Exhibit 10.3

Execution Version

 

 

 

COLLATERAL AGREEMENT

DATED AS OF OCTOBER 14, 2016

AMONG

QUOTIENT LIMITED,

as Issuer,

ALBA BIOSCIENCE LIMITED,

QBD (QS IP) LIMITED,

QUOTIENT BIOCAMPUS LIMITED,

QUOTIENT BIODIAGNOSTICS, INC.,

QUOTIENT SUISSE SA,

THE SUBSIDIARY PARTIES FROM TIME TO TIME PARTY HERETO

U.S. BANK NATIONAL ASSOCIATION,

as Trustee,

and

U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent

 

 

 

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TABLE OF CONTENTS

 

     Page  

ARTICLE I DEFINITIONS

     2   

Section 1.1 Terms Defined in the Indenture

     2   

Section 1.2 Terms Defined in UCC

     2   

Section 1.3 Definitions of Certain Terms Used Herein

     2   

Section 1.4 Construction; Certain Defined Terms

     9   

ARTICLE II GRANT OF SECURITY INTEREST

     9   

ARTICLE III REPRESENTATIONS AND WARRANTIES

     11   

Section 3.1 Validity and Priority of Security Interest

     11   

Section 3.2 Location of Collateral

     11   

Section 3.3 Exact Names

     12   

Section 3.4 Accounts and Chattel Paper

     12   

Section 3.5 Documents, Instruments, and Chattel Paper

     12   

Section 3.6 Proprietary Rights

     12   

Section 3.7 Investment Property

     12   

Section 3.8 Commercial Tort Claims

     13   

Section 3.9 Bank Accounts and Related Items

     13   

Section 3.10 Perfection Certificate

     13   

Section 3.11 Leases

     13   

Section 3.12 Trade Names

     13   

Section 3.13 No Financing Statements, Security Agreements

     13   

Section 3.14 Location for Purposes of the UCC

     13   

ARTICLE IV COVENANTS

     14   

Section 4.1 General

     14   

Section 4.2 Perfection and Protection of Security Interest

     15   

Section 4.3 Electronic Chattel Paper

     17   

Section 4.4 Maintenance of Property

     17   

Section 4.5 Investment Property

     17   

Section 4.6 Proprietary Rights

     19   

Section 4.7 Inventory

     19   

Section 4.8 Commercial Tort Claims

     19   

Section 4.9 No Interference

     20   

Section 4.10 Insurance

     20   

Section 4.11 Condemnation

     21   

Section 4.12 Further Assurances

     21   

Section 4.13 Certain Post-Closing Obligations

     21   

ARTICLE V REMEDIES

     22   

Section 5.1 Remedies

     22   

Section 5.2 Grant of Intellectual Property License

     24   

Section 5.3 Application of Proceeds

     24   

 

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ARTICLE VI CONCERNING THE COLLATERAL AGENT

     25   

Section 6.1 Reliance by Collateral Agent; Indemnity Against Liabilities, etc.

     25   

Section 6.2 Exercise of Remedies

     26   

Section 6.3 Authorized Investments

     26   

Section 6.4 Bankruptcy Proceedings

     26   

ARTICLE VII COLLATERAL AGENT AND TRUSTEE RIGHTS, DUTIES AND LIABILITIES;
ATTORNEY IN FACT; PROXY

     27   

Section 7.1 The Collateral Agent’s and the Trustee’s Rights, Duties, and
Liabilities

     27   

Section 7.2 Right to Cure

     27   

Section 7.3 Confidentiality

     28   

Section 7.4 Power of Attorney

     29   

Section 7.5 NATURE OF APPOINTMENT; LIMITATION OF DUTY

     29   

Section 7.6 Additional Matters Relating to the Collateral Agent

     30   

Section 7.7 Appointment of Co-Collateral Agent

     32   

Section 7.8 Instructions under Account Control Agreement

     33   

ARTICLE VIII GENERAL PROVISIONS

     33   

Section 8.1 Notice

     33   

Section 8.2 Waiver of Notices

     34   

Section 8.3 Limitation on Collateral Agent’s and Secured Party’s Duty with
Respect to the Collateral

     34   

Section 8.4 Compromises and Collection of Collateral

     35   

Section 8.5 Specific Performance of Certain Covenants

     35   

Section 8.6 Cumulative Remedies; No Prior Recourse to Collateral

     35   

Section 8.7 Limitation by Law; Severability of Provisions

     35   

Section 8.8 Reinstatement

     36   

Section 8.9 Binding Effect

     36   

Section 8.10 Survival of Representations

     36   

Section 8.11 Guaranties; Third Party Joinder

     36   

Section 8.12 Captions

     37   

Section 8.13 Termination and Release

     37   

Section 8.14 Entire Agreement

     37   

Section 8.15 Governing Law; Jurisdiction; Consent to Service of Process

     37   

Section 8.16 Waiver of Jury Trial

     37   

Section 8.17 Indemnity

     38   

Section 8.18 Limitation of Liability

     38   

Section 8.19 Counterparts

     39   

Section 8.20 Amendments

     39   

Section 8.21 Conflicts with Other Agreements

     39   

Section 8.22 Incorporation by Reference

     39   

Section 8.23 English Language

     40   

 

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SCHEDULE 3.1   

Exceptions to 3.1(a) Representation

EXHIBIT A   

Grantors’ Information and Collateral Locations

EXHIBIT B   

Proprietary Rights

EXHIBIT C   

Commercial Tort Claims

EXHIBIT D   

List of Investment Property

EXHIBIT E   

Filing Offices

EXHIBIT F   

Form of Amendment

EXHIBIT G   

Form of Perfection Certificate

EXHIBIT H   

Form of Supplement

EXHIBIT I   

Leased Personal Property

EXHIBIT J   

Bank Accounts and Related Items

EXHIBIT K   

Trade Names

 

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COLLATERAL AGREEMENT

THIS COLLATERAL AGREEMENT (as amended, extended, renewed, restated,
supplemented, waived or otherwise modified from time to time, this “Agreement”)
is entered into as of October 14, 2016, by and among QUOTIENT LIMITED, a public
limited liability no par value company formed under the laws of Jersey with an
address at Elizabeth House, 9 Castle Street, St. Helier, JE2 3RT Jersey, Channel
Islands (the “Issuer”), ALBA BIOSCIENCE LIMITED, a limited company formed under
the law of Scotland (“Alba”), QBD (QS IP) Limited, a public limited liability no
par value company formed under the laws of Jersey (“QBD”), QUOTIENT BIOCAMPUS
LIMITED, a limited company formed under the law of Scotland (“Biocampus”),
QUOTIENT BIODIAGNOSTICS, INC., a corporation formed under the law of Delaware
(“Biodiagnostics”), QUOTIENT SUISSE SA, a société anonyme (joint stock company)
formed under the law of Switzerland (“Suisse”), any other SUBSIDIARY PARTIES (as
defined below) from time to time party hereto, U.S. BANK NATIONAL ASSOCIATION,
in its capacity as trustee (and its successors under the Indenture (as defined
below), in such capacity, the “Trustee”), and U.S. BANK NATIONAL ASSOCIATION, in
its capacity as collateral agent for the Secured Parties (as defined below) (and
its successors under the Indenture, in such capacity, the “Collateral Agent”).

PRELIMINARY STATEMENT

WHEREAS, pursuant to the terms, conditions and provisions of (a) the Indenture
dated as of the date hereof (as amended, extended, renewed, restated,
supplemented, waived or otherwise modified from time to time, the “Indenture”),
among the Issuer, the Guarantors (as defined therein) from time to time party
thereto, the Trustee and the Collateral Agent, (b) each Purchase Agreement dated
October 14, 2016 (collectively, the “Purchase Agreements”), among the Issuer,
the Subsidiary Guarantors (as defined therein) party thereto, and each purchaser
party thereto (collectively, the “Purchasers”), the Issuer is issuing the
Securities (as defined below), which will be guaranteed on a senior secured
basis by each of the Subsidiary Parties;

WHEREAS, the initial aggregate principal amount of the Securities will be
$84,000,000;

WHEREAS, additional Securities in an aggregate principal amount not to exceed
$36,000,000 may be issued pursuant to the terms of the Indenture and subject to
the conditions in the Purchase Agreements;

WHEREAS, the Indenture permits the Issuer and the Subsidiary Parties to grant a
lien and security interest in the Intercreditor Collateral (as defined below) to
one or more ABL Collateral Agents (as defined below) and holders of First
Priority Lien Obligations (as defined below);

WHEREAS, the Issuer, the Subsidiary Parties, the Collateral Agent, the
Co-Collateral Agent (if applicable), the Trustee and the other parties party
thereto may enter into one or more Intercreditor Agreements (as defined below),
which will govern the liens upon and security interests in the Collateral
granted by this Agreement and the First Priority Lien Obligations;

 

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WHEREAS, each Grantor (as defined below) is executing and delivering this
Agreement pursuant to the terms of the Indenture to induce the Trustee to enter
into the Indenture and, pursuant to the terms of the Purchase Agreements, to
induce the Purchasers to purchase the Securities; and

WHEREAS, each Grantor has duly authorized the execution, delivery and
performance by it of this Agreement.

NOW, THEREFORE, for and in consideration of the premises, and of the mutual
covenants herein contained, and in order to induce the Trustee to enter into the
Indenture and the Purchasers to purchase the Securities, the Issuer, Alba, QBD,
Biocampus, Biodiagnostics, Suisse, each other Subsidiary Party that becomes
bound hereby and the Collateral Agent, on behalf of itself and each Secured
Party (and each of their respective successors or assigns), hereby agree as
follows:

ARTICLE I

DEFINITIONS

Section 1.1 Terms Defined in the Indenture. All capitalized terms used and not
otherwise defined herein have the meanings assigned to such terms in the
Indenture.

Section 1.2 Terms Defined in UCC. Terms defined in the UCC that are not
otherwise defined in this Agreement are used herein as defined in the UCC.

Section 1.3 Definitions of Certain Terms Used Herein. As used in this Agreement,
in addition to the terms defined in the preamble and Preliminary Statement
above, the following terms have the following meanings:

“ABL Agreement” means any revolving credit, line of credit or similar agreement,
debt facility, commercial paper facility, debt securities, indenture or other
form of debt financing (including convertible or exchangeable debt instruments
or bank guarantees or bankers’ acceptances) or other instruments or agreements
evidencing Secured Bank Indebtedness (as such term is defined in the Indenture),
in each case, with the same or different borrowers, lenders, noteholders or
other creditors or agents, as amended, extended, renewed, restated,
supplemented, waived, replaced (whether or not upon termination), restructured,
repaid, refunded, refinanced or otherwise modified from time to time.

“ABL Collateral Agent” means, with respect to ABL Obligations under any ABL
Document, one of the following: (a) the applicable collateral agent (or similar
agent party) in its capacity as collateral agent (or similar agent) under such
ABL Document, (b) the ABL Lender if acting as sole lender thereunder, or (c) any
Person or Persons acting in an administrative agent capacity thereunder, and in
each case its or their successors and assigns in such capacity.

“ABL Documents” means, with respect to any ABL Obligations under an ABL
Agreement, such ABL Agreement, any related ABL Security Documents, any related
“Loan Documents” (or similar term) as such term is defined in such ABL
Agreement, each of the other agreements, documents and instruments providing for
or evidencing such ABL Obligations, and any other document or instrument
executed or delivered at any time in connection with such

 

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ABL Obligations, including any intercreditor or joinder agreement among holders
of such ABL Obligations, in each case, as amended, extended, renewed, restated,
supplemented, waived, replaced (whether or not upon termination), restructured,
repaid, refunded, refinanced or otherwise modified from time to time.

“ABL Lenders” means, with respect to ABL Obligations under any ABL Document, the
lenders or noteholders (or similar creditors) under such ABL Document.

“ABL Liens” means, with respect to ABL Obligations under any ABL Document, Liens
on the ABL Collateral created under the related ABL Security Document to secure
such ABL Obligations.

“ABL Obligations” means all “Secured Obligations” as such term is defined in any
applicable ABL Document (or, if “Secured Obligations” is not defined therein,
then all the liabilities and obligations under all ABL Documents secured, in
whole or in part, pursuant to the related ABL Security Documents), including, if
so secured, any hedging obligations and cash management obligations and whether
for principal, interest (including interest which, but for the filing of a
petition in any Bankruptcy Proceeding with respect to any Grantor, would have
accrued on any ABL Obligation, whether or not a claim is allowed against such
Grantor for such interest in such proceeding), premium, fees, expenses,
indemnification, performance or otherwise.

“ABL Secured Parties” means, with respect to ABL Obligations under any ABL
Document, at any time, the applicable ABL Collateral Agent, the applicable
Administrative Agent, each applicable ABL Lender and each other holder of, or
obligee in respect of, any such ABL Obligations outstanding at such time, in
each case, including the successors and assigns of each of the foregoing.

“ABL Security Documents” means, with respect to ABL Obligations under an ABL
Document, any related ABL Document (insofar as the same grants a Lien on any
assets or properties of any Grantor or any of its Subsidiaries to secure any
such ABL Obligations) and any other documents now existing or entered into after
the date hereof that grant a Lien on any assets or properties of any Grantor or
any of its Subsidiaries to secure any such ABL Obligations, as amended,
extended, renewed, restated, supplemented, waived, replaced (whether or not upon
termination), restructured, repaid, refunded, refinanced or otherwise modified
from time to time.

“Account” means, with respect to a Person, any of such Person’s now owned and
hereafter acquired or arising “accounts”, as defined in the UCC, including any
rights to payment for the sale or lease of goods or rendition of services,
whether or not they have been earned by performance, and “Accounts” means, with
respect to any such Person, all of the foregoing.

“Account Control Agreement” means each of (i) the Wells Fargo Account Control
Agreement; and (ii) any other account control agreement, account pledge, charge
over accounts or similar agreement, which is in form and substance reasonably
satisfactory to the Collateral Agent (it being agreed that any agreement that
shall require the Collateral Agent to indemnify any institution in its
individual capacity shall not be reasonably acceptable to the Collateral Agent)
and to counsel to the Purchasers.

 

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“Account Debtor” means each Person obligated on an Account, Chattel Paper or
General Intangible.

“Administrative Agent” means, with respect to ABL Obligations under any ABL
Document, one of the following: (a) the applicable administrative agent (or
similar agent party) in its capacity as administrative agent (or similar agent)
under such ABL Documents, (b) the ABL Lender if acting as sole lender
thereunder, or (c) any Person or Persons acting in an administrative agent
capacity thereunder, and, in each case, its or their successors and assigns in
such capacity.

“Alba Security Agreement” means the Scots law bond and floating charge from Alba
in favor of the Collateral Agent, dated October 14, 2016.

“Alba Share Pledge” means the Scots law Share Pledge Agreement between the
Issuer and the Collateral Agent in respect of the shares in Alba, dated October
14, 2016.

“Bankruptcy Proceeding” means, with respect to any Person, a general assignment
by such Person for the benefit of its creditors, or the institution by or
against such Person of any proceeding seeking relief as debtor, or seeking to
adjudicate such Person as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of such Person or its debts, under any
law or regulation relating to bankruptcy, insolvency, reorganization or relief
of debtors, or seeking appointment of a receiver, trustee, custodian or other
similar official for such Person or for any substantial part of its property
including any procedure under Article 8 of the Interpretation (Jersey) Law 1954.

“Biocampus Security Agreement” means the Scots law bond and floating charge from
Biocampus in favor of the Collateral Agent, dated October 14, 2016.

“Biocampus Share Pledge” means the Scots law Share Pledge Agreement between the
Issuer and the Collateral Agent in respect of the shares in Biocampus, dated
October 14, 2016.

“Biocampus Standard Security” means the standard security with respect to the
Roslin Lease from Biocampus in favor of the Collateral Agent, dated October 14,
2016.

“Chattel Paper” means any “chattel paper”, as such term is defined in the UCC,
now owned or hereafter acquired by any Person and, in any event, shall include,
all Electronic Chattel Paper and Tangible Chattel Paper.

“Co-Collateral Agent” means a financial institution appointed by the Collateral
Agent in accordance with Sections 7.6(a) and 7.7 hereto to act as co-collateral
agent for the Secured Parties.

“Collateral” has the meaning specified in Article II.

“Collateral Agent’s Liens” means the Liens in the Collateral granted to the
Collateral Agent (or any Co-Collateral Agent), for the benefit of the Secured
Parties, pursuant to this Agreement and the other Indenture Documents.

 

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“Commercial Tort Claims” means, with respect to a Person, all of such Person’s
now owned or hereafter acquired “commercial tort claims”, as defined by the UCC,
identified on Exhibit C and as specifically identified hereafter, and in any
event, shall include, any claim now owned or hereafter acquired by any Person,
arising in tort with respect to which: (a) the claimant is an organization; or
(b) the claimant is an individual and the claim (i) arose in the course of the
claimant’s business or profession and (ii) does not include damages arising out
of personal injury to or the death of an individual.

“Control” has the meaning assigned to such term in Article 8 of the UCC or, if
applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

“Copyright, Patent, and Trademark Agreements” means each copyright security
agreement, patent collateral agreement, and trademark collateral agreement
executed (and if necessary, notarized and legalized) and delivered by a Grantor
to the Collateral Agent to evidence and perfect the Collateral Agent’s security
interest in such Grantor’s present and future copyrights, patents, trademarks,
and related licenses and rights for the benefit of the Secured Parties.

“Effective Date” means the date of this Agreement.

“Electronic Chattel Paper” means any “electronic chattel paper”, as such term is
defined in the UCC, now owned or hereafter acquired by any Person.

“Equipment” means, with respect to a Person, all of such Person’s now owned and
hereafter acquired machinery, “equipment”, as defined by the UCC, furniture,
furnishings, fixtures, and other tangible personal property (except Inventory),
including rolling stock with respect to which a certificate of title has been
issued, aircraft, dies, tools, jigs, and office equipment, as well as all of
such types of property leased by such Person and all of such Person’s rights and
interests with respect thereto under such leases (including, options to
purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of the
foregoing, and all manuals, drawings, instructions, warranties, and rights with
respect thereto, wherever any of the foregoing is located.

“Filing Office” means, with respect to each Grantor, the office specified on
Exhibit E and, if applicable, any other appropriate office of the state where
such Grantor is “located” (as such term is used in Article 9-307 of the UCC).

“Financial Assets” means any “financial asset”, as such term is defined in the
UCC, now owned or hereafter acquired by any Person.

“Foreign Security Documents” means the Alba Security Agreement, the Alba Share
Pledge, the Biocampus Security Agreement, the Biocampus Share Pledge, the Jersey
Security Agreement, the Jersey Share Security Agreement, the Biocampus Standard
Security, the Suisse Assignment Agreement and the Suisse Share Pledge.    

 

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“General Intangibles” means, with respect to a Person, all of such Person’s now
owned or hereafter acquired “general intangibles”, as defined in the UCC,
including payment intangibles, choses in action and causes of action and all
other intangible personal property of such Person of every kind and nature
(other than Accounts), including, all contract rights, Proprietary Rights,
corporate or other business records, inventions, designs, blueprints, plans,
specifications, patents, patent applications, trademarks, service marks, trade
names, trade secrets, goodwill, copyrights, computer software, customer lists,
registrations, licenses, franchises, tax refund claims, any funds which may
become due to such Person in connection with the termination of any employee
benefit plan or any rights thereto and any other amounts payable to such Person
from any employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof,
property, casualty or any similar type of insurance and any proceeds thereof,
proceeds of insurance covering the lives of key employees on which such Person
is beneficiary, rights to receive dividends, distributions, cash, Instruments
and other property in respect of or in exchange for pledged equity interests or
Investment Property, and any letter of credit, guarantee, claim, security
interest, or other security held by or granted to such Person.

“Grantors” means the Issuer and the Subsidiary Parties.

“Indenture Documents” means (a) the Indenture and the Securities, (b) each
Intercreditor Agreement, (c) each other Security Document, including this
Agreement and (d) any other related documents or instruments executed and
delivered pursuant to or in connection with the Indenture or any other Indenture
Document, in each case, as such agreements may be amended, extended, renewed,
restated, supplemented, waived or otherwise modified from time to time.

“Intercompany Obligations” means, collectively, all indebtedness, obligations
and other amounts at any time owing to any Grantor from any of such Grantor’s
Subsidiaries or Affiliates and all interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such indebtedness, obligations or
other amounts.

“Intercreditor Agreement” means any Lien Subordination and Intercreditor
Agreement substantially in the form attached as Exhibit D to the Indenture
entered into by one or more Grantors, the Collateral Agent and the ABL
Collateral Agent (as such agreement may be amended, extended, renewed, restated,
supplemented, waived or otherwise modified from time to time).

“Intercreditor Collateral” means ABL Collateral in which the Secured Parties
have a Lien.

“Inventory” means, with respect to a Person, all of such Person’s now owned and
hereafter acquired “inventory”, as defined in the UCC, goods, and merchandise,
wherever located, in each case to be furnished under any contract of service or
held for sale or lease, all returned goods, raw materials, work-in-process,
finished goods (including embedded software), other materials, and supplies of
any kind, nature, or description which are used or consumed in such Person’s
business or used in connection with the packing, shipping, advertising, selling,
or finishing of such goods, merchandise, and other property, and all documents
of title or other documents representing them.

 

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“Investment Property” means, with respect to a Person, all of such Person’s
right, title, and interest in and to any and all “investment property”, as
defined in the UCC, including, all (a) securities, whether certificated or
uncertificated, (b) securities entitlements, (c) securities accounts,
(d) commodity contracts, (e) commodity accounts and (f) Equity Interests;
together with all other units, shares, partnership interests, membership
interests, membership rights, equity interests, rights, or other equivalent
evidences of ownership (howsoever designated) issued by any Person.

“Investment Property Collateral” means Investment Property other than Excluded
Assets of the type described in clauses (v), (vi), (vii) and (viii) of the
definition of Excluded Assets.

“Investment Property Issuer” means the issuer of any Investment Property
Collateral.

“Jersey Security Agreement” means the general Security Agreement in respect of
the assets of QBD among QBD, the Collateral Agent and the Trustee, dated October
14, 2016.

“Jersey Share Security Agreement” means the Security Agreement in respect of the
shares of QBD among the Issuer, the Collateral Agent and the Trustee, dated
October 14, 2016.

“Majority Holders” means, at any time, the holders of at least a majority of the
aggregate principal amount of the Securities then outstanding.

“Noteholder First Lien Collateral” means the Collateral unless and until an
Intercreditor Agreement is effective and thereafter has the meaning assigned to
such term in the applicable Intercreditor Agreement.

“Obligations” means all obligations of every nature of each Grantor under the
Indenture Documents from time to time owed to the Trustee, any Holder of
Securities, the Collateral Agent and any other Secured Party, whether for
principal, interest (including interest which, but for the filing of a petition
in any Bankruptcy Proceeding with respect to such Grantor, would have accrued on
any Obligation, whether or not a claim is allowed or allowable against such
Grantor for such interest in such proceeding), premium, fees, expenses,
indemnification, performance or otherwise.

“Perfection Certificate” means a certificate substantially in the form of
Exhibit G, completed and supplemented with the schedules and attachments
contemplated thereby.

“Proprietary Rights” means, with respect to a Person, all of such Person’s now
owned and hereafter arising or acquired new drug applications or abbreviated new
drug applications (or equivalent foreign application), including those new drug
applications or abbreviated new drug applications (and equivalent foreign
applications) that are owned as of the date hereof set forth on Exhibit B, and
any licenses, franchises, permits, patents, patent rights, copyrights, works
which are the subject matter of copyrights, trademarks, service marks, trade
names, trade styles, patent, trademark and service mark applications, and all
licenses and rights related to any of the foregoing, including those patents and
trademarks set forth on Exhibit B, and all other rights under any of the
foregoing, all extensions, renewals, reissues, divisions, continuations, and
continuations in part of any of the foregoing, and all rights to sue for past,
present, and future infringement of any of the foregoing.

 

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“Related Person” means, with respect to any specified Person, such Person’s
Affiliates, and the respective officers, directors, employees, agents, advisors
and attorneys-in-fact of such Person and its Affiliates.

“Requirement of Law” means, as to any Person, any law (statutory or common),
treaty, rule, or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.

“Roslin Lease” means the tenant’s interest in the lease between Biocampus and
Scottish Enterprise of the subjects at Site 3, Bio Campus Roslin Midlothian,
forming part and portion of the subjects at Gowkley Moss Farm, Bush Loan, Milton
Bridge, Penicuik, EH26 0NX which lease is currently undergoing registration in
the Land Register of Scotland under Title Number MID166779.

“Secured Parties” means (a) the Collateral Agent (including any Co-Collateral
Agents), (b) each Holder of Securities, (c) the Trustee and (d) the successors
and permitted assigns of each of the foregoing.

“Subsidiary Parties” means Alba, QBD, Biocampus, Biodiagnostics, Suisse and each
Subsidiary that becomes a party to this Agreement as a Subsidiary Party after
the Effective Date.

“Suisse Assignment Agreement” means the Assignment Agreement among Suisse, the
Issuer, the Collateral Agent and the Trustee, governed by Swiss law, dated
October 14, 2016.

“Suisse Share Pledge” means the Share Pledge Agreement among the Issuer, the
Collateral Agent, acting for itself (including as creditor of each parallel
debt) and as direct representative (direkter Stellvertreter) in the name and for
the account of all other Secured Parties and the Trustee in respect of the
shares of Suisse, governed by Swiss law, dated October 14, 2016.

“Tangible Chattel Paper” means any “tangible chattel paper”, as such term is
defined in the UCC, now owned or hereafter acquired by any Person.

“UCC” means the Uniform Commercial Code (or any successor statute), as in effect
from time to time, of the State of New York or of any other state the laws of
which are required as a result thereof to be applied in connection with the
issue or perfection of security interests.

 

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“Wells Fargo Account Control Agreement” means the Account Control Agreement to
be entered into among Biodiagnostics, the Collateral Agent and Wells Fargo Bank,
National Association which is in form and substance reasonably satisfactory to
the Collateral Agent and counsel to the Purchasers.

Section 1.4 Construction; Certain Defined Terms. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument, other document, statute
or regulation herein shall be construed as referring to such agreement,
instrument, other document, statute or regulation as from time to time amended,
supplemented or otherwise modified, (ii) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, but shall
not be deemed to include the Subsidiaries of such person unless express
reference is made to such Subsidiaries, (iii) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (iv) all
references herein to Articles, Sections and Exhibits shall be construed to refer
to Articles, Sections and Exhibits of this Agreement, (v) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights and (vi) the term “or” is not
exclusive.

ARTICLE II

GRANT OF SECURITY INTEREST

As security for the Obligations, each Grantor hereby grants to the Collateral
Agent, for the benefit of the Secured Parties, a continuing security interest in
and lien on, such Grantor’s right, title and interest in and to all of the
following property and assets of such Grantor, whether now owned or existing or
hereafter acquired or arising, regardless of where located:

(i) all Accounts (including any credit enhancement therefor) and Intercompany
Obligations;

(ii) all Chattel Paper;

(iii) all Commercial Tort Claims;

(iv) all contract rights, leases, letters of credit, letter-of-credit rights,
instruments, promissory notes, documents, and documents of title;

(v) all Financial Assets;

(vi) all Equipment;

(vii) all General Intangibles;

(viii) all Investment Property;

 

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(ix) all Inventory;

(x) all money, cash, cash equivalents, securities, and other property of any
kind of such Grantor;

(xi) all of such Grantor’s deposit accounts, securities accounts, commodities
accounts, credits, and balances with, and other claims against, any financial
institution with which such Grantor maintains deposits;

(xii) all of such Grantor’s books, records, and other property related to or
referring to any of the foregoing, including books, records, account ledgers,
data processing records, computer software and other property, and General
Intangibles at any time evidencing or relating to any of the foregoing;

(xiii) all supporting obligations in respect of any Collateral;

(xiv) all other items, kinds and types of personal property, tangible or
intangible, of whatever nature, and regardless of whether the creation or
perfection or effect of perfection or non-perfection of a security interest
therein is governed by the UCC of any particular jurisdiction or by another
applicable treaty, convention, statute, law or regulation of any applicable
jurisdiction; and

(xv) all accessions to, substitutions for, and replacements, products, and
proceeds of any of the foregoing, including, but not limited to, After-Acquired
Property, proceeds of any insurance policies, claims against third parties, and
condemnation or requisition payments with respect to all or any of the
foregoing.

In respect of Alba and Biocampus, such continuing security interest and lien
shall be on the whole of the property (including uncalled capital) which is or
may be from time to time while this instrument is in force comprised in the
property and undertaking of Alba or Biocampus as the case may be.

All of the foregoing, and all other property of the Grantors’ in which a Secured
Party may at any time be granted a Lien to secure the Obligations, are herein
collectively referred to as the “Collateral”; provided, however, that
notwithstanding anything herein to the contrary, the Collateral shall not
include, and the security interest shall not attach to, any and all Excluded
Assets.

For purposes of registering this Agreement with the Registrar of Companies under
the law of Scotland, Paragraph 14 of Schedule B1 to the Insolvency Act 1986 (an
act of the UK Parliament) (incorporated by Schedule 16 to the Enterprise Act
2002 (an act of the UK Parliament)) shall apply to the Lien on the Collateral
granted by Alba and Biocampus hereunder which is accordingly a qualifying
floating charge.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Grantors, jointly and severally, represent and warrant to the Collateral
Agent, for the benefit of the Secured Parties, that as of the Effective Date:

Section 3.1 Validity and Priority of Security Interest.

(a) Except as set forth on Schedule 3.1, this Agreement and the applicable
Security Documents are effective to create in favor of the Collateral Agent, for
the ratable benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral and the proceeds thereof and (i) when the
Investment Property Collateral that consists of Equity Interests is delivered to
the Collateral Agent (subject to the terms of any Intercreditor Agreement (if
any)), the Lien created under this Agreement and the applicable Security
Documents shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Grantors in such Investment Property
Collateral (subject to Permitted Liens), in each case prior and superior in
right to any other Person, (ii) upon the execution and delivery of each Account
Control Agreement by each party thereto, each Account Control Agreement shall be
effective to perfect the security interest in the accounts specified therein,
and such security interest shall be perfected, and (iii) when financing
statements in appropriate form are filed in the Filing Offices, the Lien created
under this Agreement and the applicable Security Documents will constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Grantors in such Collateral in which a security interest can be perfected
by filing a financing statement (subject to Permitted Liens), in each case prior
and superior in right to any other Person with respect to such perfection
(subject only to a prior ranking lien in respect of the Intercreditor Collateral
that secures any First Priority Lien Obligations).

(b) Upon the recordation of this Agreement or the Copyright, Patent, and
Trademark Agreements with the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, together with the financing
statements in appropriate form filed in the Filing Offices, the Lien created
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Grantors in the respective Proprietary Rights in which
a security interest may be perfected by filing in the United States and its
territories and possessions, or in Europe, respectively, in each case prior and
superior in right to any other Person with respect to such perfection.

Section 3.2 Location of Collateral. (a) Exhibit A is a correct and complete list
of each Grantor’s jurisdiction of organization, the location of its books and
records, the locations of the Collateral (other than Inventory that is in
transit, consignments of Inventory not in excess of $1,000,000, rolling stock,
and Collateral in the Collateral Agent’s possession or equipment in transit
between the locations set forth on Exhibit A and equipment at other locations
for purposes of maintenance or repair), and the locations of all of its other
places of business; and (b) Exhibit A correctly identifies any of such
facilities and locations that are not owned by such Grantor and sets forth the
names of the owners and lessors or sublessors of such facilities and locations.

 

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Section 3.3 Exact Names. The name in which each Grantor has executed this
Agreement is the exact name as it appears in such Grantor’s organizational
documents, as amended, as filed with such Grantor’s jurisdiction of
organization. Except as set forth on Exhibit A or as permitted by the Indenture
or this Agreement, since the date of its organization or acquisition as a
Subsidiary of the Issuer, no Grantor has been known by or used any other
corporate or fictitious name, or been a party to any merger or consolidation, or
acquired all or substantially all of the assets of any Person.

Section 3.4 Accounts and Chattel Paper. The names of the obligors, amounts
owing, due dates and other information with respect to each Grantor’s Accounts
and Chattel Paper that are Collateral are correctly stated, in all material
respects, at the time furnished, in all records of such Grantor relating
thereto.

Section 3.5 Documents, Instruments, and Chattel Paper. (a) All documents,
instruments, and Chattel Paper of each Grantor describing, evidencing, or
constituting Collateral, and all signatures and endorsements thereon, are and
will be complete, valid, and genuine in all material respects, and (b) all goods
evidenced by such documents, instruments, and Chattel Paper are and will be
owned by such Grantor free and clear of all Liens (subject to Permitted
Liens). If any Grantor retains possession of any Chattel Paper or other
instruments, at the Collateral Agent’s request upon an Event of Default, such
Chattel Paper or instruments shall be marked with the following legend: “This
writing and the obligations evidenced or served hereby are subject to the
security interest of U.S. Bank National Association, as Collateral Agent, for
the benefit of Collateral Agent and certain Secured Parties.”

Section 3.6 Proprietary Rights. Exhibit B sets forth a correct and complete list
of all of each Grantor’s registered or applied for patents, copyrights and
trademarks material to its business, in each case owned by such Grantor in its
own name as of the Effective Date.

Section 3.7 Investment Property.

(a) Exhibit D sets forth a correct and complete list of all of the Investment
Property Collateral owned by each Grantor. Each Grantor is the legal and
beneficial owner of such Investment Property Collateral, as so reflected, free
and clear of any Lien (other than Permitted Liens), and has not sold, granted
any option with respect to, assigned or transferred, or otherwise disposed of
any of its rights or interest therein. Each Grantor further represents and
warrants that (i) to such Grantor’s knowledge, all Investment Property
constituting an Equity Interest has been (to the extent such concepts are
relevant with respect to such Investment Property) duly authorized and validly
issued by the Investment Property Issuer thereof and are fully paid and
non-assessable, (ii) with respect to any certificates delivered to the
Collateral Agent representing an Equity Interest, either such certificates are
Securities as defined in Article 8 of the UCC as a result of actions by the
Investment Property Issuer thereof or otherwise, or, if such certificates are
not Securities as defined in Article 8 of the UCC, such Grantor has filed
financing statements in appropriate form to perfect the security interest of the
Collateral Agent for the benefit of the Secured Parties therein as a General
Intangible, and (iii) to Grantor’s knowledge, all Investment Property that
represents Indebtedness owed to any Grantor has been duly authorized,
authenticated or issued and delivered by the Investment Property Issuer of such
Indebtedness and is the legal, valid and binding obligation of such Investment
Property Issuer.

 

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(b) Each Grantor further represents and warrants that, to the knowledge of such
Grantor, none of the Investment Property Collateral is or will be subject to any
option, right of first refusal, shareholders agreement, charter or by-law
provisions or contractual restriction of any nature that might prohibit, impair,
delay or otherwise affect the pledge of such Investment Property Collateral
hereunder, the sale or disposition thereof pursuant hereto or the exercise by
the Collateral Agent of rights and remedies hereunder.

Section 3.8 Commercial Tort Claims. No Grantor holds any Commercial Tort Claims
the recovery from which could reasonably be expected to exceed $500,000, for
which such Grantor has filed a complaint in a court of competent jurisdiction,
except as indicated on Exhibit C hereto.

Section 3.9 Bank Accounts and Related Items. Exhibit J contains a complete and
accurate list of all bank accounts, including deposit accounts, securities
accounts and commodity accounts, other than any Excluded Assets, maintained by
each Grantor with any bank or other financial institution, broker, securities
intermediary, commodity intermediary or other Person.

Section 3.10 Perfection Certificate. The Perfection Certificates delivered by
the Grantors have been duly prepared, completed and executed and the information
set forth therein is correct and complete, in all material respects.

Section 3.11 Leases. Exhibit I sets forth a correct and complete list of all
leases and subleases of personal property by each Grantor as lessee or sublessee
(other than any Excluded Assets, and other than any leases of personal property
as to which it is lessee or sublessee for which the value of such personal
property is less than $500,000), and all leases and subleases of personal
property by each Grantor as lessor or sublessor.

Section 3.12 Trade Names. All trade names, business names or corporate names
under which any Grantor sells Inventory or creates Accounts, or to which
instruments in payment of Accounts are made payable, are listed on Exhibit K.

Section 3.13 No Financing Statements, Security Agreements. No financing
statement or security agreement describing all or any portion of the Collateral
that has not lapsed or been terminated naming a Grantor as debtor has been filed
or is of record in any jurisdiction except (a) for financing statements or
security agreements naming the Collateral Agent on behalf of the Secured Parties
as the secured party and (b) for financing statements in connection with
Permitted Liens.

Section 3.14 Location for Purposes of the UCC. Each Grantor is “located” (as
such term is used in Article 9-307 of the UCC) in the place so identified on
Exhibit A.

 

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ARTICLE IV

COVENANTS

From the date hereof, and thereafter until this Agreement is terminated, each
Grantor agrees that:

Section 4.1 General.

(a) Collateral Records. Each Grantor shall maintain at all times reasonably
detailed, accurate and updated books and records pertaining to the Collateral
and promptly furnish to the Collateral Agent such information relating to the
Collateral as the Collateral Agent shall from time to time reasonably request.

(b) Authorization to File Financing Statements; Ratification. The Collateral
Agent may, and the Grantors hereby authorize the Collateral Agent to, at any
time and from time to time, file financing statements, continuation statements,
and amendments thereto that describe the Collateral as “all assets” or words of
similar import and which contain any other information required pursuant to
Article 9 of the UCC for the sufficiency of filing office acceptance of any
financing statement, continuation statement, or amendment, and each Grantor
agrees to furnish any such information to the Collateral Agent promptly upon
request. The Collateral Agent shall inform the applicable Grantor of any such
filing either prior to, or reasonably promptly after, such filing. Each Grantor
acknowledges that it is not authorized to file any financing statement covering
the Collateral or amendment or termination statement with respect to any
financing statement covering the Collateral without the prior written consent of
the Collateral Agent and agrees that it will not do so without such consent,
subject to (i) the Grantors’ rights under Section 9-509(d)(2) of Article 9 of
the UCC and (ii) financing statements that may be filed, in accordance with the
Indenture or each Intercreditor Agreement (if any), to perfect or release any
ABL Liens or Permitted Liens.

(c) Other Perfection, etc. Each Grantor shall, at any time and from time to time
(i) notify, in form reasonably satisfactory to the Collateral Agent, any
warehouseman, bailee, or any of such Grantor’s agents or processors having
possession of any Collateral consisting of Inventory or Equipment with a Fair
Market Value in excess of $1,000,000 (calculated based on the Grantor’s estimate
of the Fair Market Value of the Inventory or Equipment to be possessed by such
warehouseman, bailee, agent or processor over the course of any calendar year on
a weighted average basis) of the security interest of the Collateral Agent in
such Collateral (with a copy of such notice sent to the Collateral Agent), (ii)
use its commercially reasonable efforts to obtain an acknowledgment, in form
reasonably satisfactory to the Collateral Agent, from such warehouseman, bailee,
agent or processor (other than with respect to any Intercreditor Collateral,
unless the ABL Collateral Agent, if any, shall also have obtained such
acknowledgement from such warehouseman, bailee, agent or processor) and not
having otherwise entered into a subordination agreement for the benefit of the
Collateral Agent, stating that the warehouseman, bailee, agent or processor
holds such Collateral for the Collateral Agent, subject to each Intercreditor
Agreement (if any) and (iii) take such steps as are necessary or as the
Collateral Agent may reasonably request (A) for the Collateral Agent to obtain
“control” of any Investment Property Collateral, deposit accounts,
letter-of-credit rights, or Electronic Chattel Paper (as such terms, to the
extent they are undefined herein, are defined by Article 9 of the UCC with
corresponding provisions thereof defining what constitutes “control” for such
items of Collateral) constituting Noteholder First Lien Collateral in excess of
$500,000 (other than Investment Property Collateral constituting Equity
Interests of a Subsidiary for which no minimum dollar amount shall apply),
excluding any Excluded Assets, with any agreements establishing control to be in
form reasonably satisfactory to the Collateral Agent and (B) to otherwise ensure
the continued perfection and priority of the Collateral Agent’s security
interest in any of the Collateral (to the extent required hereunder) and of the
preservation of its rights therein. The $500,000 threshold described in clause
(iii)(A) of the preceding sentence as it relates to any deposit account shall be
measured by reference to the closing balance of such deposit account as of each
Business Day.

 

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(d) Change of Name, Etc. Each Grantor agrees to furnish to the Collateral Agent
prompt written notice of any change in: (i) such Grantor’s name; (ii) such
Grantor’s state or other place of organization or form of organization, in each
case at least fifteen (15) days prior thereto; (iii) such Grantor’s Federal
Taxpayer Identification Number or organizational identification number assigned
to it by its jurisdiction of incorporation or formation; or (iv) the acquisition
by such Grantor of any material property for which additional filings or
recordings are necessary to perfect and maintain the Collateral Agent’s security
interest therein (only to the extent perfection of the security interest in such
property is required hereby or by the terms of the Indenture). Each Grantor
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings are promptly made under the Uniform Commercial Code or other
applicable law that are required in order for the Collateral Agent to continue
at all times following such change to have a valid, legal and perfected,
security interest (subject to the terms of each Intercreditor Agreement (if any)
and subject to Permitted Liens) in the Collateral for its benefit and the
benefit of the other Secured Parties.

(e) Change in Location of Collateral. No Grantor shall (i) maintain any
Collateral with a Fair Market Value in excess of $1,000,000 (other than
Inventory in transit, consignments of Inventory not in excess of $1,000,000),
rolling stock, equipment in transit between locations set forth in Exhibit A,
equipment at other locations for purposes of maintenance or repair and
Collateral in the Collateral Agent’s possession or the possession of any ABL
Collateral Agent) at any location other than those locations listed on
Exhibit A, (ii) otherwise change or add to any of such locations, or
(iii) change the location of its jurisdiction of organization from the location
identified in Exhibit A, unless in each case it gives the Collateral Agent
prompt written notice thereof but in any event described in clause (iii) not
later than 30 days prior thereto, and executes or authorizes the filing of any
and all financing statements and other documents that are necessary or that the
Collateral Agent reasonably requests in connection therewith. In the event any
Grantor changes or adds any location of Collateral, such Grantor shall prepare
and promptly deliver to the Collateral Agent a revised Exhibit A, which shall
automatically be adopted as Exhibit A for all purposes. Each Grantor agrees not
to effect or permit any change referred to in the preceding sentences unless all
filings are promptly made under the Uniform Commercial Code or other applicable
law that are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected security interest
(subject to the terms of each Intercreditor Agreement (if any) and subject to
Permitted Liens) in the Collateral for its benefit and the benefit of the other
Secured Parties.

Section 4.2 Perfection and Protection of Security Interest.

(a) Perfection and Protection. Each Grantor shall, at its expense, perform all
steps necessary or otherwise reasonably requested by the Collateral Agent (at
the direction of the Majority Holders) at any time to perfect, maintain,
protect, and enforce the Collateral Agent’s Liens, subject to the terms of each
Intercreditor Agreement (if any), including: (i) filing and

 

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recording of the Copyright, Patent, and Trademark Agreements, and amendments
thereof in the United States Patent and Trademark Office, the United States
Copyright Office and any other jurisdiction’s copyright, patent or trademark
office and filing financing statements or continuation statements in the
respective Filing Office; (ii) to the extent constituting Noteholder First Lien
Collateral, delivering to the Collateral Agent the originals of all instruments,
documents, and Chattel Paper (in each case in excess of $250,000), and all other
Collateral of which the Collateral Agent is required to have or reasonably
requests to have physical possession of in order to perfect and protect the
Collateral Agent’s security interest therein, duly pledged, endorsed, or
assigned to the Collateral Agent as provided herein; (iii) deliver to the
Collateral Agent a duly executed amendment to this Agreement, in the form of
Exhibit F hereto (each, an “Amendment”), pursuant to which such Grantor will
pledge any additional Collateral that constitutes Commercial Tort Claims;
(iv) upon the occurrence and during the continuation of an Event of Default,
delivering to the Collateral Agent (A) warehouse receipts covering any portion
of the Noteholder First Lien Collateral located in warehouses and for which
warehouse receipts are issued, (B) warehouse receipts covering any portion of
the Intercreditor Collateral (so long as no ABL Liens are outstanding on such
Collateral) located in warehouses and for which warehouse receipts are issued
and (C) if requested by the Collateral Agent, certificates of title reflecting
the Collateral Agent’s Liens covering any portion of the Collateral for which
certificates of title have been issued; (v) when an Event of Default exists,
transferring Inventory to warehouses or other locations designated by the
Collateral Agent; (vi) upon the occurrence and during the continuance of an
Event of Default, delivering to the Collateral Agent all letters of credit
constituting Collateral on which such Grantor is named beneficiary; and
(vii) taking such other steps as are reasonably deemed necessary or desirable by
the Collateral Agent (acting at the direction of the Majority Holders) to
maintain, protect and enforce the Collateral Agent’s Liens. To the extent
permitted by any Requirement of Law and each Intercreditor Agreement (if any),
the Collateral Agent may file, without any Grantor’s signature, one or more
financing statements disclosing the Collateral Agent’s Liens. Each Grantor
hereby authorizes the Collateral Agent to attach each Amendment to this
Agreement and agrees that all additional collateral set forth in such Amendments
shall be considered to be part of the Collateral.

(b) Collateral in Other’s Possession. If at any time any Collateral with a Fair
Market Value in excess of $1,000,000 (other than Intercreditor Collateral,
unless (i) no ABL Liens on such Collateral are outstanding or (ii) the
applicable ABL Collateral Agent shall also have obtained such waiver or
subordination from such landlord) is located at any operating facility of a
Grantor which is not owned by such Grantor, such Grantor shall, upon request,
use commercially reasonable efforts to obtain written landlord lien waivers or
subordinations, in form reasonably satisfactory to the Collateral Agent, of all
present and future Liens to which the owner or lessor of such premises may be
entitled to assert against such Collateral.

(c) Confirmatory Instruments. From time to time, subject to each Intercreditor
Agreement (if any), each Grantor shall, upon the Collateral Agent’s request,
execute and deliver confirmatory written instruments pledging to the Collateral
Agent, for the benefit of the Secured Parties, the Collateral with respect to
such Grantor, but the failure to do so shall not affect or limit any security
interest or any other rights of the Secured Parties in and to the Collateral
with respect to such Grantor.

 

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(d) Excluded Perfection. Nothing in this Agreement shall require any Grantor to
take any action with respect to perfecting any security interest in any Excluded
Collateral.

Section 4.3 Electronic Chattel Paper. If any Grantor at any time holds or
acquires an interest in any Electronic Chattel Paper or any “transferable
record”, as that term is defined in Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction, such
Grantor shall promptly notify the Collateral Agent thereof and (other than if
such Electronic Chattel Paper constitutes Intercreditor Collateral for which ABL
Liens are outstanding) shall take such action as is necessary to vest in the
Collateral Agent Control under UCC Section 9-105 of such Electronic Chattel
Paper or control (to the extent the meaning of “control” has not been clearly
established under such provisions, “control” in this paragraph (d) to have such
meaning as the Collateral Agent shall reasonably specify in writing after
consultation with the Issuer) under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, Section
16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. The Collateral Agent agrees with such
Grantor that the Collateral Agent will arrange, pursuant to procedures
reasonably satisfactory to the Collateral Agent and so long as such procedures
will not result in the Collateral Agent’s loss of Control or control, as
applicable, which may be established to the satisfaction of the Collateral Agent
pursuant to the delivery to it by the Grantor of an Officers’ Certificate or an
Opinion of Counsel, for the Grantor to make alterations to the Electronic
Chattel Paper or transferable record permitted under UCC Section 9-105 or, as
the case may be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic Transactions Act
for a party in Control to allow without loss of Control or control, as
applicable, unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by such Grantor with respect to such
Electronic Chattel Paper or transferable record.

Section 4.4 Maintenance of Property. Except as otherwise permitted hereunder or
pursuant to the Indenture Documents, each Grantor shall maintain all of its
property necessary or useful in the conduct of its business, in reasonable
operating condition and repair, ordinary wear and tear and obsolescence
excepted.

Section 4.5 Investment Property.

(a) Registration in Nominee Name; Denominations. The Collateral Agent, on behalf
of the Secured Parties, shall hold certificated Investment Property Collateral
in the name of the applicable Grantor, endorsed or assigned in blank or in favor
of the Collateral Agent, but following the occurrence and during the continuance
of an Event of Default shall have the right (in its sole and absolute
discretion) to hold such Investment Property Collateral in its own name as
pledgee, or in the name of its nominee (as pledgee or as sub-agent). Each
Grantor will promptly give to the Collateral Agent copies of any material
notices or other material communications received by it with respect to any
Investment Property Collateral registered in the name of such Grantor. Following
the occurrence and during the continuance of an Event of Default, the Collateral
Agent shall at all times have the right to exchange the certificates
representing Investment Property Collateral for certificates of smaller or
larger denominations for any purpose consistent with this Agreement.

 

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(b) Voting Rights, Distributions, Etc. in Respect of Investment Property
Collateral.

(i) Unless an Event of Default exists and subject to each Intercreditor
Agreement (if any), (A) each Grantor shall be entitled to exercise any and all
voting and other consensual rights (including, the right to give consents,
waivers, and notifications in respect of any securities) pertaining to its
Investment Property Collateral or any part thereof; provided, however, that
without the prior written consent of the Collateral Agent and the Trustee
obtained in accordance with the Indenture, no vote shall be cast or consent,
waiver, or ratification given or action taken which would amend, modify, or
waive any term, provision, or condition of the certificate of incorporation,
bylaws, certificate of formation, or other charter document or other agreement
relating to, evidencing or providing for the issuance of any such Investment
Property Collateral, in any manner that would materially impair such Investment
Property Collateral, the transferability thereof, or the Collateral Agent’s
Liens therein, and (B) each Grantor shall be entitled to receive and retain any
and all dividends, interest paid and other cash distributions in respect of any
of such Investment Property Collateral (unless otherwise required by the
Indenture).

(ii) During the existence of an Event of Default, subject to each Intercreditor
Agreement (if any) and the rights of any applicable ABL Collateral Agent and any
ABL Secured Parties thereunder, after delivery of notice to the applicable
Grantor, (A) the Collateral Agent may exercise all voting and corporate rights
at any meeting of any corporation, partnership, or other business entity issuing
any of the Investment Property Collateral and the proceeds thereof (in cash or
otherwise) held by the Collateral Agent hereunder, and any and all rights of
conversion, exchange, subscription, or any other rights, privileges, or options
pertaining to any of the Investment Property Collateral as if it were the
absolute owner thereof, including, the right to exchange at its discretion any
and all of the Investment Property Collateral upon the merger, consolidation,
reorganization, recapitalization, or other readjustment of any Investment
Property Issuer or upon the exercise by any such issuer or the Collateral Agent
of any right, privilege, or option pertaining to any of the Investment Property
Collateral, and in connection therewith, to deposit and deliver any and all of
the Investment Property Collateral with any committee, depositary, transfer
agent, registrar, or other designated agency upon such terms and conditions as
it may determine, all without liability except to account for property actually
received by it, but the Collateral Agent shall have no duty to exercise any of
the aforesaid rights, privileges, or options, and the Collateral Agent shall not
be responsible for any failure to do so or delay in so doing, (B) all rights of
any Grantor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 4.5(b)(i) and to receive
the dividends, interest, and other distributions which it would otherwise be
authorized to receive and retain thereunder shall be suspended until such Event
of Default shall no longer exist or as the Collateral Agent shall otherwise
specify, and all such rights shall, until such Event of Default shall no longer
exist or as the Collateral Agent shall otherwise specify, thereupon become
vested in the Collateral Agent which shall thereupon have the sole right, but no
duty, to exercise such voting and other consensual rights and to receive and
hold as Investment Property Collateral such dividends, interest,

 

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and other distributions, (C) all dividends, interest, and other distributions
which are received by any Grantor contrary to the provisions of this
Section 4.5(b)(ii) shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Collateral Agent as Collateral in the same form as so
received (with any necessary endorsement), and (D) each Grantor shall execute
and deliver (or cause to be executed and delivered) to the Collateral Agent all
such proxies and other instruments as are necessary or that the Collateral Agent
may reasonably request for the purpose of enabling the Collateral Agent to
exercise the voting and other rights which it is entitled to exercise pursuant
to this Section 4.5(b)(ii) and to receive the dividends, interest, and other
distributions which it is entitled to receive and retain pursuant to this
Section 4.5(b)(ii). The foregoing shall not in any way limit the Collateral
Agent’s power and authority granted pursuant to Section 7.4. After all Events of
Default have been cured or waived and the applicable Grantor shall have
delivered to the Collateral Agent certificates to that effect, the Collateral
Agent shall promptly repay to each Grantor (without interest) all dividends or
other distributions that such Grantor would otherwise be permitted to retain
pursuant to the terms of Section 4.5(b)(i) above and that remain in such
account.

(c) The Grantors will cause or permit the Collateral Agent from time to time to
cause the appropriate Investment Property Issuers (and, if held with a
securities intermediary, such securities intermediary) of uncertificated
securities or other types of Investment Property Collateral not represented by
certificates to mark their books and records with the numbers and face amounts
of all such uncertificated securities or other types of Investment Property
Collateral not represented by certificates and all rollovers and replacements
therefor to reflect the Lien of the Collateral Agent granted pursuant to this
Agreement. The Grantors will take any actions reasonably necessary to cause (a)
the Investment Property Issuers of uncertificated securities which are
Investment Property Collateral, and (b) any securities intermediary which is the
holder of any Investment Property Collateral, to cause the Collateral Agent to
have and retain Control over such Investment Property Collateral.

Section 4.6 Proprietary Rights.

(a) The Issuer, either directly or through any agent, employee, licensee or
designee, shall inform the Collateral Agent on an annual basis of each
application for the registration of any material Proprietary Right owned or
licensed by the Issuer or any of its Affiliates with the United States Patent
and Trademark Office, the United States Copyright Office, the European Patent
Office or any similar office or agency filed during the preceding year.

Section 4.7 Inventory. Each Grantor shall keep its Inventory (other than
returned or obsolete Inventory) in good and marketable condition, except for
damaged or defective goods arising in the ordinary course of such Grantor’s
business.    

Section 4.8 Commercial Tort Claims. If any Grantor shall at any time, acquire a
Commercial Tort Claim, the recovery from which could reasonably be expected to
exceed $500,000, such Grantor shall promptly notify the Collateral Agent thereof
in a writing, therein providing a reasonable description and summary thereof,
and upon delivery thereof to the Collateral Agent, together with an Amendment as
contemplated by Section 4.2(a)(iii), such Grantor shall be deemed thereby to
grant to the Collateral Agent a security interest in such Commercial Tort Claim
(subject to each Intercreditor Agreement (if any)).

 

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Section 4.9 No Interference. Each Grantor agrees that it will not interfere with
any right, power and remedy of the Collateral Agent provided for in this
Agreement or now or hereafter existing at law or in equity or by statute or
otherwise, or the exercise or beginning of the exercise by the Collateral Agent
of any one or more of such rights, powers or remedies.

Section 4.10 Insurance.

(a) The Grantors shall maintain with financially sound and reputable insurers
insurance that is reasonably consistent with prudent industry practice.

(b) For each of the insurance policies issued as required by this Section 4.10
with respect to Collateral, each Grantor shall cause the Collateral Agent, for
the benefit of the Secured Parties, to be named as an additional insured with
respect to insurance policies for general liability for bodily injury and a
lenders loss payee for insurance policies for property damage. Certificates of
insurance of the policies shall be delivered to the Collateral Agent and shall
be in form reasonably satisfactory to the Collateral Agent.

(c) The Issuer shall promptly provide written notice to the Collateral Agent of
any loss, damage, or destruction to the Collateral in excess of (A) $1,500,000
if covered by insurance or (B) $500,000 if not covered by insurance. During the
existence of an Event of Default, subject to each Intercreditor Agreement (if
any) and the rights of any applicable ABL Collateral Agent and any ABL Secured
Parties thereunder, the Collateral Agent is hereby authorized to directly
collect all insurance proceeds in respect of Collateral and to apply such
proceeds in accordance with Section 5.3.

(d) Unless the Grantors provide the Collateral Agent with evidence of the
insurance coverage on the Collateral required by this Section 4.10, subject to
each Intercreditor Agreement (if any), the Collateral Agent may, upon sixty (60)
days’ prior notice, purchase insurance at the applicable Grantor’s expense to
protect the Collateral Agent’s Lien on such Collateral owned by the applicable
Grantor. This insurance may, but need not, protect the interests of the
Grantors. The coverage that the Collateral Agent purchases may (but shall not be
required to) pay any claim that the Grantors make or any claim that is made
against the Grantors in connection with said Collateral. The Grantors may later
cancel any insurance purchased by the Collateral Agent but only after providing
the Collateral Agent with evidence that the Grantors have obtained insurance as
required by this Agreement. If the Collateral Agent purchases such insurance,
the applicable Grantor will be responsible for the costs of that insurance,
including interest and any other reasonable charges the Collateral Agent may
impose in connection with the placement of insurance, until the effective date
of the cancellation or expiration of the insurance. The costs of the insurance
shall be added to the Obligations. The costs of the insurance may be more than
the cost of insurance that the Grantors may be able to obtain on their own.

 

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Section 4.11 Condemnation. Subject to each Intercreditor Agreement (if any) and
the rights of any applicable ABL Collateral Agent and any ABL Secured Parties
thereunder, each Grantor shall, promptly upon learning of the institution of any
proceeding for the condemnation or other taking of any of its property with a
Fair Market Value in excess of $500,000, notify the Collateral Agent of the
pendency of such proceeding.

Section 4.12 Further Assurances. The Grantors shall, at their own cost and
expense, execute and deliver, or cause to be executed and delivered, to the
Collateral Agent and/or the Trustee such documents and agreements, and shall
take or cause to be taken such actions, as are necessary or that the Collateral
Agent and/or the Trustee may, from time to time, reasonably request to carry out
the terms and conditions of this Agreement and the other Indenture
Documents. Upon the acquisition by any Grantor of any After-Acquired Property
(but subject to the limitations, if applicable, set forth herein, in the
Indenture or in each Intercreditor Agreement (if any)), such Grantor shall
execute and deliver such security instruments, financing statements and
certificates and Opinions of Counsel as shall be reasonably necessary to vest in
the Collateral Agent a perfected security interest or other Lien in such
After-Acquired Property and to have such After-Acquired Property added to the
Collateral and shall promptly deliver such Officers’ Certificates and Opinions
of Counsel as are customary in secured financing transactions in the relevant
jurisdiction(s) or as are reasonably requested by the Trustee or the Collateral
Agent (subject to customary assumptions, exceptions and qualifications), and
thereupon all provisions of this Agreement relating to the Collateral, shall be
deemed to relate to such After-Acquired Property to the same extent and with the
same force and effect. If any property or assets of the Issuer or any Grantor
originally deemed to be an Excluded Asset at any point ceases to be an Excluded
Asset pursuant to such defined term, all or the applicable portion of such
property and assets shall be deemed to be After-Acquired Property and shall be
added to the Notes Collateral in accordance with the Indenture and this
Agreement and each Intercreditor Agreement (if any). Subject to each
Intercreditor Agreement (if any), such security interests and Liens will be
created under security agreements and other instruments and documents in form
reasonably satisfactory to the Collateral Agent, and the Grantors shall deliver
or cause to be delivered to the Collateral Agent and the Trustee all such
instruments and documents (including legal opinions, Officers’ Certificates,
title insurance policies and lien searches) as are necessary or that the
Collateral Agent shall reasonably request to evidence compliance with this
Section 4.12. The Grantors shall furnish to the Collateral Agent each year at
the time of delivery of the annual report required to be delivered by the Issuer
pursuant to Section 4.02(a) of the Indenture, an Officer’s Certificate setting
forth the information required pursuant to the Perfection Certificate or
confirming that there has been no change in such information since the Effective
Date or the date of the most recent certificate delivered pursuant to this
Section 4.12.

Section 4.13 Certain Post-Closing Obligations. As promptly as practical, and in
any event no later than 30 days after the Effective Date, Biodiagnostics shall
deliver to the Collateral Agent an executed copy of the Wells Fargo Account
Control Agreement.

 

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ARTICLE V

REMEDIES

Section 5.1 Remedies.

(a) If an Event of Default has occurred and is continuing:

(i) the Collateral Agent shall have, for the benefit of the Secured Parties, in
addition to all other rights of the Collateral Agent and the Trustee, the rights
and remedies of a secured party under the UCC (whether or not the UCC applies to
the affected Collateral) or under any other applicable law when a debtor is in
default under a security agreement;

(ii) the Collateral Agent may, at any time, take possession of the Collateral
and keep it on any Grantor’s premises, at no cost to the Collateral Agent, the
Trustee or any other Secured Party or remove any part of it to such other place
or places as the Collateral Agent may desire, or any Grantor shall, upon the
Collateral Agent’s demand, at such Grantor’s cost, assemble the Collateral and
make it available to the Collateral Agent at a place reasonably convenient to
the Collateral Agent;

(iii) the Collateral Agent may sell and deliver any Collateral at public or
private sales, for cash, upon credit, or otherwise, at such prices and upon such
terms as the Collateral Agent deems advisable, in its sole discretion, and may,
if the Collateral Agent deems it reasonable, postpone or adjourn any sale of the
Collateral by an announcement at the time and place of sale or of such postponed
or adjourned sale without giving a new notice of sale; provided that in
connection with any such sale of Collateral, the Collateral Agent shall use its
reasonable commercial efforts to maintain the confidentiality of any proprietary
information of the Grantors (consistent with the confidentiality obligations of
the Holders of the Securities as required by the Indenture Documents).

(iv) the Collateral Agent may give notice of sole control or any other
instruction under any Account Control Agreement and take any action provided
therein with respect to the applicable Collateral;

(v) the Collateral Agent may, concurrently with or following written notice to
the Grantors, transfer and register in its name or in the name of its nominee
the whole or any part of the Investment Property Collateral, exchange
certificates or instruments representing or evidencing Investment Property
Collateral for certificates or instruments of smaller or larger denominations,
exercise the voting and all other rights as a holder with respect thereto,
collect and receive all cash dividends, interest, principal and other
distributions made thereon and otherwise act with respect to the Investment
Property Collateral as though the Collateral Agent was the outright owner
thereof.

(b) Without in any way requiring notice to be given in the following manner,
each Grantor agrees that any notice by the Collateral Agent of sale,
disposition, or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, shall constitute reasonable notice to
the Grantors if such notice is mailed by registered or certified mail, return
receipt requested, postage prepaid, or is delivered personally against receipt,
at least ten (10) Business Days prior to such action to the Grantors’ address
specified in or pursuant to Section 8.1.

 

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(c) If any Collateral is sold on terms other than payment in full at the time of
sale, no credit shall be given against the Obligations until the Collateral
Agent receives payment, and if the buyer defaults in payment, the Collateral
Agent may resell the Collateral without further notice to any Grantor.

(d) In the event the Collateral Agent seeks to take possession of all or any
portion of the Collateral by judicial process, each Grantor irrevocably
waives: (i) the posting of any bond, surety, or security with respect thereto
which might otherwise be required; (ii) any demand for possession prior to the
commencement of any suit or action to recover the Collateral; and (iii) any
requirement that the Collateral Agent retain possession and not dispose of any
Collateral until after trial or final judgment.

(e) If an Event of Default occurs and is continuing, each Grantor hereby waives
all rights to a hearing prior to the exercise by the Collateral Agent of the
Collateral Agent’s rights to repossess the Collateral without judicial process
or to replevy, attach, or levy upon the Collateral.

(f) Each Grantor acknowledges and agrees that the Collateral Agent has no
obligation to preserve rights to the Collateral or marshal any Collateral for
the benefit of any Person.

(g) Each Grantor acknowledges and agrees that the compliance by the Collateral
Agent, on behalf of the Secured Parties, with any applicable state or federal
law requirements may be required in connection with a disposition of the
Collateral and such compliance will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.

(h) The Collateral Agent shall have the right upon any public sale or sales and,
to the extent permitted by law, upon any private sale or sales, to purchase for
the benefit of the Collateral Agent and the other Secured Parties, the whole or
any part of the Collateral so sold, free of any right of equity redemption,
which equity redemption each Grantor hereby expressly releases.

(i) Until the Collateral Agent is able to effect a sale, lease, transfer or
other disposition of Collateral, the Collateral Agent shall have the right, but
no duty or obligation, to hold or use Collateral, or any part thereof, to the
extent that it deems appropriate for the purpose of preserving Collateral or the
value of the Collateral, or for any other purpose deemed appropriate by the
Collateral Agent. The Collateral Agent may, if it so elects, but shall have no
obligation to, seek the appointment of a receiver or keeper to take possession
of Collateral and to enforce any of the Collateral Agent’s remedies (for the
benefit of the Collateral Agent and Secured Parties), with respect to such
appointment without prior notice or hearing as to such appointment.

(j) Each Grantor recognizes that the Collateral Agent may be unable to effect a
public sale of any or all of the Collateral consisting of securities to be sold
by reason of certain prohibitions contained in the laws of any jurisdiction
outside the United States or in applicable federal or state securities laws but
may be compelled to resort to one or more private sales

 

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thereof to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire such Collateral or other property to be sold for their
own account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not, by virtue thereof, be deemed to have been made in a
commercially unreasonable manner. Unless required by a Requirement of Law, the
Collateral Agent shall not be under any obligation to delay a sale of any of the
Collateral or other property to be sold for the period of time necessary to
permit the issuer of such securities to register such securities under the laws
of any jurisdiction outside the United States or under any applicable federal or
state securities laws, even if such issuer would agree to do so. Each Grantor
further agrees to do or cause to be done, at its own cost and expense, to the
extent that such Grantor may do so under Requirements of Law, all such other
acts and things as may be necessary to make such sales or resales of any portion
or all of the Collateral or other property to be sold valid and binding and in
compliance with any and all Requirements of Law at the Grantors’ expense.

(k) Any remedy or enforcement action to be taken hereunder by the Collateral
Agent with respect to the Collateral shall be at the written direction of the
Trustee (acting pursuant to the direction of the Majority Holders pursuant to
the Indenture).

(l) Notwithstanding the foregoing, any rights and remedies provided in this
Section 5.1 shall be subject to each Intercreditor Agreement (if any).

Section 5.2 Grant of Intellectual Property License. Effective only upon the
occurrence and during the continuance of an Event of Default, for the purpose of
enabling the Collateral Agent to exercise the rights and remedies under this
Article V at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, subject to the terms of each Intercreditor
Agreement (if any), each Grantor hereby grants to the Collateral Agent a
non-exclusive license or other right to use, without charge, each Grantor’s
labels, patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, to the extent constituting
Collateral in completing production of, advertising or selling any Collateral,
and, subject to the rights of any licensor or franchisor under such agreements
and to the extent not in violation of such agreements, each Grantor’s rights
under all licenses and all franchise agreements shall inure to the Collateral
Agent’s benefit for such purpose.

Section 5.3 Application of Proceeds. Subject to each Intercreditor Agreement (if
any), the Collateral Agent shall apply the proceeds of any collection, sale,
foreclosure or other realization upon any Collateral, as well as any Collateral
consisting of cash, as follows:

FIRST, to the payment of all reasonable costs and expenses incurred by the
Collateral Agent (in its capacity as such hereunder or under the Indenture or
any other Indenture Document) and the Trustee in connection with such
collection, sale, foreclosure or realization or reasonable costs, expenses,
claims or liabilities of the Collateral Agent or the Trustee otherwise relating
to or arising in connection with this Agreement, the Indenture or any other
Indenture Document or any of the Obligations, including all court costs and the
reasonable fees and expenses of its agents and legal counsel, the repayment of
all advances made by the Collateral

 

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Agent or the Trustee hereunder or under the Indenture or any other Indenture
Document on behalf of any Grantor, any other reasonable costs or expenses
incurred by the Collateral Agent or the Trustee in connection with the exercise
of any remedy hereunder or under the Indenture or any other Indenture Document,
and any indemnification of the Collateral Agent and the Trustee required by the
terms hereunder, under the Indenture or any other Indenture Document;

SECOND, to the Trustee for distribution in accordance with the priorities set
forth in Section 6.10 of the Indenture.

Except as otherwise provided herein, the Collateral Agent shall have absolute
discretion as to the time of application of any such proceeds, moneys or
balances in accordance with this Agreement and each Intercreditor Agreement (if
any). Upon any sale of Collateral by the Collateral Agent (including pursuant to
a power of sale granted by statute or under a judicial proceeding), the receipt
of the Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Collateral Agent or such officer or
be answerable in any way for the misapplication thereof.

ARTICLE VI

CONCERNING THE COLLATERAL AGENT

Section 6.1 Reliance by Collateral Agent; Indemnity Against Liabilities, etc.

(a) Whenever in the performance of its duties under this Agreement or any other
Indenture Document, the Collateral Agent shall deem it necessary or desirable
that a matter be proved or established with respect to the Grantors or any other
Person in connection with the taking, suffering or omitting of any action
hereunder by the Collateral Agent, such matter may be conclusively deemed to be
proved or established by a certificate executed by an Officer of such Person,
including an Officers’ Certificate or an Opinion of Counsel, and the Collateral
Agent shall have no liability with respect to any action taken, suffered or
omitted in reliance thereon. The Collateral Agent may at any time solicit
written confirmatory instructions, including a direction of the Trustee, any
Grantor or an order of a court of competent jurisdiction as to any action that
it may be requested or required to take or that it may propose to take in the
performance of any of its obligations under this Agreement or any other
Indenture Document and shall be fully justified in failing or refusing to act
hereunder or under any Indenture Document until it shall have received such
requisite instruction.

(b) The Collateral Agent shall be fully protected in relying upon any note,
writing, affidavit, electronic communication, fax, resolution, statement,
certificate, instrument, opinion, report, notice (including any notice of an
Event of Default or of the cure or waiver thereof), request, consent, order or
other paper or document or oral conversation (including, telephone
conversations) which it in good faith believes to be genuine and correct and to
have been signed, presented or made by the proper party. The Collateral Agent
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any notice, certificate or opinion
furnished to the Collateral Agent in connection with this Agreement or any other
Indenture Document and upon advice and statements of legal counsel (including
counsel to the Issuer or any Grantor, independent accountants and other agents
consulted by the Collateral Agent).

 

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Section 6.2 Exercise of Remedies. The remedies of the Collateral Agent hereunder
and under the other Security Documents shall include, but not be limited to, the
disposition of the Collateral by foreclosure or other sale and the exercising of
all remedies of a secured lender under the UCC, bankruptcy laws or similar laws
of any applicable jurisdiction.

Section 6.3 Authorized Investments. Any and all funds held by the Collateral
Agent in its capacity as Collateral Agent, whether pursuant to any provision
hereof or of any other Security Document or otherwise, shall, to the extent
reasonably practicable following receipt by the Collateral Agent from the Issuer
of specific written instructions in form and substance reasonably satisfactory
to the Collateral Agent delivered to the Collateral Agent at least three (3)
Business Days prior to the proposed investment, be invested by the Collateral
Agent within a reasonable time in the Cash Equivalents identified in such
written instructions. Any interest earned on such funds shall be disbursed (i)
during an Event of Default, in accordance with Section 5.3 and (ii) at all other
times, as the Issuer shall direct. To the extent that the interest rate payable
with respect to any such account varies over time, the Collateral Agent may use
an average interest rate in making the interest allocations among the respective
Secured Parties. In the absence of gross negligence or willful misconduct as
determined by a final non-appealable order of a court of competent jurisdiction,
the Collateral Agent shall not be responsible for any investment losses in
respect of any funds invested in accordance with this Section 6.3. The
Collateral Agent shall have no duty or obligation regarding the reinvestment of
any such funds in the absence of updated written instructions from the Issuer in
form and substance reasonably satisfactory to the Collateral Agent.

Section 6.4 Bankruptcy Proceedings. The following provisions shall apply during
any Bankruptcy Proceeding of any Grantor:

(a) The Collateral Agent shall represent all Secured Parties in connection with
all matters directly relating to the Collateral, including, any use, sale or
lease of Collateral, use of cash collateral, request for relief from the
automatic stay and request for adequate protection.

(b) Each Secured Party shall be free to act independently on any issue not
affecting the Collateral. Each Secured Party shall give prior notice to the
Collateral Agent of any such action that could materially affect the rights or
interests of the Collateral Agent or the other Secured Parties to the extent
that such notice is reasonably practicable. If such prior notice is not given,
such Secured Party shall give prompt notice following any action taken
hereunder.

(c) Any proceeds of the Collateral received by any Secured Party as a result of,
or during, any Bankruptcy Proceeding will be delivered promptly to the
Collateral Agent for distribution in accordance with Section 5.3.

 

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ARTICLE VII

COLLATERAL AGENT AND TRUSTEE RIGHTS, DUTIES AND

LIABILITIES; ATTORNEY IN FACT; PROXY

Section 7.1 The Collateral Agent’s and the Trustee’s Rights, Duties, and
Liabilities.

(a) The Grantors assume all responsibility and liability arising from or
relating to the use, maintenance, storage, sale, collection, foreclosure,
realization on, conveyance or other disposition of or involving the
Collateral. The Obligations shall not be affected by any failure of any Grantor,
the Collateral Agent or the Trustee to take any steps to perfect the Collateral
Agent’s Liens or to collect or realize upon the Collateral, nor shall loss of or
damage to the Collateral release any Grantor from any of the
Obligations. Following the occurrence and during the continuation of an Event of
Default, the Collateral Agent may (but shall not be required to), and at the
direction of the Trustee (acting in accordance with the instructions of the
Majority Holders pursuant to the Indenture) shall, subject to each Intercreditor
Agreement (if any) and the terms of the Indenture, without notice to or consent
from any Grantor sue upon or otherwise collect, extend the time for payment of,
modify or amend the terms of, compromise or settle for cash, credit, or
otherwise upon any terms, grant other indulgences, extensions, renewals,
compositions, or releases, and take or omit to take any other action with
respect to the Collateral, any security therefor, any agreement relating
thereto, any insurance applicable thereto, or any Person liable directly or
indirectly in connection with any of the foregoing, without discharging or
otherwise affecting the liability of any Grantor for the Obligations or under
the Indenture, any other Indenture Document or any other agreement now or
hereafter existing between any Secured Party and any Grantor.

(b) It is expressly agreed by the Grantors that, anything herein to the contrary
notwithstanding, each of the Grantors shall remain liable under each of its
contracts and each of its licenses to observe and perform all the conditions and
obligations to be observed and performed by it thereunder. The Collateral Agent
and the Trustee shall not have any obligation or liability under any contract or
license by reason of or arising out of this Agreement or the granting herein of
a Lien thereon or the receipt by the Collateral Agent or the Trustee of any
payment relating to any contract or license pursuant hereto that is applied as
required herein. The Collateral Agent and the Trustee shall not be required or
obligated in any manner to perform or fulfill any of the obligations of any
Grantor under or pursuant to any contract or license, or to make any payment, or
to make any inquiry as to the nature or the sufficiency of any payment received
by it or the sufficiency of any performance by any party under any contract or
license, or to present or file any claims, or to take any action to collect or
enforce any performance or the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

Section 7.2 Right to Cure. The Collateral Agent may, (but shall not be required
to) in its reasonable discretion, subject to each Intercreditor Agreement (if
any), pay any reasonable amount or do any reasonable act required of any Grantor
hereunder or under any other Indenture Document in order to preserve, protect,
maintain, or enforce the Obligations, the Collateral or the Collateral Agent’s
Liens therein, and which any Grantor fails to timely pay or do, including
payment of any judgment against any Grantor, any insurance premium, any
warehouse charge, any finishing or processing charge, any landlord’s or bailee’s
claim, and any other Lien upon or with respect to the Collateral. All payments
that the Collateral Agent makes under this Section 7.2 and all reasonable
out-of-pocket costs and expenses that the Collateral Agent pays or incurs in
connection with any action taken by it hereunder shall be promptly reimbursed by
such Grantor. Any payment made or other action taken by the Collateral Agent
under this Section 7.2 shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed thereafter as herein provided.

 

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Section 7.3 Confidentiality.

(a) The Collateral Agent, in its individual capacity and as Collateral Agent,
and the Trustee, in its individual capacity and as Trustee, agree and
acknowledge that all information provided to the Collateral Agent or the Trustee
by any Grantor may be considered to be proprietary and confidential information
(“Confidential Information”). The Trustee and the Collateral Agent each agrees
to take all reasonable precautions necessary to keep such information
confidential, which precautions shall be no less stringent than those that the
Collateral Agent and the Trustee, as applicable, employs to protect its own
confidential information. Each of the Collateral Agent and the Trustee shall not
disclose to any third party other than as set forth herein, and shall not use
for any purpose other than the exercise of the Collateral Agent’s and the
Trustee’s rights and the performance of its respective obligations under this
Agreement, any such information without the prior written consent of such
Grantor, as applicable. Each of the Collateral Agent and the Trustee shall limit
access to such information received hereunder to (a) its directors, officers,
managers and employees and (b) its legal advisors, to each of whom disclosure of
such information is necessary for the purposes described above; provided,
however, that in each case such party has expressly agreed to maintain such
information in confidence under terms and conditions substantially identical to
the terms of this Section 7.3(a).

(b) Each of the Collateral Agent and the Trustee agree that, unless otherwise
provided hereunder or under the Indenture, each Grantor does not have any
responsibility whatsoever for any reliance on Confidential Information by the
Collateral Agent or the Trustee or by any Person to whom such information is
disclosed in connection with this Agreement, whether related to the purposes
described above or otherwise. Without limiting the generality of the foregoing,
each of the Collateral Agent and the Trustee agrees that the Grantor makes no
representation or warranty whatsoever to it with respect to Confidential
Information or its suitability for such purposes. Each of the Collateral Agent
and the Trustee further agrees that it shall not acquire any rights against the
Grantor or any employee, officer, director, manager, representative or agent of
the Grantor (together with the Issuer and any employee, officer, director,
manager, representative or agent of the Issuer, “Confidential Parties”) as a
result of the disclosure of Confidential Information to the Trustee and that no
Confidential Party has any duty, responsibility, liability or obligation to any
Person as a result of any such disclosure.

(c) In the event the Collateral Agent or the Trustee is required to disclose any
Confidential Information received hereunder in order to comply with any laws,
regulations or court orders, it may disclose Confidential Information only to
the extent necessary for such compliance; provided, however, that it shall give
the Grantor, reasonable advance written notice of any such court proceeding in
which such disclosure may be required pursuant to a court order so as to afford
the Grantor full and fair opportunity to oppose the issuance of such order and
to appeal therefrom and shall cooperate reasonably with the Grantor, as
applicable, in opposing such order and in securing confidential treatment of any
Confidential Information to be disclosed and/or obtaining a protective order
narrowing the scope of such disclosure.

 

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Section 7.4 Power of Attorney. Each Grantor, as to itself, hereby appoints the
Collateral Agent and the Collateral Agent’s designee as such Grantor’s attorney,
with power upon the occurrence and during the continuance of an Event of
Default: (a) to endorse such Grantor’s name on any checks, notes, acceptances,
money orders, or other forms of payment or security that come into the
Collateral Agent’s or any Secured Parties’ possession; (b) to sign such
Grantor’s name on any invoice, bill of lading, warehouse receipt, or other
document of title relating to any Collateral, on drafts against customers, on
assignments of Accounts, on notices of assignment, financing statements, and
other public records and to file any such financing statements by electronic
means with or without a signature as authorized or required by applicable law or
filing procedure; (c) to notify the post office authorities to change the
address for delivery of such Grantor’s mail to an address designated by the
Collateral Agent and to receive, open, and dispose of all mail addressed to such
Grantor; (d) to send requests for verification of Accounts to customers or
Account Debtors (but if any such Accounts constitute Intercreditor Collateral,
only so long as no ABL Liens are outstanding on such Collateral); (e) to clear
Inventory through customs in such Grantor’s name, the Collateral Agent’s name,
or the name of the Collateral Agent’s designee, and to sign and deliver to
customs officials powers of attorney in such Grantor’s name for such purpose;
and (f) to do all things the Collateral Agent reasonably determines are
necessary to carry out the security interest provisions of the Indenture and the
provisions of this Agreement. Each Grantor ratifies and approves all acts of
such attorney. Notwithstanding anything in this Agreement or any Indenture
Document to the contrary, none of the Trustee, the Collateral Agent, nor their
attorneys, employees or Affiliates will be liable for any acts or omissions or
for any error of judgment or mistake of fact or law other than any such
liability arising from any such Person’s gross negligence or willful misconduct,
as finally determined by a court of competent jurisdiction. Notwithstanding the
foregoing, any rights and remedies provided in this Section 7.4 shall be subject
to each Intercreditor Agreement (if any).

Section 7.5 NATURE OF APPOINTMENT; LIMITATION OF DUTY. THE APPOINTMENT OF THE
COLLATERAL AGENT AS ATTORNEY-IN-FACT IN THIS ARTICLE VII IS COUPLED WITH AN
INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS AGREEMENT IS
TERMINATED IN ACCORDANCE WITH SECTION 8.13. NOTWITHSTANDING ANYTHING CONTAINED
IN THIS AGREEMENT OR IN ANY INDENTURE DOCUMENT, NEITHER THE COLLATERAL AGENT,
NOR ANY SECURED PARTY, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE
ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND
SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO,
EXCEPT TO THE EXTENT SUCH DAMAGES ARE ATTRIBUTABLE TO THEIR OWN GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

 

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Section 7.6 Additional Matters Relating to the Collateral Agent.

(a) The Collateral Agent. U.S. Bank National Association shall initially act as
Collateral Agent for the Secured Parties and shall be authorized to appoint
co-collateral agents as necessary in its sole discretion. U.S. Bank National
Association, as Collateral Agent, is authorized and directed to (i) enter into
the Indenture Documents, (ii) enter into Intercreditor Agreements, (iii) bind
the Secured Parties on the terms as set forth in the Indenture Documents and any
Intercreditor Agreement and (iv) perform and observe its obligations under the
Indenture Documents and each Intercreditor Agreement (if any).

(b) Role of the Collateral Agent. The rights, duties, liabilities and immunities
of the Collateral Agent and its appointment, resignation and replacement
hereunder and under the Indenture and the other Indenture Documents shall be
governed by this Agreement, Article 11 of the Indenture and the relevant
provisions contained in the other Indenture Documents. Without limiting the
foregoing, the rights, privileges, protections and benefits given to the
Collateral Agent under the Indenture are extended to, and shall be enforceable
by, the Collateral Agent in connection with the execution, delivery and
administration of this Agreement and the other Indenture Documents and any
action taken or omitted to be taken by the Collateral Agent in connection with
its appointment and performance under this Agreement and the other Indenture
Documents to which it is a party.

(c) Absence of Fiduciary Relation. The Collateral Agent undertakes to perform or
to observe only such of its agreements and obligations as are specifically set
forth in this Agreement, the Indenture and the other Indenture Documents, and no
implied agreements, covenants or obligations with respect to any Grantor or any
Affiliate of any Grantor, any Secured Party or any other party shall be read
into this Agreement against the Collateral Agent. The Collateral Agent in its
capacity as such is not a fiduciary of and shall not owe or be deemed to owe any
fiduciary duty to any Grantor or any Related Person of any Grantor.

(d) Exculpatory Provisions.

(i) None of the Collateral Agent, the Trustee or any of their respective
officers, directors, employees, agents, attorneys-in-fact or Related Persons
shall be responsible or liable in any manner (A) to any Grantor or any of their
respective Related Persons for any action taken or omitted to be taken by it
under or in connection with this Agreement in compliance herewith, (B) to any
Secured Party or any other Person for any recitals, statements, representations,
warranties, covenants or agreements contained in this Agreement or in any
Indenture Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Collateral Agent under or in
connection with, this Agreement or any Indenture Document, (C) to any Secured
Party or any other Person for the validity, effectiveness, adequacy, genuineness
or enforceability of this Agreement or any Indenture Document, or any Lien
purported to be created hereunder or under any Indenture Document, (D) to any
Secured Party or any other Person for the validity or sufficiency of the
Collateral or the validity of the title of any Grantor to the Collateral, for
insuring the Collateral or for the payment of taxes, charges, assessments or
Liens upon the Collateral or otherwise as to the maintenance of the Collateral
or (E) to any Secured Party or other Person for any failure of any Grantor to
perform its obligations hereunder or of the Issuer to perform any of the
Obligations.

 

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(ii) Notwithstanding anything to the contrary contained in this Agreement, (A)
in no event shall the Trustee or the Collateral Agent be responsible for or have
any obligation, duty or liability with respect to the creation, perfection,
priority, maintenance, protection or enforcement of any Lien on, security
interest in, pledge or other encumbrance involving or relating to the Collateral
or any other assets, properties or rights of the Grantors, provided, however
that the Collateral Agent acknowledges that with respect to the enforcement of
any Liens, its actions will be subject to each Intercreditor Agreement (if any),
(B) none of the Trustee or the Collateral Agent shall be responsible for filing
any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting or
maintaining the perfection of any Liens in the Collateral and (C) none of the
Trustee or the Collateral Agent shall be under any obligation to any Person to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or to inspect the
properties or records of any Grantor. The permissive rights of the Collateral
Agent to do things enumerated in this Agreement shall not be construed as a duty
or obligation. The Collateral Agent may rely conclusively on any Opinions of
Counsel rendered to the Collateral Agent under the Indenture in determining any
necessary or desirable actions under this Agreement. Notwithstanding anything to
the contrary herein, the Collateral Agent’s sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under the UCC or otherwise, shall be to deal with it in the same
manner as the Collateral Agent deals with similar property for its own account
and the Collateral Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which comparable
secured parties accord comparable collateral. None of the Collateral Agent or
the Trustee shall be liable for failure to demand, collect or realize upon any
of the Collateral or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Collateral upon the request of any Grantor
or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.

(iii) Notwithstanding anything to the contrary contained herein, none of the
Collateral Agent, the Trustee or any of their respective officers, directors,
employees, agents, attorneys-in-fact, or Related Persons shall be exonerated
from any liability arising from its or their own gross negligence or willful
misconduct, as finally determined by a court of competent jurisdiction.

(e) Fees and Expenses. The Grantors agree that they shall, jointly and
severally, upon demand pay to the Collateral Agent and any Secured Party the
amount of any and all reasonable out-of-pocket fees, costs and expenses
(including the reasonable out-of-pocket fees and expenses of their respective
counsel, any special consultants reasonably engaged (and, unless an Event of
Default exists, engaged only with the consent of the Issuer), and any local
counsel who might reasonably be retained by the Collateral Agent or any Secured
Party, as the case may be, in connection with the transactions contemplated
hereby) that the Collateral Agent or any Secured Party, as the case may be, may
incur in connection with (i) any Event of Default, including the sale, lease,
license or other disposition of, collection from, or other realization upon, any
of the Collateral pursuant to the exercise or enforcement of any of their
respective rights hereunder, (ii) the exercise of their respective rights under
this Agreement or under any Indenture Document, including the custody,
preservation, use or operation of, or the sale of, any of the Collateral, (iii)
performance by the Collateral Agent of any obligations of any Grantor that

 

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any Grantor has failed or refused to perform with respect to the Collateral,
(iv) bankruptcy, insolvency, receivership, foreclosure, winding up or
liquidation proceedings and defending or asserting rights and claims of the
Collateral Agent in respect thereof, by litigation or otherwise, including
expenses of insurance, or (v) the execution and delivery and administration of
this Agreement, each Intercreditor Agreement and the other Indenture Documents
and, any agreement supplemental hereto or thereto, and any instruments of
amendment, waiver, further assurance, release or termination, including with
respect to the termination and/or release of any or all of the Liens in the
Collateral provided for in this Agreement and the other Security Documents.

(f) Filing Fees, Taxes, etc. The Grantors, jointly and severally, shall pay on
demand all filing, registration and recording fees or re-filing,
re-registration, and re-recording fees, and all federal, state, county, and
municipal stamp taxes and other similar taxes, duties, imposts, assessments, and
charges arising out of or in connection with the execution and delivery of this
Agreement, the Indenture, each Intercreditor Agreement, the other Indenture
Documents, and any agreement supplemental hereto or thereto and any instruments
of further assurance or termination.

(g) Security Against Costs. Except for action expressly provided for herein and
in the other Indenture Documents, the Collateral Agent shall be under no
obligation to exercise any of the rights or powers vested in it by this
Agreement or any other Indenture Document at the request, order or direction of
any Secured Party pursuant to the provisions of the Indenture or any Indenture
Document, unless such Secured Party shall have offered to the Collateral Agent
security or indemnity satisfactory to the Collateral Agent against the costs,
expenses and liabilities which may be incurred by it in compliance with such
request, order or direction.

(h) No Responsibility for Investments. In no event shall the Collateral Agent or
any Secured Party be liable or responsible for any funds or investments of funds
held by any Grantor or any Affiliates thereof.

Section 7.7 Appointment of Co-Collateral Agent. In the event that the Collateral
Agent appoints a Co-Collateral Agent, or Co-Collateral Agents, in accordance
with the provisions of Section 7.6(a) of this Agreement, such Co-Collateral
Agent(s) shall enter into a Co-Collateral Agent Appointment Agreement in a form
satisfactory to the Collateral Agent and such Co-Collateral Agent, and upon
acceptance of the appointment, such Co-Collateral Agent shall be entitled to all
of the rights, privileges, limitations on liability and immunities afforded to
and subject to all the duties of the Collateral Agent hereunder, and shall be
deemed to be a party to this Agreement for all purposes provided in this Section
7.7, in each case, subject to the specific rights and duties vested in the
Co-Collateral Agent pursuant to the Co-Collateral Agent Appointment Agreement
and related Security Documents. It is accepted and acknowledged by the parties
hereto that any Co-Collateral Agent appointed in accordance with Section 7.6(a)
and this Section 7.7 shall be entitled to the payment of its fees and expenses
as agreed to by the Issuer, and without limitation of any of the other
provisions of this Agreement, shall be deemed to be an indemnified party under
Section 8.17 of this Agreement with respect to any liability arising under this
Agreement or the other Indenture Documents without need for further act by the
Issuer or the Subsidiary Parties.

 

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Section 7.8 Instructions under Account Control Agreement. Each of the Trustee
and the Collateral Agent, whichsoever is a party to any Account Control
Agreement, agrees not to issue a notice of exclusive control or any other
instruction under such Account Control Agreement unless an Event of Default has
occurred and is continuing.    

ARTICLE VIII

GENERAL PROVISIONS

Section 8.1 Notice. All notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by fax, as follows:

 

  (a) if to the Collateral Agent, to it at

U.S. Bank National Association

Corporate Trust Services

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

Attention: Alison D.B. Nadeau (Quotient 2016 Indenture)

Facsimile: (617) 603-6683

 

  (b) if to the Trustee, to it at

U.S. Bank National Association

Corporate Trust Services

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

Attention: Alison D.B. Nadeau (Quotient 2016 Indenture)

Facsimile: (617) 603-6683

 

  (c) if to Grantors, at

Quotient Limited

Pentlands Science Park, Bush Loan

Penicuik, Midlothian, EH26 0PL, United Kingdom

Attention: Roland Boyd

Facsimile: +44 131 445 6184

Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto (and for
this purpose a notice to the Issuer shall be deemed to be a notice to each
Grantor). All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by facsimile or on the date five (5) Business Days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 8.1 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 8.1. Notwithstanding the foregoing, notices to the
Collateral Agent shall only be effective upon actual receipt.

 

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Section 8.2 Waiver of Notices. Unless otherwise expressly provided herein, each
Grantor hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this
Agreement or any Collateral.

Section 8.3 Limitation on Collateral Agent’s and Secured Party’s Duty with
Respect to the Collateral. The Collateral Agent shall have no obligation to
clean-up or otherwise prepare the Collateral for sale. The Collateral Agent and
each Secured Party shall use reasonable care with respect to the Collateral in
its possession or under its control. Neither the Collateral Agent nor any
Secured Party shall have any other duty as to any Collateral in its possession
or control or in the possession or control of any agent or nominee of the
Collateral Agent or such Secured Party, or any income thereon (other than to
account for proceeds therefrom) or as to the preservation of rights against
prior parties or any other rights pertaining thereto. To the extent that
applicable law imposes duties on the Collateral Agent to exercise remedies in a
commercially reasonable manner, and to the extent permitted by applicable law,
each Grantor acknowledges and agrees that it would be commercially reasonable
for the Collateral Agent (i) to fail to incur expenses deemed significant by the
Collateral Agent to prepare Collateral for disposition or otherwise to transform
raw material or work in process into finished goods or other finished products
for disposition, (ii) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of, (iii) to fail to
exercise collection remedies against Account Debtors or other Persons obligated
on Collateral or to remove Liens on or any adverse claims against Collateral,
(iv) to exercise collection remedies against Account Debtors and other Persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (v) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other Persons, whether or
not in the same business as the Grantor, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Collateral Agent against risks of loss, collection or
disposition of Collateral or to provide to the Collateral Agent a guaranteed
return from the collection or disposition of Collateral, or (xii) to the extent
deemed appropriate by the Collateral Agent, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist the
Collateral Agent in the collection or disposition of any of the Collateral. Each
Grantor acknowledges that the purpose of this Section 8.3 is to provide
non-exhaustive indications of what actions or omissions by the Collateral Agent
would be commercially reasonable in the Collateral Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the Collateral
Agent shall not be deemed commercially unreasonable solely on account of not
being indicated in this Section 8.3. Without limitation upon the foregoing,
nothing contained in this Section 8.3 shall be construed to grant any rights to
any Grantor or to impose any duties on the Collateral Agent that would not have
been granted or imposed by this Agreement or by applicable law in the absence of
this Section 8.3.

 

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Section 8.4 Compromises and Collection of Collateral. Each Grantor and the
Collateral Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Accounts, that
certain of the Accounts may be or become uncollectible in whole or in part and
that the expense and probability of success in litigating a disputed Account may
exceed the amount that reasonably may be expected to be recovered with respect
to an Account. In view of the foregoing, each Grantor agrees that the Collateral
Agent may at any time and from time to time if an Event of Default has occurred
and is continuing, (provided that if such Account constitutes Intercreditor
Collateral only so long as no ABL Liens are outstanding in on such Collateral),
compromise with the obligor on any Account, accept in full payment of any
Account such amount as the Collateral Agent in its sole discretion shall
determine or abandon any Account, and any such action by the Collateral Agent
shall be commercially reasonable so long as the Collateral Agent acts in good
faith based on information known to it at the time it takes any such action.

Section 8.5 Specific Performance of Certain Covenants. Each Grantor acknowledges
and agrees that a breach of any of the covenants contained in Sections 4.2(a),
4.5, 4.6, 4.7, 4.8, 4.10, 4.12, 5.1(j), 7.6, 8.11, 8.17 and 8.18, will cause
irreparable injury to the Collateral Agent and the other Secured Parties, that
the Collateral Agent and the other Secured Parties have no adequate remedy at
law in respect of such breaches and therefore agrees, without limiting the right
of the Collateral Agent or the other Secured Parties to seek and obtain specific
performance of other obligations of any Grantor contained in this Agreement,
that the covenants of such Grantor contained in the Sections referred to in this
Section 8.5 shall be specifically enforceable against such Grantor.

Section 8.6 Cumulative Remedies; No Prior Recourse to Collateral. The
enumeration herein of the Collateral Agent’s and the Trustee’s rights and
remedies is not intended to be exclusive, and such rights and remedies are in
addition to and not by way of limitation of any other rights or remedies that
the Collateral Agent and the Trustee may have under the UCC, other applicable
law or the Indenture Documents. The Collateral Agent and the Trustee shall have
the right, in their sole discretion, to determine which rights and remedies are
to be exercised and in which order. The exercise of one right or remedy shall
not preclude the exercise of any others, all of which shall be cumulative. The
Collateral Agent and the Trustee may, without limitation, proceed directly
against any Person liable therefor to collect the Obligations without any prior
recourse to the Collateral. No failure to exercise and no delay in exercising,
on the part of the Collateral Agent or the Trustee, any right, remedy, power, or
privilege hereunder, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power, or privilege.

Section 8.7 Limitation by Law; Severability of Provisions. All rights, remedies
and powers provided in this Agreement may be exercised only to the extent that
the exercise thereof does not violate any applicable provision of law, and all
the provisions of this Agreement are intended to be subject to all applicable
mandatory provisions of law that may be

 

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controlling and to be limited to the extent necessary so that they shall not
render this Agreement invalid, unenforceable or not entitled to be recorded or
registered, in whole or in part. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.

Section 8.8 Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against any
Grantor for liquidation or reorganization, should any Grantor become insolvent
or make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of such
Grantor’s assets. This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time when there is or has been more
than one Grantor payment and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Obligations, whether as
a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though
such payment or performance had not been made. In the event that any such
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

Section 8.9 Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective representatives, successors, and
permitted assigns of the parties hereto; provided, however, no Grantor shall
assign or delegate any of its rights or duties hereunder without the prior
written consent of the Collateral Agent and the Trustee (other than pursuant to
a transaction permitted under the Indenture), and any attempted assignment
without such consent shall be null and void. The rights and benefits of the
Collateral Agent and the Trustee hereunder shall, if such Persons so agree,
inure to any party acquiring any interest in the Obligations or any part thereof
in accordance with the terms hereof or of the Indenture.

Section 8.10 Survival of Representations. All representations and warranties
made by the Grantors in the Indenture Documents and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Indenture Document shall be considered to have been
relied upon by the Secured Parties and shall survive the execution and delivery
of the Indenture Documents and the purchase of the Securities by the Purchasers,
regardless of any investigation made by any Secured Party or on its behalf and
notwithstanding that the Collateral Agent, the Trustee or any other Secured
Party may have had notice or knowledge of any Default or incorrect
representation or warranty. Notwithstanding anything to the contrary set forth
herein, the provisions of Section 8.17 and 8.18 shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Securities or the termination of this Agreement or
any other Indenture Document.

Section 8.11 Guaranties; Third Party Joinder. Promptly upon creation or
acquisition of any Subsidiary of a Grantor, such Grantor shall, to the extent
required pursuant to the terms of the Indenture, cause such new Subsidiary to
become a Grantor by executing and delivering to the Collateral Agent such an
instrument in the form of Exhibit H hereto and other instruments, certificates,
and agreements as the Collateral Agent may reasonably request. Upon execution
and delivery of such instruments, certificates, and agreements, such newly
created or acquired Subsidiary shall automatically become a Grantor and
thereupon shall have all of the rights, benefits, duties, and obligations of a
Grantor under the Indenture Documents.

 

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Section 8.12 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.

Section 8.13 Termination and Release. This Agreement and the security interests
granted hereby shall terminate in accordance with the Indenture and each
Intercreditor Agreement (if any).

Section 8.14 Entire Agreement. This Agreement, together with the other Indenture
Documents embodies the entire agreement and understanding between each Grantor
and the Collateral Agent relating to the Collateral and supersedes all prior
agreements and understandings between any Grantor and the Collateral Agent
relating to the Collateral.

Section 8.15 Governing Law; Jurisdiction; Consent to Service of Process.

(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW
(OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW),
EXCEPT TO THE EXTENT THAT LOCAL LAW GOVERNS THE CREATION, PERFECTION, PRIORITY
OR ENFORCEMENT OF SECURITY INTERESTS.

(b) EACH PARTY HERETO HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE
FEDERAL AND STATE COURTS OF COMPETENT JURISDICTION IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY TO THIS
AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 8.1. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY
PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

Section 8.16 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

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Section 8.17 Indemnity. EACH GRANTOR AGREES, JOINTLY AND SEVERALLY, TO DEFEND,
INDEMNIFY, AND HOLD THE COLLATERAL AGENT, THE TRUSTEE AND EACH OF THEIR RELATED
PERSONS (EACH, AN “INDEMNIFIED PERSON”) HARMLESS FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, CHARGES, EXPENSES, AND DISBURSEMENTS (INCLUDING REASONABLE ATTORNEY
COSTS) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY AT ANY TIME (INCLUDING AT ANY
TIME FOLLOWING THE TERMINATION, RESIGNATION, OR REPLACEMENT OF THE COLLATERAL
AGENT OR THE TRUSTEE) BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY SUCH
PERSON IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE INDENTURE OR
ANY OTHER INDENTURE DOCUMENT OR ANY DOCUMENT CONTEMPLATED BY OR REFERRED TO
HEREIN OR THEREIN, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR ANY
ACTION TAKEN OR OMITTED BY ANY SUCH PERSON UNDER OR IN CONNECTION WITH ANY OF
THE FOREGOING, INCLUDING WITH RESPECT TO ANY INVESTIGATION, LITIGATION, OR
PROCEEDING (INCLUDING ANY INSOLVENCY PROCEEDING OR APPELLATE PROCEEDING) RELATED
TO OR ARISING OUT OF THIS AGREEMENT, THE INDENTURE, ANY OTHER INDENTURE
DOCUMENT, OR THE SECURITIES OR THE USE OF THE PROCEEDS THEREOF, WHETHER OR NOT
ANY INDEMNIFIED PERSON IS A PARTY THERETO INCLUDING ANY SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
CHARGES, EXPENSES AND REIMBURSEMENTS RESULTING FROM THE NEGLIGENCE OF SUCH
INDEMNIFIED PERSON (ALL THE FOREGOING, COLLECTIVELY, THE “INDEMNIFIED
LIABILITIES”); PROVIDED THAT THE GRANTORS SHALL HAVE NO OBLIGATION HEREUNDER TO
ANY INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES TO THE EXTENT
SUCH INDEMNIFIED LIABILITIES RESULT PRIMARILY FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PERSON OR ITS RESPECTIVE AFFILIATES, AS
FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION. THE AGREEMENTS IN THIS
SECTION 8.17 SHALL SURVIVE PAYMENT OF ALL OTHER OBLIGATIONS AND ANY TERMINATION
OR EXPIRATION OF THIS AGREEMENT OR ANY OTHER INDENTURE DOCUMENT.

Section 8.18 Limitation of Liability. NO CLAIM MAY BE MADE BY ANY GRANTOR OR
OTHER PERSON AGAINST THE COLLATERAL AGENT, THE TRUSTEE, OR THE AFFILIATES,
DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS OR THEIR RESPECTIVE RELATED PERSONS OF
ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN
RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY
ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
THE INDENTURE OR ANY OTHER INDENTURE DOCUMENT, OR ANY ACT, OMISSION, OR EVENT
OCCURRING IN CONNECTION THEREWITH, AND EACH GRANTOR HEREBY IRREVOCABLY WAIVES,
RELEASES, AND AGREES NOT TO SUE UPON OR BRING IN ANY JUDICIAL, ARBITRAL OR
ADMINISTRATIVE FORUM ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND
WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR. THE AGREEMENTS IN THIS
SECTION 8.18 SHALL SURVIVE PAYMENT OF ALL OTHER OBLIGATIONS AND ANY TERMINATION
OR EXPIRATION OF THIS AGREEMENT OR ANY OTHER INDENTURE DOCUMENT.

 

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Section 8.19 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall together constitute one and the same Agreement. Any
counterpart may be executed by facsimile or other electronic transmission, and
such facsimile or other electronic transmission shall be deemed an original.

Section 8.20 Amendments. Other than as permitted pursuant to each Intercreditor
Agreement (if any) or the Indenture, neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Collateral Agent, the Trustee and the
Grantor or Grantors with respect to which such waiver, amendment or modification
is to apply, subject to any consent that may be required in accordance with
Section 9.02 of the Indenture.

Section 8.21 Conflicts with Other Agreements. (a) Notwithstanding any other
provision contained herein, this Agreement, the Liens created hereby and the
rights, remedies, duties and obligations provided for herein are subject in all
respects to the provisions of each Intercreditor Agreement (if any) and, to the
extent provided therein, the applicable ABL Security Documents (as defined in
each applicable Intercreditor Agreement). In the event of any conflict or
inconsistency between the provisions of this Agreement and any Intercreditor
Agreement, the provisions of the applicable Intercreditor Agreement shall
control.

(b) Notwithstanding anything to the contrary herein, in any Indenture Document
or any ABL Document (as such term is defined in each Intercreditor Agreement (if
any)), the Grantors shall not be required to act or refrain from acting (a)
pursuant to any Indenture Document solely with respect to any Intercreditor
Collateral in any manner that would cause a default under any ABL Document, or
(b) pursuant to any ABL Document solely with respect to any Noteholder First
Lien Collateral in any manner that would cause a default under any Indenture
Document. For avoidance of doubt and for the purposes of this paragraph only,
the terms Indenture Document and ABL Document do not include any Intercreditor
Agreement.

(c) In the event of any conflict or inconsistency between the provisions of this
Agreement and the Foreign Security Documents with respect to the Collateral
intended to be pledged or assigned for security purposes under such Foreign
Security Document, the provisions of such Foreign Security Document shall
control and take priority.

Section 8.22 Incorporation by Reference. It is expressly understood and agreed
that U.S. Bank National Association is entering into this Agreement solely in
its capacity as Collateral Agent and as Trustee as appointed pursuant to the
Indenture, and shall be entitled to all of the rights, privileges, immunities
and protections under the Indenture as if such rights, privileges, immunities
and protections were set forth herein.

 

39

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Section 8.23 English Language. This Agreement and each other Indenture Document
has been negotiated and executed in English. All certificates, reports, notices
and other documents and communications given or delivered by any party hereto
pursuant to this Agreement or any other Indenture Document shall be in English
or, if not in English, accompanied by a certified English translation thereof.
The English version of any such document shall control the meaning of the
matters set forth herein.

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

QUOTIENT LIMITED By:  

/s/ Paul Cowan

  Name: Paul Cowan   Title: Chief Executive Officer ALBA BIOSCIENCE LIMITED By:
 

/s/ Desmond Joseph Paul Edward Cowan

  Name: Desmond Joseph Paul Edward Cowan   Title: Director QBD (QS IP) LIMITED
By:  

/s/ Paul Cowan

  Name: Paul Cowan   Title: Sole Director QUOTIENT BIOCAMPUS LIMITED By:  

/s/ Desmond Joseph Paul Edward Cowan

  Name: Desmond Joseph Paul Edward Cowan   Title: Director QUOTIENT
BIODIAGNOSTICS, INC. By:  

/s/ Paul Cowan

  Name: Paul Cowan   Title: Director QUOTIENT SUISSE SA By:  

/s/ Paul Cowan

  Name: Paul Cowan   Title: sole member of the Board

[Collateral Agreement]

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U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent

    By:  

/s/ Alison B. Nadeau

  Name: Alison B. Nadeau   Title: Vice President

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

    By:  

/s/ Alison B. Nadeau

  Name: Alison B. Nadeau   Title: Vice President

[Collateral Agreement]

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SCHEDULE 3.1

The Collateral Agent’s liens in the Collateral granted pursuant to the Alba
Security Agreement, Alba Share Pledge, Biocampus Security Agreement, Biocampus
Share Pledge and Biocampus Standard Security shall be created and perfected
pursuant to the terms of those agreements.

[Collateral Agreement]