted equitably without regard to which Party drafted the Agreement or any provisionthereof. The terms “this Agreement,” “hereof,” “hereunder” and any similar expressions refer to this Agreement and not to anyparticular section or other portion hereof. As used in this Agreement, the words “include” and “including,” and variations thereof, willbe deemed to be followed by the words “without limitation” and “discretion” means sole discretion.12.10 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an originaland all of which together shall constitute one instrument.12.11 Cumulative Remedies. No right or remedy herein conferred upon or reserved to a Party is exclusive of any other rightor remedy, and each right and remedy shall be cumulative and in addition to any other right or remedy under this Agreement or underapplicable law.12.12 Force Majeure Events. Neither Party will be liable for any delays or failures in performance, except with respect topayment obligations, that are directly caused by acts of God, disease, war, terrorism, riots, civil unrest, extraordinary acts bygovernmental authorities, national or state emergencies, strikes, lockouts, work stoppages or other such labor difficulties (excluding anyof the foregoing involving the hindered Party’s workforce), fire, or floods, which events were not caused by and could not have beenprevented by the hindered Party using reasonable efforts (each, a “ Force Majeure Event ”) and provided that the hindered Party usesreasonable efforts to restore its performance as soon as reasonably practicable.12.13 Entire Agreement. This Agreement supersedes any arrangements, understandings, promises or agreements made orexisting between the Parties hereto prior to or simultaneously with this Agreement and constitutes the entire understanding between theParties hereto. Except as otherwise provided herein, no addition, amendment to or modification of this Agreement shall be effectiveunless it is in writing and signed by and on behalf of both Parties. For clarity, any terms on purchase orders, order acknowledgements,or other similar documents that are not signed by both Parties and incorporated by reference into this Agreement are hereby rejectedand are of no force or effect.[The next page is the signature page.] 17[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the Effective Date by theirduly authorized representatives. T2 BIOSYSTEMS, INC. ALLERGAN SALES, LLC By:/s/ John McDonough By:/s/ Sigurd KirkName:John McDonough Name:Sigurd KirkTitle:CEO and President Title:VP of Corporate Development [***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential EXHIBIT A[***][***] [***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential Exhibit BT2 Bio Co-Marketed Products1.The T2Bacteria II Panel2.The T2GNR Panel3.The T2Bacteria Panel4.The T2Candida Panel [***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential Exhibit CT2 Biosystems Announce Collaboration with Allergan to Develop the First Blood-based Diagnostic Panel to DetectAntimicrobial Resistance-- T2 Biosystems to develop new panel on T2Dx platform and commercialize worldwide while receiving milestone and other payments–-- Panel to aid in rapid bacterial infection diagnosis, including sepsis; enable quicker treatment with life-saving medicines for millionsof patients –-- Allergan granted option to co-market suite of diagnostic products in targeted hospitals --LEXINGTON, Mass. , November 1, 2016 –T2 Biosystems, Inc. (NASDAQ: TTOO), a company developing innovativediagnostic products to improve patient health, today announced a collaboration with Allergan to develop a novel diagnostic panel todetect Gram negative bacterial species and antibiotic resistance for patients with serious bacterial infections, including infectionsleading to sepsis. These products will expand T2 Biosystems’ sepsis pipeline and will include the first direct-from-blood diagnosticpanel to detect antimicrobial resistance.Antimicrobial resistance may develop when bacteria have repeated exposure to antibiotics, forcing the survival of only those strainsthat cannot be treated by typical antimicrobial drugs. One of the most dangerous trends is resistance to an entire class of antibioticsknown as carbapenems, because these are often the therapy of last resort for serious Gram negative infections, according to the Centersfor Disease Control (CDC). The T2 Biosystems’ resistance panel is being developed to specifically identify carbapenem resistancewhich the CDC considers a serious and urgent threat to public health.“Our initial sepsis products, T2Candida Test Panel and T2Bacteria, are the first direct from blood sepsis diagnostics that providespecies identification in 3 to 5 hours while also detecting 40% or more infections that are completely missed by blood culture whichtakes 2 to 6 or more days for results. By identifying resistant bacteria in the early hours of sepsis treatment, we can pick up another10% or more of patients where providing the right antimicrobial drug to the patient may be further delayed – potentially saving morelives and significant costs to hospitals,” said John McDonough, chief executive officer of T2 Biosystems. “We are pleased to becollaborating with Allergan, a company with significant expertise and leadership in treating patients with serious bacterial infections.Together, we hope to not only diagnose sepsis more quickly, but also enable the delivery of life-saving medicines more rapidly to themillions of patients at high risk for bacterial infection.”Under the terms of the agreement, Allergan will pay T2 Biosystems $4 million in milestone payments related to the development of thebacterial resistance panel and an expansion of the T2Bacteria Test Panel currently under development. T2 Biosystems retains exclusiveworldwide distribution rights for all products developed through this partnership. Allergan has the option to cooperatively market T2Biosystems’ menu of sepsis diagnostics to targeted hospitals around the world through Allergan’s leading physician facing institutionalsales force. “We have a strong commitment to developing innovative treatments for serious infections caused by antibiotic-resistant bacteria,including MRSA and multi-drug resistant Gram-negative bacteria. Early identification of patients with antimicrobial resistance canlead to earlier intervention with effective therapy, improving outcomes,” said David Melnick, Vice President of Clinical Developmentand Anti-Infectives at Allergan.[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions.Confidential About T2 BiosystemsT2 Biosystems is focused on developing innovative diagnostic products to improve patient health. With two FDA-cleared productstargeting sepsis and a range of additional products in development, T2 Biosystems is an emerging leader in the field of in vitrodiagnostics. The Company is utilizing its proprietary T2 Magnetic Resonance platform, or T2MR, to develop a broad set ofapplications aimed at lowering mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medicalprofessionals make targeted treatment decisions earlier. T2MR enables the fast and sensitive detection of pathogens, biomarkers andother abnormalities in a variety of unpurified patient sample types, including whole blood, eliminating the time-consuming sample preprequired in current methods. For more information, please visit www.t2biosystems.com .Forward-Looking Statements for T2This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Allstatements contained in this press release that do not relate to matters of historical fact, including, without limitation, the statementsabove under the heading "2016 Outlook" should be considered forward-looking statements. These forward-looking statements arebased on management's current expectations. These statements are neither promises nor guarantees, but involve known and unknownrisks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially differentfrom any future results, performance or achievements expressed or implied by the forward-looking statements, including, but notlimited to, the performance of the Company's diagnostic products and the ability to bring such products to market. These and otherimportant factors could cause actual results to differ materially from those indicated by the forward-looking statements made in thispress release. For more information on risk factors for T2 Biosystems, Inc.’s business, please refer to the Company’s Annual Report onForm 10-K, filed with the Securities and Exchange Commission on March 9, 2016, under the heading “Risk Factors,” and other filingsthe Company makes with the Securities and Exchange Commission from time to time. Any such forward-looking statements representmanagement's estimates as of the date of this press release. While the Company may elect to update such forward-looking statements atsome point in the future, it disclaims any obligation to do so, even if subsequent events cause its views to change. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this pressrelease.###T2 Media Contact:Susan HeinsPure Communications864-346-8336susan@purecommunicationsinc.comT2 Investor Contact:Matt ClawsonPure Communicationsmatt@purecommunicationsinc.com949-370-8500 [***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions. Exhibit 10.22EXECUTION VERSION TERM LOAN AGREEMENTdated as ofDecember 30, 2016amongT2 BIOSYSTEMS, INC.,as Borrower,the Subsidiary Guarantors from time to time party hereto,the Lenders from time to time party hereto,andCRG SERVICING LLC,as Administrative Agent and Collateral AgentU.S. $50,000,000 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Table of Contents SECTION 1 DEFINITIONS 11.01 Certain Defined Terms 11.02 Accounting Terms and Principles 151.03 Interpretation 161.04 Changes to GAAP 16SECTION 2 THE COMMITMENT 162.01 Commitments 162.02 Borrowing Procedures 162.03 Fees 162.04 Use of Proceeds 172.05 Defaulting Lenders 172.06 Substitution of Lenders 17SECTION 3 PAYMENTS OF PRINCIPAL AND INTEREST 183.01 Repayment 183.02 Interest 183.03 Prepayments 19SECTION 4 PAYMENTS, ETC 204.01 Payments 204.02 Computations 214.03 Notices 214.04 Set-Off 214.05 Pro Rata Treatment 21SECTION 5 YIELD PROTECTION, ETC 225.01 Additional Costs 225.02 Illegality235.03 Taxes23SECTION 6 CONDITIONS PRECEDENT266.01 Conditions to the First Borrowing266.02 Conditions to Subsequent Borrowings276.03 Conditions to Each Borrowing28SECTION 7 REPRESENTATIONS AND WARRANTIES287.01 Power and Authority287.02 Authorization; Enforceability287.03 Governmental and Other Approvals; No Conflicts287.04 Financial Statements; Material Adverse Change297.05 Properties297.06 No Actions or Proceedings317.07 Compliance with Laws and Agreements317.08 Taxes317.09 Full Disclosure327.10 Regulation327.11 Solvency327.12 Subsidiaries327.13 Indebtedness and Liens327.14 Material Agreements327.15 Restrictive Agreements327.16 Real Property337.17 Pension Matters337.18 Collateral; Security Interest337.19 Regulatory Approvals337.20 Update of Schedules33SECTION 8 AFFIRMATIVE COVENANTS348.01 Financial Statements and Other Information348.02 Notices of Material Events35i [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions.Table of Contents(continued) 8.03 Existence; Conduct of Business368.04 Payment of Obligations368.05 Insurance368.06 Books and Records; Inspection Rights37 8.07 Compliance with Laws and Other Obligations378.08 Maintenance of Properties, Etc.378.09 Licenses378.10 Action under Environmental Laws378.11 Use of Proceeds378.12 Certain Obligations Respecting Subsidiaries; Further Assurances378.13 Termination of Non-Permitted Liens388.14 Intellectual Property398.15 Post-Closing Items39SECTION 9 NEGATIVE COVENANTS399.01 Indebtedness399.02 Liens409.03 Fundamental Changes and Acquisitions419.04 Lines of Business419.05 Investments429.06 Restricted Payments429.07 Payments of Indebtedness439.08 Change in Fiscal Year439.09 Sales of Assets, Etc.439.10 Transactions with Affiliates449.11 Restrictive Agreements449.12 Amendments to Material Agreements; Organizational Documents449.13 Operating Leases449.14 Sales and Leasebacks459.15 Hazardous Material459.16 Accounting Changes459.17 Compliance with ERISA45SECTION 10 FINANCIAL COVENANTS4510.01 Minimum Liquidity45 10.02 Minimum Revenue4510.03 Cure Right45SECTION 11 EVENTS OF DEFAULT4611.01 Events of Default4611.02 Remedies48SECTION 12 ADMINISTRATIVE AGENT4912.01 Appointment and Duties4912.02 Binding Effect4912.03 Use of Discretion5012.04 Delegation of Rights and Duties5012.05 Reliance and Liability5012.06 Administrative Agent Individually5112.07 Lender Credit Decision5112.08 Expenses; Indemnities5112.09 Resignation of Administrative Agent5112.10 Release of Collateral or Guarantors5212.11 Additional Secured Parties52SECTION 13 MISCELLANEOUS5213.01 No Waiver5213.02 Notices5213.03 Expenses, Indemnification, Etc.53ii [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions.Table of Contents(continued) 13.04 Amendments, Etc.5313.05 Successors and Assigns5413.06 Survival5513.07 Captions5513.08 Counterparts5513.09 Governing Law5513.10 Jurisdiction, Service of Process and Venue5613.11 Waiver of Jury Trial56 13.12 Waiver of Immunity5613.13 Entire Agreement5613.14 Severability5613.15 No Fiduciary Relationship5613.16 Confidentiality5613.17 USA PATRIOT Act5713.18 Maximum Rate of Interest5713.19 Certain Waivers5713.20 Tax Treatment5813.21 Original Issue Discount58SECTION 14 GUARANTEE5814.01 The Guarantee5814.02 Obligations Unconditional5814.03 Reinstatement5914.04 Subrogation5914.05 Remedies5914.06 Instrument for the Payment of Money5914.07 Continuing Guarantee5914.08 Rights of Contribution5914.09 General Limitation on Guarantee Obligations60 iii [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. SCHEDULES AND EXHIBITS Schedule 1-Commitments and Warrant SharesSchedule 7.05(b)(i)-Certain Intellectual PropertySchedule 7.05(b)(ii)-Intellectual Property ExceptionsSchedule 7.05(c)-Material Intellectual PropertySchedule 7.06-Certain LitigationSchedule 7.12-Information Regarding SubsidiariesSchedule 7.13(a)-Existing Indebtedness of Borrower and its SubsidiariesSchedule 7.13(b)-Liens Granted by the ObligorsSchedule 7.14-Material Agreements of ObligorsSchedule 7.15-Restrictive AgreementsSchedule 7.16-Real Property Owned or Leased by Borrower or any SubsidiarySchedule 7.17-Pension MattersSchedule 9.05-Existing InvestmentsSchedule 9.10-Transactions with AffiliatesSchedule 9.14-Permitted Sales and Leasebacks Exhibit A-Form of Guarantee Assumption AgreementExhibit B-Form of Notice of BorrowingExhibit C-1-Form of U.S. Tax Compliance CertificateExhibit C-2-Form of U.S. Tax Compliance CertificateExhibit C-3-Form of U.S. Tax Compliance CertificateExhibit C-4-Form of U.S. Tax Compliance CertificateExhibit D-Form of Compliance CertificateExhibit E-Form of Landlord ConsentExhibit F-Form of Subordination AgreementExhibit G-Form of Intercreditor Agreement [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. TERM LOAN AGREEMENT, dated as of December 30, 2016 (this “ Agreement ”), among T2 BIOSYSTEMS, INC., a Delaware corporation (“Borrower ”), the Subsidiary Guarantors from time to time party hereto, the Lenders from time to time party hereto and CRG SERVICING LLC, a Delawarelimited liability company (“ CRG Servicing ”), as administrative agent and collateral agent for the Lenders (in such capacities, together with its successorsand assigns, “ Administrative Agent ”).WITNESSETH:Borrower has requested the Lenders to make term loans to Borrower, and the Lenders are prepared to make such loans on and subject to the termsand conditions hereof. Accordingly, the parties agree as follows:SECTION 1DEFINITIONS1.01Certain Defined Terms . As used herein, the following terms have the following respective meanings:“ Accounting Change Notice ” has the meaning set forth in Section 1.04(a) .“ Act ” has the meaning set forth in Section 13.17 .“ Acquisition ” means any transaction, or any series of related transactions, by which any Person directly or indirectly, by means of a take-over bid,tender offer, amalgamation, merger, purchase of assets, or similar transaction having the same effect as any of the foregoing, (a) acquires any business,division or line of business or all or substantially all of the assets of any Person engaged in any business, division or line of business, (b) acquires control ofsecurities of a Person engaged in a business representing more than 50% of the ordinary voting power for the election of directors or other governing body ifthe business affairs of such Person are managed by a board of directors or other governing body, or (c) acquires control of more than 50% of the ownershipinterest in any Person engaged in any business that is not managed by a board of directors or other governing body.“ Affected Lender ” has the meaning set forth in Section 2.06(a) .“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or isControlled by or is under common Control with the Person specified. “ Agreement ” has the meaning set forth in the introduction hereto.“ Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to any Obligor, its Subsidiaries or Affiliates fromtime to time concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977.“ Anti-Money Laundering Laws ” means any and all laws, statutes, regulations or obligatory government orders, decrees, ordinances or rulesapplicable to an Obligor, its Subsidiaries or Affiliates related to terrorism financing or money laundering, including any applicable provision of the Act andThe Currency and Foreign Transaction Reporting Act (also known as the “Bank Secrecy Act,” 31 U.S.C. §§5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and1951-1959).“ Approval Milestone ” means 510(k) clearance for the marketing of T2Bacteria™ by the United States Food and Drug Administration on or priorto April 30, 2018.“ Asset Sale ” has the meaning set forth in Section 9.09 .“ Asset Sale Net Proceeds ” means the aggregate amount of the cash proceeds received from any Asset Sale, net of any bona fide costs andexpenses incurred in connection with such Asset Sale, plus, with respect to any non-cash proceeds of an Asset Sale, the fair market value of such non cashproceeds as determined by Borrower in its reasonable discretion in accordance with GAAP.“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee of such Lender.1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. “ Back-End Facility Fee ” has the meaning set forth in the Fee Letter.“ Bankruptcy Code ” means Title 11 of the United States Code entitled “Bankruptcy.”“ Benefit Plan ” means any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the United States orotherwise) to which any Obligor or Subsidiary thereof incurs or otherwise has any obligation or liability, contingent or otherwise.“ Borrower ” has the meaning set forth in the introduction hereto.“ Borrower Facility ” means each manufacturing or testing facility occupied or operated by any Obligor the operation of which is subject to theapproval or licensing by the United States Food and Drug Administration and/or any other Governmental Approval relating to the manufacture or testing ofmedical devices and pharmaceutical or diagnostic products.“ Borrower Landlord ” means each landlord relating to any leased Borrower Facility. As of the Closing Date, the Borrower Landlords consisted of:(a) King 101 Hartwell LLC, a Massachusetts limited liability company; (b) 91 Hartwell Avenue Trust; (c) King 4 Hartwell Place, LP, a Delaware limitedpartnership; and (d) Columbus Day Realty, Inc..“ Borrower Lease ” means each lease agreement relating to any leased Borrower Facility. As of the Closing Date, the Borrower Leases consist of:(a) that certain Lease dated August 6, 2010, as amended by that certain First Amendment to Lease dated November 2011, as further amended by that certainSecond Amendment to Lease dated July 11, 2014, and as further amended by that certain Third Amendment to Lease dated May 27, 2015, by and betweenBorrower and King 101 Hartwell LLC, a Massachusetts limited liability company; (b) that certain License Agreement dated October 31, 2014, as amended bythat certain First Amendment to License Agreement dated April 3, 2015, as further amended by that certain Second Amendment to License Agreement datedMay 6, 2015, as further amended by that certain Third Amendment to License Agreement dated October 26, 2015, and as further amended by that certainFourth Amendment to License Agreement dated May 19, 2016, by and between Borrower and 91 Hartwell Avenue Trust; (c) that certain Lease datedNovember 12, 2014, by and between Borrower and King 4 Hartwell Place, LP, a Delaware limited partnership; and (d) that certain Commercial Lease datedMay 6, 2013, as amended by that certain Amendment No. 1 to Commercial Lease dated September 24, 2013, and as further amended by that certainAmendment No. 2 to Commercial Lease dated September 21, 2015, by and between Borrower and Columbus Day Realty, Inc..“ Borrower Party ” has the meaning set forth in Section 13.03(b) .“ Borrowing ” means a borrowing consisting of Loans made on the same day by the Lenders according to their respective Commitments (includingwithout limitation a borrowing of a PIK Loan).“ Borrowing Date ” means the date of a Borrowing.“ Borrowing Notice Date ” means, (a) in the case of the first Borrowing, the date of this Agreement and, (b) in the case of a subsequent Borrowing,a date that is at least [***] Business Days prior to the Borrowing Date of such Borrowing.“ Business Day ” means a day (other than a Saturday or Sunday) on which commercial banks are not authorized or required to close in New YorkCity.“ Capital Lease Obligations ” means, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or otheragreement conveying the right to use) real and/or personal Property which obligations are required to be classified and accounted for as a capital lease on abalance sheet of such Person under GAAP and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof,determined in accordance with GAAP and as shown on such Person’s consolidated balance sheet.“ Change of Control ” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group of Personsacting jointly or otherwise in concert of capital stock representing more than 35% of the aggregate ordinary voting power represented by the issued andoutstanding capital stock of Borrower or (b) the acquisition of direct or indirect Control of Borrower by any Person or group of Persons acting jointly orotherwise in concert, in each case whether as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise; provided , for each of clauses (a) and (b), that entities affiliated with any holder of more than 10% of Borrower’s issued and outstanding capital stock as of theClosing Date may2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. collectively acquire, directly or indirectly, beneficially or of record, up to 40% of the aggregate ordinary voting power represented by the issued andoutstanding capital stock of Borrower so long as such acquisition is not effected in connection with a transaction as a result of which Borrower ceases to haveEquity Interests listed on a national securities exchange or otherwise ceases to be public reporting company.“ Claims ” means any claims, demands, complaints, grievances, actions, applications, suits, causes of action, orders, charges, indictments,prosecutions, information (brought by a public prosecutor without grand jury indictment) or other similar processes, assessments or reassessments.“ Closing Date ” means the date of the first Borrowing.“ Code ” means the Internal Revenue Code of 1986.“ Collateral ” means any Property in which a Lien is purported to be granted under any of the Security Documents (or all such Property, as thecontext may require).“ Commitment ” means, with respect to each Lender, the obligation of such Lender to make Loans to Borrower in accordance with the terms andconditions of this Agreement, which commitment is in the amount set forth opposite such Lender’s name on Schedule 1 under the caption “Commitment”, assuch Schedule may be amended from time to time. The aggregate Commitments on the date hereof equal $50,000,000. For purposes of clarification, theamount of any PIK Loans shall not reduce the amount of the available Commitment.“ Commitment Period ” means the Closing Date through and including July 27, 2018.“ Commodity Account ” has the meaning set forth in the Security Agreement.“ Compliance Certificate ” has the meaning given to such term in Section 8.01(d) .“ Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that arefranchise Taxes or branch profits Taxes.“ Contracts ” means contracts, licenses, leases, agreements, obligations, promises, undertakings, understandings, arrangements, documents,commitments, entitlements or engagements under which a Person has, or will have, any liability or contingent liability (in each case, whether written or oral,express or implied).“ Control ” means, in respect of a particular Person, the possession, directly or indirectly, of the power to direct or cause the direction of themanagement or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” havemeanings correlative thereto.“ Controlled Foreign Corporation ” means a “controlled foreign corporation” as defined in Section 957(a) of the Code.“ Copyright ” has the meaning set forth in the Security Agreement.“ Cure Amount ” has the meaning set forth in Section 10.03(a) .“ Default ” means any Event of Default and any event that, upon the giving of notice, the lapse of time or both, would constitute an Event ofDefault.“ Default Rate ” has the meaning set forth in Section 3.02(b) .“ Defaulting Lender ” means, subject to Section 2.05 , any Lender that (a) has failed to perform any of its funding obligations hereunder, includingin respect of its Loans, within [***] of the date required to be funded by it hereunder, (b) has notified Borrower or any Lender that it does not intend tocomply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreementsin which it commits to extend credit, or (c) has, or has a direct or indirect parent company that has, (i) become the subject of an Insolvency Proceeding,(ii) had a receiver, conservator, trustee,3 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it,or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that aLender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parentcompany thereof by a Governmental Authority.“ Deposit Account ” is defined in the Security Agreement.“ Disqualified Equity ” means Equity Interests of a Person subject to repurchase or redemption rights or obligations (excluding repurchases orredemptions at the sole option of such Person), in each case prior to the date that is the 181 st day anniversary of the Maturity Date (other than uponindefeasible payment in full of the Obligations (other than contingent indemnification or reimbursement obligations for which no claim has been made)).“ Dollars ” and “ $ ” means lawful money of the United States of America.“ Eligible Transferee ” means and includes a commercial bank, an insurance company, a finance company, a financial institution, any investmentfund that invests in loans or any other “accredited investor” (as defined in Regulation D of the Securities Act) that is principally in the business of managinginvestments or holding assets for investment purposes; provided that “Eligible Transferee” shall not include (a) any Person that produces, markets or sells, ordevelops a program to market or sell, a product in direct competition with Borrower or whose active business is in the medical device or medicalinstrumentation industry, and (b) so long as no Default or Event of Default has occurred and is continuing, any Person whose primary investment strategy, asdetermined by the transferring Lender in its reasonable discretion, is the investment in distressed debt; provided , further, that the foregoing limitation inclause (b) shall cease to apply with respect to any Lender that has engaged in the securitization or other factoring or financing transaction with respect to itslending portfolio.“ Environmental Law ” means any federal, state, provincial or local governmental law, rule, regulation, order, writ, judgment, injunction or decreerelating to pollution or protection of the environment or the treatment, storage, disposal, release, threatened release or handling of hazardous materials, andall local laws and regulations related to environmental matters and any specific agreements entered into with any competent authorities which includecommitments related to environmental matters.“ Equity Interest ” means, with respect to any Person, any and all shares, interests, participations or other equivalents, including membershipinterests (however designated, whether voting or nonvoting), of equity of such Person, including, if such Person is a partnership, partnership interests(whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, ordistributions of property of, such partnership, but excluding debt securities convertible or exchangeable into such equity.“ Equivalent Amount ” means, with respect to an amount denominated in one currency, the amount in another currency that could be purchased bythe amount in the first currency determined by reference to the Exchange Rate at the time of determination.“ ERISA ” means the United States Employee Retirement Income Security Act of 1974, as amended.“ ERISA Affiliate ” means, collectively, any Obligor, Subsidiary thereof, and any Person under common control, or treated as a single employer,with any Obligor or Subsidiary thereof, within the meaning of Section 414(b), (c), (m) or (o) of the Code.“ ERISA Event ” means (a) a reportable event as defined in Section 4043 of ERISA with respect to a Title IV Plan, excluding, however, such eventsas to which the PBGC by regulation has waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of suchevent; (b) a withdrawal by any Obligor or any ERISA Affiliate thereof from a Title IV Plan or the termination of any Title IV Plan resulting in liability underSections 4063 or 4064 of ERISA; (c) the withdrawal of any Obligor or any ERISA Affiliate thereof in a complete or partial withdrawal (within the meaning ofSection 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefore, or the receipt by any Obligor or any ERISAAffiliate thereof of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA; (d) the filing ofa notice of intent to terminate, the treatment of a plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement ofproceedings by the PBGC to terminate a Title IV Plan or Multiemployer Plan; (e) the imposition of liability on any Obligor or any ERISA Affiliate thereofpursuant to Sections 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (f) the failure by any Obligor or any ERISAAffiliate thereof to make any required contribution to a Plan, or the failure to meet the minimum funding standard of Section 412 of the Code with respect toany Title IV Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a required installment underSection 4304 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. of the Code with respect to any Title IV Plan or the failure to make any required contribution to a Multiemployer Plan; (g) the determination that any Title IVPlan is considered an at-risk plan or a plan in endangered to critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304and 305 of ERISA; (h) an event or condition which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of,or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan; (i) the imposition of any liability under Title I or Title IV of ERISA,other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Obligor or any ERISA Affiliate thereof; (j) an application for afunding waiver under Section 303 of ERISA or an extension of any amortization period pursuant to Section 412 of the Code with respect to any Title IV Plan; (k) the occurrence of a non-exempt prohibited transaction under Sections 406 or 407 of ERISA for which any Obligor or any Subsidiary thereof may bedirectly or indirectly liable; (l) a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a)of the Code by any fiduciary or disqualified person for which any Obligor or any ERISA Affiliate thereof may be directly or indirectly liable; (m) theoccurrence of an act or omission which could give rise to the imposition on any Obligor or any ERISA Affiliate thereof of fines, penalties, taxes or relatedcharges under Chapter 43 of the Code or under Sections 409, 502(c), (i) or (1) or 4071 of ERISA; (n) the assertion of a material claim (other than routineclaims for benefits) against any Plan or the assets thereof, or against any Obligor or any Subsidiary thereof in connection with any such plan; (o) receipt fromthe IRS of notice of the disqualification of any Qualified Plan under Section 401(a) of the Code, or the revocation of the tax-exempt status of any trustforming part of any Qualified Plan under Section 501(a) of the Code; (p) the imposition of any lien (or the fulfillment of the conditions for the imposition ofany lien) on any of the rights, properties or assets of any Obligor or any ERISA Affiliate thereof, in either case pursuant to Title I or IV, including Section302(f) or 303(k) of ERISA or to Section 401(a)(29) or 430(k) of the Code; or (q) the establishment or amendment by any Obligor or any Subsidiary thereof ofany “welfare plan”, as such term is defined in Section 3(1) of ERISA, that provides post-employment welfare benefits in a manner that materially increases theliability of any Obligor.“ ERISA Funding Rules ” means the rules regarding minimum required contributions (including any installment payment thereof) to Title IVPlans, as set forth in Sections 412, 430 and 436 of the Code and Sections 302 and 303 of ERISA.“ Essex Lease Agreement ” means, collectively, that certain Master Lease Agreement, dated as of October 30, 2015, between Essex CapitalCorporation, a California corporation, and Borrower, and all amendments, restatements, modifications and supplements thereto.“ Event of Default ” has the meaning set forth in Section 11.01 .“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.“ Exchange Rate ” means, as of any date, the rate at which any currency (the “ Pre-Exchange Currency ”) may be exchanged into another currency(the “ Post-Exchange Currency ”), as set forth on such date on the relevant Reuters screen at or about 11:00 a.m. (Central time) on such date. In the event thatsuch rate does not appear on the Reuters screen, the “Exchange Rate” with respect to exchanging such Pre-Exchange Currency into such Post-ExchangeCurrency shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by Borrower andAdministrative Agent or, in the absence of such agreement, such Exchange Rate shall instead be determined by Administrative Agent by any reasonablemethod as they deem applicable to determine such rate, and such determination shall be conclusive absent manifest error.“ Excluded Account ” has the meaning assigned to it in the Security Agreement.“ Excluded Foreign Subsidiary ” means any Foreign Subsidiary that is (i) a Controlled Foreign Corporation or (ii) a Foreign Subsidiary owned bya Subsidiary described in clause (i).“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from apayment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes and branch profits Taxes, in each case (i)imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lendingoffice located in, the jurisdiction imposing such Tax, or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes thatare imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment to the extent that theobligation to withhold amounts existed on the date that such Lender becomes a “Lender” under this Agreement or such Lender otherwise acquires suchinterest in the Loan or Commitment (other than pursuant to an assignment request by Borrower under Section 5.03(g) ) or such Lender changes its lendingoffice, except in each case to the extent that, pursuant to Section 5.03 , amounts with respect to such Taxes were payable either to such Lender’s assignorimmediately before such Lender became a party hereto or to such Lender immediately before5 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. it changed its lending office, (c) any U.S. federal withholding Taxes imposed under FATCA, and (d) Taxes attributable to such Recipient’s failure to complywith Section 5.03(e) .“ Expense Cap ” has the meaning set forth in the Fee Letter.“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that issubstantively comparable and not more onerous to comply with), any current or future regulations or official interpretations thereof , any agreements enteredinto pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement between a non-U.S. jurisdiction and the United States with respect to theforegoing and any law, regulation or practice adopted pursuant to any such intergovernmental agreement.“ Federal Funds Effective Rate ” means, for any day, the weighted average of the rates on overnight federal funds transactions with members of theFederal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, ifsuch rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by AdministrativeAgent from three federal funds brokers of recognized standing selected by it.“ Fee Letter ” means that fee letter agreement dated as of the date hereof between Borrower and Administrative Agent.“ First-Tier Foreign Subsidiary ” means an Excluded Foreign Subsidiary that is a direct Subsidiary of an Obligor.“ Foreign Lender ” means a Lender that is not a U.S. Person.“ Foreign Subsidiary ” means a Subsidiary of Borrower that is not a U.S. Person.“ GAAP ” means generally accepted accounting principles in the United States of America set forth in the opinions and pronouncements of theAccounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial AccountingStandards Board and in such other statements by such other entity as may be in general use by significant segments of the accounting profession that areapplicable to the circumstances as of the date of determination. Subject to Section 1.02 , all references to “GAAP” shall be to GAAP applied consistentlywith the principles used in the preparation of the financial statements described in Section 7.04(a) .“ Governmental Approval ” means any consent, authorization, approval, order, clearance, license, franchise, notification, permit, certificate,accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.“ Governmental Authority ” means any nation, government, branch of power (whether executive, legislative or judicial), state, province ormunicipality or other political subdivision thereof and any entity exercising executive, legislative, judicial, monetary, regulatory or administrative functionsof or pertaining to government, including without limitation regulatory authorities, governmental departments, agencies, commissions, bureaus, officials,ministers, courts, bodies, boards, tribunals and dispute settlement panels, and other law-, rule- or regulation-making organizations or entities of any State,territory, county, city or other political subdivision.“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having theeconomic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly orindirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of)such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchaseor lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintainworking capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay suchIndebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness orobligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The amount of anyGuarantee shall be deemed to be the maximum reasonably anticipated liability in respect thereof.6 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. “ Guarantee Assumption Agreement ” means a Guarantee Assumption Agreement substantially in the form of Exhibit A by an entity that, pursuantto Section 8.12(a) , is required to become a “Subsidiary Guarantor” hereunder.“ Guaranteed Obligations ” has the meaning set forth in Section 14.01 .“ Hazardous Material ” means any substance, element, chemical, compound, product, solid, gas, liquid, waste, by-product, pollutant, contaminantor material which is hazardous or toxic, and includes, without limitation, (a) asbestos, polychlorinated biphenyls and petroleum (including crude oil or anyfraction thereof) and (b) any material classified or regulated as “hazardous” or “toxic” or words of like import pursuant to an Environmental Law.“ Hedging Agreement ” means any interest rate exchange agreement, foreign currency exchange agreement, commodity price protection agreementor other interest or currency exchange rate or commodity price hedging arrangement.“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or obligations of such Personwith respect to deposits or advances of any kind by third parties, (b) all obligations of such Person evidenced by bonds, debentures, notes or similarinstruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale orother title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price ofproperty or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for whichthe holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person,whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital LeaseObligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty,(j) obligations under any Hedging Agreement currency swaps, forwards, futures or derivatives transactions, (k) all obligations, contingent or otherwise, ofsuch Person in respect of bankers’ acceptances and (l) all Disqualified Stock of such Person (excluding accrued dividends that have not increased theliquidation preference of such Disqualified Stock). The Indebtedness of any Person shall include the Indebtedness of any other entity (including anypartnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or otherrelationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.“ Indemnified Party ” has the meaning set forth in Section 13.03(b) .“ Indemnified Taxes ” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of anyObligation and (b) to the extent not otherwise described in clause (a), Other Taxes.“ Insolvency Proceeding ” means (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy,reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors,composition, marshaling of assets for creditors, or other, similar arrangement in respect of any Person’s creditors generally or any substantial portion of suchPerson’s creditors, in each case undertaken under U.S. federal, state or foreign law, including the Bankruptcy Code. “ Intellectual Property ” means all Patents, Trademarks, Copyrights, and Technical Information, whether registered or not, domestic and foreign. Intellectual Property shall include all:(a)applications or registrations relating to such Intellectual Property;(b)rights and privileges arising under applicable Laws with respect to such Intellectual Property;(c)rights to sue for past, present or future infringements of such Intellectual Property; and(d)rights of the same or similar effect or nature in any jurisdiction corresponding to such Intellectual Property throughout the world.“ Interest-Only Period ” means the period from and including the first Borrowing Date and through and including the twelfth (12 th ) Payment Datefollowing the first Borrowing Date; provided that (a) if Borrower achieves the Approval Milestone and so long as no Default or Event of Default hasoccurred and is continuing, the Interest-Only Period shall be extended through and including the7 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. sixteenth (16 th ) Payment Date following the first Borrowing Date and (b) if Borrower achieves the Market Cap Milestone and so long as no Default or Eventof Default has occurred and is continuing, the Interest-Only Period shall be extended through and including the twenty-third (23 rd ) Payment Date followingthe first Borrowing Date.“ Interest Period ” means, with respect to each Borrowing, (a) initially, the period commencing on and including the Borrowing Date thereof andending on and excluding the next Payment Date, and, (b) thereafter, each period beginning on and including the last day of the immediately precedingInterest Period and ending on and excluding the next succeeding Payment Date.“ Invention ” means any novel, inventive and useful art, apparatus, method, process, machine (including article or device), manufacture orcomposition of matter, or any novel, inventive and useful improvement in any art, method, process, machine (including article or device), manufacture orcomposition of matter. “ Investment ” means, for any Person: (a) the acquisition (whether for cash, property, services or securities or otherwise) of capital stock, bonds,notes, debentures, partnership or other ownership interests or other securities of any other Person or any agreement to make any such acquisition (includingany “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such sale); (b) the making of anydeposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of property from another Person subject to anunderstanding or agreement, contingent or otherwise, to resell such property to such Person), but excluding any such advance, loan or extension of credithaving a term not exceeding [***] arising in connection with the sale of inventory or supplies by such Person in the ordinary course of business; (c) theentering into of any Guarantee of, or other contingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication)any amount committed to be advanced, lent or extended to such Person; or (d) the entering into of any Hedging Agreement.“ IRS ” means the U.S. Internal Revenue Service or any successor agency, and to the extent relevant, the U.S. Department of the Treasury.“ Knowledge ” means, with respect to any Person, the actual knowledge of any Responsible Officer of such Person and, in the case of Borrower, solong as he or she is employed by Borrower or its Subsidiaries, the actual knowledge of John McDonough, Shawn Lynch and Tom Lowery, so long as suchPerson is an officer of Borrower.“ Landlord Consent ” means a Landlord Consent substantially in the form of Exhibit E or otherwise reasonably acceptable to AdministrativeAgent.“ Laws ” means, collectively, all international, foreign, federal, state, provincial, territorial, municipal and local statutes, treaties, rules, guidelines,regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by anyGovernmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties,requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.“ Lender ” means each Person listed as a “Lender” on a signature page hereto, together with its successors, and each assignee of a Lender pursuantto Section 13.05(b) .“ Lien ” means any mortgage, lien, pledge, charge or other security interest, or any lease, title retention agreement, mortgage, restriction, easement,right-of-way, option or adverse claim (of ownership or possession) or other encumbrance of any kind or character whatsoever or any preferential arrangementthat has the practical effect of creating a security interest.“ Liquidity ” means the balance of unencumbered (other than Liens securing the Obligations and Liens permitted pursuant to Section 9.02(c) andSection 9.02(j) ; provided that, with respect to cash subject to a Lien in connection with Permitted Priority Debt, there is no default under the documentationgoverning the Permitted Priority Debt) cash and Permitted Cash Equivalent Investments (which for greater certainty shall not include any undrawn creditlines), in each case, to the extent held in an account over which the Secured Parties have a perfected security interest.“ Loan ” means (a) each loan advanced by a Lender pursuant to Section 2.01 and (b) each PIK Loan deemed to have been advanced by a Lenderpursuant to Section 3.02(d) . For purposes of clarification, any calculation of the aggregate outstanding principal amount of Loans on any date ofdetermination shall include both the aggregate principal amount of loans advanced pursuant to Section 2.01 and not yet repaid, and all PIK Loans deemed tohave been advanced and not yet repaid, on or prior to such date of determination.8 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. “ Loan Documents ” means, collectively, this Agreement, the Fee Letter, the Security Documents, any subordination agreement or any intercreditoragreement entered into by Administrative Agent (on behalf of the Lenders) with any other creditors of Obligors or any agent acting on behalf of suchcreditors, and any other present or future document, instrument, agreement or certificate executed by Obligors and delivered to Administrative Agent or anySecured Party in connection with or pursuant to this Agreement or any of the other Loan Documents, all as amended, restated, supplemented or otherwisemodified.“ Loss ” means judgments, debts, liabilities, expenses, costs, damages or losses, contingent or otherwise, whether liquidated or unliquidated,matured or unmatured, disputed or undisputed, contractual, legal or equitable, including loss of value, professional fees, including fees and disbursements oflegal counsel on a full indemnity basis, and all costs incurred in investigating or pursuing any Claim or any proceeding relating to any Claim.“ Majority Lenders ” means, at any time, Lenders having at such time in excess of 50% of the aggregate Commitments (or, if such Commitmentsare terminated, the outstanding principal amount of the Loans) then in effect, ignoring, in such calculation, the Commitments of and outstanding Loansowing to any Defaulting Lender.“ Margin Stock ” means “margin stock” within the meaning of Regulations U and X.“ Market Cap Milestone ” means achievement by Borrower of an average Market Capitalization of $[***] over a trailing [***] month period on orprior to June 30, 2019.“ Market Capitalization ” means, as of the date of determination, the product of (a) the sum of (i) the number of shares of Borrower’s commonstock outstanding as of such date of determination and (ii) the number of shares (not included in clause (i)) of Borrower’s common stock that would beoutstanding if all outstanding in-the-money stock options, warrants and convertible securities were exercised for, or converted into, as applicable, commonstock and (b) the closing price of Borrower’s common stock on the NASDAQ Global Market on such date of determination.“ Material Adverse Change ” and “ Material Adverse Effect ” mean a material adverse change in or effect on (a) the business, condition (financialor otherwise), operations, performance or Property of Borrower and its Subsidiaries taken as a whole, (b) the ability of any Obligor to perform its obligationsunder the Loan Documents, or (c) the legality, validity, binding effect or enforceability of the Loan Documents or the rights and remedies of AdministrativeAgent or any Lender under any of the Loan Documents.“ Material Agreements ” means (a) the agreements which are listed in Schedule 7.14 (as updated by Borrower from time to time in accordance withSection 7.20 to list all such agreements that meet the description set forth in clauses (b) and (c) of this definition), (b) material inbound and outbound licenseagreements and (c) all other agreements held by the Obligors from time to time, the absence or termination of any of which would reasonably be expected toresult in a Material Adverse Effect; provided, however, that “Material Agreements” exclude all: (i) licenses implied by the sale of a product; and (ii) paid-uplicenses for commonly available software programs under which an Obligor is the licensee. “Material Agreement” means any one such agreement.“ Material Indebtedness ” means, at any time, any Indebtedness of any Obligor, the outstanding principal amount of which (i) for purposes ofSection 11.01 , exceeds $[***] individually or in the aggregate (or the Equivalent Amount in other currencies) or (ii) for all other purposes, exceeds $[***]individually (or the Equivalent Amount in other currencies).“ Material Intellectual Property ” means, the Obligor Intellectual Property described in Schedule 7.05(c) and any other Obligor IntellectualProperty after the date hereof the loss of which could reasonably be expected to have a Material Adverse Effect.“ Maturity Date ” means the earlier to occur of (a) the Stated Maturity Date, and (b) the date on which the Loans are accelerated pursuant toSection 11.02 .“ Maximum Rate ” has the meaning set forth in Section 13.18.“ Minimum Required Revenue ” has the meaning set forth in Section in 10.02.“ MSC Investment Conditions ” means that, as of any date, Borrower has on deposit in a collateral account subject to a control agreement in favorof Administrative Agent for the benefit of the Secured Parties an amount equal to or greater than 110% of9 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. the outstanding principal, interest, Back-End Facility Fee and Prepayment Premium (calculated as if the Loans were prepaid in full as of the applicable date),in each case with respect to the Loans.“ Multiemployer Plan ” means any multiemployer plan, as defined in Section 400l(a)(3) of ERISA, to which any ERISA Affiliate incurs orotherwise has any obligation or liability, contingent or otherwise.“ Non-Consenting Lender ” has the meaning set forth in Section 2.06(a) .“ Non-Disclosure Agreement ” has the meaning set forth in Section 13.16 .“ Notice of Borrowing ” has the meaning set forth in Section 2.02 .“ Obligations ” means, with respect to any Obligor, all amounts, obligations, liabilities, covenants and duties of every type and description owingby such Obligor to any Lender, any other indemnitee hereunder or any participant, to the extent arising out of, under, or in connection with, any LoanDocument, whether direct or indirect (regardless of whether acquired by assignment), absolute or contingent, due or to become due, whether liquidated or not,now existing or hereafter arising and however acquired, and whether or not evidenced by any instrument or for the payment of money, including, withoutduplication, (a) if such Obligor is Borrower, all Loans, (b) all interest, whether or not accruing after the filing of any petition in bankruptcy or after thecommencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in anysuch proceeding, and (c) all other fees, expenses (including fees, charges and disbursement of counsel), interest, commissions, charges, costs, disbursements,indemnities and reimbursement of amounts paid and other sums chargeable to such Obligor under any Loan Document. Notwithstanding the foregoing,“Obligations” shall not include the Warrant Obligations.“ Obligor Intellectual Property ” means Intellectual Property owned by or licensed to any of the Obligors.“ Obligors ” means, collectively, Borrower and the Subsidiary Guarantors and their respective successors and permitted assigns.“ OFAC ” means the Office of Foreign Assets Control of the United States Department of the Treasury.“ Other Connection Taxes ” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between suchRecipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to,performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to orenforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).“ Other Taxes ” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any paymentmade under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwisewith respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than anassignment made pursuant to Section 5.03(g) ).“ Participant ” has the meaning set forth in Section 13.05(e) .“ Participant Register ” has the meaning set forth in Section 13.05(f) . “ Patents ” has the meaning set forth in the Security Agreement.“ Payment Date ” means each March 31, June 30, September 30, December 31 and the Maturity Date, commencing on the first such date to occurfollowing the first Borrowing Date; provided that, if any such date shall occur on a day that is not a Business Day, the applicable Payment Date shall be thenext preceding Business Day.“ PBGC ” means the United States Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performingsimilar functions.10 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. “ Perfection Certificate ” means that certain Perfection Certificate dated as of the date hereof delivered by Borrower to Administrative Agent.“ Permitted Acquisition ” means any acquisition by Borrower or any of its wholly-owned Subsidiaries, whether by purchase, merger or otherwise,of all or substantially all of the assets of, all of the Equity Interests of, or a business line or unit or a division of, any Person; provided that: (a)immediately prior to, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or wouldresult therefrom;(b)all transactions in connection therewith shall be consummated, in all material respects, in accordance with all applicable Laws and inconformity with all applicable Governmental Approvals;(c)in the case of the acquisition of all of the Equity Interests of such Person, all of the Equity Interests (except for any such securities in thenature of directors’ qualifying shares required pursuant to applicable Law) acquired, or otherwise issued by such Person or any newly formed Subsidiary ofBorrower in connection with such acquisition, shall be owned 100% by an Obligor or any other Subsidiary, and Borrower shall have taken, or caused to betaken, as of the date such Person becomes a Subsidiary of Borrower, each of the actions set forth in Section 8.12 , if applicable;(d)Borrower and its Subsidiaries shall be in compliance with the financial covenants set forth in Section 10.01 and Section 10.02 on a proforma basis after giving effect to such acquisition; and(e)such Person (in the case of an acquisition of Equity Interests) or assets (in the case of an acquisition of assets or a division) (i) shall beengaged or used, as the case may be, in the same business or lines of business in which Borrower and/or its Subsidiaries are engaged, or a business reasonablyrelated thereto or (ii) shall have a similar customer base as Borrower and/or its Subsidiaries.“ Permitted Cash Equivalent Investments ” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States orany agency or any State thereof having maturities of not more than two (2) years from the date of acquisition, (b) commercial paper maturing no more thanone (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc, (c) any certificateof deposit, time deposit or bankers’ acceptance maturing not more than two (2) years after its date of issuance which is issued by any bank organized underthe laws of the United States (or any state thereof) and which has (i) a credit rating of A2 or higher from Moody’s or A or higher from S&P and (ii) a combinedcapital and surplus greater than $[***], (d) any publicly traded or SEC-regulated money market funds or other investment vehicles holding any of theforegoing Permitted Cash Equivalent Investments and (e) investments pursuant to Borrower’s investment policy, with any changes thereto requiring priorwritten consent of Administrative Agent.“ Permitted Cure Debt ” means Indebtedness incurred in connection with the exercise of Section 10.03(a) (a) that is governed by documentationcontaining representations, warranties, covenants and events of default no more burdensome or restrictive than those contained in the Loan Documents, (b)that has a maturity date later than the Maturity Date, (c) in respect of which no cash payments of principal or interest are required prior to the Maturity Dateand (d) in respect of which the holders of such Indebtedness have agreed in favor of Borrower, Administrative Agent and Lenders (i) that prior to the date onwhich the Commitments have expired or been terminated and all Obligations (other than contingent indemnification or reimbursement obligations for whichno claim has been made) have been paid in full indefeasibly in cash, such holders will not exercise any remedies (other than any conversion rights) availableto them in respect of such Indebtedness, (ii) that such Indebtedness is unsecured and (iii) to terms of subordination in substantially the form attached heretoas Exhibit F or otherwise reasonably satisfactory to Administrative Agent.“ Permitted Indebtedness ” means any Indebtedness permitted under Section 9.01 .“ Permitted Liens ” means any Liens permitted under Section 9.02 .“ Permitted Priority Debt ” means Indebtedness of Borrower under one working capital revolving credit facility, in an amount not to exceed at anytime the sum of (i) 80% of the face amount at such time of Borrower’s eligible accounts receivable outstanding and securing such Permitted Priority Debt and(ii) 50% of the face amount at such time of Borrower’s eligible inventory outstanding and securing such Permitted Priority Debt; provided that (a) suchIndebtedness, if secured, is secured solely by Borrower’s cash (other than proceeds of the Loans and proceeds from the Collateral that does not secure suchPermitted Priority11 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Debt), accounts receivable and inventory but otherwise is not secured by any property (including without limitation any Intellectual Property or proceedsthereof), (b) the holders or lenders thereof have executed and delivered to Administrative Agent an intercreditor agreement in substantially the form ofExhibit G and with such changes (if any) as are reasonably satisfactory to Administrative Agent (such consent by Administrative Agent to any such changesnot to be unreasonably withheld) and (c) Borrower has achieved the Product Revenue Milestone.“ Permitted Priority Liens ” means (a) Liens permitted under Section 9.02(c) , (d) , (e) , (f) , (g), (h) , (i) , (j) , (k) , (m) , (o) and (p) , and (b) Lienspermitted under Section 9.02(b) provided that such Liens are also of the type described in 9.02(c) , (d) , (e) , (f) , (g), (h) , (i) , (j) , (k) , (m) , (o) and (p) .“ Permitted Refinancing ” means, with respect to any Indebtedness, any extensions, renewals, refinancings and replacements of such Indebtedness;provided that such extension, renewal or replacement (a) shall not increase the outstanding principal amount of such Indebtedness except by an amountequal to the premium or other amount paid and any fees owing under the existing Indebtedness and expenses reasonably incurred in connection with anysuch extension, renewal, refinancing or replacement (so long as all premiums and bank fees do not exceed five percent (5%) of the total commitments of suchIndebtedness) and by an amount equal to any existing commitments unutilized thereunder and capitalized interest or reserves relating thereto, (b) containsterms relating to outstanding principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a wholeno less favorable in any material respect to Borrower and its Subsidiaries or the Secured Parties than the terms of any agreement or instrument governing suchexisting Indebtedness, (c) shall have an applicable interest rate which does not exceed the rate of interest of the Indebtedness being replaced by more thanthree percent (3%) and (d) shall not contain any new requirement to grant any lien or security or to give any guarantee that was not an existing requirement ofsuch Indebtedness.“ Permitted Subordinated Debt ” means Indebtedness (a) that is governed by documentation containing representations, warranties, covenants andevents of default no more burdensome or restrictive than those contained in the Loan Documents, (b) that has a maturity date later than the Stated MaturityDate, (c) in respect of which no cash payments of principal or interest are required prior to the Stated Maturity Date, (d) that converts into equity immediatelyupon the occurrence of an Event of Default, and (e) in respect of which the holders have agreed in favor of Borrower and Secured Parties (i) that prior to thedate on which the Commitments have expired or been terminated and all Obligations (other than Warrant Obligations) have been paid in full indefeasibly incash, such holders will not exercise any remedies available to them in respect of such Indebtedness, (ii) that such Indebtedness is and shall remain unsecured,and (iii) to terms of subordination in substantially the form attached hereto as Exhibit F or otherwise satisfactory to the Majority Lenders; provided thatBorrower cannot incur any Permitted Subordinated Debt without prior written consent of Administrative Agent (such consent not to be unreasonablywithheld).“ Person ” means any individual, corporation, company, voluntary association, partnership, limited liability company, joint venture, trust,unincorporated organization or Governmental Authority or other entity of whatever nature.“ PIK Loan ” has the meaning set forth in Section 3.02(d) .“ PIK Period ” means the period beginning on the first Borrowing Date through and including the earlier to occur of (a) the twelfth (12 th ) PaymentDate after the first Borrowing Date (or, if Borrower has achieved the Approval Milestone, the sixteenth (16 th ) Payment Date after the first Borrowing Date)and (b) the date on which any Default shall have occurred ( provided that, if such Default shall have been cured or waived, the PIK Period shall resume untilthe earlier to occur of the next Default and the twelfth (12 th ) Payment Date after the first Borrowing Date (or, if Borrower has achieved the ApprovalMilestone, the sixteenth (16 th ) Payment Date after the first Borrowing Date)).“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412of the Code or Section 302 of ERISA, and in respect of which Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.“ Prepayment Premium ” has the meaning set forth in Section 3.03(a) .“ Product ” means the T2Candida ® Panel and each of its successors.“ Product Revenue Milestone ” means Borrower achieves Revenue from the sale of the Product of at least $[***] during any consecutive [***]period (excluding any upfront, milestone and other one-time payments relating to the sale or commercialization of the Product); provided that (a) Borrowershall have delivered to Administrative Agent a notice certifying satisfaction of the Product12 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Revenue Milestone no later [***] thereafter, (b) Borrower shall have delivered all information reasonably required by Administrative Agent with respectthereto and (c) Administrative Agent shall have been reasonably satisfied with the results of the audit of the Product Revenue Milestone by examining suchinformation, Borrower’s books and records and any other information reasonably related thereto.“ Property ” of any Person means any property or assets, or interest therein, of such Person.“ Proportionate Share ” means, with respect to any Lender, the percentage obtained by dividing (a) the sum of the Commitment (or, if theCommitments are terminated, the outstanding principal amount of the Loans) of such Lender then in effect by (b) the sum of the Commitments (or, if theCommitments are terminated, the outstanding principal amount of the Loans) of all Lenders then in effect.“ Qualified Plan ” means an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (a) that is maintained orsponsored by any Obligor or any ERISA Affiliate thereof or to which any Obligor or ERISA Affiliate thereof has or could reasonably be expected to have anyliability and (b) that is intended to be tax qualified under Section 401(a) of the Code.“ Real Property Security Documents ” means the Landlord Consent and any mortgage or deed of trust or any other real property security documentexecuted or required hereunder to be executed by any Obligor and granting a security interest in real Property owned or leased (as tenant) by any Obligor infavor of the Secured Parties.“ Recipient ” means Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any Obligation.“ Redemption Date ” has the meaning set forth in Section 3.03(a) .“ Redemption Price ” has the meaning set forth in Section 3.03(a) .“ Register ” has the meaning set forth in Section 13.05(d) .“ Regulation T ” means Regulation T of the Board of Governors of the Federal Reserve System, as amended.“ Regulation U ” means Regulation U of the Board of Governors of the Federal Reserve System, as amended.“ Regulation X ” means Regulation X of the Board of Governors of the Federal Reserve System, as amended.“ Regulatory Approvals ” means any registrations, licenses, authorizations, permits or approvals issued by any Governmental Authority andapplications or submissions related to any of the foregoing.“ Related Person ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees,administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.“ Requirement of Law ” means, as to any Person, any statute, law, treaty, rule or regulation or determination, order, injunction or judgment of anarbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Properties or revenues.“ Responsible Officer ” of any Person means each of the president, chief executive officer, chief financial officer and chief scientific officer of suchPerson.“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interestof Borrower or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, onaccount of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of capital stock of Borrower or any of itsSubsidiaries or any option, warrant or other right to acquire any such shares of capital stock of Borrower or any of its Subsidiaries. “ Restrictive Agreement ” has the meaning set forth in Section 7.15 .13 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. “ Revenue ” of a Person means all revenue properly recognized under GAAP, consistently applied, less all rebates, discounts and other priceallowances (but without duplication of all such amounts already required to be subtracted under GAAP).“ Sanctions ” means any international economic sanction administered or enforced by the United States Government (including, withoutlimitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.“ Sanctioned Jurisdiction ” means any country or territory to the extent that such country or territory is the subject of any Sanction.“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S.Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority, (b) any Personoperating, organized or resident in a Sanctioned Jurisdiction or (c) any Person owned or Controlled by any such person or Persons described in clauses (a) and(b).“ Secured Parties ” means the Lenders, Administrative Agent and any other holder of any Obligation pursuant to the Loan Documents.“ Security Agreement ” means the Security Agreement dated as of the date hereof among the Obligors and Administrative Agent, granting asecurity interest in the Obligors’ personal Property in favor of the Secured Parties.“ Security Documents ” means, collectively, the Security Agreement, each Short-Form IP Security Agreement, each Real Property SecurityDocument, and each other security document, control agreement or financing statement entered into or filed to perfect Liens in favor of the Secured Parties.“ Securities Account ” has the meaning set forth in the Security Agreement.“ Short-Form IP Security Agreements ” means short-form copyright, patent or trademark (as the case may be) security agreements dated as of thedate hereof entered into by one or more Obligors in favor of the Secured Parties, each in form and substance reasonably satisfactory to the Majority Lenders.“ Solar Capital Loan Agreement ” means, collectively, that certain Loan and Security Agreement, dated as of July 11, 2014, among Solar CapitalLtd., a Maryland corporation, as collateral agent, the lenders listed on Schedule 1.1 thereof or otherwise a party thereto from time to time, and Borrower.“ Solvent ” means, with respect to any Person at any time, that (a) the present fair saleable value of the Property of such Person is greater than thetotal amount of liabilities (including contingent liabilities) of such Person, (b) the present fair saleable value of the Property of such Person is not less thanthe amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured and (c) such Person has notincurred and does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilitiesmature.“ Specified Financial Covenants ” has the meaning set forth in Section 10.03(a) .“ Stated Maturity Date ” means the twenty-fourth (24 th ) Payment Date following the first Borrowing Date.“ Subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association orother entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or,in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the parent and/or one or moresubsidiaries of the parent, or (b) that is, as of such date, otherwise Controlled, by the parent and/or one or more subsidiaries of the parent. Unless the contextrequires otherwise, “Subsidiary” refers to a Subsidiary of Borrower.“ Subsidiary Guarantors ” means each of the Subsidiaries of Borrower identified under the caption “SUBSIDIARY GUARANTORS” on thesignature pages hereto and each Subsidiary of Borrower that becomes, or is required to become, a “Subsidiary Guarantor” after the date hereof pursuant toSection 8.12(a) or (b) .14 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. “ Substitute Lender ” has the meaning set forth in Section 2.06(a) .“ T2 Sub ” means T2 Biosystems Securities Corporation, a Massachusetts security corporation and wholly-owned Subsidiary of Borrower.“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees orother charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.“ Tax Affiliate ” means (a) Borrower and its Subsidiaries, (b) each other Obligor and (c) any Affiliate of an Obligor with which such Obligor files oris eligible to file consolidated, combined or unitary Tax returns.“ Tax Returns ” has the meaning set forth in Section 7.08 .“ Technical Information ” means all trade secrets and other proprietary or confidential information, including any information of a scientific,technical, or business nature in any form or medium, standards and specifications, conceptions, ideas, innovations, discoveries, Invention disclosures, alldocumented research, developmental, demonstration or engineering work and all other proprietary or confidential information, data, plans, specifications,reports, summaries, experimental data, manuals, models, samples, know-how, technical information, systems, methodologies, computer programs, informationtechnology and any other similar information. “ Title IV Plan ” means an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (i) that is or within thepast six years was maintained or sponsored by any Obligor or any ERISA Affiliate thereof or to which any Obligor or any ERISA Affiliate thereof has or couldreasonably be expected to have any liability and (ii) that is, or, as of such relevant time, was, to Section 412 of the Code, Section 302 of ERISA or Title IV ofERISA.“ Trademarks ” is defined in the Security Agreement.“ Transactions ” means the execution, delivery and performance by each Obligor of this Agreement and the other Loan Documents to which suchObligor is a party and the Borrowings (and the use of the proceeds of the Loans).“ U.S. Person ” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.“ U.S. Tax Compliance Certificate ” has the meaning set forth in Section 5.03(e)(ii)(B)(3) .“ Warrants ” means the warrants to purchase Equity Interests of Borrower, issued by Borrower to the Lenders in connection with the Transactions,per the Warrant Shares table on Schedule I .“ Warrant Obligations ” means, with respect to any Obligor, all Obligations arising out of, under or in connection with, the Warrants.“ Withdrawal Liability ” means, at any time, any liability incurred (whether or not assessed) by any ERISA Affiliate and not yet satisfied or paid infull at such time with respect to any Multiemployer Plan pursuant to Section 4201 of ERISA.“ Withholding Agent ” means any Obligor and Administrative Agent. 1.02Accounting Terms and Principles . All accounting determinations required to be made pursuant hereto shall, unless expressly otherwiseprovided herein, be made in accordance with GAAP. All components of financial calculations made to determine compliance with this Agreement, includingSection 10 , shall be adjusted to include or exclude, as the case may be, without duplication, such components of such calculations attributable to anyAcquisition consummated after the first day of the applicable period of determination and prior to the end of such period, as determined in good faith byBorrower based on assumptions expressed therein and that were reasonable based on the information available to Borrower at the time of preparation of theCompliance Certificate setting forth such calculations. 15 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 1.03Interpretation . For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, (a)the terms defined in this Agreement include the plural as well as the singular and vice versa; (b) words importing gender include all genders; (c) any referenceto a Section, Annex, Schedule or Exhibit refers to a Section of, or Annex, Schedule or Exhibit to, this Agreement; (d) any reference to “this Agreement” refersto this Agreement, including all Annexes, Schedules and Exhibits hereto, and the words herein, hereof, hereto and hereunder and words of similar import referto this Agreement and its Annexes, Schedules and Exhibits as a whole and not to any particular Section, Annex, Schedule, Exhibit or any other subdivision;(e) references to days, months and years refer to calendar days, months and years, respectively; (f) all references herein to “include” or “including” shall bedeemed to be followed by the words “without limitation”; (g) the word “from” when used in connection with a period of time means “from and including”and the word “until” means “to but not including”; (h) accounting terms not specifically defined herein shall be construed in accordance with GAAP (exceptfor the term “property” , which shall be interpreted as broadly as possible, including, in any case, cash, securities, other assets, rights under contractualobligations and permits and any right or interest in any property, except where otherwise noted); and (i) any reference to any law shall include all statutoryand regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwisespecified, refer to such law or regulation as amended, modified or supplemented from time to time. Unless otherwise expressly provided herein, references toorganizational documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all permittedsubsequent amendments, restatements, extensions, supplements and other modifications thereto. Section headings herein and in the other Loan Documentsare included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.1.04Changes to GAAP . If, after the date hereof, any change occurs in GAAP or in the application thereof and such change would cause any amountrequired to be determined for the purposes of the covenants to be maintained or calculated pursuant to Section 8 , 9 or 10 to be materially different than theamount that would be determined prior to such change, then:(a)Borrower will provide a detailed notice of such change (an “ Accounting Change Notice ”) to Administrative Agent within 30 days ofsuch change; (b) either Borrower or the Majority Lenders may indicate within 90 days following the date of the Accounting Change Notice that they wish torevise the method of calculating such financial covenants or amend any such amount, in which case the parties will in good faith attempt to agree upon arevised method for calculating the financial covenants;(c)until Borrower and the Majority Lenders have reached agreement on such revisions, (i) such financial covenants or amounts will bedetermined without giving effect to such change and (ii) all financial statements, Compliance Certificates and similar documents provided hereunder shall beprovided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change in GAAP;(d)if no party elects to revise the method of calculating the financial covenants or amounts, then the financial covenants or amounts willnot be revised and will be determined in accordance with GAAP without giving effect to such change; and(e)any Event of Default arising as a result of such change which is cured by operation of this Section 1.04 shall be deemed to be of noeffect ab initio .SECTION 2THE COMMITMENT2.01Commitments . Each Lender agrees severally, on and subject to the terms and conditions of this Agreement (including Section 6 ), to make upto two term loans ( provided that PIK Loans shall be deemed not to constitute “term loans” for purposes of this Section 2.01 ) to Borrower, each on a BusinessDay during the Commitment Period in Dollars in an aggregate principal amount for such Lender not to exceed such Lender’s unfunded Commitment;provided , however , that no Lender shall be obligated to make a Loan in excess of such Lender’s Proportionate Share of the applicable amount of borrowingset forth in Section 6.01(b) or Section 6.02(b) , as applicable, other than PIK Loans. Amounts of Loans repaid may not be reborrowed.2.02Borrowing Procedures . Subject to the terms and conditions of this Agreement (including Section 6 ), each Borrowing (other than a Borrowingof PIK Loans) shall be made on written notice in the form of Exhibit B given by Borrower to Administrative Agent not later than 11:00 a.m. (Central time) onthe Borrowing Notice Date (a “ Notice of Borrowing ”).2.03Fees . Borrower shall pay to Administrative Agent and/or the Lenders, as applicable, such fees as described in the Fee Letter.16 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 2.04Use of Proceeds . Borrower shall use the proceeds of the Loans for repayment of all outstanding Indebtedness and obligations under the SolarCapital Loan Agreement, general working capital purposes and corporate purposes and to pay fees, costs and expenses incurred in connection with theTransactions; provided that the Lenders shall have no responsibility as to the use of any proceeds of Loans.2.05Defaulting Lenders . (a)Adjustments . Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender,then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:(i)Waivers and Amendments . Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consentwith respect to this Agreement shall be restricted as set forth in Section 13.04 .(ii)Reallocation of Payments . Any payment of principal, interest, fees or other amounts received by the Lenders for theaccount of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 11 or otherwise), shall be applied at such time or timesas follows: first, as Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed tofund its portion thereof as required by this Agreement; second, if so determined by the Majority Lenders and Borrower, to be held in a non-interest bearingdeposit account and released in order to satisfy obligations of such Defaulting Lender to fund Loans under this Agreement; third, to the payment of anyamounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as aresult of such Defaulting Lender’s breach of its obligations under this Agreement; fourth, so long as no Default exists, to the payment of any amounts owingto Borrower as a result of any judgment of a court of competent jurisdiction obtained by Borrower against such Defaulting Lender as a result of suchDefaulting Lender’s breach of its obligations under this Agreement; and fifth, to such Defaulting Lender or as otherwise directed by a court of competentjurisdiction; provided that if (A) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fullyfunded its appropriate share and (B) such Loans were made at a time when the conditions set forth in Section 6 were satisfied or waived, such payment shallbe applied solely to pay the Loans of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such DefaultingLender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a DefaultingLender pursuant to this Section 2.05(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.(b)Defaulting Lender Cure . If Borrower and the Majority Lenders agree in writing in their sole discretion that a Defaulting Lendershould no longer be deemed to be a Defaulting Lender, that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the otherLenders or take such other actions as necessary to cause the Loans to be held on a pro rata basis by the Lenders in accordance with their Proportionate Share,whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued orpayments made by or on behalf of Borrower while that Lender was a Defaulting Lender; and provided further that, except to the extent otherwise expresslyagreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunderarising from that Lender’s having been a Defaulting Lender.2.06Substitution of Lenders. (a)Substitution Right . If any Lender (an “ Affected Lender ”), (i) becomes a Defaulting Lender or (ii) does not consent to any amendment,waiver or consent to any Loan Document for which the consent of the Majority Lenders is obtained but that requires the consent of other Lenders (a “ Non-Consenting Lender ”), then (x) Borrower may elect to pay in full such Affected Lender with respect to all Obligations due to such Affected Lender or (y)either Borrower or Administrative Agent shall identify any willing Lender or Affiliate of any Lender or Eligible Transferee (in each case, a “ SubstituteLender ”) to substitute for such Affected Lender; provided that any substitution of a Non-Consenting Lender shall occur only with the consent ofAdministrative Agent.17 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (b)Procedure . To substitute such Affected Lender or pay in full all Obligations owed to such Affected Lender, Borrower shall deliver anotice to such Affected Lender. The effectiveness of such payment or substitution shall be subject to the delivery by Borrower (or, as may be applicable inthe case of a substitution, by the Substitute Lender) of (i) payment for the account of such Affected Lender, of, to the extent accrued through, and outstandingon, the effective date for such payment or substitution, all Obligations then owing to such Affected Lender (which for the avoidance of doubt, shall notinclude any Prepayment Premium) and (ii) in the case of a substitution, an Assignment and Assumption executed by the Substitute Lender, which shallthereunder, among other things, agree to be bound by the terms of the Loan Documents.(c)Effectiveness . Upon satisfaction of the conditions set forth in Sections 2.06(a) and (b) , Administrative Agent shall record suchsubstitution or payment in the Register, whereupon (i) in the case of any payment in full of an Affected Lender, such Affected Lender’s Commitments shall beterminated and (ii) in the case of any substitution of an Affected Lender, (A) such Affected Lender shall sell and be relieved of, and the Substitute Lendershall purchase and assume, all rights and claims of such Affected Lender under the Loan Documents, except that the Affected Lender shall retain such rightsunder the Loan Documents that expressly provide that they survive the repayment of the Obligations and the termination of the Commitments, (B) suchAffected Lender shall no longer constitute a “Lender” hereunder and such Substitute Lender shall become a “Lender” hereunder and (C) such AffectedLender shall execute and deliver an Assignment and Assumption to evidence such substitution; provided , however , that the failure of any Affected Lenderto execute any such Assignment and Assumption shall not render such sale and purchase (or the corresponding assignment) invalid.SECTION 3PAYMENTS OF PRINCIPAL AND INTEREST3.01Repayment . (a)Repayment . During the Interest-Only Period, no scheduled payments of principal of the Loans shall be due. Borrower agrees to repayto the Lenders the outstanding principal amount of the Loans, on each Payment Date occurring after the Interest-Only Period, in equal installments. Theamounts of such installments shall be calculated by dividing (i) the sum of the aggregate principal amount of the Loans outstanding on the first dayfollowing the end of the Interest-Only Period, by (ii) the number of Payment Dates remaining prior to and including the Stated Maturity Date.(b)Application . Any optional or mandatory prepayment of the Loans shall be applied to the installments thereof under Section 3.01(a)pro rata with respect to each payment due on the subsequent Payment Date in the case of any such prepayment that is made after the end of the Interest-OnlyPeriod. To the extent not previously paid, the principal amount of the Loans, together with all other outstanding Obligations, shall be due and payable onthe Maturity Date.3.02Interest .(a)Interest Generally . Subject to Section 3.02(d) , Borrower agrees to pay to the Lenders interest on the unpaid principal amount of theLoans, for the period from the applicable Borrowing Date until paid in full, at a rate per annum equal to 12.50%; provided that, if Borrower achieves theApproval Milestone and so long as no Default or Event of Default has occurred and is continuing, commencing with the first month thereafter, Borroweragrees to pay such interest at a rate per annum equal to 11.50%.(b)Default Interest . Notwithstanding the foregoing, upon the occurrence and during the continuance of any Event of Default, the interestpayable pursuant to Section 3.02(a) shall increase at the election of the Majority Lenders or automatically upon an Event of Default under Sections 11.01(a) , (b) (with respect to interest), (h) , (i) or (j) by 4.00% per annum (such aggregate increased rate, the “ Default Rate ”). Notwithstanding any other provisionherein (including Section 3.02(d) ), if interest is required to be paid at the Default Rate, it shall be paid entirely in cash. If any Obligation other than theunpaid principal amount of the Loans is not paid when due under the applicable Loan Document, the amount thereof shall accrue interest at a rate equal to4.00% per annum (without duplication of interest payable at the Default Rate).(c)Interest Payment Dates . Subject to Section 3.02(d) , accrued interest on the Loans shall be payable in arrears on each Payment Datewith respect to the most recently completed Interest Period in cash, and upon the payment or prepayment of the Loans (on the principal amount being so paidor prepaid); provided that interest payable at the Default Rate shall be payable from time to time on demand.18 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (d)Paid In-Kind Interest . Notwithstanding Section 3.02(a) , at any time during the PIK Period, Borrower may elect to pay the interest onthe outstanding principal amount of the Loans payable pursuant to Section 3.01 as follows: (i) if Borrower has not achieved the Approval Milestone and solong as no Default or Event of Default has occurred and is continuing, (1) only 8.50% of the 12.50% per annum interest in cash and (2) 4.00% of the 12.50%per annum interest as interest paid in-kind and (ii) if Borrower has achieved the Approval Milestone and so long as no Default or Event of Default hasoccurred and is continuing, (1) only 8.00% of the 11.50% per annum interest in cash and (2) 3.50% of the 11.50% per annum interest as interest paid in-kind,in each case such paid in-kind interest amount shall be added on the date such interest would otherwise be due hereunder to the aggregate principal amountof the Loans (the amount of any such compounded interest being a “ PIK Loan ”). The principal amount of each PIK Loan shall accrue interest in accordancewith the provisions of this Agreement applicable to the Loans.(e)AHYDO Limitation . Notwithstanding any provision of this Agreement to the contrary, if a Loan would otherwise constitute an“applicable high yield discount obligation” within the meaning of Section 163(i) of the Code (or any successor provisions) for any accrual period on or afterthe fifth anniversary of the Closing Date, Borrower shall pay in cash the accrued and unpaid interest and original issue discount (determined in accordancewith Treasury Regulations §§ 1.1272-1 and 1.1273-1, and treating any cash payments made pursuant to this Agreement, including Section 3.01, Section 3.02or Section 3.03, as a payment of interest or original issue discount to the extent required by Treasury Regulations § 1.1275-2(a)) in the minimum amountnecessary to ensure that the Loan shall not constitute an “applicable high yield discount obligation”; provided that any such payment shall be accompaniedby the Prepayment Premium applicable to such payment, if any, and any fees payable under the Fee Letter. No partial repayment of such Loan prior to suchpayment date pursuant to any other provision of this Agreement will alter Borrower’s obligation to make the payment pursuant to the preceding sentence. Itis the intent of Borrower and Lenders that Section 163(e)(5) of the Code not apply to the Loans.3.03Prepayments .(a)Optional Prepayments . Upon prior written notice to Administrative Agent delivered pursuant to Section 4.03 , Borrower shall havethe right to optionally prepay in whole or in part the outstanding principal amount of the Loans on any Business Day (a “ Redemption Date ”) for an amountequal to the aggregate principal amount of the Loans being prepaid plus the Prepayment Premium plus any accrued but unpaid interest and any fees then dueand owing (such aggregate amount, the “ Redemption Price ”). The applicable “ Prepayment Premium ” shall be an amount calculated pursuant to Section3.03(a)(i) . (i)If the Redemption Date occurs:(A)on or prior to the twelfth (12 th ) Payment Date, the Prepayment Premium shall be an amount equal to [***]% ofthe aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date;(B)after the twelfth (12 th ) Payment Date and on or prior to the sixteenth (16 th ) Payment Date, the PrepaymentPremium shall be an amount equal to [***]% of the aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date;(C)after the sixteenth (16 th ) Payment Date and on or prior to the twentieth (20 th ) Payment Date, the PrepaymentPremium shall be an amount equal to [***]% of the aggregate outstanding principal amount of the Loans being prepaid on such Redemption Date; (D)after the twentieth (20 th ) Payment Date, there shall be no Prepayment Premium owing on any such RedemptionDate.(ii)To determine the aggregate outstanding principal amount of the Loans, and how many Payment Dates have occurred, as ofany Redemption Date for purposes of Section 3.03(a) :(A)if, as of such Redemption Date, Borrower shall have made only one Borrowing, the number of Payment Datesshall be deemed to be the number of Payment Dates that shall have occurred following the first Borrowing Date;(B)if, as of such Redemption Date, Borrower shall have made more than one Borrowing, then the Redemption Priceshall equal the sum of multiple Redemption Prices calculated with respect to the Loans of each Borrowing, each of which Redemption Prices shall becalculated based on solely the aggregate outstanding principal amount of the Loans borrowed in such Borrowing (and PIK Loans subsequently borrowed inrespect of interest payments thereon), as though the applicable number of19 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Payment Dates equals the number of Payment Dates that shall have occurred following the applicable Borrowing Date. In the case of any partial prepayment,the amount of such prepayment shall be allocated to Loans made in the various Borrowings (and PIK Loans in respect thereof) in the order in which suchBorrowings were made;(iii)No partial prepayment shall be made under this Section 3.03(a) in connection with any event described in Section 3.03(b) .The Prepayment Premium payable upon any prepayment shall be in addition to any payments required pursuant to the Fee Letter.(b)Mandatory Prepayments.(i)Asset Sales . In the event of any contemplated Asset Sale or series of Asset Sales (other than any Asset Sale permitted underSection 9.09(a) through (g) , (i) , (j) and (k) ) yielding Asset Sale Net Proceeds in excess of $[***] in the aggregate, to the extent Borrower has notoptionally prepaid the Loans pursuant to Section 3.03(a) with the Asset Sale Net Proceeds from such Asset Sale, Borrower shall provide [***] days’ priorwritten notice of such Asset Sale to Administrative Agent and, if within such notice period Majority Lenders or Administrative Agent advise Borrower thatthe Majority Lenders require a prepayment pursuant to this Section 3.03(b)(i) , Borrower shall: (x) if the assets sold represent substantially all of the assets orRevenues of Borrower, or represent any specific line of business which either on its own or together with other lines of business sold over the term of thisAgreement account for Revenue generated by such lines of business exceeding [***]% of the Revenue of Borrower in the immediately preceding year,prepay the aggregate outstanding principal amount of the Loans in an amount equal to the Redemption Price applicable on the date of such Asset Sale inaccordance with Section 3.03(a) , and (y) in the case of all other Asset Sales not described in the foregoing clause (x) , prepay the Loans in an amount equalto the entire amount of the Asset Sale Net Proceeds of such Asset Sale, plus any accrued but unpaid interest and any fees then due and owing, credited in thefollowing order:(A)first, in reduction of Borrower’s obligation to pay any unpaid interest and any fees then due and owing (includingany fees payable pursuant to the Fee Letter);(B)second, in reduction of Borrower’s obligation to pay any Claims or Losses referred to in Section 13.03 then dueand owing;(C)third, in reduction of Borrower’s obligation to pay any amounts due and owing on account of the unpaidprincipal amount of the Loans;(D)fourth, in reduction of any other Obligation then due and owing; and(E)fifth, to Borrower or such other Persons as may lawfully be entitled to or directed by Borrower to receive theremainder.(ii)Change of Control . To the extent Borrower has not optionally prepaid the Loans pursuant to Section 3.03(a) , in the eventof a Change of Control, Borrower shall provide notice of such Change of Control to Administrative Agent [***] days prior to the expected consummation ofsuch Change of Control and, if within [***] days of receipt of such notice Majority Lenders or Administrative Agent notify Borrower in writing that theMajority Lenders require a prepayment pursuant to this Section 3.03(b)(ii) , Borrower shall prepay the aggregate outstanding principal amount of the Loansin an amount equal to the Redemption Price applicable on the date of such Change of Control in accordance with Section 3.03(a) and any fees payablepursuant to the Fee Letter.SECTION 4PAYMENTS, ETC.4.01Payments .(a)Payments Generally . Each payment of principal, interest and other amounts to be made by the Obligors under this Agreement or anyother Loan Document shall be made in Dollars, in immediately available funds, without deduction, set off or counterclaim, to an account to be designated byAdministrative Agent by written notice to Borrower, which may be by email, not later20 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. than 4:00 p.m. (Central time) on the date on which such payment shall become due (each such payment made after such time on such due date to be deemedto have been made on the next succeeding Business Day).(b) Application of Payments . Each Obligor shall, at the time of making each payment under this Agreement or any other LoanDocument, specify to Administrative Agent the amounts payable by such Obligor hereunder to which such payment is to be applied (and in the event thatObligors fail to so specify, or if an Event of Default has occurred and is continuing, the Lenders may apply such payment in the manner they determine to beappropriate). (c) Non-Business Days . If the due date of any payment under this Agreement (other than of principal of or interest on the Loans) wouldotherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and, in the case of any payment accruinginterest, interest thereon shall be payable for the period of such extension.4.02Computations . All computations of interest and fees hereunder shall be computed on the basis of a year of 360 days and actual days elapsedduring the period for which payable.4.03Notices . Each notice of optional prepayment shall be effective only if received by Administrative Agent not later than 4:00 p.m. (Central time)on the date [***] Business Days prior to the date of prepayment (or such shorter period as may be agreed to in Administrative Agent’s sole discretion). Eachnotice of optional prepayment shall specify the amount to be prepaid and the date of prepayment.4.04Set-Off . (a) Set-Off Generally . Upon the occurrence and during the continuance of any Event of Default, each of Administrative Agent, eachLender and each of their Affiliates (which are either managed by such Lender or under common management with such Lender) is hereby authorized at anytime and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional orfinal) at any time held and other indebtedness at any time owing by Administrative Agent, any Lender and any such Affiliates to or for the credit or theaccount of any Obligor against any and all of the Obligations, whether or not such Person shall have made any demand and although such obligations maybe unmatured. Administrative Agent and each Lender agree promptly to notify Borrower after any such set-off and application; provided that the failure togive such notice shall not affect the validity of such set-off and application. The rights of Administrative Agent, each Lender and such Affiliates under thisSection 4.04 are in addition to other rights and remedies (including other rights of set-off) that such Persons may have.(b) Exercise of Rights Not Required . Nothing contained herein shall require Administrative Agent, any Lender or any such Affiliatesreferred to in Section 4.04(a) to exercise any such right or shall affect the right of such Person to exercise, and retain the benefits of exercising, any such rightwith respect to any other indebtedness or obligation of any Obligor.4.05Pro Rata Treatment . (a)Unless Administrative Agent shall have been notified in writing by any Lender prior to the proposed date of any Borrowing that suchLender will not make the amount that would constitute its share of such Borrowing available to Administrative Agent, Administrative Agent may assumethat such Lender has made such amount available to Administrative Agent on such date in accordance with Section 2 , and Administrative Agent may, inreliance upon such assumption, make available to Borrower a corresponding amount. If such amount is not in fact made available to Administrative Agentby the required time on the applicable Borrowing Date therefor, such Lender and Borrower severally agree to pay to Administrative Agent forthwith, ondemand, such corresponding amount with interest thereon, for each day from and including the date on which such amount is made available to Borrower butexcluding the date of payment to Administrative Agent, at (i) in the case of a payment to be made by such Lender, a rate equal to the greater of (A) the FederalFunds Effective Rate and (B) a rate reasonably determined by Administrative Agent in accordance with banking industry rules on interbank compensation. IfBorrower and such Lender shall pay such interest to Administrative Agent for the same or an overlapping period, Administrative Agent shall promptly remitto Borrower the amount of such interest paid by Borrower for such period. If such Lender pays its share of the applicable borrowing to Administrative Agent,then the amount so paid shall constitute such Lender’s Loan included in such borrowing. Any payment by Borrower shall be without prejudice to any claimBorrower may have against a Lender that shall have failed to make such payment to Administrative Agent.(b)Unless Administrative Agent shall have received notice from Borrower prior to the date on which any payment is due to AdministrativeAgent for the account of the Lenders hereunder that Borrower will not make such payment, Administrative21 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Agent may assume that Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to theLenders the amount due. In such event, if Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to AdministrativeAgent forthwith on demand the amount so distributed to such Lender, with interest thereon, for each day from and including the date such amount isdistributed to it to but excluding the date of payment to Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined byAdministrative Agent in accordance with banking industry rules on interbank compensation. Nothing herein shall be deemed to limit the rights ofAdministrative Agent or any Lender against any Obligor.(c)If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) onaccount of the principal of or interest on any Loan made by it or other obligations hereunder, as applicable (other than pursuant to a provision hereofproviding for non-pro rata treatment), in excess of its Proportionate Share, of such payment on account of the Loans, such Lender shall (i) notifyAdministrative Agent of the receipt of such payment, and (ii) within five (5) Business Days of such receipt purchase (for cash at face value) from the otherLenders, as applicable (directly or through Administrative Agent), without recourse, such participations in the Loans made by them or make such otheradjustments as shall be equitable, as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of the other Lenders inaccordance with their respective Proportionate Shares, as applicable; provided , however , that (A) if any such participations are purchased and all or anyportion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery,without interest and (B) the provisions of this paragraph shall not be construed to apply to (x) any payment made by Borrower pursuant to and in accordancewith the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender) or (y) any payment obtainedby a Lender as consideration for the assignment or sale of a participation in any of its Loans to any assignee or participant, other than to Borrower or any ofits Affiliates (as to which the provisions of this paragraph shall apply). Borrower agrees that any Lender so purchasing a participation from another Lenderpursuant to this Section 4.05(c) may exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if suchLender were the direct creditor of Borrower in the amount of such participation. No documentation other than notices and the like referred to in this Section4.05(c) shall be required to implement the terms of this Section 4.05(c) . Administrative Agent shall keep records (which shall be conclusive and binding inthe absence of manifest error) of participations purchased pursuant to this Section 4.05(c) and shall in each case notify the Lenders following any suchpurchase. Borrower consents on behalf of itself and each other Obligor to the foregoing and agrees, to the extent it may effectively do so under applicablelaw, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Obligor rights of setoff and counterclaimwith respect to such participation as fully as if such Lender were a direct creditor of each Obligor in the amount of such participation.(d)Notwithstanding anything to the contrary contained herein, the provisions of this Section 4.05 shall be subject to the expressprovisions of this Agreement that require or permit differing payments to be made to non-Defaulting Lenders as opposed to Defaulting Lenders.SECTION 5YIELD PROTECTION, ETC.5.01Additional Costs . (a) Change in Requirements of Law Generally . If, on or after the date hereof, the adoption of any Requirement of Law, or any change inany Requirement of Law, or any change in the interpretation or administration thereof by any court or other Governmental Authority charged with theinterpretation or administration thereof, or compliance by any of the Lenders (or its lending office) with any request or directive (whether or not having theforce of law) of any such Governmental Authority, shall impose, modify or deem applicable any reserve (including any such requirement imposed by theBoard of Governors of the Federal Reserve System), special deposit, contribution, insurance assessment or similar requirement, in each case that becomeseffective after the date hereof, against assets of, deposits with or for the account of, or credit extended by, a Lender (or its lending office) or shall impose on aLender (or its lending office) any other condition affecting the Loans or the Commitment, and the result of any of the foregoing is to increase the cost to suchLender of making or maintaining the Loans, or to reduce the amount of any sum received or receivable by such Lender under this Agreement or any otherLoan Document, by an amount deemed by such Lender to be material (other than (i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (d) of thedefinition of “Excluded Taxes” and (iii) Connection Income Taxes), then Borrower shall pay to such Lender within [***] days of demand such additionalamount or amounts as will compensate such Lender for such increased cost or reduction.22 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (b)Change in Capital Requirements . If a Lender shall have determined in its reasonable discretion that, on or after the date hereof, theadoption of any Requirement of Law regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by anyGovernmental Authority charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or nothaving the force of law) of any such Governmental Authority, in each case that becomes effective after the date hereof, has or would have the effect ofreducing the rate of return on capital of a Lender (or its parent) as a consequence of a Lender’s obligations hereunder or the Loans to a level below that whicha Lender (or its parent) could have achieved but for such adoption, change, request or directive by an amount reasonably deemed by it to be material, then,upon written request stating the reasons for such request, Borrower shall pay to such Lender within [***] days of demand such additional amount or amountsas will compensate such Lender (or its parent) for such reduction; provided that Borrower shall only be required to pay such amounts if such Lender demandssuch amounts from all other borrowers of such Lender determined by such Lender in its reasonable discretion to be similarly situated as Borrower.(c)Notification by Lender . Each Lender (directly or through Administrative Agent) will promptly notify Borrower in writing of anyevent of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 5.01 . Beforegiving any such notice pursuant to this Section 5.01(c) such Lender shall designate a different lending office if such designation (x) will, in the reasonablejudgment of such Lender, avoid the need for, or reduce the amount of, such compensation and (y) will not, in the reasonable judgment of such Lender, bematerially disadvantageous to such Lender. A certificate of the Lender claiming compensation under this Section 5.01 , setting forth the additional amountor amounts to be paid to it hereunder, shall be conclusive and binding on Borrower in the absence of manifest error; provided that Borrower shall only berequired to pay such amounts if such Lender demands such amounts from all other borrowers of such Lender determined by such Lender in its reasonablediscretion to be similarly situated to Borrower.(d)Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank forInternational Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatoryauthorities, in each case pursuant to Basel III, shall in each case be deemed to constitute a change in Requirements of Law for all purposes of this Section 5.01, regardless of the date enacted, adopted or issued; provided that Borrower shall only be required to pay such amounts if such Lender demands such amountsfrom all other borrowers of such Lender determined by such Lender in its reasonable discretion to be similarly situated to Borrower.5.02Illegality . Notwithstanding any other provision of this Agreement, in the event that on or after the date hereof the adoption of or any change inany Requirement of Law or in the interpretation or application thereof by any competent Governmental Authority shall make it unlawful for a Lender or itslending office to make or maintain the Loans (and, in the reasonable opinion of such Lender, the designation of a different lending office would either notavoid such unlawfulness or would be disadvantageous to such Lender), then such Lender shall promptly notify Borrower thereof following which, to theextent that such Lender notifies all similarly situated borrowers of such Lender, (a) the Lender’s Commitment shall be suspended until such time as suchLender may again make and maintain the Loans hereunder and (b) if such Requirement of Law shall so mandate and be applicable to Borrower, the Loansshall be prepaid by Borrower on or before such date as shall be mandated by such Requirement of Law in an amount equal to the Redemption Priceapplicable on the date of such prepayment in accordance with Section 3.03(a) .5.03Taxes .(a)Payments Free of Taxes . Any and all payments by or on account of any Obligation shall be made without deduction or withholdingfor any Taxes, except as required by applicable law. If any applicable law requires the deduction or withholding of any Tax from any such payment by aWithholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amountdeducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payableby the applicable Obligor shall be increased as necessary so that after such deduction or withholding has been made (including such deductions andwithholdings applicable to additional sums payable under this Section 5.03 ) the applicable Recipient receives an amount equal to the sum it would havereceived had no such deduction or withholding been made.(b)Payment of Other Taxes by Borrower . The Obligors shall timely pay to the relevant Governmental Authority in accordance withapplicable law, or at the option of Administrative Agent, timely reimburse it for the payment of, Other Taxes.(c)Evidence of Payments . As soon as practicable after any payment of Taxes by any Obligor to a Governmental Authority pursuant tothis Section 5.03 , such Obligor shall deliver to Administrative Agent the original or a certified copy of a23 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such paymentreasonably satisfactory to Administrative Agent.(d)Indemnification . The Obligors shall jointly and severally reimburse and indemnify each Recipient, within [***] days after demandtherefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under thisSection 5.03 ) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expensesarising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant GovernmentalAuthority. A certificate as to the amount of such payment or liability delivered to Borrower by a Lender (with a copy to Administrative Agent), or byAdministrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.(e)Status of Lenders .(i)Any Lender that is entitled to an exemption from, or reduction of withholding Tax with respect to payments made under anyLoan Document shall deliver to Borrower and Administrative Agent, at the time or times reasonably requested by Borrower or Administrative Agent suchproperly completed and executed documentation reasonably requested by Borrower or Administrative Agent as will permit such payments to be madewithout withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by Borrower or Administrative Agent, shall deliversuch other documentation prescribed by applicable law or reasonably requested by Borrower or Administrative Agent as will enable Borrower orAdministrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstandinganything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentationset forth in Section 5.03(e)(ii)(A) , (B) or (D) ) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission wouldsubject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.(ii)Without limiting the generality of the foregoing, in the event that Borrower is a U.S. Person:(A)any Lender that is a U.S. Person shall deliver to Borrower and Administrative Agent on or prior to the date onwhich such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or AdministrativeAgent), executed originals of IRS Form W-9 (or successor form) certifying that such Lender is exempt from U.S. federal backup withholding tax;(B)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower and AdministrativeAgent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under thisAgreement (and from time to time thereafter upon the reasonable request of Borrower or Administrative Agent), whichever of the following is applicable:(1)in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United Statesis a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable(or successor form) establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (y)with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form)establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;(2)executed originals of IRS Form W-8ECI (or successor form);(3)in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest underSection 881(c) of the Code, (x) a certificate substantially in the form of Exhibit C-1 to the effect that such Foreign Lender is not a “bank” within the meaningof Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the applicable Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “ U.S. Tax Compliance Certificate ”) and (y) executed originals of IRSForm W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form); or(4)to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY (orsuccessor form), accompanied by IRS Form W-8ECI (or successor form), IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form), a U.S.Tax Compliance Certificate substantially in the form of Exhibit C-2 or Exhibit C-24 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 3 , IRS Form W-9 (or successor form), and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is apartnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender mayprovide a U.S. Tax Compliance Certificate substantially in the form of Exhibit C-4 on behalf of each such direct and indirect partner.(C)any Foreign Lender shall, if requested by Borrower or Administrative Agent and to the extent it is legally entitledto do so, deliver to Borrower and Administrative Agent (in such number of copies as shall be reasonably requested by the recipient) on or prior to the date onwhich such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrower orAdministrative Agent), executed originals of any other form prescribed by applicable law and requested by Borrower or Administrative Agent as a basis forclaiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may beprescribed by applicable law and requested to permit Borrower or Administrative Agent to determine the withholding or deduction required to be made; and(D)if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Taximposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrower and Administrative Agent at the time or times reasonably requested byBorrower or Administrative Agent such documentation requested by Borrower or Administrative Agent as is prescribed by applicable law (including asprescribed by Section 1471(b)(3)(C)(i) of the Code) or otherwise reasonably requested by Borrower or Administrative Agent as may be necessary for Borrowerand Administrative Agent to comply with their withholding obligations under FATCA or to determine the amount to deduct and withhold from suchpayment. Solely for purposes of this Section 5.03(e)(ii)(D) , “FATCA” shall include any amendment made to FATCA after the date of this Agreement.(iii)Each Lender agrees that if any form or certification it previously made available becomes inaccurate in any respect, or ifBorrower or Administrative Agent notifies such Recipient that any form or certification such Lender previously made available has expired or becomesobsolete in any respect, such Lender shall update such form or certification or promptly notify Borrower and Administrative Agent in writing of its legalinability to do so.(f)Treatment of Certain Refunds . If any party determines, in its sole discretion exercised in good faith, that it has received a refund ofany Taxes as to which it has been indemnified pursuant to this Section 5 (including by the payment of additional amounts pursuant to this Section 5 ), it shallpay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 5 with respect to theTaxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interestpaid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repayto such indemnified party the amount paid over pursuant to this paragraph (plus any penalties, interest or other charges imposed by the relevantGovernmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstandinganything to the contrary in this Section 5.03(f) , in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant tothis Section 5.03(f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would havebeen in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This Section 5.03(f) shall not be construed torequire any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifyingparty or any other Person.(g)Mitigation Obligations . If Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or to anyGovernmental Authority for the account of any Lender pursuant to Section 5.01 or this Section 5.03 , then such Lender shall (at the request of Borrower) usecommercially reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign and delegate its rights andobligations hereunder to another of its offices, branches or Affiliates if, in the sole reasonable judgment of such Lender, such designation or assignment anddelegation would (i) eliminate or reduce amounts payable pursuant to Section 5.01 or this Section 5.03 , as the case may be, in the future, (ii) not subject suchLender to any unreimbursed cost or expense and (iii) not otherwise be disadvantageous to such Lender. Borrower hereby agrees to pay all reasonable costsand expenses incurred by any Lender in connection with any such designation or assignment and delegation.25 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. SECTION 6CONDITIONS PRECEDENT6.01Conditions to the First Borrowing . The obligation of each Lender to make a Loan as part of the first Borrowing shall not become effectiveuntil the following conditions precedent shall have been satisfied or waived in writing by the Lenders:(a)Borrowing Date . Such Borrowing shall be made on the date hereof.(b)Amount of First Borrowing . The amount of such Borrowing shall equal $40,000,000.(c)Terms of Material Agreements, Etc . Lenders shall be reasonably satisfied with the terms and conditions of all of the Obligors’Material Agreements.(d)No Law Restraining Transactions . No applicable law or regulation shall restrain, prevent or, in the reasonable judgment of theLenders, impose materially adverse conditions upon the Transactions.(e)Payment of Fees . Lenders shall be satisfied with the arrangements to deduct the fees set forth in the Fee Letter (including, withoutlimitation, the financing fee required pursuant to the Fee Letter) from the proceeds advanced.(f)Lien Searches . Lenders shall be satisfied with Lien searches regarding Borrower and its Subsidiaries made prior to such Borrowing.(g)Documentary Deliveries . The Lenders shall have received the following documents, each of which shall be in form and substancesatisfactory to the Lenders:(i)Agreement . This Agreement duly executed and delivered by Borrower and each of the other parties hereto.(ii)Security Documents .(A)The Security Agreement, duly executed and delivered by each of the Obligors.(B)[Reserved.](C)Each of the Short-Form IP Security Agreements, duly executed and delivered by the applicable Obligor.(D)Original share certificates or other documents or evidence of title with regard to all Equity Interests owned by theObligors (to the extent that such Equity Interests are certificated), together with share transfer documents, undated and executed in blank.(E)Duly executed control agreements in favor of Administrative Agent for the benefit of the Secured Parties for allDeposit Accounts, Securities Accounts and Commodity Accounts owned by the Obligors in the United States, other than such accounts with Comerica Bank.(F)Evidence of filing of UCC-1 financing statements against each Obligor in its jurisdiction of formation orincorporation, as the case may be.(G)Evidence of filing of each of the Short-Form IP Security Agreements in the United States Patent and TrademarkOffice or the United States Copyright office, as applicable.(H)Without limitation, all other documents and instruments reasonably required to perfect the Secured Parties’ Lienon, and security interest in, the Collateral required to be delivered on or prior to such Borrowing Date shall have been duly executed and delivered and be inproper form for filing, and shall create in favor of the Secured Parties, a perfected Lien on, and security interest in, the Collateral, subject to no Liens otherthan Permitted Liens.26 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (iii)Fee Letter . The Fee Letter duly executed and delivered by Borrower and Administrative Agent.(iv)Warrants . For the Lenders, pro rata in accordance with their Proportionate Shares, the Warrants, duly executed byBorrower (for such number of shares as indicated on Schedule 1 ).(v)Perfection Certificate . The Perfection Certificate duly executed and delivered by Borrower.(vi)Approvals . Copies of all material licenses, consents, authorizations and approvals of, and notices to and filings andregistrations with, any Governmental Authority (including all foreign exchange approvals), and of all third-party consents and approvals, necessary inconnection with the making and performance by the Obligors of the Loan Documents and the Transactions.(vii)Corporate Documents . Certified copies of the constitutive documents of each Obligor (if publicly available in suchObligor’s jurisdiction of formation) and of resolutions of the board of directors (or shareholders, if applicable) of each Obligor authorizing the making andperformance by it of the Loan Documents to which it is a party.(viii)Incumbency Certificate . A certificate of each Obligor as to the authority, incumbency and specimen signatures of thepersons who have executed the Loan Documents and any other documents in connection herewith on behalf of the Obligors.(ix)Officer’s Certificate . A certificate, dated such Borrowing Date and signed by the President, a Vice President or a financialofficer of Borrower, confirming compliance with the conditions set forth in Section 6.03 .(x)Opinions of Counsel . A favorable opinion, dated such Borrowing Date, of counsel to each Obligor in form acceptable to theLenders and their counsel.(xi)Insurance . Certificates of insurance evidencing the existence of all insurance required to be maintained by Borrowerpursuant to Section 8.05(b) and the designation of Administrative Agent as the lender’s loss payees or additional named insured, as the case may be,thereunder.(xii)Payoff Letter . A duly executed and delivered payoff letter with respect to the Solar Capital Loan Agreement in form andsubstance satisfactory to Administrative Agent.6.02Conditions to Subsequent Borrowings . The obligation of each Lender to make a Loan as part of a subsequent Borrowing is subject to thefollowing conditions precedent, which shall have been satisfied or waived in writing by the Lenders:(a)Borrowing Date . Such Borrowing shall occur on or prior to July 27, 2018.(b)Amount of Borrowing . The amount of such Borrowing shall equal up to $10,000,000 and be in an increment of $5,000,000.(c)Borrowing Milestone . The Approval Milestone shall have occurred.(d)Notice of Milestone Achievement and Audit . Borrower shall have delivered to Administrative Agent a notice certifying satisfaction ofthe condition set forth in Section 6.02(c) no later than [***] calendar days thereafter, and the Lenders shall have been reasonably satisfied with the results ofits audit of Borrower’s Revenue by examining Borrower’s books and records.(e)Notice of Borrowing. A Notice of Borrowing shall have been received no later than [***] calendar days after satisfaction of thecondition set forth in Section 6.02(c) .(f)Financing Fee. Except in the case of any PIK Loan, Administrative Agent shall have received, for the account of each Lender, the feespayable pursuant to the Fee Letter.27 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 6.03Conditions to Each Borrowing . The obligation of each Lender to make a Loan as part of any Borrowing (including the first Borrowing) is alsosubject to satisfaction of the following further conditions precedent on the applicable Borrowing Date, which shall have been satisfied or waived in writingby the Lenders:(a)Commitment Period . Except in the case of any PIK Loan, such Borrowing Date shall occur during the Commitment Period.(b)No Default; Representations and Warranties . Both immediately prior to the making of such Loan and after giving effect thereto andto the intended use thereof:(i)no Default shall have occurred and be continuing; and(ii)the representations and warranties made in Section 7 shall be true and correct in all material respects (unless qualified bymateriality or Material Adverse Effect, in which case they shall be true and correct in all respects) on and as of the Borrowing Date, and immediately aftergiving effect to the application of the proceeds of the Borrowing, with the same force and effect as if made on and as of such date (except that therepresentation regarding representations and warranties that refer to a specific earlier date shall be that they were true and correct in all material respects(unless qualified by materiality or Material Adverse Effect, in which case they shall be true and correct in all respects) on such earlier date).(c)Notice of Borrowing . Except in the case of any PIK Loan, Administrative Agent shall have received a Notice of Borrowing as andwhen required pursuant to Section 2.02 .Each Borrowing shall constitute a certification by Borrower to the effect that the conditions set forth in this Section 6.03 have been fulfilled as ofthe applicable Borrowing Date.SECTION 7REPRESENTATIONS AND WARRANTIESEach Obligor represents and warrants to Administrative Agent and the Lenders that:7.01Power and Authority . Each of Borrower and its Subsidiaries (a) is a duly organized and validly existing under the laws of its jurisdiction oforganization, (b) has all requisite corporate or other applicable power, and has all material governmental licenses, authorizations, consents and approvalsnecessary to own its assets and carry on its business as now being or as proposed to be conducted except to the extent that failure to have the same could notreasonably be expected to have a Material Adverse Effect, (c) is qualified to do business and is in good standing in all jurisdictions in which the nature of thebusiness conducted by it makes such qualification necessary and where failure so to qualify could reasonably be expected (either individually or in theaggregate) to have a Material Adverse Effect, and (d) has full power, authority and legal right to make and perform each of the Loan Documents to which it isa party and, in the case of Borrower, to borrow the Loans hereunder.7.02Authorization; Enforceability . The Transactions are within each Obligor’s corporate or other applicable powers and have been dulyauthorized by all necessary corporate or other applicable action and, if required, by all necessary shareholder action. This Agreement has been duly executedand delivered by each Obligor and constitutes, and each of the other Loan Documents to which it is a party when executed and delivered by such Obligorwill constitute, a legal, valid and binding obligation of such Obligor, enforceable against each Obligor in accordance with its terms, except as suchenforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement ofcreditors’ rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or atlaw).7.03Governmental and Other Approvals; No Conflicts . The Transactions (a) do not require any consent or approval of, registration or filing with,or any other action by, any Governmental Authority or any third party, except for (i) such as have been obtained or made and are in full force and effect and(ii) filings and recordings in respect of the Liens created pursuant to the Security Documents, (b) will not violate (i) the charter, bylaws or other organizationaldocuments of Borrower and its Subsidiaries or (ii) any applicable law or regulation or any order of any Governmental Authority, other than any suchviolations in the case of this clause (ii) that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (c) will notviolate or result in a default under any Material Agreement or agreement creating or evidencing any Material Indebtedness, or give rise to a right28 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. thereunder to require any payment to be made by any such Person and (d) will not result in the creation or imposition of any Lien (other than Permitted Liens)on any asset of Borrower and its Subsidiaries.7.04Financial Statements; Material Adverse Change.(a)Financial Statements . Borrower has heretofore furnished to the Lenders certain financial statements as provided for in Section 8.01 . Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of Borrower and itsSubsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case ofthe statements previously-delivered statements of the type described in Section 8.01(b) . Neither Borrower nor any of its Subsidiaries has any materialcontingent liabilities or unusual forward or long-term commitments not disclosed in the aforementioned financial statements.(b)No Material Adverse Change . Since December 31, 2015, there has been no Material Adverse Change.7.05Properties . (a)Property Generally . Each Obligor has good and marketable fee simple title to, or valid leasehold interests in, all its real and personalProperty material to its business, subject only to Permitted Liens and except for minor defects in title that do not interfere with its ability to conduct itsbusiness as currently conducted or to utilize such properties for their intended purposes.(b)Intellectual Property . The Obligors represent and warrant to the Lenders as follows, as of the date hereof, each Borrowing Notice Dateand each Borrowing Date:(i)Schedule 7.05(b)(i) (as amended from time to time by Borrower in accordance with Section 7.20 ) contains:(A)a complete and accurate list of all applied for or registered Patents, owned by or licensed to any Obligor,including the jurisdiction and patent number;(B)a complete and accurate list of all applied for or registered Trademarks, owned by or licensed to any Obligor,including the jurisdiction, trademark application or registration number and the application or registration date; and(C)a complete and accurate list of all applied for or registered Copyrights, owned by or licensed to any Obligor;(ii)Each Obligor either (a) owns all right title and interest in and to the Obligor Intellectual Property material to Borrower’sbusiness, free and clear of any Liens or Claims of any kind whatsoever other than Permitted Liens or (b) has the right to use any Obligor Intellectual Propertymaterial to Borrower’s business licensed to such Obligor to the extent necessary for the operation of such Obligor’s business as it is currently conducted orcurrently contemplated to be conducted. Without limiting the foregoing, and except as set forth in Schedule 7.05(b)(ii) :(A)other than with respect to the Material Agreements, or as permitted by Section 9.09 , the Obligors have nottransferred ownership of Material Intellectual Property, in whole or in part, to any other Person who is not an Obligor;(B)other than (i) the Material Agreements, (ii) customary restrictions in in-bound licenses of Intellectual Property andnon-disclosure agreements, or (iii) as would have been or is permitted by Section 9.09 , there are no judgments, covenants not to sue, permits, grants, licenses,Liens (other than Permitted Liens), Claims, or other agreements or arrangements relating to the Obligors’ Material Intellectual Property, including anydevelopment, submission, services, research, license or support agreements, which bind, obligate or otherwise restrict the Obligors in any manner that couldreasonably be expected to have a Material Adverse Effect;(C)to any Obligor’s Knowledge, none of the Obligor Intellectual Property interferes with or constitutes amisappropriation of any valid rights arising under any Intellectual Property of any other Person;29 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (D)there are no pending or, to any Obligor’s Knowledge, threatened Claims against the Obligors asserted by anyother Person relating to the Obligor Intellectual Property, including any Claims of adverse ownership, invalidity, infringement, misappropriation, violation orother opposition to or conflict with such Intellectual Property; no Obligor has received any written notice from any Person that any Obligor business, the useof the Obligor Intellectual Property, or the manufacture, use or sale of any product or the performance of any service by any Obligor infringes upon, violatesor constitutes a misappropriation of, or may infringe upon, violate or constitute a misappropriation of, or otherwise interfere with, any other IntellectualProperty of any other Person;(E)no Obligor has any Knowledge that the Obligor Intellectual Property is being infringed, violated, misappropriatedor otherwise used by any other Person without the express authorization of the Obligors. Without limiting the foregoing, no Obligor has provided writtennotice to any other Person of any actual or potential infringement, violation or misappropriation of any of the Obligor Intellectual Property; no Obligor hasinitiated the enforcement of any Claim with respect to any of the Obligor Intellectual Property material to Borrower’s business;(F)all relevant current and former employees and contractors of each Obligor have executed written confidentialityand invention assignment Contracts with such Obligor that irrevocably assign to such Obligor or its designee all of their rights to any Inventions relating toany of Obligor’s business;(G)to the Knowledge of the Obligors, the Obligor Intellectual Property is all the Intellectual Property necessary forthe operation of Obligors’ business as it is currently conducted or as currently contemplated to be conducted, except for such Intellectual Property theabsence of a license or other rights thereunder thereof could not reasonably be expected to have a Material Adverse Effect;(H)each Obligor has taken reasonable precautions to protect the secrecy, confidentiality and value of its ObligorIntellectual Property consisting of trade secrets and confidential information, except as could not reasonably be expected to have a Material Adverse Effect;(I)each Obligor has delivered to Administrative Agent (or posted on a data site accessible to Administrative Agent)accurate and complete copies of all Material Agreements relating to the Obligor Intellectual Property;(J)there are no pending or, to the Knowledge of any of the Obligors, threatened in writing Claims against theObligors asserted by any other Person relating to the Material Agreements, including any Claims of breach or default under such Material Agreements;(iii)With respect to the Material Intellectual Property consisting of Patents, except as set forth in Schedule 7.05(b)(ii) , andwithout limiting the representations and warranties in Section 7.05(b)(ii) :(A)each of the issued claims in such Patents, to Obligors’ Knowledge, is valid and enforceable;(B)the inventors named in such Patents have executed written Contracts with an Obligor or its predecessor-in-interestthat properly and irrevocably assigns to an Obligor or predecessor-in-interest all of their rights to any of the Inventions claimed in such Patents to the extentpermitted by applicable law;(C)none of the Patents, or the Inventions claimed in them, have been dedicated to the public except as a result ofintentional decisions made by the applicable Obligor;(D)to any Obligor’s Knowledge, all prior art material to such Patents was adequately disclosed to or considered bythe respective patent offices during prosecution of such Patents to the extent required by applicable law or regulation;(E)subsequent to the issuance of such Patents, neither any Obligor nor any other current or prior owner of suchPatents, have filed any disclaimer or filed any other voluntary reduction in the scope of the Inventions claimed in such Patents;(F)no allowable or allowed subject matter of such Patents, to any Obligor’s Knowledge, have been the subject of anyinterference, re-examination or opposition proceedings, nor are the Obligors aware of any basis for any such interference, re-examination or oppositionproceedings;30 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (G)no such Patents, to any Obligor’s Knowledge, have ever been finally adjudicated to be invalid, unpatentable orunenforceable for any reason in any administrative, arbitration, judicial or other proceeding, and, with the exception of publicly available documents in theapplicable Patent Office recorded with respect to any Patents, no Obligor has received any notice asserting that such Patents are invalid, unpatentable orunenforceable; if any of such Patents is terminally disclaimed to another patent or patent application, all patents and patent applications subject to suchterminal disclaimer are included in the Collateral;(H)no Obligor has received an opinion, whether preliminary in nature or qualified in any manner, which concludesthat a challenge to the validity or enforceability of any of such Patents is more likely than not to succeed;(I)no Obligor has any Knowledge that any Obligor or any current or prior owner of such Patents or their respectiveagents or representatives have engaged in any conduct, or omitted to perform any necessary act, the result of which would invalidate or render unpatentableor unenforceable any such Patents; and(J)all maintenance fees, annuities, and the like due or payable on the Patents have been timely paid or the failure toso pay was the result of an intentional decision by the applicable Obligor or would not reasonably be expected to result in a Material Adverse Change.(iv)none of the foregoing representations and statements of fact contains any untrue statement of material fact or omits to stateany material fact necessary to make any such statement or representation not misleading in any material respect to a prospective Lender seeking fullinformation as to the Obligor Intellectual Property and the Obligors’ business.(c)Material Intellectual Property . Schedule 7.05(c) (as amended from time to time by Borrower in accordance with Section 7.20 ) contains an accurate list of the Obligor Intellectual Property that is material to any Obligor’s business with an indication as to whether the applicable Obligorowns or has an exclusive or non-exclusive license to such Obligor Intellectual Property. 7.06No Actions or Proceedings . (a)Litigation . Except as specified in Schedule 7.06 (as amended from time to time in accordance with Section 7.20 solely for purposes ofeach Compliance Certificate), there is no litigation, investigation or proceeding pending or, to any Obligor’s Knowledge, threatened with respect toBorrower and its Subsidiaries by or before any Governmental Authority or arbitrator (i) except as individually or in the aggregate could not reasonably beexpected to have a Material Adverse Effect or (ii) that involves this Agreement or the Transactions.(b)Environmental Matters . The operations and Property of Borrower and its Subsidiaries comply with all applicable EnvironmentalLaws, except to the extent the failure to so comply (either individually or in the aggregate) could not reasonably be expected to have a Material AdverseEffect.(c)Labor Matters . Borrower and its Subsidiaries have not engaged in unfair labor practices and there are no material labor actions ordisputes involving the employees of Borrower or its Subsidiaries.7.07Compliance with Laws and Agreements . Each of the Obligors is in compliance with all Laws applicable to it or its property and allindentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could notreasonably be expected to result in a Material Adverse Effect. On the date hereof and on each Borrowing Date, no Default has occurred and is continuing.7.08Taxes . All federal, state, local and foreign income and franchise and other material Tax returns, reports and statements (collectively, the “ TaxReturns ”) required to be filed by any Tax Affiliate have been timely filed with the appropriate Governmental Authorities, all such Tax Returns are true andcorrect in all material respects, and all Taxes reflected therein or otherwise due and payable have been timely paid (except for those contested in good faithby appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordancewith GAAP). No Tax Return is under audit or examination by any Governmental Authority and no notice of any material audit or examination or anyassertion of any claim for Taxes has been given or made in writing by any Governmental Authority. Proper and accurate amounts have been withheld byeach Tax Affiliate from their respective employees for all periods in material compliance with the Tax, social security and unemployment withholdingprovisions of applicable Laws and such withholdings have been timely paid to the respective31 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Governmental Authorities. No Tax Affiliate has participated in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).7.09Full Disclosure . Borrower has disclosed to Administrative Agent and the Lenders all Material Agreements to which any Obligor is subject, andall other matters to any Obligor’s Knowledge, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of any Obligor to Administrative Agent or any Lender inconnection with the negotiation of this Agreement and the other Loan Documents or delivered hereunder or thereunder (as modified or supplemented byother information so furnished) contains any material misstatement of material fact or omits to state any material fact necessary to make the statementstherein, in the light of the circumstances under which they were made and taken as a whole, not misleading; provided that, with respect to projected financialinformation, Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.7.10Regulation . (a)Investment Company Act . Neither Borrower nor any of its Subsidiaries is an “investment company” as defined in, or subject toregulation under, the Investment Company Act of 1940.(b)Margin Stock . Neither Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the businessof extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of the Loanswill be used to buy or carry any Margin Stock in violation of Regulation T, U or X.(c)OFAC; Sanctions, Etc. Neither Borrower nor any of its Subsidiaries or, to the knowledge of any Obligor, any Related Person (i) iscurrently the subject of any Sanctions or is a Sanctioned Person, (ii) is located (or has its assets located), organized or residing in any Sanctioned Jurisdiction,(iii) is or has been (within the previous five (5) years) engaged in any impermissible transaction with any Person who is now or was then the subject ofSanctions or who is located, organized or residing in any Sanctioned Jurisdiction, (iv) directly or indirectly derives revenues from investments in, ortransactions with, Sanctioned Persons, (v) has taken any action, directly or indirectly, that would result in a material violation by such Persons of any Anti-Corruption Laws, or (vi) has violated any Anti-Money Laundering Laws in any material respect. No Loan, nor the proceeds from any Loan, has been or willbe used, directly or indirectly, to lend, contributed or provide to, or has been or will be otherwise made available to fund, any impermissible activity orbusiness of any Person located, organized or residing in any Sanctioned Jurisdiction or who is the subject of any Sanctions, or in any other manner that willresult in any violation by the Lenders of Sanctions. Each of Borrower and its Subsidiaries has implemented and maintains in effect policies and proceduresdesigned to promote compliance by Borrower and its Subsidiaries and their respective directors, officers, employees and agents with the Anti-CorruptionLaws.7.11Solvency . Borrower individually is, and the Obligors (including Borrower) on a consolidated basis are, and, immediately after giving effect tothe Borrowing and the use of proceeds thereof will be, Solvent.7.12Subsidiaries . Set forth on Schedule 7.12 is a complete and correct list of all Subsidiaries as of the date hereof. Each such Subsidiary is dulyorganized and validly existing under the jurisdiction of its organization shown in said Schedule 7.12 , and the percentage ownership by Borrower of eachsuch Subsidiary is as shown in said Schedule 7.12 .7.13Indebtedness and Liens . Set forth on Schedule 7.13(a) is a complete and correct list of all Indebtedness for borrowed money in an amountgreater than $50,000 of each Obligor outstanding as of the date hereof. Schedule 7.13(b) is a complete and correct list of all Liens (other than Liens permittedby Section 9.02(d) ) granted by Borrower and other Obligors with respect to their respective Property and outstanding as of the date hereof.7.14Material Agreements . Set forth on Schedule 7.14 (as amended from time to time by Borrower in accordance with Section 7.20 ) is a completeand correct list of (i) each Material Agreement and (ii) each agreement creating or evidencing any Material Indebtedness. No Obligor is in material breachunder any such Material Agreement or in default under any agreement creating or evidencing any Material Indebtedness. Except as otherwise disclosed onSchedule 7.14 (as amended from time to time in accordance with Section 7.20 ), all material vendor purchase agreements and provider contracts of theObligors are in full force and effect without material modification from the form in which the same were disclosed to Administrative Agent and the Lenders.7.15Restrictive Agreements . None of the Obligors is subject to any indenture, agreement, instrument or other arrangement that prohibits, restrictsor imposes any condition upon (a) the ability of Borrower or any Subsidiary to create, incur or permit to exist any32 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Lien upon any of its property or assets (other than (i) customary provisions in contracts (including without limitation leases and licenses of IntellectualProperty) restricting the assignment thereof, (ii) restrictions or conditions imposed by any agreement governing secured Permitted Indebtedness, to the extentthat such restrictions or conditions apply only to the property or assets securing such Indebtedness, (iii) buy-sell arrangements and other restrictions on theEquity Interests of any joint venture and (iv) customary requirements imposed under each Obligor’s Organizational Documents for appropriate board or othergoverning body approvals), or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or tomake or repay loans or advances to Borrower or any other Subsidiary or to Guarantee Indebtedness of Borrower or any other Subsidiary (each, a “ RestrictiveAgreement ”), except those listed on Schedule 7.15 or otherwise permitted under Section 9.11 .7.16Real Property .(a)Generally . Neither Borrower nor any of its Subsidiaries owns or leases (as tenant thereof) any real property, except as described onSchedule 7.16 (as amended from time to time by Borrower in accordance with Section 7.20 ).(b)Borrower Lease . (i) As of the date hereof, Borrower has delivered a true, accurate and complete copy of each Borrower Lease toAdministrative Agent.(ii)Each Borrower Lease is in full force and effect, no material default has occurred under such Borrower Lease and, to theKnowledge of Borrower, there is no existing condition which, but for the passage of time or the giving of notice, could reasonably be expected to result in amaterial default under the terms of such Borrower Lease.(iii)Borrower is the tenant under each Borrower Lease and has not transferred, sold, assigned, conveyed, disposed of, mortgaged,pledged, hypothecated, or encumbered any of its interest in, such Borrower Lease.7.17Pension Matters . Schedule 7.17 sets forth, as of the date hereof, a complete and correct list of, and that separately identifies, (a) all Title IVPlans and (b) all Multiemployer Plans. Except as could not, in the aggregate, reasonably be expected to result in a Material Adverse Effect, (i) each BenefitPlan, and each trust thereunder, intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Requirements of Law so qualifies, (ii)each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other Requirements of Law, (iii) there are no existing or pending (or tothe Knowledge of any Obligor or Subsidiary thereof, threatened) claims (other than routine claims for benefits in the normal course), sanctions, actions,lawsuits or other proceedings or investigation involving any Benefit Plan to which any Obligor or Subsidiary thereof incurs or otherwise has or could have anobligation or any liability or Claim and (iv) no ERISA Event is reasonably expected to occur. Borrower and each of its ERISA Affiliates has met allapplicable requirements under the ERISA Funding Rules with respect to each Title IV Plan, and no waiver of the minimum funding standards under theERISA Funding Rules has been applied for or obtained. As of the most recent valuation date for any Title IV Plan, the funding target attainment percentage(as defined in Section 430(d)(2) of the Code) is at least 60%, and neither Borrower nor any of its ERISA Affiliates knows of any facts or circumstances thatcould reasonably be expected to cause the funding target attainment percentage to fall below 60% as of the most recent valuation date. As of the date hereof,with respect to any Multiemployer Plan or Title IV Plan, no ERISA Event has occurred in connection with which obligations and liabilities (contingent orotherwise) remain outstanding. No ERISA Affiliate would have any Withdrawal Liability as a result of a complete withdrawal from any Multiemployer Planon the date this representation is made.7.18Collateral; Security Interest . Each Security Document is effective to create in favor of the Secured Parties a legal, valid and enforceablesecurity interest in the Collateral subject thereto and each such security interest is perfected to the extent required by (and has the priority required by) theapplicable Security Document. The Security Documents collectively are effective to create in favor of the Secured Parties a legal, valid and enforceablesecurity interest in the Collateral, which security interests are first-priority (subject only to Permitted Priority Liens).7.19Regulatory Approvals . Borrower and its Subsidiaries hold, and will continue to hold, either directly or through licensees and agents, allRegulatory Approvals, licenses, permits and similar governmental authorizations of a Governmental Authority necessary or required for Borrower and itsSubsidiaries to conduct their operations and business in the manner currently conducted or in the ordinary course of business, except where the failure to doso could not reasonably be expected to result in a Material Adverse Effect.7.20Update of Schedules . Each of Schedules 7.05(b)(i) , 7.05(c) , 7.06 , 7.14 and 7.16 may be updated by Borrower from time to time in order toreflect any material changes and to ensure the continued accuracy of such Schedule as of any upcoming date on which representations and warranties aremade incorporating the information contained on such Schedule. Such update may be33 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. accomplished by Borrower providing to Administrative Agent, in writing (including by electronic means), a revised version of such Schedule in accordancewith the provisions of Section 13.02 . Each such updated Schedule shall be effective immediately upon the receipt thereof by the Lenders. SECTION 8AFFIRMATIVE COVENANTSEach Obligor covenants and agrees with Administrative Agent and the Lenders that, until the Commitments have expired or been terminated andall Obligations (other than contingent indemnification or reimbursement obligations for which no claim has been made) have been paid in full in cash:8.01Financial Statements and Other Information . Borrower will furnish to Administrative Agent:(a)as soon as available and in any event within [***] days (or such longer period as permitted by the SEC) after the end of the first threefiscal quarters of each fiscal year (or [***] days (or such longer period as permitted by the SEC), in the case of the fourth fiscal quarter), the consolidatedbalance sheets of the Obligors as of the end of such quarter, and the related consolidated statements of income, shareholders’ equity and cash flows ofBorrower and its Subsidiaries for such quarter and the portion of the fiscal year through the end of such quarter, prepared in accordance with GAAPconsistently applied, all in reasonable detail and setting forth in comparative form the figures for the corresponding period in the preceding fiscal year,together with a certificate of a Responsible Officer of Borrower stating that such financial statements fairly present, in all material respects, the financialcondition of Borrower and its Subsidiaries as at such date and the results of operations of Borrower and its Subsidiaries for the period ended on such date andhave been prepared in accordance with GAAP consistently applied, subject to changes resulting from normal, year-end audit adjustments and except for theabsence of notes; provided that, so long as Borrower is subject to the public reporting requirements of the Exchange Act, Borrower’s filing of a QuarterlyReport on Form 10-Q with the SEC shall be deemed to satisfy the requirements of this Section 8.01(a) on the date on which such report is first available viathe SEC’s EDGAR system or a successor system related thereto;(b)as soon as available and in any event within [***] days after the end of each fiscal year (or such longer period as permitted by the SEC),the consolidated balance sheets of Borrower and its Subsidiaries as of the end of such fiscal year, and the related consolidated statements of income,shareholders’ equity and cash flows of Borrower and its Subsidiaries for such fiscal year, prepared in accordance with GAAP consistently applied, all inreasonable detail and setting forth in comparative form the figures for the previous fiscal year, accompanied by a report and opinion thereon of Ernst &Young LLP or another firm of independent certified public accountants of recognized national standing acceptable to the Majority Lenders, which report andopinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any qualification or exception as to the scopeof such audit (other than “going concern” or similar exceptions); provided that, so long as Borrower is subject to the public reporting requirements of theExchange Act, Borrower’s filing of an Annual Report on Form 10-K with the SEC shall be deemed to satisfy the requirements of this Section 8.01(b) on thedate on which such report is first available via the SEC’s EDGAR system or a successor system related thereto;(c)[reserved];(d)together with the financial statements required pursuant to Sections 8.01(a) and (b) , a compliance certificate of a Responsible Officeras of the end of the applicable accounting period (which delivery may, unless a Lender requests executed originals, be by electronic communicationincluding fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes) in the form of Exhibit D (a “ ComplianceCertificate ”);(e)promptly upon receipt thereof, copies of all letters of representation signed by an Obligor to its auditors and copies of all auditor reportsdelivered for each fiscal quarter;(f)as soon as available and in any event within [***] days after the end of each fiscal year, a consolidated financial forecast for Borrowerand its Subsidiaries for the following five fiscal years, including forecasted consolidated balance sheets, consolidated statements of income, shareholders’equity and cash flows of Borrower and its Subsidiaries;(g)[reserved];34 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (h)promptly, and in any event within [***] Business Days after receipt thereof by an Obligor thereof, copies of each notice or othercorrespondence received from any securities regulator or exchange to the authority of which an Obligor may become subject from time to time concerningany investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of such Obligor;(i)the information regarding insurance maintained by Borrower and its Subsidiaries as required under Section 8.05 ; and(j)promptly following Administrative Agent’s request at any time, proof of Borrower’s compliance with Section 10.01 .8.02Notices of Material Events . Borrower will furnish to Administrative Agent written notice of the following promptly after a Responsible Officerfirst learns of the existence (or within the times periods specified below) of:(a)the occurrence of (i) any Event of Default or (ii) within [***] Business Days, any event that, upon the giving of notice, the lapse of timeor both, would constitute an Event of Default;(b)notice of the occurrence of any event with respect to an Obligor’s property or assets resulting in a Loss aggregating in an amount of $[***] (or the Equivalent Amount in other currencies) or more that is not covered by insurance;(c)(A) any proposed acquisition of stock, assets or property by any Obligor that would reasonably be expected to result in materialenvironmental liability under Environmental Laws, and (B)(1) spillage, leakage, discharge, disposal, leaching, migration or release of any HazardousMaterial required to be reported to any Governmental Authority under applicable Environmental Laws, and (2) all material actions, suits, claims, notices ofviolation, hearings, investigations or proceedings pending, or to any Obligor’s Knowledge, threatened against or affecting Borrower or any of its Subsidiariesor with respect to the ownership, use, maintenance and operation of their respective businesses, operations or properties, relating to Environmental Laws orHazardous Material;(d)the assertion of any environmental matter by any Person against, or with respect to the activities of, Borrower or any of its Subsidiariesand any alleged violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizations which could reasonably be expectedto involve damages in excess of $[***] other than any environmental matter or alleged violation that, if adversely determined, could not reasonably beexpected to (either individually or in the aggregate) have a Material Adverse Effect;(e)the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affectingBorrower or any of its Affiliates that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;(f)(i) on or prior to any filing by any ERISA Affiliate of any notice of intent to terminate any Title IV Plan, a copy of such notice and (ii)promptly, and in any event within [***] days, after any Responsible Officer of any ERISA Affiliate knows or has reason to know that a request for a minimumfunding waiver under Section 412 of the Code has been filed with respect to any Title IV Plan or Multiemployer Plan, a notice (which may be made bytelephone if promptly confirmed in writing) describing such waiver request and any action that any ERISA Affiliate proposes to take with respect thereto,together with a copy of any notice filed with the PBGC or the IRS pertaining thereto;(g)within [***] days of the date thereof, or, if earlier, on the date of delivery of any financial statements pursuant to Section 8.01 , (i) thetermination of any Material Agreement; (ii) the receipt by Borrower or any of its Subsidiaries of any material notice under any Material Agreement; (iii) theentering into of any new Material Agreement by an Obligor; or (iv) any material amendment to a Material Agreement;(h)the reports and notices as required by the Security Documents;(i)within [***] days of the date thereof, or, if earlier, on the date of delivery of any financial statements pursuant to Section 8.01 , notice ofany material change in accounting policies or financial reporting practices by the Obligors;(j)promptly after the occurrence thereof, notice of any labor controversy resulting in or reasonably likely to result in any strike, workstoppage, boycott, shutdown or other material labor disruption against or involving an Obligor;35 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (k)within [***] days of the date thereof, or, if earlier, on the date of delivery of any financial statements pursuant to Section 8.01 , alicensing agreement or arrangement entered into by Borrower or any Subsidiary in connection with any infringement or alleged infringement of theIntellectual Property of another Person that could reasonably be expected to result in a Material Adverse Effect;(l)any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect;(m)concurrently with the delivery of financial statements under Section 8.01(b) , the creation or other acquisition of any MaterialIntellectual Property by Borrower or any Subsidiary after the date hereof and during such prior fiscal year which is registered or becomes registered or thesubject of an application for registration with the U.S. Copyright Office or the U.S. Patent and Trademark Office, as applicable, or with any other equivalentforeign Governmental Authority;(n)any change to any Obligor’s ownership of Deposit Accounts (other than Excluded Accounts), Securities Accounts and CommodityAccounts, by delivering to Administrative Agent an updated Annex 7 to the Security Agreement setting forth a complete and correct list of all such accountsas of the date of such change; (o)Within [***] days of request, such information with respect to any Excluded Account as Administrative Agent may from time to timereasonably request (including, but not limited to account statements for the Excluded Accounts); and(p)such other information respecting the operations, properties, business or condition (financial or otherwise) of the Obligors (includingwith respect to the Collateral) as Administrative Agent may from time to time reasonably request. Each notice delivered under this Section 8.02 shall beaccompanied by a statement of a financial officer or other executive officer of Borrower setting forth the details of the event or development requiring suchnotice and any action taken or proposed to be taken with respect thereto, to the extent applicable.8.03Existence; Conduct of Business . Such Obligor will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary topreserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of itsbusiness in the ordinary course of business; provided that the foregoing shall not prohibit any merger, amalgamation, consolidation, liquidation ordissolution permitted under Section 9.03 . 8.04Payment of Obligations . Such Obligor will, and will cause each of its Subsidiaries to, pay and discharge its obligations, including (i) allfederal and material other Taxes, fees, assessments and governmental charges or levies imposed upon it or upon its properties or assets prior to the date onwhich penalties attach thereto, and all lawful claims for labor, materials and supplies which, if unpaid, might become a Lien upon any properties or assets ofBorrower or any Subsidiary, except to the extent such Taxes, fees, assessments or governmental charges or levies, or such claims are being contested in goodfaith by appropriate proceedings and are adequately reserved against in accordance with GAAP; and (ii) all lawful claims which, if unpaid, would by lawbecome a Lien upon its property not constituting a Permitted Lien.8.05Insurance . Such Obligor will, and will cause each of its Subsidiaries to maintain, with financially sound and reputable insurance companies,insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in thesame or similar locations. Upon the request of Administrative Agent or the Majority Lenders, such Obligor shall furnish Administrative Agent from time totime with full information as to the insurance carried by it and, if so requested, copies of all such insurance policies. Such Obligor shall use commerciallyreasonable efforts to ensure, or cause others to ensure, that all insurance policies required under this Section 8.05 shall provide that they shall not beterminated or cancelled nor shall any such policy be materially changed in a manner adverse to such Obligor without at least [***] days’ (or [***] days’ fornon-payment of premium) prior written notice to such Obligor and Administrative Agent. Receipt of notice of termination or cancellation of any suchinsurance policies or reduction of coverages or amounts thereunder shall entitle the Secured Parties to renew any such policies, cause the coverages andamounts thereof to be maintained at levels required pursuant to the first sentence of this Section 8.05 or otherwise to obtain similar insurance in place of suchpolicies, in each case at the expense of such Obligor (payable on demand). The amount of any such expenses shall accrue interest at the Default Rate if notpaid on demand, and shall constitute “Obligations.”8.06Books and Records; Inspection Rights . Such Obligor will, and will cause each of its Subsidiaries to, keep proper books of record and accountin which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. Such Obligor will, and will cause eachof its Subsidiaries to, permit any representatives designated by Administrative Agent, upon reasonable prior notice, to visit and inspect its properties, toexamine and make extracts from its books and records, and36 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times (but not more often than [***] unlessan Event of Default has occurred and is continuing) as Administrative Agent may request. The Obligors shall pay all reasonable and documented out-of-pocket costs of all such inspections.8.07Compliance with Laws and Other Obligations . Such Obligor will, and will cause each of its Subsidiaries to, (i) comply in all material respectswith all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property (including Environmental Laws) and (ii) comply inall material respects with all terms of Indebtedness and all other Material Agreements, except, in each case, where the failure to do so, individually or in theaggregate, could not reasonably be expected to result in a Material Adverse Effect.8.08Maintenance of Properties, Etc . (a)Such Obligor shall, and shall cause each of its Subsidiaries to, maintain and preserve all of its properties necessary or useful in theproper conduct of its business in good working order and condition in accordance with the general practice of other Persons of similar character and size,ordinary wear and tear and damage from casualty or condemnation excepted.(b)Without limiting the generality of Section 8.08(a) , each Obligor shall not terminate, or allow or cause to be terminated or allow toexpire, any Borrower Lease if such termination could reasonably be expected to result in a material interruption in the manufacture and testing of, or amaterial reduction in manufacturing and testing capacity of the Obligors with respect to, the Product or any other products of the Obligors, unless and until,prior to such termination or expiration, such Obligor has executed a lease for a replacement Borrower Facility or has made other accommodations (includingconsolidation with other facilities) to avoid such interruption or reduction and has received all United States Food and Drug Administration and otherGovernmental Approvals necessary to operate such replacement Borrower Facility or to implement such other accommodations, as applicable.8.09Licenses . Such Obligor shall, and shall cause each of its Subsidiaries to, obtain and maintain all material licenses, authorizations, consents,filings, exemptions, registrations and other Governmental Approvals necessary in connection with the execution, delivery and performance of the LoanDocuments, the consummation of the Transactions or the operation and conduct of its business and ownership of its properties, except where the failure to doso would not reasonably be expected to have a Material Adverse Effect.8.10Action under Environmental Laws . Such Obligor shall, and shall cause each of its Subsidiaries to, upon becoming aware of the presence ofany material Hazardous Materials or the existence of any material environmental liability under applicable Environmental Laws with respect to theirrespective businesses, operations or properties, take all actions, at their cost and expense, as shall be reasonably necessary or advisable to investigate andclean up the condition of their respective businesses, operations or properties, including all required removal, containment and remedial actions, and restoretheir respective businesses, operations or properties to a condition in compliance with applicable Environmental Laws.8.11Use of Proceeds . The proceeds of the Loans will be used only as provided in Section 2.04 . No part of the proceeds of the Loans will be used,whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board of Governors of the Federal Reserve System,including Regulations T, U and X.8.12Certain Obligations Respecting Subsidiaries; Further Assurances. (a)Subsidiary Guarantors . Such Obligor will take such action, and will cause each of its Subsidiaries to take such action, from time totime as shall be necessary to ensure that all Subsidiaries (other than any Excluded Foreign Subsidiary not required to be a Subsidiary Guarantor under Section8.12(b)(i) , are “Subsidiary Guarantors” hereunder. Without limiting the generality of the foregoing, in the event that Borrower or any of its Subsidiaries shallform or acquire any new Subsidiary (other than any new Excluded Foreign Subsidiary not required to be a Subsidiary Guarantor under Section 8.12(b)(i) ), such Obligor and its Subsidiaries concurrently will:(i)cause such new Subsidiary to become a “Subsidiary Guarantor” hereunder, and a “Grantor” under the Security Agreement,pursuant to a Guarantee Assumption Agreement;(ii)take such action or cause such Subsidiary to take such action (including delivering such shares of stock together withundated transfer powers executed in blank) as shall be necessary to create and perfect valid and enforceable first priority (subject to Permitted Priority Liens)Liens on (A) substantially all of the personal property of such new Subsidiary and (B) all real37 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. property with a fair market value in excess of $[***] owned by such new Subsidiary, in each case as collateral security for the obligations of such newSubsidiary hereunder;(iii)to the extent that the parent of such Subsidiary is not a party to the Security Agreement or has not otherwise pledged EquityInterests in its Subsidiaries in accordance with the terms of the Security Agreement and this Agreement, cause the parent of such Subsidiary to execute anddeliver a pledge agreement in favor of the Secured Parties in respect of all outstanding issued shares of such Subsidiary; and(iv)deliver such proof of corporate action, incumbency of officers, opinions of counsel as reasonably requested byAdministrative Agent and other documents as is consistent with those delivered by each Obligor pursuant to Section 6.01 or as Administrative Agent or theMajority Lenders shall have requested.(b)Excluded Foreign Subsidiaries . (i)In the event that, at any time, Excluded Foreign Subsidiaries have, in the aggregate, (i) total revenues constituting 5% ormore of the total revenues of Borrower and its Subsidiaries on a consolidated basis, or (ii) total assets constituting 5% or more of the total assets of Borrowerand its Subsidiaries on a consolidated basis, promptly (and, in any event, within [***] days after such time) Obligors shall cause one or more of suchExcluded Foreign Subsidiaries to become Subsidiary Guarantors in the manner set forth in Section 8.12(a) , such that, after such Subsidiaries becomeSubsidiary Guarantors, the non-guarantor Excluded Foreign Subsidiaries in the aggregate shall cease to have revenues or assets, as applicable, that meet thethresholds set forth in clauses (i) and (ii) above; provided that no Excluded Foreign Subsidiary shall be required to become a Subsidiary Guarantor if doingso would result in material adverse tax consequences for Borrower and its Subsidiaries, taken as a whole.(ii)With respect to each First-Tier Foreign Subsidiary that is not a Subsidiary Guarantor, such Obligor shall grant a securityinterest and Lien in 65% of each class of voting Equity Interest and 100% of all other Equity Interests in such First-Tier Foreign Subsidiaries in favor of theSecured Parties as Collateral for the Obligations. Without limiting the generality of the foregoing, in the event that any Obligor shall form or acquire any newSubsidiary that is a First-Tier Foreign Subsidiary, such Obligor will promptly and in any event within [***] days of the formation or acquisition of suchSubsidiary (or such longer time as consented to by Administrative Agent in writing) grant a security interest and Lien in 65% of each class of voting EquityInterests and 100% of all other Equity Interests of such Subsidiary in favor of the Secured Parties as Collateral for the Obligations ( provided that in the caseof a First Tier Foreign Subsidiary that is a Subsidiary Guarantor, such Obligor shall grant a security interest and Lien in 100% of the Equity Interests of suchSubsidiary in favor of the Secured Parties as Collateral for the Obligations), including entering into any necessary local law security documents and deliveryof certificated securities issued by such First-Tier Foreign Subsidiary as required by this Agreement or the Security Agreement.(c)Further Assurances . Such Obligor will, and will cause each of its Subsidiaries to, take such action from time to time as shallreasonably be requested by Administrative Agent or the Majority Lenders to effectuate the purposes and objectives of this Agreement.Without limiting the generality of the foregoing, each Obligor will, and will cause each Person that is required to be a Subsidiary Guarantor to, take suchaction from time to time (including executing and delivering such assignments, security agreements, control agreements and other instruments) as shall bereasonably requested by Administrative Agent or the Majority Lenders to create, in favor of the Secured Parties, perfected security interests and Liens in (A)substantially all of the personal property of such Obligor and (B) all real property with a fair market value in excess of $[***] owned by such Obligor, in eachcase as collateral security for the Obligations; provided that any such security interest or Lien shall be subject to the relevant requirements of the SecurityDocuments; provided further that, notwithstanding any provision under this Agreement or other Loan Document to the contrary, Borrower and itsSubsidiaries shall not be required to reimburse legal and filing costs, fees, expenses and other amounts incurred by the Administrative Agent or the Lenders inrespect of actions required under this Section 8.12 or Section 8.15(b) under more than three foreign jurisdictions (as selected by the Administrative Agent inits sole discretion) and for more than $15,000 for each such foreign jurisdiction (for an aggregate of $45,000).8.13Termination of Non-Permitted Liens . In the event that Borrower or any other Obligor shall become aware or be notified by AdministrativeAgent or any Lender of the existence of any outstanding Lien against any Property of Borrower or such other Obligor, which Lien is not a Permitted Lien,such Obligor shall use its commercially reasonable efforts to promptly terminate or cause the termination of such Lien.38 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 8.14Intellectual Property . In the event that the Obligors acquire Obligor Intellectual Property during the term of this Agreement, then theprovisions of this Agreement shall automatically apply thereto and any such Obligor Intellectual Property shall automatically constitute part of the Collateralunder the Security Documents, without further action by any party, in each case from and after the date of such acquisition (except that any representations orwarranties of any Obligor shall apply to any such Obligor Intellectual Property only from and after the date, if any, subsequent to such acquisition that suchrepresentations and warranties are brought down or made anew as provided herein).8.15Post-Closing Items .(a)Within ninety (90) days after the Closing Date, or such other date as Administrative Agent may in its sole discretion permit, Borrowershall use commercially reasonable efforts to execute and deliver each Real Property Security Document to Administrative Agent.(b)Within ninety (90) days after the Closing Date, or such other date as Administrative Agent may in its sole discretion permit, Borrowershall deliver (i) such Intellectual Property security agreements duly executed by the applicable Obligor as Administrative Agent may reasonably require withrespect to foreign Intellectual Property and (ii) evidence of such foreign filings as Administrative Agent may reasonably require with respect to foreignIntellectual Property.(c)Within seven (7) Business Days after the Closing Date, or such other date as Administrative Agent may in its sole discretion permit,Borrower shall deliver duly executed control agreements in favor of Administrative Agent for the benefit of the Secured Parties for all Deposit Accounts,Securities Accounts and Commodity Accounts (other than Excluded Accounts) that were not delivered on the Closing Date, including, but not limited tosuch control agreements with Comerica Bank.SECTION 9NEGATIVE COVENANTSEach Obligor covenants and agrees with Administrative Agent and the Lenders that, until the Commitments have expired or been terminated andall Obligations (other than contingent indemnification or reimbursement obligations for which no claim has been made) have been paid in full in cash:9.01Indebtedness . Such Obligor will not, and will not permit any of its Subsidiaries to, create, incur, assume or permit to exist any Indebtedness,whether directly or indirectly, except:(a)the Obligations;(b)Indebtedness existing on the date hereof and set forth in Part II of Schedule 7.13(a) and Permitted Refinancings thereof; provided that,in each case, with respect to such Indebtedness, an intercreditor agreement or subordination agreement on terms reasonably satisfactory to the MajorityLenders shall be entered into;(c)Permitted Priority Debt;(d)accounts payable to trade creditors for goods and services and current operating liabilities (not the result of the borrowing of money)incurred in the ordinary course of Borrower’s or such Subsidiary’s business in accordance with customary terms and paid within the specified time, unlesscontested in good faith by appropriate proceedings and reserved for in accordance with GAAP;(e)Indebtedness consisting of guarantees resulting from endorsement of negotiable instruments for collection by any Obligor in theordinary course of business;(f)(i) Indebtedness of any Obligor to any other Obligor, (ii) Indebtedness of any non-Obligor to any other non-Obligor, and (iii)Indebtedness of any non-Obligor to any Obligor to the extent permitted pursuant to Section 9.05(k) ;(g)Guarantees by any Obligor of Indebtedness of any other Obligor;39 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (h)(i) Permitted Cure Debt and (ii) Permitted Subordinated Debt (to the extent Borrower has received prior written consent ofAdministrative Agent as required by the definition of “Permitted Subordinated Debt”);(i)Indebtedness approved in advance in writing by the Majority Lenders;(j)Indebtedness incurred pursuant to the Essex Master Lease (or a replacement equipment facility of the Essex Master Lease); providedthat the aggregate outstanding principal amount of such Indebtedness does not exceed $[***] at any time;(k)Indebtedness under credit cards used in the ordinary course of business not exceeding $[***] in the aggregate at any time;(l)Hedging Agreements entered into in the ordinary course of Borrower’s financial planning solely to hedge currency risks (and not forspeculative purposes) in an aggregate notional amount for all such Hedging Agreements not in excess of $[***] (or the Equivalent Amount in othercurrencies);(m)Indebtedness secured by Liens or deposits permitted under Section 9.02(k) and (o) ;(n)normal course of business equipment financing; provided that (i) if secured, the collateral therefor consists solely of the assets beingfinanced, the products and proceeds thereof and books and records related thereto and (ii) the aggregate outstanding principal amount of such Indebtednessdoes not exceed $[***] (or the Equivalent Amount in other currencies); and(o)Other Indebtedness not exceeding $[***] in the aggregate at any time.9.02Liens . Such Obligor will not, and will not permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on any property orasset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof,except:(a)Liens securing the Obligations;(b)any Lien on any property or asset of Borrower or any of its Subsidiaries existing on the date hereof and set forth in Part II of Schedule7.13(b) ; provided that (i) no such Lien shall extend to any other property or asset of Borrower or any of its Subsidiaries and (ii) any such Lien shall secureonly those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principalamount thereof;(c)Liens described in the definition of “Permitted Priority Debt”;(d)Liens imposed by law which were incurred in the ordinary course of business, including (but not limited to) carriers’, warehousemen’sand mechanics’ liens and other similar liens arising in the ordinary course of business and which (x) do not in the aggregate materially detract from the valueof the Property subject thereto or materially impair the use thereof in the operations of the business of such Person or (y) are being contested in good faith byappropriate proceedings and for which adequate reserves have been made if required in accordance with GAAP;(e)pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance orother similar social security legislation;(f)Liens securing Taxes, assessments and other governmental charges, the payment of which is not yet due or is being contested in goodfaith by appropriate proceedings promptly initiated and diligently conducted and for which such reserve or other appropriate provisions, if any, as shall berequired by GAAP shall have been made;(g)servitudes, easements, rights of way, restrictions and other similar encumbrances on real Property imposed by applicable Laws andencumbrances consisting of zoning or building restrictions, easements, licenses, restrictions on the use of property or minor imperfections in title theretowhich, in the aggregate, are not material, and which do not in any case materially detract from the value of the property subject thereto or interfere with theordinary conduct of the business of any of the Obligors;40 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (h)with respect to any real Property, (A) such defects or encroachments as might be revealed by an up-to-date survey of such real Property;(B) the reservations, limitations, provisos and conditions expressed in the original grant, deed or patent of such property by the original owner of such realProperty pursuant to applicable Laws; (C) any leasehold interest in leases or subleases and licenses granted in the ordinary course of business; and (D) rightsof expropriation, access or user or any similar right conferred or reserved by or in applicable Laws, which, in the aggregate for (A), (B), (C) and (D), are notmaterial, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the businessof any of the Obligors;(i)Bankers liens, rights of setoff and similar Liens incurred on deposits made in the ordinary course of business;(j)(i) Liens in the form of cash collateral securing Indebtedness permitted under Section 9.01(k) and (l) and (ii) Liens securingIndebtedness permitted under Section 9.01(j) and (n) ; provided that, in the case of clause (ii), such Liens are restricted solely to the collateral described inSection 9.01(j) or (n) , as applicable;(k)deposits to secure the performance of bids, trade contracts, statutory obligations, surety bonds (other than bonds related to judgments orlitigation), performance bonds, and other obligations of a like nature incurred in the ordinary course of business;(l)Liens securing judgments for the payment of money not constituting an Event of Default under Section 11 or securing appeal or othersurety bonds related to such judgments;(m)Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties that are promptly paidon or before the date they become due;(n)Liens on insurance proceeds securing payment of financed insurance premiums that are not overdue (provided that such Liens extendonly to such insurance proceeds and not to any other property or assets);(o)Deposits or letters of credit to provide credit support for real estate leases, in each case not to exceed $[***] in the aggregateoutstanding at any time; and(p)licenses of the Product or Intellectual Property that is permitted under Section 9.09 ;provided that no Lien otherwise permitted under any of the foregoing Sections 9.02(b) through (p) shall apply to any Material Intellectual Property. 9.03Fundamental Changes and Acquisitions . Such Obligor will not, and will not permit any of its Subsidiaries to, (i) enter into any transaction ofmerger, amalgamation or consolidation (ii) liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or (iii) make any Acquisition orotherwise acquire any business or substantially all the property from, or capital stock of, or be a party to any acquisition of, any Person, except:(a)Investments permitted under Section 9.05(e) ;(b)the merger, amalgamation or consolidation of any Subsidiary Guarantor with or into any other Obligor; provided that, in the case of amerger, amalgamation or consolidation with or into Borrower, Borrower shall be the surviving entity;(c)the sale, lease, transfer or other disposition by any Subsidiary Guarantor of any or all of its property (upon voluntary liquidation orotherwise) to any other Obligor; and(d)the sale, transfer or other disposition of the capital stock of (x) any Subsidiary Guarantor to any other Obligor, (y) any Subsidiary that isnot an Obligor to another Subsidiary that is not an Obligor and (z) any Subsidiary to an Obligor; and(e)Permitted Acquisitions for consideration in an amount not exceeding $[***] in the aggregate.9.04Lines of Business . Such Obligor will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business otherthan the business engaged in on the date hereof by Borrower or any Subsidiary or a business reasonably related thereto.41 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 9.05Investments . Such Obligor will not, and will not permit any of its Subsidiaries to, make, directly or indirectly, or permit to remain outstandingany Investments except:(a)Investments outstanding on the date hereof and identified in Schedule 9.05 ;(b)operating deposit accounts with banks;(c)extensions of credit in the nature of accounts receivable, prepaid royalties, notes receivable and other similar items arising from thesales of goods or services in the ordinary course of business;(d)Permitted Cash Equivalent Investments;(e)Investments by any Obligor in any Subsidiary Guarantors;(f)Hedging Agreements entered into in the ordinary course of Borrower’s financial planning solely to hedge currency risks (and not forspeculative purposes) and in an aggregate notional amount for all such Hedging Agreements not in excess of $[***] (or the Equivalent Amount in othercurrencies);(g)Investments consisting of security deposits with utilities and other like Persons made in the ordinary course of business;(h)employee loans, travel advances and guarantees in accordance with Borrower’s usual and customary practices with respect thereto (ifpermitted by applicable law) which in the aggregate shall not exceed $[***] outstanding at any time (or the Equivalent Amount in other currencies);(i)Investments received in connection with any Insolvency Proceedings in respect of any customers, suppliers or clients and in settlementof delinquent obligations of, and other disputes with, customers, suppliers or clients;(j)Investments permitted under Section 9.03 ;(k)(i) Investments in joint ventures, corporate collaborations, partnerships or similar arrangements, (ii) Investments in Foreign Subsidiariesand (iii) other Investments, provided that (x) the cash Investment by Borrower in such Investments for clauses (i), (ii) and (iii) in the aggregate cannot exceed$[***] per calendar year commencing with the calendar year ending December 31, 2017 and increasing by $[***] for each calendar year thereafter, and (y)any non-cash Investments are permitted under Section 9.09 (other than Sections 9.09(f), (h), (i), (j) and (k));(l)Investments constituting Permitted Acquisitions (including Investments in Subsidiaries formed for the purpose of merging suchSubsidiary into the target of a Permitted Acquisition or for merging the target of a Permitted Acquisition into such Subsidiary so long as, upon theconsummation of such Permitted Acquisition, Borrower is in compliance with Sections 8.12 and 9.03 ); and(m)if the MSC Investment Conditions have been met and no Default or Event of Default has occurred and is continuing, Investments in T2Sub for the purpose of holding Investments as a Massachusetts security corporation under 830 CMR 63.38B.1 of the Massachusetts tax code and applicableregulations; provided that if at any time the MSC Investment Conditions are not met then (i) Borrower shall promptly cause T2 Sub to distribute to Borrowerall assets held by it for deposit into a collateral account subject to a control agreement in favor of Administrative Agent for the benefit of the Secured Partiesand (ii) Borrower shall not permit T2 Sub to hold any assets.9.06Restricted Payments . Such Obligor will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly orindirectly, any Restricted Payment, except:(a)Any Obligor may declare and pay dividends with respect to its capital stock payable solely in additional shares of its common stock;(b)any Subsidiary may pay dividends or distributions to any other Obligor;42 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (c)Borrower may purchase, redeem, retire, or otherwise acquire shares of its capital stock or other Equity Interests with the proceedsreceived from a substantially concurrent issue of new shares of its capital stock or other Equity Interests; and(d)for the purpose of repurchasing Borrower’ stock, where such repurchase is in connection with the issuance of Borrower’s stock tomanagement, former employees, consultants or members of the board of directors of Borrower, in an amount not exceeding $[***] in repurchases in any fiscalyear.9.07Payments of Indebtedness . Such Obligor will not, and will not permit any of its Subsidiaries to, make any payments in respect of anyIndebtedness other than (a) payments of the Obligations, (b) scheduled payments of Indebtedness and other payments of Indebtedness that is contractuallysubordinated to the Obligations, in each case, if subordinated, to the extent permitted under the terms of any subordination to the Obligations, (c) repaymentof intercompany Indebtedness permitted in reliance upon Section 9.01(f) , (d) payments under Permitted Priority Debt, (e) payments in respect ofIndebtedness in the form of capital leases and real estate letters of credit of a Subsidiary acquired in connection with a Permitted Acquisition and (f) paymentsin respect of Indebtedness in the form of trade credit.9.08Change in Fiscal Year . Such Obligor will not, and will not permit any of its Subsidiaries to, change the last day of its fiscal year from that ineffect on the date hereof, except to change the fiscal year of a Subsidiary acquired in connection with an Acquisition to conform its fiscal year to that ofBorrower. 9.09Sales of Assets, Etc . Such Obligor will not, and will not permit any of its Subsidiaries to, sell, lease, exclusively license (in terms of geographyor field of use), transfer, or otherwise dispose of any of its Property (including accounts receivable and capital stock of Subsidiaries) to any Person in onetransaction or series of transactions (any thereof, an “ Asset Sale ”), except:(a)transfers of cash in the ordinary course of its business;(b)sales of inventory in the ordinary course of its business;(c)development and other collaborative arrangements where such arrangements provide for the licenses under or disclosure of Patents,Trademarks, Copyrights or other Intellectual Property rights where such license requires periodic payments based on per unit sales of a product over a periodof time or other consideration and provided that such licenses does not effect a legal transfer of title to such Intellectual Property rights and such licensesmust be true licenses as opposed to licenses that are sales transactions in substance;(d)transfers of Property by any Subsidiary Guarantor to any other Obligor;(e)dispositions of any equipment that is surplus, obsolete or worn out or no longer used or useful in the Business;(f)any transaction permitted under Section 9.03 or 9.05 ;(g)(i) licenses of Obligor Intellectual Property or other property owned by Obligor which may only be exclusive with respect togeographical location outside the US, provided that such licenses must be true licenses as opposed to licenses that are sales transactions in substance; and (ii)non-exclusive licenses of Obligor Intellectual Property;(h)any other Disposition the Asset Sale Net Proceeds of which are applied as required under Section 3.03(b)(i) ; (i)the sale or licenses, which may be exclusive, of the Obligor Intellectual Property set forth on Schedule 9.09 relating to the development,commercialization, marketing, distribution and manufacture of the T2HemoStat Panel (and no other field of use); provided that (i) immediately prior to theentry into of such transaction, Borrower has achieved a Market Capitalization of at least $[***] on the date of such entry into such license, (ii) no ObligorIntellectual Property that is sold or licensed on an exclusive basis is necessary or useful for the continued commercialization, marketing, distribution, ormanufacture of the Product as it then exists or is then contemplated to exist in the future, and (iii) prior to, and after giving effect to, the entry into of suchtransaction, John McDonough (or other Person acceptable to Administrative Agent) remains the chief executive officer of Borrower;43 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (j)Asset Sales not exceeding $[***] with the consent of Administrative Agent (such consent not to be unreasonably withheld);(k)other Asset Sales not exceeding $[***] in the aggregate in any fiscal year.9.10Transactions with Affiliates . Such Obligor will not, and will not permit any of its Subsidiaries to, sell, lease, license or otherwise transfer anyassets to, or purchase, lease, license or otherwise acquire any assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:(a)transactions between or among Obligors;(b)any transaction permitted under Section 9.01 , 9.05 , 9.06 or 9.09 ;(c)customary compensation and indemnification of, and other employment arrangements with, directors, officers and employees ofBorrower or any Subsidiary in the ordinary course of business,(d)management, cost-sharing, cost-plus and similar intercompany agreements pursuant to which Obligors provide services, products orinventory to any Foreign Subsidiary in the ordinary course of business; provided that (i) such agreements do not require the Obligors to pay such ForeignSubsidiary for any services, products or inventory, and (ii) the terms of any such agreements are no less favorable to the Obligors than those that would beobtained in a comparable arm’s-length transaction with a Person not an Affiliate of the Obligors;(e)Borrower may issue Equity Interests to Affiliates in exchange for cash; provided that the terms thereof are no less favorable (includingthe amount of cash received by Borrower) to Borrower than those that would be obtained in a comparable arm’s-length transaction with a Person not anAffiliate of Borrower;(f)Agreements for the supply or manufacture of tangible products by the investor set forth on Schedule 9.10(f) or such investor’s Affiliates; provided that the terms thereof are no less favorable to the Obligors than those that would be obtained in a comparable arm’s-length transaction with aPerson not an Affiliate of the Obligors; and(g)the transactions set forth on Schedule 9.10(g) .9.11Restrictive Agreements . Such Obligor will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permitto exist any Restrictive Agreement other than (a) restrictions and conditions imposed by law or by this Agreement and (b) Restrictive Agreements listed onSchedule 7.15 .9.12Amendments to Material Agreements; Organizational Documents . Such Obligor will not, and will not permit any of its Subsidiaries to, enterinto any amendment to or modification of any Material Agreement in a manner that is materially adverse to the Lenders or terminate any Material Agreementif such termination is materially adverse to the Lenders. Such Obligor will not, and will not permit any of its Subsidiaries to, enter into any amendment to ormodification of its organizational documents in a manner that could (a) be materially adverse to the rights or remedies of the Lenders under the LoanDocuments (other than the Warrants) or (b) prevent any Obligor from fulfilling, or limit any Obligor’s ability to fulfill, all of its obligations under the LoanDocuments.9.13Operating Leases . Borrower will not, and will not permit any of its Subsidiaries to, make any expenditures in respect of operating leases,except for:(i)real estate operating leases;(ii)operating leases between Borrower and any of its wholly-owned Subsidiaries or between any of Borrower’s wholly-ownedSubsidiaries; and(iii)operating leases that would not cause Borrower and its Subsidiaries, on a consolidated basis, to make payments exceeding$[***] (or the Equivalent Amount in other currencies) in any fiscal year.44 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 9.14Sales and Leasebacks . Except as disclosed on Schedule 9.14 , such Obligor will not, and will not permit any of its Subsidiaries to, becomeliable, directly or indirectly, with respect to any lease, whether an operating lease or a Capital Lease Obligation, of any property (whether real, personal, ormixed), whether now owned or hereafter acquired, (i) which Borrower or such Subsidiary has sold or transferred or is to sell or transfer to any other Person and(ii) which Borrower or such Subsidiary intends to use for substantially the same purposes as property which has been or is to be sold or transferred.9.15Hazardous Material . Such Obligor will not, and will not permit any of its Subsidiaries to, use, generate, manufacture, install, treat, release,store or dispose of any Hazardous Material, except in compliance with all applicable Environmental Laws or where the failure to comply could notreasonably be expected to result in a Material Adverse Change.9.16Accounting Changes . Such Obligor will not, and will not permit any of its Subsidiaries to, make any significant change in accountingtreatment or reporting practices, except as required or permitted by GAAP. 9.17Compliance with ERISA . No Obligor or any ERISA Affiliate shall cause or suffer to exist any ERISA Event that would, in the aggregate, havea Material Adverse Effect. No Obligor or Subsidiary thereof shall cause or suffer to exist any event that could reasonably be expected to result in theimposition of a Lien with respect to any Benefit Plan or any Title IV Plan or Multiemployer Plan. SECTION 10FINANCIAL COVENANTS10.01Minimum Liquidity . Borrower shall maintain at all times Liquidity in an amount which shall exceed the greater of (i) $[***] and (ii) to theextent Borrower has incurred Permitted Priority Debt, the minimum cash balance, if any, required of Borrower by Borrower’s Permitted Priority Debt creditors.10.02Minimum Revenue . Borrower and its Subsidiaries shall have annual Revenue from sales of the Product and the licensing of any underlyingObligor Intellectual Property (for each respective calendar year, the “ Minimum Required Revenue ”):(a)during the twelve month period beginning on January 1, 2017, of at least $[***];(b)during the twenty-four month period beginning on January 1, 2017, of at least $[***];(c)during the twenty-four month period beginning on January 1, 2018, of at least $[***];(d)during the twenty-four month period beginning on January 1, 2019, of at least $[***]; and(e)during the twenty-four month period beginning on January 1, 2020, of at least $[***].10.03Cure Right . Notwithstanding anything to the contrary contained in Section 11 , in the event that Borrower fails to comply with the covenantscontained in Section 10.02(a) through (e) (such covenants for such applicable periods being the “ Specified Financial Covenants ”), Borrower shall have theright within [***] days of the end of the respective calendar year to apply cash on hand (other than cash proceeds from the Loans or any Permitted PriorityDebt) or proceeds from the issuance of additional shares of Equity Interests (other than Disqualified Equity), Permitted Cure Debt or any licensing, corporatecollaboration, development or similar transactions in an amount equal to (x) two (2) multiplied by (y) the Minimum Required Revenue less Borrower’sannual Revenue (the “ Cure Amount ”) to prepay the Loans (including any fees payable pursuant to the Fee Letter but not including any PrepaymentPremium) in accordance with Section 3.03(a) . If, after giving effect to the foregoing prepayment, Borrower shall then be in compliance with the requirementsof the Specified Financial Covenants, Borrower shall be deemed to have satisfied the requirements of the Specified Financial Covenants as of the relevantdate of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach of the SpecifiedFinancial Covenants that had occurred, the related Default and Event of Default, shall be deemed cured without any further action of Borrower or Lenders forall purposes under the Loan Documents. For the avoidance of doubt, Borrower shall comply with Section 10.01 at all times and this Section 10.03 shallapply only to the Specified Financial Covenants.45 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. SECTION 11EVENTS OF DEFAULT11.01Events of Default . Each of the following events shall constitute an “ Event of Default ”:(a)Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due datethereof or at a date fixed for prepayment thereof or otherwise;(b)any Obligor shall fail to pay any Obligation (other than an amount referred to in Section 11.01(a) ) when and as the same shall becomedue and payable, and such failure shall continue unremedied for a period of (i) in the case of Obligations payable on demand and consisting of indemnifiedamounts or costs, [***] Business Days, and (ii) in all other cases, [***] Business Days;(c)any representation or warranty made by or on behalf of Borrower or any of its Subsidiaries in or in connection with this Agreement orany other Loan Document or any amendment or modification hereof or thereof, or in any report, certificate, financial statement or other document furnishedpursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, when taken as a whole,shall be materially misleading and incorrect when made;(d)any Obligor shall fail to observe or perform any covenant, condition or agreement contained in Section 8.02 , 8.03 (with respect toBorrower’s existence), 8.11 , 8.12 , 8.14 , 8.15 , 9 or 10 ;(e)any Obligor shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than thosespecified in Section 11.01(a) , (b) or (d) ) or any other Loan Document, and, in the case of any failure that is capable of cure, if such failure shall continueunremedied for a period of 30 or more days after the earlier of (i) written notice thereof from Administrative Agent is received by Borrower or (ii) aResponsible Officer of Borrower has Knowledge of or reasonably should have known of such failure;(f)Borrower or any of its Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount) in respectof any Material Indebtedness, when and as the same shall become due and payable after giving effect to any applicable grace or cure period as originallyprovided by the terms of such Indebtedness;(g)(i) any material breach of, or “event of default” or similar event by any Obligor under, any Material Agreement which would give thecounterparty to such Material Agreement the right to terminate such Material Agreement pursuant to the terms thereof, provided in the case of any MaterialAgreement solely for the supply or manufacture of tangible products, such Material Agreement has been terminated as a result of such breach, event of defaultor similar event and the Obligors shall not have entered into one or more new supply or manufacturing agreements that replace the supply or themanufacturing provided under the terminated agreement on terms no less favorable to the Obligors than the terminated agreement prior to, or within [***]days of, the termination of such agreement, (ii) any material breach of, or “event of default” or similar event under, the documentation governing anyMaterial Indebtedness shall occur, or (iii) any event or condition occurs (A) that results in any Material Indebtedness becoming due prior to its scheduledmaturity or (B) that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of such Material Indebtedness orany trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption ordefeasance thereof, prior to its scheduled maturity; provided that this Section 11.01(g) shall not apply to secured Indebtedness that becomes due as a result ofthe voluntary sale or transfer of the property or assets securing such Material Indebtedness.(h)Borrower or any Obligor with assets (at fair market value) constituting more than [***] percent ([***]%) of the asset value of Borrowerand its Subsidiaries on a consolidated basis:(i)becomes insolvent, or generally does not or becomes unable to pay its debts or meet its liabilities as the same become due, oradmits in writing its inability to pay its debts generally, or declares any general moratorium on its indebtedness, or proposes a compromise or arrangement ordeed of company arrangement between it and any class of its creditors;(ii)commits an act of bankruptcy or makes an assignment of its property for the general benefit of its creditors or makes aproposal (or files a notice of its intention to do so);(iii)institutes any proceeding seeking to adjudicate it an insolvent, or seeking liquidation, dissolution, winding-up,reorganization, compromise, arrangement, adjustment, protection, moratorium, relief, stay of proceedings of creditors generally (or46 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. any class of creditors), or composition of it or its debts or any other relief, under any federal, provincial or foreign Law now or hereafter in effect relating tobankruptcy, winding-up, insolvency, reorganization, receivership, plans of arrangement or relief or protection of debtors or at common law or in equity, orfiles an answer admitting the material allegations of a petition filed against it in any such proceeding;(iv)applies for the appointment of, or the taking of possession by, a receiver, interim receiver, receiver/manager, sequestrator,conservator, custodian, administrator, trustee, liquidator, voluntary administrator, receiver and manager or other similar official for it or any substantial part ofits property; or(v)takes any action, corporate or otherwise, to approve, effect, consent to or authorize any of the actions described in thisSection 11.01(h) or (i) , or otherwise acts in furtherance thereof or fails to act in a timely and appropriate manner in defense thereof;(i)any petition is filed, application made or other proceeding instituted against or in respect of Borrower or any Obligor with assets (at fairmarket value) constituting more than [***] percent ([***]%) of the asset value of Borrower and its Subsidiaries on a consolidated basis:(i)seeking to adjudicate it an insolvent;(ii)seeking a receiving order against it;(iii)seeking liquidation, dissolution, winding-up, reorganization, compromise, arrangement, adjustment, protection,moratorium, relief, stay of proceedings of creditors generally (or any class of creditors), deed of company arrangement or composition of it or its debts or anyother relief under any federal, provincial or foreign law now or hereafter in effect relating to bankruptcy, winding-up, insolvency, reorganization,receivership, plans of arrangement or relief or protection of debtors or at common law or in equity; or(iv)seeking the entry of an order for relief or the appointment of, or the taking of possession by, a receiver, interim receiver,receiver/manager, sequestrator, conservator, custodian, administrator, trustee, liquidator, voluntary administrator, receiver and manager or other similarofficial for it or any substantial part of its property, and,in each of the cases of clauses (i) through (iv), such petition, application or proceeding continues undismissed, or unstayed and in effect, for aperiod of [***] days after the institution thereof; provided that if an order, decree or judgment is granted or entered (whether or not entered or subject toappeal) against Borrower or such Subsidiary thereunder in the interim, such grace period will cease to apply; provided further that if Borrower or suchSubsidiary files an answer admitting the material allegations of a petition filed against it in any such proceeding, such grace period will cease to apply;(j)any other event occurs which, under the laws of any applicable jurisdiction, has an effect equivalent to any of the events referred to ineither of Section 11.01(h) or (i) ;(k)one or more judgments for the payment of money in an aggregate amount in excess of $[***] (or the Equivalent Amount in othercurrencies) which is not covered by insurance shall be rendered against any Obligor or any combination thereof and the same shall remain undischarged for aperiod of [***] consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attachor levy upon any assets of any Obligor to enforce any such judgment;(l)(i) an ERISA Event shall have occurred that, in the reasonable opinion of the Lenders, when taken together with all other ERISA Eventsthat have occurred, could reasonably be expected to result in liability of Borrower and its Subsidiaries in an aggregate amount exceeding (i) $[***] in anyyear or (ii) $[***] for all periods until repayment of all Obligations;(m)a Change of Control shall have occurred (except to the extent the Loans are prepaid by Borrower pursuant to and in accordance withSection 3.03(a) or (b)(ii) prior to or concurrently with (and in any case on the same Business Day as) such Change of Control );(n)a Material Adverse Change shall have occurred;47 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (o)(i) any Lien created by any of the Security Documents over Collateral that individually or in the aggregate exceeds $[***] in marketvalue shall at any time not constitute a valid and perfected Lien on the applicable Collateral (to the extent perfection is required herein or therein) in favor ofAdministrative Agent, free and clear of all other Liens (other than Permitted Liens), except as a result of the action or inaction of any Lender, (ii) except forexpiration in accordance with its terms, any of the Security Documents or any Guarantee of any of the Obligations (including that contained in Section 14 )shall for whatever reason cease to be in full force and effect, or (iii) any of the Security Documents or any Guarantee of any of the Obligations (including thatcontained in Section 14 ), or the enforceability thereof, shall be repudiated or contested by any Obligor; and(p)any injunction, whether temporary or permanent, shall be rendered against any Obligor that prevents the Obligors from selling ormanufacturing the Product or its commercially available successors, or any of their other material and commercially available products in the United Statesfor more than [***] consecutive calendar days;11.02Remedies . (a) Upon the occurrence and during the continuation of any Event of Default, then, and in every such event (other than an Eventof Default described in Section 11.01(h) , (i) or (j) ), and at any time thereafter during the continuance of such event, the Majority Lenders may, by notice toBorrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shallterminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared tobe due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, togetherwith accrued interest thereon and all fees and other Obligations (including the fees specified in the Fee Letter), shall become due and payable immediately (inthe case of the Loans, at the Redemption Price therefor), without presentment, demand, protest or other notice of any kind, all of which are hereby waived byeach Obligor.(b)Upon the occurrence of any Event of Default described in Section 11.01(h) , (i) or (j) , the Commitments shall automatically terminateand the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations (including fees specified in the FeeLetter), shall automatically become due and payable immediately (in the case of the Loans, at the Redemption Price therefor), without presentment, demand,protest or other notice of any kind, all of which are hereby waived by each Obligor.(c)Prepayment Premium and Redemption Price . (i) For the avoidance of doubt, the Prepayment Premium (as a component of theRedemption Price) shall be due and payable whenever so stated in this Agreement, or by any applicable operation of law, regardless of the circumstancescausing any related acceleration or payment prior to the Stated Maturity Date, including without limitation any Event of Default or other failure to complywith the terms of this Agreement, whether or not notice thereof has been given, or any acceleration by, through or on account of any bankruptcy filing. (ii)For the avoidance of doubt, the Prepayment Premium (as a component of the Redemption Price) and the fees specified in theFee Letter that are payable upon the repayment of the Loans shall be due and payable at any time the Loans become due and payable prior to the StatedMaturity Date for any reason, whether due to acceleration pursuant to the terms of this Agreement (in which case it shall be due immediately, upon the givingof notice to Borrower in accordance with Section 11.02(a) , or automatically, in accordance with Section 11.02(b) ), by operation of law or otherwise(including, without limitation, where bankruptcy filings or the exercise of any bankruptcy right or power, whether in any plan of reorganization or otherwise,results or would result in a payment, discharge, modification or other treatment of the Loans or Loan Documents that would otherwise evade, avoid, orotherwise disappoint the expectations of Lenders in receiving the full benefit of their bargained-for Prepayment Premium or Redemption Price as providedherein). The Obligors and Lenders acknowledge and agree that any Prepayment Premium and the fees specified in the Fee Letter due and payable inaccordance with this Agreement shall not constitute unmatured interest, whether under section 502(b)(3) of the Bankruptcy Code or otherwise, but instead isreasonably calculated to ensure that the Lenders receive the benefit of their bargain under the terms of this Agreement. (iii)Each Obligor acknowledges and agrees that the Lenders shall be entitled to recover the full amount of the Redemption Priceand the fees specified in the Fee Letter in each and every circumstance such amount is due pursuant to or in connection with this Agreement and the FeeLetter, including without limitation in the case of any Obligor’s bankruptcy filing, so that the Lenders shall receive the benefit of their bargain hereunder andotherwise receive full recovery as agreed under every possible circumstance, and Borrower hereby waives any defense to payment, whether such defense maybe based in public policy, ambiguity, or otherwise. Each Obligor further acknowledges and agrees, and waives any argument to the contrary, that payment ofsuch amounts does not constitute a penalty or an otherwise unenforceable or invalid obligation. Any damages that the Lenders may suffer or incur resultingfrom or arising in connection with any breach hereof or thereof by Borrower shall constitute secured obligations owing to the Lenders.48 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. SECTION 12ADMINISTRATIVE AGENT12.01Appointment and Duties . (a) Appointment of Administrative Agent . Each Lender hereby irrevocably appoints CRG Servicing (togetherwith any successor Administrative Agent pursuant to Section 12.09 ) as Administrative Agent hereunder and authorizes Administrative Agent to (i) executeand deliver the Loan Documents and accept delivery thereof on its behalf from any Obligor or any of its Subsidiaries, (ii) take such action on its behalf and toexercise all rights, powers and remedies and perform the duties as are expressly delegated to Administrative Agent under such Loan Documents, (iii) act asagent of such Lender for purposes of acquiring, holding, enforcing and perfecting all Liens granted by the Obligors on the Collateral to secure any of theObligations and (iv) exercise such powers as are reasonably incidental thereto.(b)Duties as Collateral and Disbursing Agent . Without limiting the generality of Section 12.01(a) , Administrative Agent shall have thesole and exclusive right and authority (to the exclusion of the Lenders), and is hereby authorized, to (i) act as the disbursing and collecting agent for theLenders with respect to all payments and collections arising in connection with the Loan Documents (including in any proceeding described in Section11.01(h) , (i) or (j) or any other bankruptcy, insolvency or similar proceeding), and each Person making any payment in connection with any LoanDocument to any Secured Party is hereby authorized to make such payment to Administrative Agent, (ii) file and prove claims and file other documentsnecessary or desirable to allow the claims of the Secured Parties with respect to any Obligation in any proceeding described in Section 11.01(h) , (i) or (j) orany other bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Secured Party), (iii) act as collateral agentfor each Secured Party for purposes of acquiring, holding, enforcing and perfecting all Liens created by the Loan Documents and all other purposes statedtherein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take such other action as is necessary or desirable to maintain the perfection andpriority of the Liens created or purported to be created by the Loan Documents, (vi) except as may be otherwise specified in any Loan Document, exercise allremedies given to Administrative Agent and the other Secured Parties with respect to the Collateral, whether under the Loan Documents, applicableRequirements of Law or otherwise, (vii) enter into subordination agreements with respect to Permitted Cure Debt, intercreditor agreements with respect toPermitted Priority Debt or any other subordination agreement or intercreditor agreement with respect to Indebtedness of an Obligor, (viii) enter into non-disturbance agreements and similar agreements and (ix) execute any amendment, consent or waiver under the Loan Documents on behalf of any Lender thathas consented in writing to such amendment, consent or waiver; provided, however, that Administrative Agent hereby appoints, authorizes and directs eachLender to act as collateral sub-agent for Administrative Agent and the Secured Parties for purposes of the perfection of all Liens with respect to the Collateral,including any deposit account maintained by an Obligor with, and cash and Permitted Cash Equivalent Investments held by, such Lender, and may furtherauthorize and direct any Lender to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateralsubject thereto to Administrative Agent, and each Lender hereby agrees to take such further actions to the extent, and only to the extent, so authorized anddirected.(c)Limited Duties . Under the Loan Documents, Administrative Agent (i) is acting solely on behalf of the Lenders (except to the limitedextent provided in Section 12.11 ), with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Administrative Agent”,the terms “agent”, “administrative agent” and “collateral agent” and similar terms in any Loan Document to refer to Administrative Agent, which terms areused for title purposes only, (ii) is not assuming any obligation under any Loan Document other than as expressly set forth therein or any role as agent,fiduciary or trustee of or for any Lender or any other Secured Party and (iii) shall have no implied functions, responsibilities, duties, obligations or otherliabilities under any Loan Document, and each Lender hereby waives and agrees not to assert any claim against Administrative Agent based on the roles,duties and legal relationships expressly disclaimed in the foregoing clauses (i) through (iii) .12.02Binding Effect . Each Lender agrees that (i) any action taken by Administrative Agent or the Majority Lenders (or, if expressly requiredhereby, a greater proportion of the Lenders) in accordance with the provisions of the Loan Documents, (ii) any action taken by Administrative Agent inreliance upon the instructions of the Majority Lenders (or, where so required, such greater proportion) and (iii) the exercise by Administrative Agent or theMajority Lenders (or, where so required, such greater proportion) of the powers set forth herein or therein, together with such other powers as are reasonablyincidental thereto, shall be authorized and binding upon all of the Secured Parties.49 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 12.03Use of Discretion . (a) No Action without Instructions . Administrative Agent shall not be required to exercise any discretion or take, or toomit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit to take (i) under any LoanDocument or (ii) pursuant to instructions from the Majority Lenders (or, where expressly required by the terms of this Agreement, a greater proportion of theLenders).(b)Right Not to Follow Certain Instructions . Notwithstanding Section 12.03(a) , Administrative Agent shall not be required to take, orto omit to take, any action (i) unless, upon demand, Administrative Agent receives an indemnification satisfactory to it from the Lenders (or, to the extentapplicable and acceptable to Administrative Agent, any other Secured Party) against all liabilities that, by reason of such action or omission, may be imposedon, incurred by or asserted against Administrative Agent or any Related Person thereof or (ii) that is, in the opinion of Administrative Agent or its counsel,contrary to any Loan Document or applicable Requirement of Law.12.04Delegation of Rights and Duties . Administrative Agent may, upon any term or condition it specifies, delegate or exercise any of its rights,powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document by or through or to any trustee,co-agent, sub-agent, employee, attorney-in-fact and any other Person (including any other Secured Party). Any such Person shall benefit from this Section 12to the extent provided by Administrative Agent. Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agent except tothe extent that a court of competent jurisdiction determines in a final and nonappealable judgment that Administrative Agent acted with gross negligence orwillful misconduct in the selection of such sub-agent.12.05Reliance and Liability . (a) Administrative Agent may, without incurring any liability hereunder, (i) consult with any of its Related Personsand, whether or not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts engaged by, anyObligor) and (ii) rely and act upon any document and information and any telephone message or conversation, in each case believed by it to be genuine andtransmitted, signed or otherwise authenticated by the appropriate parties hereto.(b)None of Administrative Agent and its Related Persons shall be liable for any action taken or omitted to be taken by any of them underor in connection with any Loan Document, and each Lender and each Obligor hereby waives and shall not assert any right, claim or cause of action basedthereon, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of Administrative Agent or, as the case may be,such Related Person (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection with the duties expressly setforth herein. Without limiting the foregoing, Administrative Agent:(i)shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of theMajority Lenders or for the actions or omissions of any of its Related Persons selected with reasonable care (other than employees, officers and directors ofAdministrative Agent, when acting on behalf of Administrative Agent);(ii)shall not be responsible to any Secured Party for the due execution, legality, validity, enforceability, effectiveness,genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, anyLoan Document;(iii)makes no warranty or representation, and shall not be responsible, to any Secured Party for any statement, document,information, representation or warranty made or furnished by or on behalf of any Related Person, in or in connection with any Loan Document or anytransaction contemplated therein, whether or not transmitted by Administrative Agent, including as to completeness, accuracy, scope or adequacy thereof, orfor the scope, nature or results of any due diligence performed by Administrative Agent in connection with the Loan Documents; and(iv)shall not have any duty to ascertain or to inquire as to the performance or observance of any provision of any LoanDocument, whether any condition set forth in any Loan Document is satisfied or waived, as to the financial condition of any Obligor or as to the existence orcontinuation or possible occurrence or continuation of any Default or Event of Default and shall not be deemed to have notice or knowledge of suchoccurrence or continuation unless it has received a notice from Borrower or any Lender describing such Default or Event of Default clearly labeled “notice ofdefault” (in which case Administrative Agent shall promptly give notice of such receipt to all Lenders);and, for each of the items set forth in clauses (i) through (iv) above, each Lender and each Obligor hereby waives and agreesnot to assert any right, claim or cause of action it might have against Administrative Agent based thereon.50 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 12.06Administrative Agent Individually . Administrative Agent and its Affiliates may make loans and other extensions of credit to, acquire EquityInterests of, engage in any kind of business with, any Obligor or Affiliate thereof as though it were not acting Administrative Agent and may receive separatefees and other payments therefor. To the extent Administrative Agent or any of its Affiliates makes any Loan or otherwise becomes a Lender hereunder, itshall have and may exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities as any other Lender and theterms “Lender”, “Majority Lender”, and any similar terms shall, except where otherwise expressly provided in any Loan Document, include, withoutlimitation, Administrative Agent or such Affiliate, as the case may be, in its individual capacity as Lender or as one of the Majority Lenders, respectively.12.07Lender Credit Decision . Each Lender acknowledges that it shall, independently and without reliance upon Administrative Agent, anyLender or any of their Related Persons or upon any document solely or in part because such document was transmitted by Administrative Agent or any of itsRelated Persons, conduct its own independent investigation of the financial condition and affairs of each Obligor and make and continue to make its owncredit decisions in connection with entering into, and taking or not taking any action under, any Loan Document or with respect to any transactioncontemplated in any Loan Document, in each case based on such documents and information as it shall deem appropriate.12.08Expenses; Indemnities . (a) Each Lender agrees to reimburse Administrative Agent and each of its Related Persons (to the extent notreimbursed by any Obligor) promptly upon demand for such Lender’s Proportionate Share of any costs and expenses (including fees, charges anddisbursements of financial, legal and other advisors and Other Taxes paid in the name of, or on behalf of, any Obligor) that may be incurred by AdministrativeAgent or any of its Related Persons in connection with the preparation, syndication, execution, delivery, administration, modification, consent, waiver orenforcement (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding or otherwise) of, or legaladvice in respect of its rights or responsibilities under, any Loan Document.(b)Each Lender further agrees to indemnify Administrative Agent and each of its Related Persons (to the extent not reimbursed by anyObligor), from and against such Lender’s aggregate Proportionate Share of the liabilities (including Taxes, interests and penalties imposed for not properlywithholding or backup withholding on payments made to on or for the account of any Lender) that may be imposed on, incurred by or asserted againstAdministrative Agent or any of its Related Persons in any matter relating to or arising out of, in connection with or as a result of any Loan Document, anyRelated Document or any other act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any action taken oromitted to be taken by Administrative Agent or any of its Related Persons under or with respect to any of the foregoing; provided, however, that no Lendershall be liable to Administrative Agent or any of its Related Persons to the extent such liability is found in a final, non-appealable judgment by a court ofcompetent jurisdiction to have resulted from such Administrative Agent’s or such Related Person’s gross negligence or willful misconduct. 12.09Resignation of Administrative Agent . (a) Administrative Agent may resign at any time by delivering notice of such resignation to theLenders and Borrower, effective on the date set forth in such notice or, if not such date is set forth therein, upon the date such notice shall be effective. IfAdministrative Agent delivers any such notice, the Majority Lenders shall have the right to appoint a successor Administrative Agent. If, within 30 days afterthe retiring Administrative Agent having given notice of resignation, no successor Administrative Agent has been appointed by the Majority Lenders thathas accepted such appointment, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent from amongthe Lenders. Each appointment under this Section 12.09(a) shall be subject to the prior consent of Borrower, which may not be unreasonably withheld butshall not be required during the continuance of an Event of Default.(b)Effective immediately upon its resignation, (i) the retiring Administrative Agent shall be discharged from its duties and obligationsunder the Loan Documents, (ii) the Lenders shall assume and perform all of the duties of Administrative Agent until a successor Administrative Agent shallhave accepted a valid appointment hereunder, (iii) the retiring Administrative Agent and its Related Persons shall no longer have the benefit of any provisionof any Loan Document other than with respect to any actions taken or omitted to be taken while such retiring Administrative Agent was, or because suchAdministrative Agent had been, validly acting as Administrative Agent under the Loan Documents and (iv) subject to its rights under Section 12.03 , theretiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights asAdministrative Agent under the Loan Documents. Effective immediately upon its acceptance of a valid appointment as Administrative Agent, a successorAdministrative Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent under theLoan Documents.51 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 12.10Release of Collateral or Guarantors . Each Lender hereby consents to the release and hereby directs Administrative Agent to release (or, inthe case of Section 12.10(b)(ii) , release or subordinate) the following:(a)any Subsidiary of Borrower from its guaranty of any Obligation of any Obligor if all of the Equity Interests in such Subsidiary ownedby any Obligor or any of its Subsidiaries are disposed of in an Asset Sale permitted under the Loan Documents (including pursuant to a waiver or consent), tothe extent that, after giving effect to such Asset Sale, such Subsidiary would not be required to guaranty any Obligations pursuant to Section 8.12 ; and(b)any Lien held by Administrative Agent for the benefit of the Secured Parties against (i) any Collateral that is disposed of by an Obligorin an Asset Sale permitted by the Loan Documents (including pursuant to a valid waiver or consent), to the extent all Liens required to be granted in anyCollateral pursuant to Section 8.12 after giving effect to such Asset Sale have been granted, (ii) any property subject to a Lien described in Section 9.02(d)and (iii) all of the Collateral and all Obligors, upon (A) termination of the Commitments, (B) payment and satisfaction in full of all Loans and all otherObligations that Administrative Agent has been notified in writing are then due and payable, (C) deposit of cash collateral with respect to all contingentObligations, in amounts and on terms and conditions and with parties satisfactory to the Majority Lenders and each Indemnitee that is owed such Obligationsand (D) to the extent requested by Administrative Agent, receipt by the Secured Parties of liability releases from the Obligors each in form and substanceacceptable to Administrative Agent.Each Lender hereby directs Administrative Agent, and Administrative Agent hereby agrees, upon receipt of reasonable advance notice fromBorrower, to execute and deliver or file such documents and to perform other actions reasonably necessary to release the guaranties and Liens when and asdirected in this Section 12.10 .12.11Additional Secured Parties . The benefit of the provisions of the Loan Documents directly relating to the Collateral or any Lien grantedthereunder shall extend to and be available to any Secured Party that is not a Lender as long as, by accepting such benefits, such Secured Party agrees, asamong Administrative Agent and all other Secured Parties, that such Secured Party is bound by (and, if requested by Administrative Agent, shall confirm suchagreement in a writing in form and substance acceptable to Administrative Agent) this Section 12 and the decisions and actions of Administrative Agent andthe Majority Lenders (or, where expressly required by the terms of this Agreement, a greater proportion of the Lenders) to the same extent a Lender is bound;provided , however , that, notwithstanding the foregoing, (a) such Secured Party shall be bound by Section 12.08 only to the extent of liabilities, costs andexpenses with respect to or otherwise relating to the Collateral held for the benefit of such Secured Party, in which case the obligations of such Secured Partythereunder shall not be limited by any concept of Proportionate Share or similar concept, (b) each of Administrative Agent and each Lender shall be entitledto act at its sole discretion, without regard to the interest of such Secured Party, regardless of whether any Obligation to such Secured Party thereafter remainsoutstanding, is deprived of the benefit of the Collateral, becomes unsecured or is otherwise affected or put in jeopardy thereby, and without any duty orliability to such Secured Party or any such Obligation and (c) such Secured Party shall not have any right to be notified of, consent to, direct, require or beheard with respect to, any action taken or omitted in respect of the Collateral or under any Loan Document.SECTION 13MISCELLANEOUS13.01No Waiver . No failure on the part of Administrative Agent or any Lender to exercise and no delay in exercising, and no course of dealingwith respect to, any right, power or privilege under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right,power or privilege under any Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Theremedies provided herein are cumulative and not exclusive of any remedies provided by law.13.02Notices . All notices, requests, instructions, directions and other communications provided for herein (including any modifications of, orwaivers, requests or consents under, this Agreement) shall be given or made in writing (including by telecopy or electronic email) delivered, if to Borrower,another Obligor, Administrative Agent or any Lender, to its address specified on the signature pages hereto or its Guarantee Assumption Agreement, as thecase may be, or at such other address as shall be designated by such party in a notice to the other parties. Except as otherwise provided in this Agreement, allsuch communications shall be deemed to have been duly given upon receipt of a legible copy thereof, in each case given or addressed as aforesaid. All suchcommunications provided for herein by telecopy or electronic email shall be confirmed in writing promptly after the delivery of such communication (itbeing understood that non-receipt of written confirmation of such communication shall not invalidate such communication). 52 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 13.03Expenses, Indemnification, Etc . (a)Expenses . Borrower agrees to pay or reimburse (i) Administrative Agent and the Lenders for all of their reasonable out of pocket costsand expenses (including the reasonable fees and expenses of Cooley LLP, special counsel to Administrative Agent and the Lenders, and any sales, goods andservices or other similar Taxes applicable thereto, and printing, reproduction, document delivery, communication and travel costs) in connection with (x) thenegotiation, preparation, execution and delivery of this Agreement and the other Loan Documents and the making of the Loans (exclusive of post-closingcosts), (y) post-closing costs and (z) the negotiation or preparation of any modification, supplement or waiver of any of the terms of this Agreement or any ofthe other Loan Documents (whether or not consummated) and (ii) Administrative Agent and the Lenders for all of their out of pocket costs and expenses(including the fees and expenses of legal counsel) in connection with any enforcement or collection proceedings resulting from the occurrence of an Event ofDefault; provided, however, that Borrower shall not be required to pay or reimburse any amounts pursuant to Section 13.03(a)(i)(x) in excess of the ExpenseCap. (b)Indemnification . Borrower hereby indemnifies Administrative Agent, each Lender, their respective Affiliates, and their respectivedirectors, officers, employees, attorneys, agents, advisors and controlling parties (each, an “ Indemnified Party ”) from and against, and agrees to hold themharmless against, any and all Claims and Losses of any kind (including reasonable fees and disbursements of counsel), joint or several, that may be incurredby or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or relating to this Agreement or any of the otherLoan Documents or the transactions contemplated hereby or thereby or any use made or proposed to be made with the proceeds of the Loans, and any claim,investigation, litigation or proceeding or the preparation of any defense with respect thereto arising out of or in connection with or relating to any of theforegoing, whether or not any Indemnified Party is a party to an actual or prospective claim, litigation, investigation or proceeding relating to any of theforegoing, whether based in contract, tort or any other theory, and whether or not such investigation, litigation or proceeding is brought by Borrower, any ofits shareholders or creditors, and whether or not the conditions precedent set forth in Section 6 are satisfied or the other transactions contemplated by thisAgreement are consummated, except to the extent such Claim or Loss is found in a final, non-appealable judgment by a court of competent jurisdiction tohave resulted from such Indemnified Party’s gross negligence or willful misconduct. No Obligor shall assert any claim against any Indemnified Party, on anytheory of liability, for consequential, indirect, special or punitive damages arising out of or otherwise relating to this Agreement or any of the other LoanDocuments or any of the transactions contemplated hereby or thereby or the actual or proposed use of the proceeds of the Loans. Borrower, its Subsidiariesand Affiliates and their respective directors, officers, employees, attorneys, agents, advisors and controlling parties are each sometimes referred to in thisAgreement as a “ Borrower Party .” No Lender shall assert any claim against any Borrower Party, on any theory of liability, for consequential, indirect,special or punitive damages arising out of or otherwise relating to this Agreement or any of the other Loan Documents or any of the transactionscontemplated hereby or thereby or the actual or proposed use of the proceeds of the Loans. This Section 13.03 shall not apply with respect to Taxes otherthan Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.13.04Amendments, Etc . Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be modified orsupplemented only by an instrument in writing signed by Borrower and the Majority Lenders (or Administrative Agent on behalf of such Majority Lenders); provided however, that:(a)the consent of all of the Lenders shall be required to:(i)amend, modify, discharge, terminate or waive any of the terms of this Agreement if such amendment, modification, discharge,termination or waiver would increase the amount of the Loans, reduce the fees payable hereunder, reduce interest rates or other amounts payable with respectto the Loans, extend any date fixed for payment of principal, interest or other amounts payable relating to the Loans or extend the repayment dates of theLoans;(ii)amend the provisions of Section 6 ;(iii)amend, modify, discharge, terminate or waive any Security Document if the effect is to release a material part of theCollateral subject thereto other than pursuant to the terms hereof or thereof; or(iv)amend this Section 13.04 ; and(b)no amendment, waiver or consent shall affect the rights or duties under any Loan Document of, or any payment to, AdministrativeAgent (or otherwise modify any provision of Section 12 or the application thereof) unless in writing and signed by Administrative Agent in addition to anysignature otherwise required.53 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Notwithstanding anything to the contrary herein, a Defaulting Lender shall not have any right to approve or disapprove any amendment, waiver or consenthereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with theconsent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased orextended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender thatby its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.13.05Successors and Assigns . (a)General . The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the partieshereto and their respective successors and assigns permitted hereby, except that Borrower may not assign or otherwise transfer any of its rights or obligationshereunder or under any of the other Loan Documents without the prior written consent of the Majority Lenders. Any of the Lenders may assign or otherwisetransfer any of their rights or obligations hereunder or under any of the other Loan Documents to an assignee (i) in accordance with the provisions of Section13.05(b) , (ii) by way of participation in accordance with the provisions of Section 13.05(e) or (iii) by way of pledge or assignment of a security interestsubject to the restrictions of Section 13.05(g) . Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than theparties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 13.05(e) and, to the extent expresslycontemplated hereby, the Indemnified Parties) any legal or equitable right, remedy or claim under or by reason of this Agreement.(b)Assignments by Lenders . Any of the Lenders may at any time assign to one or more Eligible Transferees (or, if an Event of Default hasoccurred and is continuing, to any Person) all or a portion of their rights and obligations under this Agreement (including all or a portion of the Commitmentand the Loans at the time owing to it); provided , however , that no such assignment shall be made to Borrower, an Affiliate of Borrower, or any employees ordirectors of Borrower or, unless an Event of Default has occurred and is continuing, any other Person that is not an Eligible Transferee (which restriction shallnot apply to (A) an assignment by a Lender in connection with (x) assignments by such Lender due to a forced divestiture at the request of any regulatoryagency; or (y) upon the occurrence of a default, event of default or similar occurrence with respect to such Lender’s own financing or securitizationtransactions, or (B) a pledge of assets by a Lender in connection with such Lender’s own financing or securitization transactions). Subject to the recordingthereof by Administrative Agent pursuant to Section 13.05(d) , from and after the effective date specified in each Assignment and Assumption, the assigneethereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligationsof the Lenders under this Agreement and the other Loan Documents, and correspondingly the assigning Lender shall, to the extent of the interest assigned bysuch Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of aLender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) and the other Loan Documents but shall continue to beentitled to the benefits of Section 5 and Section 13.03 . Any assignment or transfer by a Lender of rights or obligations under this Agreement that does notcomply with this Section 13.05(b) shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations inaccordance with Section 13.05(e) .(c)Amendments to Loan Documents . Each of Administrative Agent, the Lenders and the Obligors agrees to enter into such amendmentsto the Loan Documents, and such additional Security Documents and other instruments and agreements, in each case in form and substance reasonablyacceptable to Administrative Agent, the Lenders and the Obligors, as shall reasonably be necessary to implement and give effect to any assignment madeunder this Section 13.05 . (d)Register . Administrative Agent, acting solely for this purpose as an agent of Borrower, shall maintain at one of its offices a register forthe recordation of the name and address of any assignee of the Lenders and the Commitment and outstanding principal amount (and stated interest) of theLoans owing thereto (the “ Register ”). The entries in the Register shall be conclusive, absent manifest error, and Borrower shall treat each Person whosename is recorded in the Register pursuant to the terms hereof as the “Lender” hereunder for all purposes of this Agreement, notwithstanding notice to thecontrary. The Register shall be available for inspection by Borrower, at any reasonable time and from time to time upon reasonable prior notice. This Section13.05 shall be construed so that the Obligations are at all times maintained in “registered form” within the meaning of Section 871(h)(2) and 881(c)(2) of theCode.(e)Participations . Any of the Lenders may at any time, without the consent of, or notice to, Borrower, sell participations to any Person(other than a natural person or Borrower or any of Borrower’s Affiliates or Subsidiaries or any party that is not an Eligible Assignee) (each, a “ Participant ”)in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of the Commitment and/or the Loans owing toit); provided that (i) such Lender’s obligations54 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of suchobligations and (iii) Borrower shall continue to deal solely and directly with the Lenders in connection therewith. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce thisAgreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument mayprovide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that would (i) increase or extendthe term of such Lender’s Commitment, (ii) extend the date fixed for the payment of principal of or interest on the Loans or any portion of any fee hereunderpayable to the Participant, (iii) reduce the amount of any such payment of principal, or (iv) reduce the rate at which interest is payable thereon to a levelbelow the rate at which the Participant is entitled to receive such interest. Subject to Section 13.05(f) , Borrower agrees that each Participant shall be entitledto the benefits of Section 5 (subject to the requirements and limitations therein, including the requirements under Section 5.03(e) (it being understood thatthe documentation required by Section 5.03(e) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired itsinterest by assignment pursuant to Section 13.05(b) . To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 4.04(a)as though it were the Lender.(f)Limitations on Rights of Participants . A Participant shall not be entitled to receive any greater payment under Section 5.01 or 5.03than a Lender would have been entitled to receive with respect to the participation sold to such Participant. Each Lender that sells a participation shall,acting solely for this purpose as a non-fiduciary agent of Borrower, maintain a register on which it enters the name and address of each Participant and theprincipal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “ Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant orany information relating to a Participant’s interest in any commitments, loans, letter of credit or its other obligations under any Loan Document) to anyPerson except to the extent that such disclosure is necessary to establish that such commitment, loan, letters of credit or its other obligation is in registeredform under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error,and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of thisAgreement notwithstanding any notice to the contrary. For the avoidance of doubt, Administrative Agent (in its capacity as Administrative Agent) shall haveno responsibility for maintaining a Participant Register.(g)Certain Pledges . The Lenders may at any time pledge or assign a security interest in all or any portion of its rights under thisAgreement and any other Loan Document to secure obligations of the Lenders, including any pledge or assignment to secure obligations to a Federal ReserveBank; provided that no such pledge or assignment shall release the Lenders from any of their obligations hereunder or substitute any such pledgee orassignee for the Lenders as a party hereto.13.06Survival . The obligations of the Obligors under Sections 5.01 , 5.02 , 5.03 , 13.03 , 13.05 , 13.09 , 13.10 , 13.11 , 13.12 , 13.13 , 13.14 , 13.20 and Section 14 (solely to the extent guaranteeing any of the obligations under the foregoing Sections) shall survive the repayment of theObligations and the termination of the Commitment and, in the case of the Lenders’ assignment of any interest in the Commitment or the Loans hereunder,shall survive, in the case of any event or circumstance that occurred prior to the effective date of such assignment, the making of such assignment,notwithstanding that the Lenders may cease to be “Lenders” hereunder. In addition, each representation and warranty made, or deemed to be made by aNotice of Borrowing, herein or pursuant hereto shall survive the making of such representation and warranty.13.07Captions . The table of contents and captions and section headings appearing herein are included solely for convenience of reference and arenot intended to affect the interpretation of any provision of this Agreement.13.08Counterparts . This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the sameinstrument and any of the parties hereto may execute this Agreement by signing any such counterpart.13.09Governing Law . This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed in accordancewith, the law of the State of New York, without regard to principles of conflicts of laws that would result in the application of the laws of any otherjurisdiction; provided that Section 5-1401 of the New York General Obligations Law shall apply.55 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 13.10Jurisdiction, Service of Process and Venue. (a)Submission to Jurisdiction . Each Obligor agrees that any suit, action or proceeding with respect to this Agreement or any other LoanDocument to which it is a party or any judgment entered by any court in respect thereof may be brought initially in the federal or state courts in Houston,Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction of each such court for the purpose of any suchsuit, action, proceeding or judgment. This Section 13.10(a) is for the benefit of Administrative Agent and the Lenders only and, as a result, neitherAdministrative Agent nor any Lender shall be prevented from taking proceedings in any other courts with jurisdiction. To the extent allowed by applicableLaws, Administrative Agent and the Lenders may take concurrent proceedings in any number of jurisdictions.(b)Alternative Process . Nothing herein shall in any way be deemed to limit the ability of Administrative Agent or the Lenders to serveany such process or summonses in any other manner permitted by applicable law.(c)Waiver of Venue, Etc . Each Obligor irrevocably waives to the fullest extent permitted by law any objection that it may now orhereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document and herebyfurther irrevocably waives to the fullest extent permitted by law any claim that any such suit, action or proceeding brought in any such court has beenbrought in an inconvenient forum. A final judgment (in respect of which time for all appeals has elapsed) in any such suit, action or proceeding shall beconclusive and may be enforced in any court to the jurisdiction of which such Obligor is or may be subject, by suit upon judgment.13.11Waiver of Jury Trial . EACH OBLIGOR AND EACH LENDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF ORRELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.13.12Waiver of Immunity . To the extent that any Obligor may be or become entitled to claim for itself or its Property or revenues any immunityon the ground of sovereignty or the like from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment or executionof a judgment, and to the extent that in any such jurisdiction there may be attributed such an immunity (whether or not claimed), such Obligor herebyirrevocably agrees not to claim and hereby irrevocably waives such immunity with respect to its obligations under this Agreement and the other LoanDocuments.13.13Entire Agreement . This Agreement and the other Loan Documents constitute the entire agreement among the parties with respect to thesubject matter hereof and thereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. EACH OBLIGOR ACKNOWLEDGES, REPRESENTS AND WARRANTS THAT IN DECIDING TO ENTER INTO THIS AGREEMENT AND THE OTHERLOAN DOCUMENTS OR IN TAKING OR NOT TAKING ANY ACTION HEREUNDER OR THEREUNDER, IT HAS NOT RELIED, AND WILL NOT RELY,ON ANY STATEMENT, REPRESENTATION, WARRANTY, COVENANT, AGREEMENT OR UNDERSTANDING, WHETHER WRITTEN OR ORAL, OFOR WITH ADMINISTRATIVE AGENT OR THE LENDERS OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE OTHERLOAN DOCUMENTS.13.14Severability . If any provision hereof is found by a court to be invalid or unenforceable, to the fullest extent permitted by applicable law theparties agree that such invalidity or unenforceability shall not impair the validity or enforceability of any other provision hereof.13.15No Fiduciary Relationship . Each Obligor acknowledges that Administrative Agent and the Lenders have no fiduciary relationship with, orfiduciary duty to, Borrower arising out of or in connection with this Agreement or the other Loan Documents, and the relationship between the Lenders andBorrower is solely that of creditor and debtor. This Agreement and the other Loan Documents do not create a joint venture among the parties.13.16Confidentiality . Administrative Agent and the Lenders agree to maintain the confidentiality of the Confidential Information (as defined inthe Non-Disclosure Agreement (defined below)) in accordance with the terms of that certain confidentiality agreement dated September 7, 2016, betweenBorrower and CR Group (the “ Non-Disclosure Agreement ”). Any new Lender that becomes party to this Agreement hereby agrees to be bound by the termsof the Non-Disclosure Agreement. The parties to this Agreement shall prepare a mutually agreeable press release announcing the completion of thistransaction on the first Borrowing Date.56 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 13.17USA PATRIOT Act . Administrative Agent and the Lenders hereby notify the Obligors that pursuant to the requirements of the USAPATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”) or any Anti-Money Laundering Laws, they are required to obtain,verify and record information that identifies such Obligor, which information includes the name and address of such Obligor and other information that willallow such Lender to identify such Obligor in accordance with the Act or other Anti-Money Laundering Laws.13.18Maximum Rate of Interest . Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to bepaid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (in each case, the “ Maximum Rate”). If the Lenders shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans, andnot to the payment of interest, or, if the excessive interest exceeds such unpaid principal, the amount exceeding the unpaid balance shall be refunded to theapplicable Obligor. In determining whether the interest contracted for, charged, or received by the Lenders exceeds the Maximum Rate, the Lenders may, tothe extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) excludevoluntary prepayments and the effects thereof, (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout thecontemplated term of the Indebtedness and other obligations of any Obligor hereunder, or (d) allocate interest between portions of such Indebtedness andother obligations under the Loan Documents to the end that no such portion shall bear interest at a rate greater than that permitted by applicable Law.13.19Certain Waivers .(a)Real Property Security Waivers .(i)Each Obligor acknowledges that all or any portion of the Obligations may now or hereafter be secured by a Lien or Liensupon real property evidenced by certain documents including, without limitation, deeds of trust and assignments of rents. The Secured Parties may, pursuantto the terms of said real property security documents and applicable law, foreclose under all or any portion of one or more of said Liens by means of judicialor nonjudicial sale or sales. Each Obligor agrees that the Secured Parties may exercise whatever rights and remedies they may have with respect to said realproperty security, all without affecting the liability of any Obligor under the Loan Documents, except to the extent the Secured Parties realize payment bysuch action or proceeding. No election to proceed in one form of action or against any party, or on any obligation shall constitute a waiver of any SecuredParty’s rights to proceed in any other form of action or against any Obligor or any other Person, or diminish the liability of any Obligor, or affect the right ofthe Secured Parties to proceed against any Obligor for any deficiency, except to the extent the Secured Parties realize payment by such action,notwithstanding the effect of such action upon any Obligor’s rights of subrogation, reimbursement or indemnity, if any, against Obligor or any other Person.(ii)To the extent permitted under applicable law, each Obligor hereby waives any rights and defenses that are or may becomeavailable to such Obligor by reason of Sections 2787 to 2855, inclusive, of the California Civil Code.(iii)To the extent permitted under applicable law, each Obligor hereby waives all rights and defenses that such Obligor mayhave because the Obligations are or may be secured by real property. This means, among other things:(A)the Secured Parties may collect from any Obligor without first foreclosing on any real or personal propertycollateral pledged by any other Obligor;(B)If the Secured Parties foreclose on any real property collateral pledged by any Obligor:(1)The amount of the Loans may be reduced only by the price for which that collateral is sold at theforeclosure sale, even if the collateral is worth more than the sale price; and(2)the Secured Parties may collect from each Obligor even if the Secured Parties, by foreclosing on the realproperty collateral, have destroyed any right that such Obligor may have to collect from any other Obligor. (3)To the extent permitted under applicable law, this is an unconditional and irrevocable waiver of anyrights and defenses each Obligor may have because the Obligations are or may be secured by real property. These rights and defenses include, but are notlimited to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure. 57 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (iv)To the extent permitted under applicable law, each Obligor waives all rights and defenses arising out of an election ofremedies by the Secured Parties, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation,has destroyed such Obligor’s rights of subrogation and reimbursement against the principal by the operation of Section 580d of the California Code of CivilProcedure or otherwise.(b)Waiver of Marshaling . WITHOUT LIMITING THE FOREGOING IN ANY WAY, EACH OBLIGOR HEREBY IRREVOCABLYWAIVES AND RELEASES, TO THE EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISINGDIRECTLY OR INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR OTHERWISE) TO REQUIRE THE MARSHALING OF ANY ASSETS OF ANYOBLIGOR, WHICH RIGHT OF MARSHALING MIGHT OTHERWISE ARISE FROM ANY PAYMENTS MADE OR OBLIGATIONS PERFORMED.13.20Tax Treatment . Absent a change in the applicable law requiring otherwise, the parties hereto agree (a) that no Loan shall be treated as a“contingent payment debt instrument” under Treasury Regulations Section 1.1275-4, (b) except for a Lender described in Sections 871(h)(3) or 881(c)(3) ofthe Code, all interest on the Loans is “portfolio interest” within the meaning of Sections 871(h), 881(c) and 1441(c)(9) of the Code, and (c) to adhere to thisSection 13.20 for federal income and any other applicable tax purposes and not to take any action or file any Tax Return, report or declaration inconsistentherewith.13.21Original Issue Discount . For purposes of Sections 1272, 1273 and 1275 of the Code, each Loan is being issued with original issue discount;please contact Shawn Lynch, Chief Financial Officer, 101 Hartwell Avenue, Lexington, Massachusetts 02421, telephone: (781) 457-1200 to obtaininformation regarding the issue price, the amount of original issue discount and the yield to maturity.SECTION 14GUARANTEE14.01The Guarantee . The Subsidiary Guarantors hereby jointly and severally guarantee to the Secured Parties and their respective successors andassigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Loans and allfees and other amounts from time to time owing to the Secured Parties by Borrower under this Agreement or under any other Loan Document and by anyother Obligor under any of the Loan Documents, in each case strictly in accordance with the terms thereof (such obligations being herein collectively calledthe “ Guaranteed Obligations ”). The Subsidiary Guarantors hereby further jointly and severally agree that if Borrower shall fail to pay in full when due(whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same, withoutany demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will bepromptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.14.02Obligations Unconditional . The obligations of the Subsidiary Guarantors under Section 14.01 are absolute and unconditional, joint andseveral, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of Borrower under this Agreement or any otheragreement or instrument referred to herein, or any substitution, release or exchange of any other guarantee of or security for any of the GuaranteedObligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legalor equitable discharge or defense of a surety or guarantor, it being the intent of this Section 14.02 that the obligations of the Subsidiary Guarantors hereundershall be absolute and unconditional, joint and several, under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that theoccurrence of any one or more of the following shall not alter or impair the liability of the Subsidiary Guarantors hereunder, which shall remain absolute andunconditional as described above:(a)at any time or from time to time, without notice to the Subsidiary Guarantors, the time for any performance of or compliance with any ofthe Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;(b)any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein shall bedone or omitted;58 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (c)the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified,supplemented or amended in any respect, or any right under this Agreement or any other agreement or instrument referred to herein shall be waived or anyother guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or(d)any lien or security interest granted to, or in favor of, the Secured Parties as security for any of the Guaranteed Obligations shall fail tobe perfected.The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and anyrequirement that any Secured Party exhaust any right, power or remedy or proceed against Borrower under this Agreement or any other agreement orinstrument referred to herein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations.14.03Reinstatement . The obligations of the Subsidiary Guarantors under this Section 14 shall be automatically reinstated if and to the extent thatfor any reason any payment by or on behalf of Borrower in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder ofany of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary Guarantors jointlyand severally agree that they will indemnify the Secured Parties on reasonable demand for all reasonable costs and expenses (including fees of counsel)incurred by the Lenders in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claimalleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.14.04Subrogation . The Subsidiary Guarantors hereby jointly and severally agree that until the payment and satisfaction in full of all GuaranteedObligations and the expiration and termination of the Commitments under this Agreement, they shall not exercise any right or remedy arising by reason ofany performance by them of their guarantee in Section 14.01 , whether by subrogation or otherwise, against Borrower or any other guarantor of any of theGuaranteed Obligations or any security for any of the Guaranteed Obligations.14.05Remedies . The Subsidiary Guarantors jointly and severally agree that, as between the Subsidiary Guarantors and the Secured Parties, theobligations of Borrower under this Agreement and under the other Loan Documents may be declared to be forthwith due and payable as provided in Section11 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 11 ) for purposes of Section 14.01notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) asagainst Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), suchobligations (whether or not due and payable by Borrower) shall forthwith become due and payable by the Subsidiary Guarantors for purposes of Section14.01 .14.06Instrument for the Payment of Money . Each Subsidiary Guarantor hereby acknowledges that the guarantee in this Section 14 constitutes aninstrument for the payment of money, and consents and agrees that the Secured Parties, at their sole option, in the event of a dispute by such SubsidiaryGuarantor in the payment of any moneys due hereunder, shall have the right to proceed by motion for summary judgment in lieu of complaint pursuant toN.Y. Civ. Prac. L&R § 3213.14.07Continuing Guarantee . The guarantee in this Section 14 is a continuing guarantee, and shall apply to all Guaranteed Obligations wheneverarising.14.08Rights of Contribution . The Subsidiary Guarantors hereby agree, as between themselves, that if any Subsidiary Guarantor shall become anExcess Funding Guarantor (as defined below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed Obligations, each other SubsidiaryGuarantor shall, on reasonable demand of such Excess Funding Guarantor (but subject to the next sentence), pay to such Excess Funding Guarantor anamount equal to such Subsidiary Guarantor’s Pro rata Share (as defined below and determined, for this purpose, without reference to the properties, debts andliabilities of such Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of such Guaranteed Obligations. The payment obligationof a Subsidiary Guarantor to any Excess Funding Guarantor under this Section 14.08 shall be subordinate and subject in right of payment to the priorpayment in full of the obligations of such Subsidiary Guarantor under the other provisions of this Section 14 and such Excess Funding Guarantor shall notexercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations.59 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. For purposes of this Section 14.08 , (i) “ Excess Funding Guarantor ” means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor thathas paid an amount in excess of its Pro rata Share of such Guaranteed Obligations, (ii) “ Excess Payment ” means, in respect of any Guaranteed Obligations,the amount paid by an Excess Funding Guarantor in excess of its Pro rata Share of such Guaranteed Obligations and (iii) “ Pro Rata Share ” means, for anySubsidiary Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the aggregate present fair saleable value of all properties of suchSubsidiary Guarantor (excluding any shares of stock of any other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of such SubsidiaryGuarantor (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of such Subsidiary Guarantorhereunder and any obligations of any other Subsidiary Guarantor that have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which theaggregate fair saleable value of all properties of all of the Subsidiary Guarantors exceeds the amount of all the debts and liabilities (including contingent,subordinated, unmatured and unliquidated liabilities, but excluding the obligations of Borrower and the Subsidiary Guarantors hereunder and under theother Loan Documents) of all of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary Guarantor that is a party hereto on the firstBorrowing Date, as of such Borrowing Date, and (B) with respect to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes aSubsidiary Guarantor hereunder.14.09General Limitation on Guarantee Obligations . In any action or proceeding involving any provincial, territorial or state corporate law, orany state or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any SubsidiaryGuarantor under Section 14.01 would otherwise, taking into account the provisions of Section 14.08 , be held or determined to be void, invalid orunenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 14.01 , then, notwithstanding anyother provision hereof to the contrary, the amount of such liability shall, without any further action by such Subsidiary Guarantor, any Secured Party or anyother Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditorsas determined in such action or proceeding.[Signature Pages Follow] 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first abovewritten. BORROWER: T2 BIOSYSTEMS, INC. By:/s/ John McDonough Name: John McDonough Title: Chief Executive Officer Address for Notices: 101 Hartwell Avenue Lexington, MA 02421 Attn: Michael Gibbs Tel.: (781) 761-4630 Fax: (781) 538-4020 Email: mgibbs@t2biosystems.com ADMINISTRATIVE AGENT: CRG SERVICING LLC By:/s/ Nathan Hukill Name: Nathan Hukill Title: Authorized Signatory Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn: General Counsel Tel.: 713.209.7350 Fax: 713.209.7351 Email: adorenbaum@crglp.com S-1[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. LENDERS:CRG PARTNERS III L.P.By CRG PARTNERS III GP L.P., its General PartnerBy CRG PARTNERS III GP LLC, its General Partner By:Nathan Hukill Name: Nathan Hukill Title: Authorized Signatory Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn: General Counsel Tel.: 713.209.7350 Fax: 713.209.7351 Email: adorenbaum@crglp.com CRG PARTNERS III – PARALLEL FUND “A” L.P.By CRG PARTNERS III – PARALLEL FUND “A” GP L.P., its General PartnerBy CRG PARTNERS III – PARALLEL FUND “A” GP LLC, its General Partner By:/s/ Nathan Hukill Name: Nathan Hukill Title: Authorized Signatory Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn: General Counsel Tel.: 713.209.7350 Fax: 713.209.7351 Email: adorenbaum@crglp.com S-2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. CRG PARTNERS III (CAYMAN) L.P.By CRG PARTNERS III (CAYMAN) GP L.P., its General PartnerBy CRG PARTNERS III (CAYMAN) GP LLC, its General Partner By:/s/ Nathan Hukill Name: Nathan Hukill Title: Authorized Signatory Witness:/s/ Nicole Nesson Name:Nicole Nesson Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn: General Counsel Tel.: 713.209.7350 Fax: 713.209.7351 Email: adorenbaum@crglp.com CRG PARTNERS III PARALLEL FUND “B” (CAYMAN) L.P.By CRG PARTNERS III (CAYMAN) GP L.P., its General PartnerBy CRG PARTNERS III (CAYMAN) GP LLC, its General Partner By:Nathan Hukill Name: Nathan Hukill Title: Authorized Signatory Witness:/s/ Nicole Nesson Name:Nicole Nesson Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn: General Counsel Tel.: 713.209.7350 Fax: 713.209.7351 Email: adorenbaum@crglp.com S-3 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Schedule 1to Term Loan AgreementCOMMITMENTS LenderCommitmentProportionate ShareCRG Partners III – Parallel Fund “A” L.P.$ 4,250,000.008.50%CRG Partners III L.P.$ 8,650,000.0017.30%CRG Partners III (Cayman) L.P.$ 18,200,000.0036.40%CRG Partners III Parallel Fund “B” (Cayman) L.P.$ 18,900,000.0037.80%TOTAL$ 50,000,000.00100% WARRANT SHARES LenderNumber of Sharesof Common Stock subject to theWarrantsCRG Partners III – Parallel Fund “A” L.P.44,961CRG Partners III L.P.91,510CRG Partners III (Cayman) L.P.192,541CRG Partners III Parallel Fund “B” (Cayman) L.P.199,946TOTAL528,958 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit Ato Term Loan Agreement FORM OF GUARANTEE ASSUMPTION AGREEMENTGUARANTEE ASSUMPTION AGREEMENT dated as of [DATE] (this “ Agreement ”) by [NAME OF ADDITIONAL SUBSIDIARY GUARANTOR],a ________ [corporation][limited liability company] (the “ Additional Subsidiary Guarantor ”), in favor of CRG SERVICING LLC, as administrative agentand collateral agent (“ Administrative Agent ”) for the benefit of the Secured Parties under that certain Term Loan Agreement, dated as of December 30, 2016(as amended, restated, supplemented or otherwise modified, renewed, refinanced or replaced, the “ Loan Agreement ”), among T2 Biosystems, Inc., aDelaware corporation (“ Borrower ”), Administrative Agent, the lenders from time to time party thereto and the Subsidiary Guarantors from time to time partythereto. The terms defined in the Loan Agreement are herein used as therein defined.Pursuant to Section 8.12(a) of the Loan Agreement, the Additional Subsidiary Guarantor hereby agrees to become a “Subsidiary Guarantor” for allpurposes of the Loan Agreement, and a “Grantor” for all purposes of the Security Agreement. Without limiting the foregoing, the Additional SubsidiaryGuarantor hereby, jointly and severally with the other Subsidiary Guarantors, guarantees to the Lenders and their successors and assigns the prompt paymentin full when due (whether at stated maturity, by acceleration or otherwise) of all Guaranteed Obligations (as defined in Section 14.01 of the Loan Agreement)in the same manner and to the same extent as is provided in Section 14 of the Loan Agreement. In addition, as of the date hereof, the Additional SubsidiaryGuarantor hereby makes the representations and warranties set forth in Sections 7.01 , 7.02 , 7.03 , 7.05(a) , 7.06 , 7.07 , 7.08 and 7.18 of the LoanAgreement, and in Section 2 of the Security Agreement, with respect to itself and its obligations under this Agreement and the other Loan Documents, as ifeach reference in such Sections to the Loan Documents included reference to this Agreement, such representations and warranties to be made as of the datehereof.The Additional Subsidiary Guarantor hereby instructs its counsel to deliver the opinions referred to in Section 8.12(a) of the Loan Agreement toAdministrative Agent.IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused this Agreement to be duly executed and delivered as of the day and yearfirst above written. [ADDITIONAL SUBSIDIARY GUARANTOR] By Name: Title: Exhibit A-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit Bto Term Loan Agreement FORM OF NOTICE OF BORROWINGDate : [__________]To: CRG Servicing LLC and the Lenders referred to below1000 Main Street, Suite 2500Houston, TX 77002Attn: General CounselRe: Borrowing under Term Loan AgreementLadies and Gentlemen:The undersigned, T2 Biosystems, Inc., a Delaware corporation (“ Borrower ”), refers to the Term Loan Agreement, dated as of December 30, 2016(as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”), among Borrower, CRG ServicingLLC, as administrative agent and collateral agent (in such capacities, “ Administrative Agent ”), and the lenders from time to time party thereto and thesubsidiary guarantors from time to time party thereto. The terms defined in the Loan Agreement are herein used as therein defined.Borrower hereby gives you notice irrevocably, pursuant to Section 2.02 of the Loan Agreement, of the borrowing of the Loan specified herein:1.The proposed Borrowing Date is [__________].2.The amount of the proposed Borrowing is $[__________].3.The payment instructions with respect to the funds to be made available to Borrower are as follows:Bank name: [__________]Bank Address: [__________]Routing Number: [__________]Account Number: [__________]Swift Code: [__________]Borrower hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed borrowing of theLoan, before and after giving effect thereto and to the application of the proceeds therefrom:a)the representations and warranties made by Borrower in Section 7 of the Loan Agreement are true and correct in all material respects(unless qualified by materiality or Material Adverse Effect, in which case they are true and correct in all respects) on and as of the Borrowing Date andimmediately after giving effect to the application of the proceeds of the Borrowing with the same force and effect as if made on and as of such date exceptthat the representation regarding representations and warranties that refer to a specific earlier date shall be that they were true and correct in all materialrespects (unless qualified by materiality or Material Adverse Effect, in which case they were true and correct in all respects) on such earlier date;b)on and as of the Borrowing Date, there shall have occurred no Material Adverse Change since [__________]; andc) no Default has occurred and is continuing or would result from such proposed Borrowing or the application of the proceeds thereof. Exhibit B-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, Borrower has caused this Notice of Borrowing to be duly executed and delivered as of the day and year first abovewritten. BORROWER: T2 BIOSYSTEMS, INC. By Name: Title: Exhibit B-2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit C-1to Term Loan Agreement FORM OF U.S. TAX COMPLIANCE CERTIFICATE(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes) Reference is made to the Term Loan Agreement, dated as of December 30, 2016 (as the same may be amended, restated, supplemented or otherwisemodified from time to time, the “ Loan Agreement ”), among Borrower, CRG Servicing LLC, as administrative agent and collateral agent (in such capacities,“ Administrative Agent ”), and the lenders and the subsidiary guarantors from time to time party thereto. [______________________] (the “ ForeignLender ”) is providing this certificate pursuant to Section 5.03(e)(ii)(B) of the Loan Agreement. The Foreign Lender hereby represents and warrants that:1.The Foreign Lender is the sole record owner of the Loans in respect of which it is providing this certificate;2.The Foreign Lender is not a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “ Code”). In this regard, the Foreign Lender further represents and warrants that:(a)The Foreign Lender is not subject to regulatory or other legal requirements as a bank in any jurisdiction; and(b)The Foreign Lender has not been treated as a bank for purposes of any tax, securities law or other filing or submission made to anyGovernmental Authority, any application made to a rating agency or qualification for any exemption from tax, securities law or other legal requirements;3.The Foreign Lender is not a 10-percent shareholder of Borrower within the meaning of Section 881(c)(3)(B) of the Code; and4.The Foreign Lender is not a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code.5.The undersigned has furnished Administrative Agent and Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BENor W-8BEN-E, as applicable.By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptlyso inform Borrower and Administrative Agent, and (2) if Borrower or Administrative Agent notifies the Foreign Lender that any form or certification theForeign Lender previously made available has expired or become obsolete in any respect, such Foreign Lender shall furnish Borrower and AdministrativeAgent with a properly completed and currently effective certificate.Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the LoanAgreement. [Signature follows]Exhibit C-1-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered as of the date indicated below. [NAME OF NON-U.S. LENDER] By Name: Title: Date: Exhibit C-1-2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit C-2to Term Loan AgreementFORM OF U.S. TAX COMPLIANCE CERTIFICATE(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)Reference is made to the Term Loan Agreement, dated as of December 30, 2016 (as the same may be amended, restated, supplemented or otherwisemodified from time to time, the “ Loan Agreement ”), among Borrower, CRG Servicing LLC, as administrative agent and collateral agent (in such capacities,“ Administrative Agent ”), and the lenders and the subsidiary guarantors from time to time party thereto. [______________________] (the “ ForeignParticipant ”) is providing this certificate pursuant to Section 5.03(e)(ii)(B) of the Loan Agreement. The Foreign Participant hereby represents and warrantsthat:1.The Foreign Participant is the sole record and beneficial owner of the participation in respect of which it is providing this certificate;2.The Foreign Participant is not a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code ”). In this regard, the Foreign Participant further represents and warrants that:(a)The Foreign Participant is not subject to regulatory or other legal requirements as a bank in any jurisdiction; and(b)The Foreign Participant has not been treated as a bank for purposes of any tax, securities law or other filing or submission made to anyGovernmental Authority, any application made to a rating agency or qualification for any exemption from tax, securities law or other legal requirements;3.The Foreign Participant is not a 10-percent shareholder of Borrower within the meaning of Section 881(c)(3)(B) of the Code; and4.The Foreign Participant is not a controlled foreign corporation receiving interest from a related person within the meaning of Section881(c)(3)(C) of the Code.5.The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E, as applicable.By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptlyso inform its participating Lender, and (2) if its participating Lender notifies the Foreign Participant that any form or certification the Foreign Participantpreviously made available has expired or become obsolete in any respect, the Foreign Participant shall furnish its participating Lender with a properlycompleted and currently effective certificate.Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement. [Signature follows]Exhibit C-2-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered as of the date indicated below. [NAME OF NON-U.S. PARTICIPANT] By Name: Title: Date: Exhibit C-2-2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit C-3to Term Loan AgreementFORM OF U.S. TAX COMPLIANCE CERTIFICATE(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)Reference is made to the Term Loan Agreement, dated as of December 30, 2016 (as the same may be amended, restated, supplemented or otherwisemodified from time to time, the “ Loan Agreement ”), among Borrower, CRG Servicing LLC, as administrative agent and collateral agent (in such capacities,“ Administrative Agent ”), and the lenders and the subsidiary guarantors from time to time party thereto. [______________________] (the “ ForeignParticipant ”) is providing this certificate pursuant to Section 5.03(e)(ii)(B) of the Loan Agreement. The Foreign Participant hereby represents and warrantsthat:1.The Foreign Participant is the sole record owner of the participation in respect of which it is providing this certificate;2.The Foreign Participant’s direct or indirect partners/members are the sole beneficial owners of the participation in respect of which it isproviding this certificate;3.Neither the Foreign Participant nor its direct or indirect partners/members is a “bank” for purposes of Section 881(c)(3)(A) of the InternalRevenue Code of 1986, as amended (the “ Code ”). In this regard, the Foreign Participant further represents and warrants that:(a)neither the Foreign Participant nor its direct or indirect partners/members is subject to regulatory or other legal requirements as a bankin any jurisdiction; and(b)neither the Foreign Participant nor its direct or indirect partners/members has been treated as a bank for purposes of any tax, securitieslaw or other filing or submission made to any Governmental Authority, any application made to a rating agency or qualification for any exemption from tax,securities law or other legal requirements;4.Neither the Foreign Participant nor its direct or indirect partners/members is a 10-percent shareholder of Borrower within the meaning ofSection 881(c)(3)(B) of the Code; and5.Neither the Foreign Participant nor its direct or indirect partners/members is a controlled foreign corporation receiving interest from arelated person within the meaning of Section 881(c)(3)(C) of the Code.6.The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms for each ofits partners/members that is claiming the portfolio interest exemption : (i) an IRS Form W-8BEN or W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMYaccompanied by an IRS Form W-8BEN or W-8BEN-E, as applicable, from each such partner’s/member’s beneficial owners that is claiming the portfoliointerest exemption.By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptlyso inform its participating Lender, and (2) if its participating Lender notifies the Foreign Participant that any form or certification the Foreign Participantpreviously made available has expired or become obsolete in any respect, the Foreign Participant shall furnish its participating Lender with a properlycompleted and currently effective certificate. Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the LoanAgreement. [Signature follows]Exhibit C-3-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered as of the date indicated below. [NAME OF NON-U.S. PARTICIPANT] By Name: Title: Date: Exhibit C-3-2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit C-4to Term Loan AgreementFORM OF U.S. TAX COMPLIANCE CERTIFICATE(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)Reference is made to the Term Loan Agreement, dated as of December 30, 2016 (as the same may be amended, restated, supplemented or otherwisemodified from time to time, the “ Loan Agreement ”), among Borrower, CRG Servicing LLC, as administrative agent and collateral agent (in such capacities,“ Administrative Agent ”), and the lenders and the subsidiary guarantors from time to time party thereto. [______________________] (the “ ForeignLender ”) is providing this certificate pursuant to Section 5.03(e)(ii)(B) of the Loan Agreement. The Foreign Lender hereby represents and warrants that:1.The Foreign Lender is the sole record owner of the Loans in respect of which it is providing this certificate;2.The Foreign Lender’s direct or indirect partners/members are the sole beneficial owners of the Loans in respect of which it is providingthis certificate;3.Neither the Foreign Lender nor its direct or indirect partners/members is a “bank” for purposes of Section 881(c)(3)(A) of the InternalRevenue Code of 1986, as amended (the “ Code ”). In this regard, the Foreign Lender further represents and warrants that:(a)neither the Foreign Lender nor its direct or indirect partners/members is subject to regulatory or other legal requirements as a bank inany jurisdiction; and(b)neither the Foreign Lender nor its direct or indirect partners/members has been treated as a bank for purposes of any tax, securities lawor other filing or submission made to any Governmental Authority, any application made to a rating agency or qualification for any exemption from tax,securities law or other legal requirements;4.Neither the Foreign Lender nor its direct or indirect partners/members is a 10-percent shareholder of Borrower within the meaning ofSection 881(c)(3)(B) of the Code; and5.Neither the Foreign Lender nor its direct or indirect partners/members is a controlled foreign corporation receiving interest from a relatedperson within the meaning of Section 881(c)(3)(C) of the Code.6.The undersigned has made available to Borrower (directly or through Administrative Agent) an IRS Form W-8IMY accompanied by oneof the following forms for each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E, asapplicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E, as applicable, from each such partner’s/member’s beneficialowners that is claiming the portfolio interest exemption.By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptlyso inform Borrower and Administrative Agent, and (2) if Borrower or Administrative Agent notifies the Foreign Lender that any form or certification theForeign Lender previously made available has expired or become obsolete in any respect, such Foreign Lender shall furnish Borrower and AdministrativeAgent with a properly completed and currently effective certificate. Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the LoanAgreement.[Signature follows]Exhibit C-4-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed and delivered as of the date indicated below. [NAME OF NON-U.S. LENDER] By Name: Title: Date: Exhibit C-4-2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit Dto Term Loan AgreementFORM OF COMPLIANCE CERTIFICATE[DATE]This certificate is delivered pursuant to Section 8.01(d) of, and in connection with the consummation of the transactions contemplated in, the TermLoan Agreement, dated as of December 30, 2016 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ LoanAgreement ”), among T2 Biosystems, Inc., a Delaware corporation (“ Borrower ”), CRG Servicing LLC, as administrative agent and collateral agent (in suchcapacities, “ Administrative Agent ”), and the lenders and the subsidiary guarantors from time to time party thereto. Capitalized terms used herein and nototherwise defined herein are used herein as defined in the Loan Agreement.The undersigned, a duly authorized Responsible Officer of Borrower having the name and title set forth below under his signature, hereby certifies,as an officer of Borrower and on behalf of Borrower (and not in his or her individual capacity), for the benefit of the Secured Parties and pursuant to Section8.01(d) of the Loan Agreement that such Responsible Officer of Borrower is familiar with the Loan Agreement and that, in accordance with each of thefollowing sections of the Loan Agreement, each of the following is true on the date hereof, both before and after giving effect to any Loan to be made on orbefore the date hereof:In accordance with Section 8.01 [ (a)/(b) ] of the Loan Agreement, attached hereto as Annex A are the financial statements for the [fiscalquarter/fiscal year] ended [__________] required to be delivered pursuant to Section 8.01 [ (a)/(b) ] of the Loan Agreement. Such financial statements fairlypresent in all material respects the consolidated financial position, results of operations and cash flow of Borrower and its Subsidiaries as at the datesindicated therein and for the periods indicated therein in accordance with GAAP [(subject to the absence of footnote disclosure and normal year-end auditadjustments)] 1 [without qualification as to the scope of the audit or as to going concern and without any other similar qualification. The examination bysuch auditors in connection with such financial statements has been made in accordance with the standards of the United States’ Public Company accountingOversight Board (or any successor entity).] 2Attached hereto as Annex B are the calculations used to determine compliance with each financial covenant contained in Section 10 of the LoanAgreement.No Default or Event of Default is continuing as of the date hereof[, except as provided for on Annex C attached hereto, with respect to each ofwhich Borrower proposes to take the actions set forth on Annex C ].The representations and warranties made by Borrower in Section 7 of the Loan Agreement are true and correct in all material respects (unlessqualified by materiality or Material Adverse Effect, in which case they are true and correct in all respects) on and as of the date hereof, with the same force andeffect as if made on and as of the date hereof (except that the representation regarding representations and warranties that refer to a specific earlier date shallbe that they were true and correct in all material respects (unless qualified by materiality or Material Adverse Effect, in which case they were true and correctin all respects) on such earlier date)[, except as provided for on Annex D attached hereto, with respect to each of which Borrower proposes to take the actionsset forth on Annex D ].1 Insert language in brackets only for quarterly certifications.2 Insert language in brackets only for annual certifications.Exhibit D-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, the undersigned has executed this certificate on the date first written above. T2 BIOSYSTEMS, INC. By Name: Title:Exhibit D-2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Annex A to Compliance Certificate FINANCIAL STATEMENTS [see attached] Exhibit D-3 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Annex B to Compliance Certificate CALCULATIONS OF FINANCIAL COVENANT COMPLIANCE I. Section 10.01: Minimum Liquidity A.Amount of unencumbered [(other than Liens securing the Obligations and Liens permittedpursuant to Section 9.02(c) and Section 9.02(j) ); provided that with respect to case subject to aLien in connection with Permitted Priority Debt, there is no default under the documentationgoverning the Permitted Priority Debt]) cash and Permitted Cash Equivalent Investments (whichfor greater certainty shall not include any undrawn credit lines), in each case, to the extent held inan account over which the Lenders have a perfected security interest:$__________B.The greater of:$__________ (1) $[***] and (2) to the extent Borrower has incurred Permitted Priority Debt, the minimum cash balance required ofBorrower by Borrower’s Permitted Priority Debt creditors Is Line IA equal to or greater than Line IB?:Yes: In compliance; No: Not in complianceII. Section 10.02(a)-(e): Minimum Revenue—Subsequent Periods A.Revenues during the [***] period beginning on January 1, 2017$__________ [Is line II.A equal to or greater than $[***]?Yes: In compliance; No: Not in compliance] 3B.Revenues during the [***] period beginning on January 1, 2017$__________ [Is line II.B equal to or greater than $[***]?Yes: In compliance; No: Not in compliance] 4 C.Revenues during the [***] period beginning on January 1, 2018$__________ [Is line II.C equal to or greater than $[***]?Yes: In compliance; No: Not in compliance] 5D.Revenues during the [***]period beginning on January 1, 2019$__________ [Is line II.D equal to or greater than $[***]?Yes: In compliance; No: Not in compliance] 6E.Revenues during the [***] period beginning on January 1, 2020$__________ [Is line II.E equal to or greater than $[***]?Yes: In compliance; No: Not in compliance] 7 3 Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2017 pursuant to Section 8.01(b) of the LoanAgreement.4 Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2018 pursuant to Section 8.01(b) of the LoanAgreement. 5 Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2019 pursuant to Section 8.01(b) of the LoanAgreement.6 Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2020 pursuant to Section 8.01(b) of the LoanAgreement.7 Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2021 pursuant to Section 8.01(b) of the LoanAgreement. Exhibit D-4 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit Eto Term Loan AgreementFORM OF LANDLORD CONSENTTHIS LANDLORD CONSENT (the “ Agreement ”) is made and entered into as of [DATE], by and among CRG Servicing LLC, as administrativeagent and collateral agent for the “Secured Parties” under the Loan Agreement referred to below (in such capacities, “ Administrative Agent ”), T2Biosystems, Inc., a Delaware corporation (“ Debtor ”), and [INSERT NAME OF LANDLORD], a [state of formation/organization] [type of entity] (“ Landlord”).WHEREAS, Debtor has entered into a Term Loan Agreement, dated as of December 30, 2016 (as the same may be amended, restated, supplementedor otherwise modified from time to time, the “ Loan Agreement ”; capitalized terms used but not defined herein have the meanings assigned to them in theLoan Agreement), among Borrower, Administrative Agent, the lenders from time to time party thereto and the subsidiary guarantors from time to time partythereto, pursuant to which the Secured Parties have been granted a security interest in all of Debtor’s personal property, including, but not limited to,inventory, equipment and trade fixtures (hereinafter “ Personal Property ”); andWHEREAS, Landlord is the owner of the real property located at [__________] (the “ Premises ”); andWHEREAS, Landlord and Debtor have entered into that certain [LEASE AGREEMENT] dated [__________][, as amended by [___________]dated [__________]] ([collectively,] the “ Lease ”); andWHEREAS, certain of the Personal Property has or may become affixed to or be located on, wholly or in part, the Premises.NOW, THEREFORE, in consideration of any loans or other financial accommodation extended by the Secured Parties to Debtor at any time, andother good and valuable consideration, the parties agree as follows:1.Landlord subordinates to Administrative Agent (for the benefit of the Secured Parties) all security interests or other interests or rightsLandlord may now or hereafter have in, or to any of the Personal Property, whether for rent or otherwise, while Debtor is indebted to the Secured Parties.2.The Personal Property may be installed in or located on the Premises and is not and shall not be deemed a fixture or part of the real estateand shall at all times be considered personal property.3.Administrative Agent or its representatives may enter upon the Premises during normal business hours, and upon not less than 24 hours’advance notice, to inspect the Personal Property.4.Upon and during the continuance of an Event of Default under the Loan Agreement, Administrative Agent or its representatives, atAdministrative Agent’s option, upon written notice delivered to Landlord not less than [***] in advance, may enter the Premises during normal businesshours for the purpose of repossessing, removing or otherwise dealing with said Personal Property; provided that neither Administrative Agent nor SecuredParties shall be permitted to operate the business of Debtor on the Premises or sell, auction or otherwise dispose of any Personal Property at the Premises oradvertise any of the foregoing; and such license shall continue, from the date Administrative Agent enters the Premises for as long as Administrative Agentreasonably deems necessary but not to exceed a period of ninety (90) days. During the period Administrative Agent occupies the Premises, it shall pay toLandlord the rent provided under the Lease relating to the Premises, prorated on a per diem basis to be determined on a thirty (30) day month, withoutincurring any other obligations of Debtor.5.Administrative Agent shall pay to Landlord any costs for damage to the Premises or the building in which the Premises is located inremoving or otherwise dealing with said Personal Property pursuant to paragraph 4 above, and shall indemnify and hold harmless Landlord from and against(i) all claims, disputes and expenses, including reasonable attorneys’ fees, suffered or incurred by Landlord arising from Administrative Agent’s exercise ofany of its rights hereunder, and (ii) any injury to third persons, caused by actions of Administrative Agent pursuant to this consent.Exhibit E-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 6.Landlord agrees to give notice to Administrative Agent in writing by certified mail or facsimile of Landlord’s intent to exercise itsremedies in response to any default by Debtor of any of the provisions of the Lease, to:CRG Servicing LLC1000 Main Street, Suite 2500Houston, TX 77002Attention: General CounselFax: 713.209.7351 7.Landlord shall have no obligation to preserve or protect the Personal Property or take any action in connection therewith, andAdministrative Agent waives all claims they may now or hereafter have against Landlord in connection with the Personal Property.8.This consent shall terminate and be of no further force or effect upon the earlier of (i) the date on which all indebtedness secured by thePersonal Property indefeasibly is paid in full in cash and (ii) the date on which the Lease is terminated or expires.9.Nothing contained herein shall be construed to amend the Lease, and the Lease remains unchanged and in full force and effect.This consent shall be construed and interpreted in accordance with and governed by the laws of the State of [__________].This consent may not be changed or terminated orally and is binding upon and shall inure to the benefit of Landlord, Administrative Agent,Secured Parties and Debtor and the heirs, personal representatives, successors and assigns of Landlord, Administrative Agent, Secured Parties and Debtor.[Signature Page follows]Exhibit E-2[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. LANDLORD: [_________] By Name: Title: ADMINISTRATIVE AGENT: CRG SERVICING LLC By Name: Title: Address for Notices: 1000 Main Street, Suite 2500Houston, TX 77002Attn:General CounselTel.:713.209.7350Fax:713.209.7351Email:adorenbaum@crglp.com Acknowledged and Agreed:T2 BIOSYSTEMS, INC. By Name: Title: Exhibit E-3[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit Fto Term Loan AgreementFORM OF SUBORDINATION AGREEMENT This Subordination Agreement is made as of [________] (this “ Agreement ”) among CRG Servicing LLC, a Delaware limited liability company (“Senior Agent ”), and [__________], a [__________] [corporation] (“ Subordinated Creditor ”).RECITALS:A.T2 Biosystems, Inc., a Delaware corporation (“ Borrower ”), will, as of the date hereof, issue in favor of Subordinated Creditor theSubordinated Note (as defined below)[, and grant a security interest in the Subordinated Collateral (as defined below) in favor of Subordinated Creditor].B.Senior Creditors, Borrower and certain of its subsidiaries have entered into the Senior Loan Agreement (as defined below), and SeniorAgent, Borrower and certain of its subsidiaries have entered into the Senior Security Agreement (as defined below) under which Borrower and suchsubsidiaries have granted a security interest in the Collateral (as defined below) in favor of the Senior Creditors as security for the payment of Borrower’sobligations under the Senior Loan Agreement.C.To induce the Lenders under and as defined in the Senior Loan Agreement referred to below to make and maintain the credit extensionsto Borrower under the Senior Loan Agreement, Subordinated Creditor is willing to subordinate the Subordinated Debt (as defined below) to the Senior Debt(as defined below)[, and all liens securing the Subordinated Debt to the Senior Creditors’ liens on and security interests in the Collateral] on the terms andconditions herein set forth.NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:1.Definitions . As used herein, the following terms have the following meanings:“ Bankruptcy Code ” means title 11 of the United States Code, 11 U.S.C. §§ 101 et seq .“ Collateral ” has the meaning set forth in the Senior Security Agreement.“ Enforcement Action ” means, with respect to any indebtedness, obligation (contingent or otherwise) or Collateral at any time held by any lenderor noteholder, (i) commencing, by judicial or non-judicial means, the enforcement of, or otherwise attempting to enforce, such indebtedness, obligation orCollateral of any of the default remedies under any of the applicable agreements or documents of such lender or noteholder, the UCC or other applicable law(other than the mere issuance of a notice of default or notice of the right by such lender or noteholder to seek specific performance with respect to anycovenants in favor of such lender or noteholder), (ii) repossessing, selling, leasing or otherwise disposing of all or any part of such Collateral, includingwithout limitation causing any attachment of, levy upon, execution against, foreclosure upon or the taking of other action against or institution of otherproceedings with respect to any Collateral, or exercising account debtor or obligor notification or collection rights with respect to all or any portion thereof,or attempting or agreeing to do so, (iii) appropriating, setting off or applying to such lender or noteholder’s claim any part or all of such Collateral or otherproperty in the possession of, or coming into the possession of, such lender or noteholder or its agent, trustee or bailee, (iv) asserting any claim or interest inany insurance with respect to such indebtedness, obligation or Collateral, (v) instituting or commencing, or joining with any Person in commencing, anyaction or proceeding with respect to any of the foregoing rights or remedies (including any action of foreclosure, enforcement, collection or execution andany Insolvency Event involving any Obligor), (vi) exercising any rights under any lockbox agreement, account control agreement, landlord waiver orbailee’s letter or similar agreement or arrangement to which the Subordinated Creditor is a party, (vii) [causing or compelling the pledge or delivery ofSubordinated Collateral], or (viii) otherwise enforcing, or attempting to enforce, any other rights or remedies under or with respect to any such indebtedness,obligation or Collateral.“ Insolvency Event ” means that any Obligor or any of its subsidiaries shall have (i) applied for, consented to or acquiesced in the appointment of atrustee, receiver or other custodian for it or any of its property, or (ii) made a general assignment for the benefit of creditors or similar arrangement in respectof such Obligor’s or subsidiary’s creditors generally or any substantial portionExhibit F-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. thereof, or (iii) permitted, consented to, or suffered to exist the appointment of a trustee, receiver or other custodian for it or for a substantial part of itsproperty, or (iv) commenced any case, action or proceeding before any court or other governmental agency or authority relating to bankruptcy,reorganization, insolvency, debt arrangement or relief or other case, action or proceeding under any bankruptcy or insolvency law, or any dissolution,winding up or liquidation case, action or proceeding, including without limitation any case under the Bankruptcy Code, in respect of it, or (v) (A) permitted,consented to, or suffered to exist the commencement of any case, action or proceeding before any court or other governmental agency or authority relating tobankruptcy, reorganization, insolvency, debt arrangement or relief or other case, action or proceeding under any bankruptcy or insolvency law, or anydissolution, winding up or liquidation case, action or proceeding, including without limitation any case under the Bankruptcy Code, in respect of it, or (B)any such case, action or proceeding shall have resulted in the entry of an order for relief or shall have remained for sixty (60) days undismissed.“ Obligor ” has the meaning set forth in the Senior Loan Agreement.“ Person ” has the meaning set forth in the Senior Loan Agreement.“ Senior Creditors ” means Senior Agent and the Lenders under and as defined in the Senior Loan Agreement.“ Senior Debt ” means the Obligations (as defined in the Senior Loan Agreement).“ Senior Discharge Date ” means the first date on which all of the Senior Debt (other than contingent indemnification obligations and any WarrantObligations (as defined in the Senior Loan Agreement)) has been paid indefeasibly in full in cash and all commitments of Senior Lenders under the SeniorLoan Documents have been terminated.“ Senior Loan Agreement ” means that certain Term Loan Agreement, dated as of December 30, 2016, by and among Borrower, the subsidiaryguarantors from time to time party thereto, and the Senior Creditors from time to time party thereto, as amended, restated, supplemented or otherwise modifiedfrom time to time.“ Senior Loan Documents ” means, collectively, the Loan Documents (as defined in the Senior Loan Agreement), in each case as amended,restated, supplemented or otherwise modified from time to time.“ Senior Security Agreement ” means that certain Security Agreement, dated as of December 30, 2016, among Borrower, the other Obligors partythereto, and Senior Agent, as amended, restated, supplemented or otherwise modified from time to time.[“ Subordinated Collateral ” means any property or assets that may at any time be or become subject to a lien or security interest in favor of theSubordinated Creditor pursuant to the Subordinated Collateral Documents or otherwise, and all products and proceeds of any of the foregoing.][“ Subordinated Collateral Documents ” means, collectively, each security agreement, deed of trust, mortgage, pledge agreement and any otheragreement pursuant to which any Obligor or any other Person provides a lien on or security interest in its assets in favor of the Subordinated Creditor, and allfinancing statements, fixture filings, patent, trademark and copyright filings, assignments, acknowledgments and other filings, documents and agreementsmade or delivered pursuant thereto.]“ Subordinated Debt ” means and includes all obligations, liabilities and indebtedness of Borrower owed to Subordinated Creditor, whether director indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, including without limitation, principal, premium (if any),interest, fees, charges, expenses, costs, professional fees and expenses, and reimbursement obligations.“ Subordinated Debt Documents ” means, collectively, the Subordinated Note and each other loan document or agreement entered into byBorrower in connection with the Subordinated Note[, including without limitation each Subordinated Collateral Document], as amended, restated,supplemented or otherwise modified from time to time.“ Subordinated Note ” means that certain $[__________] subordinated promissory note, dated [__________], issued by Borrower to SubordinatedCreditor, as amended, restated, supplemented or otherwise modified from time to time.Exhibit F-2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. “ UCC ” means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any UniformCommercial Code, the Uniform Commercial Code as in effect in the State of New York.2.Liens . (a) Subordinated Creditor represents and warrants that 8 [the Subordinated Debt is unsecured. Subordinated Creditor agrees that it willnot request or accept any security interest in any Collateral to secure the Subordinated Debt; provided that, should Subordinated Creditor obtain a lien orsecurity interest on any asset or Collateral to secure all or any portion of the Subordinated Debt for any reason (which action shall be in violation of thisAgreement), notwithstanding the respective dates of attachment and perfection of the security interests in the Collateral in favor of the Senior Creditors orSubordinated Creditor, or any contrary provision of the UCC, or any applicable law or decision to the contrary, or the provisions of the Senior LoanDocuments or the Subordinated Debt Documents, and irrespective of whether Subordinated Creditor or the Senior Creditors hold possession of any or all partof the Collateral, all now existing or hereafter arising security interests in the Collateral in favor of Subordinated Creditor in respect of the Subordinated DebtDocuments shall at all times be subordinate to the security interest in such Collateral in favor of the Senior Creditors in respect of the Senior LoanDocuments.] [all liens and security interests, if any, now or hereafter existing that secure the Subordinated Debt, are hereby subordinated and junior in allrespects to the liens and security interests now or hereafter existing securing the Senior Debt, regardless of the time, manner or order of attachment orperfection of any such liens and security interests, the time or order of filing of financing statements, the acquisition of purchase money or other liens orsecurity interests, the time of giving or failure to give notice of the acquisition or expected acquisition of purchase money or other liens or security interests,or any other circumstances whatsoever.](b)Subordinated Creditor acknowledges that the Senior Creditors have been granted liens upon the Collateral [(including theSubordinated Collateral)], and Subordinated Creditor hereby consents thereto and to the incurrence of the Senior Debt. (c)Until the Senior Discharge Date, in the event of any private or public sale or other disposition of all or any portion of the Collateral,Subordinated Creditor agrees that such Collateral shall be sold or otherwise disposed of free and clear of any liens in favor of SubordinatedCreditor. Subordinated Creditor agrees that any such sale or disposition of Collateral shall not require any consent from Subordinated Creditor, andSubordinated Creditor hereby waives any right it may have to object to such sale or disposition.(d)[Subordinated Creditor agrees that it will not request or accept any guaranty of the Subordinated Debt.] (e)[Each of the Senior Creditors and Subordinated Creditor agrees to hold all collateral in which a lien may be perfected by possession orcontrol (“ Possessory Collateral ”) in its possession, custody, or control (or in the possession, custody, or control of agents or bailees for any such party) asagent for the other solely for the purpose of perfecting the security interest granted to each in such Possessory Collateral subject to the terms and conditionsof this Agreement. Neither any Senior Creditor nor Subordinated Creditor shall have any obligationwhatsoever to the other to assure that any Possessory Collateral is genuine or owned by any Obligor or any other Person or to preserve its rights or benefits orthose of any Person. The duties or responsibilities of the Senior Creditors and Subordinated Creditor under this Section 2(e) are and shall be limited solely toholding or maintaining control of the Possessory Collateral as agent for the others for purposes of perfecting the lien or security interest held by suchothers. The Senior Creditors are not and shall not be deemed to be a fiduciary of any kind for Subordinated Creditor or any other Person.]3.Payment Subordination . (a) Notwithstanding the terms of the Subordinated Debt Documents, until the Senior Discharge Date, (i) all paymentsand distributions of any kind or character, whether in cash, property or securities, in respect of the Subordinated Debt are subordinated in right and time ofpayment to all payments in respect of the Senior Debt, and (ii) Subordinated Creditor will not demand, sue for or receive from Borrower (and Borrower willnot pay) any part of the Subordinated Debt, whether by payment, prepayment, distribution, setoff, or otherwise, or accelerate the Subordinated Debt. (b)Subordinated Creditor must deliver to the Senior Agent in the form received (except for endorsement or assignment by SubordinatedCreditor) any payment, distribution, security or proceeds it receives on the Subordinated Debt other than according to this Agreement.8 Select one, as appropriate.Exhibit F-3 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 4.Subordination of Remedies . Until the Senior Discharge Date, and whether or not any Insolvency Event has occurred, Subordinated Creditor willnot accelerate the maturity of all or any portion of the Subordinated Debt, enforce, attempt to enforce, or exercise any right or remedy with respect to anyCollateral [(including the Subordinated Collateral)] or the Subordinated Debt, or take any other Enforcement Action with respect to the Subordinated Debt[or the Subordinated Collateral].5.Payments Over . All payments and distributions of any kind, whether in cash, property or securities, in respect of the Subordinated Debt to whichSubordinated Creditor would be entitled if the Subordinated Debt were not subordinated pursuant to this Agreement, shall be paid to the Senior Creditors inrespect of the Senior Debt, regardless of whether such Senior Debt, or any portion thereof, is reduced, expunged, disallowed, subordinated orrecharacterized. Notwithstanding the foregoing, if any payment or distribution of any kind, whether in cash, property or securities, shall be received bySubordinated Creditor on account of the Subordinated Debt [or the Subordinated Collateral] before Senior Discharge Date (whether or not expresslycharacterized as such), then such payment or distribution shall be segregated by Subordinated Creditor and held in trust for, and shall be promptly paid overto, the Senior Creditors in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct, in respectof the Senior Debt, regardless of whether such Senior Debt, or any portion thereof, is reduced, expunged, disallowed, subordinated orrecharacterized. Subordinated Creditor irrevocably appoints the Senior Agent as Subordinated Creditor’s attorney-in-fact, and grants to the Senior Creditorsa power of attorney with full power of substitution (which power of attorney is coupled with an interest), in the name of Subordinated Creditor or in the nameof the Senior Agent, for the use and benefit of the Senior Creditors, without notice to Subordinated Creditor, to make any such endorsements. This Section 5shall be enforceable even if the Senior Creditors’ liens on the Collateral are alleged, determined, or held to constitute fraudulent transfers (whetherconstructive or actual), preferential transfers, or otherwise avoided or voidable, set aside, recharacterized or equitably subordinated.6.Insolvency Proceedings . (a) This Agreement is intended to constitute and shall be deemed to constitute a “subordination agreement” within themeaning of Section 510(a) of the Bankruptcy Code and is intended to be and shall be interpreted to be enforceable to the maximum extent permittedpursuant to applicable nonbankruptcy law. All references to Borrower or any other Obligor shall include Borrower or such Obligor as debtor and debtor-in-possession and any receiver or trustee for Borrower or any other Obligor (as the case may be) in connection with any case under the Bankruptcy Code or inconnection with any other Insolvency Event.(b)Without limiting the generality of the other provisions of this Agreement, until the Senior Discharge Date, without the express writtenconsent of the Senior Agent, Subordinated Creditor shall not institute or commence (nor shall it join with or support any third party instituting, commencing,opposing, objecting or contesting, as the case may be, or otherwise suffer to exist), any Insolvency Event involving Borrower or any other Obligor.(c)The Senior Creditors shall have the right to enforce rights, exercise remedies (including set-off and the right to credit bid its debt) andmake determinations regarding the release, disposition, or restrictions with respect to the Collateral without any consultation with or consent of SubordinatedCreditor. (d)Subordinated Creditor will not, and hereby waives any right to bring, join in, or otherwise support or take any action to (i) contest thevalidity, legality, enforceability, perfection, priority or avoidability of any of the Senior Debt, any of the Senior Loan Documents or any security interestsand/or liens of the Senior Creditors on or in any property or assets of Borrower or any other Obligor, including without limitation, the Collateral; (ii) interferewith or in any manner oppose or support any other Person in opposing any foreclosure on or other disposition of any Collateral by the Senior Creditors inaccordance with applicable law, or otherwise to contest, protest, object to or interfere with the manner in which the Senior Creditors may seek to enforce theLiens on any Collateral; (iii) provide a debtor-in-possession facility (including on a priming basis) to Borrower or any other Obligor, under Section 362, 363or 364 of the Bankruptcy Code or any other applicable law, without the consent, in their sole discretion, of the Senior Creditors; or (iv) exercise any rightsagainst the Senior Creditors or the Collateral under Section 506(c) of the Bankruptcy Code. [Subordinated Creditor hereby waives any and all rights it mayhave as a junior lien creditor or otherwise to contest, protest, object to or interfere with the manner in which any Senior Creditor seeks to enforce its liens onor security interests in any Collateral.](e)Subordinated Creditor will not, and hereby waives any right to, oppose, contest, object to, join in, or otherwise support any oppositionto or objection with respect to, (i) any request or motion of the Senior Creditors seeking, pursuant to Section 362(d) of the Bankruptcy Code or otherwise, themodification, lifting or vacating of the automatic stay of Section 362(a) of the Bankruptcy Code or from any other stay in connection with any InsolvencyEvent or seeking adequate protection of the Senior Creditors’ interests in the Collateral or with respect to the Senior Debt (whether under Sections 362, 363,and/or 364 of the Bankruptcy Code or other applicable law), and, until Senior Discharge Date, Subordinated Creditor agrees that it shall not seek relief fromsuch automatic stay without the prior written consent of the Senior Agent; (ii) any debtor-in-possession financing (including on aExhibit F-4 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. priming basis) or use of cash collateral (as defined in Section 363(a) of the Bankruptcy Code or other applicable law) arrangement by Borrower, whether fromthe Senior Creditors or any other third party under Section 362, 363 or 364 of the Bankruptcy Code or any other applicable law, if the Senior Creditors, intheir sole discretion, consent to such debtor-in-possession financing or cash collateral arrangement, and Subordinated Creditor shall not request adequateprotection (whether under Sections 362, 363, and/or 364 of the Bankruptcy Code or other applicable law) or any other relief in connection therewith; (iii) anysale or other disposition of the Collateral or substantially all of the assets of Borrower or any other Obligor (include any such sale free and clear of liens orother claims) under Section 363 of the Bankruptcy Code or other applicable law if the Senior Creditors, in their sole discretion, consent to such sale ordisposition; (vii) the Senior Creditors’ exercise or enforcement of its right to make an election under Section 1111(b) of the Bankruptcy Code, andSubordinated Creditor hereby waives any claim it may hereafter have against the Senior Creditors arising out of such election; (viii) the Senior Creditors’exercise or enforcement of its right to credit bid any or all of its debt claims against Borrower or any other Obligor, including, without limitation, the SeniorDebt; or (ix) any plan of reorganization or liquidation if the Senior Creditors, in their sole discretion, consent to, vote in favor of, or otherwise do not opposesuch plan of reorganization or liquidation, and, in furtherance thereof, Subordinated Creditor hereby grants to the Senior Creditors the right to voteSubordinated Creditor’s claim or claims (as such term is defined in the Bankruptcy Code) arising on account of or in connection with the Subordinated Debt,as Subordinated Creditor’s agent, with respect to any plan of reorganization or liquidation to which Subordinated Creditor may be entitled to vote in anybankruptcy or liquidation proceeding or in connection with any other Insolvency Event of Borrower or any other Obligor.7.Distributions of Proceeds of Collateral . All realizations upon any Collateral pursuant to or in connection with an Enforcement Action, anInsolvency Event or otherwise shall be paid or delivered to the Senior Agent in respect of the Senior Debt until the Senior Discharge Date before any paymentmay be made to Subordinated Creditor. 8.Release of Liens . In the event of any private or public sale or other disposition, by or with the consent of the Senior Agent, of all or any portion ofthe Collateral, Subordinated Creditor agrees that such sale or disposition shall be free and clear of any liens Subordinated Creditor may have on suchCollateral[, and, if the sale or other disposition includes any pledged equity interests in any Obligor, if the Subordinated Collateral includes any such anypledged equity interests, the Subordinated Creditor further agrees to release the entities whose pledged equity interests are sold from all SubordinatedDebt]. Subordinated Creditor agrees that, in connection with any such sale or other disposition, (i) the Senior Creditors are authorized to file any and all UCCand other applicable lien releases and/or terminations in respect of any liens held by Subordinated Creditor in connection with such a sale or otherdisposition, and (ii) it shall execute any and all lien releases or other documents reasonably requested by the Senior Agent in connection therewith. Infurtherance of the foregoing, Subordinated Creditor hereby appoints the Senior Agent as its attorney-in-fact, with full authority in the place and stead ofSubordinated Creditor and full power of substitution and in the name of Subordinated Creditor or otherwise, to execute and deliver any document orinstrument which Subordinated Creditor is required to deliver pursuant to this Section 8 , such appointment being coupled with an interest andirrevocable. Subordinated Creditor agrees that the Senior Creditors may release or refrain from enforcing their security interest in any Collateral, or permit theuse or consumption of such Collateral by Borrower free of any Subordinated Creditor security interest, without incurring any liability to SubordinatedCreditor.9.Attorney-In-Fact . Until the Senior Discharge Date, Subordinated Creditor irrevocably appoints the Senior Agent as its attorney-in-fact, withpower of attorney with power of substitution, in Subordinated Creditor’s name or in any Senior Creditor’s name, for the Senior Creditors’ use and benefitwithout notice to Subordinated Creditor, to do the following during an Insolvency Event:(a)file any claims in respect of the Subordinated Debt on behalf of Subordinated Creditor if Subordinated Creditor does not do so at least30 days before the time to file claims expires; and(b)vote Subordinated Creditor’s claim or claims (as such term is defined in the Bankruptcy Code) arising on account of or in connectionwith the Subordinated Debt, as Subordinated Creditor’s agent, with respect to any plan of reorganization or liquidation to which Subordinated Creditor maybe entitled to vote in any bankruptcy or liquidation proceeding or in connection with any other Insolvency Event of Borrower or any other Obligor.Such power of attorney is irrevocable and coupled with an interest.10.Legend; Amendment of Debt . (a) Subordinated Creditor will immediately put a legend on or otherwise indicate on the Subordinated Notethat the Subordinated Note is subject to this Agreement. (b)Until the Senior Discharge Date, Subordinated Creditor shall not, without prior written consent of the Senior Agent, agree to anyamendment, modification or waiver of any provision of the Subordinated Debt Documents, if the effect of suchExhibit F-5 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. amendment, modification or waiver is to: (i) terminate or impair the subordination of the Subordinated Debt in favor of the Senior Creditors; (ii) increase theinterest rate on the Subordinated Debt or change (to earlier dates) the dates upon which principal, interest and other sums are due under the SubordinatedNote; (iii) alter the redemption, prepayment or subordination provisions of the Subordinated Debt; (iv) impose on Borrower or any other Obligor any new oradditional prepayment charges, premiums, reimbursement obligations, reimbursable costs or expenses, fees or other payment obligations; (v) alter therepresentations, warranties, covenants, events of default, remedies and other provisions in a manner which would make such provisions materially moreonerous, restrictive or burdensome to Borrower or any other Obligor; (vi) 9 [grant a lien or security interest in favor of any holder of the Subordinated Debt onany asset or Collateral to secure all or any portion of the Subordinated Debt][terminate or impair the subordination of any security interest or lien securing theSubordinated Debt in favor of the Senior Creditors]; or (vii) otherwise increase the obligations, liabilities and indebtedness in respect of the SubordinatedDebt or confer additional rights upon Subordinated Creditor, which individually or in the aggregate would be materially adverse to Borrower, any otherObligor or the Senior Creditors. Any such amendment, modification or waiver made in violation of this Section 10(b) shall be void.(c)At any time without notice to Subordinated Creditor, the Senior Creditors may take such action with respect to the Senior Debt as theSenior Creditors, in their sole discretion, may deem appropriate, including, without limitation, terminating advances, increasing the principal, extending thetime of payment, increasing interest rates, renewing, compromising or otherwise amending any documents affecting the Senior Debt and any Collateralsecuring the Senior Debt, and enforcing or failing to enforce any rights against Borrower or any other person. No action or inaction will impair or otherwiseaffect any Senior Creditor’s rights under this Agreement. 11.Certain Waivers . (a) Subordinated Creditor hereby (i) waives any and all notice of the incurrence of the Senior Debt or any part thereof; (ii)waives any and all rights it may have to require the Senior Creditors to marshal assets, to exercise rights or remedies in a particular manner, to forbear fromexercising such rights and remedies in any particular manner or order, or to claim the benefit of any appraisal, valuation or other similar right that mayotherwise be available under applicable law, regardless of whether any action or failure to act by or on behalf of the Senior Creditors is adverse to the interestof Subordinated Creditor; (iii) agrees that the Senior Creditors shall have no liability to Subordinated Creditor, and Subordinated Creditor hereby waives anyclaim against the Senior Creditors arising out of any and all actions not in breach of this Agreement which the Senior Creditors may take or permit or omit totake with respect to the Senior Loan Documents (including any failure to perfect or obtain perfected security interests in the Collateral), the collection of theSenior Debt or the foreclosure upon, or sale, liquidation or other disposition of, any Collateral; and (iv) agrees that the Senior Creditors have no duty, expressor implied, fiduciary or otherwise, to them in respect of the maintenance or preservation of the Collateral, the Senior Debt or otherwise. Without limiting theforegoing, Subordinated Creditor agrees that the Senior Creditors shall have no duty or obligation to maximize the return to any class of creditors holdingindebtedness of any type (whether Senior Debt or Subordinated Debt), notwithstanding that the order and timing of any realization, sale, disposition orliquidation of the Collateral may affect the amount of proceeds actually received by such class of creditors from such realization, sale, disposition orliquidation.(b)Subordinated Creditor confirms that this Agreement shall govern as between the Senior Creditors and the SubordinatedCreditor irrespective of: (i) any lack of validity or enforceability of any Senior Loan Document or any Subordinated Debt Document; (ii) the occurrence ofany Insolvency Event in respect of any Obligor; (iii) whether the Senior Debt, or the liens or security interests securing the Senior Debt, shall be held to beunperfected, deficient, invalid, void, voidable, voided, unenforceable, subordinated, reduced, discharged or are set aside by a court of competent jurisdiction,including pursuant or in connection with any Insolvency Event; (iv) any change in the time, manner or place of payment of, or in any other terms of, all orany of the Senior Debt or the Subordinated Debt, or any amendment or waiver or other modification, including any increase in the amount thereof, whetherby course of conduct or otherwise, of the terms of any Senior Loan Document or any Subordinated Debt Document or any guarantee thereof; or (v) any othercircumstances which otherwise might constitute a defense available to, or a discharge of, any Obligor in respect of the Senior Debt or the Subordinated Debt.12.Representations and Warranties . Subordinated Creditor represents and warrants to the Senior Creditors that:(a)all action on the part of Subordinated Creditor, its officers, directors, partners, members and shareholders, as applicable, necessary forthe authorization of this Agreement and the performance of all obligations of Subordinated Creditor hereunder has been taken;9 Select one, as appropriate.Exhibit F-6 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (b)this Agreement constitutes the legal, valid and binding obligation of Subordinated Creditor, enforceable against Subordinated Creditorin accordance with its terms;(c)the execution, delivery and performance of and compliance with this Agreement by Subordinated Creditor will not (i) result in anymaterial violation or default of any term of any of Subordinated Creditor’s charter, formation or other organizational documents (such as Articles orCertificate of Incorporation, bylaws, partnership agreement, operating agreement, etc.) or (ii) violate any material applicable law, rule or regulation; and(d)Subordinated Creditor has not previously assigned any interest in the Subordinated Debt[ or any Subordinated Collateral], and noPerson other than the Subordinated Creditor owns an interest in the Subordinated Debt[ or Subordinated Collateral].13.Term; Reinstatement . This Agreement shall remain in full force and effect until the Senior Discharge Date, notwithstanding the occurrence ofan Insolvency Event. If, after the Senior Discharge Date, the Senior Creditors must disgorge any payments made on the Senior Debt for any reason (including,without limitation, in connection with the bankruptcy of Borrower or in connection with any other Insolvency Event), this Agreement and the relative rightsand priorities provided in it, will be reinstated as to all disgorged payments as though such payments had not been made, and Subordinated Creditor willimmediately pay the Senior Agent all payments received in respect of the Subordinated Debt to the extent such payments or retention thereof would havebeen prohibited under this Agreement. 14.Successors and Assigns . This Agreement binds Subordinated Creditor, its successors or assigns, and benefits the Senior Creditors’ successors orassigns. This Agreement is for Subordinated Creditor’s and the Senior Creditors’ benefit and not for the benefit of Borrower or any other party. SubordinatedCreditor shall not sell, assign, pledge, dispose of or otherwise transfer all or any portion of the Subordinated Debt or any related document or any interest inany Collateral therefor unless prior to the consummation of any such action, the transferee thereof shall execute and deliver to the Senior Agent an agreementof such transferee to be bound hereby, or an agreement substantially identical to this Agreement providing for the continued subjection of the SubordinatedDebt, the interests of the transferee in the Collateral and the remedies of the transferee with respect thereto as provided herein with respect to SubordinatedCreditor and for the continued effectiveness of all of the other rights of the Senior Creditors arising under this Agreement, in each case in form satisfactory tothe Senior Creditors. Any such sale, assignment, pledge, disposition or transfer not made in compliance with the terms of this Section 14 shall be void. 15.Further Assurances . Subordinated Creditor hereby agrees to execute such documents and/or take such further action as the Senior Agent may atany time or times reasonably request in order to carry out the provisions and intent of this Agreement, including, without limitation, ratifications andconfirmations of this Agreement from time to time hereafter, as and when requested by the Senior Agent.16.Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of whichtogether shall constitute one instrument. Executed counterparts may be delivered by facsimile.17.Governing Law; Waiver of Jury Trial . (a) This Agreement and the rights and obligations of the parties hereunder shall be governed by, andconstrued in accordance with, the law of the State of New York, without regard to principles of conflicts of laws that would result in the application of thelaws of any other jurisdiction; provided that Section 5-1401 of the New York General Obligations Law shall apply. (b)EACH PARTY HERETO WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON ORARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN.18.Entire Agreement; Waivers and Amendments . This Agreement represents the entire agreement with respect to the subject matter hereof, andsupersedes all prior negotiations, agreements and commitments. The Senior Creditors and Subordinated Creditor are not relying on any representations bythe other creditor party or Borrower in entering into this Agreement, and each of the Senior Creditors and Subordinated Creditor has kept and will continue tokeep itself fully apprised of the financial and other condition of Borrower. No amendment, modification, supplement, termination, consent or waiver of or toany provision of this Agreement, nor any consent to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed bythe Senior Agent and Subordinated Creditor. Any waiver of any provision of this Agreement, or any consent to any departure from the terms of any provisionof this Agreement, shall be effective only in the specific instance and for the specific purpose for which given.Exhibit F-7 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 19.No Waiver . No failure or delay on the part of any Senior Creditor or Subordinated Creditor in the exercise of any power, right, remedy orprivilege under this Agreement shall impair such power, right, remedy or privilege or shall operate as a waiver thereof, nor shall any single or partial exerciseof any such power, right or privilege preclude any other or further exercise of any other power, right or privilege. The rights and remedies under thisAgreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to any Senior Creditor.20.Legal Fees . In the event of any legal action to enforce the rights of a party under this Agreement, the party prevailing in such action shall beentitled, in addition to such other relief as may be granted, all reasonable, invoiced and out-of-pocket costs and expenses, including reasonable attorneys’fees, incurred in such action.21.Severability . Any provision of this Agreement which is illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent such illegality, invalidity, prohibition or unenforceability without invalidating or impairing the remainingprovisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.22.Notices . All notices, demands, instructions and other communications required or permitted to be given to or made upon any party hereto shallbe in writing and shall be delivered or sent by first-class mail, postage prepaid, or by overnight courier or messenger service or by facsimile or electronic mail,message confirmed, and shall be deemed to be effective for purposes of this Agreement on the day that delivery is made or refused. Unless otherwisespecified in a notice mailed or delivered in accordance with the foregoing sentence, notices, demands, instructions and other communications in writing shallbe given to or made upon the respective parties hereto at their respective addresses and facsimile numbers indicated on the signature pages hereto.23.No Third-Party Beneficiaries; Other Benefits . The terms and provisions of this Agreement are intended solely for the benefit of each partyhereto and their respective successors and permitted assigns, and the parties do not intend to confer third party beneficiary rights upon any other person.Subordinated Creditor understands that there may be various agreements between the Senior Creditors and Borrower or the other Obligors evidencing andgoverning the Senior Debt, and Subordinated Creditor acknowledges and agrees that such agreements are not intended to confer any benefits onSubordinated Creditor and that the Senior Creditors shall have no obligation to Subordinated Creditor or any other Person to exercise any rights, enforce anyremedies, or take any actions which may be available to it under such agreements.[Signature pages follow]Exhibit F-8 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. SUBORDINATED CREDITOR: [_____________] By Name: Title: Address for Notices: SENIOR AGENT (on behalf of the SENIORCREDITORS): CRG SERVICING LLC By Name: Title: Address for Notices: 1000 Main Street, Suite 2500Houston, TX 77002Attn: General CounselTel.: 713.209.7350Fax: 713.209.7351Email: adorenbaum@crglp.com T2 BIOSYSTEMS, INC. By Name: Title: Address for Notices: [__________][__________][__________]Attn: [__________]Tel.: [__________]Fax: [__________]Email: [__________] Exhibit F-9 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Exhibit Gto Term Loan Agreement FORM OF INTERCREDITOR AGREEMENT This Intercreditor Agreement, dated as of [__________] (this “ Agreement ”), is made between CRG Servicing LLC, a Delaware limited liabilitycompany, as Administrative Agent, and [INSERT NAME OF A/R LENDER], a [__________] (“ [A/R Lender] ”).RECITALSA.T2 Biosystems, Inc., a Delaware corporation (“ Borrower ”), has entered into the A/R Facility Agreement (as defined below) with [A/RLender], which, along with any other obligations owing to [A/R Lender] by Borrower, is secured by certain property of Borrower [and the other Obligors (asdefined below)].B.Borrower [has][and the other Obligors have] entered into that certain Term Loan Agreement, dated as of December 30, 2016 (asamended, restated, supplemented or otherwise modified from time to time, the “ CRG Credit Agreement ”), with certain lenders and CRG Servicing LLC, aDelaware limited liability company, as administrative agent and collateral agent for such lenders (in such capacities and together with its successors andassigns, “ CRG Agent ”), which is secured by certain property of Borrower [and the other Obligors].C.To induce each of [A/R Lender] and the lenders under the CRG Credit Agreement to make and maintain the credit extensions under theA/R Facility Agreement and the CRG Credit Agreement, respectively, each of [A/R Lender] and CRG Agent, on behalf of the “Secured Parties” (as defined inthe CRG Credit Agreement, the “ CRG Creditors ”; CRG Creditors, collectively with [A/R Lender], “ Creditors ” and each individually, a “ Creditor ”), iswilling to enter into this Agreement to, among other things, subordinate certain of its liens on the terms and conditions herein set forth.NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:1.Definitions . As used herein, the following terms have the following meanings:“ A/R Facility Agreement ” means that certain [Credit Agreement], dated as of [_____________], between [A/R Lender] and Borrower, as thesame may be amended, restated, supplemented or otherwise modified from time to time.“ A/R Facility Documents ” means the A/R Facility Agreement and all [Loan Documents], each as defined in the A/R Facility Agreement.“ A/R Facility Senior Collateral ” means (i) [Borrower’s] accounts arising from the sale or lease of inventory or the provision of services, excluding IP/Equipment Accounts (collectively, “ Inventory/Service Accounts ”), (ii) [Borrower’s] inventory, (iii) to the extent evidencing, governing, orsecuring [Borrower’s] Inventory/Service Accounts or inventory, [Borrower’s] payment intangibles, chattel paper, instruments and documents, (iv) to theextent held in a segregated deposit account, cash proceeds of [Borrower’s] Inventory/Service Accounts and inventory, and (v) proceeds of insurance policiescovering [Borrower’s] Inventory/Service Accounts and inventory received with respect to such accounts and inventory; provided that , for purposes ofclarification, notwithstanding the foregoing, in no event shall “A/R Facility Senior Collateral” include any right, title or interest of any Obligor in (A) anyIntellectual Property or any licenses thereof, (B) any accounts or proceeds arising from the sale, transfer, licensing or other disposition of any IntellectualProperty or licenses, or from the sale, transfer, lease or other disposition of equipment (collectively, “ IP/Equipment Accounts ”), (C) equipment, (D) to theextent evidencing, governing, securing or otherwise related to equipment, any general intangibles, chattel paper, instruments or documents or (E) proceeds ofequipment or proceeds of insurance policies with respect to equipment.“ Bankruptcy Code ” means the federal bankruptcy law of the United States as from time to time in effect, currently as Title 11 of the United StatesCode. Section references to current sections of the Bankruptcy Code shall refer to comparable sections of any revised version thereof if section numbering ischanged.Exhibit G-1 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. “ Claim ” means, (i) in the case of [A/R Lender], any and all present and future “claims” (used in its broadest sense, as contemplated by and definedin Section 101(5) of the Bankruptcy Code, but without regard to whether such claim would be disallowed under the Bankruptcy Code) of [A/R Lender] nowor hereafter arising or existing under or relating to the A/R Facility Documents (with the portion of [A/R Lender]’s Claim at any time consisting of theaggregate principal amount of indebtedness under the A/R Facility Documents not to exceed the lesser of $[__________] and 80% of the face amount atsuch time of [Borrower’s] eligible Inventory/Service Accounts (as defined in the A/R Facility Agreement as of the date hereof), whether joint, several, or jointand several, whether fixed or indeterminate, due or not yet due, contingent or non-contingent, matured or unmatured, liquidated or unliquidated, or disputedor undisputed, whether under a guaranty or a letter of credit, and whether arising under contract, in tort, by law, or otherwise, any interest or fees thereon(including interest or fees that accrue after the filing of a petition by or against any Obligor under the Bankruptcy Code, irrespective of whether allowableunder the Bankruptcy Code), any costs of Enforcement Actions, including reasonable attorneys’ fees and costs, and any prepayment or termination fees, and(ii) in the case of CRG Creditors, any and all present and future “claims” (used in its broadest sense, as contemplated by and defined in Section 101(5) of theBankruptcy Code, but without regard to whether such claim would be disallowed under the Bankruptcy Code) of CRG Creditors now or hereafter arising orexisting under or relating to the CRG Documents, whether joint, several, or joint and several, whether fixed or indeterminate, due or not yet due, contingentor non-contingent, matured or unmatured, liquidated or unliquidated, or disputed or undisputed, whether under a guaranty or a letter of credit, and whetherarising under contract, in tort, by law, or otherwise, any interest or fees thereon (including interest or fees that accrue after the filing of a petition by or againstany Obligor under the Bankruptcy Code, irrespective of whether allowable under the Bankruptcy Code), any costs of Enforcement Actions, includingreasonable attorneys’ fees and costs, and any prepayment or termination fees.“ Collateral ” means all real or personal property of any Obligor in which any Creditor now or hereafter has a security interest.“ Common Collateral ” means all Collateral in which both [A/R Lender] and CRG Agent have a security interest.“ CRG Documents ” means all documentation related to the CRG Credit Agreement and all Loan Documents (as defined in the CRG CreditAgreement), including security or pledge agreements and all other related agreements.“ CRG Senior Collateral ” means all Collateral in which CRG Agent has a security interest, other than the A/R Facility Senior Collateral,including, for the avoidance of doubt and without limitation, any additional Collateral in which CRG Agent may have a security interest following thecommencement of or in connection with any Insolvency Proceeding, including without limitation Collateral subject to any CRG Agent security interests,superpriority claims, or other rights arising under Sections 507(b) and 552 of the Bankruptcy Code.“ Credit Documents ” means, collectively, the CRG Documents and the A/R Facility Documents.“ Enforcement Action ” means, with respect to any Creditor and with respect to any Claim of such Creditor or any item of Collateral in which suchCreditor has or claims a security interest, lien, or right of offset, (i) any action, whether judicial or nonjudicial, to repossess, collect, offset, recoup, givenotification to third parties with respect to, sell, dispose of, foreclose upon, give notice of sale, disposition, or foreclosure with respect to, or obtain equitableor injunctive relief with respect to, such Claim or Collateral, (ii) any action in connection with any Insolvency Proceeding to protect, defend, enforce or assertrights with respect to such Claim or Collateral, including without limitation filing and defending any proof of claim, opposing or joining in the opposition ofany sale of assets or confirmation of a plan of reorganization, or opposing or joining in the opposition of any proposed debtor-in-possession loan or use ofcash collateral, and (iii) the filing of, or the joining in the filing of, an involuntary bankruptcy or insolvency proceeding against any Obligor. “ Intellectual Property ” means, collectively, all copyrights, copyright registrations and applications for copyright registrations, including allrenewals and extensions thereof, all rights to recover for past, present or future infringements thereof and all other rights whatsoever accruing thereunder orpertaining thereto (collectively, “ Copyrights ”), all patents and patent applications, including the inventions and improvements described and claimedtherein together with the reissues, divisions, continuations, renewals, extensions and continuations in part thereof, all damages and payments for past orfuture infringements thereof and rights to sue therefor, and all rights corresponding thereto throughout the world and all income, royalties, damages andpayments now or hereafter due and/or payable under or with respect thereto (collectively, “ Patents ”), and all trade names, trademarks and service marks,logos, trademark and service mark registrations, and applications for trademark and service mark registrations, including all renewals of trademark and servicemark registrations, all rights to recover for all past, present and future infringements thereof and all rights to sue therefor, and all rights corresponding theretothroughout the world (collectively, “ Trademarks ”), together, in each case,Exhibit G-2 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. with the product lines and goodwill of the business connected with the use of, and symbolized by, each such trade name, trademark and service mark,together with (a) all inventions, processes, production methods, proprietary information, know-how and trade secrets; (b) all licenses or user or otheragreements granted to any Obligor with respect to any of the foregoing, in each case whether now or hereafter owned or used; (c) all information, customerlists, identification of suppliers, data, plans, blueprints, specifications, designs, drawings, recorded knowledge, surveys, engineering reports, test reports,manuals, materials standards, processing standards, performance standards, catalogs, computer and automatic machinery software and programs; (d) all fieldrepair data, sales data and other information relating to sales or service of products now or hereafter manufactured; (e) all accounting information and allmedia in which or on which any information or knowledge or data or records may be recorded or stored and all computer programs used for the compilationor printout of such information, knowledge, records or data; (f) all licenses, consents, permits, variances, certifications and approvals of governmentalagencies now or hereafter held by any Obligor; and (g) all causes of action, claims and warranties now or hereafter owned or acquired by any Obligor inrespect of any of the items listed above.“ Junior Collateral ” means, (i) in the case of [A/R Lender], all Common Collateral consisting of CRG Senior Collateral and (ii) in the case of CRGCreditors, all Common Collateral consisting of A/R Facility Senior Collateral.“ Obligor ” means Borrower, each subsidiary thereof and each other person or entity that provides a guaranty of, or collateral for, any Claim of anyCreditor.“ Proceeds Sweep Period ” means the period beginning on the later to occur of (i) the occurrence of an event of default under any Creditor’s CreditDocuments and (ii) receipt by the other Creditor of written notice from such Creditor of such event of default, and ending on the date on which such event ofdefault shall have been waived in writing by the Creditor issuing such notice.“ Senior Collateral ” means, (i) in the case of [A/R Lender], all A/R Facility Senior Collateral and (ii) in the case of CRG Creditors, all CRG SeniorCollateral.“ UCC ” means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any UniformCommercial Code, the Uniform Commercial Code as in effect in the State of New York. The following terms have the meanings given to them in theapplicable UCC: “account”, “chattel paper”, “commodity account”, “deposit account”, “document”, “equipment”, “general intangible”, “instrument”,“inventory”, “proceeds” and “securities account”.2.Lien Subordination . (a) Notwithstanding the respective dates of attachment or perfection of the security interests of CRG Creditors and thesecurity interests of [A/R Lender], or any contrary provision of the UCC, or any applicable law or decision, or the provisions of the Credit Documents, andirrespective of whether [A/R Lender] or any CRG Creditor holds possession of all or any part of the Collateral, (i) all now existing and hereafter arisingsecurity interests of [A/R Lender] in any A/R Facility Senior Collateral shall at all times be senior to the security interests of CRG Creditors in such A/RFacility Senior Collateral, and (ii) all now existing and hereafter arising security interests of CRG Creditors in any CRG Senior Collateral shall at all times besenior to any interests, including the security interests of [A/R Lender] in such CRG Senior Collateral. Notwithstanding the foregoing, [A/R Lender] agreesand acknowledges that it shall not receive, and [neither Borrower nor any Obligor shall grant][Borrower shall not grant], any security interest to [A/R Lender]in the CRG Senior Collateral.(b)Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors:(i)acknowledges and consents to (A) [Borrower][each Obligor] granting to the other Creditor a security interest in the CommonCollateral of such other Creditor, (B) the other Creditor filing any and all financing statements and other documents as reasonably deemed necessary by theother Creditor in order to perfect its security interest in its Common Collateral, and (C) [Borrower’s][each Obligor’s] entry into the Credit Documents to whichthe other Creditor is a party.(ii)acknowledges, agrees and covenants, notwithstanding Section 2(c) but subject to Section 5 , that it shall not contest,challenge or dispute the validity, attachment, perfection, priority or enforceability of the other Creditor’s security interest in the Common Collateral, or thevalidity, priority or enforceability of the other Creditor’s Claim. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary,[A/R Lender] shall not file or join in any motion or pleading in connection with any Insolvency Proceeding or take any other action seeking to recharacterizeany Intellectual Property, the proceeds thereof, or any other CRG Senior Collateral or proceeds thereof as A/R Facility Senior Collateral.(c)Subject to Section 2(b)(ii) , the priorities provided for herein with respect to security interests and liens are applicable only to the extentthat such security interests and liens are enforceable, perfected and have not been avoided; if a securityExhibit G-3 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. interest or lien is judicially determined to be unenforceable or unperfected or is judicially avoided with respect to one or more Claims or any part thereof, thepriorities provided for herein shall not be available to such security interest or lien to the extent that it is avoided or determined to beunenforceable. Nothing in this Section 2(c) affects the operation of any turnover of payment provisions hereof, or of any other agreements among any of theparties hereto.3.Distribution of Proceeds of Common Collateral . (a) During each Proceeds Sweep Period, all proceeds including proceeds of any sale, exchange,collection, or other disposition of:(i)A/R Facility Senior Collateral shall be distributed first, to [A/R Lender], in an amount up to the amount of [A/R Lender]’sClaim; then, to CRG Agent, in an amount up to the amount of CRG Creditors’ Claim;(ii)CRG Senior Collateral shall be distributed first, to CRG Agent, in an amount up to the amount of CRG Creditors’ Claim;then, to [A/R Lender], in an amount up to the amount of [A/R Lender]’s Claim.(b)In the event that, notwithstanding Section 3(a) , any Creditor shall during any Proceeds Sweep Period receive any payment,distribution, security or proceeds constituting its Junior Collateral prior to the indefeasible payment in full of the other set of Creditors’ Claims andtermination of all commitments of the other set of Creditors under their Credit Documents, such Creditor shall hold in trust, for such other Creditor, suchpayment, distribution, security or proceeds, and shall deliver to such other Creditor, in the form received (with any necessary endorsements or as a court ofcompetent jurisdiction may otherwise direct) such payment, distribution, security or proceeds for application to the other set of Creditors’ Claims inaccordance with Section 3(a) .(c)At all times other than during a Proceeds Sweep Period, all proceeds including proceeds of any sale, exchange, collection, or otherdisposition of Collateral shall be distributed or applied, as applicable, in accordance with the CRG Documents and the A/R Facility Documents. (d)Except as expressly set forth herein, nothing in this Section 3 shall obligate any Creditor (i) to sell, exchange, collect or otherwisedispose of Collateral at any time, or (ii) to take any action in violation of any stay imposed in connection with any Insolvency Proceeding, including withoutlimitation the automatic stay in Section 362(a) of the Bankruptcy Code, nor shall any Creditor have any liability to the other arising from or in connectionwith such Creditor’s failure to take such action.4.Subordination of Remedies . Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors (such Person for purposes of this Section 4 , the “Junior Creditor ”), agrees, subject to Section 5 , that, (i) unless and until all Claims of the other set of Creditors (for purposes of this Section 4 , the “ SeniorCreditor ”) have been indefeasibly paid in full and all commitments of the Senior Creditor under its Credit Documents have been terminated, or (ii) until theexpiration of a period of 180 days from the date of notice of default under the Senior Creditor’s Credit Documents given by the Senior Creditor to the JuniorCreditor, whichever is earlier, and whether or not any Insolvency Proceeding has been commenced by or against any Obligor, the Junior Creditor shall not,without the prior written consent of the Senior Creditor, enforce, or attempt to enforce, any rights or remedies under or with respect to any of such JuniorCreditor’s Junior Collateral, including causing or compelling the pledge or delivery of such Junior Collateral, any attachment of, levy upon, executionagainst, foreclosure upon or the taking of other action against or institution of other proceedings with respect to any such Junior Collateral, notifying anyaccount debtors of any Obligor, asserting any claim or interest in any insurance with respect to such Junior Collateral, or exercising any rights under anylockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement with respect to such Junior Collateral,or institute or commence, or join with any person or entity in commencing, any action or proceeding with respect to such rights or remedies (including anyaction of foreclosure, enforcement, collection or execution and any Insolvency Proceeding involving any Obligor), except that notwithstanding theforegoing, at all times, including during a Proceeds Sweep Period, the Junior Creditor shall be able to exercise its rights under a lockbox agreement or anaccount control agreement with respect to any deposit account, securities account or commodity account constituting Collateral, including its rights to freezesuch account or exercise any rights of offset; provided that any distribution or withdrawal from such account shall be applied in accordance with Section 3(a).5.Insolvency Proceedings . (a) Rights Continue . In the event of any Obligor’s insolvency, reorganization or any case, action or proceeding,commenced by or against such Obligor, under any bankruptcy or insolvency law or laws relating to the relief of debtors, including, without limitation, anyvoluntary or involuntary bankruptcy (including any case commenced under the Bankruptcy Code), insolvency, receivership, liquidation, dissolution,winding-up or other similar statutory or common law proceeding or arrangement involving any Obligor, the readjustment of its liabilities, any assignment forthe benefit of its creditors, or any marshalling of its assets or liabilities (each, an “ Insolvency Proceeding ”), (i) this Agreement shall remain in full force andeffect in accordance with Section 510(a) of the United States Bankruptcy Code, and (ii) the Collateral shall include, without limitation, allExhibit G-4 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. Collateral arising during or after any such Insolvency Proceeding (which Collateral shall be subject to the priorities set forth in this Agreement).(b)Proof of Claim, Sales and Plans . At any meeting of creditors or in the event of any Insolvency Proceeding, each Creditor shall retainthe right to vote, file a proof of claim and otherwise act with respect to its Claims (including the right to vote to accept or reject any plan of partial orcomplete liquidation, reorganization, arrangement, composition, or extension (a “ Plan ”)); provided that (i) no Creditor shall initiate, prosecute orparticipate in any claim or action in such Insolvency Proceeding directly or indirectly challenging the enforceability, validity, perfection or priority of theother set of Creditors’ Claims, this Agreement, the Credit Documents, or any liens securing the other set of Creditors’ Claims; and (ii) no Creditor shallpropose any Plan or file or join in any motion or pleading in support of any motion or Plan or exercise any other voting rights unless such Plan provides forthe treatment of the Creditors’ claims in accordance with the terms of Section 5(g) and otherwise consistent with the terms of this Agreement, or that wouldotherwise impair the timely repayment of the other set of Creditors’ Claims in accordance with its terms or impair or impede any rights of the other set ofCreditors.(c)Finance and Sale Issues . (i) If any Obligor shall be subject to any Insolvency Proceeding and a Creditor shall desire to permit the useby such Obligor of cash collateral (as defined in Section 363(a) of the Bankruptcy Code, “ Cash Collateral ”) constituting such Creditor’s Senior Collateralor to permit any Obligor to obtain financing (including on a priming basis with respect to such Creditor’s Senior Collateral), whether from such Creditor orany other third party under Section 362, 363 or 364 of the Bankruptcy Code or any other applicable law (each, a “ Post-Petition Financing ”), then the otherset of Creditors shall not oppose or raise any objection to or contest (or join with or support any third party opposing, objecting to or contesting), such use ofCash Collateral or Post-Petition Financing and shall not request adequate protection or any other relief in connection therewith (except as specificallypermitted under Section 5(e) ); provided, however, that, notwithstanding the foregoing, each Creditor shall be entitled to oppose, raise objection to, orcontest (or join with or support any third party opposing, objecting to, or contesting) any such use of Cash Collateral or Post-Petition Financing if suchproposed use of Cash Collateral or Post-Petition Financing would result in any liens on such Creditor’s Senior Collateral to be subordinated to or pari passuwith such Cash Collateral or Post-Petition Financing.(ii)Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors, agrees that it shall raise no objection to, and shall notoppose or contest (or join with or support any third party opposing, objecting to or contesting), a sale, revesting or other disposition of any Collateralconstituting its Junior Collateral free and clear of its liens or other Claims, whether under Sections 363 or 1141 of the Bankruptcy Code or other applicablelaw, if the other set of Creditors has consented to such sale or disposition of such assets; provided, however, that, notwithstanding the foregoing and for theavoidance of doubt, any Creditor shall be entitled to oppose, raise objection to, or contest (or join with or support any third party opposing, objecting to, orcontesting) any sale, revesting or other disposition of any Collateral constituting its Senior Collateral free and clear of its liens or other Claims.(d)Relief from the Automatic Stay . Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors, agrees that, until the other set ofCreditors’ Claims have been indefeasibly paid in full, such Creditor shall not seek relief, pursuant to Section 362(d) of the Bankruptcy Code or otherwise,from the automatic stay of Section 362(a) of the Bankruptcy Code or from any other stay in any Insolvency Proceeding in respect of its Junior Collateralwithout the prior written consent of such other Creditor.(e)Adequate Protection . [A/R Lender] agrees that it shall not:(i)oppose, object to or contest (or join with or support any third party opposing, objecting to or contesting) (A) any request byCRG Agent for adequate protection in any Insolvency Proceeding (or any granting of such request), or (B) any objection by CRG Agent to any motion, relief,action or proceeding based on such Senior Creditor claiming a lack of adequate protection; or(ii)seek or accept any form of adequate protection under any of Sections 362, 363 and/or 364 of the Bankruptcy Code withrespect to the Collateral, except to the extent that, in the sole discretion of CRG Agent, the receipt by [A/R Lender] of any such adequate protection wouldnot reduce (or would not have the effect of reducing) or adversely affect the adequate protection that CRG Creditors otherwise would be entitled to receive, itbeing understood that, in any event, (y) no adequate protection shall be requested or accepted by [A/R Lender] unless CRG Agent is satisfied in its solediscretion with the adequate protection afforded to CRG Creditors, and (z) any such adequate protection is in the form of a replacement lien on the Obligors’assets, which lien shall be subordinated to the liens securing CRG Creditors’ Claims (including any replacement liens granted in respect of CRG Creditors’Claims) and any Post-Petition Financing (and all obligations relating thereto) on the same basis as the other liens securing [A/R Lender]’s Claims are sosubordinated to the liens securing CRG Creditors’ Claims as set forth in this Agreement.Exhibit G-5 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. (f)Post-Petition Interest . Each Creditor shall not oppose or seek to challenge any claim by the other set of Creditors for allowance in anyInsolvency Proceeding of Claims consisting of post-petition interest, fees or expenses; provided that the treatment of such Claims are consistent with theCreditors’ relative priorities set forth in this Agreement.(g)Separate Class . Without limiting anything to the contrary contained herein or in the Credit Documents, each of [A/R Lender] andCRG Agent, on behalf of CRG Creditors, acknowledges and agrees that (i) the grants of liens pursuant to the CRG Documents and the A/R FacilityDocuments constitute two separate and distinct grants of liens, and (ii) because of, among other things, their differing rights in the Collateral, each set ofCreditors’ Claims are fundamentally different from the other’s Claims and must be separately classified in any Plan proposed or adopted in an InsolvencyProceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the respective Claims of theCreditors in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then each of [A/RLender] and CRG Agent, on behalf of CRG Creditors, acknowledges and agrees (x) that all distributions shall be made as if there were separate classes ofsenior and junior secured claims against the Obligors in respect of the Collateral, and (y) to turn over to the other Creditor amounts otherwise received orreceivable by it in the manner described in Section 3(b) to the extent necessary to effectuate the intent of this sentence.(h)Waiver . Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors, waives any claim it may hereafter have against the otherset of Creditors arising out of the election by such other set of Creditors of the application to the claims of such other set of Creditors of Section 1111(b)(2) ofthe Bankruptcy Code, and/or out of any Cash Collateral or Post-Petition Financing arrangement or out of any grant of a lien in connection with the Collateralin any Insolvency Proceeding.6.Notice of Default . Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors, shall give to the other prompt written notice of theoccurrence of any default or event of default (which has not been promptly waived or cured) under any of its Credit Documents of which it has knowledge(and any subsequent cure or waiver thereof) and shall, simultaneously with giving any notice of default or acceleration to Borrower, provide to such otherCreditor a copy of such notice of default. [A/R Lender] acknowledges and agrees that any event of default under the A/R Facility Documents shall bedeemed to be an event of default under the CRG Documents. For the avoidance of doubt, nothing in this Section 6 shall obligate any Creditor to provide anynotice in violation of any stay imposed in connection with any Insolvency Proceeding, including without limitation the automatic stay in Section 362(a) ofthe Bankruptcy Code, nor shall any Creditor have any liability to the other arising from or in connection with such Creditor’s failure to take such action.7.Release of Liens . In the event of any private or public sale or other disposition, by or with the consent of [A/R Lender] and CRG Agent, on behalfof CRG Creditors (such Person, for purposes of this Section 7 , the “ Senior Creditor ”), of all or any portion of such set of Creditors’ Senior Collateral, CRGAgent, on behalf of CRG Creditors, and [A/R Lender], respectively (for purposes of this Section 7 , the “ Junior Creditor ”), agrees that such sale ordisposition shall be free and clear of such Junior Creditor’s liens; provided that such sale or disposition is made in accordance with the UCC or applicableprovisions of the Bankruptcy Code, including without limitation Sections 363(f) or 1141(c) of the Bankruptcy Code. The Junior Creditor agrees that, inconnection with any such sale or other disposition, (i) the Senior Creditor is authorized to file any and all UCC and other applicable lien releases and/orterminations in respect of the liens held by the Junior Creditor in connection with such a sale or other disposition, and (ii) it shall execute any and all lienreleases or other documents reasonably requested by the Senior Creditor in connection therewith.8.Attorney-In-Fact . Until the CRG Creditors’ Claims have been fully paid in cash and the CRG Creditors’ arrangements to lend any funds to theObligors have been terminated, [A/R Lender] irrevocably appoints CRG Agent as [A/R Lender]’s attorney-in-fact, and grants to CRG Agent a power ofattorney with full power of substitution (which power of attorney is coupled with an interest), in the name of [A/R Lender] or in the name of CRG Agent, forthe use and benefit of CRG Agent, without notice to [A/R Lender], to perform at CRG Agent’s option the following acts in any bankruptcy, insolvency orsimilar proceeding involving Borrower:(a)To file the appropriate claim or claims in respect of the [A/R Lender] Claims on behalf of [A/R Lender] if [A/R Lender] does not do soprior to 30 days before the expiration of the time to file claims in such proceeding and if CRG Agent elects, in its sole discretion, to file such claim or claims;and(b)To accept or reject any plan of reorganization or arrangement on behalf of [A/R Lender] and to otherwise vote [A/R Lender]’s claims inrespect of any [A/R Lender] Claim in any manner that CRG Agent deems appropriate for the enforcement of its rights hereunder.Exhibit G-6 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 9.Agent for Perfection . [A/R Lender] acknowledges that applicable provisions of the UCC may require, in order to properly perfect CRG Creditors’security interest in the Common Collateral securing the CRG Creditors’ Claims, that CRG Agent possess certain of such Common Collateral, and may requirethe execution of control agreements in favor of CRG Agent concerning such Common Collateral. In order to help ensure that CRG Creditors’ securityinterest in such Common Collateral is properly perfected (but subject to and without waiving the other provisions of this Agreement), [A/R Lender] agrees tohold both for itself and, solely for the purposes of perfection and without incurring any duties or obligations to CRG Creditors as a result thereof or withrespect thereto, for the benefit of CRG Creditors, any such Common Collateral, and agrees that CRG Creditors’ lien in such Common Collateral shall bedeemed perfected in accordance with applicable law10.Credit Documents . (a) Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors, represents and warrants that it has provided to theother true, correct and complete copies of all Credit Documents which relate to its credit agreement. (b)At any time and from time to time, without notice to the other set of Creditors, each Creditor may take such actions with respect to itsClaims as such Creditor, in its sole discretion, may deem appropriate, including, without limitation, terminating advances under its Credit Documents,increasing the principal amount, extending the time of payment, increasing applicable interest to the default rate, renewing, compromising or otherwiseamending the terms of any documents affecting its Claims and any Collateral therefor, and enforcing or failing to enforce any rights against Borrower or anyother person, and no such action or inaction described in this sentence shall impair or otherwise affect such Creditor’s rights hereunder; provided, however,that (i) no Creditor shall take any action that is inconsistent with the provisions of this Agreement, and (ii) [A/R Lender] shall not increase the portion of [A/RLender]’s Claim consisting of principal to an amount in excess of $[__________] without the prior written consent of CRG Agent. Each of [A/R Lender] andCRG Agent, on behalf of CRG Creditors, waives the benefits, if any, of any statutory or common law rule that may permit a subordinating creditor to assertany defenses of a surety or guarantor, or that may give the subordinating creditor the right to require a senior creditor to marshal assets, and each of [A/RLender] and CRG Agent, on behalf of CRG Creditors, agrees that it shall not assert any such defenses or rights. (c)Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors, agrees that any other Creditor may release or refrain from enforcingits security interest in the Collateral, or permit the use or consumption of such Collateral by any Obligor free of the other Creditor’s security interest, withoutincurring any liability to any other Creditor.11.Waiver of Right to Require Marshaling . Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors, expressly waives any right that itotherwise might have to require any other Creditor to marshal assets or to resort to Collateral in any particular order or manner, whether provided for bycommon law or statute. No Creditor shall be required to enforce any guaranty or any security interest or lien given by any person or entity as a conditionprecedent or concurrent to the taking of any Enforcement Action with respect to the Collateral.12.Representations and Warranties . Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors, represents and warrants to the other that:(a)all action on the part of such Creditor, its officers, directors, partners, members and shareholders, as applicable, necessary for theauthorization of this Agreement and the performance of all obligations of such Creditor hereunder has been taken;(b)this Agreement constitutes the legal, valid and binding obligation of such Creditor, enforceable against such Creditor in accordancewith its terms;(c)the execution, delivery and performance of and compliance with this Agreement by such Creditor will not (i) result in any materialviolation or default of any term of any of such Creditor’s charter, formation or other organizational documents (such as Articles or Certificate ofIncorporation, bylaws, partnership agreement, operating agreement, etc.) or (ii) violate any material applicable law, rule or regulation. Exhibit G-7 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 13.Disgorgement . (a) If, at any time after payment in full of the [A/R Lender] Claims any payments of the [A/R Lender] Claims must be disgorgedby [A/R Lender] for any reason (including, without limitation, any Insolvency Proceeding), this Agreement and the relative rights and priorities set forthherein shall be reinstated as to all such disgorged payments as though such payments had not been made and CRG Creditors shall immediately pay over to[A/R Lender] all money or funds received or retained by CRG Creditors with respect to the CRG Creditors’ Claims to the extent that such receipt or retentionwould have been prohibited hereunder.(b)If, at any time after payment in full of the CRG Creditors’ Claims any payments of the CRG Creditors’ Claims must be disgorged by anyCRG Creditor for any reason (including, without limitation, any Insolvency Proceeding), this Agreement and the relative rights and priorities set forth hereinshall be reinstated as to all such disgorged payments as though such payments had not been made and [A/R Lender] shall immediately pay over to CRGAgent all money or funds received or retained by [A/R Lender] with respect to the [A/R Lender] Claims to the extent that such receipt or retention would havebeen prohibited hereunder. 14.Successors and Assigns . This Agreement shall bind any successors or assignees of each Creditor. This Agreement shall remain effective until allClaims are indefeasibly paid or otherwise satisfied in full and [A/R Lender] and the CRG Creditors have no commitment to extend credit under the CreditDocuments. This Agreement is solely for the benefit of the Creditors and not for the benefit of Borrower or any other party. Each Creditor shall not sell,assign, pledge, dispose of or otherwise transfer all or any portion of its Claims or any of its Credit Documents or any interest in any Common Collateralunless, prior to the consummation of any such action, the transferee thereof shall execute and deliver to the other set of Creditors an agreement of suchtransferee to be bound hereby, or an agreement substantially identical to this Agreement providing for the continued subjection of such Claims, the interestsof the transferee in the Collateral and the remedies of the transferee with respect thereto as provided herein with respect to the transferring Creditor and for thecontinued effectiveness of all of the other rights of the other Creditor arising under this Agreement, in each case in form satisfactory to the other set ofCreditors.15.Further Assurances . Each of [A/R Lender] and CRG Agent, on behalf of CRG Creditors, agrees to execute such documents and/or take suchfurther action as the other Creditor may at any time or times reasonably request in order to carry out the provisions and intent of this Agreement, including,without limitation, ratifications and confirmations of this Agreement from time to time hereafter, as and when requested by the other Creditor.16.Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of whichtogether shall constitute one instrument.17.Governing Law; Waiver of Jury Trial . (a) This Agreement and the rights and obligations of the parties hereunder shall be governed by, andconstrued in accordance with, the law of the State of New York without regard to principles of conflicts of laws that would result in the application of the lawsof any other jurisdiction.(b)EACH CREDITOR WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISINGOUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN.18.Entire Agreement . This Agreement represents the entire agreement with respect to the subject matter hereof, and supersedes all priornegotiations, agreements and commitments. Each Creditor is not relying on any representations by the other Creditor, Borrower or any other Obligor inentering into this Agreement, and each Creditor has kept and will continue to keep itself fully apprised of the financial and other condition of eachObligor. This Agreement may be amended only by written instrument signed by the Creditors.19.Relationship among Creditors . The relationship among the Creditors is, and at all times shall remain solely that of creditors ofObligors. Creditors shall not under any circumstances be construed to be partners or joint venturers of one another; nor shall the Creditors under anycircumstances be deemed to be in a relationship of confidence or trust or a fiduciary relationship with one another, or to owe any fiduciary duty to oneanother. Creditors do not undertake or assume any responsibility or duty to one another to select, review, inspect, supervise, pass judgment upon orotherwise inform each other of any matter in connection with any Obligor’s property, any Collateral held by any Creditor or the operations of anyObligor. Each Creditor shall rely entirely on its own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment orsupply of information undertaken or assumed by any Creditor in connection with such matters is solely for the protection of such Creditor.20.No Modification . Notwithstanding anything contained herein, no provision of this Agreement shall be deemed to waive, amend, limit orotherwise modify any term or condition of the CRG Credit Agreement and the A/R Facility Documents.Exhibit G-8 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. 21.Severability . Any provision of this Agreement which is illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent such illegality, invalidity, prohibition or unenforceability without invalidating or impairing the remainingprovisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.22.Notices . All notices, demands, instructions and other communications required or permitted to be given to or made upon any party hereto shallbe in writing and shall be delivered or sent by first-class mail, postage prepaid, or by overnight courier or messenger service or by facsimile, messageconfirmed, and shall be deemed to be effective for purposes of this Agreement on the day that delivery is made or refused. Unless otherwise specified in anotice mailed or delivered in accordance with the foregoing sentence, notices, demands, instructions and other communications in writing shall be given toor made upon the respective parties hereto at their respective addresses and facsimile numbers indicated on the signature pages hereto. [Signature pages follow]Exhibit G-9 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. IN WITNESS WHEREOF, the undersigned have executed this Intercreditor Agreement as of the date first above written. [A/R Lender]: [INSERT NAME OF A/R LENDER] By Name: [______________ ] Title: [______________ ] Address for Notices: [______________ ] [______________ ] [______________ ] Tel.:[______________ ] Email:[______________ ] CRG AGENT: CRG SERVICING LLC By Name: Title: Address for Notices:1000 Main Street, Suite 2500Houston, TX 77002Attn:General CounselTel.:713.209.7350Fax:713.209.7351Email:adorenbaum@crglp.com Acknowledged and Agreed to: Exhibit G-10 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions. BORROWER: T2 BIOSYSTEMS, INC. By:/s/ John McDonough Name:John McDonough Title:Chief Executive Officer Address for Notices:[__________][__________]Attn: [__________]Tel.: [__________]Fax: [__________]Email: [__________] Exhibit G-11 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions.EXHIBIT 10.35 March 7, 2016 Alec Barclay700 1st Street, Apt. 3GHoboken, NJ 07030 Dear Alec: On behalf of T2 Biosystems, Inc., (the “Company”) I am delighted to make this offer of employment to you to join us in therole of Senior Director, Program Management for the Company beginning on April 18, 2016. At T2 Biosystems, our mission is to lower mortality rates, improve patient outcomes and reduce the cost of healthcare byempowering medical professionals to make targeted therapeutic treatment decisions earlier. To this end, you are joining us at a veryexciting stage in our development as a Company! In September 2014, we received FDA clearance to sell our first two products, theT2Dx Instrument and T2Candida Panel, which provide sensitive detection of specific sepsis-causing pathogens directly from a wholeblood specimen in 3-5 hours versus 2-5 days for competitive detection systems. Published data has demonstrated that thisimprovement in time to detection may reduce the current mortality rate of 40% for those infections to 11%. We are truly excited tobring this product to market. This speed and detection capability is made possible by our proprietary magnetic resonance-based diagnostic technologyplatform, called T2MR, which has been in development since our inception in 2006. Our next two clinical applications for our T2MRtechnology will target bacterial sepsis and hemostasis, areas of significant unmet medical need where existing therapies could be moreeffective with improved diagnostics. Alec, we are excited to extend this offer of employment to you. We think you can help us fulfill our mission and we believeyou’d be a great fit for our team. To kick things off, you will find all of the pertinent information related to our offer of employment inthe attached pages. Please read the offer carefully and, if it is acceptable, sign and return one copy to my attention (PDF copy isfine). If you have any questions, please do not hesitate to contact me at (781) 457-1220 or email atjmcdonough@t2biosystems.com. We are looking forward to having you on our team! Sincerely, /s/ John McDonough John McDonoughChief Executive Officer Active: 2016 OFFER OF EMPLOYMENT Date of employment: Should you accept the terms of this offer, your employment with the Company will commence on April 18,2016. Background check: Your employment is contingent upon your successful completion of a background check, which is required for allemployees of the Company. The Company will forward you the appropriate documents, and such documents shall be required to besubmitted to the Company by no later than one week prior to your start date. Position: You have been offered the position of Senior Director, Program Management. In this capacity, you will initially report toJohn McDonough, Chief Executive Officer. Your duties and responsibilities will include all those customarily attendant to such aposition, and any other such duties or responsibilities that John McDonough or the Company may, from time to time, assign toyou. You agree that you shall not enter into any employment endeavors which may conflict with your ability to devote the necessarytime and energies to the Company’s business interest while engaged by the Company. You further agree to comply with all applicablelaws and with all Company rules and policies established by the Company from time to time. Compensation and Tax Matters: Your salary shall be $9,166.67 (the equivalent of $220,000 when annualized), payable semi-monthlyand subject to pro-ration for any partial initial or terminal week during which you are employed, in accordance with normal payrollpractices and schedule of the Company. You will be eligible for an annual bonus of up to 15% of your annualized base salary based on corporate and personal objectives to bedetermined. The bonus will be pro-rated based on your start date and paid at the sole discretion of the Company. If your start date ison or after July 1, 2016, you will not be eligible for a performance bonus for 2016. Additionally, the Company will provide you with a sign-on bonus of $20,000.00 to be paid upon completion of sixty (60) days ofcontinued employment from your start date. Should you voluntarily leave the Company prior to twelve (12) months from the date ofpayment, or should the Company terminate your employment for cause, you agree you must refund to the Company the entire sign-onbonus that was paid to you. If you voluntarily leave the Company more than twelve (12) months from the date of payment, but prior totwenty-four (24) months from the date of payment, you agree you must refund a pro rata portion of the bonus that was paid toyou. You further agree that the Company may deduct any such amounts remaining at the time of termination from amounts theCompany owes you. All compensation amounts stated are before any deductions for FICA taxes, state and federal withholding taxes and other payrolldeductions required to be made by the Company under applicable law. Stock Options: Subject to the approval of the Board of Directors and your execution of the Company’s Stock Option Agreement, youwill be offered 15,000 shares of T2 Biosystems common stock options under the Company’s 2014 Incentive Award Plan. Theexercise price of the options will be equal to their fair market value on the date of grant as determined by the Board of Directors. Thestock options will have a 4-year vesting schedule with 25% of the options vesting one year from the vesting commencement date (yourstart date) and remaining options vesting in equal monthly installments for the following 36 months. The terms and conditions of suchstock option grant will be more fully described in the Company’s Amended and Restated Stock Plan.Active: 2016 Fringe Benefits: You will have the opportunity to participate in the Company’s fringe benefits program. Currently, these fringebenefits are as follows: •The Company currently provides contributions toward a medical and dental plan for yourself and immediate family members •Three (3) weeks paid vacation, Company designated holidays, personal holidays and sick days (see Benefits Summary formore information). •The Company provides 100% contribution towards Term Life Insurance, Accidental Death and Dismemberment Insurance,and Short and Long-Term Disability Insurance; •The opportunity to enroll in the Company’s 401(k) Investment and Section 125 Plans based on plan eligibility requirements;and •Pay or reimburse you in accordance with the Company’s reimbursement policies from time to time in connection with theperformance of your duties for the Company subject to your submission of satisfactory documentation with respect thereto. The Company reserves the right to amend, delete or change any of its employment policies and/or benefits at any time in its solediscretion. Non Competition/Non-Disclosure/Invention Assignment Agreement: No later than on the first day of your employment with theCompany you will be required to sign the enclosed Non-Competition/Non-Disclosure/Inventions Assignment Agreement(“Obligations Agreement”) which includes nondisclosure, inventions ownership, and other provisions that are necessary to protect theCompany’s confidential information, intellectual; property, trade secrets, and customer relationships. As you may be given access tosuch protectable interests, your employment is contingent upon your signing the Obligations Agreement. The terms of the ObligationsAgreement will survive termination, for whatever reason, of the employment relationship. Prior Agreements: You acknowledge and confirm that you have provided/disclosed to the Company all restrictive covenants andagreements, including nondisclosure and confidentiality agreements, to which you are a party. You agree that you shall not disclose tothe Company or use while an employee of the Company any confidential or trade secret information obtained by you from otherpersons or employers and shall not bring any property upon the Company premises which has been misappropriated by others. Youalso acknowledge that the Company expects you to honor any prior obligations to former employers to which you remain bound.Employment At Will: Although you are being hired as an employee commencing on or about April 18, 2016, your employment withthe Company shall be at will. This means that your employment is not guaranteed for any definite period of time, and you or theCompany may terminate your employment relationship with or without notice at any time and for any or no reason or cause. TheCompany is not bound to follow any policy, procedure, or process in connection with employee discipline, employment terminationor otherwise. Entire Agreement: This letter (together with the attached Obligations Agreement) sets forth the entire understanding between theCompany and yourself with respect to your employment by the Company. Active: 2016 All prior discussions, negotiations, correspondence and other understandings between you and the Company are superseded, andthere are no representations, warranties or undertakings by the Company or you with respect to your employment by the Company,which are not set forth in this letter. If you agree with the terms of this offer, please acknowledge your understanding and acceptance of this offer by signing whereindicated below and return to me by 5:00 p.m. EST on March 9, 2016. We look forward to working with you. Sincerely, T2 Biosystems, Inc. By: _/s/ Kelley Morgan____________6/7/2017________________Kelley Morgan DateDirector of Human Resources I have read agree with and accept the items contained in this letter. By: __/s/ Alec Barclay___________6/7/2017___________________Alec Barclay Date The Immigration Control and Reform Act of 1986 requires that all new employees complete the I-9 form and submit proof of employment eligibility to work in the United Stateswithin the first three days of their start date. If accepting employment the Company will provide you the I-9 form and requests that you present appropriate documents when youreport to the Company and a representative of the Company will complete the I-9 form with you. Accordingly, you will have three days from your start date to submit proof ofyour eligibility to work in the United States.Active: 2016EXHIBIT 10.36T2 BIOSYSTEMS, INC. February 1, 2017 Alec Barclay700 1st Street, 3GHoboken, NJ 07030 Dear Alec, This letter sets forth the agreement between you and T2 Biosystems, Inc. (the “Company”) regarding certain terms and conditions ofyour employment. You are entitled to receive the following: 1.Severance Compensation. If your employment is terminated either by you with Good Reason within 12 monthsfollowing a Change of Control, or by the Company without Cause within 3 months preceding or within 12 months following aChange of Control, subject to your executing and delivering to the Company, and not revoking, a release of claims in a formacceptable to the Company (the “Release”) within the 30-day period following your termination of employment: (a)the Company will pay you severance in an amount equal to 6 months of your then current annual basesalary, payable in equal installments over a period of 6 months (the “Severance Period”) in accordance with the Company’s payrollpractices, commencing on your termination of employment; (b)if you have been continuously employed by the Company for at least one year as of the date youremployment terminates, all of the outstanding unvested equity awards of the Company held by you shall become fully vested and, ifapplicable, exercisable as of the date of your termination, provided that with respect to any such awards intended to constitute“qualified performance based compensation” under Section 162(m) of the Code, whether a Change of Control has occurred shall bedetermined without regard to clause (iv) of the definition of Change of Control below; and (c)If you timely elect continued group medical insurance coverage pursuant to the Consolidated OmnibusBudget Reconciliation Act of 1985, as amended (“COBRA”), the Company will reimburse you for a portion of the applicablepremiums, based on the then-current cost-sharing rates for active employees, for you and your eligible dependents during the periodcommencing on the date of your termination of employment and ending on the earliest to occur of (a) the final day of the SeverancePeriod, (b) the date you and/or your eligible dependents are no longer eligible for COBRA, and (c) the date you become eligible toreceive medical insurance coverage from a subsequent employer (and you agree to notify the Company of sucheligibility). Notwithstanding the foregoing, if the Company determines that it cannot provide such reimbursement of premiums to youwithout potentially violating applicable law, the Company shall in lieu thereof provide to you a taxable monthly payment in an amount equal to a portion of the applicable premiums, based onthen-current cost-sharing rates for active employees, which payment will be made regardless of whether you elect COBRAcontinuation coverage and will commence in the month following the month in which your termination of employment occurs and endon the earliest to occur of (x) the final day of the Severance Period, (y) the date you and/or your eligible dependents are no longereligible for COBRA, and (z) the date you become eligible to receive medical insurance coverage from a subsequent employer (and youagree to notify the Company of such eligibility). Notwithstanding anything herein to the contrary, in the event that any compensation or benefit that constitutes “nonqualified deferredcompensation” within the meaning of Section 409A (as defined below) becomes payable upon the occurrence of a Change of Control,such compensation or benefit shall not be paid unless such Change of Control constitutes a “change in control event” within themeaning of Section 409A. 2.Definitions. For purposes of this letter, the terms “Change of Control,” “Cause,” and “Good Reason” shall havethe following meanings. (a)“Change of Control” means that any of the following events has occurred: (i)Any person (as such term is used in Section 13(d) of the Securities Exchange Act of 1934 (the“Exchange Act”)), other than the Company, any employee benefit plan of the Company, or any entity organized, appointed,or established by the Company for or pursuant to the terms of any such plan, together with all “affiliates” and “associates”(as such terms are defined in Rule 12b-2 under the Exchange Act) becomes the beneficial owner or owners (as defined inRule 13d-3 and 13d-5 promulgated under the Exchange Act), directly or indirectly (the “Control Group”), of more than 50%of the outstanding equity securities of the Company, or otherwise becomes entitled, directly or indirectly, to vote more than50% of the voting power entitled to be cast at elections for directors (“Voting Power”) of the Company, provided that aChange of Control will not have occurred if such Control Group acquired securities or Voting Power solely by purchasingsecurities from the Company, including, without limitation, acquisition of securities by one or more third party investors; (ii)A consolidation or merger (in one transaction or a series of related transactions) of theCompany pursuant to which the holders of the Company’s equity securities immediately prior to such transaction or series ofrelated transactions cease to be the holders, directly or indirectly, immediately after such transaction or series of relatedtransactions of more than 50% of the Voting Power of the entity surviving such transaction or series of related transactions; (iii)The sale, lease, exchange, or other transfer (in one transaction or series of relatedtransactions) of all or substantially all of the assets of the Company; or (iv)The liquidation or dissolution of the Company or the Company ceasing to do business.2 (b)“Cause” means: (i)Your conviction of a felony, either in connection with the performance of your obligations tothe Company or which otherwise materially and adversely affects your ability to perform such obligations; (ii)Your willful disloyalty to the Company or deliberate material dishonesty to the Company; (iii)The commission by you of an act of fraud or embezzlement against the Company; (iv)Your willful, substantial failure to perform any of your duties hereunder or your deliberatefailure to follow reasonable, lawful directions of the Company’s Board of Directors or your direct supervisor, which failure,if capable of being cured, is not cured within 30 days after delivery to you by the Company of written notice of such failure;or (v)A material breach by you of any material provision of this letter which breach is not curedwithin 30 days after delivery to you by the Company of written notice of such breach. (c)“Good Reason” means one or more of the following: (i)A material change in the principal location at which you provide services to the Company,without your prior written consent; (ii)A material and continuing diminution by the Company in the duties, authority orresponsibilities of your position which causes such position to become of less responsibility or authority than immediatelyprior to such material and continuing diminution, provided that such change is not in connection with a termination of youremployment hereunder by the Company; (iii)A material reduction in your base salary or other benefits except if such a reduction is inconnection with a general reduction in compensation or other benefits of all similarly situated employees of the Company; (iv)Failure by the Company to obtain the assumption of this Agreement by any successor to theCompany. Notwithstanding the foregoing, Good Reason shall only exist if you have given written notice to the Company within 90days of the initial existence of the Good Reason condition(s), and the Company has failed to cure such event(s) within 30 days of itsreceipt of said notice. 3 3.Section 409A. (a)Separation from Service. Notwithstanding anything in this letter to the contrary, any compensation orbenefit payable under this letter that is designated as payable upon your termination of employment shall be payable only upon your“separation from service” with the Company (a “Separation from Service”) within the meaning of Section 409A of the InternalRevenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”), andexcept as provided below, any such compensation or benefits shall not be paid, or, in the case of installments, shall not commencepayment, until the 30th day following your Separation from Service. Any installment payments that would have been made to youduring the 30 day period immediately following your Separation from Service but for the preceding sentence shall be paid to you onthe 30th day following your Separation from Service and the remaining payments shall be made as provided in this letter. (b)Specified Employee. Notwithstanding anything in this letter to the contrary, if you are deemed by theCompany at the time of your Separation from Service to be a “specified employee” for purposes of Section 409A, to the extentdelayed commencement of any portion of the benefits to which you are entitled under this letter is required in order to avoid aprohibited distribution under Section 409A, such portion of your benefits shall not be provided to you prior to the earlier of (i) theexpiration of the six-month period measured from the date of your Separation from Service with the Company or (ii) the date of yourdeath. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant tothe preceding sentence shall be paid in a lump-sum to you (or your estate or beneficiaries), and any remaining payments due to youunder this letter shall be paid as otherwise provided herein. (c)Installments. Your right to receive any installment payments under this letter shall be treated as a rightto receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separateand distinct payment as permitted under Section 409A. Except as otherwise permitted under Section 409A, no payment hereundershall be accelerated or deferred unless such acceleration or deferral would not result in additional tax or interest pursuant to Section409A. 4.General (a)No provision of this letter shall be modified, waived or discharged unless the modification, waiver ordischarge is agreed to in writing and signed by you and by an authorized officer of the Company (other than you). No waiver byeither party of any breach of, or of compliance with, any condition or provision of this letter by the other party shall be considered awaiver of any other condition or provision or of the same condition or provision at another time. The validity, interpretation,construction and performance of this letter shall be governed by the laws of the Commonwealth of Massachusetts without regard toconflicts of law. The invalidity or unenforceability of any provision or provisions of this letter shall not affect the validity orenforceability of any other provision hereof, which shall remain in full force and effect. This letter may be executed in counterparts,each of which shall be deemed an original, but all of which together will constitute one and the same instrument.4 (b)This letter contains the entire and exclusive agreement between the parties with respect to the subjectmatter hereof and is intended to supersede and replace all previous agreements, negotiations, and representations between the parties,whether written or oral, including any provision of the employment offer letter agreement between you and the Company, dated as ofMarch 7, 2016, to the extent such letter addresses the subject matter hereof. Sincerely, T2 BIOSYSTEMS, INC. By:/s/ John McDonough____________Name:John McDonoughTitle: President & CEO Acknowledged and Agreed _/s/ Alec Barclay__________________Alec Barclay5 EXHIBIT 10.37AMENDMENTTOSEVERANCE AND CHANGE IN CONTROL AGREEMENT This Amendment to Severance and Change in Control Agreement is entered into as of March 6, 2018, by andbetween T2 Biosystems, Inc., a Delaware corporation having its principal place of business at 101 Hartwell Avenue, Lexington,Massachusetts 02421 USA (“T2 Bio”) and Alec Barclay (“Employee”). Capitalized terms used herein without definition shall havethe meaning ascribed thereto in the Severance / Change in Control Agreement (as defined below). Recitals A.T2 Bio and Employee previously executed that certain Letter Agreement governing severance compensation andpayments upon a Change in Control, dated as of February 1, 2017 (as may be amended, restated, or otherwise modified, the“Severance Agreement”). B.T2 Bio and Distributor desire to amend the Severance Agreement. NOW THEREFORE, in consideration of the foregoing and the mutual agreements set forth below, and for other goodand valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Amendment agree toamend the Severance Agreement in accordance with Section 4(a) thereof as follows: 1. Amendment to Section 1(a). Section 1(a) of the Severance Agreement is hereby amended by deleting it in its entirety andreplacing it with the following: “(a)the Company will pay you severance in an amount equal to 12 months of your then current annual basesalary, payable in equal installments over a period of 12 months (the “Severance Period”) in accordance with the Company’s payrollpractices, commencing on your termination of employment;” 2.No Other Amendments. Except to the extent amended hereby, all of the definitions, terms, provisions and conditions set forth inthe Severance Agreement are hereby ratified and confirmed and shall remain in full force and effect. The Severance Agreement andthis Amendment shall be read and construed together as a single agreement and the term “Agreement” shall henceforth be deemed areference to the Severance Agreement as amended by this Amendment. This Amendment may be signed in any number ofcounterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the sameinstrument. In making proof of this Amendment, it shall not be necessary to produce or account for more than one such counterpart. [Signature Page Follows] IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorizedrepresentatives below. T2 BIOSYSTEMS, INC. By:/s/ Michael Gibbs___________ By:/s/ Alec Barclay________ Name:Michael Gibbs Name:Alec BarclayTitle:General Counsel Date:March 6, 2018 2 3 EXHIBIT 10.38 January 29, 2018 John Sprague62 Washington StreetWellesley, MA 02481 Dear John: On behalf of T2 Biosystems, Inc., (the “Company”) I am delighted to make this offer of employment to you to join us in therole of Chief Financial Officer for the Company beginning January 30, 2018. At T2 Biosystems, our mission is to fundamentally change the way that medicine is practiced by transforming diagnostics forthe tangible benefit of patients, practitioners and healthcare institutions. We have developed a breakthrough and innovative technology,T2MR, that has received the most prestigious industry awards and is protected by almost 50 patents. Our first products, T2Candidaand the T2Dx, are already in use in over 100 hospitals in the United States and Europe. We are positively impacting the lives ofpatients and saving hospitals millions of dollars each year. Our next product, T2Bacteria, is expected to be FDA cleared this year andadditional products are in development. There is a lot of growth ahead and you are joining us at a very exciting time! John, we are thrilled to extend this offer of employment to you. We think you can help us fulfill our mission and we believeyou’d be a great fit for our team. To kick things off, you will find all of the pertinent information related to our offer of employment inthe attached pages. Please read the offer carefully and, if it is acceptable, sign and return one copy to my attention (PDF copy isfine). If you have any questions, please do not hesitate to contact me at (781) 457-1220 or email atjmcdonough@t2biosystems.com. We are looking forward to having you on our team! Sincerely, /s/ John McDonough John McDonoughPresident and Chief Executive Officer OFFER OF EMPLOYMENT Date of employment: Should you accept the terms of this offer, your employment with the Company will commence on January 30,2018. Background check: Your employment is contingent upon your successful completion of a background check, which is required for allemployees of the Company. The Company will forward you the appropriate documents, and such documents shall be required to besubmitted to the Company by no later than one week prior to your start date. Position: You have been offered the position of Chief Financial Officer. In this capacity, you will report to John McDonough, ChiefExecutive Officer, or his successor in such position. Your duties and responsibilities will include all those customarily attendant to sucha position, and any other such duties or responsibilities that John McDonough or the Company may, from time to time, assign toyou. You agree that you shall not enter into any employment endeavors which may conflict with your ability to devote the necessarytime and energies to the Company’s business interest while engaged by the Company. You further agree to comply with all applicablelaws and with all Company rules and policies established by the Company from time to time. Compensation and Tax Matters: Your salary shall be $14,583.34 (the equivalent of $350,000 when annualized), payable semi-monthly and subject to pro-ration for any partial initial or terminal week during which you are employed, in accordance with normalpayroll practices and schedule of the Company. You will be eligible for a salary increase during the 2018 calendar year, and the timingof that adjustment will align with other members of the Company’s executive management team. You will be eligible to receive an annual bonus (the "Annual Bonus") based upon the achievement of specific company and individualmilestones as determined by the Board of Directors (the “Board”). The target amount of your Annual Bonus will be 45% of your BaseSalary, subject to adjustment by the Board. Payment of the Annual Bonus will be pro-rated for 2018 and will in all events be subject toyour continued employment with the Company through the date of payment. All compensation amounts stated are before any deductions for FICA taxes, state and federal withholding taxes and other payrolldeductions required to be made by the Company under applicable law. Stock Options: Subject to the approval of the Board and your execution of a Stock Option Agreement, you will be offered options topurchase 225,000 shares of T2 Biosystems common stock under an Inducement Award Plan to be established by the Company assoon as practicable following the date hereof (the “Inducement Plan”). Subject to the approval of the Inducement Plan by the Board,the exercise price of the options will be equal to the fair market value of the Company’s common stock on the grant date, which shallbe first permissible date under the Inducement Plan (determined in accordance with the terms of the Inducement Plan). The options willhave a 4-year vesting schedule with 25% of the options vesting one year from the vesting commencement date (your start date) and theremaining options vesting in equal monthly installments over the following 36 months. The terms and conditions of the options shallbe more fully described in the Inducement Plan and applicable Stock Option Agreement. In the event that theActive: 2018 Inducement Plan is not approved by the Board within thirty (30) days following your start date, subject to Board approval, theCompany shall make such grant under its existing 2014 Incentive Award Plan. Severance Compensation: Subject to the approval of the Board and your execution of the attached Change of Control SeveranceAgreement (the “Change in Control Agreement”), you will be offered certain benefits in the event of a change in control of theCompany, as set forth in more detail and defined in the Change in Control Agreement, including severance compensation and theacceleration of certain stock options, each such benefit to be subject to the terms of the Change in Control Agreement. In the event your employment is terminated by the Company for reasons other than Cause and unrelated to a Change in Control, bothas defined in the Change in Control Agreement (but for the avoidance doubt excluding a termination of your employment (x) due todeath, (y) due to your inability to perform your duties for the Company on account of physical or mental illness for a period of threeconsecutive full months or for a period of six full months during any 12-month rolling period or (z) in circumstances that entitle you toseverance payments or benefits under the Change in Control Agreement), subject to your executing and delivering to the Company,and not revoking, a release of claims in a form acceptable to the Company (the “Release”) within the 30-day period following yourtermination of employment, you will be entitled to receive severance benefits in the form of salary continuation and reimbursement forcosts associated with COBRA, for a period of six (6) months following the end of your employment. Fringe Benefits: You will have the opportunity to participate in the Company’s fringe benefits program. Currently, these fringebenefits are as follows: •The Company currently provides contributions toward a medical and dental plan for yourself and immediate family members •Three (3) weeks paid vacation, Company designated holidays, personal holidays and sick days (see Benefits Summary formore information). •The Company provides 100% contribution towards Term Life Insurance, Accidental Death and Dismemberment Insurance,and Short and Long-Term Disability Insurance; •The opportunity to enroll in the Company’s 401(k) Investment and Section 125 Plans based on plan eligibility requirements;and •Pay or reimburse you in accordance with the Company’s reimbursement policies from time to time in connection with theperformance of your duties for the Company subject to your submission of satisfactory documentation with respect thereto. The Company reserves the right to amend, delete or change any of its employment policies and/or benefits at any time in its solediscretion. Non Competition/Non-Disclosure/Invention Assignment Agreement: No later than on the first day of your employment with theCompany you will be required to sign the enclosed Non-Competition/Non-Disclosure/Inventions Assignment Agreement(“Obligations Agreement”) which includes nondisclosure, inventions ownership, and other provisions that are necessary to protect theCompany’s confidential information, intellectual; property, trade secrets, and customer relationships. As you may be given access tosuch protectable interests, your employment is contingent upon your signing the ObligationsActive: 2018 Agreement. The terms of the Obligations Agreement will survive termination, for whatever reason, of the employment relationship. Prior Agreements: You acknowledge and confirm that you have provided/disclosed to the Company all restrictive covenants andagreements, including nondisclosure and confidentiality agreements, to which you are a party. You agree that you shall not disclose tothe Company or use while an employee of the Company any confidential or trade secret information obtained by you from otherpersons or employers and shall not bring any property upon the Company premises which has been misappropriated by others. Youalso acknowledge that the Company expects you to honor any prior obligations to former employers to which you remain bound.Employment At Will: Although you are being hired as an employee commencing on January 30, 2018, your employment with theCompany shall be at will. This means that your employment is not guaranteed for any definite period of time, and you or theCompany may terminate your employment relationship with or without notice at any time and for any or no reason or cause. TheCompany is not bound to follow any policy, procedure, or process in connection with employee discipline, employment terminationor otherwise. Entire Agreement: This letter (together with the attached Obligations Agreement and Change in Control Agreement) sets forth theentire understanding between the Company and yourself with respect to your employment by the Company. All prior discussions,negotiations, correspondence and other understandings between you and the Company are superseded, and there are norepresentations, warranties or undertakings by the Company or you with respect to your employment by the Company, which are notset forth in this letter. Section 409A: Notwithstanding anything in this letter to the contrary, any compensation or benefit payable under this letter that isdesignated as payable upon your termination of employment shall be payable only upon your “separation from service” with theCompany (a “Separation from Service”) within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, andthe regulations and guidance promulgated thereunder (collectively, “Section 409A”), and except as provided below, any suchcompensation or benefits shall not be paid, or, in the case of installments, shall not commence payment, until the 30th day followingyour Separation from Service. Any installment payments that would have been made to you during the 30 day period immediatelyfollowing your Separation from Service but for the preceding sentence shall be paid to you on the 30th day following your Separationfrom Service and the remaining payments shall be made as provided in this letter. Notwithstanding anything in this letter to thecontrary, if you are deemed by the Company at the time of your Separation from Service to be a “specified employee” for purposes ofSection 409A, to the extent delayed commencement of any portion of the benefits to which you are entitled under this letter is requiredin order to avoid a prohibited distribution under Section 409A, such portion of your benefits shall not be provided to you prior to theearlier of (i) the expiration of the six-month period measured from the date of your Separation from Service with the Company or (ii)the date of your death. Upon the first business day following the expiration of the applicable Section 409A period, all paymentsdeferred pursuant to the preceding sentence shall be paid in a lump-sum to you (or your estate or beneficiaries), and any remainingpayments due to you under this letter shall be paid as otherwise provided herein. Your right to receive any installment paymentsunder this letter shall be treated as a right to receive a series of separate payments and, accordingly, each such installment paymentshall at all times be considered a separate and distinct payment as permitted under Section 409A. Except as otherwise permitted underSection 409A, no payment hereunder shall be accelerated or deferred unless such acceleration or deferral would not result inadditional tax or interest pursuant to Section 409A.Active: 2018 If you agree with the terms of this offer, please acknowledge your understanding and acceptance of this offer by signing whereindicated below and return to me along with a completed background check authorization form by 8:00 a.m. ET on January 30, 2018.We look forward to working with you. Sincerely, T2 Biosystems, Inc. By: ___/s/ John McDonough____________1/30/2018____________________________John McDonoughDateChief Executive Officer I have read agree with and accept the items contained in this letter. By: _/s/ John Sprague_____1/30/2018____________________________John SpragueDate The Immigration Control and Reform Act of 1986 requires that all new employees complete the I-9 form and submit proof of employment eligibility to work in the United Stateswithin the first three days of their start date. If accepting employment the Company will provide you the I-9 form and requests that you present appropriate documents when youreport to the Company and a representative of the Company will complete the I-9 form with you. Accordingly, you will have three days from your start date to submit proof ofyour eligibility to work in the United States.Active: 2018EXHIBIT 10.39T2 BIOSYSTEMS, INC. CHANGE OF CONTROL SEVERANCE AGREEMENT January 30, 2018 John M. Sprague62 Washington StreetWellesley, MA 02481 Dear John, This letter sets forth the agreement between you and T2 Biosystems, Inc. (the “Company”) regarding certain terms and conditions ofyour employment. 1.Severance Compensation. If your employment is terminated either by you with Good Reason within 12 monthsfollowing a Change of Control, or by the Company without Cause within 3 months preceding or within 12 months following aChange of Control, subject to your executing and delivering to the Company, and not revoking, a release of claims in a formacceptable to the Company (the “Release”) within the 30-day period following your termination of employment: (a)the Company will pay you severance in an amount equal to 12 months of your then current annual basesalary, payable in equal installments over a period of 12 months (the “Severance Period”) in accordance with the Company’s payrollpractices, commencing on your termination of employment; (b)if you have been continuously employed by the Company for less than one year as of the date youremployment terminates, the vesting schedule of any equity awards of the Company held by you shall automatically be amended tostate that all of the options subject to such equity award(s) scheduled to vest within 12 months of the date of your termination shallimmediately accelerate and become fully vested; (c)if you have been continuously employed by the Company for at least one year as of the date youremployment terminates, all of the outstanding unvested equity awards of the Company held by you shall become fully vested and, ifapplicable, exercisable as of the date of your termination; and (d)If you timely elect continued group medical and dental insurance coverage pursuant to the ConsolidatedOmnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will reimburse you for a portion of theapplicable premiums, based on the then-current cost-sharing rates for active employees, for you and your eligible dependents duringthe period commencing on the date of your termination of employment and ending on the earliest to occur of (a) the final day of theSeverance Period, (b) the date you and/or your eligible dependents are no longer eligible for COBRA, and (c) the date you becomeeligible to receive medical insurance coverage from a subsequent employer (and you agree to notify the Company of such eligibility). Notwithstanding the foregoing, if the Company determines that it cannot provide such reimbursement of premiums toyou without potentially violating applicable law, the Company shall in lieu thereof provide to you a taxable monthly payment in anamount equal to a portion of the applicable premiums, based on then-current cost-sharing rates for active employees, which paymentwill be made regardless of whether you elect COBRA continuation coverage and will commence in the month following the month inwhich your termination of employment occurs and end on the earliest to occur of (x) the final day of the Severance Period, (y) the dateyou and/or your eligible dependents are no longer eligible for COBRA, and (z) the date you become eligible to receive medicalinsurance coverage from a subsequent employer (and you agree to notify the Company of such eligibility). Notwithstanding anything herein to the contrary, in the event that any compensation or benefit that constitutes “nonqualified deferredcompensation” within the meaning of Section 409A (as defined below) becomes payable upon the occurrence of a Change of Control,such compensation or benefit shall not be paid unless such Change of Control constitutes a “change in control event” within themeaning of Section 409A. 2.Definitions. For purposes of this letter, the terms “Change of Control,” “Cause,” and “Good Reason” shall havethe following meanings. (a)“Change of Control” means that any of the following events has occurred: (i)Any person (as such term is used in Section 13(d) of the Securities Exchange Act of 1934 (the“Exchange Act”)), other than the Company, any employee benefit plan of the Company, or any entity organized, appointed,or established by the Company for or pursuant to the terms of any such plan, together with all “affiliates” and “associates”(as such terms are defined in Rule 12b-2 under the Exchange Act) becomes the beneficial owner or owners (as defined inRule 13d-3 and 13d-5 promulgated under the Exchange Act), directly or indirectly (the “Control Group”), of more than 50%of the outstanding equity securities of the Company, or otherwise becomes entitled, directly or indirectly, to vote more than50% of the voting power entitled to be cast at elections for directors (“Voting Power”) of the Company, provided that aChange of Control will not have occurred if such Control Group acquired securities or Voting Power solely by purchasingsecurities from the Company, including, without limitation, acquisition of securities by one or more third party investors; (ii)A consolidation or merger (in one transaction or a series of related transactions) of theCompany pursuant to which the holders of the Company’s equity securities immediately prior to such transaction or series ofrelated transactions cease to be the holders, directly or indirectly, immediately after such transaction or series of relatedtransactions of more than 50% of the Voting Power of the entity surviving such transaction or series of related transactions; (iii)The sale, lease, exchange, or other transfer (in one transaction or series of relatedtransactions) of all or substantially all of the assets of the Company; or 2 (iv)The liquidation or dissolution of the Company or the Company ceasing to do business. (b)“Cause” means: (i)Your conviction of a felony, either in connection with the performance of your obligations tothe Company or which otherwise materially and adversely affects your ability to perform such obligations; (ii)Your willful disloyalty to the Company or deliberate material dishonesty to the Company; (iii)The commission by you of an act of fraud or embezzlement against the Company; (iv)Your willful, substantial failure to perform any of your duties hereunder or your deliberatefailure to follow reasonable, lawful directions of the Company’s Board of Directors or your direct supervisor, which failure,if capable of being cured, is not cured within 30 days after delivery to you by the Company of written notice of such failure;or (v)A material breach by you of any material provision of this letter which breach is not curedwithin 30 days after delivery to you by the Company of written notice of such breach. (c)“Good Reason” means one or more of the following: (i)A material change in the principal location at which you provide services to the Company,without your prior written consent; (ii)A material and continuing diminution by the Company in the duties, authority orresponsibilities of your position which causes such position to become of less responsibility or authority than immediatelyprior to such material and continuing diminution, provided that such change is not in connection with a termination of youremployment hereunder by the Company (for purposes of clarity, if you are not the Chief Financial Officer of the combinedpublic company following the Change of Control, you shall be deemed to have a material diminution of your duties); (iii)A material reduction in your base salary or other benefits except if such a reduction is inconnection with a general reduction in compensation or other benefits of all similarly situated employees of the Company; (iv)Failure by the Company to obtain the assumption of this Agreement by any successor to theCompany. 3 Notwithstanding the foregoing, Good Reason shall only exist if you have given written notice to the Company within 90days of the initial existence of the Good Reason condition(s), and the Company has failed to cure such event(s) within 30 days of itsreceipt of said notice. 3.Section 409A. (a)Separation from Service. Notwithstanding anything in this letter to the contrary, any compensation orbenefit payable under this letter that is designated as payable upon your termination of employment shall be payable only upon your“separation from service” with the Company (a “Separation from Service”) within the meaning of Section 409A of the InternalRevenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”), andexcept as provided below, any such compensation or benefits shall not be paid, or, in the case of installments, shall not commencepayment, until the 30th day following your Separation from Service. Any installment payments that would have been made to youduring the 30 day period immediately following your Separation from Service but for the preceding sentence shall be paid to you onthe 30th day following your Separation from Service and the remaining payments shall be made as provided in this letter. (b)Specified Employee. Notwithstanding anything in this letter to the contrary, if you are deemed by theCompany at the time of your Separation from Service to be a “specified employee” for purposes of Section 409A, to the extentdelayed commencement of any portion of the benefits to which you are entitled under this letter is required in order to avoid aprohibited distribution under Section 409A, such portion of your benefits shall not be provided to you prior to the earlier of (i) theexpiration of the six-month period measured from the date of your Separation from Service with the Company or (ii) the date of yourdeath. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant tothe preceding sentence shall be paid in a lump-sum to you (or your estate or beneficiaries), and any remaining payments due to youunder this letter shall be paid as otherwise provided herein. (c)Installments. Your right to receive any installment payments under this letter shall be treated as a rightto receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separateand distinct payment as permitted under Section 409A. Except as otherwise permitted under Section 409A, no payment hereundershall be accelerated or deferred unless such acceleration or deferral would not result in additional tax or interest pursuant to Section409A. 4.General (a)No provision of this letter shall be modified, waived or discharged unless the modification, waiver ordischarge is agreed to in writing and signed by you and by an authorized officer of the Company (other than you). No waiver byeither party of any breach of, or of compliance with, any condition or provision of this letter by the other party shall be considered awaiver of any other condition or provision or of the same condition or provision at4 another time. The validity, interpretation, construction and performance of this letter shall be governed by the laws of theCommonwealth of Massachusetts without regard to conflicts of law. The invalidity or unenforceability of any provision or provisionsof this letter shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force andeffect. This letter may be executed in counterparts, each of which shall be deemed an original, but all of which together willconstitute one and the same instrument. (b)This letter contains the entire and exclusive agreement between the parties with respect to the subjectmatter hereof and is intended to supersede and replace all previous agreements, negotiations, and representations between the parties,whether written or oral, including any provision of the employment offer letter agreement between you and the Company, dated as ofJanuary 30, 2018, to the extent such letter addresses the subject matter hereof. Sincerely, T2 BIOSYSTEMS, INC. By:/s/ John McDonough___________Name:John McDonoughTitle: President & CEO Acknowledged and Agreed /s/ John Sprague__________________________John M. Sprague5 EXHIBIT 10.40 AMENDMENT NO. 2 TO COMMERCIAL LEASE BETWEENCOLUMBUS DAY REALTY, INC., AND T2 BIOSYSTEMS, INC. This Amendment No. 2 is to a Commercial Lease dated May 6, 2013, by and between Columbus Day Realty,Inc. (LESSOR), and T2 Biosystems, Inc. (LESSEE), which lease relates to the premises at 231 Andover Street,Wilmington, Massachusetts. WHEREAS, the Commercial Lease is dated May 6, 2013; WHEREAS, the parties signed Amendment No. 1 to the Commercial Lease on September 24, 2013; WHEREAS, the parties are desirous of amending the Commercial Lease for the purpose of extending theterm of the Lease to December 31, 2017; NOW, THEREFORE, in accordance with the covenants, considerations and conditions contained herein, theparties agree to further amend the Commercial Lease as follows: 3. TERM. This paragraph of the Commercial Lease is hereby amended by extending the expiration date to December31, 2017. 25. OPTION TO EXTEND. In substitution for the Option to Extend which was granted to the LESSEE in this said Paragraph 25 of theCommercial Lease, the parties agree that the term of the Lease shall be extended to December 31, 2017. Thisextension shall be on the same terms and conditions as the original Lease, as changed by Amendment No. 1, and the base rent for the remainder of the term shall continue at the rate of Nine Dollars ($9.00) per square foot. This extension replaces the Option to Extend in the original Commercial Lease and the partiesagree that that option shall now be considered null and void. Except as modified by this Amendment, all other terms of the Commercial Lease and AmendmentNo. 1 shall remain in full force and effect for the remaining term of the Lease. IN WITNESS WHEREOF, the LESSOR and LESSEE have set their hands and seals this 21stday of September, 2015. COLUMBUS DAY REALTY, INC.T2 BIOSYSTEMS, INC. By: _[Illegible]____________________By: /s/ Michael Gibbs_____ Its PresidentIts Senior Corporate Counsel By: __[Illegible]____________________ Its Treasurer EXHIBIT 10.41 AMENDMENT NO. 3 TO COMMERCIAL LEASE BETWEEN COLUMBUS DAYREALTY, INC., AND T2 BIOSYSTEMS, INC. This Amendment No. 3 is to a Commercial Lease dated May 6, 2013, by and between Columbus Day Realty, Inc.(LESSOR), and T2 Biosystems, Inc. (LESSEE), which lease relates to the premises at 231 Andover Street, Wilmington,Massachusetts. WHEREAS, the Commercial Lease is dated May 6, 2013; WHEREAS, the parties signed Amendment No. 1 to the Commercial Lease on September 24, 2013; WHEREAS, the parties signed Amendment No. 2 to the Commercial Lease on September 21, 2015; WHEREAS, the parties are desirous of amending the Commercial Lease for the purpose of extending the term of theLease to December 31, 2018; NOW, THEREFORE, in accordance with the covenants, considerations and conditions contained herein, the partiesagree to further amend the Commercial Lease as follows: 3.TERM. This paragraph of the Commercial Lease is hereby amended by extending the expiration date to December 31, 2018. 4.RENT. The base rent for the period of January 1, 2018 to December 31, 2018 shall be at the rate of Ten Dollars ($10.00) persquare foot. 1 Except as modified by this Amendment, all other terms of the Commercial Lease and Amendments No. 1 and No. 2shall remain in full force and effect for the remaining term of the Lease. IN WITNESS WHEREOF, the LESSOR and LESSEE have set their hands andseals this10th day of August, 2017. COLUMBUS DAY REALTY, INC.T2 BIOSYSTEMS, INC. By: _[Illegible]____________________By: /s/ JohnMcDonough_____ Its PresidentIts President &CEO By: __[Illegible]____________________ Its Treasurer 2 EXHIBIT 10.42 AMENDMENT NO. 2 TO TERM LOAN AGREEMENTTHIS AMENDMENT NO. 2 TO TERM LOAN AGREEMENT, dated as of December 18, 2017 (this “Amendment”) ismade among T2 BIOSYSTEMS, INC., a Delaware corporation (“Borrower”), CRG SERVICING LLC, as administrative agent andcollateral agent (in such capacities, “Administrative Agent”) and the lenders listed on the signature pages hereof under the heading“LENDERS” (each, a “Lender” and, collectively, the “Lenders”), with respect to the Loan Agreement described below.RECITALSWHEREAS, Borrower, Administrative Agent and the Lenders are parties to the Term Loan Agreement, dated as ofDecember 30, 2016, with the Subsidiary Guarantors from time to time party thereto (as amended by Amendment No. 1 to Term LoanAgreement, dated as of March 1, 2017, among Borrower, Administrative Agent and the lenders party thereto, and as further amended,supplemented or modified to date, the “Loan Agreement”); andWHEREAS, Borrower has requested that Administrative Agent and the Lenders (which Lenders constitute the MajorityLenders), and Administrative Agent and the Lenders (which Lenders constitute the Majority Lenders) have agreed to, amend theMinimum Required Revenue in Section 10.02(a) of the Loan Agreement.NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the partiesagree as follows:SECTION 1.Definitions; Interpretation.(a)Terms Defined in Loan Agreement. All capitalized terms used in this Amendment (including in therecitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.(b)Interpretation. The rules of interpretation set forth in Section 1.03 of the Loan Agreement shall beapplicable to this Amendment and are incorporated herein by this reference.SECTION 2.Amendment to Loan Agreement. Subject to Section 3 of this Amendment, Section 10.02(a) of theLoan Agreement is hereby amended and restated in its entirety as follows:“(a)during the twelve-month period beginning on January 1, 2017, of at least $[********];” SECTION 3.Conditions of Effectiveness. The effectiveness of Section 2 of this Amendment shall be subject to thefollowing conditions precedent:(a)Borrower, Administrative Agent and the Lenders, which constitute the Majority Lenders, shall have dulyexecuted and delivered this Amendment pursuant to Section 13.04 of the Loan Agreement; provided, however, that this Amendmentshall have no binding force or effect unless all conditions set forth in this Section 3 have been satisfied;[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions (b)No Default or Event of Default under the Loan Agreement shall have occurred and be continuing; and(c)Borrower shall have paid or reimbursed Administrative Agent and the Lenders for their reasonable out ofpocket costs and expenses (including the reasonable fees and expenses of Administrative Agent’s and the Lenders’ legal counsel)incurred in connection with this Amendment pursuant to Section 13.03(a)(i)(z) of the Loan Agreement.SECTION 4.Representations and Warranties; Reaffirmation.(a)Borrower hereby represents and warrants to each Lender as follows:(i)Borrower has full power, authority and legal right to make and perform thisAmendment. This Amendment is within Borrower’s corporate powers and has been duly authorized by all necessary corporate actionand, if required, by all necessary shareholder action. This Amendment has been duly executed and delivered by Borrower andconstitutes a legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as suchenforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicabilityaffecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whether suchenforceability is considered in a proceeding in equity or at law). This Amendment (x) does not require any consent or approval of,registration or filing with, or any other action by, any Governmental Authority or any third party, except for such as have beenobtained or made and are in full force and effect, (y) will not violate (i) the charter, bylaws or other organizational documents ofBorrower and its Subsidiaries or (ii) any applicable law or regulation or any order of any Governmental Authority, other than any suchviolations in the case of this clause (ii) that, individually or in the aggregate, could not reasonably be expected to have a MaterialAdverse Effect and (z) will not violate or result in a default under any Material Agreement or agreement creating or evidencing anyMaterial Indebtedness, or give rise to a right thereunder to require any payment to be made by any such Person.(ii)No Default has occurred or is continuing or will result after giving effect to thisAmendment.(iii)The representations and warranties in Section 7 of the Loan Agreement are true andcorrect in all material respects (taking into account any changes made to schedules updated in accordance with Section 7.20 of theLoan Agreement) (unless qualified by materiality or Material Adverse Effect, in which case they are true in all respects (taking intoaccount any changes made to schedules updated in accordance with Section 7.20 of the Loan Agreement)) on and as of the datehereof, with the same force as if made on and as of the date hereof (except that the representation regarding representations andwarranties that refer to a specific earlier date is that they were true and correct in all material respects (taking into account any changesmade to schedules updated in accordance with Section 7.20 of the Loan Agreement) (unless qualified by materiality or MaterialAdverse Effect, in which case they are true in and correct in all respects (taking into account any changes made to schedules updated inaccordance with Section 7.20 of the Loan Agreement)) on such earlier date).2[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions (iv)There has been no Material Adverse Effect since the date of the Loan Agreement.(b)Borrower hereby ratifies, confirms, reaffirms, and acknowledges its obligations under the LoanDocuments to which it is a party and agrees that the Loan Documents remain in full force and effect, undiminished by thisAmendment, except as expressly provided herein. By executing this Amendment, Borrower acknowledges that it has read, consultedwith its attorneys regarding, and understands, this Amendment.(c)Borrower and the Lenders hereby acknowledge and agree that, upon an event of an acceleration or othermandatory prepayment event, the “Redemption Date” for purposes of calculating the Prepayment Premium due and payable uponsuch acceleration or other mandatory prepayment will be the date of such acceleration or such obligation to mandatorily prepay arose.SECTION 5.Release. In consideration of the agreements of Administrative Agent and the Lenders contained hereinand for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf ofitself and its successors, assigns and other legal representatives, hereby fully, absolutely, unconditionally and irrevocably releases,remises and forever discharges Administrative Agent and each Lender, and their respective successors and assigns, and their respectivepresent and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents andother representatives (Administrative Agent, each Lender and all such other persons being hereinafter referred to collectively as the“Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts,controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims,defenses, rights of set-off, demands and liabilities whatsoever of every name and nature, known or unknown, suspected orunsuspected, both at law and in equity, which Borrower or any of its successors, assigns or other legal representatives may now orhereafter own, hold, have or claim to have against the Releasees or any of them for, upon or by reason of any circumstance, action,cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, foror on account of, or in relation to, or in any way in connection with the Loan Agreement or any of the other Loan Documents ortransactions thereunder or related thereto (collectively, the “Released Claims”). Borrower understands, acknowledges and agrees thatthe release set forth above (the “Release”) may be pleaded as a full and complete defense and may be used as a basis for an injunctionagainst any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of theRelease. Borrower agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which mayhereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the Release. Borrower acknowledgesthat the Release constitutes a material inducement to Administrative Agent and the Lenders to enter into this Amendment and thatAdministrative Agent and the Lenders would not have done so but for Administrative Agent’s and each Lender’s expectation that theRelease is valid and enforceable in all events.SECTION 6.Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.3[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions (a)Governing Law. This Amendment and the rights and obligations of the parties hereunder shall begoverned by, and construed in accordance with, the law of the State of New York, without regard to principles of conflicts of laws thatwould result in the application of the laws of any other jurisdiction; provided that Section 5-1401 of the New York GeneralObligations Law shall apply.(b)Submission to Jurisdiction. Borrower agrees that any suit, action or proceeding with respect to thisAmendment or any judgment entered by any court in respect thereof may be brought initially in the federal or state courts in Houston,Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction of each such court for thepurpose of any such suit, action, proceeding or judgment. This Section 6 is for the benefit of Administrative Agent and the Lendersonly and, as a result, none of Administrative Agent or any Lender shall be prevented from taking proceedings in any other courts withjurisdiction. To the extent allowed by applicable Laws, Administrative Agent and the Lenders may take concurrent proceedings in anynumber of jurisdictions.(c)Waiver of Jury Trial. Borrower, Administrative Agent and each Lender hereby irrevocably waives, tothe fullest extent permitted by applicable law, any and all right to trial by jury in any suit, action or proceeding arising out of or relatingto this Amendment.SECTION 7.Miscellaneous.(a)No Waiver. Except as expressly stated herein, nothing contained herein shall be deemed to constitute awaiver of compliance with any term or condition contained in the Loan Agreement or any of the other Loan Documents or constitute acourse of conduct or dealing among the parties. Except as expressly stated herein, Administrative Agent and the Lenders reserve allrights, privileges and remedies under the Loan Documents. Except as amended hereby, the Loan Agreement and other LoanDocuments remain unmodified and in full force and effect. All references in the Loan Documents to the Loan Agreement shall bedeemed to be references to the Loan Agreement as amended hereby.(b)Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal orunenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of suchprovision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.(c)Headings. Headings and captions used in this Amendment (including the Exhibits, Schedules andAnnexes hereto, if any) are included for convenience of reference only and shall not be given any substantive effect.(d)Integration. This Amendment constitutes a Loan Document and, together with the other LoanDocuments, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression andagreement of the parties hereto with respect to the subject matter hereof.4[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions (e)Counterparts. This Amendment may be executed in any number of counterparts, all of which takentogether shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any suchcounterpart. Executed counterparts delivered by facsimile or other electronic transmission (e.g., “PDF” or “TIF”) shall be effective asdelivery of a manually executed counterpart.(f)Controlling Provisions. In the event of any inconsistencies between the provisions of this Amendmentand the provisions of any other Loan Document, the provisions of this Amendment shall govern and prevail. Except as expresslymodified by this Amendment, the Loan Documents shall not be modified and shall remain in full force and effect.(g)Notices. Administrative Agent and the Lenders hereby designate that all notices, requests, instructions,directions and other communications provided for herein shall be provided in accordance with Section 13.02 of the Loan Agreementto the address specified on the signature pages hereto. [Remainder of page intentionally left blank]5[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first above written. BORROWER: T2 BIOSYSTEMS, INC.By /s/ John McDonough____Name: John McDonoughTitle: President & CEO Address for Notices:101 Hartwell AvenueLexington, MA 02421Attn:Michael GibbsTel.:(781) 761-4630Fax:(781) 538-4020Email:mgibbs@t2biosystems.com [Signature Page – Amendment No. 2] 156485769 v4 ADMINISTRATIVE AGENT: CRG SERVICING LLC By /s/ Nathan Hukill_____________________Name: /s/ Nathan HukillTitle: Authorized Signatory Address for Notices:1000 Main Street, Suite 2500Houston, TX 77002Attn:Portfolio ReportingTel.:713.209.7350Fax:713.209.7351Email:notices@crglp.com [Signature Page – Amendment No. 2] 156485769 v4 LENDERS: CRG PARTNERS III – PARALLEL FUND “A” L.P. By CRG PARTNERS III – PARALLEL FUND “A” GP L.P., itsGeneral PartnerBy CRG PARTNERS III – PARALLEL FUND “A” GP LLC, itsGeneral Partner By /s/ Nathan Hukill____Name: /s/ Nathan HukillTitle: Authorized Signatory Address for Notices:1000 Main Street, Suite 2500Houston, TX 77002Attn:Portfolio ReportingTel.:713.209.7350Fax:713.209.7351Email:notices@crglp.com CRG PARTNERS III (CAYMAN) UNLEV AIV I L.P. By CRG PARTNERS III (CAYMAN) GP L.P., its GeneralPartnerBy CRG PARTNERS III (CAYMAN) GP LLC, its General Partner By /s/ Nathan Hukill _________________Name: Nathan HukillTitle: Authorized Signatory Witness:/s/ Nicole Nesson _________________Name:/s/ Nicole Nesson________________________________ Address for Notices:1000 Main Street, Suite 2500Houston, TX 77002Attn:Portfolio ReportingTel.:713.209.7350Fax:713.209.7351Email:notices@crglp.com [Signature Page – Amendment No. 2] 156485769 v4 CRG ISSUER 2017-1By CRG SERVICING LLC, acting by power of attorney By: /s/ Nathan Hukill_____________Name: Nathan HukillTitle: Authorized Signatory Address for Notices:1000 Main Street, Suite 2500Houston, TX 77002Attn:Portfolio ReportingTel.:713.209.7350Fax:713.209.7351Email:notices@crglp.com [Signature Page – Amendment No. 2] 156485769 v4EXHIBIT 10.43AMENDMENT NO. 3 TO TERM LOAN AGREEMENTTHIS AMENDMENT NO. 3 TO TERM LOAN AGREEMENT, dated as of March 16, 2018 (this “Amendment”) ismade among T2 BIOSYSTEMS, INC., a Delaware corporation (“Borrower”), CRG SERVICING LLC, as administrative agent andcollateral agent (in such capacities, “Administrative Agent”) and the lenders listed on the signature pages hereof under the heading“LENDERS” (each, a “Lender” and, collectively, the “Lenders”), with respect to the Loan Agreement described below.RECITALSWHEREAS, Borrower, Administrative Agent and the Lenders are parties to the Term Loan Agreement, dated as ofDecember 30, 2016, with the Subsidiary Guarantors from time to time party thereto (as amended by Amendment No. 1 to Term LoanAgreement, dated as of March 1, 2017, among Borrower, Administrative Agent and the lenders party thereto, and as further amendedby Amendment No. 2 to Term Loan Agreement, dated as of December 18, 2017, among Borrower, Administrative Agent and thelenders party thereto, and as further amended, supplemented or modified to date, the “Loan Agreement”); andWHEREAS, Borrower has requested that Administrative Agent and the Lenders (which Lenders constitute the MajorityLenders), and Administrative Agent and the Lenders (which Lenders constitute the Majority Lenders) have agreed to, amend theMinimum Required Revenue in Section 10.02(b) of the Loan Agreement and make certain other changes as more fully set forthherein.NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the partiesagree as follows:SECTION 1. Definitions; Interpretation.(a)Terms Defined in Loan Agreement. All capitalized terms used in this Amendment (including in therecitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.(b)Interpretation. The rules of interpretation set forth in Section 1.03 of the Loan Agreement shall beapplicable to this Amendment and are incorporated herein by this reference.SECTION 2. Amendment to Loan Agreement. Subject to Section 3 of this Amendment, the Loan Agreement is hereby amendedas follows:(a)The definition of “Approval Milestone” in Section 1.01 of the Loan Agreement shall be amended andrestated in its entirety as follows:“Approval Milestone” means 510(k) clearance for the marketing of T2Bacteria™ by the United States Food and DrugAdministration on or prior to June 30, 2018.(b)Section 6.02(a) of the Loan Agreement is hereby amended and restated in its entirety as follows:[***] Certain information in this document has been omitted and filed separately with the Securities and ExchangeCommission. Confidential treatment has been requested with respect to the omitted portions “(a) Borrowing Date. Such Borrowing shall occur on or prior to September 27, 2018.”(c)Section 8.01(g) of the Loan Agreement is hereby amended and restated in its entirety as follows:“(g) concurrent with delivery thereof to Borrower’s directors, copies of any materials of any type madeavailable to Borrower’s directors, including, without limitation, presentations, correspondence, projections, memoranda,reports, term sheets, agreements, notices, minutes, consents and any other material that Borrower makes available to itsdirectors for such meetings, but excluding in each case (i) any materials provided to such directors in any capacity other thanof a director, (ii) any materials or information that is subject to attorney-client privilege if such exclusion is reasonablynecessary to preserve the attorney-client privilege, and (iii) any material or information relating to a refinancing of theLoans.”(d)Section 10.02(b) of the Loan Agreement is hereby amended and restated in its entirety as follows: “(b)during the twelve month period beginning on January 1, 2018, of at least $[******];”(e)Annex B of Exhibit E of the Loan Agreement is hereby replaced in its entirety by Annex B toCompliance Certificate attached hereto.SECTION 3. Conditions of Effectiveness. The effectiveness of Section 2 of this Amendment shall be subject to the followingconditions precedent:(a)Borrower, Administrative Agent and the Lenders, which constitute the Majority Lenders, shall have dulyexecuted and delivered this Amendment pursuant to Section 13.04 of the Loan Agreement; provided, however, that this Amendmentshall have no binding force or effect unless all conditions set forth in this Section 3 have been satisfied;(b)No Default or Event of Default under the Loan Agreement shall have occurred and be continuing; and(c)Borrower shall have paid or reimbursed Administrative Agent and the Lenders for their reasonable out ofpocket costs and expenses (including the reasonable fees and expenses of Administrative Agent’s and the Lenders’ legal counsel)incurred in connection with this Amendment pursuant to Section 13.03(a)(i)(z) of the Loan Agreement.SECTION 4. Representations and Warranties; Reaffirmation.(a)Borrower hereby represents and warrants to each Lender as follows:(i)Borrower has full power, authority and legal right to make and perform this Amendment. ThisAmendment is within Borrower’s corporate powers and has been duly2[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions authorized by all necessary corporate action and, if required, by all necessary shareholder action. This Amendment has been dulyexecuted and delivered by Borrower and constitutes a legal, valid and binding obligation of Borrower, enforceable against Borrower inaccordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium orsimilar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity(regardless of whether such enforceability is considered in a proceeding in equity or at law). This Amendment (x) does not require anyconsent or approval of, registration or filing with, or any other action by, any Governmental Authority or any third party, except forsuch as have been obtained or made and are in full force and effect, (y) will not violate (i) the charter, bylaws or other organizationaldocuments of Borrower and its Subsidiaries or (ii) any applicable law or regulation or any order of any Governmental Authority, otherthan any such violations in the case of this clause (ii) that, individually or in the aggregate, could not reasonably be expected to have aMaterial Adverse Effect and (z) will not violate or result in a default under any Material Agreement or agreement creating orevidencing any Material Indebtedness, or give rise to a right thereunder to require any payment to be made by any such Person.(ii)No Default has occurred or is continuing or will result after giving effect to this Amendment.(iii)The representations and warranties in Section 7 of the Loan Agreement are true and correct in allmaterial respects (taking into account any changes made to schedules updated in accordance with Section 7.20 of the LoanAgreement) (unless qualified by materiality or Material Adverse Effect, in which case they are true in all respects (taking into accountany changes made to schedules updated in accordance with Section 7.20 of the Loan Agreement)) on and as of the date hereof, withthe same force as if made on and as of the date hereof (except that the representation regarding representations and warranties that referto a specific earlier date is that they were true and correct in all material respects (taking into account any changes made to schedulesupdated in accordance with Section 7.20 of the Loan Agreement) (unless qualified by materiality or Material Adverse Effect, in whichcase they are true in and correct in all respects (taking into account any changes made to schedules updated in accordance with Section7.20 of the Loan Agreement)) on such earlier date).(iv)There has been no Material Adverse Effect since the date of the Loan Agreement.(b)Borrower hereby ratifies, confirms, reaffirms, and acknowledges its obligations under the LoanDocuments to which it is a party and agrees that the Loan Documents remain in full force and effect, undiminished by thisAmendment, except as expressly provided herein. By executing this Amendment, Borrower acknowledges that it has read, consultedwith its attorneys regarding, and understands, this Amendment.SECTION 5. Release. In consideration of the agreements of Administrative Agent and the Lenders contained herein and for othergood and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf of itself and itssuccessors, assigns and other legal representatives, hereby fully, absolutely, unconditionally and irrevocably3[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions releases, remises and forever discharges Administrative Agent and each Lender, and their respective successors and assigns, and theirrespective present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees,agents and other representatives (Administrative Agent, each Lender and all such other persons being hereinafter referred tocollectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants,contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims,counterclaims, defenses, rights of set-off, demands and liabilities whatsoever of every name and nature, known or unknown, suspectedor unsuspected, both at law and in equity, which Borrower or any of its successors, assigns or other legal representatives may now orhereafter own, hold, have or claim to have against the Releasees or any of them for, upon or by reason of any circumstance, action,cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, including, without limitation, foror on account of, or in relation to, or in any way in connection with the Loan Agreement or any of the other Loan Documents ortransactions thereunder or related thereto (collectively, the “Released Claims”). Borrower understands, acknowledges and agrees thatthe release set forth above (the “Release”) may be pleaded as a full and complete defense and may be used as a basis for an injunctionagainst any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of theRelease. Borrower agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which mayhereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the Release. Borrower acknowledgesthat the Release constitutes a material inducement to Administrative Agent and the Lenders to enter into this Amendment and thatAdministrative Agent and the Lenders would not have done so but for Administrative Agent’s and each Lender’s expectation that theRelease is valid and enforceable in all events.SECTION 6. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.(a)Governing Law. This Amendment and the rights and obligations of the parties hereunder shall begoverned by, and construed in accordance with, the law of the State of New York, without regard to principles of conflicts of laws thatwould result in the application of the laws of any other jurisdiction; provided that Section 5-1401 of the New York GeneralObligations Law shall apply.(b)Submission to Jurisdiction. Borrower agrees that any suit, action or proceeding with respect to thisAmendment or any judgment entered by any court in respect thereof may be brought initially in the federal or state courts in Houston,Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction of each such court for thepurpose of any such suit, action, proceeding or judgment. This Section 6 is for the benefit of Administrative Agent and the Lendersonly and, as a result, none of Administrative Agent or any Lender shall be prevented from taking proceedings in any other courts withjurisdiction. To the extent allowed by applicable Laws, Administrative Agent and the Lenders may take concurrent proceedings in anynumber of jurisdictions.(c)Waiver of Jury Trial. Borrower, Administrative Agent and each Lender hereby irrevocably waives, tothe fullest extent permitted by applicable law,4[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions any and all right to trial by jury in any suit, action or proceeding arising out of or relating to this Amendment.SECTION 7. Miscellaneous.(a)No Waiver. Except as expressly stated herein, nothing contained herein shall be deemed to constitute awaiver of compliance with any term or condition contained in the Loan Agreement or any of the other Loan Documents or constitute acourse of conduct or dealing among the parties. Except as expressly stated herein, Administrative Agent and the Lenders reserve allrights, privileges and remedies under the Loan Documents. Except as amended hereby, the Loan Agreement and other LoanDocuments remain unmodified and in full force and effect. All references in the Loan Documents to the Loan Agreement shall bedeemed to be references to the Loan Agreement as amended hereby.(b)Severability. In case any provision of or obligation under this Amendment shall be invalid, illegal orunenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of suchprovision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.(c)Headings. Headings and captions used in this Amendment (including the Exhibits, Schedules andAnnexes hereto, if any) are included for convenience of reference only and shall not be given any substantive effect.(a)Integration. This Amendment constitutes a Loan Document and, together with the other LoanDocuments, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression andagreement of the parties hereto with respect to the subject matter hereof.(b)Counterparts. This Amendment may be executed in any number of counterparts, all of which takentogether shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any suchcounterpart. Executed counterparts delivered by facsimile or other electronic transmission (e.g., “PDF” or “TIF”) shall be effective asdelivery of a manually executed counterpart.(c)Controlling Provisions. In the event of any inconsistencies between the provisions of this Amendmentand the provisions of any other Loan Document, the provisions of this Amendment shall govern and prevail. Except as expresslymodified by this Amendment, the Loan Documents shall not be modified and shall remain in full force and effect.(d)Notices. Administrative Agent and the Lenders hereby designate that all notices, requests, instructions,directions and other communications provided for in connection with the Loan Agreement shall be provided in accordance withSection 13.02 of the Loan Agreement to the address specified on the signature pages hereto. [Remainder of page intentionally left blank]5[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment hasbeen requested with respect to the omitted portions IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first above written. BORROWER: T2 BIOSYSTEMS, INC.By /s/ John McDonough________Name: John McDonoughTitle: President & CEO Address for Notices:101 Hartwell AvenueLexington, MA 02421Attn:Michael GibbsTel.:(781) 761-4630Fax:(781) 538-4020Email:mgibbs@t2biosystems.com ADMINISTRATIVE AGENT: CRG SERVICING LLC By _________________________________Name:Title: Address for Notices:1000 Main Street, Suite 2500Houston, TX 77002Attn:Portfolio ReportingTel.:713.209.7350Fax:713.209.7351Email:notices@crglp.com LENDERS: CRG PARTNERS III – PARALLEL FUND “A” L.P. By CRG PARTNERS III – PARALLEL FUND “A” GP L.P., itsGeneral PartnerBy CRG PARTNERS III – PARALLEL FUND “A” GP LLC, itsGeneral Partner By _________________________________Name:Title: Address for Notices:1000 Main Street, Suite 2500Houston, TX 77002Attn:Portfolio ReportingTel.:713.209.7350Fax:713.209.7351Email:notices@crglp.com CRG PARTNERS III (CAYMAN) UNLEV AIV I L.P. By CRG PARTNERS III (CAYMAN) GP L.P., its GeneralPartnerBy CRG PARTNERS III (CAYMAN) GP LLC, its General Partner By _________________________________Name: Nathan HukillTitle: Authorized Signatory Witness:________________________________Name:________________________________ Address for Notices:1000 Main Street, Suite 2500Houston, TX 77002Attn:Portfolio ReportingTel.:713.209.7350Fax:713.209.7351Email:notices@crglp.com CRG ISSUER 2017-1By CRG SERVICING LLC, acting by power of attorney By: ________________________________Name:Title: Address for Notices:1000 Main Street, Suite 2500Houston, TX 77002Attn:Portfolio ReportingTel.:713.209.7350Fax:713.209.7351Email:notices@crglp.com EXHIBIT 10.44AMENDMENT NUMBER THREETOCONSULTING AGREEMENT This Amendment Number Three to Consulting Agreement (this “Amendment”) is entered into this 13th day of October,2017, between T2 Biosystems, Inc., a Delaware corporation (the "Company"), and Dr. Robert Langer (the “Consultant”). Capitalizedterms used herein without definition shall have the meaning ascribed thereto in the Consulting Agreement (as defined below).RecitalsA.The Company and the Consultant have entered into that certain Consulting Agreement, dated as of July 20, 2006,as amended by that certain letter dated March 20, 2013 and further amended by that certain letter dated July 24, 2014 (collectively, the“Consulting Agreement”), pursuant to which the Consultant agreed to provide certain services to the Company on the terms andconditions set forth therein.B.The Company and the Consultant mutually desire to amend the Consulting Agreement to revise certain termsrelating to, among other things, the term of the Consulting Agreement and the compensation of the Consultant.NOW, THEREFORE, in consideration of the foregoing and the mutual promises made herein, and for other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to amend the ConsultingAgreement in accordance with Section 20 of the Consulting Agreement as follows:1.Amendment of Term. The first sentence of Section 6 of the Consulting Agreement is hereby amended bydeleting the word “third” and replacing it with the word “sixth” immediately prior to the word “anniversary”.2.Amendment of Compensation. Section 7 of the Consulting Agreement (as amended to date) is herebyamended by deleting clause (a) in its entirety and replacing it with the following:“(a) During the Term, the Company shall pay you annual compensation of $25,000 per year, to be paid inquarterly installments.3.No Other Amendments. Except to the extent amended hereby, all of the definitions, terms, provisions andconditions set forth in the Consulting Agreement are hereby ratified and confirmed and shall remain in full force and effect. TheConsulting Agreement, and this Amendment shall be read and construed together as a single agreement and the term “Agreement”shall henceforth be deemed a reference to the Consulting Agreement as amended by this Amendment. This Amendment may besigned in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute oneand the same instrument. In making proof of this Amendment, it shall not be necessary to produce or account for more than one suchcounterpart. In Witness Whereof, the parties have duly authorized and caused this Amendment to be executed as of the date first writtenabove.T2 BIOSYSTEMS, INC. By:/s/ John McDonoughName: John McDonoughTitle: President & CEO CONSULTANT:/s/ Robert Langer_Name: Dr. Robert Langer EXHIBIT 10.45 April 16, 2017 Darlene Deptula-Hicks30 Crane Crossing RoadPlaistow, NH 03865 Dear Darlene: On behalf of T2 Biosystems, Inc., (the “Company”) I am delighted to make this offer of employment to you to join us in therole of Senior Vice President and Chief Financial Officer for the Company beginning May 1, 2017. At T2 Biosystems, our mission is to fundamentally change the way that medicine is practiced by transforming diagnostics forthe tangible benefit of patients, practitioners and healthcare institutions. We have developed a breakthrough and innovative technology,T2MR, that has received the most prestigious industry awards and is protected by almost 50 patents. Our first products, T2Candidaand the T2Dx, are already in use in over 100 hospitals in the United States and Europe. We are positively impacting the lives ofpatients and saving hospitals millions of dollars each year. Our next product, T2Bacteria, is expected to be FDA cleared later this yearand additional products are in development. There is a lot of growth ahead and you are joining us at a very exciting time! Darlene, we are thrilled to extend this offer of employment to you. We think you can help us fulfill our mission and webelieve you’d be a great fit for our team. To kick things off, you will find all of the pertinent information related to our offer ofemployment in the attached pages. Please read the offer carefully and, if it is acceptable, sign and return one copy to my attention(PDF copy is fine). If you have any questions, please do not hesitate to contact me at (781) 457-1283 or email at kmorgan@t2biosystems.com.We are looking forward to having you on our team! Sincerely, /s/ Kelley Morgan Kelley MorganSenior Director, Human Resources OFFER OF EMPLOYMENT Date of employment: Should you accept the terms of this offer, your employment with the Company will commence on May 1, 2017. Background check: Your employment is contingent upon your successful completion of a background check, which is required for allemployees of the Company. The Company will forward you the appropriate documents, and such documents shall be required to besubmitted to the Company by no later than one week prior to your start date. Position: You have been offered the position of Senior Vice President and Chief Financial Officer. In this capacity, you will report toJohn McDonough, Chief Executive Officer. Your duties and responsibilities will include all those customarily attendant to such aposition, and any other such duties or responsibilities that John McDonough or the Company may, from time to time, assign toyou. You agree that you shall not enter into any employment endeavors which may conflict with your ability to devote the necessarytime and energies to the Company’s business interest while engaged by the Company. You further agree to comply with all applicablelaws and with all Company rules and policies established by the Company from time to time. Compensation and Tax Matters: Your salary shall be $14,166.67 (the equivalent of $340,000 when annualized), payable semi-monthly and subject to pro-ration for any partial initial or terminal week during which you are employed, in accordance with normalpayroll practices and schedule of the Company. You will be eligible to receive an annual bonus (the "Annual Bonus") based upon the achievement of specific company and individualmilestones as determined by the Board of Directors. The target amount of your Annual Bonus will be 45% of your Base Salary,subject to adjustment by the Board of Directors. Payment of the Annual Bonus will be pro-rated for 2017 and will in all events besubject to your continued employment with the Company through the date of payment. All compensation amounts stated are before any deductions for FICA taxes, state and federal withholding taxes and other payrolldeductions required to be made by the Company under applicable law. Stock Options: Subject to the approval of the Board of Directors and your execution of the Company’s Stock Option Agreement, youwill be offered options to purchase 175,000 shares of T2 Biosystems common stock under the Company’s 2014 Incentive Award Plan(the “2014 Plan”). The exercise price of the options will be equal to their fair market value on the date of grant (determined inaccordance with the 2014 Plan). The stock options will have a 4-year vesting schedule with 25% of the options vesting one year fromthe vesting commencement date (your start date) and the remaining options vesting in equal monthly installments over the following 36months. The terms and conditions of such stock option grant are more fully described in the 2014 Plan. Severance Compensation: Subject to the approval of the Board of Directors and your execution of the attached Change of ControlSeverance Agreement (the “Change in Control Agreement”), you will be offered certain benefits in the event of a change in control ofthe Company, as set forth in more detail and defined in the Change in Control Agreement, including severance compensation and theacceleration of certain stock options, each such benefit to be subject to the terms of the Change in Control Agreement.Active: 2017 In the event your employment is terminated by the Company for reasons other than Cause and unrelated to a Change in Control, bothas defined in the Change in Control Agreement, you will be entitled to receive severance benefits in the form of salary continuationand reimbursement for costs associated with COBRA, for a period of six (6) months following the end of your employment. Fringe Benefits: You will have the opportunity to participate in the Company’s fringe benefits program. Currently, these fringebenefits are as follows: •The Company currently provides contributions toward a medical and dental plan for yourself and immediate family members •Three (3) weeks paid vacation, Company designated holidays, personal holidays and sick days (see Benefits Summary formore information). •The Company provides 100% contribution towards Term Life Insurance, Accidental Death and Dismemberment Insurance,and Short and Long-Term Disability Insurance; •The opportunity to enroll in the Company’s 401(k) Investment and Section 125 Plans based on plan eligibility requirements;and •Pay or reimburse you in accordance with the Company’s reimbursement policies from time to time in connection with theperformance of your duties for the Company subject to your submission of satisfactory documentation with respect thereto. The Company reserves the right to amend, delete or change any of its employment policies and/or benefits at any time in its solediscretion. Non Competition/Non-Disclosure/Invention Assignment Agreement: No later than on the first day of your employment with theCompany you will be required to sign the enclosed Non-Competition/Non-Disclosure/Inventions Assignment Agreement(“Obligations Agreement”) which includes nondisclosure, inventions ownership, and other provisions that are necessary to protect theCompany’s confidential information, intellectual; property, trade secrets, and customer relationships. As you may be given access tosuch protectable interests, your employment is contingent upon your signing the Obligations Agreement. The terms of the ObligationsAgreement will survive termination, for whatever reason, of the employment relationship. Prior Agreements: You acknowledge and confirm that you have provided/disclosed to the Company all restrictive covenants andagreements, including nondisclosure and confidentiality agreements, to which you are a party. You agree that you shall not disclose tothe Company or use while an employee of the Company any confidential or trade secret information obtained by you from otherpersons or employers and shall not bring any property upon the Company premises which has been misappropriated by others. Youalso acknowledge that the Company expects you to honor any prior obligations to former employers to which you remain bound.Employment At Will: Although you are being hired as an employee commencing on May 1, 2017, your employment with theCompany shall be at will. This means that your employment is not guaranteed for any definite period of time, and you or theCompany may terminate your employment relationship with or without notice at any time and for any or no reason or cause. TheCompany is not bound to followActive: 2017 any policy, procedure, or process in connection with employee discipline, employment termination or otherwise. Entire Agreement: This letter (together with the attached Obligations Agreement and Change in Control Agreement) sets forth theentire understanding between the Company and yourself with respect to your employment by the Company. All prior discussions,negotiations, correspondence and other understandings between you and the Company are superseded, and there are norepresentations, warranties or undertakings by the Company or you with respect to your employment by the Company, which are notset forth in this letter. If you agree with the terms of this offer, please acknowledge your understanding and acceptance of this offer by signing whereindicated below and return to me along with a completed background check authorization form by 5:00 p.m. ET on April 18, 2017.We look forward to working with you. Sincerely, T2 Biosystems, Inc. By: __/s/ Kelley Morgan ________________4/16/2017_________________________Kelley MorganDateSenior Director, Human Resources I have read agree with and accept the items contained in this letter. By: ___/s/ Darlene Deptula-Hicks__________4/16/2017______________________________Darlene Deptula-HicksDate The Immigration Control and Reform Act of 1986 requires that all new employees complete the I-9 form and submit proof of employment eligibility to work in the United Stateswithin the first three days of their start date. If accepting employment the Company will provide you the I-9 form and requests that you present appropriate documents when youreport to the Company and a representative of the Company will complete the I-9 form with you. Accordingly, you will have three days from your start date to submit proof ofyour eligibility to work in the United States.Active: 2017EXHIBIT 10.46T2 BIOSYSTEMS, INC. CHANGE OF CONTROL SEVERANCE AGREEMENT May 1, 2017 Darlene Deptula-Hicks30 Crane Crossing RoadPlaistow, NH 03865 Dear Darlene, This letter sets forth the agreement between you and T2 Biosystems, Inc. (the “Company”) regarding certain terms and conditions ofyour employment. 1.Severance Compensation. If your employment is terminated either by you with Good Reason within 12 monthsfollowing a Change of Control, or by the Company without Cause within 3 months preceding or within 12 months following aChange of Control, subject to your executing and delivering to the Company, and not revoking, a release of claims in a formacceptable to the Company (the “Release”) within the 30-day period following your termination of employment: (a)the Company will pay you severance in an amount equal to 12 months of your then current annual basesalary, plus a pro-rata share of your target annual cash bonus for the calendar year in which the termination occurs (based on thenumber of calendar days elapsed prior to the effective date of such termination), payable in equal installments over a period of 12months (the “Severance Period”) in accordance with the Company’s payroll practices, commencing on your termination ofemployment; (b)if you have been continuously employed by the Company for less than one year as of the date youremployment terminates, the vesting schedule of any equity awards of the Company held by you shall automatically be amended tostate that all of the options subject to such equity award(s) scheduled to vest within 12 months of the date of your termination shallimmediately accelerate and become fully vested, provided that with respect to any such awards intended to constitute “qualifiedperformance based compensation” under Section 162(m) of the Code, whether a Change of Control has occurred shall be determinedwithout regard to clause (iv) of the definition of Change of Control below; (c)if you have been continuously employed by the Company for at least one year as of the date youremployment terminates, all of the outstanding unvested equity awards of the Company held by you shall become fully vested and, ifapplicable, exercisable as of the date of your termination, provided that with respect to any such awards intended to constitute“qualified performance based compensation” under Section 162(m) of the Code, whether a Change of Control has occurred shall bedetermined without regard to clause (iv) of the definition of Change of Control below; and (d)If you timely elect continued group medical and dental insurance coverage pursuant to the ConsolidatedOmnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will reimburse you for a portion of theapplicable premiums, based on the then-current cost-sharing rates for active employees, for you and your eligible dependents duringthe period commencing on the date of your termination of employment and ending on the earliest to occur of (a) the final day of theSeverance Period, (b) the date you and/or your eligible dependents are no longer eligible for COBRA, and (c) the date you becomeeligible to receive medical insurance coverage from a subsequent employer (and you agree to notify the Company of sucheligibility). Notwithstanding the foregoing, if the Company determines that it cannot provide such reimbursement of premiums to youwithout potentially violating applicable law, the Company shall in lieu thereof provide to you a taxable monthly payment in an amountequal to a portion of the applicable premiums, based on then-current cost-sharing rates for active employees, which payment will bemade regardless of whether you elect COBRA continuation coverage and will commence in the month following the month in whichyour termination of employment occurs and end on the earliest to occur of (x) the final day of the Severance Period, (y) the date youand/or your eligible dependents are no longer eligible for COBRA, and (z) the date you become eligible to receive medical insurancecoverage from a subsequent employer (and you agree to notify the Company of such eligibility). Notwithstanding anything herein to the contrary, in the event that any compensation or benefit that constitutes “nonqualified deferredcompensation” within the meaning of Section 409A (as defined below) becomes payable upon the occurrence of a Change of Control,such compensation or benefit shall not be paid unless such Change of Control constitutes a “change in control event” within themeaning of Section 409A. 2.Definitions. For purposes of this letter, the terms “Change of Control,” “Cause,” and “Good Reason” shall havethe following meanings. (a)“Change of Control” means that any of the following events has occurred: (i)Any person (as such term is used in Section 13(d) of the Securities Exchange Act of 1934 (the“Exchange Act”)), other than the Company, any employee benefit plan of the Company, or any entity organized, appointed,or established by the Company for or pursuant to the terms of any such plan, together with all “affiliates” and “associates”(as such terms are defined in Rule 12b-2 under the Exchange Act) becomes the beneficial owner or owners (as defined inRule 13d-3 and 13d-5 promulgated under the Exchange Act), directly or indirectly (the “Control Group”), of more than 50%of the outstanding equity securities of the Company, or otherwise becomes entitled, directly or indirectly, to vote more than50% of the voting power entitled to be cast at elections for directors (“Voting Power”) of the Company, provided that aChange of Control will not have occurred if such Control Group acquired securities or Voting Power solely by purchasingsecurities from the Company, including, without limitation, acquisition of securities by one or more third party investors; (ii)A consolidation or merger (in one transaction or a series of related transactions) of theCompany pursuant to which the holders of the Company’s equity2 securities immediately prior to such transaction or series of related transactions cease to be the holders, directly or indirectly,immediately after such transaction or series of related transactions of more than 50% of the Voting Power of the entitysurviving such transaction or series of related transactions; (iii)The sale, lease, exchange, or other transfer (in one transaction or series of relatedtransactions) of all or substantially all of the assets of the Company; or (iv)The liquidation or dissolution of the Company or the Company ceasing to do business. (b)“Cause” means: (i)Your conviction of a felony, either in connection with the performance of your obligations tothe Company or which otherwise materially and adversely affects your ability to perform such obligations; (ii)Your willful disloyalty to the Company or deliberate material dishonesty to the Company; (iii)The commission by you of an act of fraud or embezzlement against the Company; (iv)Your willful, substantial failure to perform any of your duties hereunder or your deliberatefailure to follow reasonable, lawful directions of the Company’s Board of Directors or your direct supervisor, which failure,if capable of being cured, is not cured within 30 days after delivery to you by the Company of written notice of such failure;or (v)A material breach by you of any material provision of this letter which breach is not curedwithin 30 days after delivery to you by the Company of written notice of such breach. (c)“Good Reason” means one or more of the following: (i)A material change in the principal location at which you provide services to the Company,without your prior written consent; (ii)A material and continuing diminution by the Company in the duties, authority orresponsibilities of your position which causes such position to become of less responsibility or authority than immediatelyprior to such material and continuing diminution, provided that such change is not in connection with a termination of youremployment hereunder by the Company (for purposes of clarity, if you are not the Chief Financial Officer of the combinedpublic company following the Change of Control, you shall be deemed to have a material diminution of your duties); 3 (iii)A material reduction in your base salary or other benefits except if such a reduction is inconnection with a general reduction in compensation or other benefits of all similarly situated employees of the Company; (iv)Failure by the Company to obtain the assumption of this Agreement by any successor to theCompany. Notwithstanding the foregoing, Good Reason shall only exist if you have given written notice to the Company within 90days of the initial existence of the Good Reason condition(s), and the Company has failed to cure such event(s) within 30 days of itsreceipt of said notice. 3.Section 409A. (a)Separation from Service. Notwithstanding anything in this letter to the contrary, any compensation orbenefit payable under this letter that is designated as payable upon your termination of employment shall be payable only upon your“separation from service” with the Company (a “Separation from Service”) within the meaning of Section 409A of the InternalRevenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”), andexcept as provided below, any such compensation or benefits shall not be paid, or, in the case of installments, shall not commencepayment, until the 30th day following your Separation from Service. Any installment payments that would have been made to youduring the 30 day period immediately following your Separation from Service but for the preceding sentence shall be paid to you onthe 30th day following your Separation from Service and the remaining payments shall be made as provided in this letter. (b)Specified Employee. Notwithstanding anything in this letter to the contrary, if you are deemed by theCompany at the time of your Separation from Service to be a “specified employee” for purposes of Section 409A, to the extentdelayed commencement of any portion of the benefits to which you are entitled under this letter is required in order to avoid aprohibited distribution under Section 409A, such portion of your benefits shall not be provided to you prior to the earlier of (i) theexpiration of the six-month period measured from the date of your Separation from Service with the Company or (ii) the date of yourdeath. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant tothe preceding sentence shall be paid in a lump-sum to you (or your estate or beneficiaries), and any remaining payments due to youunder this letter shall be paid as otherwise provided herein. (c)Installments. Your right to receive any installment payments under this letter shall be treated as a rightto receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separateand distinct payment as permitted under Section 409A. Except as otherwise permitted under Section 409A, no payment hereundershall be accelerated or deferred unless such acceleration or deferral would not result in additional tax or interest pursuant to Section409A. 4 4.General (a)No provision of this letter shall be modified, waived or discharged unless the modification, waiver ordischarge is agreed to in writing and signed by you and by an authorized officer of the Company (other than you). No waiver byeither party of any breach of, or of compliance with, any condition or provision of this letter by the other party shall be considered awaiver of any other condition or provision or of the same condition or provision at another time. The validity, interpretation,construction and performance of this letter shall be governed by the laws of the Commonwealth of Massachusetts without regard toconflicts of law. The invalidity or unenforceability of any provision or provisions of this letter shall not affect the validity orenforceability of any other provision hereof, which shall remain in full force and effect. This letter may be executed in counterparts,each of which shall be deemed an original, but all of which together will constitute one and the same instrument. (b)This letter contains the entire and exclusive agreement between the parties with respect to the subjectmatter hereof and is intended to supersede and replace all previous agreements, negotiations, and representations between the parties,whether written or oral, including any provision of the employment offer letter agreement between you and the Company, dated as ofApril 18, 2017, to the extent such letter addresses the subject matter hereof. Sincerely, T2 BIOSYSTEMS, INC. By:/s/ John McDonough____________Name:John McDonoughTitle: President & CEO Acknowledged and Agreed /s/ Darlene Deptula-Hicks_______________Darlene Deptula-Hicks5 Exhibit 21.1Subsidiaries of T2 Biosystems, Inc.:Name Jurisdiction of OrganizationT2 Biosystems Securities Corporation Massachusetts Exhibit 23.1Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the following Registration Statements: (1) Registration Statement (Form S-3 No. 333-206707) of T2 Biosystems, Inc., (2)Registration Statement (Form S-3 No. 333-216833) of T2 Biosystems, Inc., and (3) Registration Statement (Form S-8 No. 333-197946) pertaining to the Amended and Restated 2006 Employee, Director and Consultant StockPlan, 2014 Incentive Award Plan, and the 2014 Employee Stock Purchase Plan of T2 Biosystems, Inc. of our report dated March 19, 2018, with respect to the consolidated financial statements of T2 Biosystems, Inc. included in this Annual Report(Form 10-K) of T2 Biosystems, Inc. for the year ended December 31, 2017. /s/ Ernst & Young LLP Boston, MassachusettsMarch 19, 2018 Exhibit 31.1CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, John McDonough, certify that:1.I have reviewed this Annual Report on Form 10-K of T2 Biosystems, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: March 19, 2018By:/s/ John McDonough John McDonough President, Chief Executive Officer and Director Exhibit 31.2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, John Sprague, certify that: 1.I have reviewed this Annual Report on Form 10-K of T2 Biosystems, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: (a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles; (c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: March 19, 2018By:/s/ John M. Sprague John M. Sprague Principal Financial Officer Exhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of T2 Biosystems, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2017 (the “Report”), asfiled with the Securities and Exchange Commission on or about the date hereof, I, John M. Sprague, Principal Financial Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (i)the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and (ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. Date: March 19, 2018By:/s/ John M. Sprague John M. Sprague Principal Financial Officer By:/s/ John McDonough John McDonough President, Chief Financial Officer andDirector This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of T2 Biosystems, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

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