Exhibit 10.2

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (this “Agreement”) is dated as of October 8, 2008 and
entered into by and among QUIDEL CORPORATION, a Delaware corporation
(“Borrower”), each of THE UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES of
Borrower (each of such undersigned Subsidiaries being a “Subsidiary Grantor” and
collectively “Subsidiary Grantors”) and each ADDITIONAL GRANTOR that may become
a party hereto after the date hereof in accordance with Section 21 hereof (each
of Borrower, each Subsidiary Grantor, and each Additional Grantor being a
“Grantor” and collectively the “Grantors”) and BANK OF AMERICA, N.A., as Agent
for and representative of (in such capacity herein called “Secured Party”) the
Beneficiaries (as hereinafter defined).

 

PRELIMINARY STATEMENTS

 

A.            Pursuant to the Credit Agreement dated as of October 8, 2008 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement;” the terms defined therein and not
otherwise defined in Section 31, the UCC or elsewhere herein being used herein
as therein defined), by and among Borrower, the financial institutions listed
therein as Lenders, U.S. Bank N.A., as Syndication Agent, and Bank of America,
N.A., as Agent (in such capacity, “Agent”), Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Borrower.

 

B.            Any Loan Party may from time to time enter, or may from time to
time have entered, into one or more Secured Hedge Agreements with one or more
Hedge Banks in accordance with the terms of the Credit Agreement, and it is
desired that the obligations of Loan Parties under the Secured Hedge Agreements,
including, without limitation, the obligation of Loan Parties to make payments
thereunder in the event of early termination thereof, together with all
obligations of Borrower under the Credit Agreement and the other Loan Documents,
be secured hereunder.

 

C.            Any Loan Party may from time to time enter, or may from time to
time have entered, into one or more Secured Cash Management Agreements with one
or more Cash Management Banks in accordance with the terms of the Credit
Agreement, and it is desired that the obligations of Loan Parties under the
Secured Cash Management Agreements, together with all obligations of Borrower
under the Credit Agreement and the other Loan Documents, be secured hereunder.

 

D.            Subsidiary Grantors have executed and delivered the Subsidiary
Guaranty, in each case in favor of Secured Party for the benefit of Lenders, any
Hedge Banks and any Cash Management Banks, pursuant to which each Subsidiary
Grantor has guarantied the prompt payment and performance when due of all
obligations of Borrower under the Credit Agreement and all obligations of Loan
Parties under the Secured Hedge Agreements and Secured Cash Management
Agreements.

 

E.             It is a condition precedent to the initial extensions of credit
by Lenders under the Credit Agreement that Grantors listed on the signature
pages hereof shall have granted the security interests and undertaken the
obligations contemplated by this Agreement.

 

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NOW, THEREFORE, in consideration of the agreements set forth herein and in the
Credit Agreement and in order to induce Lenders to make Loans and other
extensions of credit under the Credit Agreement, to induce Hedge Banks to enter
into the Secured Hedge Agreements and to induce Cash Management Banks to enter
into the Secured Cash Management Agreements, each Grantor hereby agrees with
Secured Party as follows:

 

SECTION 1.         Grant of Security.

 

Each Grantor hereby assigns to Secured Party, and hereby grants to Secured Party
a security interest in, all of such Grantor’s right, title and interest in and
to all of the personal property of such Grantor, in each case whether now or
hereafter existing, whether tangible or intangible, whether now owned or
hereafter acquired, wherever the same may be located and whether or not subject
to the Uniform Commercial Code as it exists on the date of this Agreement, or as
it may hereafter be amended in the State of California (the “UCC”), including
the following (the “Collateral”):

 

(a)           all Accounts;

 

(b)           all Chattel Paper;

 

(c)           all Money and all Deposit Accounts, together with all amounts on
deposit from time to time in such Deposit Accounts;

 

(d)           all Documents;

 

(e)           all General Intangibles, including all intellectual property,
Payment Intangibles and Software;

 

(f)            all Goods, including Inventory, Equipment and Fixtures;

 

(g)           all Instruments;

 

(h)           all Investment Property;

 

(i)            all Letter-of-Credit Rights and other Supporting Obligations;

 

(j)            all Records;

 

(k)           all Commercial Tort Claims, including those set forth on Schedule
1  annexed hereto; and

 

(l)            all Proceeds and Accessions with respect to any of the foregoing
Collateral.

 

Each category of Collateral set forth above shall have the meaning set forth in
the UCC (to the extent such term is defined in the UCC), it being the intention
of Grantors that the description of the Collateral set forth above be construed
to include the broadest possible range of assets.

 

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Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in, any of such Grantor’s rights or interests in or under, any license,
contract, permit, Instrument, Security or franchise to which such Grantor is a
party or any of its rights or interests thereunder to the extent, but only to
the extent, that such a grant would, under the terms of such license, contract,
permit, Instrument, Security or franchise, result in a breach of the terms of,
or constitute a default under, such license, contract, permit, Instrument,
Security or franchise (other than to the extent that any such term would be
rendered ineffective pursuant to the UCC or any other applicable law (including
the Bankruptcy Code) or principles of equity); provided, that immediately upon
the ineffectiveness, lapse or termination of any such provision the Collateral
shall include, and such Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.

 

Notwithstanding the foregoing, the Collateral shall not include (a) any equity
interests issued by a Person if such Person is a controlled foreign corporation
(used hereinafter as such term is defined in Section 957(a) or any successor
provision of the Internal Revenue Code), in excess of the amount of such equity
interests possessing up to but not exceeding 65% of the voting power of all
classes of such equity interests entitled to vote of such Person, and (b) assets
subject to any Lien permitted under Section 7.1(i) of the Credit Agreement where
the security agreement or other instrument creating such purchase money Lien
prohibits the granting of a security interest in such assets to Secured Party or
results in an event of default under such security agreement or instrument
(other than to the extent that such term would be rendered ineffective pursuant
to the UCC or any other applicable law (including the Bankruptcy Code));
provided that the security interest in any such assets shall automatically
attach hereunder when and after any such Liens are discharged or released or
when the assets encumbered by such Liens are no longer subject to such
restrictions; provided further, that in any event any Account or any money or
other amounts due or to become due under any such contract, agreement,
instrument or indenture shall not be excluded from the definition of Collateral
to the extent that any of the foregoing is (or if it contained a provision
limiting the transferability or pledge thereof would be) subject to Section 9406
of the UCC.

 

SECTION 2.         Security for Obligations.

 

This Agreement secures, and the Collateral is collateral security for, the
prompt payment or performance in full when due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise, of all
Secured Obligations of each Grantor.  “Secured Obligations” means:

 

(a)           with respect to Borrower, all obligations and liabilities of every
nature of Borrower now or hereafter existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents and any
Secured Hedge Agreement and any Cash Management Agreement (including all
Obligations (as defined in the Credit Agreement)); and

 

(b)           with respect to each Subsidiary Grantor and Additional Grantor,
all obligations and liabilities of every nature of such Subsidiary Grantor now
or hereafter existing under or arising out of or in connection with the
Subsidiary Guaranty (including all Guarantied Obligations (as defined in the
Subsidiary Guaranty));

 

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in each case together with all extensions or renewals thereof, whether for
principal, interest, reimbursement of amounts drawn under Letters of Credit,
payments for early termination of Secured Hedge Agreements, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender or
Hedge Bank or Cash Management Bank as a preference, fraudulent transfer or
otherwise, and all obligations of every nature of Grantors now or hereafter
existing under this Agreement (including, without limitation, interest and other
amounts that, but for the filing of a petition in bankruptcy with respect to
Borrower or any other Grantor, would accrue on such obligations, whether or not
a claim is allowed against Borrower or such Grantor for such amounts in the
related bankruptcy proceeding).

 

SECTION 3.         Grantors Remain Liable.

 

Anything contained herein to the contrary notwithstanding, (a) each Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts, licenses, and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

 

SECTION 4.         Representations and Warranties.

 

Each Grantor represents and warrants as follows:

 

(a)           Ownership of Collateral.  Except as expressly permitted by the
Credit Agreement, such Grantor owns its interests in the Collateral free and
clear of any Lien and no effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
filing or recording office, including any IP Filing Office.

 

(b)           Perfection.  The security interests in the Collateral granted to
Secured Party for the ratable benefit of Lenders, Hedge Banks and Cash
Management Banks hereunder constitute valid security interests in the
Collateral, securing the payment of the Secured Obligations.  Upon (i) the
filing of UCC financing statements naming each Grantor as “debtor”, naming
Secured Party as “secured party” and describing the Collateral in the filing
offices with respect to such Grantor set forth on Schedule 2 annexed hereto,
(ii) in the case of the Securities Collateral consisting of certificated
Securities or evidenced by Instruments, in addition to filing of such UCC
financing statements, delivery of the certificates representing such
certificated Securities and delivery of such Instruments to Secured Party, and
in the case of Securities Collateral issued by a foreign issuer, any actions
required under foreign law to perfect a security interest in such Securities
Collateral), in each case duly endorsed or accompanied by duly

 

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executed instruments of assignment or transfer in blank, (iii) in the case of
the Intellectual Property Collateral described in clause (a) of the definition
thereof, in addition to the filing of such UCC financing statements, the
recordation of a Grant with the applicable IP Filing Office, (iv) in the case of
Equipment that is covered by a certificate of title, the filing with the
registrar of motor vehicles or other appropriate authority in the applicable
jurisdiction of an application requesting the notation of the security interest
created hereunder on such certificate of title, (v), in the case of any Deposit
Account and any Investment Property constituting a Security Entitlement,
Securities Account, Commodity Contract or Commodity Account, the execution and
delivery to Secured Party of an agreement providing for control by Secured Party
thereof, (vi) in the case of Letter-of-Credit Rights (other than
Letter-of-Credit Rights consisting of Supporting Obligations for Collateral as
to which Secured Party otherwise has a perfected security interest), the issuer
of the applicable letter of credit has consented to the assignment of proceeds
thereof under Section 5114(c) of the UCC, and (vii) in the case of commercial
tort claims, the sufficient identification thereof in filed UCC financing
statements, the security interests in the Collateral (except for security
interests in Collateral that cannot be perfected by the filing of financing
statements and are not material to the Company) granted to Secured Party for the
ratable benefit of Lenders, Hedge Banks and Cash Management Banks will
constitute perfected security interests therein prior to all other Liens (except
for Liens permitted by clauses (b) through (i) of subsection 7.1 of the Credit
Agreement), and all filings and other actions required under this Agreement and
necessary or desirable to perfect and protect such security interests have been
duly made or taken.

 

(c)           Office Locations; Type and Jurisdiction of Organization; Locations
of Equipment and Inventory.  Such Grantor’s name as it appears in official
filings in the jurisdiction of its organization, type of organization (i.e.
corporation, limited partnership, etc.), jurisdiction of organization, principal
place of business, chief executive office, office where such Grantor keeps its
Records regarding the Accounts, Intellectual Property and originals of Chattel
Paper, and organization number provided by the applicable Government Authority
of the jurisdiction of organization are set forth on Schedule 3 annexed hereto. 
All of the Equipment and Inventory is located at the places set forth on
Schedule 4 annexed hereto, except for Inventory which, in the ordinary course of
business, is in transit either (i) from a supplier to a Grantor, (ii) between
the locations set forth on Schedule 4 annexed hereto, or (iii) to customers of a
Grantor.

 

(d)           Names.  No Grantor (or predecessor by merger or otherwise of such
Grantor) has, within the five year period preceding the date hereof, or, in the
case of an Additional Grantor, the date of the applicable Counterpart, had a
different name from the name of such Grantor listed on the signature
pages hereof, except the names set forth on Schedule 5 annexed hereto.

 

(e)           Delivery of Certain Collateral.  All certificates or Instruments
(excluding checks) evidencing, comprising or representing the Collateral having
a value or face amount in excess of $25,000 have been delivered to Secured Party
duly endorsed or accompanied by duly executed instruments of transfer or
assignment in blank.

 

(f)            Securities Collateral.  All of the Pledged Subsidiary Equity set
forth on Schedule 6 annexed hereto has been duly authorized and validly issued
and is fully paid and

 

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non-assessable; all of the Pledged Subsidiary Debt set forth on Schedule 7
annexed hereto has been duly authorized and is the legally valid and binding
obligation of the issuers thereof and is not in default; there are no
outstanding warrants, options or other rights to purchase, or other agreements
outstanding with respect to, or property that is now or hereafter convertible
into, or that requires the issuance or sale of, any Pledged Subsidiary Equity;
Schedule 6 annexed hereto sets forth all of the Equity Interests and the Pledged
Equity owned by each Grantor, and the percentage ownership in each issuer
thereof; and Schedule 7 annexed hereto sets forth all of the Pledged Debt owned
by such Grantor.

 

(g)           Intellectual Property Collateral.  A true and complete list of all
Trademark Registrations and applications for any Trademark owned, held or used
by such Grantor, in whole or in part (other than those held or used pursuant to
a license and those not yet required to be set forth on an update to Schedule
5.17(a) to the Credit Agreement pursuant to Section 6.2(g) of the Credit
Agreement), is set forth on Schedule 8 annexed hereto; a true and complete list
of all Patents owned, held or used by such Grantor, in whole or in part (other
than those held or used pursuant to a license and those not yet required to be
set forth on an update to Schedule 5.17(a) to the Credit Agreement pursuant to
Section 6.2(g) of the Credit Agreement), is set forth on Schedule 9 annexed
hereto; a true and complete list of all Copyright Registrations and applications
for Copyright Registrations held by such Grantor, in whole or in part (other
than those held pursuant to a license and those not yet required to be set forth
on an update to Schedule 5.17(a) to the Credit Agreement pursuant to
Section 6.2(g) of the Credit Agreement), is set forth on Schedule 10 annexed
hereto; and such Grantor is not aware of any material pending or threatened
claim by any third party that any of the Intellectual Property Collateral owned,
held or used by such Grantor is invalid or unenforceable.

 

(h)           Deposit Accounts, Securities Accounts, Commodity Accounts. 
Schedule 11 annexed hereto lists all Deposit Accounts, Securities Accounts and
Commodity Accounts owned by each Grantor, and indicates the institution or
intermediary at which the account is held and the account number.

 

(i)            Chattel Paper.  Such Grantor has no interest in any Chattel
Paper, except as set forth in Schedule 12 annexed hereto.

 

(j)            Letter-of-Credit Rights.  Such Grantor has no interest in any
Letter-of-Credit Rights, except as set forth on Schedule 13 annexed hereto.

 

(k)           Documents.  No negotiable Documents are outstanding with respect
to any of the Inventory, except as set forth on Schedule 14 annexed hereto.

 

The representations and warranties as to the information set forth in Schedules
referred to herein are made as to each Grantor (other than Additional Grantors)
as of the date hereof and as to each Additional Grantor as of the date of the
applicable Counterpart, except that, in the case of a Pledge Supplement, IP
Supplement or notice delivered pursuant to Section 5(d) hereof, such
representations and warranties are made as of the date of such supplement or
notice.

 

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SECTION 5.         Further Assurances.

 

(a)           Generally.  Each Grantor agrees that from time to time, at the
expense of Grantors, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.  Without limiting the generality of the
foregoing, each Grantor will:  (i) notify Secured Party in writing of receipt by
such Grantor of any interest in Chattel Paper having a value or face amount in
excess of $25,000 and at the request of Secured Party, mark conspicuously each
item of Chattel Paper and each of its records pertaining to the Collateral, with
a legend, in form and substance satisfactory to Secured Party, indicating that
such Collateral is subject to the security interest granted hereby, (ii) deliver
to Secured Party all promissory notes and other Instruments having a value or
face amount in excess of $25,000 and, at the request of Secured Party, all
original counterparts of Chattel Paper, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Secured Party, (iii) (A) execute (if necessary) and file such
financing or continuation statements, or amendments thereto, (B) execute and
deliver, and cause to be executed and delivered, agreements establishing that
Secured Party has control of Deposit Accounts other than Excluded Accounts and
Investment Property of such Grantor, (C) deliver such documents, instruments,
notices, records and consents, and take such other actions, necessary to
establish that secured party has control over electronic Chattel Paper and
Letter-of-Credit Rights of such Grantor and (D) deliver such other instruments
or notices, in each case, as may be necessary or desirable, or as Secured Party
may request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (iv) furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail, (v) at any reasonable time, upon
request by Secured Party, exhibit the Collateral to and allow inspection of the
Collateral by Secured Party, or persons designated by Secured Party, (vi) at
Secured Party’s request, appear in and defend any action or proceeding that may
affect such Grantor’s title to or Secured Party’s security interest in all or
any part of the Collateral, and (vii) use commercially reasonable efforts to
obtain any necessary consents of third parties to the creation and perfection of
a security interest in favor of Secured Party with respect to any Collateral. 
Each Grantor hereby authorizes Secured Party to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral (including any financing statement indicating that it covers “all
assets” or “all personal property” of such Grantor) without the signature of any
Grantor.

 

(b)           Securities Collateral.  Without limiting the generality of the
foregoing Section 5(a), each Grantor agrees that (i) all certificates or
Instruments representing or evidencing the Securities Collateral having a value
or face amount in excess of $25,000 shall be delivered to and held by or on
behalf of Secured Party pursuant hereto and shall be in suitable form for
transfer by delivery or, as applicable, shall be accompanied by such Grantor’s
endorsement, where necessary, or duly executed instruments of transfer or
assignments in blank, all in form and substance satisfactory to Secured Party
and (ii) it will, upon obtaining any additional Equity Interests or Indebtedness
having a value or face amount in excess of $25,000, promptly (and in any event
within five Business Days) deliver to Secured Party a Pledge Supplement, duly
executed by such Grantor, in respect of such additional Pledged Equity or
Pledged Debt; provided, that the failure of any Grantor to execute a Pledge
Supplement with

 

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respect to any additional Pledged Equity or Pledged Debt shall not impair the
security interest of Secured Party therein or otherwise adversely affect the
rights and remedies of Secured Party hereunder with respect thereto.  Upon each
such acquisition, the representations and warranties contained in
Section 4(f) hereof shall be deemed to have been made by such Grantor as to such
Pledged Equity or Pledged Debt, whether or not such Pledge Supplement is
delivered.

 

(c)           Intellectual Property Collateral.  As soon as available but in any
event within 30 days after the end of each fiscal year, Borrower shall deliver
any update to Schedule 5.17(a) to the Credit Agreement required by
Section 6.2(g) of the Credit Agreement and, together therewith, with respect to
any registered Intellectual Property Collateral acquired by a Grantor during the
fiscal year covered by such update, such Grantor shall execute and deliver to
Secured Party an IP Supplement, and submit a Grant for recordation with respect
thereto in the applicable IP Filing Office; provided, the failure of any Grantor
to execute an IP Supplement or submit a Grant for recordation with respect to
any additional Intellectual Property Collateral shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights and
remedies of Secured Party hereunder with respect thereto.  Upon delivery to
Secured Party of an IP Supplement, Schedules 8, 9 and 10 annexed hereto and
Schedule A to each Grant, as applicable, shall be deemed modified to include a
reference to any right, title or interest in any existing Intellectual Property
Collateral or any Intellectual Property Collateral set forth on Schedule A to
such IP Supplement.  Upon each such acquisition, the representations and
warranties contained in Section 4(g) hereof shall be deemed to have been made by
such Grantor as to such Intellectual Property Collateral.

 

(d)           Commercial Tort Claims.  Grantors have no Commercial Tort Claims
asserted in any judicial action as of the date hereof, except as set forth on
Schedule 1 annexed hereto.  In the event that a Grantor shall at any time after
the date hereof have any material Commercial Tort Claims asserted in any
judicial action, such Grantor shall promptly notify Secured Party thereof in
writing, which notice shall (i) set forth in reasonable detail the basis for and
nature of such Commercial Tort Claim and (ii) constitute an amendment to this
Agreement by which such Commercial Tort Claim shall constitute part of the
Collateral.

 

SECTION 6.         Certain Covenants of Grantors.

 

Each Grantor shall:

 

(a)           not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;

 

(b)           give Secured Party at least 30 days’ prior written notice of
(i) any change in such Grantor’s name, identity or corporate structure and
(ii) any reincorporation, reorganization or other action that results in a
change of the jurisdiction of organization of such Grantor;

 

(c)           if Secured Party gives value to enable such Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes;

 

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(d)           keep correct and accurate Records of Collateral at the locations
described in Schedule 3 annexed hereto; and

 

(e)           permit representatives of Secured Party at any time during normal
business hours to inspect and make abstracts from such Records, and each Grantor
agrees to render to Secured Party, at such Grantor’s cost and expense, such
clerical and other assistance as may be reasonably requested with regard
thereto.

 

SECTION 7.         Special Covenants With Respect to Equipment and Inventory.

 

Each Grantor shall:

 

(a)           if any Inventory is in possession or control of any of such
Grantor’s agents or processors, if the aggregate book value of all such
Inventory exceeds $100,000, and in any event upon the occurrence of an Event of
Default, instruct such agent or processor to hold all such Inventory for the
account of Secured Party and subject to the instructions of Secured Party;

 

(b)           subject to Section 6.16(b) of the Credit Agreement, if any
Inventory is located on premises leased by such Grantor, deliver to Secured
Party a fully executed Landlord Waiver; and

 

(c)           promptly upon the issuance and delivery to such Grantor of any
negotiable Document having a value or face amount in excess of $25,000, deliver
such Document to Secured Party.

 

SECTION 8.         Special Covenants with respect to Accounts.

 

(a)           Each Grantor shall, for not less than three years from the date on
which each Account of such Grantor arose, maintain (i) complete Records of such
Account, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.

 

(b)           Except as otherwise provided in this subsection (b), each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor under the Accounts.  In connection with such collections, each
Grantor may take (and, upon the occurrence and during the continuance of an
Event of Default at Secured Party’s direction, shall take) such action as such
Grantor or Secured Party may deem necessary or advisable to enforce collection
of amounts due or to become due under the Accounts; provided, however, that
Secured Party shall have the right at any time, upon the occurrence and during
the continuation of an Event of Default and upon written notice to such Grantor
of its intention to do so, to (i) notify the account debtors or obligors under
any Accounts of the assignment of such Accounts to Secured Party and to direct
such account debtors or obligors to make payment of all amounts due or to become
due to such Grantor thereunder directly to Secured Party, (ii) notify each
Person maintaining a lockbox or similar arrangement to which account debtors or
obligors under any Accounts have been directed to make payment to remit all
amounts representing collections on checks and other payment items from time to
time sent to or deposited in such lockbox or other arrangement directly to
Secured Party, (iii) enforce collection of any such Accounts at the expense of
Grantors, and (iv) adjust, settle or compromise the amount or payment thereof,
in the

 

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same manner and to the same extent as such Grantor might have done.  After
receipt by such Grantor of the notice from Secured Party referred to in the
proviso to the preceding sentence, (A) all amounts and proceeds (including
checks and other Instruments) received by such Grantor in respect of the
Accounts shall be received in trust for the benefit of Secured Party hereunder,
shall be segregated from other funds of such Grantor and shall be forthwith paid
over or delivered to Secured Party in the same form as so received (with any
necessary endorsement) to be held as cash Collateral and applied as provided by
Section 17 hereof, and (B) such Grantor shall not, without the written consent
of Secured Party, adjust, settle or compromise the amount or payment of any
Account, or release wholly or partly any account debtor or obligor thereof, or
allow any credit or discount thereon.

 

SECTION 9.         Special Covenants With Respect to the Securities Collateral.

 

(a)           Form of Securities Collateral.  Secured Party shall have the right
at any time to exchange certificates or instruments representing or evidencing
Securities Collateral for certificates or instruments of smaller or larger
denominations.  If any Securities Collateral is not a security pursuant to
Section 8-103 of the UCC, no Grantor shall take any action that, under such
Section, converts such Securities Collateral into a security without causing the
issuer thereof to issue to it certificates or instruments evidencing such
Securities Collateral, which it shall promptly deliver to Secured Party as
provided in this Section 9(a).

 

(b)           Covenants.  Each Grantor shall (i) not, except as expressly
permitted by the Credit Agreement, permit any issuer of Pledged Subsidiary
Equity to merge or consolidate unless all the outstanding Equity Interests of
the surviving or resulting Person are, upon such merger or consolidation,
subject to the provisions of the last paragraph of Section 1 pledged and become
Collateral hereunder and no cash, securities or other property is distributed in
respect of the outstanding Equity Interests of any other constituent
corporation; (ii) cause each issuer of Pledged Subsidiary Equity not to issue
Equity Interests in addition to or in substitution for the Pledged Subsidiary
Equity issued by such issuer, except to such Grantor; (iii) immediately upon its
acquisition (directly or indirectly) of any Equity Interests, including
additional Equity Interests in each issuer of Pledged Equity, comply with
Section 5(b) subject to the provisions of the last paragraph of Section 1;
(iv) immediately upon issuance of any and all Instruments or other evidences of
additional Indebtedness from time to time owed to such Grantor by any obligor on
the Pledged Debt, comply with Section 5; (v) promptly deliver to Secured Party
all written notices received by it with respect to the Securities Collateral;
(vi) at its expense (A) perform and comply in all material respects with all
terms and provisions of any agreement related to the Securities Collateral
required to be performed or complied with by it, (B) maintain all such
agreements in full force and effect and (C) enforce all such agreements in
accordance with their terms; and (vii) at the request of Secured Party, promptly
execute and deliver to Secured Party an agreement providing for control by
Secured Party of all Securities Entitlements, Securities Accounts, Commodity
Contracts and Commodity Accounts of such Grantor.

 

(c)           Voting and Distributions.  So long as no Event of Default shall
have occurred and be continuing, (i) each Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not prohibited by the terms of
this Agreement or the Credit Agreement; provided, no Grantor shall exercise or
refrain from exercising any such right if Secured Party shall have notified such

 

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Grantor that, in Secured Party’s judgment, such action would have a material
adverse effect on the value of the Securities Collateral or any part thereof;
and (ii) each Grantor shall be entitled to receive and retain any and all
dividends, other distributions, principal and interest paid in respect of the
Securities Collateral.

 

Upon the occurrence and during the continuation of an Event of Default, (x) upon
written notice from Secured Party to any Grantor, all rights of such Grantor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights; (y) except as otherwise
specified in the Credit Agreement, upon written notice from Secured Party to any
Grantor of any exercise of remedies under Section 8.2 of the Credit Agreement,
all rights of such Grantor to receive the dividends, other distributions,
principal and interest payments which it would otherwise be authorized to
receive and retain pursuant hereto shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole right
to receive and hold as Collateral such dividends, other distributions, principal
and interest payments; and (z) all dividends, principal, interest payments and
other distributions which are received by such Grantor contrary to the
provisions of clause (y) above shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of such Grantor and shall
forthwith be paid over to Secured Party as Collateral in the same form as so
received (with any necessary endorsements).

 

In order to permit Secured Party to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant hereto and to receive all
dividends and other distributions which it may be entitled to receive hereunder,
(I) each Grantor shall promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment orders and other
instruments as Secured Party may from time to time reasonably request, and
(II) without limiting the effect of clause (I) above, each Grantor hereby grants
to Secured Party an irrevocable proxy to vote the Pledged Equity and to exercise
all other rights, powers, privileges and remedies to which a holder of the
Pledged Equity would be entitled (including giving or withholding written
consents of holders of Equity Interests, calling special meetings of holders of
Equity Interests and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Equity on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Equity or any officer or agent
thereof), upon the occurrence of an Event of Default and which proxy shall only
terminate upon the payment in full of the Secured Obligations, the cure of such
Event of Default or waiver thereof as evidenced by a writing executed by Secured
Party.

 

SECTION 10.               Special Covenants With Respect to the Intellectual
Property Collateral.

 

(a)           Each Grantor shall:

 

(i)            use reasonable efforts so as not to permit the inclusion in any
contract to which it hereafter becomes a party of any provision that could or
might in any way impair or prevent the creation of a security interest in, or
the assignment of, such

 

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Grantor’s rights and interests in any property included within the definitions
of any Intellectual Property Collateral acquired under such contracts;

 

(ii)           take any and all reasonable steps to protect the secrecy of all
trade secrets relating to the products and services sold or delivered under or
in connection with the Intellectual Property Collateral, including, without
limitation, where appropriate entering into confidentiality agreements with
employees and labeling and restricting access to secret information and
documents;

 

(iii)          use proper statutory notice in connection with its use of any of
the Intellectual Property Collateral and products and services covered by the
Intellectual Property Collateral; and

 

(iv)          use a commercially appropriate standard of quality (which may be
consistent with such Grantor’s past practices) in the manufacture, sale and
delivery of products and services sold or delivered under or in connection with
the Trademarks.

 

(b)           Except as otherwise provided in this Section 10, each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor in respect of the Intellectual Property Collateral or any
portion thereof.  In connection with such collections, each Grantor may take
(and, after the occurrence and during the continuance of any Event of Default at
Secured Party’s reasonable direction, shall take) such action as such Grantor or
Secured Party may deem reasonably necessary or advisable to enforce collection
of such amounts; provided, Secured Party shall have the right at any time, upon
the occurrence and during the continuation of an Event of Default and upon
written notice to such Grantor of its intention to do so, to notify the obligors
with respect to any such amounts of the existence of the security interest
created hereby and to direct such obligors to make payment of all such amounts
directly to Secured Party, and, upon such notification and at the expense of
such Grantor, to enforce collection of any such amounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done.  After receipt by any Grantor of the
notice from Secured Party referred to in the proviso to the preceding sentence
and upon the occurrence and during the continuance of any Event of Default,
(i) all amounts and proceeds (including checks and Instruments) received by each
Grantor in respect of amounts due to such Grantor in respect of the Intellectual
Property Collateral or any portion thereof shall be received in trust for the
benefit of Secured Party hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over or delivered to Secured Party in the
same form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 17 hereof, and (ii) such Grantor
shall not adjust, settle or compromise the amount or payment of any such amount
or release wholly or partly any obligor with respect thereto or allow any credit
or discount thereon.

 

(c)           Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make, unless
and until such Grantor, in its commercially reasonable judgment, decides
otherwise, (i) any application for registration relating to any of the
Intellectual Property Collateral owned, held or used by such Grantor and set
forth on Schedules 8, 9 or 10 annexed hereto, as applicable, that is pending as
of the date of this Agreement, (ii) any Copyright Registration on any existing
or future unregistered but

 

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copyrightable works (except for works of nominal commercial value or with
respect to which such Grantor has determined in the exercise of its commercially
reasonable judgment that it shall not seek registration), (iii) any application
on any future patentable but unpatented innovation or invention comprising
Intellectual Property Collateral, and (iv) any Trademark opposition and
cancellation proceedings, renew Trademark Registrations and Copyright
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Intellectual Property Collateral.  Any
expenses incurred in connection therewith shall be borne solely by Grantors. 
Subject to the foregoing, each Grantor shall give Secured Party prior written
notice of any abandonment of any material Intellectual Property Collateral.

 

(d)           Except as provided herein, each Grantor shall have the right to
commence and prosecute in its own name, as real party in interest, for its own
benefit and at its own expense, such suits, proceedings or other actions for
infringement, unfair competition, dilution, misappropriation or other damage, or
reexamination or reissue proceedings as are necessary to protect the
Intellectual Property Collateral.  Each Grantor shall promptly, following its
becoming aware thereof, notify Secured Party of the institution of, or of any
adverse determination in, any proceeding (whether in an IP Filing Office or any
federal, state, local or foreign court) or regarding such Grantor’s ownership,
right to use, or interest in any material Intellectual Property Collateral. 
Each Grantor shall provide to Secured Party any information with respect thereto
requested by Secured Party.

 

(e)           In addition to, and not by way of limitation of, the granting of a
security interest in the Collateral pursuant hereto, each Grantor, effective
upon the occurrence and during the continuance of an Event of Default, hereby
assigns, transfers and conveys to Secured Party the nonexclusive right and
license to use all Trademarks, tradenames, Copyrights, Patents or technical
processes (including, without limitation, the Intellectual Property Collateral)
owned or used by such Grantor that relate to the Collateral, together with any
goodwill associated therewith, all to the extent necessary to enable Secured
Party to realize on the Collateral in accordance with this Agreement and to
enable any transferee or assignee of the Collateral to enjoy the benefits of the
Collateral.  This right shall inure to the benefit of all successors, assigns
and transferees of Secured Party and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise.  Such right and license
shall be granted free of charge, without requirement that any monetary payment
whatsoever be made to such Grantor.

 

SECTION 11.               Collateral Account.

 

(a)         Secured Party is hereby authorized to establish and maintain as a
blocked account under the sole dominion and control of Secured Party, a
restricted Deposit Account designated as “Quidel Corporation Collateral
Account”.  All amounts at any time held in the Collateral Account shall be
beneficially owned by Grantors but shall be held in the name of Secured Party
hereunder, for the benefit of Beneficiaries, as collateral security for the
Secured Obligations upon the terms and conditions set forth herein.  Grantors
shall have no right to withdraw, transfer or, except as expressly set forth
herein or in the Credit Agreement, otherwise receive any funds deposited into
the Collateral Account.  Anything contained herein to the contrary
notwithstanding, the Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any

 

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other appropriate banking or Government Authority, as may now or hereafter be in
effect.  All deposits of funds in the Collateral Account shall be made by wire
transfer (or, if applicable, by intra-bank transfer from another account of a
Grantor) of immediately available funds, in each case addressed in accordance
with instructions of Secured Party.  Each Grantor shall, promptly after
initiating a transfer of funds to the Collateral Account, give notice to Secured
Party by telefacsimile or E-mail (if and when confirmed by telephone) of the
date, amount and method of delivery of such deposit.  Cash held by Secured Party
in the Collateral Account shall not be invested by Secured Party but instead
shall be maintained as a cash deposit in the Collateral Account pending
application thereof as elsewhere provided in this Agreement or in the Credit
Agreement.  To the extent permitted under Regulation Q of the Board of Governors
of the Federal Reserve System, any cash held in the Collateral Account shall
bear interest at the standard rate paid by Secured Party to its customers for
deposits of like amounts and terms.  Subject to Secured Party’s rights
hereunder, any interest earned on deposits of cash in the Collateral Account
shall be deposited directly in, and held in, the Collateral Account.

 

(b)           In the event that Borrower is required to cash collateralize any
Letter of Credit or Letters of Credit pursuant to the Credit Agreement, other
than pursuant to Section 8 of the Credit Agreement, in which case the provisions
of Section 15(c) of this Agreement shall apply, subject to the provisions of the
Credit Agreement, such cash collateral shall be retained by Secured Party until
such time as such Letter of Credit or Letters of Credit shall have expired or
been surrendered and any drawings under such Letter of Credit or Letters of
Credit paid in full, whether by reason of application of funds in the Collateral
Account or otherwise.  Secured Party is authorized to apply any amount in the
Collateral Account to pay any drawing on a Letter of Credit.  Subject to the
provisions of Section 15(c) of this Agreement and the Credit Agreement, if any
such cash collateral is no longer required to be retained in the Collateral
Account, it shall be paid by Secured Party to Borrower or at Borrower’s
direction.

 

SECTION 12.       Secured Party Appointed Attorney-in-Fact.

 

Each Grantor hereby irrevocably appoints Secured Party as such Grantor’s
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, Secured Party or otherwise, from time to time in
Secured Party’s discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:

 

(a)           upon the occurrence and during the continuance of an Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to Secured Party pursuant to the Credit Agreement;

 

(b)           upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

 

(c)           upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other Instruments,
Documents, Chattel Paper and other documents in connection with clauses (a) and
(b) above;

 

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(d)           upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce or protect the rights of Secured Party with
respect to any of the Collateral;

 

(e)           to pay or discharge taxes or Liens (other than taxes not required
to be discharged pursuant to the Credit Agreement and Liens permitted under this
Agreement or the Credit Agreement) levied or placed upon or threatened against
the Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its sole discretion, any
such payments made by Secured Party to become obligations of such Grantor to
Secured Party, due and payable immediately without demand;

 

(f)            upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and

 

(g)           upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party’s option and Grantors’ expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect, preserve or
realize upon the Collateral and Secured Party’s security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.

 

SECTION 13.       Secured Party May Perform.

 

If any Grantor fails to perform any agreement contained herein, Secured Party
may itself perform, or cause performance of, such agreement, and the expenses of
Secured Party incurred in connection therewith shall be payable by Grantors
under Section 18(b) hereof.

 

SECTION 14.       Standard of Care.

 

The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers.  Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.  Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property.

 

SECTION 15.       Remedies.

 

(a)           Generally.  If any Event of Default shall have occurred and be
continuing, Secured Party may, subject to Section 20 hereof,  exercise in
respect of the Collateral, in addition to all other rights and remedies provided
for herein or otherwise available to it, all the rights and

 

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remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral), and also may (i) require each Grantor to,
and each Grantor hereby agrees that it will at its expense and upon request of
Secured Party forthwith, assemble all or part of the Collateral as directed by
Secured Party and make it available to Secured Party at a place to be designated
by Secured Party that is reasonably convenient to both parties, (ii) enter onto
the property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iv) take possession of any Grantor’s premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor’s equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (iii) and collecting any
Secured Obligation, (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party’s offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable, (vi) exercise
dominion and control over and refuse to permit further withdrawals from any
Deposit Account maintained with Secured Party or any Lender and provide
instructions directing the disposition of funds in Deposit Accounts not
maintained with Secured Party or any Lender and (vii) provide entitlement orders
with respect to Security Entitlements and other Investment Property constituting
a part of the Collateral and, without notice to any Grantor, transfer to or
register in the name of Secured Party or any of its nominees any or all of the
Securities Collateral.  Secured Party or any Lender, Hedge Bank or Cash
Management Bank may be the purchaser of any or all of the Collateral at any such
sale and Secured Party, as agent for and representative of Lenders, Hedge Banks
and Cash Management Banks (but not any Lender, Hedge Bank or Cash Management
Bank in its individual capacity unless Requisite Obligees shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by Secured
Party at such sale.  Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by applicable law) all
rights of redemption, stay and/or appraisal which it now has or may at any time
in the future have under any rule of law or statute now existing or hereafter
enacted.  Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days’ notice to such Grantor of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification.  Secured Party shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. 
Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. 
Each Grantor hereby waives any claims against Secured Party arising by reason of
the fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if Secured Party accepts the first offer received and does not offer
such Collateral to more than one offeree.  If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be jointly and severally liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency.  Each Grantor further agrees

 

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that a breach of any of the covenants contained in this Section 15 will cause
irreparable injury to Secured Party, that Secured Party has no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section shall be specifically enforceable against
such Grantor, and each Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for
a defense that no default has occurred giving rise to the Secured Obligations
becoming due and payable prior to their stated maturities.

 

(b)           Securities Collateral.  Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, Secured Party may be compelled, with respect to any sale of all
or any part of the Securities Collateral conducted without prior registration or
qualification of such Securities Collateral under the Securities Act and/or such
state securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Securities Collateral for their own account, for
investment and not with a view to the distribution or resale thereof.  Each
Grantor acknowledges that any such private placement may be at prices and on
terms less favorable than those obtainable through a sale without such
restrictions (including an offering made pursuant to a registration statement
under the Securities Act) and, notwithstanding such circumstances, each Grantor
agrees that any such private placement shall not be deemed, in and of itself, to
be commercially unreasonable and that Secured Party shall have no obligation to
delay the sale of any Securities Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of sale requiring
registration under the Securities Act or under applicable state securities laws,
even if such issuer would, or should, agree to so register it.  If Secured Party
determines to exercise its right to sell any or all of the Securities
Collateral, upon written request, each Grantor shall and shall cause each issuer
of any Securities Collateral to be sold hereunder from time to time to furnish
to Secured Party all such information as Secured Party may request in order to
determine the amount of Securities Collateral which may be sold by Secured Party
in exempt transactions under the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder, as the same are from time to
time in effect.

 

(c)           Collateral Account.  If an Event of Default has occurred and is
continuing, any amounts on deposit in the Collateral Account, except for funds
deposited in the Collateral Account as described in the next sentence, shall be
held by Agent and applied as Obligations become due.  If, in accordance with
Article VIII of the Credit Agreement, Borrower is required to pay to Secured
Party an amount (the “Aggregate Available Amount”) equal to the maximum amount
that may at any time be drawn under all Letters of Credit then outstanding under
the Credit Agreement, Borrower shall deliver funds in such an amount for deposit
in the Collateral Account.  Following such deposit in the Collateral Account,
(i) upon any drawing under any outstanding Letter of Credit, Secured Party shall
apply any amount in the Collateral Account to reimburse the L/C Issuer for the
amount of such drawing and (ii) in the event of cancellation or expiration of
any Letter of Credit, or in the event of any reduction in the maximum available
amount under any Letter of Credit, Secured Party shall apply the amount then on
deposit in the Collateral Account in excess of the Aggregate Available Amount
(calculated giving effect to such cancellation, expiration or reduction) as
provided in Section 17.

 

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SECTION 16.       Additional Remedies for Intellectual Property Collateral.

 

(a)           Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default, (i) Secured
Party shall have the right (but not the obligation) to bring suit, in the name
of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents required by Secured
Party in aid of such enforcement and each Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in subsections 10.4 and 10.5
of the Credit Agreement and Section 18 hereof, as applicable, in connection with
the exercise of its rights under this Section 16, and, to the extent that
Secured Party shall elect not to bring suit to enforce any Intellectual Property
Collateral as provided in this Section, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement of any of the material Intellectual Property Collateral
by others and for that purpose agrees to use its commercially reasonable
judgment in maintaining any action, suit or proceeding against any Person so
infringing reasonably necessary to prevent such infringement; (ii) upon written
demand from Secured Party, each Grantor shall execute and deliver to Secured
Party an assignment or assignments of the Intellectual Property Collateral and
such other documents as are necessary or appropriate to carry out the intent and
purposes of this Agreement; (iii) each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Secured Obligations outstanding
only to the extent that Secured Party (or any Lender) receives cash proceeds in
respect of the sale of, or other realization upon, the Intellectual Property
Collateral; and (iv) within five Business Days after written notice from Secured
Party, each Grantor shall make available to Secured Party, to the extent within
such Grantor’s power and authority, such personnel in such Grantor’s employ as
Secured Party may reasonably designate, by name, title or job responsibility, to
permit such Grantor to continue, directly or indirectly, to produce, advertise
and sell the products and services sold or delivered by such Grantor under or in
connection with the Trademarks, Trademark Registrations and Trademark Rights,
such persons to be available to perform their prior functions on Secured Party’s
behalf and to be compensated by Secured Party at such Grantor’s expense on a per
diem, pro-rata basis consistent with the salary and benefit structure applicable
to each as of the date of such Event of Default.

 

(b)           If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, Secured Party shall promptly execute and deliver
to such Grantor such assignments as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to Secured Party
as aforesaid, subject to any disposition thereof that may have been made by
Secured Party; provided, after giving effect to such reassignment, Secured
Party’s security interest granted pursuant hereto, as well as all other rights
and remedies of Secured Party granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Liens permitted under Section 7.1 of the Credit Agreement.

 

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SECTION 17.               Application of Proceeds.

 

Except as expressly provided elsewhere in this Agreement, all proceeds received
by Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in Section 8.3 of the Credit Agreement.

 

SECTION 18.               Indemnity and Expenses.

 

(a)        Grantors jointly and severally agree to indemnify Secured Party, each
Lender, each Hedge Bank and each Cash Management Bank from and against any and
all claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result from Secured Party’s or such
Lender’s, Hedge Bank’s or Cash Management Bank’s gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.

 

(b)        Grantors jointly and severally agree to pay to Secured Party upon
demand the amount of any and all costs and expenses in accordance with
subsection 10.4 of the Credit Agreement.

 

(c)        The obligations of Grantors in this Section 18 shall (i) survive the
termination of this Agreement and the discharge of Grantors’ other obligations
under this Agreement, the Secured Hedge Agreements, the Secured Cash Management
Agreements, the Credit Agreement and the other Loan Documents and (ii), as to
any Grantor that is a party to a Subsidiary Guaranty, be subject to the
provisions of Section 1(b) thereof.

 

SECTION 19.               Continuing Security Interest; Transfer of Loans;
Termination and Release.

 

(a)        This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit (or the securing of reimbursement Obligations in respect thereof with
cash collateral or letters of credit in a manner satisfactory to Secured Party),
(ii) be binding upon Grantors and their respective successors and assigns, and
(iii) inure, together with the rights and remedies of Secured Party hereunder,
to the benefit of Secured Party and its successors, transferees and assigns. 
Without limiting the generality of the foregoing clause (iii), (A) but subject
to the provisions of subsection 10.6 of the Credit Agreement, any Lender may
assign or otherwise transfer any Loans held by it to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise, (B) any Hedge Bank may assign or
otherwise transfer any Secured Hedge Agreement to which it is a party to any
other Person in accordance with the terms of such Secured Hedge Agreement, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Hedge Banks herein or otherwise and (C) any Cash Management
Bank may assign or otherwise transfer any Secured Cash Management Agreement to
which it is a party to any other Person in accordance with the terms of such
Secured Cash Management Agreement, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Cash Management Banks
herein or otherwise.

 

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(b)        Upon the payment in full of all Secured Obligations, the cancellation
or termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit (or the securing of reimbursement Obligations in
respect thereof with cash collateral or letters of credit in a manner
satisfactory to Secured Party), the security interest granted hereby (other than
with respect to any cash collateral in respect of Letters of Credit) shall
terminate and all rights to the Collateral shall revert to the applicable
Grantors.  Upon any such termination Secured Party will, at Grantors’ expense,
execute and deliver to Grantors such documents as Grantors shall reasonably
request to evidence such termination.  In addition, upon the proposed sale or
other disposition of any Collateral by a Grantor in accordance with the Credit
Agreement for which such Grantor desires a security interest release from
Secured Party, such a release may be obtained pursuant to the provisions of
subsection 9.10 of the Credit Agreement.

 

SECTION 20.               Secured Party as Agent.

 

(a)        Secured Party has been appointed to act as Secured Party hereunder by
Lenders and, by their acceptance of the benefits hereof, Hedge Banks and Cash
Management Banks.  Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 15 hereof in accordance with the instructions of Requisite Obligees.  In
furtherance of the foregoing provisions of this Section 20(a), each Hedge Bank
and each Cash Management Bank, by its acceptance of the benefits hereof, agrees
that it shall have no right individually to realize upon any of the Collateral
hereunder, it being understood and agreed by such Hedge Bank that all rights and
remedies hereunder may be exercised solely by Secured Party for the benefit of
Lenders, Hedge Banks and Cash Management Banks in accordance with the terms of
this Section 20(a).

 

(b)        Secured Party shall at all times be the same Person that is Agent
under the Credit Agreement.  Written notice of resignation by Agent pursuant to
subsection 9.6 of the Credit Agreement shall also constitute notice of
resignation as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 9.6 of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement.  Upon
the acceptance of any appointment as Agent under subsection 9.6 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Secured Party under this Agreement, and the retiring Secured Party
under this Agreement shall promptly (i) transfer to such successor Secured Party
all sums, securities and other items of Collateral held hereunder, together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute (if necessary) and deliver to such successor Secured Party such
amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Secured Party of the security interests created hereunder, whereupon such
retiring Secured Party shall be discharged from its duties and obligations under
this Agreement.  After any retiring Agent’s resignation hereunder as Secured
Party, the provisions of this Agreement

 

20

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shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was Secured Party hereunder.

 

(c)        Secured Party shall not be deemed to have any duty whatsoever with
respect to any Hedge Bank or any Cash Management Bank until it shall have
received written notice in form and substance satisfactory to Secured Party from
a Grantor or the Hedge Bank or the Cash Management Bank as to the existence and
terms of the applicable Secured Hedge Agreement or Secured Cash Management
Agreement.

 

SECTION 21.               Additional Grantors.

 

The initial Grantors hereunder shall be Borrower and such of the Subsidiaries of
Borrower as are signatories hereto on the date hereof.  From time to time
subsequent to the date hereof, additional Subsidiaries of Borrower may become
Additional Grantors, by executing a Counterpart.  Upon delivery of any such
Counterpart to Secured Party, notice of which is hereby waived by Grantors, each
such Additional Grantor shall be a Grantor and shall be as fully a party hereto
as if such Additional Grantor were an original signatory hereto.  Each Grantor
expressly agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by any
election of Secured Party not to cause any Subsidiary of Borrower to become an
Additional Grantor hereunder.  This Agreement shall be fully effective as to any
Grantor that is or becomes a party hereto regardless of whether any other Person
becomes or fails to become or ceases to be a Grantor hereunder.

 

SECTION 22.               Amendments; Etc.

 

No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Grantors;
provided this Agreement may be modified by the execution of a Counterpart by an
Additional Grantor in accordance with Section 21 hereof and Grantors hereby
waive any requirement of notice of or consent to any such amendment.  Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.

 

SECTION 23.               Notices.

 

Any notice or other communication herein required or permitted to be given shall
be in writing and may be personally served or sent by telefacsimile or United
States mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile, or
three Business Days after depositing it in the United States mail, certified or
registered, with postage prepaid and properly addressed; provided that notices
to Secured Party shall not be effective until received.  For the purposes
hereof, the address of each party hereto shall be as provided in subsection 10.2
of the Credit Agreement or as set forth under such party’s name on the signature
pages hereof or such other address as shall be designated by such party in a
written notice delivered to the other parties hereto.

 

21

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SECTION 24.               Failure or Indulgence Not Waiver; Remedies Cumulative.

 

No failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. 
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.

 

SECTION 25.               Severability.

 

In case any provision in or obligation under this Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

 

SECTION 26.               Headings.

 

Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.

 

SECTION 27.               Governing Law; Rules of Construction.

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA (INCLUDING, WITHOUT LIMITATION,
SECTION 1646.5 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT
THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF CALIFORNIA, IN WHICH CASE THE LAWS OF SUCH JURISDICTION
SHALL GOVERN WITH RESPECT TO THE PERFECTION OF THE SECURITY INTEREST IN, OR THE
REMEDIES WITH RESPECT TO, SUCH PARTICULAR COLLATERAL.  The rules of construction
set forth in subsection 1.2 of the Credit Agreement shall be applicable to this
Agreement mutatis mutandis.

 

SECTION 28.               Consent to Jurisdiction and Service of Process.

 

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA.  BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

 

22

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(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH
COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
SUCH GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 23 HEREOF;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO
CONFER PERSONAL JURISDICTION OVER SUCH GRANTOR IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; (V) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH GRANTOR IN
THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF
THIS SECTION 28 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 410.40 OR OTHERWISE.

 

SECTION 29.               Waiver of Jury Trial.

 

GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. 
EACH GRANTOR AND SECURED PARTY ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR GRANTORS AND SECURED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT GRANTORS AND SECURED PARTY HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING
INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR
RELATED FUTURE DEALINGS.  EACH GRANTOR AND SECURED PARTY FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 29 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.  In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

 

SECTION 30.               Counterparts.

 

This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same

 

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instrument; signature pages may be detached from multiple separate counterparts
and attached to a single counterpart so that all signature pages are physically
attached to the same document.

 

SECTION 31.               Definitions.

 

(a)        Each capitalized term utilized in this Agreement that is not defined
in the Credit Agreement or in this Agreement, but that is defined in the UCC,
including the categories of Collateral listed in Section 1 hereof, shall have
the meaning set forth in Divisions 1, 8 or 9 of the UCC.

 

(b)        In addition, the following terms used in this Agreement shall have
the following meanings:

 

“Additional Grantor” means a Subsidiary of Borrower that becomes a party hereto
after the date hereof as an additional Grantor by executing a Counterpart.

 

“Beneficiary” means Agent, each Lender, each Hedge Bank and each Cash Management
Bank.

 

“Cash Management Bank” means any Person that, at the time it enters into a Cash
Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity
as a party to such Cash Management Agreement.

 

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

 

“Collateral” has the meaning set forth in Section 1 hereof.

 

“Collateral Account” means the “Quidel Corporation Collateral Account”
established pursuant to Section 11.

 

“Copyright Registrations” means all copyright registrations issued to any
Grantor and applications for copyright registration that have been or may
hereafter be issued to, or applied for thereon by, any Grantor in the United
States and any state thereof and in foreign countries (including, without
limitation, the registrations set forth on Schedule 10 annexed hereto, as the
same may be amended pursuant hereto from time to time).

 

“Copyright Rights” means all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright licenses,
only to the extent permitted by such licensing arrangements), the right (but not
the obligation) to renew and extend Copyright Registrations and any such rights
and to register works protectable by copyright and the right (but not the
obligation) to sue in the name of any Grantor or in the name of Secured Party or
Lenders for past, present and future infringements of the Copyrights and any
such rights.

 

“Copyrights” means all items under copyright in various published and
unpublished works of authorship including, without limitation, computer
programs, computer data bases,

 

24

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other computer software layouts, trade dress, drawings, designs, writings, and
formulas (including, without limitation, the works set forth on Schedule 10
annexed hereto, as the same may be amended pursuant hereto from time to time).

 

“Counterpart” means a counterpart to this Agreement entered into by a Subsidiary
of Borrower pursuant to Section 21 hereof.

 

“Credit Agreement” has the meaning set forth in the Preliminary Statements of
this Agreement.

 

“Equity Interests” means all shares of stock, partnership interests, interests
in Joint Ventures, limited liability company interests and all other equity
interests in a Person, whether such stock or interests are classified as
Investment Property or General Intangibles under the UCC.

 

“Event of Default” means any Event of Default as defined in the Credit Agreement
or, after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the cancellation or expiration of all Letters of Credit
and the termination of the Commitments, the occurrence of an Early Termination
Date (as defined in a Master Agreement in the form prepared by the International
Swap and Derivatives Association, Inc. or a similar event under any similar swap
agreement) under any Secured Hedge Agreement or the occurrence of a default
under a Cash Management Agreement.

 

“Grant” means a Grant of Trademark Security Interest, substantially in the form
of Exhibit I annexed hereto, and a Grant of Patent Security Interest,
substantially in the form of Exhibit II annexed hereto, and a Grant of Copyright
Security Interest, substantially in the form of Exhibit III annexed hereto.

 

“Hedge Bank” means any Person that, at the time it enters into a Swap Contract
permitted under Article VII of the Credit Agreement, is a Lender or an Affiliate
of a Lender, in its capacity as a party to such Swap Contract.

 

“Intellectual Property Collateral” means, with respect to any Grantor all right,
title and interest (including rights acquired pursuant to a license or otherwise
but only to the extent permitted by agreements governing such license or other
use) in and to all

 

(a)           Copyrights, Copyright Registrations and Copyright Rights,
including, without limitation, each of the Copyrights, rights, titles and
interests in and to the Copyrights, all derivative works and other works
protectable by copyright, which are presently, or in the future may be, owned,
created (as a work for hire for the benefit of such Grantor), authored (as a
work for hire for the benefit of such Grantor), or acquired by such Grantor, in
whole or in part, and all Copyright Rights with respect thereto and all
Copyright Registrations therefor, heretofore or hereafter granted or applied
for, and all renewals and extensions thereof, throughout the world;

 

(b)           Patents;

 

(c)           Trademarks, Trademark Registrations, the Trademark Rights and
goodwill of such Grantor’s business symbolized by the Trademarks and associated
therewith;

 

25

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(d)           all trade secrets, trade secret rights, know-how, customer lists,
processes of production, ideas, confidential business information, techniques,
processes, formulas, and all other proprietary information; and

 

(e)           all proceeds thereof (such as, by way of example and not by
limitation, license royalties and proceeds of infringement suits).

 

“IP Supplement” means an IP Supplement, substantially in the form of Exhibit V
annexed hereto.

 

“Patents” means all patents and patent applications and rights and interests in
patents and patent applications under any domestic or foreign law that are
presently, or in the future may be, owned or held by a Grantor and all patents
and patent applications and rights, title and interests in patents and patent
applications under any domestic or foreign law that are presently, or in the
future may be, owned by such Grantor in whole or in part (including, without
limitation, the patents and patent applications set forth on Schedule 9 annexed
hereto), all rights (but not obligations) corresponding thereto to sue for past,
present and future infringements and all re-issues, divisions, continuations,
renewals, extensions and continuations-in-part thereof.

 

“Pledged Debt” means the Indebtedness from time to time owed to a Grantor,
including the Indebtedness set forth on Schedule 7 annexed hereto and issued by
the obligors named therein, the Instruments and certificates evidencing such
Indebtedness and all interest, cash or other property received, receivable or
otherwise distributed in respect of or exchanged therefor.

 

“Pledged Equity” means all Equity Interests now or hereafter owned by a Grantor,
including all securities convertible into, and rights, warrants, options and
other rights to purchase or otherwise acquire, any of the foregoing, including
those owned on the date hereof and set forth on Schedule 6 annexed hereto, the
certificates or other instruments representing any of the foregoing and any
interest of such Grantor in the entries on the books of any securities
intermediary pertaining thereto and all distributions, dividends and other
property received, receivable or otherwise distributed in respect of or
exchanged therefor but excluding any Equity Interests that would be excluded
from the Collateral on the basis of clause (a) of the last paragraph of
Section 1 hereof.

 

“Pledged Subsidiary Debt” means Pledged Debt owed to a Grantor by any obligor
that is, or becomes, a direct or indirect Subsidiary of such Grantor, of which
such Grantor is a direct or indirect Subsidiary or that controls, is controlled
by or under common control with such Grantor.

 

“Pledged Subsidiary Equity” means Pledged Equity in a Person that is, or becomes
a direct Subsidiary of a Grantor.

 

“Pledge Supplement” means a Pledge Supplement, in substantially the form of
Exhibit IV annexed hereto, in respect of the additional Pledged Equity or
Pledged Debt pledged pursuant to this Agreement.

 

“Requisite Obligees” means either (i) Required Lenders or (ii), after payment in
full of all Obligations under the Credit Agreement and the other Loan Documents,
the cancellation or

 

26

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expiration of all Letters of Credit and the termination of the Commitments, the
holders of a majority of the aggregate amount then due and payable (exclusive of
expenses and similar payments but including, with respect to Secured Hedge
Agreements, any early termination payments then due) under the Secured Hedge
Agreements and Secured Cash Management Agreements.

 

“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between any Loan Party and any Cash Management Bank.

 

“Secured Hedge Agreement” means any Swap Contract permitted under Article VII of
the Credit Agreement that is entered into by and between any Loan Party and any
Hedge Bank.

 

“Secured Obligations” has the meaning set forth in Section 2 hereof.

 

“Securities Collateral” means, with respect to any Grantor, the Pledged Equity,
the Pledged Debt and any other Investment Property in which such Grantor has an
interest.

 

“Trademark Registrations” means all registrations that have been or may
hereafter be issued or applied for thereon in the United States and any state
thereof and in foreign countries (including, without limitation, the
registrations and applications set forth on Schedule 8 annexed hereto).

 

“Trademark Rights” means all common law and other rights (but in no event any of
the obligations) in and to the Trademarks in the United States and any state
thereof and in foreign countries.

 

“Trademarks” means all trademarks, service marks, designs, logos, indicia,
tradenames, trade dress, corporate names, company names, business names,
fictitious business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned by a Grantor, or
hereafter adopted and used, in its business (including, without limitation, the
trademarks specifically set forth on Schedule 8 annexed hereto).

 

“UCC” means the Uniform Commercial Code, as it exists on the date of this
Agreement or as it may hereafter be amended, in the State of California.

 

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IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

 

 

QUIDEL CORPORATION

 

 

 

 

 

 

 

By:

 /s/ Caren Mason

 

 

Name: Caren Mason

 

 

Title: President/CEO

 

 

 

 

 

 

 

PACIFIC BIOTECH, INC.

 

 

 

 

 

By:

 /s/ Caren Mason

 

 

Name: Caren Mason

 

 

Title: President/CEO

 

 

 

 

 

 

 

METRA BIOSYSTEMS, INC.

 

 

 

 

 

By:

 /s/ Caren Mason

 

 

Name: Caren Mason

 

 

Title: President/CEO

 

 

 

 

 

 

 

OSTEO SCIENCES CORPORATION

 

 

 

 

 

By:

 /s/ Caren Mason

 

 

Name: Caren Mason

 

 

Title: President/CEO

 

 

 

 

 

 

 

LITMUS CONCEPTS, INC.

 

 

 

 

 

By:

 /s/ Caren Mason

 

 

Name: Caren Mason

 

 

Title: President/CEO

 

S-1

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Notice Address for each Grantor:

 

10165 McKellar Court

San Diego, CA 92121

Attention: Chief Financial Officer

Telephone: (858) 552-1100

Facsimile:  (858) 646-8028

Electronic Mail: jradak@quidel.com

 

with a copy to:

 

10165 McKellar Court

San Diego, CA 92121

Attention: Legal Department

Telephone: (858) 552-1100

Facsimile:  (858) 646-8028

Electronic Mail: rbujarski@quidel.com

 

S-2

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BANK OF AMERICA, N.A.

 

 

as Agent and Secured Party

 

 

 

 

 

 

 

 

By:

/s/ Tiffany Shin

 

 

Name: Tiffany Shin

 

 

Title: Assistant Vice President

 

 

 

 

 

Notice Address:

 

 

 

Bank of America, N.A.

 

Agency Management

 

Global Product Solutions

 

WA1-501-17-32

 

800 Fifth Avenue, Floor 17

 

Seattle WA 98104

 

Attn: Tiffany Shin, Assistant Vice President

 

Telephone: 206-358-0078

 

Telecopier: 415-343-0561

 

Electronic Mail: tiffany.shin@bankofamerica.com

 

S-3

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EXHIBIT I TO
SECURITY AGREEMENT

 

FORM OF GRANT OF TRADEMARK SECURITY INTEREST

 

WHEREAS, [NAME OF GRANTOR], a                        corporation (“Grantor”),
owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and

 

WHEREAS, Quidel Corporation, a Delaware corporation (“Borrower”), has entered
into a Credit Agreement dated as of October 8, 2008 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, being
the “Credit Agreement”) with the financial institutions named therein
(collectively, together with their respective successors and assigns party to
the Credit Agreement from time to time, the “Lenders”), U.S. Bank N.A., as
Syndication Agent, and Bank of America, N.A., as Agent for the Lenders (in such
capacity, “Secured Party”) pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Borrower; and

 

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more swap
agreements (collectively, the “Secured Hedge Agreements”) with one or more
Persons that are Lenders or Affiliates of Lenders at the time such Secured Hedge
Agreements are entered into (in such capacity, collectively, “Hedge Banks”);

 

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more cash
management agreement (collectively, the “Secured Cash Management Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Secured Cash Management Agreements are entered into (in such capacity,
collectively, “Cash Management Banks”); and

 

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and
delivered that certain Subsidiary Guaranty dated as of October 8, 2008 (said
Subsidiary Guaranty, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the “Guaranty”) in favor of Secured Party for the benefit of Lenders, any
Hedge Banks and any Cash Management Banks, pursuant to which Grantor has
guarantied the prompt payment and performance when due of all obligations of
Borrower under the Credit Agreement and the other Loan Documents (as defined in
the Credit Agreement) and all obligations of Loan Parties (as defined in the
Credit Agreement) under the Secured Hedge Agreements and the Secured Cash
Management Agreements, including, without limitation, the obligation of Loan
Parties to make payments under the Secured Hedge Agreements in the event of
early termination thereof; and]

 

WHEREAS, pursuant to the terms of a Security Agreement dated as of October 8,
2008 (said Security Agreement, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the “Security Agreement”), among Grantor, Secured Party and
the other grantors named therein,

 

l-1

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Grantor has created in favor of Secured Party a security interest in, and
Secured Party has become a secured creditor with respect to, the Trademark
Collateral;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, subject to the terms and conditions of the
Security Agreement, to evidence further the security interest granted by Grantor
to Secured Party pursuant to the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor’s right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the “Trademark Collateral”) to secure the Secured Obligations
(as defined in the Security Agreement):

 

(i)            all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all trademarks,
service marks, designs, logos, indicia, tradenames, trade dress, corporate
names, company names, business names, fictitious business names, trade styles
and/or other source and/or business identifiers and applications pertaining
thereto, owned by such Grantor, or hereafter adopted and used, in its business
(including, without limitation, the trademarks set forth on Schedule A annexed
hereto) (collectively, the “Trademarks”), all registrations that have been or
may hereafter be issued or applied for thereon in the United States and any
state thereof and in foreign countries (including, without limitation, the
registrations and applications set forth on Schedule A annexed hereto), all
common law and other rights (but in no event any of the obligations) in and to
the Trademarks in the United States and any state thereof and in foreign
countries, and all goodwill of such Grantor’s business symbolized by the
Trademarks and associated therewith; and

 

(ii)           all proceeds, products, rents and profits of or from any and all
of the foregoing Trademark Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Trademark
Collateral.  For purposes of this Grant of Trademark Security Interest, the term
“proceeds” includes whatever is receivable or received when Trademark Collateral
or proceeds are sold, licensed, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.

 

Grantor does hereby further acknowledge and affirm that the rights and remedies
of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.

 

[The remainder of this page is intentionally left blank.]

 

l-2

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IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security Interest
to be duly executed and delivered by its officer thereunto duly authorized as of
the      day of               ,           .

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

l-3

 

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SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST

 

Owner

 

Trademark
Description

 

Registration/
Appl. Number

 

Registration/
Appl. Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I-A-1

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EXHIBIT II TO
SECURITY AGREEMENT

 

FORM OF GRANT OF PATENT SECURITY INTEREST

 

WHEREAS, [NAME OF GRANTOR], a                        corporation (“Grantor”),
owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and

 

WHEREAS, Quidel Corporation, a Delaware corporation (“Borrower”), has entered
into a Credit Agreement dated as of October 8, 2008 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Credit Agreement”) with the financial institutions named therein (collectively,
together with their respective successors and assigns party to the Credit
Agreement from time to time, the “Lenders”), U.S. Bank N.A., as Syndication
Agent, and Bank of America, N.A., as Agent for the Lenders (in such capacity,
“Secured Party”), pursuant to which Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Borrower; and

 

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more swap
agreements (collectively, the “Secured Hedge Agreements”) with one or more
Persons that are Lenders or Affiliates of Lenders at the time such Secured Hedge
Agreements are entered into (in such capacity, collectively, “Hedge Banks”);

 

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more cash
management agreement (collectively, the “Secured Cash Management Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Secured Cash Management Agreements are entered into (in such capacity,
collectively, “Cash Management Banks”); and

 

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and
delivered that certain Subsidiary Guaranty dated as of October 8, 2008 (said
Subsidiary Guaranty, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the “Guaranty”) in favor of Secured Party for the benefit of Lenders, any
Hedge Banks and any Cash Management Banks, pursuant to which Grantor has
guarantied the prompt payment and performance when due of all obligations of
Borrower under the Credit Agreement and the other Loan Documents (as defined in
the Credit Agreement) and all obligations of Loan Parties (as defined in the
Credit Agreement) under the Secured Hedge Agreements and Secured Cash Management
Agreements, including, without limitation, the obligation of Loan Parties to
make payments under the Secured Hedge Agreements in the event of early
termination thereof; and]

 

WHEREAS, pursuant to the terms of a Security Agreement dated as of October 8,
2008 (said Security Agreement, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the “Security Agreement”), among Grantor, Secured Party and
the other grantors named therein,

 

II-1

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Grantor created in favor of Secured Party a security interest in, and Secured
Party has become a secured creditor with respect to, the Patent Collateral;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, subject to the terms and conditions of the
Security Agreement, to evidence further the security interest granted by Grantor
to Secured Party pursuant to the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor’s right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the “Patent Collateral”) to secure the Secured Obligations (as
defined in the Security Agreement):

 

(i)            all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all patents and patent
applications and rights and interests in patents and patent applications under
any domestic or foreign law that are presently, or in the future may be, owned
or held by such Grantor and all patents and patent applications and rights,
title and interests in patents and patent applications under any domestic or
foreign law that are presently, or in the future may be, owned by such Grantor
in whole or in part (including, without limitation, the patents and patent
applications set forth on Schedule A annexed hereto), all rights (but not
obligations) corresponding thereto to sue for past, present and future
infringements and all re-issues, divisions, continuations, renewals, extensions
and continuations-in-part thereof; and

 

(ii)           all proceeds, products, rents and profits of or from any and all
of the foregoing Patent Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Patent Collateral. 
For purposes of this Grant of Patent Security Interest, the term “proceeds”
includes whatever is receivable or received when Patent Collateral or proceeds
are sold, licensed, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.

 

Grantor does hereby further acknowledge and affirm that the rights and remedies
of Secured Party with respect to the security interest in the Patent Collateral
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.

 

[The remainder of this page intentionally left blank.]

 

II-2

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IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest to
be duly executed and delivered by its officer thereunto duly authorized as of
the        day of                         ,           .

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

II-3

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SCHEDULE A
TO
GRANT OF PATENT SECURITY INTEREST

 

Patents Issued:

 

Patent No.

 

Issue Date

 

Invention

 

Inventor(s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patents Pending:

 

Applicant’s
Name

 

Date
Filed

 

Application
Number

 

Invention

 

Inventor(s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

II-A-1

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EXHIBIT III TO
SECURITY AGREEMENT

 

FORM OF GRANT OF COPYRIGHT SECURITY INTEREST

 

WHEREAS, [NAME OF GRANTOR], a                        corporation (“Grantor”),
owns and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Copyright Collateral (as defined below); and

 

WHEREAS, Quidel Corporation, a Delaware corporation (“Borrower”), has entered
into a Credit Agreement dated as of October 8, 2008 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Credit Agreement”) with the financial institutions named therein (collectively,
together with their respective successors and assigns party to the Credit
Agreement from time to time, the “Lenders”), U.S. Bank N.A., as Syndication
Agent, and Bank of America, N.A., as Agent for the Lenders (in such capacity,
“Secured Party”), pursuant to which Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Borrower; and

 

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more swap
agreements (collectively, the “Secured Hedge Agreements”) with one or more
Persons that are Lenders or Affiliates of Lenders at the time such Secured Hedge
Agreements are entered into (in such capacity, collectively, “Hedge Banks”);

 

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more cash
management agreement (collectively, the “Secured Cash Management Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Secured Cash Management Agreements are entered into (in such capacity,
collectively, “Cash Management Banks”); and

 

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and
delivered that certain Subsidiary Guaranty dated as of October 8, 2008 (said
Subsidiary Guaranty, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the “Guaranty”) in favor of Secured Party for the benefit of Lenders, any
Hedge Banks and any Cash Management Banks pursuant to which Grantor has
guarantied the prompt payment and performance when due of all obligations of
Borrower under the Credit Agreement and the other Loan Documents (as defined in
the Credit Agreement) and all obligations of Loan Parties (as defined in the
Credit Agreement) under the Secured Hedge Agreements and the Secured Cash
Management Agreements, including, without limitation, the obligation of Loan
Parties to make payments under the Secured Hedge Agreements in the event of
early termination thereof; and]

 

WHEREAS, pursuant to the terms of a Security Agreement dated as of October 8,
2008 (said Security Agreement, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time, being the “Security Agreement”), among Grantor, Secured Party and
the other grantors named therein,

 

III-1

--------------------------------------------------------------------------------

 

Grantor created in favor of Secured Party a security interest in, and Secured
Party has become a secured creditor with respect to, the Copyright Collateral;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, subject to the terms and conditions of the
Security Agreement, to evidence further the security interest granted by Grantor
to Secured Party pursuant to the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor’s right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the “Copyright Collateral”) to secure the Secured Obligations
(as defined in the Security Agreement):

 

(i)            all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) under copyright in various
published and unpublished works of authorship including, without limitation,
computer programs, computer data bases, other computer software layouts,
drawings, designs, writings, and formulas (including, without limitation, the
works set forth on Schedule A annexed hereto, as the same may be amended
pursuant hereto from time to time) (collectively, the “Copyrights”), all
copyright registrations issued to Grantor and applications for copyright
registration that have been or may hereafter be issued or applied for thereon in
the United States and any state thereof and in foreign countries (including,
without limitation, the registrations set forth on Schedule A annexed hereto, as
the same may be amended pursuant hereto from time to time) (collectively, the
“Copyright Registrations”), all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright licenses,
only to the extent permitted by such licensing arrangements) (the “Copyright
Rights”), including, without limitation, each of the Copyrights, rights, titles
and interests in and to the Copyrights, all derivative works and other works
protectable by copyright, which are presently, or in the future may be, owned,
created (as a work for hire for the benefit of Grantor), authored (as a work for
hire for the benefit of Grantor), or acquired by Grantor, in whole or in part,
and all Copyright Rights with respect thereto and all Copyright Registrations
therefor, heretofore or hereafter granted or applied for, and all renewals and
extensions thereof, throughout the world, including all proceeds thereof (such
as, by way of example and not by limitation, license royalties and proceeds of
infringement suits), the right (but not the obligation) to renew and extend such
Copyright Registrations and Copyright Rights and to register works protectable
by copyright and the right (but not the obligation) to sue in the name of such
Grantor or in the name of Secured Party or Lenders for past, present and future
infringements of the Copyrights and Copyright Rights; and

 

(ii)           all proceeds, products, rents and profits of or from any and all
of the foregoing Copyright Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Copyright
Collateral.  For purposes of this Grant of Copyright Security Interest, the term
“proceeds” includes whatever is receivable or

 

III-2

--------------------------------------------------------------------------------

 

received when Copyright Collateral or proceeds are sold, licensed, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary or
involuntary.

 

Grantor does hereby further acknowledge and affirm that the rights and remedies
of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.

 

III-3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security Interest
to be duly executed and delivered by its officer thereunto duly authorized as of
the        day of                       ,           .

 

 

[NAME OF GRANTOR]

 

 

 

 

 

By: 

 

 

 

Name: 

 

 

 

Title: 

 

 

III-4

--------------------------------------------------------------------------------

 

SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST

 

U.S. Copyright Registrations:

 

Title

 

Registration No.

 

Date of Issue

 

Registered Owner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Copyright Registrations:

 

Country

 

Title

 

Registration No.

 

Date of Issue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pending U.S. Copyright Registration Applications:

 

Title

 

Appl. No.

 

Date of Application

 

Copyright Claimant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pending Foreign Copyright Registration Applications:

 

Country

 

Title

 

Appl. No.

 

Date of Application

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

III-A-1

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EXHIBIT IV TO
SECURITY AGREEMENT

 

PLEDGE SUPPLEMENT

 

This Pledge Supplement, dated as of                                     , is
delivered pursuant to the Security Agreement, dated as of October 8, 2008
between                                         , a
                               (“Grantor”), the other Grantors named therein,
and Bank of America, N.A., as Secured Party (said Security Agreement, as it may
heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, being the “Security
Agreement”).  Capitalized terms used herein not otherwise defined herein shall
have the meanings ascribed thereto in the Security Agreement.

 

Grantor hereby agrees that the [Pledged Equity] [Pledged Debt] set forth on
Schedule A annexed hereto shall be deemed to be part of the [Pledged Equity]
[Pledged Debt] and shall become part of the Securities Collateral and shall
secure all Secured Obligations.

 

IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be duly
executed and delivered by its duly authorized officer as of
                              .

 

 

[GRANTOR]

 

 

 

 

 

By: 

 

 

 

Title: 

 

 

IV-1

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SCHEDULE A
TO
PLEDGE SUPPLEMENT

 

IV-A-1

--------------------------------------------------------------------------------

 

EXHIBIT V TO
SECURITY AGREEMENT

 

IP SUPPLEMENT

 

This IP SUPPLEMENT, dated as of               , is delivered pursuant to and
supplements (i) the Security Agreement, dated as of October 8, 2008 (said
Security Agreement, as it may heretofore have been and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the “Security Agreement”), among Quidel Corporation, [Insert Name of
Grantor] (“Grantor”), the other grantors named therein, and Bank of America,
N.A., as Secured Party, and (ii) the [Grant of Trademark Security Interest]
[Grant of Patent Security Interest] [Grant of Copyright Security Interest] dated
as of                       ,            (the “Grant”) executed by Grantor. 
Capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed thereto in the Grant.

 

Grantor grants to Secured Party a security interest in all of Grantor’s right,
title and interest in and to the [Trademark Collateral] [Patent Collateral]
[Copyright Collateral] set forth on Schedule A annexed hereto.  All such
[Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be
deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright
Collateral] and shall be hereafter subject to each of the terms and conditions
of the Security Agreement and the Grant.

 

IN WITNESS WHEREOF, Grantor has caused this IP Supplement to be duly executed
and delivered by its duly authorized officer as of                             .

 

 

[GRANTOR]

 

 

 

 

 

By: 

 

 

 

Title: 

 

 

V-1

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EXHIBIT VI TO
SECURITY AGREEMENT

 

FORM OF COUNTERPART

 

COUNTERPART (this “Counterpart”), dated as of               , is delivered
pursuant to Section 21 of the Security Agreement referred to below.  The
undersigned hereby agrees that this Counterpart may be attached to the Security
Agreement, dated as of October 8, 2008 (said Security Agreement, as it may
heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time being the “Security
Agreement”; capitalized terms used herein not otherwise defined herein shall
have the meanings ascribed therein), among Quidel Corporation, the other
Grantors named therein, and Bank of America, N.A., as Secured Party.  The
undersigned by executing and delivering this Counterpart hereby becomes a
Grantor under the Security Agreement in accordance with Section 21 thereof and
agrees to be bound by all of the terms thereof.  Without limiting the generality
of the foregoing, the undersigned hereby:

 

(i)            authorizes the Secured Party to add the information set forth on
the Schedules to this Agreement to the correlative Schedules attached to the
Security Agreement;

 

(ii)           agrees that all Collateral of the undersigned, including the
items of property described on the Schedules hereto, shall become part of the
Collateral and shall secure all Secured Obligations; and

 

(iii)          makes the representations and warranties set forth in the
Security Agreement, as amended hereby, to the extent relating to the
undersigned.

 

 

[NAME OF ADDITIONAL GRANTOR]

 

 

 

 

 

By: 

 

 

 

Name: 

 

 

 

Title: 

 

 

VI-1

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