Exhibit 10.6

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “ACT”). NO SALE OR DISPOSITION OF THIS PROMISSORY NOTE OR THE
SECURITIES INTO WHICH THIS PROMISSORY NOTE IS CONVERTIBLE MAY BE EFFECTED EXCEPT
IN COMPLIANCE WITH RULE 144 UNDER THE ACT, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO, FOLLOWING RECEIPT BY THE COMPANY OF AN OPINION OF
COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT, OR FOLLOWING RECEIPT BY THE COMPANY
OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT.

Dated May 19, 2006

Amended and Restated on January, 2007

MONOGRAM BIOSCIENCES, INC.

3.0% SENIOR SECURED CONVERTIBLE NOTE DUE MAY 19, 2010

Monogram Biosciences, Inc., a Delaware corporation (the “Company”, which term
shall include any successor thereto), promises to pay to Pfizer Inc. (the
“Holder”, which term shall include any successor thereto or permitted transferee
thereof) in cash, the principal sum of Twenty-Five Million Dollars ($25,000,000)
on May 19, 2010 or such earlier date as may be provided herein, with simple
interest on the outstanding principal amount at the rate of 3% per annum.

This Note and the Common Stock issuable upon conversion of this Note
(collectively, the “Securities”) are being offered and sold by the Company
pursuant to a Purchase Agreement, dated May 5, 2006, amended as of January ,
2007, and as amended or supplemented from time to time (as so amended from time
to time, the “Purchase Agreement”), among the Company and the Holder, in a
transaction exempt from, or not subject to, the registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”).

In connection with the Company’s issuance of its 0% Convertible Senior Unsecured
Notes due 2026, in the aggregate original principal amount of $30,000,000 (the
“Subordinated Notes”) pursuant to an Indenture, dated as of January , 2007 (the
“Indenture”) between the Company and U.S. Bank National Association, a national
banking association organized and existing under the laws of the United States,
as trustee (the “Subordinated Creditor”), (i) the Company and Holder entered
into a First

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Amendment to Note Purchase Agreement and Senior Note, dated as of January , 2007
between the Company and Holder for the purpose of amending the Purchase
Agreement and amending and restating this Note pursuant to Section 12 hereof and
(ii) the Company, the Holder and the Subordinated Creditor entered into a
Subordination Agreement, dated as of January , 2007 (the “Subordination
Agreement”) setting forth the terms of the subordination of the Subordinated
Note to this Note.

1. INTEREST

The Company promises to pay interest on the principal amount of this Note at the
rate of 3.0% per annum. The Company shall pay interest quarterly on
March 31, June 30, September 30 and December 31 of each year (each an “Interest
Payment”), commencing June 30, 2006. Interest on this Note shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from May 19, 2006. Interest will be computed on the basis of a 365-day
year for the actual number of days elapsed. The Company shall pay interest on
this Note (except defaulted interest) to the Holder at the close of business on
the Business Day (as hereinafter defined) immediately following the related
interest payment date.

The Company may make the Interest Payment at its option, either in cash or
Common Stock (or a combination of cash and Common Stock); provided, however,
that payment of any Interest Payment may not be made in shares of Common Stock,
in whole or in part, unless (i) the shares of Common Stock to be issued in
payment of each Interest Payment are (A) listed or quoted as of the date of the
payment of each Interest Payment on a national securities exchange or on the
Nasdaq National Market and (B) upon issuance, shall be capable of immediate
resale to the public pursuant to an effective registration statement at the time
of issuance (without any Suspension Period (as defined in the Purchase
Agreement) then in effect) or pursuant to Rule 144(k) if such registration
statement is no longer required to be in effect under the Purchase Agreement;
(ii) all shares of Common Stock that may be issued in payment of each Interest
Payment shall be newly issued, shall, upon issue, be duly authorized, validly
issued, fully paid and non-assessable and shall be free from preemptive or
similar rights and free of any lien or adverse claim; and (iii) any required
corporate approvals or authorizations, including without limitation any approval
by the Company’s stockholders as may be required under the Marketplace Rules of
The Nasdaq Stock Market, Inc., shall have been obtained prior to the issuance of
such shares of Common Stock. Payments made in Common Stock will be valued at 90%
of the average of the Closing Prices (as hereinafter defined) of the Common
Stock for the five consecutive Trading Days (as hereinafter defined) ending on
the Trading Day immediately preceding the date of the applicable Interest
Payment; and provided further that any accrued and unpaid interest shall be paid
concurrently with the repayment of the outstanding principal balance of the Note
and shall be paid in cash.

“Adjustment Event” has the meaning specified in Section 7(k).

 

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“Affiliate” means with respect to any specified Person any other Person that
controls, is controlled by or is under common control with such specified
Person. For the purposes of this definition, “control”, when used with respect
to any specified Person, means the actual power, either directly or indirectly
through one or more intermediaries, to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlled by” and “under
common control with” have meanings correlative to the foregoing.

“Board of Directors” means the Board of Directors of the Company or a committee
of such Board duly authorized to act for it hereunder.

“Business Day” means each day that is not a Legal Holiday.

“Collaboration Agreement” means the Collaboration Agreement, dated May 5, 2006,
between the Company and Holder, as amended from time to time.

“Collaboration Security Agreement” means the Collaboration Security Agreement,
dated as of May 5, 2006, between the Company and Holder, as amended from time to
time.

“Collateral” has the meaning assigned to it in the Security Agreement.

“Current Market Price” has the meaning specified in Section 7(g).

“Determination Date” has the meaning specified in Section 7(k).

“Distributed Property” has the meaning specified in Section 7(d).

“Ex-Dividend Date” has the meaning specified in Section 7(d).

“Expiration Time” has the meaning specified in Section 7(f).

“Fair Market Value” has the meaning specified in Section 7(g).

“Indebtedness” means, with respect to any Person, and without duplication,

(i) all indebtedness, obligations and other liabilities (contingent or
otherwise) of such Person for borrowed money (including obligations of the
Person in respect of overdrafts, foreign exchange contracts, commodity
contracts, currency exchange agreements, interest rate protection agreements and
any loans or advances from banks, whether or not evidenced by notes or similar
instruments) or evidenced by bonds, debentures, notes or similar instruments
(whether or not the recourse of the lender is to the whole of the assets of such
Person or to only a portion thereof), other than any current account payable or
other accrued current liability or obligation to trade creditors incurred in the
ordinary course of business in connection with the obtaining of materials or
services;

 

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(ii) all reimbursement obligations and other liabilities (contingent or
otherwise) of such Person with respect to letters of credit, bank guarantees or
bankers’ acceptances;

(iii) all obligations and liabilities (contingent or otherwise) in respect of
leases of such Person required, in conformity with generally accepted accounting
principles, to be accounted for as capital lease obligations on the balance
sheet of such Person and all obligations and other liabilities (contingent or
otherwise) under any lease or related document (including a purchase agreement)
in connection with the lease of real property or personal property or assets
which provides that such Person is contractually obligated to purchase or cause
a third party to purchase the leased property or assets and thereby guarantee a
minimum residual value of the leased property or assets to the lessor and the
obligations of such Person under such lease or related document to purchase or
to cause a third party to purchase such leased property or assets;

(iv) all obligations of such Person (contingent or otherwise) with respect to an
interest rate or other swap, cap or collar agreement or other similar instrument
or agreement or foreign currency hedge, exchange, purchase or similar instrument
or agreement;

(v) all direct or indirect guarantees or similar agreements by such Person in
respect of, and obligations or liabilities (contingent or otherwise) of such
Person to purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of, indebtedness, obligations or liabilities of another Person
of the kind described in clauses (i) through (iv);

(vi) any indebtedness or other obligations described in clauses (i) through
(v) secured by any mortgage, pledge, lien or other encumbrance existing on
property that is owned or held by such Person, regardless of whether the
indebtedness or other obligation secured thereby shall have been assumed by such
Person; and

(vii) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or
liability of the kind or type described in clauses (i) through (vi).

 

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“Legal Holiday” is a Saturday, Sunday or a day on which state or federally
chartered banking institutions in New York, New York are not required to be
open.

“Lien” means any security interest, pledge, mortgage, lien (statutory or other),
charge, option to purchase, lease or otherwise acquire any interest or any
claim, restriction, covenant, title defect, hypothecation, assignment, deposit
arrangement or any preference, priority or other security agreement (including
any conditional sale or other title retention agreement and the filing of, or
agreement to give, any financing statement under the Uniform Commercial Code of
any applicable jurisdiction).

“Master Services Agreement” means the Master Services Agreement, dated as of
November 14, 2002, between the Company and Holder, as amended from time to time.

“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

“Secured Property” means the properties and assets of the Company subject to a
security interest pursuant to the Security Agreement.

“Security Agreement” has the meaning assigned to it in Article 3.

“Subordinated Note Document” has the meaning assigned to such term in the
Subordination Agreement.

“Subordinated Debt” has the meaning assigned to such term in the Subordination
Agreement.

“Subsidiary” means as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.

“Trading Day” has the meaning specified in Section 7(g).

“Trigger Event” has the meaning specified in Section 7(d).

“Warning Notice” means a prior written notice by the Subordinated Creditor or
any holder of all or any part of the Subordinated Debt indicating its or their
intention to accelerate all or any portion of the Subordinated Debt or exercise
any of their remedies with respect to all or any portion of the Subordinated
Debt, delivered to the Holder at

 

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least one Business Day prior to the proposed date of such acceleration or
exercise of remedies, provided that none of the following shall be deemed a
Warning Notice: (i) notice by any Noteholder (as defined in the Indenture) to
the Company requesting delivery of share certificates pursuant to the third
paragraph of Section 15.2 of the Indenture and, (ii) any action taken by the
Subordinated Creditor pursuant solely to clause (b) of the proviso of
Section 4(a) of the Subordination Agreement and any notice in respect thereof
(iii) any action taken by the Subordinated Creditor solely for the specific
performance by the Company of its obligation to issue shares of common stock in
accordance with the Indenture and any notice in respect thereof and (iv) a
Notice of Default (as defined in the Indenture) delivered to the Company
pursuant to and solely for the purpose set forth in clauses (d), (f), (i) and
(j) of Section 7.1 of the Indenture.

The “Closing Price” per share of Common Stock for each day shall be the last
reported sales price or, in case no such reported sale take place on such date,
the average of the reported closing bid and asked prices in either case on the
Nasdaq Capital Market or, if the Common Stock is not listed or admitted to
trading on the Nasdaq Capital Market, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on the Nasdaq Capital Market or any national
securities exchange, the average of the closing bid and asked prices as quoted
on NASDAQ or any comparable system or, if the Common Stock is not quoted on
NASDAQ or any comparable system, the closing sales price or, in case no reported
sale takes place, the average of the closing bid and asked prices, as furnished
by any two members of the National Association of Securities Dealers, Inc.
selected from time to time by the Company for that purpose.

2. METHOD OF PAYMENT

The Holder must surrender this Note to the Company to collect payment of
principal. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts.

3. SECURED OBLIGATION

The indebtedness evidenced by this Note is secured pursuant to a Note Security
Agreement, dated as of May 5, 2006 (as amended from time to time, the “Security
Agreement”), by and among the Company and the Holder, pursuant to which the
Company has granted Holder a security interest in all of the Collateral.

 

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4. REDEMPTION

The Note cannot be redeemed by the Company before May 19, 2010 (other than at
the option of the Holder as provided herein).

5. PURCHASE OF NOTE AT OPTION OF HOLDER

(a) Upon the occurrence of a Fundamental Change, at the option of the Holder,
the Company shall become obligated to purchase all or any part (so long as the
principal amount of such part is $1,000 or an integral multiple of $1,000 in
excess thereof) of this Note specified by the Holder on the Fundamental Change
Purchase Date (as defined below), at a purchase price equal to 100% of the
principal amount thereof together with accrued and unpaid interest to, but
excluding, the Fundamental Change Purchase Date (the “Fundamental Change
Purchase Price”), subject to satisfaction by or on behalf of the Holder of the
requirements set forth in subsection (d) of this Section 5.

(b) A “Change in Control” shall be deemed to have occurred if any of the
following occurs after the date hereof:

(1) the Company consolidates with or merges with or into a “Designated Entity”
(as such term is defined below) or a wholly-owned subsidiary of a Designated
Entity; or

(2) any “Major Pharmaceutical Company” (as such term is defined below) is or
becomes the “beneficial owner” (as defined below), directly or indirectly, of
shares of capital of the Company representing more than 50% of the total voting
power of all outstanding classes of capital stock of the Company; or

(3) the Company sells, assigns, conveys, transfers, leases or otherwise disposes
of all or substantially all of the assets of the Company to a Designated Entity.

“Beneficial owner” shall be determined in accordance with Rule 13d-3 under the
Exchange Act, as in effect on the date of this Note, except that the number of
shares of capital stock of the Company shall be deemed to include, in addition
to all outstanding shares of capital stock of the Company and Unissued Shares
deemed to be held by the “person” or “group” (as such terms are defined above)
or other Person with respect to which the Change in Control determination is
being made, all Unissued Shares deemed to be held by all other Persons.

 

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“Company Notice” has the meaning assigned to it in the Indenture.

“Debt-to-Equity-Ratio” means the ratio of (a) aggregate Indebtedness of an
entity to (b) the stockholders’ equity of that entity (determined in accordance
with GAAP).

A “Fundamental Change” shall be deemed to have occurred upon the occurrence of
any of the following: (i) a Change in Control (ii) a Termination of Trading or
(iii) a Repurchase Event as a result of a Change in Control (as defined in the
Indenture) pursuant to the Indenture and delivery by the Company of a copy of
the Company Notice to the Holder with respect to such Repurchase Event.

“Repurchase Event” has the meaning assigned to it in the Indenture.

“Repurchase Notice” has the meaning assigned to it in the Indenture.

A “Termination of Trading” shall be deemed to have occurred if, after the date
hereof, the Common Stock (or other common stock into which the Securities are
then convertible) is not listed for trading on a United States national
securities exchange, quoted on the Nasdaq Capital Market, or approved for
trading and/or eligible for quotation on an established automated
over-the-counter trading market in the United States, including the OTC Bulletin
Board, but excluding the “pink sheets” or any similar quotation system.

The term “Designated Entity” means (i) any Person having, on a consolidated
basis and measured pro forma for the completion of the Change in Control
transaction as of the date on which the Change in Control is consummated,
(A) stockholders equity determined in accordance with GAAP of less than
$43,127,000 or (B) a Debt-to-Equity-Ratio greater than 1.5:1 or (ii) a Major
Pharmaceutical Company.

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time.

“Major Pharmaceutical Company” means (A) a pharmaceutical or biotechnology
company (excluding Holder or any Affiliates of Holder) (x) whose worldwide net
sales on a consolidated basis of human pharmaceutical products, including
consumer over-the-counter pharmaceutical products in the most recently completed
fiscal year for which audited financial statements are publicly available at the
time such Change in Control occurs, total $1,000,000,000 or more, as reported in
such financial statements, or if such information is not publicly available, as
reasonably calculated and provided by the Company, or (y) whose worldwide net
sales on a consolidated basis of human pharmaceutical products approved for the
treatment of HIV in the most recently completed fiscal year for which audited
financial statements are publicly available at the time such Change in Control
occurs, or if such information is not publicly available, as

 

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reasonably calculated and provided by the Company, is in excess of $100,000,000
or (B) any one or more Persons which are direct or indirect parent holding
companies of a Person identified in clause (A) or is an Affiliate of a Person
identified in clause (A).

The term “Unissued Shares” means shares of capital stock not outstanding that
are subject to options, warrants, rights to purchase or conversion privileges
exercisable within 60 days of the date of determination of a Change in Control.

(c) Upon (i) the earlier of public announcement of any transaction, that if
consummated, would result in a Change in Control or the date on which a Change
in Control occurs or (ii) in the case of a Termination of Trading, within 5 days
of such termination, the Company shall mail a written notice of the Change in
Control or Termination of Trading, as applicable, to the Holder. The notice
shall include the form of a Fundamental Change Purchase Notice to be completed
by the Holder and shall state:

(1) the actual or anticipated date of such Fundamental Change and, briefly, the
events causing such Change in Control or Repurchase Event, as applicable;

(2) the date by which the Fundamental Change Purchase Notice pursuant to this
Section 5 must be given;

(3) the Fundamental Change Purchase Date; and

(4) the Fundamental Change Purchase Price.

In case of the a Repurchase Event, in lieu of the notice describe in the first
paragraph of this clause (c), the Company, or at the Company’s instructions the
Subordinated Creditor shall deliver a copy of the Company Notice to the Holder
together with an appropriate form of the Fundamental Change Purchase Notice,
concurrently with the delivery of such Company Notice to the holders of the
Subordinated Notes pursuant to the Indenture.

(d) The Holder may exercise its rights specified in subsection (a) of this
Section 5 upon delivery of a written notice in the form delivered by the Company
pursuant to Section 5(c) (a “Fundamental Change Purchase Notice”) to the Company
at any time prior to the close of business on the Business Day next preceding
the Fundamental Change Purchase Date. The “Fundamental Change Purchase Date” is
the later of (i) the fifth business day following delivery of the notice
contemplated by subsection (c) of this Section 5, (ii) in case of a Change in
Control, the date on which the Change in Control occurs and (iii) in case of a
Repurchase Event, the fifteenth Business Day following notice from the
Subordinated Creditor that it has received at least one Repurchase Notice (as
defined in the Indenture) in connection with the applicable Repurchase Event.
The delivery of this Note to the Company (together with all necessary
endorsements) at the office of the Company shall be a condition to the receipt
by the Holder of the Fundamental Change Purchase Price therefor.

 

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6. CONVERSION

(a) Subject to the second proviso of this Section 6(a), the Holder may convert
the principal amount of and any accrued but unpaid interest on this Note (or any
portion thereof equal to $1,000 or any integral multiple of $1,000 in excess
thereof) into shares of Common Stock at any time prior to the close of business
on May 19, 2010, at the Conversion Price (as defined below) then in effect;
provided, however, that if the Note is subject to purchase upon a Change in
Control, the conversion right will terminate at the close of business on the
business day immediately preceding the Change in Control Purchase Date for the
Note or such earlier date as the Holder presents the Note for purchase (unless
the Company shall default in paying the Change in Control Purchase Price when
due, in which case, without limiting any other rights of the Holder, the
conversion right shall terminate at the close of business on the date such
default is cured and the Note is purchased); provided further that if any
limitation imposed by the Nasdaq Marketplace Rules would prevent the Company
from issuing the full number of shares of Common Stock issuable upon such
conversion, then the portion of the principal amount of and any accrued but
unpaid interest on this Note for which such conversion right has been exercised,
the conversion of which would exceed such limitation, shall be repaid in
accordance with the terms hereof or, at the written election of the Holder,
shall instead be treated as an advance of monies then-owed or thereafter owing
to the Company by the Holder under the Master Services Agreement or the
Collaboration Agreement and shall thereby reduce the obligations of the Holder
thereunder by the amount that is deemed advanced. Upon conversion of any portion
of the principal amount of this Note, or Holder’s election to treat such as an
advance of monies under the Master Services Agreement or the Collaboration
Agreement, the Company shall be forever released from all its obligations and
liabilities under this Note with respect to such amount.

(b) Following the registration of the shares of Common Stock issuable upon
conversion of this Note pursuant to Section 10 of the Purchase Agreement
pursuant to an effective registration statement, the outstanding principal and
accrued interest due under this Note shall automatically convert into shares of
the Company’s Common Stock at the Conversion Price on the Trading Day
immediately following any period in which the Closing Price is equal to or
greater than 150% of the Conversion Price (as such amount shall be adjusted in
the same manner as the Conversion Price shall be adjusted as provided in this
Note) for 20 out of 30 consecutive Trading Days.

(c) The initial conversion price is $2.7048 per share, subject to adjustment
under certain circumstances as provided in this Note (as adjusted, the
“Conversion Price”). The number of shares of Common Stock issuable upon
conversion of this Note is determined by dividing the principal amount of this
Note, or portion thereof surrendered for conversion, together with any accrued
interest due thereunder, by the Conversion Price in effect on the Conversion
Date (as defined below). No fractional shares will be issued upon conversion; in
lieu thereof, the

 

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Company will pay to the Holder in cash the amount that would have otherwise been
converted into such fractional share. Immediately following the Conversion Date,
the Company shall deliver to the Holder a certificate for the number of whole
shares of Common Stock issuable upon conversion of this Note.

(d) The Holder must (i) complete and manually sign the conversion notice
attached to this Note and deliver such notice to the Company, (ii) surrender the
Note, duly endorsed, to the Company, and (iii) pay any transfer or similar tax,
if required. The date on which the Holder satisfies all of the foregoing
requirements shall be the “Conversion Date.”

(e) The Note or portion thereof in respect of which a Change in Control Purchase
Notice has been given by the Holder may not be converted into shares of Common
Stock pursuant to this Section 6 on or after the date of the delivery of such
Change in Control Purchase Notice unless such Change in Control Purchase Notice
has first been validly withdrawn.

7. ADJUSTMENT OF CONVERSION PRICE

The Conversion Price shall be adjusted from time to time by the Company as
follows:

(a) In case the Company shall hereafter pay a dividend or make a distribution to
all holders of the outstanding shares of Common Stock in shares of Common Stock,
the Conversion Price shall be reduced so that the same shall equal the price
determined by dividing the Conversion Price in effect at the opening of business
on the date following the Record Date for such dividend or distribution by a
fraction,

(i) the numerator of which shall be the sum of the number of shares of Common
Stock outstanding at the close of business on such Record Date plus the total
number of shares of Common Stock constituting such dividend or other
distribution; and

(ii) the denominator of which shall be the a number of shares of Common Stock
outstanding at the close of business on such Record Date,

such decrease to become effective immediately after the opening of business on
the day following such Record Date. If any dividend or distribution of the type
described in this Section 7(a) is declared but ultimately not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price that would
then be in effect if such dividend or distribution had not been declared.

 

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(b) In case the Company shall issue rights or warrants to all holders of its
outstanding shares of Common Stock entitling them (for a period expiring within
forty-five (45) days after the Record Date for the issuance of such rights and
warrants) to subscribe for or purchase shares of Common Stock at a price per
share less than the average of the Closing Sale Prices of the Common Stock for
the ten (10) Trading Days immediately preceding the date such distribution is
first publicly announced by the Company (other than any rights or warrants
referred to in Section 7(d) or Rights (as defined in Section 7(d)) distributed
pursuant to a Rights Plan (as defined in Section 7(d))), the Conversion Price
shall be reduced so that the same shall equal the price determined by dividing
the Conversion Price in effect immediately prior to such Record Date by a
fraction,

(i) the numerator of which shall be the number of shares of Common Stock
outstanding on such Record Date plus the total number of additional shares of
Common Stock offered for subscription or purchase, and

(ii) the denominator of which shall be the sum of the number of shares of Common
Stock outstanding at the close of business on such Record Date plus the number
of shares that the aggregate offering price of the total number of shares so
offered would purchase at a price equal to the average of the Closing Sale
Prices of the Common Stock for the ten (10) Trading Days immediately preceding
the date such distribution is first publicly announced by the Company.

Such adjustment shall be successively made whenever any such rights or warrants
are issued, and shall become effective immediately after the opening of business
on the day following the Record Date for the issuance of such rights or
warrants. To the extent that shares of Common Stock ultimately are not delivered
after the expiration of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price that would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants ultimately are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such Record Date had not been fixed. In determining whether
any rights or warrants entitle the holders to subscribe for or purchase shares
of Common Stock at a price less than the average of the Closing Sale Prices of
the Common Stock for the ten (10) Trading Days immediately preceding the date
such distribution is first publicly announced by the Company, and in determining
the aggregate offering price of such

 

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shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights or warrants and any amount payable on
exercise or conversion thereof, the value of such consideration, if other than
cash, to be determined by the Board of Directors with the consent of the Holder
(not to be unreasonably withheld).

(c) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.

(d) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of any class of capital stock of the Company
or evidence of its indebtedness or assets (including cash or securities, but
excluding any rights or warrants referred to in Section 7(b) and also excluding
the distribution of rights to all holders of Common Stock pursuant to a Rights
Plan (as defined below) adopted before or after the date of this Note, and
excluding any dividend or distribution (x) paid exclusively in cash or
(y) referred to in Section 7(a) (any of the foregoing hereinafter in this
Section 7(d) called the “Distributed Property”), then, in each such case (unless
the Company elects to reserve such Distributed Property for distribution to the
Holder upon the conversion of this Note so that the Holder will receive upon
conversion, in addition to the shares of Common Stock to which the Holder is
entitled, the amount and kind of such Distributed Property which the Holder
would have received if the Holder had converted this Note into Common Stock
immediately prior to the Record Date for such distribution of the Distributed
Property) the Conversion Price shall be reduced so that the same shall be equal
to the price determined by dividing the Conversion Price in of in effect on the
Record Date with respect to such distribution by a fraction,

(i) the numerator of which shall be the Current Market Price on such Record
Date; and

(ii) the denominator of which shall be the Current Market Price on such Record
Date less the Fair Market Value (in each case, for purposes of this Note, as
determined by the Board of Directors with the consent of the Holder (which shall
not be unreasonably withheld), whose determination in the case of the Company
shall be described in a resolution of the Board of Directors) on such Record
Date of the portion of the Distributed Property so distributed applicable to one
share of Common Stock,

 

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such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that if the then Fair Market
Value (as so determined) of the portion of the Distributed Property so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on such Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that the Holder shall have the
right to receive upon conversion the amount of Distributed Property the Holder
would have received had the Holder converted this Note on the Record Date for
such distribution. If such dividend or distribution ultimately is not so paid or
made, the Conversion Price shall again be adjusted to be the Conversion Price
that would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the Fair Market Value of any
distribution for purposes of this Section 7(d) by reference to the actual or
when issued trading market for any securities, it must in doing so consider the
prices in such market over the same period used in computing the Current Market
Price on the applicable Record Date for such distribution. Notwithstanding the
foregoing, if the Distributed Property distributed by the Company to all holders
of its Common Stock consist of capital stock of, or similar equity interests in,
a Subsidiary or other business unit of the Company or a Subsidiary, the
Conversion Price shall be reduced so that the same shall be equal to the price
determined by dividing the Conversion Price in effect on the Record Date with
respect to such distribution by a fraction,

(i) the numerator of which shall be the sum of (A) the average of the Closing
Sale Prices of the Common Stock for the ten (10) Trading Days commencing on and
including the fifth Trading Day after the date on which “ex-dividend trading”
commences for such dividend or distribution on the Nasdaq National Market or
such other national or regional exchange or market on which such securities are
then listed or quoted (the “Ex-Dividend Date”) plus (B) the Fair Market Value of
the securities distributed in respect of each share of Common Stock for which
this Section 7(d) applies, which shall equal the number of securities
distributed in respect of each share of Common Stock multiplied by the average
of the Closing Sale Prices of those securities distributed for the ten
(10) Trading Days commencing on and including the fifth Trading Day after the
Ex-Dividend Date; and

(ii) the denominator of which shall be the average of the Closing Sale Prices of
the Common Stock for the ten (10) Trading Days commencing on and including the
fifth Trading Day after the Ex-Dividend Date,

 

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such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that the Company may in lieu of
the foregoing adjustment make adequate provision so that the Holder shall have
the right to receive upon conversion the amount of Distributed Property the
Holder would have received had the Holder converted this Note on the Record Date
with respect to such distribution.

With respect to any rights (the “Rights”) that may be issued or distributed
pursuant to any preferred stock rights plan implemented by the Company (any
existing or future preferred shares rights plan or similar rights plan, a
“Rights Plan”), upon conversion of this Note into Common Stock, to the extent
that such Rights Plan has been implemented and is still in effect upon such
conversion, the Holder will receive, in addition to the Common Stock, the Rights
described therein (whether or not the Rights have separated from the Common
Stock at the time of conversion), subject to the limitations set forth in any
such Rights Plan. Any distribution of Rights pursuant to a Rights Plan complying
with the requirements set forth in the immediately preceding sentence of this
paragraph shall not constitute a distribution of rights or warrants pursuant to
this Section 7(d) but, if not so compliant, shall constitute such a
distribution. Other than as specified in this paragraph, there will not be any
adjustment to the Conversion Price as the result of the issuance of any Rights,
the distribution of separate certificates representing such Rights, the exercise
or redemption of such Rights in accordance with any Rights Plan or the
termination or invalidation of any Rights.

Rights or warrants (other than rights issued pursuant to a Rights Plan)
distributed by the Company to all holders of Common Stock entitling the holders
thereof to subscribe for or purchase shares of the Company’s capital stock
(either initially or under certain circumstances), which rights or warrants,
until the occurrence of a specified event or events (“Trigger Event”): (i) are
deemed to be transferred with such shares of Common Stock, (ii) are not
exercisable, and (iii) are also issued in respect of future issuances of Common
Stock, shall be deemed not to have been distributed for purposes of this
Section 7 (and no adjustment to the Conversion Price under this Section 7 will
be required) until the occurrence of the earliest Trigger Event, whereupon such
rights and warrants shall be deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Price shall be made under this
Section 7(d). If any such right or warrant, including any such existing rights
or warrants distributed prior to the date of this Note, are subject to events,
upon the occurrence of which such rights or warrants become exercisable to
purchase different securities, evidences of indebtedness or other assets, then
the date of the occurrence of any and each such event shall be deemed to be the
date of distribution and Record Date with respect to new rights or warrants with
such rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was

 

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counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 7 was made, (1) in the
case of any such rights or warrants that shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all holders
of Common Stock as of the date of such redemption or repurchase, and (2) in the
case of such rights or warrants that shall have expired or been terminated
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.

No adjustment of the Conversion Price shall be made pursuant to this
Section 7(d) in respect of rights or warrants distributed or deemed distributed
on any Trigger Event to the extent that such rights or warrants are actually
distributed or reserved by the Company for distribution to the Holder upon
conversion by the Holder of this Note into Common Stock.

For purposes of this Section 7(d) and Sections 7(a) and (b), any dividend or
distribution to which this Section 7(d) is applicable that also includes shares
of Common Stock, or rights or warrants to subscribe for or purchase shares of
Common Stock (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, assets or shares of capital stock
other than such shares of Common Stock or rights or warrants (and any Conversion
Price adjustment required by this Section 7(d) with respect to such dividend or
distribution shall then be made) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights or warrants (and any
further Conversion Price adjustment required by Sections 7(a) and 7(b) with
respect to such dividend or distribution shall then be made), except any shares
of Common Stock included in such dividend or distribution shall not be deemed
“outstanding at the close of business on such Record Date” within the meaning of
Section 7(a).

(e) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary), then, in such case, the Conversion Price
shall be reduced so that the same shall equal the price determined by dividing
the Conversion Price in effect immediately prior to the close of business on the
Record Date for such dividend or distribution by a fraction,

 

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(i) the numerator of which shall be the Current Market Price on such Record
Date; and

(ii) the denominator of which shall be the Current Market Price on such Record
Date less the amount of cash so distributed applicable to one share of Common
Stock,

such adjustment to be effective immediately prior to the opening of business on
the day following such Record Date; provided that if the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on such Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that the Holder shall have the
right to receive upon conversion the amount of cash the Holder would have
received had the Holder converted this Note on the Record Date. If such dividend
or distribution is not so paid or made, such Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such
dividend or distribution had not been declared.

(f) In case a tender or exchange offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall expire and such tender or exchange
offer (as amended upon the expiration thereof) shall require the payment to
stockholders of consideration per share of Common Stock having a Fair Market
Value (as determined as aforesaid) that as of the last time (the “Expiration
Time”) tenders or exchanges may be made pursuant to such tender or exchange
offer (as it may be amended) exceeds the Closing Sale Price of a share of Common
Stock on the Trading Day next succeeding the Expiration Time, the Conversion
Price shall be reduced so that the same shall equal the price determined by
dividing the Conversion Price in effect immediately prior to the Expiration Time
by a fraction,

(i) the numerator of which shall be the sum of (x) the Fair Market Value
(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all shares validly tendered or exchanged and not withdrawn
as of the Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the “Purchased Shares”) a (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Closing Sale Price of a share of Common Stock on the Trading Day
next succeeding the Expiration Time, and

(ii) the denominator of which shall be the number of shares of Common Stock
outstanding (including any Purchased Shares) at the Expiration Time multiplied
by the Closing Sale Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time.

 

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such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. If the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Price shall again be adjusted
to be the Conversion Price that would then be in effect if such tender or
exchange offer had not been made.

(g) For purposes of this Section 7, the following terms shall have the meaning
indicated:

“Current Market Price” shall mean the average of the daily Closing Sale Prices
per share of Common Stock for the ten consecutive Trading Days ending not later
than the earlier of such date of determination and the day before the “ex” date
with respect to the issuance, distribution, subdivision or combination requiring
such computation immediately prior to the date in question. For purposes of this
paragraph, the term “ex” date, (1) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades, regular
way, on the relevant exchange or in the relevant market from which the Closing
Sale Price was obtained without the right to receive such issuance or
distribution, and (2) when used with respect to any subdivision or combination
of shares of Common Stock, means the first date on which the Common Stock
trades, regular way, on such exchange or in such market after the time at which
such subdivision or combination becomes effective.

If another issuance, distribution, subdivision or combination to which Section 7
applies occurs during the period applicable for calculating “Current Market
Price” pursuant to the definition in the preceding paragraph, “Current Market
Price” shall be calculated for such period in a manner determined by the Board
of Directors to reflect the impact of such issuance, distribution, subdivision
or combination on the Closing Sale Price of the Common Stock during such period
with the consent of the Holder (which shall not be unreasonably withheld).

“Fair Market Value” shall mean the amount which a willing buyer would pay a
willing seller in an arm’s-length transaction.

“Record Date” shall mean, with respect to any dividend, distribution or other
transaction or event in which the holders of Common Stock have the right to
receive any cash, securities or other property or in which the Common Stock (or
other applicable security) is exchanged for or converted into any combination of
cash, securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or y statute, contract or
otherwise).

 

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“Trading Day” shall mean (x) if the applicable security is quoted on The Nasdaq
Stock Market, a day on which trades may be made thereon or (y) if the applicable
security is listed or admitted for trading on the American Stock Exchange, New
York Stock Exchange or another national securities exchange, a day on which the
American Stock Exchange, New York Stock Exchange or another national securities
exchange is open for business or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.

(h) The Company may make such reductions in the Conversion Price in addition to
those required by Section 7(a), (b), (c), (d), (e) or (f) as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes.

To the extent permitted by applicable law, the Company from time to time may
reduce the Conversion Price by any amount for any period of time if the Board of
Directors shall have made a determination that such decrease would be in the
best interests of the Company, which determination shall be conclusive. Whenever
the Conversion Price is reduced pursuant to the preceding sentence, the Company
shall notify the Holder of such reduction, and such notice shall state the
reduced Conversion Price and the period during which it will be in effect.

(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
such price; provided that any adjustments that by reason of this Section 7(i)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 7 shall be made
by the Company and shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) of a share, as the case may be. No adjustment need be made
for rights to purchase Common Stock pursuant to a Company plan for reinvestment
of dividends or interest or for any issuance of Common Stock or convertible or
exchangeable securities or rights to purchase Common Stock or convertible or
exchangeable securities. To the extent this Note becomes convertible into cash,
assets, property or securities (other than capital stock of the Company), no
adjustment need be made thereafter as to the cash, assets, property or such
securities. Interest will not accrue on any cash into which this Note is
convertible.

(j) Whenever the Conversion Price is adjusted as herein provided, the Company
shall promptly notify the Holder of the adjustment and provide the Holder with a
notice

 

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setting forth the Conversion Price after such adjustment, the date of such
adjustment, and a brief statement of the facts requiring such adjustment.
Failure to deliver such notice shall not affect the legality or validity of any
such adjustment.

(k) In any case in which this Section 7 provides that an adjustment shall become
effective immediately after (1) a Record Date for an event, (2) the Record Date
for a dividend or distribution described in Section 7(a), (3) the Record Date
for the issuance of rights or warrants as described in Section 7(b) or (4) the
Expiration Time for any tender or exchange offer pursuant to Section 7(f) (each
a “Determination Date”), the Company may elect to defer until the occurrence of
the applicable Adjustment Event (as hereinafter defined) (x) issuing to the
Holder if this Note is converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or
other securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (y) paying to the
Holder any amount in cash in lieu of any fraction pursuant to Section 6(c). For
purposes of this Section 7(k), the term “Adjustment Event” shall mean:

(i) in any case referred to in clause (1) hereof, the occurrence of such event,

(ii) in any case referred to in clause (2) hereof, the date any such dividend or
distribution is paid or made,

(iii) in any case referred to in clause (3) hereof, the date of expiration of
such rights or warrants, and

(iv) in any case referred to in clause (4) hereof, the date a sale or exchange
of Common Stock pursuant to such tender or exchange consummated and becomes
irrevocable.

(l) For purposes of this Section 7, the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company.

 

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8. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.

If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 7(c) applies), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing Person, as
the case may be, shall execute and deliver to the Holder a supplemental
instrument agreeing to be bound by all terms of this Note and providing that
this Note shall be convertible into the kind and amount of shares of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of this Note (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock are available to convert this Note)
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his rights of election, if any, as to the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance (provided that , if the kind or amount of stock, other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election shall
not have been exercised (“non-electing share”), then for the purposes of this
Section 8 the kind and amount of stock, other securities or other property
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such supplemental instrument shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to those provided for in this Sections 7 and 8.

The above provisions of this Section 8 shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.

If this Section 8 applies to any event or occurrence, Section 7 shall not apply.

 

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9. COVENANTS

(a) The Company shall not, without the approval of the Holder, create, incur,
assume or permit to exist any Indebtedness, except the following (together, the
“Permitted Indebtedness”):

(i) Indebtedness secured by equipment (including equipment that is part of the
Secured Property) and that constitutes capital equipment financing for capital
expenditures (including but not limited to Indebtedness secured by purchase
money security interests) incurred in the ordinary course of the Company’s
business; provided that the amount of such financing incurred does not exceed $5
million during 2006, $5 million during 2007, $8 million during 2008 and $10
million during 2009, excluding in all cases any expenditures required of the
Company by Holder in connection with the establishment of the Adjacent Facility
or Separate Facility (as contemplated by the Collaboration Agreement,

(ii) Indebtedness in respect of working capital financing on commercially
available terms that is secured by a security interest only in (A) the accounts
receivable of the Company (including books and records related thereto), and/or
(B) other assets of the Company that are not part of the Secured Property,
and/or (C) by assets consisting of Secured Property, provided that in the case
of clause (C) such security interest shall be otherwise subordinated to the Note
in the same manner as the Indebtedness referred to in clause (viii) below;

(iii) Indebtedness secured by equipment (including equipment that is part of the
Secured Property) in an outstanding principal amount of $250,000 or less, in
aggregate (together with Indebtedness permitted under clause (i) and (ii) above,
“Permitted Lien Indebtedness”);

(iv) Indebtedness with respect to surety bonds, letters of credit and similar
obligations arising in the ordinary course of business;

(v) Indebtedness that may arise out of currency hedge transactions, interest
rate or other swap arrangements incurred in the ordinary course of business;

(vi) Unsecured indebtedness in an aggregate outstanding amount of up to
$250,000;

 

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(vii) Extensions, refinancings and renewals of Permitted Lien Indebtedness; and

(viii) other Indebtedness, provided that no principal, interest or other amount
on such Indebtedness shall be payable prior to the full payment or conversion of
this Note and such Indebtedness shall be otherwise subordinated to the Note and
any Permitted Lien securing such Indebtedness shall be junior to the security
interest granted to the Secured Party, pursuant to a subordination and
intercreditor agreement in form and substance reasonably satisfactory to the
Holder.

(b) The Company shall not, without the approval of the Holder, redeem,
repurchase, pay or declare any dividends or other distributions with respect to
any of its capital stock or other equity interests (except for (i) acquisitions
of Common Stock by the Company upon termination of an employee or consultant’s
services to the Company and (ii) settlement or repurchase of any of the
Company’s outstanding Contingent Value Rights (as defined in the Purchase
Agreement)).

(c) The Company shall not, without the approval of the Holder, enter into any
line of business that is not within the scope of the Company’s current or
proposed Business (as hereinafter defined). For purposes of this Section 9,
“Business” shall mean the provision of diagnostic products and services that
(i) aid in the guidance of therapy choices for serious diseases and (ii) aid in
the development of new therapies for serious diseases, including, but not
limited to, infectious disease and cancer. Notwithstanding the foregoing,
neither (x) the grant of technology license(s) by or to the Company, nor (y) the
marketing or co-promotion of therapeutic products not comprising anti viral
therapeutic products, shall constitute entry into a line of Business.

(d) The Company shall not, without the approval of the Holder, consolidate with
or merge into any other Person (in a transaction in which the Company is not the
surviving Person) or convey, transfer or lease all or substantially all of its
assets (including, without limitation, a substantial part of the Secured
Property) to another entity unless the Person formed by such consolidation or
into which the Company is merged or the entity which acquires by conveyance or
transfer, or which leases, such properties and assets of the Company, shall
(i) be a corporation, limited liability company, partnership or trust organized
and validly existing under the laws of the United States of America, any State
thereof or the District of Columbia, (ii) agrees to be bound by all terms of the
Note and (iii) have at least one class of common equity listed on the Nasdaq
National Market or a national securities exchange.

 

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(e) The Company shall not, without the approval of the Holder, create, incur,
assume or permit to exist any Lien on any of the Secured Property, except for
the following (together, the “Permitted Liens”): (i) Liens securing Permitted
Lien Indebtedness, (ii) Liens securing Indebtedness permitted under clause
(a)(viii) of this Section, which shall be subject to the applicable
subordination and intercreditor agreement referred to in such clause,
(iii) Liens existing on the date hereof and listed on Schedule 3.4 of the
Security Agreement, (iv) Liens for taxes, fees and other governmental charges,
either not delinquent or being contested in good faith by appropriate
proceedings and for which the Company maintains adequate reserves, (v) Liens
arising from judgments resulting from circumstances that do not constitute an
Event of Default, (vi) Liens in favor of financial institutions in connection
with the Company’s deposit accounts securing standard fees for deposit, lockbox
and other services (but not borrowed money), (vii) non-exclusive licenses
granted to others in the ordinary course of business, (viii) Liens of
materialmen, carriers, mechanics or similar Liens arising in the ordinary course
of business, (ix) Deposits in the ordinary course of business under worker’s
compensation and other similar laws, (x) Easements, restrictions and
irregularities in title and other similar charges or encumbrances affecting real
property, (xi) Liens in favor of customs authorities arising as a matter of law,
and (xi) the Liens created pursuant to the Collaboration Security Agreement in
favor of the Holder.

(f) The Company shall not without the approval of the holder authorize, enter
into or permit to exist any transactions with any director or officer, or any
member of such director’s or officer’s immediate family or any Affiliate of the
Company (collectively, a “Related Person”), other than in the ordinary course of
business on terms not more favorable to the Related Person than would have been
obtainable in an “arms’ length” dealing.

(g) The Company shall cause each of its Subsidiaries not to take any action that
the Company is restricted from taking under this Note. All assets and property
that would constitute Secured Property (if acquired by the Company) shall be
acquired by the Company directly and not by any Subsidiary of the Company.

(h) All covenants of the Company contained in this Section 9 shall expire and
terminate upon full payment or conversion of the Note.

10. TRANSFER

The Note is non-transferable by the Holder other than to one of its Affiliates.

 

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11. PERSONS DEEMED OWNERS

The Holder of a Note may be treated as the owner of it for all purposes.

12. AMENDMENT, SUPPLEMENT AND WAIVER

This Note may be amended or supplemented only with the consent of the Company
and the Holder, and an existing default or Event of Default (as defined below)
and its consequences or compliance with any provision of this Note may be waived
in a particular instance only with the consent of the Holder.

13. DEFAULTS AND REMEDIES

(a) An Event of Default shall occur and be continuing if any of the following
occurs:

(i) the Company defaults in the payment of any interest on this Note when the
same becomes due and payable and the default continues for a period of 5 days;

(ii) the Company defaults in payment of any principal (including, without
limitation, any premium, if any) on the Note when the same becomes due and
payable;

(iii) the Company fails to cure within 30 days following notice to comply with
any covenant, condition, agreement or obligation contained in any of the Note,
the Purchase Agreement or the Security Agreement (the “Transaction Documents”);

(iv) any representation or warranty made or, pursuant to Section 7.2 of the
Purchase Agreement deemed made as of the Closing Date, by the Company pursuant
to any Transaction Document shall have been incorrect when made or deemed made,
but only if such inaccuracy (disregarding for this purpose any materiality or
material adverse effect qualification set forth therein) has a material adverse
effect on the Company or materially limits the ability of the Holder to exercise
its rights hereunder;

(v) the holder or holders of any Permitted Lien Indebtedness or any trustee or
agent on its or their behalf cause, any Permitted Lien Indebtedness in an
outstanding principal amount in excess of $100,000 to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity;

 

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(vi) any default occurs and is continuing under any Subordinated Note Document
and the holder or holders of Subordinated Debt or any trustee or agent on its or
their behalf delivers a Warning Notice to the Holder.

(vii) the Company, pursuant to or within the meaning of any Bankruptcy Law:

(A) commences a voluntary case or proceeding;

(B) consents to the entry of an order for relief against it in an involuntary
case or proceeding;

(C) consents to the appointment of a Custodian of it or for all or substantially
all of its property; or

(D) makes a general assignment for the benefit of its creditors; or

(viii) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

(A) is for relief against the Company in an involuntary case or proceeding;

(B) appoints a Custodian of the Company or for all or substantially all of the
property of the Company; or

(C) orders the liquidation of the Company;

and in each case the order or decree remains unstayed and in effect for
60 consecutive days.

The term “Bankruptcy Law” means Title 11 of the United States Code (or any
successor thereto) or any similar federal or state law for the relief of
debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.

(b) If an Event of Default (other than an Event of Default specified in
subsections (a)(vii) and (a)(viii) above) occurs and is continuing, the Holder
may, by notice to the Company, declare all unpaid principal of the Note
outstanding on the date of acceleration (if not then due and payable) to be due
and payable immediately. If an Event of Default specified in subsections
(a)(vii) and (a)(viii) above with respect to the Company occurs, all unpaid
principal of the Note then outstanding shall become due and payable

 

26

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immediately without any declaration or other act on the part of the Holder.
After an acceleration, but before a judgment or decree relating thereto by any
federal or state court of competent jurisdiction has been entered or issued, the
Holder by notice to the Company may rescind an acceleration and its consequences
if (i) all existing Events of Default, other than the nonpayment of the
principal of the Note which has become due solely by such declaration of
acceleration, have been cured or waived; (ii) to the extent the payment of such
interest is lawful, interest (calculated at the rate per annum borne by this
Note) on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid;
and (iii) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction. No such rescission shall affect any subsequent
default or impair any right consequent thereto.

14. NO RECOURSE AGAINST OTHERS

A director, officer, employee or shareholder, as such, of the Company shall not
have any liability for any obligations of the Company under this Note nor for
any claim based on, in respect of or by reason of such obligations or their
creation. The Holder, by accepting this Note, waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of this Note.

15. NOTICES

Unless otherwise provided, any notice required or permitted under this Note
shall be given in writing and shall be deemed effectively given as hereinafter
described (i) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (ii) if given by telex or telecopier, then such notice
shall be deemed given upon receipt of confirmation of complete transmittal,
(iii) if given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by
an internationally recognized overnight air courier, then such notice shall be
deemed given one business day after delivery to such carrier. All notices shall
be addressed to the party to be notified at the address as follows, or at such
other address as such party may designate by ten days’ advance written notice to
the other party:

 

27

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If to the Company:    Monogram Biosciences Inc.    345 Oyster Point Boulevard   
South San Francisco, California 94080    Attention: Chief Executive Officer   
Facsimile No: +1 650-635-1111 with a copy to:    Attention: General Counsel   
Facsimile No.: +1 650-635-1111 If to the Holder:    Pfizer Inc.    235 East 42nd
Street    New York, New York 10017    Attention: President, Pfizer Human Health
   Facsimile No.: +1 212-808-8652 with a copy to:   

Attention: Vice Chairman, Executive Vice President

and General Counsel

   Facsimile No.: +1 212-808-8924

16. GOVERNING LAW

This Note shall be governed by, and construed in accordance with, the laws of
the State of New York, without regard to principles of conflicts of law.

 

28

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17. SUBMISSION TO JURISDICTION

(a) Submission to Jurisdiction. In accordance with Section 5-1402 of the New
York General Obligations Law, the Company hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Note, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the holder may otherwise
have to bring any action or proceeding relating to this Note against the Company
or its properties in the courts of any jurisdiction.

(b) Waiver of Venue and Inconvenient Forum. The Company hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Note in any
court referred to in paragraph (a) of this Section 17. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

(c) Service of Process. Each Obligor irrevocably consents to service of process
in the manner provided for notices in Section 15. This Section 17(c) does not
affect any other method of service allowed by law. Nothing in this Note will
affect the right of any party to this Note to serve process in any other manner
permitted by law.

(d) WAIVER OF JURY TRIAL EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS NOTE
OR ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY or
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 17.

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

MONOGRAM BIOSCIENCES, INC. By:  

 

Name:   Title:  

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CONVERSION NOTICE

To convert this Note into Common Stock of the Company, check the box:    ¨

To convert only part of this Note, state the principal amount to be converted
(must be $1,000 or an integral multiple of $1,000): $            .

If you want the stock certificate made out in another person’s name, fill in the
form below:

 

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

 

 

(Print or type assignee’s name, address and zip code)

 

      Your Signature: Date:    

 

 

 

 

 

     

(Sign exactly as your name appears on the

     

other side of this Note)