Exhibit 10.43

 

[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

CREDIT AND SECURITY AGREEMENT

THIS CREDIT AND SECURITY AGREEMENT (as the same may be amended, supplemented,
restated or otherwise modified from time to time, the “Agreement”) is dated as
of September 27, 2006 by and among MONOGRAM BIOSCIENCES, INC., a Delaware
corporation, (“Monogram”, and together with any additional Borrower that may
hereafter be added to this Agreement each individually a “Borrower” and
collectively as “Borrowers”), MERRILL LYNCH CAPITAL, a division of Merrill Lynch
Business Financial Services Inc., individually as a Lender, and as Agent, and
the financial institutions or other entities from time to time parties hereto,
each as a Lender.

RECITALS

Borrowers have requested that Agent and Lenders make available to Borrowers
term, revolving and/or letter of credit financing facilities as described
herein. Agent and Lenders are willing to extend such credit to Borrowers under
the terms and conditions herein set forth.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Borrowers, Lenders and Agent agree as follows:

ARTICLE 1 - DEFINITIONS

 

  Section 1.1 Certain Defined Terms.

The following terms have the following meanings:

“Account Debtor” means “account debtor”, as defined in Article 9 of the UCC, and
any other obligor in respect of an Account.

“Accounts” means collectively (a) any right to payment of a monetary obligation,
whether or not earned by performance, (b) without duplication, any “account” (as
defined in the UCC), any accounts receivable (whether in the form of payments
for services rendered or goods sold, rents, license fees or otherwise), any
“health-care-insurance receivables” (as defined in the UCC), any “payment
intangibles” (as defined in the UCC) and all other rights to payment and/or
reimbursement of every kind and description, whether or not earned by
performance, (c) all accounts, “general intangibles” (as defined in the UCC),
Intellectual Property, rights, remedies, Guarantees, “supporting obligations”
(as defined in the UCC), “letter-of-credit rights” (as defined in the UCC) and
security interests in respect of the foregoing, all rights of enforcement and
collection, all books and records evidencing or related to the foregoing, and
all rights under the Financing Documents in respect of the foregoing, (d) all
information and data compiled or derived by any Borrower or to which any
Borrower is entitled in respect of or related to the foregoing, and (e) all
proceeds of any of the foregoing.

“Agent” means Merrill Lynch, in its capacity as Agent for the Lenders hereunder,
as such capacity is established in, and subject to the provisions of,
Article 10, and the successors of Merrill Lynch in such capacity.

“Affiliate” means with respect to any Person (a) any Person that directly or
indirectly controls such Person, (b) any Person which is controlled by or is
under common control with such controlling Person, and (c) each of such Person’s
(other than, with respect to any Lender, any Lender’s) officers or directors (or
Persons functioning in substantially similar roles) and the spouses, parents,
descendants and siblings of such officers, directors or other Persons. As used
in this definition, the term “control” of a Person means the possession,
directly or indirectly, of the

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power to vote fifty percent (50%) or more of any class of voting securities of
such Person or to direct or cause the direction of the management or policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.

“Affiliated Financing Document” means any credit, loan, letter of credit or
related documents which are, by their terms and by the terms of this Agreement,
cross-defaulted and/or cross-collateralized with the Financing Documents, and
for which a Credit Party hereunder is liable or contingently liable for payment
to Agent or any Lender as security for which a Credit Party hereunder has
pledged, assigned or subjected any assets to Agent or any Lender.

“Allowed Distribution” has the meaning set forth in Section 5.3.

“Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering,
including Executive Order No. 13224 (effective September 24, 2001), the USA
PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the
Laws administered by OFAC.

“Assignment Agreement” means an agreement pursuant to which any Lender shall
assign any or all of its interests as a Lender hereunder pursuant to
Section 11.6.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as the same may be amended, modified or supplemented from time to
time, and any successor statute thereto.

“Base Rate” means a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) equal to (a) the rate of interest which is identified and
normally published by Bloomberg Professional Service Page BBAM 1 as the offered
rate for loans in United States dollars for the period of one (1) month under
the caption British Bankers Association LIBOR Rates as of 11:00 a.m. (London
time) as adjusted on a daily basis and effective on the first full Business Day
after each such day (unless such date is not a Business Day, in which event the
next succeeding Business Day will be used); divided by (b) the sum of one minus
the daily average during the preceding month of the aggregate maximum reserve
requirement (expressed as a decimal) then imposed under Regulation D of the
Board of Governors of the Federal Reserve System (or any successor thereto) for
“Eurocurrency Liabilities” (as defined therein). If Bloomberg Professional
Service (or another nationally-recognized rate reporting source acceptable to
Agent) no longer reports the LIBOR or Agent determines in good faith that the
rate so reported no longer accurately reflects the rate available to Agent in
the London Interbank Market or if such index no longer exists or if Page BBAM 1
no longer exists or accurately reflects the rate available to Agent in the
London Interbank Market, Agent may select a comparable replacement index or
replacement page, as the case may be.

“Base Rate Margin” means 4.75% per annum, with respect to the Revolving Loans
and other Obligations.

“Blocked Person” means any Person: (a) listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224, (b) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224, (c) a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person
that commits, threatens or conspires to commit or supports “terrorism” as
defined in Executive Order No. 13224, or (e) a Person that is named a “specially
designated national” or “blocked person” on the most current list published by
OFAC or other similar list.

“Borrowers” mean, collectively, Monogram Biosciences, Inc. and any additional
borrower that may hereafter be added by written amendment to this Agreement.

“Borrower’s Account” means, with respect to any Borrower, the account specified
on the signature pages hereof below such Borrower’s name into which Loans for
the benefit of such Borrower shall, absent other instructions, be made, or such
other account as Borrower may specify by written notice to Agent.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Credit and Security Agreement Page 2

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“Borrowing Base” means:

(a) the product of (i) eighty-five percent (85.0%) multiplied by (ii) the
aggregate net amount at such time of the Eligible Accounts; minus

(b) the amount of any reserves and/or adjustments provided for in this
Agreement.

“Borrowing Base Certificate” means a certificate, duly executed by a Responsible
Officer of Borrower, appropriately completed and substantially in the form of
Exhibit C hereto.

“Business Day” means any day except a Saturday, Sunday or other day on which
either the New York Stock Exchange is closed, or on which commercial banks in
Chicago and New York City are authorized by law to close.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.

“Change in Control” means any “Change of Control”, “Change in Control”, or terms
of similar import under any Pfizer Debt Document as such terms are defined as of
the date hereof.

“Closing Date” means the date of this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” means all property described on Schedule 8.1 hereto.

“Commitment Annex” means Annex A to this Agreement.

“Commitment Expiry Date” means March 27, 2010.

“Compliance Certificate” means a certificate, duly executed by a Responsible
Officer of Borrower, appropriately completed and substantially in the form of
Exhibit B hereto.

“Consolidated Subsidiary” means at any date any Subsidiary or other Person the
accounts of which would be consolidated with those of a Borrower (or any other
Person, as the context may require hereunder) in its consolidated financial
statements if such statements were prepared as of such date.

“Contingent Obligation” means, with respect to any Person, any direct or
indirect liability of such Person: (a) with respect to any debt, lease, dividend
or other obligation of another Person (a “Third Party Obligation”) if the
purpose or intent of such Person incurring such liability, or the effect
thereof, is to provide assurance to the obligee of such Third Party Obligation
that such Third Party Obligation will be paid or discharged, or that any
agreement relating thereto will be complied with, or that any holder of such
Third Party Obligation will be protected, in whole or in part, against loss with
respect thereto; (b) with respect to any undrawn portion of any letter of credit
issued for the account of such Person or as to which such Person is otherwise
liable for the reimbursement of any drawing; (c) under any swap contract or
other derivative obligation; (d) to make take-or-pay or similar payments if
required regardless of nonperformance by any other party or parties to an
agreement; or (e) for any obligations of another Person pursuant to any
Guarantee or pursuant to any agreement to purchase, repurchase or otherwise
acquire any obligation or any property constituting security therefor, to
provide funds for the payment or discharge of such obligation or to preserve the
solvency, financial condition or level of income of another Person. The amount
of any Contingent Obligation shall be equal to the amount of the obligation so
Guaranteed or otherwise supported or, if not a fixed and determinable amount,
the maximum amount so Guaranteed or otherwise supported.

“Credit Exposure” means any period of time during which the Revolving Loan
Commitment is outstanding or any Loan, Reimbursement Obligation or other
Obligation remains unpaid or any Letter of Credit or Support Agreement remains
outstanding; provided, however, that no Credit Exposure shall be deemed to exist
solely due to the existence of contingent indemnification liability (other than
liability in respect of the Affiliated Financing Documents), absent the
assertion of a claim with respect thereto.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Credit and Security Agreement Page 3

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“Credit Party” means any Guarantor under a Guarantee of the Obligations or any
part thereof, any Borrower and any Subsidiary of any Borrower, whether now
existing or hereafter acquired or formed; and “Credit Parties” means all such
Persons, collectively.

“Debt” of a Person means at any date, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising and paid on a timely basis and in the Ordinary
Course of Business, (d) all capital leases of such Person, (e) all
non-contingent obligations of such Person to reimburse any bank or other Person
in respect of amounts paid under a letter of credit, banker’s acceptance or
similar instrument, (f) all equity securities of such Person subject to
repurchase or redemption otherwise than at the sole option of such Person,
(g) all obligations secured by a Lien on any asset of such Person, whether or
not such obligation is otherwise an obligation of such Person, (h) ”earnouts”,
purchase price adjustments, profit sharing arrangements, deferred purchase money
amounts and similar payment obligations or continuing obligations of any nature
of such Person arising out of purchase and sale contracts; (i) all Debt of
others Guaranteed by such Person; (j) off-balance sheet liabilities and/or
pension plan liabilities; (k) obligations arising under non-compete agreements;
(l) obligations arising under bonus, deferred compensation, incentive
compensation or similar arrangements, other than those arising in the Ordinary
Course of Business; and (m) Contingent Obligations. Without duplication of any
of the foregoing, Debt of Borrowers shall include any and all Loans and Letter
of Credit Liabilities.

“Default” means any condition or event which with the giving of notice or lapse
of time or both would, unless cured or waived, become an Event of Default.

“Deposit Account” means a “deposit account” (as defined in Article 9 of the
UCC), an investment account, or other account in which funds are held or
invested for credit to or for the benefit of any Borrower.

“Deposit Account Control Agreement” means an agreement, in form and substance
satisfactory to Agent, among Agent, a Borrower and each bank in which such
Borrower maintains a Deposit Account, which agreement provides that (a) such
bank shall comply with instructions originated by Agent directing disposition of
the funds in such Deposit Account without further consent by the applicable
Borrower, and (b) such bank shall agree that it shall have no Lien on, or right
of setoff or recoupment against, such Deposit Account or the contents thereof,
other than in respect of commercially reasonable fees and other items, in each
such case expressly consented to by Agent, and containing such other terms and
conditions as Agent may require, including as to any such agreement pertaining
to any Lockbox Account, providing that such bank shall wire, or otherwise
transfer, in immediately available funds, on a daily basis to the Payment
Account all funds received or deposited into such Lockbox or Lockbox Account.

“EBITDA” has the meaning provided in the Compliance Certificate.

“Eligible Accounts” means, subject to the criteria below, an account receivable
of a Borrower, which was generated in the Ordinary Course of Business, which was
generated originally in the name of the Borrower and not acquired via assignment
or otherwise, and which Agent, in its good faith credit judgment and discretion,
deems to be an Eligible Account. The net amount of Eligible Accounts at any time
shall be the face amount of such Eligible Accounts as originally billed minus
all cash collections and other proceeds of such Account received from or on
behalf of the Account Debtor thereunder as of such date and any and all returns,
rebates, discounts (which may, at Agent’s option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time. Without limiting the generality of the
foregoing, no Account shall be an Eligible Account if:

(a) the Account remains unpaid more than one hundred twenty (120) days past the
claim or invoice date (but in no event more than one hundred thirty-five
(135) days after the applicable goods or services have been rendered or
delivered);

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Credit and Security Agreement Page 4

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(b) the Account is subject to any defense, set-off, recoupment, counterclaim,
deduction, discount, credit, chargeback, freight claim, allowance, or adjustment
of any kind (but only to the extent of such defense, set-off, recoupment,
counterclaim, deduction, discount, credit, chargeback, freight claim, allowance,
or adjustment), or the applicable Borrower is not able to bring suit or
otherwise enforce its remedies against the Account Debtor through judicial
process;

(c) if the Account arises from the sale of goods, any part of any goods the sale
of which has given rise to the Account has been returned, rejected, lost, or
damaged (but only to the extent that such goods have been so returned, rejected,
lost or damaged);

(d) if the Account arises from the sale of goods, the sale was not an absolute,
bona fide sale, or the sale was made on consignment or on approval or on a
sale-or-return or bill-and-hold or progress billing basis, or the sale was made
subject to any other repurchase or return agreement, or the goods have not been
shipped to the Account Debtor or its designee or the sale was not made in
compliance with applicable Laws;

(e) if the Account arises from the performance of services, the services have
not actually been performed or the services were undertaken in violation of any
law or the Account represents a progress billing for which services have not
been fully and completely rendered;

(f) the Account is subject to a Lien other than a Permitted Lien, or Agent does
not have a Lien on such Account;

(g) the Account is evidenced by Chattel Paper or an Instrument of any kind, or
has been reduced to judgment, unless such Chattel Paper or Instrument has been
delivered to Agent;

(h) the Account Debtor is an Affiliate or Subsidiary of a Credit Party, or if
the Account Debtor holds any Debt of a Credit Party (but only to the extent of
such Debt);

(i) except for Medicaid Accounts owing from the Medicaid department of the State
of New York, more than fifty percent (50%) of the aggregate balance of all
Accounts owing from the Account Debtor obligated on the Account are outstanding
more than one hundred twenty (120) days past their invoice date;

(j) without limiting the provisions of clause (j) above, fifty percent (50%) or
more of the aggregate unpaid Accounts from the Account Debtor obligated on the
Account are not deemed Eligible Accounts under this Agreement for any reason;

(k) the total unpaid Accounts of the Account Debtor obligated on the Account
exceed twenty percent (20%) of the net amount of all Eligible Accounts owing
from all Account Debtors, and fifty percent (50%) with respect to Pfizer (but
only the amount of the Accounts of such Account Debtor exceeding such percentage
limitation shall be considered ineligible), provided, however, Accounts owing
from the Medicaid department of the State of New York shall not be subject to
the concentration limits set forth in this subsection (k);

(l) any covenant, representation or warranty contained in the Financing
Documents with respect to such Account has been breached in any respect;

(m) the Account is unbilled or has not been invoiced to the Account Debtor in
accordance with the procedures and requirements of the applicable Account
Debtor;

(n) the Account is an obligation of an Account Debtor that is the Federal (or
local) government or a political subdivision thereof, unless Agent has agreed to
the contrary in writing and Agent has received from the Account Debtor the
acknowledgement of Agent’s notice of assignment of such obligation pursuant to
this Agreement;

(o) the Account is an obligation of an Account Debtor that has suspended
business, made a general

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Credit and Security Agreement Page 5

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assignment for the benefit of creditors, is unable to pay its debts as they
become due or as to which a petition has been filed (voluntary or involuntary)
under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or the Account is an Account as to which any facts, events or
occurrences exist which could reasonably be expected to impair the validity,
enforceability or collectibility of such Account or reduce the amount payable or
delay payment thereunder;

(p) except for Accounts owing from the Account Debtors listed on Schedule 1.1,
the Account Debtor has its principal place of business or executive office
outside the United States or the Account is payable in a currency other than
United States dollars;

(q) the Account Debtor is an individual;

(r) the Borrower owning such Account has not signed and delivered to Agent
notices, in substantially the form of Exhibit A attached hereto, directing the
Account Debtors (to the extent such Account Debtors are not already making
payments to the Lockbox Accounts) to make payment to the applicable Lockbox
Account; or

(s) the Account or Account Debtor fails to meet such other specifications and
requirements which may from time to time be established by Agent in its good
faith credit judgment and discretion.

“Environmental Laws” means any and all Laws relating to the environment or the
effect of the environment on human health or to emissions, discharges or
releases of pollutants, contaminants, Hazardous Materials or wastes into the
environment, including ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, Hazardous
Materials or wastes or the clean-up or other remediation thereof.

“ERISA” means the Employee Retirement Income Security Act of 1974, as the same
may be amended, modified or supplemented from time to time, and any successor
statute thereto, and any and all rules or regulations promulgated from time to
time thereunder.

“ETag Products” means Borrower’s oncology products, including, without
limitation, its ETag products, for the purpose of pharmaceutical customer use in
the development of products designed to be used in the treatment of cancer.

“Event of Default” has the meaning set forth in Section 9.1.

“Financing Documents” means this Agreement, any Notes, any subordination or
intercreditor agreement pursuant to which any Debt and/or any Liens securing
such Debt is subordinated to all or any portion of the Obligations and all other
documents, instruments and agreements contemplated herein or thereby and
heretofore executed, executed concurrently herewith or executed at any time and
from time to time hereafter, as any or all of the same may be amended,
supplemented, restated or otherwise modified from time to time.

“Fixed Charge Coverage Ratio” has the meaning provided in the Compliance
Certificate.

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the United States
accounting profession), which are applicable to the circumstances as of the date
of determination.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any agency, department or Person exercising
executive, legislative, judicial, regulatory or Agent functions of or pertaining
to government and any corporation or other Person owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing, whether
domestic or foreign.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Credit and Security Agreement Page 6

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“Guarantee” by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Debt or other obligation of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), or
(b) entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part), provided, however, that
the term Guarantee shall not include endorsements for collection or deposit in
the Ordinary Course of Business. The term “Guarantee” used as a verb has a
corresponding meaning.

“Guarantor” means any Credit Party that has executed or delivered, or shall in
the future execute or deliver, any Guarantee of any portion of the Obligations.

“Hazardous Materials” means (a) any “hazardous substance” as defined in CERCLA,
(b) any “hazardous waste” as defined by the Resource Conservation and Recovery
Act, (c) asbestos, (d) polychlorinated biphenyls, (e) petroleum, its
derivatives, by-products and other hydrocarbons, (f) mold, and (g) any other
pollutant, toxic, radioactive, caustic or otherwise hazardous substance
regulated under Environmental Laws.

“HIV Testing Business” means the performance by Monogram in its clinical
laboratory facility or at another location on behalf of Monogram, of Monogram’s
proprietary in-house PhenoSense(tm) HIV, PhenoSense GT(tm), GeneSeq(tm) HIV, and
Entry and Co-receptor Tropism assays and any assays that may be performed by
Monogram after the date hereof, for the purpose of HIV virology diagnostic
testing with respect to patient blood samples and for the purpose of
pharmaceutical customer use in the development of products designed to be used
in the treatment of HIV.

“Intellectual Property” means, with respect to any Person, all Patents,
Trademarks, trade names, trade styles, trade dress, service marks, logos and
other business identifiers, Copyrights, technology, know-how and processes,
computer hardware and software and all applications and licenses therefor, used
in or necessary for the conduct of business by such Person.

“Inventory” has the meaning given in the UCC.

“Investment” means any investment in any Person, whether by means of acquiring
(whether for cash, property, services, securities or otherwise) or holding
securities, capital contributions, loans, time deposits, advances, Guarantees or
otherwise. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect thereto.

“Investor” means any holder of equity securities of Borrower.

“Laws” means any and all federal, state, local and foreign statutes, laws,
judicial decisions, regulations, guidances, guidelines, ordinances, rules,
judgments, orders, decrees, codes, plans, injunctions, permits, concessions,
grants, franchises, governmental agreements and governmental restrictions,
whether now or hereafter in effect, which are applicable to any Credit Party in
any particular circumstance. “Laws” includes, without limitation, Specific Laws
and Environmental Laws.

“LC Issuer” means one or more banks, trust companies or other Persons in each
case expressly identified by Agent from time to time, in its sole discretion, as
an LC Issuer for purposes of issuing one or more Letters of Credit hereunder.
Without limitation of Agent’s discretion to identify any Person as an LC Issuer,
no Person shall be designated as an LC Issuer unless such Person maintains
reporting systems acceptable to Agent with respect to letter of credit exposure
and agrees to provide regular reporting to Agent satisfactory to it with respect
to such exposure.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Credit and Security Agreement Page 7

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“Lender” means each of (a) Merrill Lynch, (b) each other Person party hereto in
its capacity as a lender, (c) each other Person that becomes a party hereto as
Lender pursuant to Section 11.6, and (d) the respective successors of all of the
foregoing, and “Lenders” means all of the foregoing.

“Lender Letter of Credit” means a Letter of Credit issued by an LC Issuer that
is also, at the time of issuance of such Letter of Credit, a Lender.

“Letter of Credit” means a standby letter of credit issued for the account of
any Borrower by an LC Issuer which expires by its terms within one year after
the date of issuance and in any event at least thirty (30) days prior to the
Commitment Expiry Date. Notwithstanding the foregoing, a Letter of Credit may
provide for automatic extensions of its expiry date for one or more successive
one (1) year periods provided that the LC Issuer that issued such Letter of
Credit has the right to terminate such Letter of Credit on each such annual
expiration date and no renewal term may extend the term of the Letter of Credit
to a date that is later than the thirtieth (30th) day prior to the Commitment
Expiry Date.

“Letter of Credit Liabilities” means, at any time of calculation, the sum of
(a) without duplication, the amount then available for drawing under all
outstanding Lender Letters of Credit and all Supported Letters of Credit, in
each case without regard to whether any conditions to drawing thereunder can
then be met, plus (b) without duplication, the aggregate unpaid amount of all
reimbursement obligations in respect of previous drawings made under all such
Lender Letters of Credit and Supported Letters of Credit.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset. For the purposes of this Agreement and the other
Financing Documents, any Borrower or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.

“Litigation” means any action, suit or proceeding before any court, mediator,
arbitrator or Governmental Authority.

“Loan Account” has the meaning set forth in Section 2.5(b).

“Loans” means the Revolving Loans.

“Lockbox” has the meaning set forth in Section 2.9.

“Lockbox Account” means an account or accounts maintained at the Lockbox Bank
into which collections of Accounts are paid.

“Lockbox Bank” has the meaning set forth in Section 2.9.

“Material Adverse Effect” means, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related (a) a material
adverse change in, or a material adverse effect upon, any of (i) the
(financial), condition, business, or properties of the Borrower or of the
Borrower and the Other Credit Parties taken as a whole, (ii) the rights and
remedies of Agent or Lenders under any Financing Document, or the ability of any
Credit Party to perform any of its obligations under any Financing Document to
which it is a party, (iii) the legality, validity or enforceability of any
Financing Document, or (iv) the existence, perfection or priority of any
security interest granted in any material Collateral.

“Material Contracts” has the meaning set forth in Section 3.15.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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“Merrill Lynch” means Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., and its successors.

“Minimum Liquidity” means the sum of Revolving Loan Availability plus cash which
are (a) owned by Borrower, (b) not subject to any Lien other than a Lien in
favor of Lender, and (c) not pledged to or held by Lender to secure a specified
Obligation, and (d) not pledged to or held by Lender as an escrow or reserve
required under this Agreement.

“Non-Funding Lender” means a Lender that has delivered a notice to the Agent
stating that such Lender shall cease making Revolving Loans due to the
non-satisfaction of one or more conditions set forth in Article 7, and
specifying any such non-satisfied conditions; provided, however, that any Lender
delivering any such notice shall be a Non-Funding Lender solely over the period
commencing on the Business Day following receipt by Agent of such notice, and
terminating on such date that such Lender has either revoked the effectiveness
of such notice or acknowledged to Agent the satisfaction of the condition
specified in such notice.

“Notes” means the Revolving Loan Notes.

“Notice of Borrowing” means a notice of a Responsible Officer of Borrower,
appropriately completed and substantially in the form of Exhibit D hereto.

“Notice of LC Credit Event” means a notice from a Responsible Officer of
Borrower to Agent with respect to any issuance, increase or extension of a
Letter of Credit specifying: (a) the date of issuance or increase of a Letter of
Credit; (b) the identity of the LC Issuer with respect to such Letter of Credit,
(c) the expiry date of such Letter of Credit; (d) the proposed terms of such
Letter of Credit, including the face amount; and (e) the transactions that are
to be supported or financed with such Letter of Credit or increase thereof.

“Obligations” means all obligations, liabilities and indebtedness (monetary
(including post-petition interest, whether or not allowed) or otherwise) of each
Credit Party under this Agreement or any other Financing Document, in each case
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due. In addition to,
but without duplication of, the foregoing, the Obligations shall include,
without limitation, all obligations, liabilities and indebtedness arising from
or in connection with (a) all Support Agreements, and (b) all Lender Letters of
Credit.

“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.

“OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.

“Oncology Testing Business” means the performance by Borrower in its clinical
laboratory facility or at another location on behalf of Borrower, of Borrower’s
ETag assays, for the purpose of oncological diagnostic testing with respect to
human tumor samples.

“Operative Documents” means the Financing Documents and any documents effecting
any purchase or sale or other transaction that is closing contemporaneously with
the closing of the financing under this Agreement.

“Ordinary Course of Business” means, in respect of any transaction involving any
Credit Party, the ordinary course of such Credit Party’s business, as conducted
by such Credit Party in accordance with past practices.

“Orderly Liquidation Value” means the net amount (after all costs of sale),
expressed in terms of money, which Agent, in its good faith discretion,
estimates can be realized from a sale, as of a specific date, given a reasonable
period to find a purchaser(s), with the seller being compelled to sell on an
as-is/where-is basis.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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“Organizational Documents” means, with respect to any Person other than a
natural person, the documents by which such Person was organized (such as a
certificate of incorporation, certificate of limited partnership or articles of
organization, and including, without limitation, any certificates of designation
for preferred stock or other forms of preferred equity) and which relate to the
internal governance of such Person (such as by-laws, a partnership agreement or
an operating, limited liability or members agreement).

“Payment Account” means the account specified on the signature pages hereof into
which all payments by or on behalf of each Borrower to Agent under the Financing
Documents shall be made, or such other account as Agent shall from time to time
specify by notice to Borrower.

“PBGC” means the Pension Benefit Guaranty Corporation and any Person succeeding
to any or all of its functions under ERISA.

“Pension Plan” means any ERISA Plan that is subject to Section 412 of the Code
or Title IV of ERISA.

“Permits” means all governmental licenses, authorizations, provider numbers,
supplier numbers, registrations, permits, certificates, franchises,
qualifications, accreditations, consents and approvals required under all
applicable Laws and required in order to carry on its business as now conducted.

“Permitted Affiliate” means with respect to any Person (a) any Person that
directly or indirectly controls such Person, and (b) any Person which is
controlled by or is under common control with such controlling Person. As used
in this definition, the term “control” of a Person means the possession,
directly or indirectly, of the power to vote eighty percent (80%) or more of any
class of voting securities of such Person or to direct or cause the direction of
the management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

“Permitted Contest” means, with respect to any tax obligation or other
obligation allegedly or potentially owing from any Borrower to any governmental
tax authority or other third party, a contest maintained in good faith by
appropriate proceedings promptly instituted and diligently conducted and with
respect to which such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made on the books and
records and financial statements of the applicable Borrower(s); provided,
however, that (a) compliance with the obligation that is the subject of such
contest is effectively stayed during such challenge; (b) Borrowers’ title to,
and its right to use, the Collateral is not adversely affected thereby and
Agent’s Lien and priority on the Collateral are not adversely affected, altered
or impaired thereby; (c) Borrowers have given prior written notice to Agent of
Borrowers’ intent to so contest the obligation; (d) in the case of real estate
taxes or assessments or mechanic’s, workmen’s, materialmen’s or other like Liens
with respect to any real estate which is part of the Collateral, Borrowers have
obtained an endorsement, in form and substance satisfactory to Agent, to the
loan policy of title insurance issued to Agent insuring over any Lien created by
such obligation, or Borrowers have deposited with Agent a bond or other security
satisfactory to Agent, in its reasonable discretion, against loss or injury by
reason of such contest or the non-payment of such obligation or charge (and if
such security is cash, Agent may, but shall not be obligated to, deposit the
same in an interest-bearing account and interest accrued thereon, if any, shall
be deemed to constitute a part of such security for purposes of this Agreement,
but Agent (i) makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue thereon and shall have no liability in
connection therewith and (ii) shall not be deemed to be a trustee or fiduciary
with respect to its receipt of any such security and any such security may be
commingled with other monies of Agent); (e) the Collateral or any part thereof
or any interest therein shall not be in any danger of being sold, forfeited or
lost by reason of such contest by Borrowers; (f) Borrowers have given Agent
notice of the commencement of such contest and upon request by Agent, from time
to time, notice of the status of such contest by Borrowers and/or confirmation
of the continuing satisfaction of this definition; and (g) upon a final
determination of such contest, Borrowers shall promptly comply with the
requirements thereof.

“Permitted Indebtedness” means: (a) Borrower’s Debt to Agent and each Lender
under this Agreement and the other Financing Documents; (b) Pfizer Debt;
(c) unsecured Debt to trade creditors incurred in the ordinary course of
business; (d) Debt incurred as a result of endorsing negotiable instruments
received in the ordinary course

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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of business; (e) purchase money Debt not to exceed $5,000,000 incurred in 2006,
$6,000,000 incurred in 2007, $8,000,000 incurred in 2008 and $10,000,000
incurred in 2009 (whether in the form of a loan or a lease) used solely to
acquire equipment used in the ordinary course of business and secured only by
such equipment; (f) other Debt not to exceed $250,000 at any time; (g) Debt
existing on the date of this Agreement and described on Schedule 5.1;
(h) letters of credit issued by Silicon Valley Bank (or its successors or
assigns) for the account of a Borrower in an aggregate face amount not to exceed
$700,000; and (i) any refinancings, extensions, or amendments to such Debt,
provided that the principal amount thereof is not increased or the terms thereof
are not modified to impose more burdensome terms upon Borrower or its
Subsidiary, as the case may be.

“Permitted Investments” means:

(a) Investments shown on Schedule 5.7 and existing on the Closing Date;

(b) (i) cash equivalents, and (ii) any similar short term Investments permitted
by Borrowers’ investment policy, as amended from time to time, provided that
such investment policy (and any such amendment thereto) has been approved by
Agent;

(c) Investments consisting of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
Borrowers;

(d) Investments consisting of (i) travel advances and employee relocation loans
and other employee loans and advances in the ordinary course of business, and
(ii) loans to employees, officers or directors relating to the purchase of
equity securities of Borrowers or their Subsidiaries pursuant to employee stock
purchase plans or agreements approved by Borrowers’ Board of Directors (or other
governing body);

(e) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of business;

(f) Investments consisting of notes receivable of, or prepaid royalties and
other credit extensions, to customers and suppliers who are not Affiliates, in
the ordinary course of business; provided that this paragraph (f) shall not
apply to Investments of Borrowers in any Subsidiary.

(g) Investments consisting of deposit accounts in which Agent has a security
interest;

(h) Investments consisting of the acquisition of all or substantially all of the
assets or capital stock of another Person provided that, after giving effect to
such acquisition, no Event of Default has occurred and is continuing or would
exist after giving effect to such acquisition, and such acquisition would not
result in a decrease of more than twenty percent (20%) of Tangible Net Worth of
the Borrowers; (i) Investments in domestic subsidiaries which are Borrowers
hereunder; and

(i) Other Investments in an amount not exceeding $1,250,000 in the aggregate.

“Permitted Liens” means: (a) Liens on Collateral, other than Accounts, for taxes
or other governmental charges not at the time delinquent or thereafter payable
without penalty or the subject of a Permitted Contest; (b) attachments, appeal
bonds, judgments and other similar Liens on Collateral other than Accounts, for
sums not exceeding $250,000 in the aggregate arising in connection with court
proceedings; provided, however, that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are the subject of a
Permitted Contest; (c) Liens in favor of Agent under the Financing Documents;
(d) Liens on Collateral other than Accounts existing on the date hereof and set
forth on Schedule 5.2; (e) Liens in favor of other financial institutions
arising in connection with Borrowers’ deposit and/or securities accounts held at
such institutions, provided that Agent has a perfected security interest in the
amounts held in such deposit and/or securities accounts; (f) Liens on cash
collateral granted in respect of any letters of credit permitted under subpart
(h) of the definition of Permitted Indebtedness; (g) Liens on cash collateral
granted to secure performance bonds and similar assurances of performance
entered into the ordinary course of business; and (g) any Lien on equipment
securing Debt permitted under subpart (e) of the definition of Permitted
Indebtedness.

“Permitted Transfers” means the collective reference to one or more transfers,
via a sale and not by pledge or hypothecation, which, in the aggregate during
the term of this Agreement, result in a transfer of legal or beneficial
ownership or control of up to 20% of the direct or indirect ownership or voting
interests in the Borrowers or any Guarantor to a Person, (a) purchasing such
ownership interest in a public offering registered with the Securities and
Exchange Commission or (b) other than a Blocked Person, that is (i) a venture
capital investor so long as Borrowers have given Agent at least fifteen
(15) days prior written notice of the identity of the assignees, together with
such information as Agent shall deem necessary to confirm that such assignee is
not a Blocked Person or (ii) at

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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the time of such transfer, already a holder of direct or indirect ownership or
voting interests in the Borrowers. Notwithstanding the limitations set forth in
the foregoing sentence (a) any holder of direct or indirect ownership or voting
interests in the Borrowers which is a partnership may transfer such holder’s
rights to such holder’s constituent partners, retired partners (including
spouses, ancestors, lineal descendants and siblings of such partners or spouses
who acquire such interests by gift, will or intestate succession) or their
respective Affiliates, (b) any holder of direct or indirect ownership or voting
interests in the Borrowers which is a limited liability company may transfer
such holder’s right to such holder’s members, (c) any holder of direct or
indirect ownership or voting interests in the Borrowers which is a natural
person may transfer such holder’s rights to any immediate family member or to
any trust created for the benefit or such holder or his or her immediate family
members, and (d) any holder of direct or indirect ownership or voting interests
in the Borrowers may transfer such holder’s rights to a Permitted Affiliate of
such holder (provided that no transfer of any given interest pursuant to this
subpart may be made more often than once per twelve (12) month period), subject
in each case to such transferee’s agreeing in writing to be bound by the rights
and restrictions of this Agreement; and any such transfer described in the
foregoing clauses (a) through (d) shall be deemed a “Permitted Transfer” and
shall not count toward the 20% limitation described above.

“Person” means any natural person, corporation, limited liability company,
professional association, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, and
any Governmental Authority.

“Pfizer” means Pfizer, Inc.

“Pfizer Debt” means any Debt of any Borrower owing to Pfizer.

“Pfizer Debt Documents” means any documents evidencing and/or securing the
Pfizer Debt, including, without limitation, that certain 3% Senior Secured
Convertible Note Due May 19, 2010 and that certain Security Agreement between
Borrower and Pfizer dated as of May 17, 2006.

“Pro Rata Share” means (a) with respect to a Lender’s obligation to make
Revolving Loans, such Lender’s right to receive payments of principal and
interest with respect thereto, such Lender’s right to receive the unused line
fee described in Section 2.2(b), and such Lender’s obligation to share in Letter
of Credit Liabilities and to receive the related Letter of Credit fee described
in Section 2.4(b), the Revolving Loan Commitment Percentage of such Lender, and
(b) for all other purposes with respect to any Lender, the percentage obtained
by dividing (i) the sum of the Revolving Loan Commitment Amount of such Lender
(or, in the event the Revolving Loan Commitment shall have been terminated, such
Lender’s then existing Revolving Loan Outstandings), by (ii) the sum of the
Revolving Loan Commitment (or, in the event the Revolving Loan Commitment shall
have been terminated, the then existing Revolving Loan Outstandings) of all
Lenders.

“Reimbursement Obligations” means, at any date, the obligations of each Borrower
then outstanding to reimburse (a) Agent for payments made by Agent under a
Support Agreement, and/or (b) any LC Issuer, for payments made by such LC Issuer
under a Lender Letter of Credit.

“Required Lenders” means at any time Lenders holding (a) sixty-six and two
thirds percent (66 2/3%) or more of the Revolving Loan Commitment, or (b) if the
Revolving Loan Commitment has been terminated, sixty-six and two thirds percent
(66 2/3) or more of the sum of (x) the then aggregate outstanding principal
balance of the Loans plus (y) the then aggregate amount of Letter of Credit
Liabilities.

“Responsible Officer” means any of the Chief Executive Officer or Chief
Financial Officer of the applicable Borrower.

“Restricted Distribution” means as to any Person (a) any dividend or other
distribution (whether in cash, securities or other property) on any equity
interest in such Person (except those payable solely in its equity interests of
the same class), (b) any payment on account of (i) the purchase, redemption,
retirement, defeasance, surrender,

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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cancellation, termination or acquisition of any equity interests in such Person
or any claim respecting the purchase or sale of any equity interest in such
Person or (ii) any option, warrant or other right to acquire any equity
interests in such Person, (c) any management fees, salaries or other fees or
compensation to any Person holding an equity interest in a Borrower (other than
payments of salaries to individuals in the Ordinary Course of Business and
consistent with past practices), an Affiliate of Borrower or an Affiliate of any
Subsidiary of Borrower, (d) any lease or rental payments to an Affiliate or
Subsidiary of Borrower, or (e) repayments of or debt service on loans or other
indebtedness held by an Investor (other than Pfizer and Affiliates of Pfizer),
an Affiliate of Borrower or an Affiliate of any Subsidiary of Borrower.

“Revolving Lender” means each Lender having a Revolving Loan Commitment Amount
in excess of zero (or, in the event the Revolving Loan Commitment shall have
been terminated at any time, each Lender at such time having Revolving Loan
Outstandings in excess of zero).

“Revolving Loan Availability” means, at any time, the Revolving Loan Limit less
the Revolving Loan Outstandings.

“Revolving Loan Borrowing” means a borrowing of a Revolving Loan.

“Revolving Loan Commitment” means the sum of each Lender’s Revolving Loan
Commitment Amount.

“Revolving Loan Commitment Amount” means, as to any Lender, the dollar amount
set forth opposite such Lender’s name on the Commitment Annex under the column
“Revolving Loan Commitment Amount” (if such Lender’s name is not so set forth
thereon, then the dollar amount on the Commitment Annex for the Revolving Loan
Commitment Amount for such Lender shall be deemed to be zero), as such amount
may be adjusted from time to time by any “Amounts Assigned” (with respect to
such Lender’s portion of Revolving Loans outstanding and its commitment to make
Revolving Loans) pursuant to the terms of any and all effective Assignment
Agreements to which such Lender is a party.

“Revolving Loan Commitment Percentage” means, as to any Lender, (a) on the
Closing Date, the percentage set forth opposite such Lender’s name on the
Commitment Annex under the column “Revolving Loan Commitment Percentage” (if
such Lender’s name is not so set forth thereon, then, on the Closing Date, such
percentage for such Lender shall be deemed to be zero), and (b) on any date
following the Closing Date, the percentage equal to the Revolving Loan
Commitment Amount of such Lender on such date divided by the Revolving Loan
Commitment on such date.

“Revolving Loan Limit” means, at any time, the lesser of (a) the Revolving Loan
Commitment and (b) the Borrowing Base.

“Revolving Loan Note” has the meaning set forth in Section 2.3.

“Revolving Loan Outstandings” means at any time of calculation the sum of the
then existing aggregate outstanding principal amount of Revolving Loans and the
then existing Letter of Credit Liabilities.

“Revolving Loan Principal Outstandings” means at any time the then existing
aggregate outstanding principal amount of Revolving Loans.

“Revolving Loans” has the meaning set forth in Section 2.1(b).

“Security Document” means this Agreement and any other agreement, document or
instrument executed concurrently herewith or at any time hereafter pursuant to
which one or more Credit Parties or any other Person either (a) Guarantees
payment or performance of all or any portion of the Obligations, and/or
(b) provides, as security for all or any portion of the Obligations, a Lien on
any of its assets in favor of Agent for its own benefit and the benefit of the
Lenders, as any or all of the same may be amended, supplemented, restated or
otherwise modified from time to time.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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“Solvent” means, with respect to any Person, that such Person (a) owns and will
own assets the fair saleable value of which are (i) greater than the total
amount of its liabilities (including Contingent Obligations), and (ii) greater
than the amount that will be required to pay the probable liabilities of its
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to it;
(b) has capital that is not unreasonably small in relation to its business as
presently conducted or after giving effect to any contemplated transaction; and
(c) does not intend to incur and does not believe that it will incur debts
beyond its ability to pay such debts as they become due.

“Subordination Agreement” means any agreement between Agent and another creditor
of Borrowers, as the same may be amended, supplemented, restated or otherwise
modified from time to time in accordance with the terms thereof, pursuant to
which the Debt owing from any Borrower(s) and/or the Liens securing such Debt
granted by any Borrower(s) to such creditor are subordinated in any way to the
Obligations and the Liens created under the Security Documents, the terms and
provisions of which such Subordination Agreements have been agreed to by and are
acceptable to Agent in the exercise of its sole discretion.

“Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than 50% of the outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, capital stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of more than 50% of such capital stock whether by proxy,
agreement, operation of law or otherwise, and (b) any partnership or limited
liability company in which such Person and/or one or more Subsidiaries of such
Person shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower.

“Support Agreement” has the meaning set forth in Section 2.4(a).

“Supported Letter of Credit” means a Letter of Credit issued by an LC Issuer in
reliance on one or more Support Agreements.

“Tangible Net Worth” means, on any date, the consolidated total assets of
Borrowers and their Subsidiaries minus, (i) any amounts attributable to
(a) goodwill, (b) intangible items such as unamortized debt discount and
expense, patents, trade and service marks and names, copyrights and research and
development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and (ii) Total Liabilities.

“Taxes” has the meaning set forth in Section 2.7.

“Termination Date” means the earlier to occur of (a) the Commitment Expiry Date,
or (b) any date on which Agent accelerates the maturity of the Loans pursuant to
Section 9.2.

“Total Liabilities” means, on any day, obligations that should, under GAAP, be
classified as liabilities on Borrowers’ consolidated balance sheet, including
all Debt.

“UCC” means the Uniform Commercial Code of the State of Illinois or of any other
state the laws of which are required to be applied in connection with the
perfection of security interests in any Collateral.

“United States” means the United States of America.

Section 1.2 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder (including, without limitation, determinations made
pursuant to the exhibits hereto) shall be made, and all financial statements
required to be delivered hereunder shall be prepared on a consolidated basis in
accordance with GAAP applied on a basis

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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consistent with the most recent audited consolidated financial statements of
each Borrower and its Consolidated Subsidiaries delivered to Agent and each of
the Lenders on or prior to the Closing Date. If at any time any change in GAAP
would affect the computation of any financial ratio or financial requirement set
forth in any Financing Document, and either Borrowers or the Required Lenders
shall so request, the Agent, the Lenders and Borrowers shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required
Lenders); provided, however, that until so amended, (a) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (b) Borrowers shall provide to the Agent and the Lenders
financial statements and other documents required under this Agreement which
include a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP. All amounts used for
purposes of financial calculations required to be made herein shall be without
duplication.

Section 1.3 Other Definitional Provisions. References in this Agreement to
“Articles”, “Sections”, “Annexes”, “Exhibits” or “Schedules” shall be to
Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement
unless otherwise specifically provided. Any term defined herein may be used in
the singular or plural. “Include”, “includes” and “including” shall be deemed to
be followed by “without limitation”. Except as otherwise specified or limited
herein, references to any Person include the successors and assigns of such
Person. References “from” or “through” any date mean, unless otherwise
specified, “from and including” or “through and including”, respectively.
References to any statute or act shall include all related current regulations
and all amendments and any successor statutes, acts and regulations. References
to any statute or act, without additional reference, shall be deemed to refer to
federal statutes and acts of the United States. References to any agreement,
instrument or document shall include all schedules, exhibits, annexes and other
attachments thereto. References to capitalized terms that are not defined
herein, but are defined in the UCC, shall have the meanings given them in the
UCC.

Section 1.4 Funding and Settlement Currency. Unless otherwise specified herein,
the settlement of all payments and fundings hereunder between or among the
parties hereto shall be made in lawful money of the United States and in
immediately available funds.

Section 1.5 Riders. All Riders attached hereto are hereby incorporated herein by
this reference and made a part hereof.

ARTICLE 2 - LOANS AND LETTERS OF CREDIT

Section 2.1 Loans.

(a) Reserved.

(b) Revolving Loans.

(i) Revolving Loans and Borrowings. On the terms and subject to the conditions
set forth herein, each Lender severally agrees to make Loans to Borrowers from
time to time as set forth herein (each a “Revolving Loan”, and collectively,
“Revolving Loans”) equal to such Lender’s Revolving Loan Commitment Percentage
of Revolving Loans requested by Borrower hereunder, provided, however, that
after giving effect thereto, the Revolving Loan Outstandings shall not exceed
the Revolving Loan Limit and the Revolving Loan Principal Outstandings shall not
exceed the Borrowing Base. Borrowers shall deliver to Agent a Notice of
Borrowing with respect to each proposed Revolving Loan Borrowing, such Notice of
Borrowing to be delivered no later than noon (Chicago time) two (2) Business
Days prior to such proposed borrowing. Each Borrower and each Revolving Lender
hereby authorizes Agent to make Revolving Loans on behalf of Revolving Lenders,
at any time in its sole discretion, (A) as provided in Section 2.4(c), with
respect to obligations arising under Support Agreements and/or Lender Letters of
Credit, and (B) to pay principal owing in respect of the Loans and interest,
fees, expenses and other charges of any Credit Party from time to time arising
under this Agreement or any other Financing Document. The Borrowing Base shall
be determined by Agent based on the most recent Borrowing Base Certificate

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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delivered to Agent in accordance with this Agreement and such other information
as may be available to Agent. Without limiting any other rights and remedies of
Agent hereunder or under the other Financing Documents, the Revolving Loans
shall be subject to Agent’s continuing right to withhold from the Borrowing Base
reserves, and to increase and decrease such reserves from time to time, if and
to the extent that in Agent’s good faith credit judgment and discretion, such
reserves are necessary.

(ii) Mandatory Revolving Loan Repayments and Prepayments.

(A) The Revolving Loan Commitment shall terminate on the Termination Date. On
such Termination Date, there shall become due, and Borrowers shall pay, the
entire outstanding principal amount of each Revolving Loan, together with
accrued and unpaid interest thereon to, but excluding, the Termination Date.

(B) If at any time the Revolving Loan Outstandings exceed the Revolving Loan
Limit, then, on the next succeeding Business Day, Borrowers shall repay the
Revolving Loans or cash collateralize Letter of Credit Liabilities in the manner
specified in Section 2.4(e) or cancel outstanding Letters of Credit, or any
combination of the foregoing, in an aggregate amount equal to such excess. If at
any time the Revolving Loan Principal Outstandings exceed the Borrowing Base,
then, on the next succeeding Business Day, Borrowers shall repay the Revolving
Loans in an aggregate amount equal to such excess.

(C) Principal payable on account of Revolving Loans shall be payable by
Borrowers to Agent (A) immediately upon the receipt by any Borrower or Agent of
any payments on or proceeds from any of the Accounts, to the extent of such
payments or proceeds, as further described in Section 2.9 below, and (B) in full
on the Termination Date.

(iii) Optional Prepayments. Borrowers may from time to time prepay the Revolving
Loans in whole or in part; provided, however, that any such partial prepayment
shall be in an amount equal to $100,000 or a higher integral multiple of
$25,000.

(iv) Restriction on Termination. Borrowers shall have no right to terminate the
Revolving Loan Commitment, or to otherwise terminate this Agreement, while any
portion of the indebtedness under the Affiliated Financing Documents shall
remain outstanding. Notwithstanding any prepayment of the Revolving Loan
Outstandings or any other termination of Lenders’ Credit Exposure under this
Agreement, Agents and Lenders shall have no obligation to release any of the
Collateral securing this Agreement while any portion of the indebtedness under
the Affiliated Financing Documents shall remain outstanding.

Section 2.2 Interest, Interest Calculations and Certain Fees.

(a) Interest. From and following the Closing Date, the Loans and the other
Obligations shall bear interest at the sum of the Base Rate plus the applicable
Base Rate Margin. For purposes of calculating interest, all funds transferred
from the Payment Account for application to any Revolving Loans shall be subject
to a three (3) Business Day clearance period.

(b) Unused Line Fee. From and following the Closing Date, Borrowers shall pay
Agent, for the benefit of all Lenders committed to make Revolving Loans, in
accordance with their respective Pro Rata Shares, a fee in an amount equal to
(i) (A) the average daily balance of the Borrowing Base during the preceding
month minus (B) the average daily balance of the sum of the Revolving Loan
Outstandings during the preceding month, multiplied by (ii) fifty one-hundredths
percent (0.50%) per annum. Such fee is to be paid monthly in arrears on the
first day of each month.

(c) Collateral Fee. From and following the Closing Date, Borrowers shall pay
Agent, for its own account and not for the benefit of any other Lenders, a fee
in an amount equal to (i) the average daily balance of the sum of the Revolving
Loan Outstandings during the preceding month, multiplied by (ii) fifty
one-hundredths percent (0.50%) per annum. Such fee is to be paid monthly in
arrears on the first day of each month.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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(d) Commitment Fee. Contemporaneous with Borrowers’ execution of this Agreement,
Borrowers shall pay Agent, for the benefit of all Lenders committed to make
Revolving Loans on the Closing Date, in accordance with their respective Pro
Rata Shares, a fee in an amount equal to (i) the Revolving Loan Commitment,
multiplied by (ii) one and 25/100 percent (1.25%). Notwithstanding the
foregoing, provided that no Event of Default shall have occurred, Borrowers
shall be permitted to defer payment of (A) one-third (1/3) of the fees described
in this subsection for a period of one year from the date of this Agreement,
(B) one-third (1/3) of the fees described in this subsection for a period of two
years from the date of this Agreement and (C) one-third (1/3) of the fees
described in this subsection for a period of three years from the date of this
Agreement..

(e) Deferred Commitment Fee. If Agent’s funding obligations in respect of the
Revolving Loan Commitment under this Agreement terminate for any reason (whether
by voluntary termination by Borrowers, by reason of the occurrence of an Event
of Default or otherwise) prior to the Commitment Expiry Date, Borrowers shall
pay to Agent, for the benefit of all Lenders committed to make Revolving Loans,
a fee (the “Deferred Commitment Fee”) as compensation for the costs of such
Lenders being prepared to make funds available to Borrowers under this
Agreement, equal to an amount determined by multiplying the Revolving Loan
Commitment by the following applicable percentage amount: three percent
(3.0%) for the first year following the Closing Date, two percent (2.0%) for the
second and third years following the Closing Date, and one percent
(1.0%) thereafter. No Deferred Commitment Fee shall be payable if this Agreement
is terminated as a consequence of an assignment made under Section 11.6(a)(i) to
which Borrower does not consent.

(f) Reserved.

(g) Audit Fees. Borrowers shall pay to Agent, for its own account and not for
the benefit of any other Lenders, all fees and expenses in connection with
audits of Borrowers’ books and records, audits, valuations or appraisals of the
Collateral, audits of Borrowers’ compliance with applicable Laws and such other
matters as Agent shall deem appropriate, which shall be due and payable on the
first Business Day of the month following the date of issuance by Agent of a
written request for payment thereof to Borrowers.

(h) Wire Fees. Borrowers shall pay to Agent, for its own account and not for the
account of any other Lenders, on written demand, any and all fees, costs or
expenses which Agent pays to a bank or other similar institution (including,
without limitation, any fees paid by Agent to any other Lender) arising out of
or in connection with (i) the forwarding to Borrowers or any other Person on
behalf of Borrowers, by Agent, of proceeds of the Loans made by any Lender to
Borrowers pursuant to this Agreement, and (ii) the depositing for collection, by
Agent, of any check or item of payment received or delivered to Agent on account
of Obligations.

(i) Computation of Interest and Related Fees; Payment of Interest. All interest
and fees under each Financing Document shall be calculated on the basis of a
360-day year for the actual number of days elapsed. The date of funding of Loan
shall be included in the calculation of interest. The date of payment of a Loan
shall be excluded from the calculation of interest. If a Loan is repaid on the
same day that it is made, one (1) day’s interest shall be charged. Interest on
all Loans is payable in arrears on the first day of each month and on the
maturity of such Loans, whether by acceleration or otherwise.

Section 2.3 Notes. The portion of the Loans made by each Lender shall be
evidenced, if so requested by such Lender, by a promissory note executed by
Borrowers on a joint and several basis (a “Note”) in an original principal
amount equal to such Lender’s Pro Rata Share of the applicable Loan Commitment.

Section 2.4 Letters of Credit and Letter of Credit Fees.

(a) Letter of Credit. On the terms and subject to the conditions set forth
herein, the Revolving Loan Commitment may be used by Borrowers, in addition to
the making of Revolving Loans hereunder, for the issuance, prior to the
Termination Date, by (i) Agent, of letters of credit, Guarantees or other
agreements or arrangements (each, a “Support Agreement”) to induce an LC Issuer
to issue or increase the amount of, or extend the expiry date of, one or more
Letters of Credit and (ii) a Lender, identified by Agent, as an LC Issuer, of
one or more Lender Letters of Credit, so long as, in each case:

(i) Agent shall have received a Notice of LC Credit Event at least five
(5) Business Days before the relevant date of issuance, increase or extension;
and

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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(ii) after giving effect to such issuance, increase or extension, (A) the
aggregate Letter of Credit Liabilities under all Letters of Credit do not exceed
$25,000, and (B) the Revolving Loan Outstandings do not exceed the Revolving
Loan Limit.

Nothing in this Agreement shall be construed to obligate any Lender to issue,
increase the amount of or extend the expiry date of any letter of credit, which
act or acts, if any, shall be subject to agreements to be entered into from time
to time between Borrowers and such Lender. Each Lender that is an LC Issuer
hereby agrees to give Agent prompt written notice of each issuance of a Lender
Letter of Credit by such Lender and each payment made by such Lender in respect
of Lender Letters of Credit issued by such Lender.

(b) Letter of Credit Fee. Borrowers shall pay to Agent, for the benefit of the
Revolving Lenders in accordance with their respective Pro Rata Shares, a letter
of credit fee with respect to the Letter of Credit Liabilities for each Letter
of Credit, computed for each day from the date of issuance of such Letter of
Credit to the date that is the last day a drawing is available under such Letter
of Credit, at a rate per annum equal to the Base Rate Margin then applicable to
Revolving Loans. Such fee shall be payable in arrears on the last day of each
calendar month prior to the Termination Date and on such date. In addition,
Borrowers agree to pay promptly to the LC Issuer any fronting or other fees that
it may charge in connection with any Letter of Credit.

(c) Reimbursement Obligations of Borrowers. If either (i) Agent shall make a
payment to an LC Issuer pursuant to a Support Agreement, or (ii) any Lender
shall honor any draw request under, and make payment in respect of, a Lender
Letter of Credit, (A) the applicable Borrower shall reimburse Agent or such
Lender, as applicable, for the amount of such payment by the end of the day on
which Agent or such Lender shall make such payment and (B) Borrowers shall be
deemed to have immediately requested that Revolving Lenders make a Revolving
Loan, in a principal amount equal to the amount of such payment (but solely to
the extent such Borrower shall have failed to directly reimburse Agent or, with
respect to Lender Letters of Credit, the applicable LC Issuer, for the amount of
such payment). Agent shall promptly notify Revolving Lenders of any such deemed
request and each Revolving Lender (other than any such Revolving Lender that was
a Non-Funding Lender at the time the applicable Supported Letter of Credit or
Lender Letter of Credit was issued) hereby agrees to make available to Agent not
later than noon (Chicago time) on the Business Day following such notification
from Agent such Revolving Lender’s Pro Rata Share of such Revolving Loan. Each
Revolving Lender (other than any applicable Non-Funding Lender specified above)
hereby absolutely and unconditionally agrees to fund such Revolving Lender’s Pro
Rata Share of the Loan described in the immediately preceding sentence,
unaffected by any circumstance whatsoever, including, without limitation,
(x) the occurrence and continuance of a Default or Event of Default, (y) the
fact that, whether before or after giving effect to the making of any such
Revolving Loan, the Revolving Loan Outstandings exceed or will exceed the
Revolving Loan Limit, and/or (z) the non-satisfaction of any conditions set
forth in Section 7.2. Agent hereby agrees to apply the gross proceeds of each
Revolving Loan deemed made pursuant to this Section 2.4(c) in satisfaction of
Borrowers’ reimbursement obligations arising pursuant to this Section 2.4(c).
Borrowers shall pay interest, on demand, on all amounts so paid by Agent
pursuant to any Support Agreement or to any applicable Lender in honoring a draw
request under any Lender Letter of Credit for each day from the date of such
payment until Borrowers reimburse Agent or the applicable Lender therefore
(whether pursuant to clause (A) or (B) of the first sentence of this subsection
(c)) at a rate per annum equal to the sum of two percent (2%) plus the interest
rate applicable to Revolving Loans for such day.

(d) Reimbursement and Other Payments by Borrowers. The obligations of each
Borrower to reimburse Agent and/or the applicable LC Issuer pursuant to
Section 2.4(c) shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including the following:

(i) any lack of validity or enforceability of, or any amendment or waiver of or
any consent to departure from, any Letter of Credit or any related document;

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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(ii) the existence of any claim, set-off, defense or other right which any
Borrower may have at any time against the beneficiary of any Letter of Credit,
the LC Issuer (including any claim for improper payment), Agent, any Lender or
any other Person, whether in connection with any Financing Document or any
unrelated transaction, provided, however, that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;

(iii) any statement or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;

(iv) any affiliation between the LC Issuer and Agent; or

(v) to the extent permitted under applicable law, any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing.

(e) Deposit Obligations of Borrowers. In the event any Letters of Credit are
outstanding at the time that Borrowers prepay or are required to repay the
Obligations or the Revolving Loan Commitment is terminated, Borrowers shall
(i) deposit with Agent for the benefit of all Revolving Lenders cash in an
amount equal to one hundred and ten percent (110%) of the aggregate outstanding
Letter of Credit Liabilities to be available to Agent, for its benefit and the
benefit of issuers of Letters of Credit, to reimburse payments of drafts drawn
under such Letters of Credit and pay any fees and expenses related thereto, and
(ii) prepay the fee payable under Section 2.4(b) with respect to such Letters of
Credit for the full remaining terms of such Letters of Credit assuming that the
full amount of such Letters of Credit as of the date of such repayment or
termination remain outstanding until the end of such remaining terms. Upon
termination of any such Letter of Credit and provided no Event of Default has
occurred and is continuing, the unearned portion of such prepaid fee
attributable to such Letter of Credit shall be refunded to Borrowers, together
with the deposit described in the preceding clause (i) to the extent not
previously applied by Agent in the manner described herein.

Section 2.5 General Provisions Regarding Payment; Loan Account.

(a) All payments to be made by each Borrower under any Financing Document,
including payments of principal and interest made hereunder and pursuant to any
other Financing Document, and all fees, expenses, indemnities and
reimbursements, shall be made without set-off, recoupment or counterclaim, in
lawful money of the United States and in immediately available funds. If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension (it being understood and agreed that,
solely for purposes of calculating financial covenants and computations
contained herein and determining compliance therewith, if payment is made, in
full, on any such extended due date, such payment shall be deemed to have been
paid on the original due date without giving effect to any extension thereto).
Any payments received in the Payment Account before noon (Chicago time) on any
date shall be deemed received by Agent on such date, and any payments received
in the Payment Account after noon (Chicago time) on any date shall be deemed
received by Agent on the next succeeding Business Day.

(b) Agent shall maintain a loan account (the “Loan Account”) on its books to
record Loans and other extensions of credit made by the Lenders hereunder or
under any other Financing Document, and all payments thereon made by each
Borrower. All entries in the Loan Account shall be made in accordance with
Agent’s customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded in Agent’s books and records at any
time shall be conclusive and binding evidence of the amounts due and owing to
Agent by each Borrower absent clear and convincing evidence to the contrary;
provided, however, that any failure to so record or any error in so recording
shall not limit or otherwise affect any Borrower’s duty to pay all amounts owing
hereunder or under any other Financing Document. Agent shall endeavor to provide
Borrowers with a monthly statement regarding the Loan Account (but neither Agent
nor any Lender shall have any liability if Agent shall fail to provide any such
statement). Unless any Borrower notifies Agent of any objection to any such
statement (specifically describing the basis for such objection) within thirty
(30) days after the date of receipt thereof, it shall be deemed final, binding
and conclusive upon Borrowers in all respects as to all matters reflected
therein.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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Section 2.6 Maximum Interest. In no event shall the interest charged with
respect to the Notes (if any) or any other obligations of any Borrower under any
Financing Document exceed the maximum amount permitted under the laws of the
State of Illinois or of any other applicable jurisdiction. Notwithstanding
anything to the contrary herein or elsewhere, if at any time the rate of
interest payable hereunder or under any Note or other Financing Document (the
“Stated Rate”) would exceed the highest rate of interest permitted under any
applicable law to be charged (the “Maximum Lawful Rate”), then for so long as
the Maximum Lawful Rate would be so exceeded, the rate of interest payable shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the Stated Rate is less than the Maximum Lawful Rate, each Borrower
shall, to the extent permitted by law, continue to pay interest at the Maximum
Lawful Rate until such time as the total interest received is equal to the total
interest which would have been received had the Stated Rate been (but for the
operation of this provision) the interest rate payable. Thereafter, the interest
rate payable shall be the Stated Rate unless and until the Stated Rate again
would exceed the Maximum Lawful Rate, in which event this provision shall again
apply. In no event shall the total interest received by any Lender exceed the
amount which it could lawfully have received had the interest been calculated
for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the
prior sentence, any Lender has received interest hereunder in excess of the
Maximum Lawful Rate, such excess amount shall be applied to the reduction of the
principal balance of the Loans or to other amounts (other than interest) payable
hereunder, and if no such principal or other amounts are then outstanding, such
excess or part thereof remaining shall be paid to Borrowers. In computing
interest payable with reference to the Maximum Lawful Rate applicable to any
Lender, such interest shall be calculated at a daily rate equal to the Maximum
Lawful Rate divided by the number of days in the year in which such calculation
is made.

Section 2.7 Capital Adequacy. If any Lender shall determine in its commercially
reasonable judgment that the adoption or taking effect of, or any change in, any
applicable Law regarding capital adequacy, in each instance, after the Closing
Date, or any change after the Closing Date in the interpretation, administration
or application thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation, administration or application thereof,
or the compliance by any Lender or any Person controlling such Lender with any
request, guideline or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency adopted or otherwise taking effect after the Closing Date, has
or would have the effect of reducing the rate of return on such Lender’s or such
controlling Person’s capital as a consequence of such Lender’s obligations
hereunder or under any Support Agreement or Lender Letter of Credit to a level
below that which such Lender or such controlling Person could have achieved but
for such adoption, taking effect, change, interpretation, administration,
application or compliance (taking into consideration such Lender’s or such
controlling Person’s policies with respect to capital adequacy) then from time
to time, upon written demand by such Lender (which demand shall be accompanied
by a statement setting forth the basis for such demand and a calculation of the
amount thereof in reasonable detail, a copy of which shall be furnished to
Agent), Borrowers shall promptly pay to such Lender such additional amount as
will compensate such Lender or such controlling Person for such reduction, so
long as such amounts have accrued on or after the day which is two hundred
seventy (270) days prior to the date on which such Lender first made demand
therefor.

Section 2.8 Joint and Several Liability. Borrowers are defined collectively to
include all Persons constituting the Borrowers; provided, however, that any
references herein to “any Borrower”, “each Borrower” or similar references,
shall be construed as a reference to each individual Person named as one of the
Borrowers herein. Each Person so named shall be jointly and severally liable for
all of the obligations of Borrowers under this Agreement. Each Borrower,
individually, expressly understands, agrees and acknowledges, that the Credit
Facilities would not be made available on the terms herein in the absence of the
collective credit of all of the Persons constituting the Borrowers, the joint
and several liability of all such Persons, and the cross-collateralization of
the collateral of all such Persons. Accordingly, each Borrower, individually
acknowledges that the benefit to each of the Persons comprising the Borrower as
a whole constitutes reasonably equivalent value, regardless of the amount of the
Credit Facilities actually borrowed by, advanced to, or the amount of collateral
provided by, any individual Borrower. In addition, each entity comprising
Borrowers hereby acknowledges and agrees that all of the representations,
warranties, covenants, obligations, conditions, agreements and other terms
contained in this Agreement shall be applicable to and shall be binding upon and
measured and enforceable individually against each

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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Person comprising Borrowers as well as all such Persons when taken together. By
way of illustration, but without limiting the generality of the foregoing, the
terms of Section 9.1 of this Agreement are to be applied to each individual
Person comprising the Borrowers (as well as to all such Persons taken as a
whole), such that the occurrence of any of the events described in Section 9.1
of this Agreement as to any Person comprising the Borrowers shall constitute an
Event of Default even if such event has not occurred as to any other Persons
comprising the Borrowers or as to all such Persons taken as a whole.

Section 2.9 Collections and Lockbox Account.

(a) Borrowers shall maintain a lockbox (the “Lockbox”) with a United States
depository institution designated from time to time by Agent (the “Lockbox
Bank”), subject to the provisions of this Agreement, and shall execute with the
Lockbox Bank a Deposit Account Control Agreement and such other agreements
related to such Lockbox as Agent may require. Borrowers shall ensure that all
collections of Accounts (other than Accounts for which the Account Debtor is a
Governmental Account Debtor) are paid directly from Account Debtors into the
Lockbox for deposit into the Lockbox Account and/or directly into the Lockbox
Account; provided, however, unless Agent shall otherwise direct by written
notice to Borrowers, Borrowers shall be permitted to cause Account Debtors who
are individuals to pay Accounts directly to Borrowers, which Borrowers shall
then administer and apply in the manner required below.

(b) All funds deposited into a Lockbox Account shall be transferred into the
Payment Account by the close of each Business Day.

(c) Notwithstanding anything in any lockbox agreement or Deposit Account Control
Agreement to the contrary, Borrowers agree that they shall be liable for any
fees and charges in effect from time to time and charged by the Lockbox Bank in
connection with the Lockbox and the Lockbox Account, and that Agent shall have
no liability therefor. Borrowers hereby indemnify and agree to hold Agent
harmless from any and all liabilities, claims, losses and demands whatsoever,
including reasonable attorneys’ fees and expenses, arising from or relating to
actions of Agent or the Lockbox Bank pursuant to this Section or any lockbox
agreement or Deposit Account Control Agreement, but excluding those arising from
Agent’s gross negligence or willful misconduct.

(d) Agent shall apply, on a daily basis, all funds transferred into the Payment
Account pursuant to this Section to reduce the outstanding Revolving Loans in
such order of application as Agent shall elect. If as the result of collections
of Accounts pursuant to the terms and conditions of this Section a credit
balance exists with respect to the Payment Account, such credit balance shall
not accrue interest in favor of Borrowers, but shall be available to Borrowers
upon request of Borrowers at any time or times for so long as no Default exists.

(e) To the extent that any collections of Accounts or proceeds of other
Collateral are not sent directly to the Lockbox but are received by any
Borrower, such collections shall be held in trust for the benefit of Agent
pursuant to an express trust created hereby and immediately remitted, in the
form received, to applicable Lockbox and Lockbox Account. No such funds received
by any Borrower shall be commingled with other funds of the Borrowers.

(f) Borrowers acknowledge and agree that compliance with the terms of this
Section is essential, and that Agent and Lenders will suffer immediate and
irreparable injury and have no adequate remedy at law, if any Borrower, through
acts or omissions, causes or permits Account Debtors to send payments other than
to the Lockbox, or if any Borrower fails to immediately deposit collections of
Accounts or proceeds of other Collateral in the Lockbox Account as herein
required. Accordingly, in addition to all other rights and remedies of Agent and
Lenders hereunder, Agent shall have the right to seek specific performance of
the Borrowers’ obligations under this Section, and any other equitable relief as
Agent may deem necessary or appropriate, and Borrowers waive any requirement for
the posting of a bond in connection with such equitable relief.

(g) Borrowers shall not, and Borrowers shall not suffer or permit any Credit
Party to, (i) withdraw any amounts from any Lockbox Account, (ii) change the
procedures or sweep instructions under the agreements governing any Lockbox
Accounts, or (iii) send to or deposit in any Lockbox Account any funds other
than payments

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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made with respect to and proceeds of Accounts or other Collateral. Borrowers
shall, and shall cause each Credit Party to, cooperate with Agent in the
identification and reconciliation on a daily basis of all amounts received in or
required to be deposited into the Lockbox Accounts. If more than five percent
(5%) of the collections of Accounts received by Borrowers during any given
fifteen (15) day period is not identified or reconciled to the reasonable
satisfaction of Agent within ten (10) Business Days of receipt, Agent shall not
be obligated to make further advances under this Agreement until such amount is
identified or is reconciled to the reasonable satisfaction of Agent, as the case
may be. In addition, if any such amount cannot be identified or reconciled to
the satisfaction of Agent, Agent may utilize its own staff or, if it deems
necessary, engage an outside auditor, in either case at Borrowers’ expense
(which in the case of Agent’s own staff shall be in accordance with Agent’s then
prevailing customary charges (plus expenses)), to make such examination and
report as may be necessary to identify and reconcile such amount.

(h) If any Borrower breaches its obligation to direct payments of the proceeds
of the Collateral to the Lockbox Account, Agent, as the irrevocably made,
constituted and appointed true and lawful attorney for Borrowers, may, by the
signature or other act of any of Agent’s officers (without requiring any of them
to do so), direct any Account Debtor to pay proceeds of the Collateral to
Borrowers by directing payment to the Lockbox Account.

ARTICLE 3 - REPRESENTATIONS AND WARRANTIES

To induce Agent and Lenders to enter into this Agreement and to make the Loans
and other credit accommodations contemplated hereby, each Borrower hereby
represents and warrants to Agent and each Lender that:

Section 3.1 Existence and Power. Each Credit Party is an entity as specified on
Schedule 3.1, is duly organized, validly existing and in good standing under the
laws of the jurisdiction specified on Schedule 3.1, has the same legal name as
it appears in such Credit Party’s Organizational Documents and an organizational
identification number (if any), in each case as specified on Schedule 3.1, and
has all powers and all Permits necessary or desirable in the operation of its
business as presently conducted or as proposed to be conducted, except where the
failure to have such Permits could not reasonably be expected to have a Material
Adverse Effect. Each Credit Party is qualified to do business as a foreign
entity in each jurisdiction in which it is required to be so qualified, which
jurisdictions as of the Closing Date are specified on Schedule 3.1, except where
the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 3.1, no Credit Party
(a) has had, over the five (5) year period preceding the Closing Date, any name
other than its current name, or (b) was incorporated or organized under the laws
of any jurisdiction other than its current jurisdiction of incorporation or
organization.

Section 3.2 Organization and Governmental Authorization; No Contravention. The
execution, delivery and performance by each Credit Party of the Operative
Documents to which it is a party are within its powers, have been duly
authorized by all necessary action pursuant to its Organizational Documents,
require no further action by or in respect of, or filing with, any Governmental
Authority and do not violate, conflict with or cause a breach or a default under
(a) any Law applicable to any Credit Party or any of the Organizational
Documents of any Credit Party, or (b) any agreement or instrument binding upon
it, except for such violations, conflicts, breaches or defaults as could not,
with respect to this clause (b), reasonably be expected to have a Material
Adverse Effect.

Section 3.3 Binding Effect. Each of the Operative Documents to which any Credit
Party is a party constitutes a valid and binding agreement or instrument of such
Credit Party, enforceable against such Credit Party in accordance with its
respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws relating to the enforcement of
creditors’ rights generally and by general equitable principles.

Section 3.4 Reserved.

Section 3.5 Financial Information. All consolidated financial statements for
Borrower and any of its

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Subsidiaries delivered to Agent fairly present in all material respects
Borrower’s consolidated financial condition and Borrower’s consolidated results
of operations. There has not been any material deterioration in Borrower’s
consolidated financial condition since the date of the most recent financial
statements submitted to Agent.

Section 3.6 Litigation. Except as set forth on Schedule 3.6 as of the Closing
Date, and except as hereafter disclosed to Agent in writing, there is no
Litigation pending against, or to such Borrower’s knowledge threatened against
or affecting, any Credit Party or, to such Borrower’s knowledge, any party to
any Operative Document other than a Credit Party. There is no Litigation pending
in which an adverse decision could reasonably be expected to have a Material
Adverse Effect or which in any manner draws into question the validity of any of
the Operative Documents.

Section 3.7 Ownership of Property. Each Borrower and each of its Subsidiaries is
the lawful owner of, has good and marketable title to and is in lawful
possession of, or has valid leasehold interests in, all properties and other
assets (real or personal, tangible, intangible or mixed) purported or reported
to be owned or leased (as the case may be) by such Person.

Section 3.8 No Default. No Event of Default, or to such Borrower’s knowledge,
Default, has occurred and is continuing. No Credit Party is in breach or default
under or with respect to any contract, agreement, lease or other instrument to
which it is a party or by which its property is bound or affected, which breach
or default could reasonably be expected to have a Material Adverse Effect.

Section 3.9 Labor Matters. As of the Closing Date, there are no strikes or other
labor disputes pending or, to such Borrower’s knowledge, threatened against any
Credit Party. Hours worked and payments made to the employees of the Credit
Parties have not been in violation of the Fair Labor Standards Act or any other
applicable Law dealing with such matters. All payments due from the Credit
Parties, or for which any claim may be made against any of them, on account of
wages and employee and retiree health and welfare insurance and other benefits
have been paid or accrued as a liability on their books, as the case may be. The
consummation of the transactions contemplated by the Financing Documents and the
other Operative Documents will not give rise to a right of termination or right
of renegotiation on the part of any union under any collective bargaining
agreement to which it is a party or by which it is bound.

Section 3.10 Regulated Entities. No Credit Party is an “investment company” or a
company “controlled” by an “investment company” or a “subsidiary” of an
“investment company,” all within the meaning of the Investment Company Act of
1940. No Credit Party is a “holding company”, or a “subsidiary company” of a
“holding company”, or an “affiliate” of a “holding company” or of a “subsidiary
company” of a “holding company”, within the meaning of the Public Utility
Holding Company Act of 1935.

Section 3.11 Margin Regulations. None of the proceeds from the Loans have been
or will be used, directly or indirectly, for the purpose of purchasing or
carrying any “Margin Stock” (as defined in Regulation U of the Federal Reserve
Board), for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any “Margin Stock” or for any other
purpose which might cause any of the Loans to be considered a “purpose credit”
within the meaning of Regulation T, U or X of the Federal Reserve Board.

Section 3.12 Compliance With Laws; Anti-Terrorism Laws.

(a) Each Credit Party is in compliance with the requirements of all applicable
Laws, except for such Laws the noncompliance with which could not reasonably be
expected to have a Material Adverse Effect.

(b) None of the Credit Parties, their Affiliates or any of their respective
agents acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law,
(ii) engages in or conspires to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person.
No Credit Party nor, to the knowledge of any Credit Party, any of its Affiliates
or agents acting or benefiting in any capacity in connection with the
transactions contemplated by this Agreement,

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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(x) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person, or
(y) deals in, or otherwise engages in any transaction relating to, any property
or interest in property blocked pursuant to Executive Order No. 13224, any
similar executive order or other Anti-Terrorism Law.

Section 3.13 Taxes. All Federal, state and local tax returns, reports and
statements required to be filed by or on behalf of each Credit Party have been
filed with the appropriate Governmental Authorities in all jurisdictions in
which such returns, reports and statements are required to be filed and, except
to the extent subject to a Permitted Contest, all Taxes (including real property
Taxes) and other charges shown to be due and payable in respect thereof have
been timely paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for nonpayment thereof. Except to the extent
subject to a Permitted Contest, all state and local sales and use Taxes required
to be paid by each Credit Party have been paid. All Federal and state returns
have been filed by each Credit Party for all periods for which returns were due
with respect to employee income tax withholding, social security and
unemployment taxes, and, except to the extent subject to a Permitted Contest,
the amounts shown thereon to be due and payable have been paid in full or
adequate provisions therefor have been made.

Section 3.14 Pensions. Borrower has paid all amounts necessary to fund all
present pension, profit sharing and deferred compensation plans in accordance
with their terms, and Borrower has not withdrawn from participation in, and has
not permitted partial or complete termination of, or permitted the occurrence of
any other event with respect to, any such plan which could reasonably be
expected to have a Material Adverse Effect, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other governmental
agency.

Section 3.15 Material Contracts. Except for the Operative Documents and the
other agreements set forth on Schedule 3.15 (collectively with the Operative
Documents, the “Material Contracts”), as of the Closing Date there are no
(a) employment agreements covering the management of any Credit Party,
(b) collective bargaining agreements or other similar labor agreements covering
any employees of any Credit Party, (c) agreements for managerial, consulting or
similar services to which any Credit Party is a party or by which it is bound,
(d) agreements regarding any Credit Party, its assets or operations or any
investment therein to which any of its equityholders is a party or by which it
is bound, (e) real estate leases, Intellectual Property licenses or other lease
or license agreements to which any Credit Party is a party, either as lessor or
lessee, or as licensor or licensee (other than licenses arising from the
purchase of “off the shelf” products), or (f) customer, distribution, marketing
or supply agreements to which any Credit Party is a party, in each case with
respect to the preceding clauses (a), (c), (d), (e) and (f) requiring payment by
a Credit Party of more than $250,000 in any year, (g) partnership agreements to
which any Credit Party is a general partner or joint venture agreements to which
any Credit Party is a party, (h) third party billing arrangements to which any
Credit Party is a party, or (i) any other agreements or instruments to which any
Credit Party is a party, and the breach, nonperformance or cancellation of
which, or the failure of which to renew, could reasonably be expected to have a
Material Adverse Effect. The consummation of the transactions contemplated by
the Financing Documents and the other Operative Documents will not give rise to
a right of termination in favor of any party to any Material Contract (other
than any Credit Party), except for such Material Contracts the termination of
which would not reasonably be expected to have a Material Adverse Effect..

Section 3.16 Compliance with Environmental Requirements; No Hazardous Materials.

Except in each case as set forth on Schedule 3.16:

(a) no notice, notification, demand, request for information, citation, summons,
complaint or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending, or to such Borrower’s
knowledge, threatened by any Governmental Authority or other Person with respect
to any (i) alleged violation by any Credit Party of any Environmental Law,
(ii) alleged failure by any Credit Party to have any Permits required in
connection with the conduct of its business or to comply with the terms and
conditions thereof, (iii) any generation, treatment, storage, recycling,
transportation or disposal of any Hazardous Materials, or (iv) release of
Hazardous Materials; and

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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(b) no property now owned or leased by any Credit Party and, to the knowledge of
such Borrower, no such property previously owned or leased by any Credit Party,
to which any Credit Party has, directly or indirectly, transported or arranged
for the transportation of any Hazardous Materials, is listed or, to such
Borrower’s knowledge, proposed for listing, on the National Priorities List
promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar
state list or is the subject of Federal, state or local enforcement actions or,
to the knowledge of such Borrower, other investigations which may lead to claims
against any Credit Party for clean-up costs, remedial work, damage to natural
resources or personal injury claims, including, without limitation, claims under
CERCLA;

For purposes of this Section 3.16, each Credit Party shall be deemed to include
any business or business entity (including a corporation) that is, in whole or
in part, a predecessor of such Credit Party.

Section 3.17 Intellectual Property. Each Credit Party owns, is licensed to use
or otherwise has the right to use, all Intellectual Property that is material to
the condition (financial or other), business or operations of such Credit Party.
All such Intellectual Property existing as of the Closing Date and registered
with any United States or foreign Governmental Authority is set forth on
Schedule 3.17. All Intellectual Property of each Credit Party is fully protected
and/or duly and properly registered, filed or issued in the appropriate office
and jurisdictions for such registrations, filings or issuances, except where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 3.17, Borrowers are not a party, nor are
bound by, any material license or other agreement with respect to which any
Borrower is the licensee that prohibits or otherwise restricts such Borrower
from granting a security interest in such Borrower’s interest in such license or
agreement or other property. To such Borrower’s knowledge, each Credit Party
conducts its business without infringement or claim of infringement of any
Intellectual Property rights of others and there is no infringement or claim of
infringement by others of any Intellectual Property rights of any Credit Party,
which infringement or claim of infringement could reasonably be expected to have
a Material Adverse Effect.

Section 3.18 Solvency. Each Borrower and each additional Credit Party is
Solvent.

Section 3.19 Full Disclosure. None of the written information (financial or
otherwise) furnished by or on behalf of any Credit Party to Agent or any Lender
in connection with the consummation of the transactions contemplated by the
Operative Documents, contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which such statements
were made. All financial projections delivered to Agent and the Lenders by
Borrowers (or their agents) have been prepared on the basis of the assumptions
stated therein. Such projections represent each Borrower’s best estimate of such
Borrower’s future financial performance and such assumptions are believed by
such Borrower to be fair and reasonable in light of current business conditions;
provided, however, that Borrowers can give no assurance that such projections
will be attained.

Section 3.20 Subsidiaries. Borrowers do not own any stock, partnership
interests, limited liability company interests or other equity securities except
for Permitted Investments.

Section 3.21 Representations and Warranties Incorporated from Operative
Documents. As of the Closing Date, each of the representations and warranties
made in the Operative Documents by each of the parties thereto is true and
correct in all material respects, and such representations and warranties are
hereby incorporated herein by reference with the same effect as though set forth
in their entirety herein, as qualified therein, except to the extent that such
representation or warranty relates to a specific date, in which case such
representation and warranty shall be true as of such earlier date.

ARTICLE 4 - AFFIRMATIVE COVENANTS

Each Borrower agrees that, so long as any Credit Exposure exists:

Section 4.1 Financial Statements and Other Reports. Each Borrower will deliver
to Agent: (1) as soon as available, but no later than forty (40) days after the
last day of each quarter, a company prepared

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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consolidated balance sheet and income statement covering Borrower’s consolidated
operations during the period certified by a Responsible Officer and in a form
acceptable to Agent; (2) as soon as available, but in any case within one
hundred twenty (120) days after the last day of Borrower’s fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied,
together with an unqualified opinion on the financial statements from an
independent certified public accounting firm acceptable to Agent in its
reasonable discretion; (3) within five (5) days of delivery, copies of all
statements, reports and notices made available to Borrower’s security holders or
pursuant to the Pfizer Debt Documents; (4) a prompt report of any legal actions
pending or threatened against Borrower or any of its Subsidiaries that could
result in damages or costs to Borrower or any of its Subsidiaries of $250,000 or
more; (5) prompt written notice of an event that materially and adversely
affects the value of any Intellectual Property; and (6) budgets, sales
projections, operating plans and other financial information reasonably
requested by Agent from time to time. Each Borrower will, within thirty
(30) days after the last day of each quarter, deliver to Agent with the
quarterly financial statements, a duly completed Compliance Certificate signed
by a Responsible Officer setting forth calculations showing compliance with the
financial covenants set forth in this Agreement. Each Borrower will, within ten
(10) days after the last day of each month, deliver to Agent a duly completed
Borrowing Base Certificate signed by a Responsible Officer, with aged listings
of accounts receivable and accounts payable (by invoice date).

Section 4.2 Payment and Performance of Obligations. Each Borrower (a) will pay
and discharge, and cause each Subsidiary to pay and discharge, at or before
maturity, all of their respective obligations and liabilities, including tax
liabilities, except for such obligations and/or liabilities (i) that may be the
subject of a Permitted Contest, and (ii) the nonpayment or nondischarge of which
could not reasonably be expected to have a Material Adverse Effect, (b) will
maintain, and cause each Subsidiary to maintain, in accordance with GAAP,
appropriate reserves for the accrual of all of their respective obligations and
liabilities, and (c) will not breach or permit any Subsidiary to breach, or
permit to exist any default under, the terms of any lease, commitment, contract,
instrument or obligation to which it is a party, or by which its properties or
assets are bound, except for such breaches or defaults which could not
reasonably be expected to have a Material Adverse Effect.

Section 4.3 Maintenance of Existence. Each Borrower will preserve, renew and
keep in full force and effect, and will cause each Subsidiary to preserve, renew
and keep in full force and effect, their respective existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business.

Section 4.4 Maintenance of Property; Insurance.

(a) Each Borrower will keep, and will cause each Subsidiary to keep, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted. If all or any part of the Collateral
becomes damaged or destroyed, each Borrower will, and will cause each Subsidiary
to, promptly and completely repair and/or restore the affected Collateral in a
good and workmanlike manner, regardless of whether Agent agrees to disburse
insurance proceeds or other sums to pay costs of the work of repair or
reconstruction.

(b) Upon completion of any Permitted Contest, Borrowers shall, and will cause
each Subsidiary to, immediately pay the amount due, if any, and deliver to Agent
proof of the completion of the contest and payment of the amount due, if any,
following which Agent shall return the security, if any, deposited with Agent
pursuant to the definition of Permitted Contest.

(c) Each Borrower will maintain, and will cause each Subsidiary to maintain,
(i) all insurance described on Schedule 4.4, upon the terms and with the
coverages and rights in favor of Agent and Lenders as described in Schedule 4.4,
and (ii) such other insurance coverage in such amounts and with respect to such
risks as Agent may reasonably from time to time request. In the event any
Borrower fails to provide Agent with evidence of the insurance coverage required
by this Agreement, Agent may purchase insurance at Borrowers’ expense to protect
Agent’s interests in the Collateral.

Section 4.5 Compliance with Laws. Each Borrower will comply, and cause each
Subsidiary to comply, with the requirements of all applicable Laws, except to
the extent that failure to so comply could not reasonably be expected to
(a) have a Material Adverse Effect, or (b) result in any Lien upon either (i) a
material portion of the assets of any such Person in favor of any Governmental
Authority, or (ii) any Accounts.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Section 4.6 Inspection of Property, Books and Records. Each Borrower will keep,
and will cause each Subsidiary to keep, proper books of record and account in
accordance with GAAP in which full, true and correct entries shall be made of
all dealings and transactions in relation to its business and activities; and
will permit, and will cause each Subsidiary to permit, at the sole cost of the
applicable Borrower or any applicable Subsidiary, representatives of Agent and
of any Lender (at Borrower’s expense for audits up to four times per year and at
Borrower’s expense at any time that an Event of Default has occurred and is
continuing) (but at such Lender’s expense unless such visit or inspection is
made concurrently with Agent) to visit and inspect any of their respective
properties, to examine and make abstracts or copies from any of their respective
books and records, to conduct a collateral audit and analysis of their
respective operations and the Collateral, to verify the amount and age of the
Accounts, the identity and credit of the respective Account Debtors, to review
the billing practices of Borrower and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants as often as may reasonably be desired. In the absence of an
Event of Default, Agent or any Lender exercising any rights pursuant to this
Section 4.6 shall give the applicable Borrower or any applicable Subsidiary
commercially reasonable prior notice of such exercise. No notice shall be
required during the existence and continuance of any Event of Default.

Section 4.7 Use of Proceeds. The proceeds of Revolving Loans shall be used by
Borrowers solely for working capital needs of Borrowers and their Subsidiaries.
No portion of the proceeds of the Loans will be used for family, personal,
agricultural or household use.

Section 4.8 Hazardous Materials; Remediation.

(a) If any release or disposal of Hazardous Materials shall occur or shall have
occurred on any real property or any other assets of any Borrower or any other
Credit Party, such Borrower will cause, or direct the applicable Credit Party to
cause, the prompt containment and removal of such Hazardous Materials and the
remediation of such real property or other assets as is necessary to comply with
all Environmental Laws and to preserve the value of such real property or other
assets. Without limiting the generality of the foregoing, each Borrower shall,
and shall cause each other Credit Party to, comply with each Environmental Law
requiring the performance at any real property by any Borrower or any other
Credit Party of activities in response to the release or threatened release of a
Hazardous Material.

(b) Borrowers will provide Agent within thirty (30) days after written demand
therefor with a bond, letter of credit or similar financial assurance evidencing
to the reasonable satisfaction of Agent that sufficient funds are available to
pay the cost of removing, treating and disposing of any Hazardous Materials or
Hazardous Materials Contamination and discharging any assessment which may be
established on any property as a result thereof, such demand to be made, if at
all, upon Agent’s reasonable business determination that the failure to remove,
treat or dispose of any Hazardous Materials or Hazardous Materials
Contamination, or the failure to discharge any such assessment could reasonably
be expected to have a Material Adverse Effect.

Section 4.9 Further Assurances.

(a) Each Borrower will, and will cause each Subsidiary to, at its own cost and
expense, cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as may from time to
time be necessary or as Agent or the Required Lenders may from time to time
reasonably request in order to carry out the intent and purposes of the
Financing Documents and the transactions contemplated thereby, including all
such actions to (i) establish, create, preserve, protect and perfect a first
priority Lien (subject only to Permitted Liens) in favor of Agent for the
benefit of the Lenders on the Collateral (including Collateral acquired after
the date hereof), including on any and all assets of each Credit Party, whether
now owned or hereafter acquired, and (ii) cause all Subsidiaries of Borrowers to
be jointly and severally obligated with the other Borrowers under all covenants
and obligations under this Agreement, including the obligation to repay the
Obligations.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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(b) Upon receipt of an affidavit of an officer of Agent or a Lender as to the
loss, theft, destruction or mutilation of any Note or any other Financing
Document which is not of public record, and, in the case of any such mutilation,
upon surrender and cancellation of such Note or other applicable Financing
Document, Borrowers will issue, in lieu thereof, a replacement Note or other
applicable Financing Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Financing Document in the same principal amount thereof
and otherwise of like tenor.

(c) Upon the request of Agent, Borrowers shall obtain a landlord’s agreement or
mortgagee agreement, as applicable, from the lessor of each leased property or
mortgagee of owned property with respect to any business location where any
portion of the Collateral included in or proposed to be included in the
Borrowing Base, or the records relating to such Collateral and/or software and
equipment relating to such records or Collateral, is stored or located, which
agreement or letter shall be reasonably satisfactory in form and substance to
Agent, provided, however, if Borrower provides Agent with evidence satisfactory
to Agent, that under the laws of any such state where such property is located
the owner or landlord does not have a lien on the Collateral which is senior to
Agent’s lien, Borrower shall only be required to use commercially reasonable
efforts to obtain such an agreement. Borrowers shall timely and fully pay and
perform its obligations under all leases and other agreements with respect to
each leased location where any Collateral, or any records related thereto, is or
may be located.

Section 4.10 Notices of Litigation and Default. Borrowers will give prompt
written notice to Agent of any litigation or governmental proceedings pending or
threatened (in writing) against Borrowers or any Subsidiary or other Credit
Party which would reasonably be expected to have a Material Adverse Effect with
respect to Borrowers, any Subsidiary or any other Credit Party. Without limiting
or contradicting any other more specific provision of this Agreement, promptly
(and in any event within three (3) Business Days) upon any Borrower becoming
aware of the existence of any Default or Event of Default, Borrowers shall give
written notice to Agent of such occurrence, which such notice shall include a
reasonably detailed description of such Default or Event of Default.

Section 4.11 Updates of Representations. Borrowers shall deliver to Agent within
ten (10) days of the written request of Agent an Officer’s Certificate updating
all of the representations and warranties contained in this Agreement and the
other Financing Documents and certifying that all of the representations and
warranties contained in this Agreement and the other Financing Documents, as
updated pursuant to such Officer’s Certificate, are true, accurate and complete
as of the date of such Officer’s Certificate.

Section 4.12 Power of Attorney. Each of the officers of Agent is hereby
irrevocably made, constituted and appointed the true and lawful attorney for
Borrowers (without requiring any of them to act as such) with full power of
substitution to do the following so long as Agent has provided not less than
three (3) Business Days’ prior written notice to Borrower to perform the same
and Borrower has failed to take such action: (a) endorse the name of Borrowers
upon any and all checks, drafts, money orders, and other instruments for the
payment of money that are payable to Borrowers and constitute collections on
Borrowers’ Accounts; (b) execute in the name of Borrowers any financing
statements, schedules, assignments, instruments, documents, and statements that
Borrowers are obligated to give Agent under this Agreement; (c) after the
occurrence and during the continuance of a Default, take any action Borrowers
are required to take under this Agreement; (d) do such other and further acts
and deeds in the name of Borrowers that Agent may deem necessary or desirable to
enforce any Account or other Collateral or perfect Agent’s security interest or
Lien in any Collateral; and (e) after the occurrence and during the continuance
of an Event of Default, do such other and further acts and deeds in the name of
Borrowers that Agent may deem necessary or desirable to enforce its rights with
regard to any Account or other Collateral. This power of attorney shall be
irrevocable and coupled with an interest.

Section 4.13 Borrowing Base Collateral Administration.

(a) All data and other information relating to Accounts or other intangible
Collateral shall at all times be kept by Borrowers at their respective principal
offices and shall not be moved from such locations without (i) providing prior
written notice to Agent, and (ii) obtaining the prior written consent of Agent,
which consent shall not be unreasonably withheld.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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(b) After a Default or an Event of Default has occurred, any of Agent’s
officers, employees or agents shall have the right, at any time or times
hereafter, in the name of Agent or any designee of Agent or Borrowers, to verify
the validity, amount or any other matter relating to any Accounts by mail,
telephone, telegraph or otherwise, including, without limitation, verification
of Borrowers’ compliance with applicable Laws. Borrowers shall cooperate fully
with Agent in an effort to facilitate and promptly conclude such verification
process. Such verification may include contacts between Agent and applicable
federal, state and local regulatory authorities having jurisdiction over the
Borrowers’ affairs, all of which contacts Borrowers hereby irrevocably
authorize.

(c) To expedite collection, Borrowers shall endeavor in the first instance to
make collection of Accounts for Agent. Agent shall have the right at any time to
notify Account Debtors that Agent has been granted a Lien upon all Accounts,
that Accounts have been assigned to Agent and, following the occurrence of a
Default, that payment of such Accounts shall be made directly by such Account
Debtors to Agent (and once such notice has been given to an Account Debtor,
Borrowers shall not give any contrary instructions to such Account Debtor
without Agent’s prior written consent). Borrowers shall provide prompt written
notice to each Person who either is currently an Account Debtor or becomes an
Account Debtor at any time following the date of this Agreement that directs
each Account Debtor to make payments into the Lockbox, and hereby authorizes
Agent, upon Borrowers’ failure to send such notices within ten (10) days after
the date of this Agreement (or ten (10) days after the Person becomes an Account
Debtor), to send any and all similar notices to such Person.

Section 4.14 [*]. Borrowers shall cause [*], pursuant to all applicable Permits
and Specified Permits, [*].

ARTICLE 5 - NEGATIVE COVENANTS

Each Borrower agrees that, so long as any Credit Exposure exists:

Section 5.1 Debt. No Borrower will, or will permit any Subsidiary to, directly
or indirectly, create, incur, assume, guarantee or otherwise become or remain
directly or indirectly liable with respect to, any Debt, except for Permitted
Indebtedness.

Section 5.2 Liens. No Borrower will, or will permit any Subsidiary to, directly
or indirectly, create, assume or suffer to exist any Lien on any Collateral now
owned or hereafter acquired by it, except for Permitted Liens.

Section 5.3 Restricted Distributions. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Distribution; provided, however, that the following
Restricted Distributions may be paid (each, an “Allowed Distribution”): (a) at
any time, dividends may be paid by any Borrower that is a Subsidiary of another
Borrower to such parent Borrower (and/or to any intermediate Subsidiary of such
Borrower); (b) Borrower may pay dividends solely in common stock; (c) Borrower
may make payments on account of the contingent value rights held by certain
Persons; and (d) Borrower may repurchase the stock of former employees,
directors or consultants pursuant to stock repurchase agreements so long as an
Event of Default does not exist at the time of such repurchase and would not
exist after giving effect to such repurchase.

Section 5.4 Restrictive Agreements. Except for non-assignment or non-encumbrance
provisions contained in licenses or other agreements entered into by Borrower in
good faith in connection with the HIV Testing Business (as defined in the Pfizer
Debt Documents), and except for non-assignment or non-encumbrance provisions
contained in non-exclusive licenses or other agreements entered into by Borrower
in good faith, no Borrower will, or will permit any Subsidiary to, directly or
indirectly (a) enter into or assume any agreement (other than the Financing
Documents) prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired, or (b) create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind (except as provided by the Financing
Documents and Pfizer Debt Documents, if any) on the ability of any Subsidiary
to: (i) pay or make Restricted Distributions to any Borrower or any Subsidiary;
(ii) pay any Debt owed to any Borrower or any Subsidiary; (iii) make loans or
advances to any Borrower or any Subsidiary; or (iv) transfer any of its property
or assets to any Borrower or any Subsidiary.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Section 5.5 Payments and Modifications of Pfizer Debt. No Borrower will, or will
permit any Subsidiary to, directly or indirectly, declare, pay, make or set
aside any amount for payment in respect of the Pfizer Debt other than regularly
scheduled payments of principal and interest due on a non-accelerated basis
under the terms of the Pfizer Debt Documents. No Borrower will, or will permit
any Subsidiary to, directly or indirectly, modify any of the terms of the Pfizer
Debt Documents from those existing as of the date hereof and reviewed by
Administrative Agent prior to the date hereof.

Section 5.6 Consolidations, Mergers and Sales of Assets; Change in Control.

(a) No Borrower will, or will permit any Subsidiary to, directly or indirectly
(a) merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person (an “Acquisition”), except for Permitted
Acquisitions, or (b) consummate any disposition of Collateral other than
(i) dispositions of personal property assets (other than Accounts) for cash and
fair value that the applicable Borrower determines in good faith is no longer
used or useful in the business of such Borrower and its Subsidiaries, and
(ii) the granting of non-exclusive licenses (or exclusive licenses limited to a
particular geographic range or field of use). No Borrower will suffer or permit
to occur any Change in Control with respect to itself, any Subsidiary or any
Guarantor, other than Permitted Transfers.

(b) Notwithstanding the foregoing in Section 5.6(a), Borrower may make
Acquisitions (each a “Permitted Acquisition” and collectively, the “Permitted
Acquisitions”) during the existence of this Agreement and in connection with
such Permitted Acquisition, alter or amend its capital structure or authorize
any additional class of equity, subject to the following conditions:
(i) Borrower gives Agent not less than ten (10) days prior written notice of
such Acquisition, (ii) that the Person being acquired or invested in (the
“Target”) shall be in the same or related line of business as the Borrower’s
current line of business, (iii) after giving effect to any such merger or
acquisition a Borrower is the surviving entity, (iv) Borrower shall remain in
compliance with all of the terms and conditions of the Loan Documents, and
(v) that the new entity will be added as a co-Borrower and will grant a lien in
favor of Agent and the Lenders in the Collateral. The Borrower shall provide the
Agent with legal and financial information on the Target within ten (10) days of
such Permitted Acquisition which legal and financial information must be
satisfactory to the Agent in all material respects.

(c) As soon as available, but in no event more than seven (7) days after
finalizing any Permitted Acquisition, Borrower shall provide the Agent with a
written summary of the transaction, which summary shall set forth, among other
things, the structure of the transaction, including whether the transaction
shall cause a change in any Borrower’s or any Subsidiary’s capital structure,
require the issuance of stock, or options to purchase stock, or require any
Borrower or any Subsidiary to redeem any stock and shall deliver to Agent such
information, documents and instruments as the Lender may require to perfect a
first lien security interest on the Collateral being acquired. In addition,
Borrower shall at the same time provide the Agent with a pro-forma Compliance
Certificate as of the most recent reporting period for which the Borrower sent
Agent a Compliance Certificate, which indicates that no default will occur under
this Agreement as a result of the Permitted Acquisition.

(d) Borrower shall not make any acquisitions, where either (i) the acquisition
is a “hostile” acquisition; or (ii) the Target is a business whose principal
office is located outside of the United States, unless the Company and Agent
have agreed upon reasonable restrictions on the transfer of assets and monies to
such Target.

(e) Each Target now or hereafter acquired either through a Permitted Acquisition
shall within seven (7) days of the closing of such Permitted Acquisition,
deliver to Agent a Joinder Agreement in substantially the form acceptable to
Agent, pursuant to which (a) it shall join as a Borrower under each of the Loan
Documents to which the Borrowers are parties, and (b) grant to Lender a lien on
all of its Collateral to secure the Obligations, free and clear of all Liens.

Section 5.7 Reserved.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Section 5.8 Transactions with Affiliates. Except as otherwise disclosed on
Schedule 5.8, and except for transactions that are disclosed to Agent in advance
of being entered into and which contain terms that are no less favorable to the
applicable Borrower or any Subsidiary, as the case may be, than those which
might be obtained from a third party not an Affiliate of any Credit Party, no
Borrower will, or will permit any Subsidiary to, directly or indirectly, enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
any Borrower.

Section 5.9 Modification of Organizational Documents. No Borrower will, or will
permit any Subsidiary to, directly or indirectly, amend or otherwise modify any
Organizational Documents of such Person, except for such amendments or other
modifications (a) that do not adversely affect Agent or Lenders and that would
not reasonably be expected to have a Material Adverse Effect or (b) that are
required (i) under this Agreement or (ii) by applicable Law, and in each case
fully disclosed to Agent.

Section 5.10 Modification of Certain Agreements. No Borrower will, or will
permit any Subsidiary to, directly or indirectly, amend or otherwise modify any
Operative Document, which amendment or modification in any case: (a) is contrary
to the terms of this Agreement or any other Financing Document; (b) could
reasonably be expected to be adverse to the rights, interests or privileges of
the Agent or the Lenders or their ability to enforce the same; (c) results in
the imposition or expansion in any material respect of any restriction or burden
on any Borrower or any Subsidiary; or (d) reduces in any material respect any
rights or benefits of any Borrower or any Subsidiaries (it being understood and
agreed that any such determination shall be in the discretion of the Agent).
Each Borrower shall, prior to entering into any amendment or other modification
of any of the foregoing documents, deliver to Agent reasonably in advance of the
execution thereof, any final or execution form copy of amendments or other
modifications to such documents, and, if approval of Required Lenders is
required by the terms of this Section 5.10 prior to the taking of any such
action, such Borrower agrees not to take, nor permit any of its Subsidiaries to
take, any such action with respect to any such documents without obtaining such
approval from Required Lenders.

Section 5.11 Conduct of Business. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, engage in any line of business other than
those businesses engaged in on the Closing Date and described on Schedule 5.11
and businesses reasonably related thereto.

Section 5.12 Lease Payments. No Borrower will, or will permit any Subsidiary to,
directly or indirectly, incur or assume (whether pursuant to a Guarantee or
otherwise) any liability for rental payments except in the Ordinary Course of
Business.

Section 5.13 Limitation on Sale and Leaseback Transactions. No Borrower will, or
will permit any Subsidiary to, directly or indirectly, enter into any
arrangement with any Person whereby, in a substantially contemporaneous
transaction, any Borrower or any Subsidiaries sells or transfers all or
substantially all of its right, title and interest in an asset and, in
connection therewith, acquires or leases back the right to use such asset.

Section 5.14 Bank Accounts. No Borrower will, or will permit any Subsidiary to,
directly or indirectly, establish any new bank account without prior written
notice to Agent and unless Agent, such Borrower or such Subsidiary and the bank
at which the account is to be opened enter into a control agreement regarding
such bank account pursuant to which such bank acknowledges the security interest
of Agent in such bank account, agrees to comply with instructions originated by
Agent directing disposition of the funds in the bank account without further
consent from any Borrower, and agrees to subordinate and limit any security
interest the bank may have in the bank account on terms satisfactory to Agent.

Section 5.15 Compliance with Anti-Terrorism Laws. Agent hereby notifies
Borrowers that pursuant to the requirements of Anti-Terrorism Laws, and Agent’s
policies and practices, Agent is required to obtain, verify and record certain
information and documentation that identifies Borrowers and its principals,
which information includes the name and address of each Borrower and its
principals and such other information that will allow Agent to identify such
party in accordance with Anti-Terrorism Laws. No Borrower will, or will permit
any Subsidiary to, directly or indirectly, knowingly enter into any Operative
Documents or Material Contracts with any Person listed on the OFAC Lists. Each
Borrower shall immediately notify Agent if such Borrower has knowledge

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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that any Borrower or any additional Credit Party is listed on the OFAC Lists or
(a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or
(d) is arraigned and held over on charges involving money laundering or
predicate crimes to money laundering. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including, without limitation,
the making or receiving of any contribution of funds, goods or services to or
for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224 or other
Anti-Terrorism Law.

ARTICLE 6 - RESERVED

ARTICLE 7 - CONDITIONS

Section 7.1 Conditions to Closing. The obligation of each Lender to make the
initial Loans, of Agent to issue any Support Agreements on the Closing Date and
of any LC Issuer to issue any Lender Letter of Credit on the Closing Date shall
be subject to the receipt by Agent of each agreement, document and instrument
set forth on the closing checklist prepared by Agent or its counsel, each in
form and substance satisfactory to Agent, and to the satisfaction of the
following conditions precedent, each to the satisfaction of Agent and Lenders in
their sole discretion:

(a) receipt by Agent of evidence of the consummation of the transactions (other
than the funding of the Loans and the closing of any acquisition for which the
proceeds of the Loans are purchase money) contemplated by the Operative
Documents;

(b) the payment of all fees, expenses and other amounts due and payable under
each Financing Document;

(c) the absence, since March 31, 2006, of any Material Adverse Effect;

(d) the receipt by Agent of the initial Borrowing Base Certificate, prepared as
of the Closing Date;

(e) the receipt by Agent of a subordination agreement acceptable to Agent and
executed by Pfizer, Inc. pursuant to which Pfizer, Inc. subordinates its Lien on
Proceeds of its collateral to the Lien of the Agent and Lenders in Borrower’s
Accounts, and

(f) receipt by Agent of such other documents, instruments and/or agreements as
Agent may reasonably request.

Section 7.2 Conditions to Each Loan, Support Agreement and Lender Letter of
Credit.

The obligation of the Lenders to make a Loan (other than Revolving Loans made
pursuant to Section 2.4(c)) or an advance in respect of any Loan, of Agent to
issue any Support Agreement or of any LC Issuer to issue any Lender Letter of
Credit (including, in each case, on the Closing Date) is subject to the
satisfaction of the following additional conditions:

(a) in the case of a Revolving Loan Borrowing, receipt by Agent of a Notice of
Borrowing (or telephonic notice if permitted by this Agreement) and updated
Borrowing Base Certificate current as of the last day of the month before the
date of the Notice of Borrowing, in the case of any Support Agreement or Lender
Letter of Credit, receipt by Agent of a Notice of LC Credit Event in accordance
with Section 2.4(a);

(b) the fact that, immediately after such borrowing and after application of the
proceeds thereof or after such issuance, the Revolving Loan Outstandings will
not exceed the Revolving Loan Limit;

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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(c) in the case of the obligation of the Lenders to make a Loan (other than
Revolving Loans made pursuant to Section 2.4(c)) or an advance in respect of any
Loan, the fact that, immediately after such borrowing and after application of
the proceeds thereof, the Revolving Loan Principal Outstandings will not exceed
the Borrowing Base;

(d) the fact that, immediately before and after such borrowing or issuance, no
Default or Event of Default shall have occurred and be continuing;

(d) the fact that the representations and warranties of each Credit Party
contained in the Financing Documents shall be true, correct and complete on and
as of the date of such borrowing or issuance, except to the extent that any such
representation or warranty relates to a specific date in which case such
representation or warranty shall be true and correct as of such earlier date;
and

(e) the fact that no Material Adverse Effect shall have occurred and be
continuing since the date of this Agreement.

Each giving of a Notice of LC Credit Event hereunder, each giving of a Notice of
Borrowing hereunder and each acceptance by any Borrower of the proceeds of any
Loan made hereunder shall be deemed to be (y) a representation and warranty by
each Borrower on the date of such notice or acceptance as to the facts specified
in this Section, and (z) a restatement by each Borrower that each and every one
of the representations made by it in any of the Financing Documents is true and
correct in all material respects (except to the extent that such representations
and warranties expressly relate solely to an earlier date).

Section 7.3 Searches. Before the Closing Date, and thereafter (as and when
determined by Agent in its discretion), Agent shall have the right to perform,
all at Borrowers’ expense, the searches described in clauses (a), (b), (c) and
(d) below against Borrowers and any other Credit Party, the results of which are
to be consistent with Borrowers’ representations and warranties under this
Agreement and the satisfactory results of which shall be a condition precedent
to all advances of Loan proceeds, all issuances of Lender Letters of Credit and
all undertakings in respect of Support Agreements: (a) UCC searches with the
Secretary of State and local filing offices of each jurisdiction where the
applicable Person maintains its executive offices, a place of business, or
assets and the jurisdiction in which the applicable Person is organized;
(b) Judgment, pending litigation, federal tax lien, personal property tax lien,
and corporate and partnership tax lien searches, in each jurisdiction searched
under clause (a) above; (c) Real property title and lien searches in each
jurisdiction in which any real property Collateral is located; and (d) Searches
of applicable corporate, limited liability company, partnership and related
records to confirm the continued existence, organization and good standing of
the applicable Person and the exact legal name under which such Person is
organized.

Section 7.4 Post Closing Requirements. Borrowers shall complete each of the post
closing obligations and/or provide to Agent each of the documents, instruments,
agreements and information listed on Schedule 7.4 attached hereto on or before
the date set forth for each such item thereon, each of which shall be completed
or provided in form and substance satisfactory to Agent.

ARTICLE 8 - SECURITY AGREEMENT

Section 8.1 Generally. As security for the payment and performance of the
Obligations, and without limiting any other grant of a Lien and security
interest in any Security Document, Borrowers hereby assign and grant to Agent a
continuing first priority Lien (except for the second priority Lien on
Inventory) on and security interest in, upon, and to the Collateral.

Section 8.2 Covenants Relating to Collateral.

(a) Borrowers shall not take any of the following actions or make any of the
following changes unless Borrowers have given at least thirty (30) days prior
written notice to Agent of Borrowers’ intention to take any such action (which
such written notice shall include an updated version of any Schedule impacted by
such change) and

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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have executed any and all documents, instruments and agreements and taken any
other actions with Agent may request after receiving such written notice in
order to protect and preserve the Liens, rights and remedies of Agent with
respect to the Collateral: (i) change the legal name or organizational
identification number of any Borrower, (ii) change the jurisdiction of
incorporation or formation of any Borrower or allow any Borrower to designate
any jurisdiction as an additional jurisdiction of incorporation for such
Borrower, or (iii) move any Collateral to or place any Collateral on any
location that is not then listed on the Schedules and/or establish any business
location at any location that is not then listed on the Schedules.

(b) Borrowers shall not adjust, settle or compromise the amount or payment of
any Account, or release wholly or partly any Account Debtor, or allow any credit
or discount thereon (other than credits and discounts in the Ordinary Course of
Business and in amounts which are not material with respect to the Account)
without the prior written consent of Agent. Without limiting the generality of
this Agreement or any other provisions of any of the Financing Documents
relating to the rights of Agent after the occurrence and during the continuance
of an Event of Default, Agent shall have the right at any time after the
occurrence and during the continuance of an Event of Default to: (i) exercise
the rights of Borrowers with respect to the obligation of any Account Debtor to
make payment or otherwise render performance to Borrowers and with respect to
any property that secures the obligations of any Account Debtor or any other
Person obligated on the Collateral, and (ii) adjust, settle or compromise the
amount or payment of such Accounts.

(c) Without limiting the generality of Sections 8.2(b):

(i) Borrowers shall deliver to Agent all tangible Chattel Paper and all
Instruments owned by any Borrower and constituting part of the Collateral duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to Agent. Borrowers shall provide Agent
with “control” (as defined in Article 9 of the UCC) of all electronic Chattel
Paper owned by any Borrower and constituting part of the Collateral by having
Agent identified as the assignee of the records pertaining to the single
authoritative copy thereof and otherwise complying with the applicable elements
of control set forth in the UCC. Borrowers also shall deliver to Agent all
security agreements securing any such Chattel Paper and securing any such
Instruments. Borrowers will mark conspicuously all such Chattel Paper and all
such Instruments with a legend, in form and substance satisfactory to Agent,
indicating that such Chattel Paper and such Instruments are subject to the
security interests and Liens in favor of Agent created pursuant to this
Agreement and the Security Documents.

(ii) Borrowers shall deliver to Agent all letters of credit on which any
Borrower is the beneficiary and which give rise to letter of credit rights owned
by such Borrower which constitute part of the Collateral in each case duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to Agent. Borrowers shall take any and
all actions as may be necessary or desirable, or that Agent may request, from
time to time, to cause Agent to obtain exclusive “control” (as defined in
Article 9 of the UCC) of any such letter of credit rights in a manner acceptable
to Agent.

(iii) Borrowers shall promptly advise Agent upon any Borrower becoming aware
that it has any interests in any commercial tort claim that constitutes part of
the Collateral, which such notice shall include descriptions of the events and
circumstances giving rise to such commercial tort claim and the dates such
events and circumstances occurred, the potential defendants with respect such
commercial tort claim and any court proceedings that have been instituted with
respect to such commercial tort claims, and Borrowers shall, with respect to any
such commercial tort claim, execute and deliver to Agent such documents as Agent
shall request to perfect, preserve or protect the Liens, rights and remedies of
Agent with respect to any such commercial tort claim.

(iv) No Collateral shall at any time be in the possession or control of any
warehouse, consignee, bailee or any of Borrowers’ agents or processors without
prior written notice to Agent and the receipt by Agent, if Agent has so
requested, of warehouse receipts, consignment agreements or bailee lien waivers
(as applicable) satisfactory to Agent prior to the commencement of such
possession or control. Borrower has notified Agent that Collateral is currently
located at the locations set forth on Schedule 8.2. Borrowers shall, upon the
request of Agent, notify any such warehouse, consignee, bailee, agent or
processor of the security interests and Liens in favor of Agent created pursuant
to this Agreement and the Security Documents, instruct such Person to hold all
such Collateral for Agent’s account subject to Agent’s instructions and shall
obtain an acknowledgement from such Person that such Person holds the Collateral
for Lender’s benefit.

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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(v) Borrowers shall cause all equipment and other tangible personal property
other than Inventory to be maintained and preserved in the same condition,
repair and in working order as when new, ordinary wear and tear excepted, and
shall promptly make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable to such
end. Upon request of Agent, Borrowers shall promptly deliver to Agent any and
all certificates of title, applications for title or similar evidence of
ownership of all such tangible personal property and shall cause Agent to be
named as lienholder on any such certificate of title or other evidence of
ownership. Borrowers shall not permit any such tangible personal property to
become fixtures to real estate.

(vi) Each Borrower hereby authorizes Agent to file without the signature of such
Borrower one or more UCC financing statements relating to all or any part of the
Collateral, which financing statements may list Agent as the “secured party” and
such Borrower as the “debtor” and which describe and indicate the collateral
covered thereby as all or any part of the Collateral under the Financing
Documents (including an indication of the collateral covered by any such
financing statement as “all assets” of such Borrower now owned or hereafter
acquired), in such jurisdictions as Agent from time to time determines are
appropriate, and to file without the signature of such Borrower any
continuations of or amendments to any such financing statements, in any such
case in order for Agent to perfect, preserve or protect the Liens, rights and
remedies of Agent with respect to the Collateral.

(vii) Borrowers shall promptly notify Agent in writing upon creation or
acquisition by any Borrower of any Collateral which constitutes a claim against
any Governmental Authority, including, without limitation, the federal
government of the United States or any instrumentality or agency thereof, the
assignment of which claim is restricted by any applicable Law, including,
without limitation, the federal Assignment of Claims Act and any other
comparable Law. Upon the request of Agent, Borrowers shall take such steps as
may be necessary or desirable, or that Agent may request, to comply with any
such applicable Law.

(viii) Borrowers shall furnish to Agent from time to time any statements and
schedules further identifying or describing the Collateral and any other
information, reports or evidence concerning the Collateral as Lender may
reasonably request from time to time.

Section 8.3 UCC Remedies.

(a) Upon the occurrence of and during the continuance of an Event of Default
under this Agreement or the other Financing Documents, Agent, in addition to all
other rights, options, and remedies granted to Agent under this Agreement or at
law or in equity, may exercise, either directly or through one or more assignees
or designees, all rights and remedies granted to it under all Financing
Documents and under the UCC in effect in the applicable jurisdiction(s) and
under any other applicable law; including, without limitation:

(i) The right to take possession of, send notices regarding, and collect
directly the Collateral, with or without judicial process;

(ii) The right to (by its own means or with judicial assistance) enter any of
Borrowers’ premises and take possession of the Collateral, or render it
unusable, or to render it usable or saleable, or dispose of the Collateral on
such premises in compliance with subsection (iii) below and to take possession
of Borrowers’ original books and records, to obtain access to Borrowers’ data
processing equipment, computer hardware and software relating to the Collateral
and to use all of the foregoing and the information contained therein in any
manner Agent deems appropriate, without any liability for rent, storage,
utilities, or other sums, and Borrowers shall not resist or interfere with such
action (if Borrowers’ books and records are prepared or maintained by an
accounting service, contractor or other third party agent, Borrowers hereby
irrevocably authorize such service, contractor or other agent, upon notice by
Agent to such Person that an Event of Default has occurred and is continuing, to
deliver to Agent or its designees such books and records, and to follow Agent’s
instructions with respect to further services to be rendered);

 

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(iii) The right to require Borrowers at Borrowers’ expense to assemble all or
any part of the Collateral and make it available to Agent at any place
designated by Lender;

(iv) The right to notify postal authorities to change the address for delivery
of Borrowers’ mail to an address designated by Agent and to receive, open and
dispose of all mail addressed to any Borrower.

(v) The right to enforce Borrowers’ rights against Account Debtors and other
obligors, including, without limitation, the right to collect Accounts directly
in Agent’s own name (as agent for Lenders) and to charge the collection costs
and expenses, including attorneys’ fees, to Borrowers.

(b) Each Borrower agrees that a notice received by it at least ten (10) days
before the time of any intended public sale, or the time after which any private
sale or other disposition of the Collateral is to be made, shall be deemed to be
reasonable notice of such sale or other disposition. If permitted by applicable
law, any perishable Collateral which threatens to speedily decline in value or
which is sold on a recognized market may be sold immediately by Agent without
prior notice to Borrowers. At any sale or disposition of Collateral, Agent may
(to the extent permitted by applicable law) purchase all or any part of the
Collateral, free from any right of redemption by Borrowers, which right is
hereby waived and released. Each Borrower covenants and agrees not to interfere
with or impose any obstacle to Agent’s exercise of its rights and remedies with
respect to the Collateral. Agent shall have no obligation to clean-up or
otherwise prepare the Collateral for sale. Agent may comply with any applicable
state or federal law requirements in connection with a disposition of the
Collateral and compliance will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral. Agent may sell the
Collateral without giving any warranties as to the Collateral. Agent may
specifically disclaim any warranties of title or the like. This procedure will
not be considered to adversely affect the commercial reasonableness of any sale
of the Collateral. If Agent sells any of the Collateral upon credit, Borrowers
will be credited only with payments actually made by the purchaser, received by
Agent and applied to the indebtedness of the purchaser. In the event the
purchaser fails to pay for the Collateral, Agent may resell the Collateral and
Borrowers shall be credited with the proceeds of the sale. Borrowers shall
remain liable for any deficiency if the proceeds of any sale or disposition of
the Collateral are insufficient to pay all Obligations.

(c) Without restricting the generality of the foregoing and for the purposes
aforesaid, each Borrower hereby appoints and constitutes Agent its lawful
attorney-in-fact with full power of substitution in the Collateral to use
unadvanced funds remaining under this Agreement or which may be reserved,
escrowed or set aside for any purposes hereunder at any time, or to advance
funds in excess of the face amount of the Notes, to pay, settle or compromise
all existing bills and claims, which may be liens or security interests, or to
avoid such bills and claims becoming liens against the Collateral; to execute
all applications and certificates in the name of such Borrower and to prosecute
and defend all actions or proceedings in connection with the Collateral; and to
do any and every act which such Borrower might do in its own behalf; it being
understood and agreed that this power of attorney shall be a power coupled with
an interest and cannot be revoked.

(d) Agent and each Lender is hereby granted a non-exclusive, royalty-free
license or other right to use, without charge, Borrowers’ labels, patents,
copyrights, mask works, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any similar property as it
pertains to the Collateral, in completing production of, advertising for sale,
and selling any Collateral and, in connection with Agent’s exercise of its
rights under this Article, Borrowers’ rights under all licenses and all
franchise agreements inure to Agent’s and each Lender’s benefit.

ARTICLE 9 - EVENTS OF DEFAULT

Section 9.1 Events of Default.

For purposes of the Financing Documents, the occurrence of any of the following
conditions and/or events, whether voluntary or involuntary, by operation of law
or otherwise, shall constitute an “Event of Default”:

 

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(a) any Borrower shall fail to pay when due any principal, interest, premium or
fee under any Financing Document or any other amount payable under any Financing
Document, or there shall occur any default in the performance of or compliance
with any of the following sections of this Agreement: Article 5; Section 4.4;
and Section 2.9;

(b) any Credit Party defaults in the performance of or compliance with any term
contained in this Agreement or in any other Financing Document (other than
occurrences described in other provisions of this Section 9.1 for which a
different grace or cure period is specified or for which no grace or cure period
is specified and thereby constitute immediate Events of Default) and such
default is not remedied or waived within thirty (30) days;

(c) any representation, warranty, certification or statement made by any Credit
Party or any other Person in any Financing Document or in any certificate,
financial statement or other document delivered pursuant to any Financing
Document is incorrect in any respect (or in any material respect if such
representation, warranty, certification or statement is not by its terms already
qualified as to materiality) when made (or deemed made);

(d) any Credit Party shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;

(e) an involuntary case or other proceeding shall be commenced against any
Credit Party seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of forty-five (45) days; or an order for
relief shall be entered against any Credit Party under the federal bankruptcy
laws as now or hereafter in effect;

(f) one or more judgments or orders for the payment of money (not paid or fully
covered by insurance maintained in accordance with the requirements of this
Agreement and as to which the relevant insurance company has acknowledged
coverage) aggregating in excess of $250,000 shall be rendered against any or all
Credit Parties and either (i) enforcement proceedings shall have been commenced
by any creditor upon any such judgments or orders, or (ii) there shall be any
period of twenty (20) consecutive days during which a stay of enforcement of any
such judgments or orders, by reason of a pending appeal, bond or otherwise,
shall not be in effect;

(g) any Lien created by any of the Security Documents shall at any time fail to
constitute a valid and perfected Lien on all of the Collateral purported to be
secured thereby, subject to no prior or equal Lien except Permitted Liens, or
any Credit Party shall so assert;

(h) the institution by any Governmental Authority of criminal proceedings
against any Credit Party;

(i) a default or event of default occurs under any Financing Document Guarantee;

(j) any Borrower makes any payment on account of (1) any Debt that has been
subordinated to any of the Obligations, other than payments specifically
permitted by the terms of such subordination, or (2) the Pfizer Debt other than
payments of principal and interest due on a non-accelerated basis in accordance
with the terms of the Pfizer Debt Documents as they exist on the date hereof; or

(k) the holder or holders of an Indebtedness in an amount in excess of One
Hundred Thousand Dollars ($100,000), including, without limitation, the holder
of the Pfizer Debt, causes such Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity.

 

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All cure periods provided for in this Section shall run concurrently with any
cure period provided for in any applicable Financing Documents under which the
default occurred.

Section 9.2 Acceleration and Suspension or Termination of Revolving Loan
Commitment. Upon the occurrence and during the continuance of an Event of
Default, Agent may, and shall if requested by Required Lenders, (a) by notice to
Borrowers suspend or terminate the Revolving Loan Commitment and the obligations
of Agent and the Lenders with respect thereto, in whole or in part (and, if in
part, such reduction shall be pro rata among the Lenders having a Revolving Loan
Commitment Percentage), and/or (b) by notice to Borrowers declare the
Obligations to be, and the Obligations shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower and Borrowers will pay the same;
provided, however, that in the case of any of the Events of Default specified in
Section 9.1(f) or 9.1(g) above, without any notice to any Borrower or any other
act by Agent or the Lenders, the Revolving Loan Commitment and the obligations
of Agent and the Lenders with respect thereto shall thereupon terminate and all
of the Obligations shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Borrower and Borrowers will pay the same.

Section 9.3 Cash Collateral. If (a) any Event of Default specified in
Section 9.1(f) or 9.1(g) shall occur, (b) the Obligations shall have otherwise
been accelerated pursuant to Section 9.2, or (c) the Revolving Loan Commitment
and the obligations of Agent and the Lenders with respect thereto shall have
been terminated pursuant to Section 9.2, then without any request or the taking
of any other action by Agent or the Lenders, Borrowers shall immediately comply
with the provisions of Section 2.4(e) with respect to the deposit of cash
collateral to secure the existing Letter of Credit Liability and future payment
of related fees.

Section 9.4 Default Rate of Interest. At the election of Agent or Required
Lenders, after the occurrence of an Event of Default and for so long as it
continues, (a) the Loans and other Obligations shall bear interest at rates that
are two percent (2.0%) per annum in excess of the rates otherwise payable under
this Agreement, and (b) the fee described in Section 2.4(b) shall increase by a
rate that is two percent (2.0%) in excess of the rate otherwise payable under
such Section.

Section 9.5 Setoff Rights. During the continuance of any Event of Default, each
Lender is hereby authorized by each Borrower at any time or from time to time,
with reasonably prompt subsequent notice to such Borrower (any prior or
contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (a) balances held by such Lender or any of
such Lender’s Affiliates at any of its offices for the account of such Borrower
or any of its Subsidiaries (regardless of whether such balances are then due to
such Borrower or its Subsidiaries), and (b) other property at any time held or
owing by such Lender to or for the credit or for the account of such Borrower or
any of its Subsidiaries, against and on account of any of the Obligations;
except that no Lender shall exercise any such right without the prior written
consent of Agent. Any Lender exercising a right to set off shall purchase for
cash (and the other Lenders shall sell) interests in each of such other Lender’s
Pro Rata Share of the Obligations as would be necessary to cause all Lenders to
share the amount so set off with each other Lender in accordance with their
respective Pro Rata Share of the Obligations. Each Borrower agrees, to the
fullest extent permitted by law, that any Lender and any of such Lender’s
Affiliates may exercise its right to set off with respect to the Obligations as
provided in this Section 9.5.

Section 9.6 Application of Proceeds. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, (a) each Borrower irrevocably waives the right to direct
the application of any and all payments at any time or times thereafter received
by Agent from or on behalf of such Borrower or any Guarantor of all or any part
of the Obligations, and, as between Borrowers on the one hand and Agent and
Lenders on the other, Agent shall have the continuing and exclusive right to
apply and to reapply any and all payments received against the Obligations in
such manner as Agent may deem advisable notwithstanding any previous application
by Agent, and (b) the proceeds of any sale of, or other realization upon, all or
any part of the Collateral shall be applied: first, to all fees, costs,
indemnities, liabilities, obligations and expenses incurred by or owing to Agent
with respect to this Agreement, the other Financing Documents or the Collateral;
second, to all fees, costs, indemnities, liabilities, obligations and expenses
incurred by

 

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or owing to any Lender with respect to this Agreement, the other Financing
Documents or the Collateral; third, to accrued and unpaid interest on the
Obligations (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts); fourth, to the principal
amount of the Obligations outstanding; and fifth to any other indebtedness or
obligations of Borrowers owing to Agent or any Lender under the Financing
Documents. Any balance remaining shall be delivered to Borrowers or to whoever
may be lawfully entitled to receive such balance (including any holder of the
indebtedness evidenced by the Affiliated Financing Documents) or as a court of
competent jurisdiction may direct. In carrying out the foregoing, (x) amounts
received shall be applied in the numerical order provided until exhausted prior
to the application to the next succeeding category, and (y) each of the Persons
entitled to receive a payment in any particular category shall receive an amount
equal to its pro rata share of amounts available to be applied pursuant thereto
for such category.

Section 9.7 Waivers.

(a) Except as otherwise provided for in this Agreement and to the fullest extent
permitted by applicable law, each Borrower waives: (i) presentment, demand and
protest, and notice of presentment, dishonor, intent to accelerate,
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all Financing Documents, the Notes or
any other notes, commercial paper, accounts, contracts, documents, Instruments,
Chattel Paper and Guarantees at any time held by Lenders on which any Borrower
may in any way be liable, and hereby ratifies and confirms whatever Lenders may
do in this regard; (ii) all rights to notice and a hearing prior to Agent’s or
any Lender’s taking possession or control of, or to Agent’s or any Lender’s
replevy, attachment or levy upon, any Collateral or any bond or security which
might be required by any court prior to allowing Agent or any Lender to exercise
any of its remedies; and (iii) the benefit of all valuation, appraisal and
exemption Laws. Each Borrower acknowledges that it has been advised by counsel
of its choices and decisions with respect to this Agreement, the other Financing
Documents and the transactions evidenced hereby and thereby.

(b) Each Borrower for itself and its successors and assigns, (i) agrees that its
liability shall not be in any manner affected by any indulgence, extension of
time, renewal, waiver, or modification granted or consented to by Lender;
(ii) consents to any indulgences and all extensions of time, renewals, waivers,
or modifications that may be granted by Agent or any Lender with respect to the
payment or other provisions of the Financing Documents, and to any substitution,
exchange or release of the Collateral, or any part thereof, with or without
substitution, and agrees to the addition or release of any Borrower, endorsers,
guarantors, or sureties, or whether primarily or secondarily liable, without
notice to any other Borrower and without affecting its liability hereunder;
(iii) agrees that its liability shall be unconditional and without regard to the
liability of any other Borrower, Agent or any Lender for any tax on the
indebtedness; and (iv) to the fullest extent permitted by law, expressly waives
the benefit of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict
with the foregoing.

(c) To the extent that Agent or any Lender may have acquiesced in any
noncompliance with any requirements or conditions precedent to the closing of
the Loans or to any subsequent disbursement of Loan proceeds, such acquiescence
shall not be deemed to constitute a waiver by Agent or any Lender of such
requirements with respect to any future disbursements of Loan proceeds and Agent
may at any time after such acquiescence require Borrowers to comply with all
such requirements. Any forbearance by Agent or Lender in exercising any right or
remedy under any of the Financing Documents, or otherwise afforded by applicable
law, including any failure to accelerate the maturity date of the Loans, shall
not be a waiver of or preclude the exercise of any right or remedy nor shall it
serve as a novation of the Notes or as a reinstatement of the Loans or a waiver
of such right of acceleration or the right to insist upon strict compliance of
the terms of the Financing Documents. Agent’s or any Lender’s acceptance of
payment of any sum secured by any of the Financing Documents after the due date
of such payment shall not be a waiver of Agent’s and such Lender’s right to
either require prompt payment when due of all other sums so secured or to
declare a default for failure to make prompt payment. The procurement of
insurance or the payment of taxes or other liens or charges by Agent as the
result of an Event of Default shall not be a waiver of Agent’s right to
accelerate the maturity of the Loans, nor shall Agent’s receipt of any
condemnation awards, insurance proceeds, or damages under this Agreement operate
to cure or waive any Credit Party’s default in payment of sums secured by any of
the Financing Documents.

 

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(d) Without limiting the generality of anything contained in this Agreement or
the other Financing Documents, each Borrower agrees that if an Event of Default
is continuing (i) Agent and Lenders are not subject to any “one action” or
“election of remedies” law or rule, and (ii) all Liens and other rights,
remedies or privileges provided to Agent or Lenders shall remain in full force
and effect until Agent or Lenders have exhausted all remedies against the
Collateral and any other properties owned by Borrowers and the Financing
Documents and other security instruments or agreements securing the Loans have
been foreclosed, sold and/or otherwise realized upon in satisfaction of
Borrowers’ obligations under the Financing Documents.

(e) Nothing contained herein or in any other Financing Document shall be
construed as requiring Agent or any Lender to resort to any part of the
Collateral for the satisfaction of any of Borrowers’ obligations under the
Financing Documents in preference or priority to any other Collateral, and Agent
may seek satisfaction out of all of the Collateral or any part thereof, in its
absolute discretion in respect of Borrowers’ obligations under the Financing
Documents. In addition, Agent shall have the right from time to time to
partially foreclose upon any Collateral in any manner and for any amounts
secured by the Financing Documents then due and payable as determined by Agent
in its sole discretion, including, without limitation, the following
circumstances: (i) in the event any Borrower defaults beyond any applicable
grace period in the payment of one or more scheduled payments of principal
and/or interest, Agent may foreclose upon all or any part of the Collateral to
recover such delinquent payments, or (ii) in the event Agent elects to
accelerate less than the entire outstanding principal balance of the Loans,
Agent may foreclose all or any part of the Collateral to recover so much of the
principal balance of the Loans as Lender may accelerate and such other sums
secured by one or more of the Financing Documents as Agent may elect.
Notwithstanding one or more partial foreclosures, any unforeclosed Collateral
shall remain subject to the Financing Documents to secure payment of sums
secured by the Financing Documents and not previously recovered.

(f) To the fullest extent permitted by law, each Borrower, for itself and its
successors and assigns, waives in the event of foreclosure of any or all of the
Collateral any equitable right otherwise available to any Credit Party which
would require the separate sale of the any of the Collateral or require Agent or
Lenders to exhaust their remedies against any part of the Collateral before
proceeding against any other part of the Collateral; and further in the event of
such foreclosure each Borrower does hereby expressly consent to and authorize,
at the option of Lender, the foreclosure and sale either separately or together
of each part of the Collateral.

Section 9.8 Injunctive Relief. The parties acknowledge and agree that, in the
event of a breach or threatened breach of any Credit Party’s obligations under
any Financing Documents, Agent and Lenders may have no adequate remedy in money
damages and, accordingly, shall be entitled to an injunction (including without
limitation, a temporary restraining order, preliminary injunction, writ of
attachment, or order compelling an audit) against such breach or threatened
breach, including, without limitation, maintaining the cash management and
collection procedure described herein. However, no specification in this
Agreement of a specific legal or equitable remedy shall be construed as a waiver
or prohibition against any other legal or equitable remedies in the event of a
breach or threatened breach of any provision of this Agreement. Each Credit
Party waives, to the fullest extent permitted by law, the requirement of the
posting of any bond in connection with such injunctive relief. By joining in the
Financing Documents as a Credit Party, each Credit Party specifically joins in
this Section as if this Section were a part of each Financing Documents executed
by the Credit Party.

Section 9.9 Marshalling. Agent and Lenders shall have no obligation to marshal
any assets in favor of any Credit Party, or against or in payment of any of the
other Obligations or any other obligation owed to Agent or Lenders by any Credit
Party.

ARTICLE 10 - AGENT

Section 10.1 Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes Agent to enter into each of the Financing Documents to
which it is a party (other than this Agreement) on its behalf and to take such
actions as Agent on its behalf and to exercise such powers under the Financing
Documents as are delegated to Agent by the terms thereof, together with all such
powers as are reasonably incidental thereto. Subject to the terms of the other
Financing Documents, Agent is authorized and empowered to amend,

 

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modify, or waive any provisions of this Agreement or the other Financing
Documents on behalf of Lenders. The provisions of this Article 10 are solely for
the benefit of Agent and Lenders and neither any Borrower nor any other Credit
Party shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
Agent shall act solely as agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Borrower or any other Credit Party. Agent may perform any of its
duties hereunder, or under the Financing Documents, by or through its agents or
employees.

Section 10.2 Right to Perform, Preserve and Protect. If any Credit Party fails
to perform any obligation hereunder or under any other Financing Document, Agent
itself may, but shall not be obligated to, cause such obligation to be performed
at Borrowers’ expense. Agent is further authorized by Borrowers and the Lenders
to make expenditures from time to time which Agent, in its reasonable business
judgment, deems necessary or desirable to (a) preserve or protect the business
conducted by Borrowers, the Collateral, or any portion thereof and/or
(b) enhance the likelihood of, or maximize the amount of, repayment of the Loans
and other Obligations. Each Borrower hereby agrees to reimburse Agent on demand
for any and all costs, liabilities and obligations incurred by Agent pursuant to
this Section 10.2, together with interest thereon at the applicable default rate
hereunder.

ARTICLE 11 - MISCELLANEOUS

Section 11.1 Survival. All agreements, representations and warranties made
herein and in every other Financing Document shall survive the execution and
delivery of this Agreement and the other Financing Documents and the other
Operative Documents. The provisions of Sections 2.7 and Articles 10 and 11 shall
survive the payment of the Obligations (both with respect to any Lender and all
Lenders collectively) and any termination of this Agreement.

Section 11.2 No Waivers. No failure or delay by Agent or any Lender in
exercising any right, power or privilege under any Financing Document shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein and therein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Any reference in any Financing Document to the “continuing” nature of any Event
of Default shall not be construed as establishing or otherwise indicating that
any Borrower or any other Credit Party has the independent right to cure any
such Event of Default, but is rather presented merely for convenience should
such Event of Default be waived in accordance with the terms of the applicable
Financing Documents.

Section 11.3 Notices.

(a) All notices, requests and other communications to any party hereunder shall
be in writing (including prepaid overnight courier, facsimile transmission or
similar writing) and shall be given to such party at its address, facsimile
number or e-mail address set forth on the signature pages hereof (or, in the
case of any such Lender who becomes a Lender after the date hereof, in an
Assignment Agreement or in a notice delivered to Borrowers and Agent by the
assignee Lender forthwith upon such assignment) or at such other address,
facsimile number or e-mail address as such party may hereafter specify for the
purpose by notice to Agent and Borrowers; provided, however, that notices,
requests or other communications shall be permitted by electronic means only in
accordance with the provisions of Section 11.3(b) and (c). Each such notice,
request or other communication shall be effective (i) if given by facsimile,
when such notice is transmitted to the facsimile number specified by this
Section and the sender receives a confirmation of transmission from the sending
facsimile machine, or (ii) if given by mail, prepaid overnight courier or any
other means, when received or when receipt is refused at the applicable address
specified by this Section 11.3(a).

(b) Notices and other communications to the parties hereto may be delivered or
furnished by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved from time to time by Agent, provided,
however, that the foregoing shall not apply to notices sent directly to any
Lender if such Lender has notified the Agent that it is incapable of receiving
notices by electronic communication. The Agent

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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or Borrowers may, in their discretion, agree to accept notices and other
communications to them hereunder by electronic communications pursuant to
procedures approved by it, provided, however, that approval of such procedures
may be limited to particular notices or communications.

(c) Unless the Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgment from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgment), and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor, provided, however, that if any such
notice or other communication is not sent or posted during normal business
hours, such notice or communication shall be deemed to have been sent at the
opening of business on the next Business Day.

Section 11.4 Severability. In case any provision of or obligation under this
Agreement or any other Financing Document 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 11.5 Amendments and Waivers. No provision of this Agreement or any other
Financing Document may be amended, waived or otherwise modified unless such
amendment, waiver or other modification is in writing and is signed or otherwise
approved by Borrowers, the Agent and the Lenders.

Section 11.6 Assignments; Participations.

(a) Assignments by Lenders.

(i) Each Lender may at any time assign or grant participations in all or any
portion of such Lender’s Loans and interest in the Revolving Loan Commitment,
together with all related obligations of such Lender hereunder. Each Lender may
at any time pledge or assign a security interest in all or any portion of its
rights under this Agreement to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided,
however, that no such pledge or assignment shall release such Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

(ii) Agent, acting solely for this purpose as an agent of Borrowers, shall
maintain at its offices located in Chicago, Illinois a copy of each Assignment
Agreement delivered to it and a register for the recordation of the names and
addresses of each Lender, and the commitments of, and principal amount of the
Loans owing to, such Lender pursuant to the terms hereof. The entries in such
register shall be conclusive, and Borrowers, Agent and Lenders may treat each
Person whose name is recorded therein pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. Such register shall be available for inspection by any Borrower and
any Lender, at any reasonable time upon reasonable prior notice to Agent.

(b) Credit Party Assignments. No Credit Party may assign, delegate or otherwise
transfer any of its rights or other obligations hereunder or under any other
Financing Document without the prior written consent of Agent and each Lender.

Section 11.7 Headings. Headings and captions used in the Financing Documents
(including the Exhibits, Schedules and Annexes hereto and thereto) are included
for convenience of reference only and shall not be given any substantive effect.

Section 11.8 Confidentiality. Agent and each Lender shall hold all non-public
information regarding the Credit Parties and their respective businesses
identified as such by Borrowers and obtained by Agent or any

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Lender pursuant to the requirements hereof in accordance with such Person’s
customary procedures for handling information of such nature, except that
disclosure of such information may be made (a) to their respective agents,
employees, Subsidiaries, Affiliates, attorneys, auditors, professional
consultants, rating agencies, insurance industry associations and portfolio
management services, (b) to prospective transferees or purchasers of any
interest in the Loans, and to prospective contractual counterparties (or the
professional advisors thereto) in swap contracts or other derivative obligations
permitted hereby, provided, however, that any such Persons shall have agreed to
be bound by the provisions of this Section 11.8, (c) as required by Law,
subpoena, judicial order or similar order and in connection with any litigation,
(d) as may be required in connection with the examination, audit or similar
investigation of such Person, and (e) to a Person that is a trustee, investment
advisor, collateral manager, servicer, noteholder or secured party in a
Securitization (as hereinafter defined) in connection with the administration,
servicing and reporting on the assets serving as collateral for such
Securitization. For the purposes of this Section, “Securitization” shall mean a
public or private offering by a Lender or any of its Affiliates or their
respective successors and assigns, of securities which represent an interest in,
or which are collateralized, in whole or in party, by the Loans. Confidential
information shall include only such information identified as such at the time
provided to Agent and shall not include information that either: (i) is in the
public domain, or becomes part of the public domain after disclosure to such
Person through no fault of such Person, or (ii) is disclosed to such Person by a
Person other than a Credit Party, provided, however, Agent does not have actual
knowledge that such Person is prohibited from disclosing such information. The
obligations of Agent and Lenders under this Section 11.8 shall supersede and
replace the obligations of Agent and Lenders under any confidentiality agreement
in respect of this financing executed and delivered by Agent or any Lender prior
to the date hereof.

Section 11.9 Waiver of Consequential and Other Damages. To the fullest extent
permitted by applicable law, no Borrower shall assert, and each Borrower hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of this
Agreement, any other Financing Document or any agreement or instrument
contemplated hereby or thereby, the transactions contemplated hereby or thereby,
any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Financing Documents or the transactions contemplated
hereby or thereby.

Section 11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT, EACH
NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL MATTERS RELATING HERETO OR
THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR
OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES. EACH BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN CHICAGO, STATE OF ILLINOIS AND IRREVOCABLY
AGREES THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE
LITIGATED IN SUCH COURTS. EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH BORROWER BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH
BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

Section 11.11 WAIVER OF JURY TRIAL. EACH BORROWER, AGENT AND THE LENDERS HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH BORROWER, AGENT AND
EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
BORROWER, AGENT AND EACH LENDER WARRANTS AND REPRESENTS THAT IT HAS HAD THE
OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

Section 11.12 Publication; Advertisement.

(a) Publication. No Credit Party will directly or indirectly publish, disclose
or otherwise use in any public disclosure, advertising material, promotional
material, press release or interview, any reference to the name, logo or any
trademark of Merrill Lynch or any of its Affiliates or any reference to this
Agreement or the financing evidenced hereby, in any case except (i) as required
by Law, subpoena or judicial or similar order, in which case the applicable
Credit Party shall give Agent prior written notice of such publication or other
disclosure, or (ii) with Merrill Lynch’s prior written consent.

(b) Advertisement. Each Lender and each Credit Party hereby authorizes Merrill
Lynch to publish the name of such Lender and Credit Party, the existence of the
financing arrangements referenced under this Agreement, the primary purpose
and/or structure of those arrangements, the amount of credit extended under each
facility, the title and role of each party to this Agreement, and the total
amount of the financing evidenced hereby in any “tombstone”, comparable
advertisement or press release which Merrill Lynch elects to submit for
publication. In addition, each Lender and each Credit Party agrees that Merrill
Lynch may provide lending industry trade organizations with information
necessary and customary for inclusion in league table measurements after the
Closing Date. With respect to any of the foregoing, Merrill Lynch shall provide
Borrowers with an opportunity to review and confer with Merrill Lynch regarding
the contents of any such tombstone, advertisement or information, as applicable,
prior to its submission for publication and, following such review period,
Merrill Lynch may, from time to time, publish such information in any media form
desired by Merrill Lynch, until such time that Borrowers shall have requested
Merrill Lynch cease any such further publication.

Section 11.13 Counterparts; Integration. This Agreement and the other Financing
Documents may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. Signatures by facsimile shall bind the parties hereto. This
Agreement and the other Financing Documents constitute the entire agreement and
understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.

Section 11.14 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.

Section 11.15 Time. Time is of the essence in each Borrower’s and each other
Credit Party’s performance under this Agreement and all other Financing
Documents.

Section 11.16 Lender Approvals. Unless expressly provided herein to the
contrary, any approval, consent, waiver or satisfaction of Agent or Lenders with
respect to any matter that is the subject of this Agreement, the other Financing
Documents may be granted or withheld by Agent and Lenders in their sole and
absolute discretion and credit judgment.

Section 11.17 Cross-Collateralization; Cross-Default. Lender and Borrower are
parties to those certain Pfizer Debt Documents (as the same may from time to
time be further amended, modified, supplemented or restated). Both this
Agreement and the Pfizer Debt Documents shall continue in full force and effect,
and all rights and remedies under this Agreement and the Pfizer Debt Documents
are cumulative. The term “Obligations” as used in this Agreement and the Pfizer
Debt Documents shall include without limitation the obligation to pay when due
all Loans made pursuant to this Agreement and all interest and finance charges
thereon and the obligation to pay

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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when due all advances under the Loans (as defined in the Pfizer Debt Documents)
(the “Pfizer Loans”) made pursuant to the Pfizer Debt Documents and all interest
and finance charges thereon. Without limiting the generality of the foregoing,
all “Collateral” as defined in this Agreement shall secure all Pfizer Loans and
all interest and finance charges thereon and all Loans and all interest and
finance charges thereon, and all other Obligations. Any Event of Default under
this Agreement shall also constitute an Event of Default under the Pfizer Debt
Documents, and any Event of Default under the Pfizer Debt Documents shall also
constitute an Event of Default under this Agreement. In the event the Lender
assigns its rights under the Pfizer Debt Documents and/or under any note
evidencing Pfizer Loans, to any third party, whether before or after the
occurrence of any Event of Default, the Lender shall have the right (but not any
obligation), in its sole discretion, to allocate and apportion Collateral to the
Agreement and/or note assigned and to specify the priorities of the respective
security interests in such Collateral between itself and the assignee, all
without notice to or consent of the Borrower.

Section 11.18 Expenses; Taxes; Indemnity

(a) Borrowers agree to pay all reasonable legal, audit and appraisal fees and
all other reasonable out-of-pocket charges and expenses incurred by Agent and
Lenders in connection with the negotiation, preparation, legal review and
execution of each of the Financing Documents, including but not limited to UCC
and judgment lien searches and UCC filings and fees for post-closing UCC and
judgment lien searches. In addition, Borrowers shall pay all such fees and
expenses associated with any amendments, modifications and terminations to the
Financing Documents following closing. If Agent uses in-house counsel for any of
these purposes, Borrowers further agree that the Obligations include reasonable
charges for such work commensurate with the fees that would otherwise be charged
by outside legal counsel selected by Agent for the work performed.

(b) Borrowers agree to pay all out-of-pocket charges and expenses incurred by
Agent (including the fees and expenses of Lender’s counsel, advisers and
consultants) in connection with the administration, enforcement, protection or
preservation of any right or claim of Agent, the termination of this Agreement,
the termination of any Liens of Agent on the Collateral, or the collection of
any amounts due under the Financing Documents. If Agent uses in-house counsel
for any of these purposes (i.e., for any task in connection with the
enforcement, protection or preservation of any right or claim of Agent and
Lenders and the collection of any amounts due under the Financing Documents),
Borrowers further agree that the Obligations include reasonable charges for such
work commensurate with the fees that would otherwise be charged by outside legal
counsel selected by Agent for the work performed.

(c) Borrowers shall pay all taxes (other than taxes based upon or measured by
Agent’s or a Lender’s income or revenues or any personal property tax), if any,
in connection with the issuance of the execution of this Agreement, the issuance
of the Notes and the recording of any Financing Documents. The obligations of
Borrower under this clause (c) shall survive the payment of Borrowers’
indebtedness under this Agreement and the termination of this Agreement.

(d) Borrowers hereby indemnify and agree to defend (with counsel acceptable to
Agent) and hold harmless Agent and Lenders, their partners, officers, agents and
employees (collectively in the singular, “Indemnitee”) from and against any
liability, loss, cost, expense (including reasonable attorneys’ fees and
expenses for both in-house and outside counsel), claim, damage, suit, action or
proceeding ever suffered or incurred by any Indemnitee or in which an Indemnitee
may ever be or become involved (whether as a party, witness or otherwise)
(a) arising from any Credit Party’s failure to observe, perform or discharge any
of its covenants, obligations, agreements or duties under the Financing
Documents, (b) arising from the breach of any of the representations or
warranties contained in any Financing Document, (c) by reason of this Agreement,
the other Financing Documents or the transactions contemplated hereby or
thereby, or (d) relating to claims of any Person with respect to the Collateral.
Notwithstanding any contrary provision in this Agreement, the obligation of
Borrower under this Section 11.17 shall survive the payment in full of the
Obligations and the termination of this Agreement. NO INDEMNITEE PERSON SHALL BE
RESPONSIBLE OR LIABLE TO THE BORROWERS OR TO ANY OTHER PARTY TO ANY FINANCING
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS AGREEMENT OR ANY OTHER
FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.

[SIGNATURES APPEAR ON FOLLOWING PAGES]

 

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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

 

BORROWER: MONOGRAM BIOSCIENCES, INC.

By:

 

/s/ William D. Young

Name:

 

William D. Young

Title:

 

Chairman and CEO

Address:

   

345 Oyster Point Blvd.

South San Francisco, California 94080

Attn: Kathy L. Hibbs

Facsimile: (650) 635-1111

E-Mail: khibbs@monogrambio.com

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Signature Page to Credit and Security Agreement

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AGENT: MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial
Services Inc., as Agent and a Lender By:  

/s/ William D. Gould

Name:   William D. Gould Title:   Director, Healthcare Finance, Life Sciences

Address:

  222 N. LaSalle Street, 16th Floor   Chicago, Illinois 60601   Attn: Account
Manager for MLC-HCF Monogram Biosciences transaction   Facsimile: 1-866-251-2944
  E-Mail: MLC_HCF_ABL2@ml.com

With copies to:

Merrill Lynch Capital 222 N. LaSalle Street, 16th Floor Chicago, Illinois 60601
Attn: Group Senior Transaction Attorney, Healthcare Finance Facsimile Number:
(312) 499-3245 Merrill Lynch Capital 7700 Wisconsin Ave., Suite 400 Bethesda,
Maryland 20814 Attn: Group Senior Transaction Attorney, Healthcare Finance
Facsimile Number: (866) 341-9053 And with an additional copy to:  

Troutman Sanders

1660 International Drive, Suite 600

McLean, Virginia 22102

Attn: David Lawson

Facsimile: (703) 448-6535

E-Mail: david.lawson@troutmansanders.com

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Signature Page to Credit and Security Agreement

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Payment Account Designation:

 

[*]

LENDERS:

MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services
Inc., as Lender

By:

 

/s/ William D. Gould

Name:

 

William D. Gould

Title:

 

Director, Healthcare Finance, Lifesciences

Address:

   

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Account Manager for MLC-HCF Monogram Biosciences transaction

Facsimile: 1-866-251-2944

E-Mail: MLC_HCF_ABL2@ml.com

With copies to:

 

Merrill Lynch Capital

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (312) 499-3245

 

Merrill Lynch Capital

7700 Wisconsin Ave., Suite 400

Bethesda, Maryland 20814

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (866) 341-9053

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Signature Page to Credit and Security Agreement

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ANNEXES, EXHIBITS, RIDERS AND SCHEDULES

 

ANNEXES   Annex A   Commitment Annex EXHIBITS   Exhibit A   Form of Account
Debtor Notice Exhibit B   Compliance Certificate Exhibit C   Borrowing Base
Certificate Exhibit D   Notice of Borrowing RIDERS   Medicaid/Medicare Rider  
SCHEDULES   Schedule 1.1   Certain Foreign Account Debtors Schedule 3.1  
Existence, Organizational ID Numbers, Foreign Qualification, Prior Names
Schedule 3.4   Capitalization Schedule 3.6   Litigation Schedule 3.15   Material
Contracts Schedule 3.16   Environmental Compliance Schedule 3.17   Intellectual
Property Schedule 4.4   Insurance Schedule 5.1   Debt Schedule 5.2   Liens
Schedule 5.8   Affiliate Transactions Schedule 5.11   Business Description
Schedule 7.4   Post-Closing Obligations Schedule 8.1   Collateral Schedule 8.2  
Location of Collateral

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Annexes, Exhibits, Riders and Schedules to Credit and Security Agreement

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LOGO [g13601g13601.jpg]   

Annex A to Credit and Security Agreement (Commitment Annex)

 

 

Lender

  

Revolving Loan

Commitment

Amount

  

Revolving Loan

Commitment

Percentage

 

Merrill Lynch Capital

   $ 10,000,000    100 %

TOTALS

   $ 10,000,000    100 %

 

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[*]  = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

Annex A to Credit and Security Agreement

Page 1