Exhibit 10.1

Execution Version

CREDIT AGREEMENT

Dated as of December 19, 2013

among

UNIVERSAL BIOSENSORS PTY LTD,

as the Borrower,

UNIVERSAL BIOSENSORS, INC.,

as a Guarantor,

the other Guarantors from time to time party hereto,

ATHYRIUM OPPORTUNITIES FUND (A) LP,

as Administrative Agent and a Lender,

and

THE OTHER LENDERS FROM TIME TO TIME PARTY HERETO

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TABLE OF CONTENTS

 

         Page  

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

     1  

1.01

 

Defined Terms

     1  

1.02

 

Other Interpretive Provisions

     24  

1.03

 

Accounting Terms

     25  

1.04

 

Times of Day

     25  

ARTICLE II. THE COMMITMENTS

     25  

2.01

 

Commitments and Warrants

     25  

2.02

 

Borrowings

     26  

2.03

 

Prepayments

     26  

2.04

 

Repayment of Loans

     29  

2.05

 

Interest

     29  

2.06

 

Fees

     29  

2.07

 

Computation of Interest

     30  

2.08

 

Evidence of Debt

     30  

2.09

 

Payments Generally

     30  

2.10

 

Sharing of Payments by Lenders

     31  

2.11

 

Defaulting Lenders

     31  

ARTICLE III. TAXES

     32  

3.01

 

Taxes

     32  

3.02

 

Survival

     34  

ARTICLE IV. GUARANTY

     34  

4.01

 

The Guaranty

     34  

4.02

 

Obligations Unconditional

     34  

4.03

 

Reinstatement

     35  

4.04

 

Certain Additional Waivers

     36  

4.05

 

Remedies

     36  

4.06

 

Rights of Contribution

     36  

4.07

 

Guarantee of Payment; Continuing Guarantee

     36  

ARTICLE V. CONDITIONS PRECEDENT TO BORROWING

     36  

5.01

 

Conditions of Borrowing of Initial Term Loan and Purchase of Warrants

     36  

5.02

 

Conditions Precedent to All Borrowings

     40  

5.03

 

Additional Conditions Precedent to Delayed Draw Tranche A Borrowing

     40  

5.04

 

Additional Conditions Precedent to Delayed Draw Tranche B Borrowing

     41  

ARTICLE VI. REPRESENTATIONS AND WARRANTIES

     41  

6.01

 

Existence, Qualification and Power

     41  

6.02

 

Authorization; No Contravention

     41  

6.03

 

Governmental Authorization; Other Consents

     42  

6.04

 

Binding Effect

     42  

6.05

 

Financial Statements; No Material Adverse Effect

     42  

6.06

 

Litigation; Labor Matters

     42  

6.07

 

No Default

     42  

6.08

 

Ownership of Property; Liens

     43  

 

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6.09

 

Environmental Compliance

     43  

6.10

 

Insurance

     44  

6.11

 

Taxes

     44  

6.12

 

ERISA Compliance

     44  

6.13

 

Subsidiaries and Capitalization

     45  

6.14

 

Margin Regulations; Investment Company Act; Federal Fair Labor Standards Act

     45  

6.15

 

Disclosure

     46  

6.16

 

Compliance with Laws

     46  

6.17

 

Intellectual Property; Licenses, Etc.

     46  

6.18

 

Regulatory Matters

     48  

6.19

 

Solvency

     49  

6.20

 

Perfection of Security Interests in the Collateral

     49  

6.21

 

Key Contracts

     49  

6.22

 

Business Locations

     50  

6.23

 

OFAC

     50  

6.24

 

Registration Rights; Issuance Taxes

     50  

6.25

 

Holding Company

     50  

ARTICLE VII. AFFIRMATIVE COVENANTS

     51  

7.01

 

Financial Statements

     51  

7.02

 

Certificates; Other Information

     51  

7.03

 

Notices

     53  

7.04

 

Payment of Obligations

     54  

7.05

 

Preservation of Existence, Etc.

     54  

7.06

 

Maintenance of Properties

     55  

7.07

 

Maintenance of Insurance

     55  

7.08

 

Compliance with Laws

     55  

7.09

 

Books and Records

     55  

7.10

 

Inspection Rights

     56  

7.11

 

Use of Proceeds

     56  

7.12

 

Additional Subsidiaries

     56  

7.13

 

ERISA Compliance

     56  

7.14

 

Pledged Assets

     57  

7.15

 

Key Contracts and Material Contracts

     57  

7.16

 

Accounts

     57  

7.17

 

Post-Closing Deliverables

     57  

7.18

 

Further Assurances

     58  

7.19

 

Tax Matters

     58  

ARTICLE VIII. NEGATIVE COVENANTS

     60  

8.01

 

Liens

     60  

8.02

 

Investments

     61  

8.03

 

Indebtedness

     62  

8.04

 

Fundamental Changes

     63  

8.05

 

Dispositions

     63  

8.06

 

Restricted Payments

     64  

8.07

 

Change in Nature of Business

     64  

8.08

 

Transactions with Affiliates and Insiders

     64  

8.09

 

Burdensome Agreements

     64  

8.10

 

Use of Proceeds

     65  

 

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8.11

 

Prepayment of Other Indebtedness

     65  

8.12

 

Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of
Entity; Certain Amendments

     65  

8.13

 

Ownership of Subsidiaries

     66  

8.14

 

Sale Leasebacks

     66  

8.15

 

Sanctions

     66  

8.16

 

Holding Company

     66  

8.17

 

Financial Covenant

     66  

ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES

     67  

9.01

 

Events of Default

     67  

9.02

 

Remedies Upon Event of Default

     70  

9.03

 

Application of Funds

     71  

ARTICLE X. ADMINISTRATIVE AGENT

     71  

10.01

 

Appointment and Authority

     71  

10.02

 

Rights as a Lender

     72  

10.03

 

Exculpatory Provisions

     72  

10.04

 

Reliance by Administrative Agent

     73  

10.05

 

Delegation of Duties

     73  

10.06

 

Resignation of Administrative Agent

     74  

10.07

 

Non-Reliance on Administrative Agent and Other Lenders

     74  

10.08

 

Administrative Agent May File Proofs of Claim

     74  

10.09

 

Collateral and Guaranty Matters

     75  

ARTICLE XI. PROTECTION OF ADMINISTRATIVE AGENT AND LENDERS

     76  

11.01

 

Protection for Statutory Proscriptions

     76  

11.02

 

PPSA Further Assurances

     76  

11.03

 

PPSA Waivers

     76  

11.04

 

Other Rights

     77  

11.05

 

PPSA Undertaking

     77  

11.06

 

Interpretation

     77  

ARTICLE XII. MISCELLANEOUS

     77  

12.01

 

Amendments, Etc.

     77  

12.02

 

Notices and Other Communications; Facsimile Copies

     78  

12.03

 

No Waiver; Cumulative Remedies; Enforcement

     80  

11.04

 

Expenses; Indemnity; and Damage Waiver

     80  

12.05

 

Payments Set Aside

     82  

12.06

 

Successors and Assigns

     83  

12.07

 

Treatment of Certain Information; Confidentiality

     86  

12.08

 

Set-off

     87  

12.09

 

Interest Rate Limitation

     88  

12.10

 

Counterparts; Integration; Effectiveness

     88  

12.11

 

Survival of Representations and Warranties

     89  

12.12

 

Severability

     89  

12.13

 

Replacement of Lenders

     89  

12.14

 

Governing Law; Jurisdiction; Etc.

     90  

12.15

 

Waiver of Right to Trial by Jury

     91  

12.16

 

Conversion of Currencies

     91  

12.17

 

Electronic Execution of Assignments and Certain Other Documents

     92  

 

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12.18

 

USA PATRIOT Act

     92  

12.19

 

No Advisory or Fiduciary Relationship

     92  

12.20

 

Acknowledgment

     93  

 

iv

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SCHEDULES

    

2.01

 

Commitments and Applicable Percentages

  

6.10

 

Insurance

  

6.13(a)

 

Subsidiaries

  

6.13(b)(i)

 

Capitalization

  

6.13(b)(ii)

 

Capitalization

  

6.13(b)(iii)

 

Capitalization

  

6.17(a)

 

Material IP Rights

  

6.17(c)

 

Ownership of Material IP Rights

  

6.17(d)

 

IP Licenses

  

6.17(e)

 

IP Infringement

  

6.17(g)

 

IP Violations

  

6.18(b)

 

Regulatory Actions

  

6.18(c)

 

Regulatory Compliance

  

6.22(a)

 

Locations of Real Property

  

6.22(b)

 

Taxpayer and Organizational Identification Numbers

  

6.25

 

Holding Company

  

8.01

 

Liens Existing on the Closing Date

  

8.02

 

Investments Existing on the Closing Date

  

8.03

 

Indebtedness Existing on the Closing Date

  

8.05

 

Permitted Dispositions

  

12.02

 

Certain Addresses for Notices

  

EXHIBITS

    

A

 

Form of Loan Notice

  

B-1

 

Form of Initial Term Note

  

B-2

 

Form of Delayed Draw Tranche A Note

  

B-3

 

Form of Delayed Draw Tranche B Note

  

B-4

 

Form of Warrant

  

C

 

Form of Compliance Certificate

  

D

 

Form of Joinder Agreement

  

E

 

Form of Assignment and Assumption

  

F

 

Form of Verification Certificate

  

 

v

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CREDIT AGREEMENT

This CREDIT AGREEMENT is entered into as of December 19, 2013 among UNIVERSAL
BIOSENSORS PTY LTD (ACN 098 234 309), a proprietary limited company incorporated
in Australia (the “Borrower”), the Guarantors (defined herein), the Lenders
(defined herein) and ATHYRIUM OPPORTUNITIES FUND (A) LP, as Administrative
Agent.

The Borrower has requested that the Lenders make an investment in the Borrower
in the form of a senior secured term loan facility and common stock warrants,
and the Lenders are willing to do so on the terms and conditions set forth
herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms.

As used in this Agreement, the following terms shall have the meanings set forth
below:

“Account Control Deed” means an account control deed governed by Australian law
dated on or about the date of this Agreement between the Borrower, the account
bank and the Administrative Agent (for the benefit of the holders of the
Obligations).

“Acquisition”, by any Person, means the acquisition by such Person, in a single
transaction or in a series of related transactions, of all or any substantial
portion of the property of another Person, or any division, line of business or
other business unit of another Person or at least a majority of the Voting Stock
of another Person, in each case whether or not involving a merger or
consolidation with such other Person and whether for cash, property, services,
assumption of Indebtedness, securities or otherwise.

“Act” has the meaning specified in Section 12.18.

“Administrative Agent” means Athyrium Opportunities Fund (A) LP, in its capacity
as administrative agent under any of the Loan Documents, or any successor
administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 12.02 or such other address or
account as the Administrative Agent may from time to time notify the Borrower
and the Lenders.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Agreement” means this Credit Agreement.

“Agreement Currency” has the meaning specified in Section 12.16(b).

“Applicable Creditor” has the meaning specified in Section 12.16(b).

 

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“Applicable Percentage” means, with respect to any Lender at any time, with
respect to such Lender’s portion of the outstanding Loans at any time, the
percentage of the outstanding principal amount of the Loans held by such Lender
at such time. The initial Applicable Percentage of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 12.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit E or any other form (including electronic
documentation generated by MarkitClear or other electronic platform) approved by
the Administrative Agent.

“Athyrium” means, collectively and individually, (i) Athyrium Capital
Management, LLC and (ii) Athyrium Opportunities Advisers LLC.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capital
Lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
(b) in respect of any Synthetic Lease of any Person, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a Capital Lease and (c) in respect of any
Securitization Transaction of any Person, the outstanding principal amount of
such financing, after taking into account reserve accounts and making
appropriate adjustments, determined by the Administrative Agent in its
reasonable judgment.

“Audited Financial Statements” means the audited consolidated balance sheets of
the Parent and the other Transaction Parties for the fiscal year ended
December 31, 2012, and the related consolidated statements of comprehensive
income, consolidated statements of changes in stockholders’ equity and
comprehensive income, and consolidated statements of cash flows for such fiscal
year of the Parent and the other Transaction Parties, including the notes
thereto, audited by independent public accountants of recognized national
standing and prepared in conformity with GAAP.

“Australia” means the Commonwealth of Australia.

“Australian Law Documents” means the General Security Deed, the Specific
Security Deed, the Account Control Deeds and the Landlord Consent.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrowing” means a borrowing of Loans pursuant to Sections 2.01 and 2.02.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state of New York, the state where the Administrative Agent’s
Office is located or Melbourne, Victoria.

“Businesses” means, at any time, a collective reference to the businesses
operated by the Transaction Parties at such time.

 

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“Capital Lease” means, as applied to any Person, any lease of any property by
that Person as lessee which, in accordance with GAAP, is required to be
accounted for as a capital lease on the balance sheet of that Person.

“Cash Equivalents” means, as at any date, (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or
instrumentality thereof or any State thereof (provided that the full faith and
credit of the United States or such State, as applicable, is pledged in support
thereof) having maturities of not more than twelve months from the date of
acquisition, (b) U.S. or Australian dollar denominated time deposits, term
deposits and certificates of deposit of (i) any Australian commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 or
(ii) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from Moody’s is at least P-1 or the equivalent
thereof (any such bank being an “Approved Bank”), in each case with maturities
of not more than eighteen months from the date of acquisition, (c) commercial
paper and variable or fixed rate notes issued by any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or guaranteed by,
any U.S. or Australian corporation rated A-2 (or the equivalent thereof) or
better by S&P or P-2 (or the equivalent thereof) or better by Moody’s and
maturing within six months of the date of acquisition, and (d) Investments,
classified in accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940 which are
administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (c).

“Change of Control” means the occurrence of any of the following events:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 45% or more of the Voting Stock of the Parent on a fully diluted
basis (and taking into account all such securities that such person or group has
the right to acquire pursuant to any option right); or

(b) during any period of 24 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of the Parent cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, and/or (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body and/or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body.

“Closing Date” means the date hereof.

“Coagulation Manufacturing Revenues” means, with respect to any fiscal quarter,
(i) Per-Strip Fees, as defined in the Siemens Collaboration Agreement, earned by
the Borrower in such fiscal quarter, (ii) any bonus payment paid by Siemens to
the Borrower pursuant to Section 7.3 of the Siemens Collaboration Agreement, and
(iii) any other coagulation manufacturing revenue that will be reflected in the
consolidated statements of comprehensive income of the Parent and the
Transaction Parties for such fiscal quarter (or, if such fiscal quarter is the
final quarter of a fiscal year, for such fiscal year), which are

 

3

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delivered pursuant to Section 7.01, and the details of which such coagulation
manufacturing revenue shall be set forth in the notes to the related financial
statements of the Parent and the Transaction Parties or in the Management’s
Discussion and Analysis of Financial Condition and Results of Operations set
forth in the Parent’s Form 10-Q or 10-K which includes such financial statements
as filed with the SEC.

“Collateral” means a collective reference to all present and future property of
any kind with respect to which Liens in favor of the Administrative Agent, for
the benefit of the holders of the Obligations, are purported to be granted
pursuant to and in accordance with the terms of the Collateral Documents and
shall, for the avoidance of doubt, in no event include Excluded Property.

“Collateral Documents” means a collective reference to the Security Agreement,
the General Security Deed, the Specific Security Deed, the Account Control
Deeds, the Landlord Consent, the Deposit Account Control Agreements, the
Mortgages, if any, and other security documents as may be executed and delivered
by the Transaction Parties pursuant to the terms of Section 7.14, 7.16, 7.17 or
7.18.

“Commitment” means, as to each Lender, the Initial Term Loan Commitment of such
Lender, the Delayed Draw Tranche A Commitment of such Lender and the Delayed
Draw Tranche B Commitment of such Lender.

“Commitment Fee Termination Date” has the meaning specified in Section 2.06(b).

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

“Confidential Information” means all non-public information, whether written,
oral or in any electronic, visual or other medium, that is the subject of
reasonable efforts to keep it confidential and that is owned by any Transaction
Party or that any Transaction Party is licensed, authorized or otherwise granted
rights under or to as of the Closing Date, or subsequent thereto.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Contribution Amount” has the meaning given in subsection 444-90(1A) in Schedule
1 of the TAA.

“Control” means (a) in respect of the Borrower and any Transaction Party
incorporated in Australia, (x) the meaning given in section 50AA of the
Corporations Act, and (y) the direct or indirect power to directly or indirectly
direct the management or policies of the Borrower or such Transaction Party or
control the membership or voting of the board of directors or other governing
body of the Borrower or such Transaction Party (whether or not the power has
statutory, legal or equitable force or arises by means of statutory, legal or
equitable rights or trusts, agreements, arrangements, understandings, practices,
the ownership of any interest in “marketable securities” (as defined in the
Corporations Act), bonds or instruments of the entity or otherwise) or (b) in
respect of each other Transaction Party, the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
Without limiting the generality of the foregoing, a Person shall be deemed to be
Controlled by another Person if such other Person possesses, directly or
indirectly, power to vote 10% or more of Voting Stock of such Person.

“Copyright License” means any agreement, whether written or oral, providing for
the grant of any right to use any Copyright.

 

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“Copyrights” means (a) all proprietary rights afforded Works pursuant to Title
17 of the United States Code, including, without limitations, all rights in mask
works, copyrights and original designs, and all equivalent proprietary rights
afforded such Works by other countries for the full term thereof (and including
all rights accruing by virtue of bilateral or international treaties and
conventions thereto), whether registered or unregistered, including, but not
limited to, all registrations, applications for registration, renewals,
extensions, reversions or restorations thereof now or hereafter provided for by
law and all rights to make applications for registrations and recordations,
regardless of the medium of fixation or means of expression, which are owned by
any Transaction Party or which any Transaction Party is licensed, authorized or
otherwise granted rights under or to as of the Closing Date, or subsequent
thereto; and (b) all copyright rights under the copyright laws of the United
States and all other countries for the full term thereof (and including all
rights accruing by virtue of bilateral or international copyright treaties and
conventions), whether registered or unregistered, including, but not limited to,
all registrations, applications for registration, renewals, extensions,
reversions or restorations of copyrights now or hereafter provided for by law
and all rights to make applications for copyright registrations and
recordations, regardless of the medium of fixation or means of expression, which
are owned by any Transaction Party or which any Transaction Party is licensed,
authorized or otherwise granted rights under or to as of the Closing Date, or
subsequent thereto.

“Corporations Act” means the Corporations Act 2001 (Cth).

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Defaulting Lender” means, subject to Section 2.11(b), any Lender, as reasonably
determined by the Administrative Agent, that (a) has failed to perform any of
its funding obligations hereunder, including in respect of any Delayed Draw
Loan, within three (3) Business Days of the date required to be funded by it
hereunder, (b) has notified the Borrower or the Administrative Agent that it
does not intend to comply with its funding obligations hereunder or (c) has, or
has a direct or indirect parent company that has, (i) become the subject of a
proceeding under any Debtor Relief Law, (ii) had a receiver, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or a custodian
appointed for it or (iii) taken any action in furtherance of, or indicated its
consent to, approval of or acquiescence in any such proceeding or appointment;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any Equity Interests in that Lender or any direct or
indirect parent company thereof by a Governmental Authority if, and only if,
such ownership interest does not result in or provide such Lender with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Lender (or
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made by such Lender.

“Default Rate” has the meaning specified in Section 2.05(b).

“Delayed Draw Loans” means the Delayed Draw Tranche A Loan and the Delayed Draw
Tranche B Loan.

“Delayed Draw Tranche A Closing Date” means the date of the making of the
Delayed Draw Tranche A Loan hereunder in accordance with Section 2.01(b) and
Section 5.03.

 

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“Delayed Draw Tranche A Commitment”, as to each Lender, means its obligation to
make a portion of the Delayed Draw Tranche A Loan to the Borrower pursuant to
Section 2.01(b), in the principal amount up to the amount set forth opposite
such Lender’s name on Schedule 2.01, as such amounts may be adjusted from time
to time in accordance with this Agreement. The aggregate principal amount of the
Delayed Draw Tranche A Commitments of all of the Lenders as in effect on the
Closing Date is FIVE MILLION DOLLARS ($5,000,000). The Delayed Draw Tranche A
Commitment of a Lender shall be reduced to zero after the funding of the Delayed
Draw Tranche A Loan with respect thereto.

“Delayed Draw Tranche A Loan” has the meaning specified in Section 2.01(b).

“Delayed Draw Tranche A Note” has the meaning specified in Section 2.08.

“Delayed Draw Tranche B Closing Date” means the date of the making of the
Delayed Draw Tranche B Loan hereunder in accordance with Section 2.01(b) and
Section 5.04.

“Delayed Draw Tranche B Commitment”, as to each Lender, means its obligation to
make a portion of the Delayed Draw Tranche B Loan to the Borrower pursuant to
Section 2.01(b), in the principal amount up to the amount set forth opposite
such Lender’s name on Schedule 2.01, as such amounts may be adjusted from time
to time in accordance with this Agreement. The aggregate principal amount of the
Delayed Draw Tranche B Commitments of all of the Lenders as in effect on the
Closing Date is FIVE MILLION DOLLARS ($5,000,000). The Delayed Draw Tranche B
Commitment of a Lender shall be reduced to zero after the funding of the Delayed
Draw Tranche B Loan with respect thereto.

“Delayed Draw Tranche B Loan” has the meaning specified in Section 2.01(b).

“Delayed Draw Tranche B Note” has the meaning specified in Section 2.08.

“Deposit Account Control Agreement” means any U.S. law-governed account control
agreement by and among the Borrower or any Guarantor, the applicable depository
bank and the Administrative Agent, for the purpose of perfecting the
Administrative Agent’s first priority Lien in such account, in each case in form
and substance reasonably satisfactory to the Administrative Agent.

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory is the subject of any Sanction.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition after the date hereof (including any Sale and Leaseback Transaction)
of any property by any Transaction Party (including the Equity Interests of any
Subsidiary), including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith, but excluding the following: (a) the sale, lease, license,
transfer or other disposition of inventory in the ordinary course of business;
(b) the sale, lease, license, transfer or other disposition in the ordinary
course of business of (i) surplus, obsolete or worn out property no longer used
or useful in the conduct of business of any Transaction Party or (ii) property
that is exchanged for credit against the purchase price of similar replacement
property or the proceeds of which are reasonably promptly (and in any event,
within twenty (20) days) applied to the purchase price of such replacement
property; (c) any sale, lease, license, transfer or other disposition of
property by one Transaction Party to another Transaction Party; provided that to
the extent such transaction constitutes an Investment or Restricted Payment,
such transaction is permitted under Section 8.02 or Section 8.06, respectively;
(d) licenses of or other grants of rights of or in IP Rights on a non-exclusive
basis or on an exclusive basis so long as such exclusive licensing is limited to
geographic areas, particular fields of use, a subset of products for customers
or limited time periods and so long as after giving effect to such license the
Transaction Parties retain sufficient rights to use the

 

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subject IP Rights as to enable them to continue to conduct their business in the
ordinary course, consistent with past practice; (e) any Involuntary Disposition;
(f) dispositions of cash or Cash Equivalents in the ordinary course of business
(which, for purposes of clarification, shall include any purchases of fixed
assets in the ordinary course of business) or in any manner not prohibited by
the terms of the Loan Documents; (g) dispositions in the ordinary course of
business consisting of the abandonment or lapse of IP Rights which, in the good
faith determination of the Borrower, are not material to the conduct of the
business of the Borrower and its Subsidiaries; (h) to the extent constituting
dispositions, the termination of any Swap Contract; (i) transactions permitted
by Sections 8.01(e) and (f); (j) dispositions of property secured by Purchase
Money Liens; (k) Investments explicitly permitted by Section 8.02(i); and
(l) Restricted Payments explicitly permitted by Sections 8.06(a), (b) or (d).

“Disqualified Stock” means any class of Equity Interests that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, or otherwise has any
distributions or other payments which are mandatory or otherwise required at any
time on or prior to the date that is one hundred eighty-one (181) days after the
Maturity Date, (b) is convertible into or exchangeable (unless at the sole
option of the issuer thereof) for (x) debt securities or (y) any Equity Interest
referred to in clause (a) above, in each case at any time prior to the date that
is one hundred eighty-one (181) days after the Maturity Date or (c) requires
that dividends be paid at any time that such payment would be prohibited by the
terms of this Agreement or any other agreement of such Person relating to
outstanding indebtedness (it being understood that non-cash dividends may
nonetheless accrue on such Equity Interests at such time).

“Dollar” and “$” mean lawful money of the United States.

“Domain Names” means all domain names and URLs that are registered to and/or
owned by the Borrower or any Guarantor or which the Borrower or any Guarantor is
licensed, authorized or otherwise granted rights under or to as of the Closing
Date, or subsequent thereto.

“Earn Out Obligations” means, with respect to an Acquisition, all obligations of
the Transaction Parties to make earn out or other contingency payments
(including purchase price adjustments, non-competition and consulting
agreements, or other indemnity obligations) pursuant to the documentation
relating to such Acquisition. For purposes of determining the aggregate
consideration paid for an Acquisition at the time of such Acquisition, the
amount of any Earn Out Obligations shall be deemed to be the maximum amount of
the earn-out payments in respect thereof as specified in the documents relating
to such Acquisition. For purposes of determining the amount of any Earn Out
Obligations to be included in the definition of Funded Indebtedness, the amount
of Earn Out Obligations shall be deemed to be the aggregate liability in respect
thereof, as determined in accordance with GAAP.

“Eligible Assets” means property that is used or useful in the same or a similar
line of business as the Transaction Parties were engaged in on the Closing Date
(or any reasonable extension or expansions thereof).

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 12.06(b)(iii) and (v) (subject to such consents, if any,
as may be required under Section 12.06(b)(iii)).

“Environmental Laws” means any and all federal, state, local, foreign and other
applicable statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

 

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“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Transaction Party directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is treated as a single employer with the Borrower within the meaning of
Section 414(b), (c), (m), or (o) of the Internal Revenue Code.

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate or the
treatment of a Pension Plan amendment as a termination under Sections 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan; (f) any event or condition that constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (g) the determination that any Pension Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Internal Revenue Code or Sections
303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV
of ERISA, other than for PBGC premiums due but not delinquent under Section 4007
of ERISA, upon the Borrower or any ERISA Affiliate.

“Event of Default” has the meaning specified in Section 9.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

“Excluded Property” means, with respect to any Transaction Party, including any
Person that becomes a Transaction Party after the Closing Date as contemplated
by Section 7.12, (i) any property which is subject to a Purchase Money Lien,
provided that such Purchase Money Liens are granted in the ordinary course of
business and permitted hereunder, and (ii) all Equity Interests of Sunday
Silicon

 

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Technologies Pty Ltd (ACN 120 852 048) held by the Borrower, so long as the fair
market value of such Equity Interests is not more than $1,000,000 in the
aggregate; provided that if the fair market value of such Equity Interests
exceeds $1,000,000 in the aggregate at any time, the Borrower shall promptly
provide written notice of such change in value to the Administrative Agent and
take such actions to grant security over those Equity Interests and deliver such
documentation as the Administrative Agent may reasonably request in connection
therewith, including payment of any applicable stamp duties and delivery to the
Administrative Agent of any Title Documents with respect to such Equity
Interests whereupon such Equity Interests will no longer constitute “Excluded
Property”.

“External Administrator” means an administrator, controller or managing
controller (each as defined in the Corporations Act), trustee, provisional
liquidator, liquidator or any other person (however described) holding or
appointed to an analogous office or acting or purporting to act in an analogous
capacity.

“Extraordinary Receipts” means any cash received by or paid to or for the
account of any Person not in the ordinary course of business, including tax
refunds (other than cash received by or paid or credited to any Transaction
Party from time to time as (i) a research and development tax rebate (each, an
“R&D Tax Rebate”) or (ii) a goods and services tax refund (each, a “GST
Refund”)), pension plan reversions, proceeds of insurance (other than
(i) proceeds of liability insurance and proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost earnings
and (ii) any proceeds of any other insurance paid to a Transaction Party
representing reimbursement for past expenses or liabilities, or payment for
future expenses or liabilities, owing to any third party for matters or items
covered by such insurance policies, including without limitation D&O, travel,
marine and theft insurance), indemnity payments, any purchase price adjustments,
payments received by the Borrower pursuant to Section 11.3 of the LifeScan
Master Services and Supply Agreement, and payments received by the Borrower
pursuant to Section 11.4 of the Siemens Collaboration Agreement. It is
understood and agreed that “Extraordinary Receipts” shall not include (i) any
cash received by or paid to or for the account of any Transaction Party as
consideration for such Transaction Party’s issuance of its Equity Interests to
another Person, (ii) any R&D Tax Rebate or GST Refund, (iii) any cash received
by or paid to any Transaction Party as part of a research and development grant,
(iv) cash received by any Transaction Party as milestone, service fee, success
fee or revenue/profit-sharing or similar payments under any contract, agreement,
understanding or other arrangement with respect to any Transaction Party as
amended and in effect at any time and from time to time, (v) any cash received
when any Cash Equivalent is liquidated, (vi) any proceeds of any Indebtedness
permitted pursuant to Section 8.03 or the exercise of the Warrant, (vii) any
payments otherwise permitted hereunder by a Transaction Party to another
Transaction Party, (viii) any proceeds received from any key man insurance
policy, (ix) any cash received upon the termination of a Swap Contract, and
(x) the release of any cash of any Transaction Party held in reserves pursuant
to the Letter of Credit in accordance with the terms thereof.

“Facilities” means, at any time, a collective reference to the facilities and
real properties owned, leased or operated by any Transaction Party.

“FDA” means the U.S. Food and Drug Administration and any successor thereto.

“FD&C Act” means the U.S. Food, Drug and Cosmetic Act (or any successor
thereto), as amended from time to time, and the rules, regulations, guidelines,
guidance documents and compliance policy guides issued or promulgated thereunder
by the FDA.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the

 

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Business Day next succeeding such day; provided that if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day.

“FRB” means the Board of Governors of the Federal Reserve System of the United
States and any successor thereto.

“Fund” means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.

“Funded Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations for borrowed money, whether current or long-term (including
the Obligations) and all obligations of such Person evidenced by bills, bonds,
debentures, notes, loan agreements or other similar instruments;

(b) all purchase money Indebtedness;

(c) the principal portion of all obligations under conditional sale or other
title retention agreements relating to property purchased by any Transaction
Party (other than customary reservations or retentions of title under agreements
with suppliers entered into in the ordinary course of business);

(d) all obligations arising under letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar
instruments, except for the Letter of Credit;

(e) all obligations in respect of the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business
and, in each case, not past due for more than 90 days after the date on which
such trade account payable was created), including, without limitation, any Earn
Out Obligations;

(f) the Attributable Indebtedness of Capital Leases, Securitization Transactions
and Synthetic Leases;

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Disqualified Stock in such Person
or any other Person, valued, in the case of a redeemable preferred interest, at
the greater of its voluntary or involuntary liquidation preference plus accrued
and unpaid dividends;

(h) all Funded Indebtedness of others secured by (or for which the holder of
such Funded Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed;

(i) all Guarantees with respect to Funded Indebtedness of the types specified in
clauses (a) through (h) above of another Person; and

 

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(j) all Funded Indebtedness of the types referred to in clauses (a) through
(i) above of any partnership or joint venture (other than a joint venture that
is itself a corporation, limited liability company or proprietary limited
company) in which such Person is a general partner or joint venturer, except to
the extent that Funded Indebtedness is expressly made non-recourse to such
Person.

For purposes hereof, the amount of any direct obligation arising under letters
of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments shall be the maximum amount
available to be drawn thereunder.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, consistently applied
and as in effect from time to time.

“General Security Deed” means the general security deed dated on or about the
date of this Agreement granted by the Borrower in favor of the Administrative
Agent (for the benefit of the holders of the Obligations).

“Good Clinical Practices” means the then-current requirements under applicable
Laws and applicable ethical, scientific and quality standards for designing,
conducting, recording, analyzing and reporting trials that involve the
participation of human subjects, including as set forth in 21 C.F.R. parts 50,
54, 56 and 312 and in the International Conference on Harmonisation Guideline
for Good Clinical Practice (E6), in each case as amended from time to time.

“Good Laboratory Practices” means the then-current requirements under applicable
Laws for nonclinical laboratory studies that support or are intended to support
applications to conduct research in humans or to obtain marketing authorization,
including as set forth in 21 C.F.R. part 58 and EU Directives 2004/9/EC and
2004/10/EC, and as otherwise required by the applicable Regulatory Agencies, in
each case as amended from time to time.

“Governmental Authority” means the government of the United States, Australia or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

“Governmental Licenses” means all Regulatory Authorizations which are owned by
any Transaction Party, acquired by any Transaction Party via assignment,
purchase or otherwise or that any Transaction Party is licensed, authorized or
otherwise granted rights under or to.

“GST” has the meaning given in the GST Act.

“GST Act” means the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

“GST Group” has the meaning given in the GST Act.

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or

 

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supply funds for the purchase or payment of) such Indebtedness or other
obligation, (ii) to purchase or lease property, securities or services for the
purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such Indebtedness
or other obligation, or (iv) entered into for the purpose of assuring in any
other manner the obligee in respect of such Indebtedness or other obligation of
the payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person
(or any right, contingent or otherwise, of any holder of such Indebtedness to
obtain any such Lien). The amount of any Guarantee shall be deemed to be an
amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good faith. The term
“Guarantee” as a verb has a corresponding meaning.

“Guarantors” means the Parent and each Subsidiary of the Parent (other than the
Borrower) identified as a “Guarantor” on the signature pages hereto and each
other Person that joins as a Guarantor pursuant to Section 7.12, together with
their successors and permitted assigns.

“Guaranty” means the Guaranty made by the Guarantors in favor of the
Administrative Agent, the Lenders and the other holders of the Obligations
pursuant to Article IV.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any applicable
Environmental Law.

“Head Company” has the meaning specified in the Tax Act.

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all Funded Indebtedness;

(b) the Swap Termination Value of any Swap Contract;

(c) all Guarantees with respect to outstanding Indebtedness of the types
specified in clauses (a) and (b) above of any other Person; and

(d) all Indebtedness of the types referred to in clauses (a) through (c) above
of any partnership or joint venture (other than a joint venture that is itself a
corporation, limited liability company or proprietary limited company) in which
a Transaction Party is a general partner or joint venturer, unless such
Indebtedness is expressly made non-recourse to such Transaction Party.

“Indemnitees” has the meaning specified in Section 12.04(b).

“Information” has the meaning specified in Section 12.07.

“Initial Term Loan” has the meaning specified in Section 2.01(a).

 

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“Initial Term Loan Commitment” as to each Lender, means its obligation to make a
portion of the Initial Term Loan to the Borrower pursuant to Section 2.01(a), in
the principal amount set forth opposite such Lender’s name on Schedule 2.01. The
aggregate principal amount of the Initial Term Loan Commitments of all of the
Lenders as in effect on the Closing Date is FIFTEEN MILLION DOLLARS
($15,000,000). The Initial Term Loan Commitment of a Lender shall be reduced to
zero after the funding of the Initial Term Loan with respect thereto.

“Initial Term Note” has the meaning specified in Section 2.08.

“Insolvency Event” means, in respect of a Person incorporated under the laws of
Australia, the occurrence of any of the following:

(a) such Person becomes insolvent within the meaning of section 95A, or is taken
to have failed to comply with a statutory demand under section 459F(1), or must
be presumed by a court to be insolvent under section 459C(2), or is the subject
of a circumstance specified in section 461 (whether or not an application to
court has been made under that section) or, if the person is a Part 5.7 body, is
taken to be unable to pay its debts under section 585, of the Corporations Act;

(b) except with the Administrative Agent’s consent, (i) such Person is the
subject of a Liquidation, or an order or an application is made for its
Liquidation; or an effective resolution is passed or meeting summoned or
convened to consider a resolution for such Person’s Liquidation;

(c) an External Administrator is appointed to such Person or any of its assets
or a step is taken to do so or its Related Party requests such an appointment;

(d) if such Person is a registered corporation under the Corporations Act, a
step is taken under section 601AA, 601AB or 601AC of the Corporations Act to
cancel its registration;

(e) an analogous or equivalent event to any listed above occurs in any
jurisdiction; or

(f) such Person stops or suspends payment to all or a class of creditors
generally.

“Interest Payment Date” means the last Business Day of each March, June,
September and December and the Maturity Date, commencing March 31, 2014.

“Interim Financial Statements” has the meaning specified in Section 5.01(c)(ii).

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

“Internal Revenue Service” means the United States Internal Revenue Service or
any successor thereto.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person and any arrangement pursuant to which the investor Guarantees
Indebtedness of such other Person, or (c) an Acquisition. For purposes of
covenant compliance, the amount of any Investment shall be the amount actually
invested, without adjustment for subsequent increases or decreases in the value
of such Investment.

 

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“Investment Documents” means, collectively, the Loan Documents and the Warrants.

“Involuntary Disposition” means any loss of, damage to or destruction of, or any
condemnation or other taking for public use of, any property of any Transaction
Party.

“IP Rights” means, collectively, all Confidential Information, all Copyrights,
all Domain Names, all Governmental Licenses, all Patents, all Proprietary
Databases, all Proprietary Software, all Trademarks, all Trade Secrets, all
Other Intellectual Property, all Copyright Licenses, all Patent Licenses, all
Other IP Agreements, all Trademark Licenses, all Websites, all Website
Agreements and any and all interests, claims and rights for damages, profits and
other awards related to any past, present or future infringement,
misappropriation, dilution or other violation of the foregoing, or any license
or other right to use or to grant the use of the aforementioned rights or to be
the registered proprietor or user of any of the aforementioned rights.

“ITSA” means an agreement between the members of a GST Group which takes effect
as an indirect tax sharing agreement under section 444-90 of Schedule 1 of the
TAA and complies with the TAA and the GST Act as well as any applicable law,
official directive, request, guideline or policy (whether or not having the
force of law) issued in connection with the TAA.

“Joinder Agreement” means a joinder agreement substantially in the form of
Exhibit D executed and delivered by a Subsidiary in accordance with the
provisions of Section 7.12.

“Judgment Currency” has the meaning specified in Section 12.16(b).

“Key Contracts” means (i) the Siemens Collaboration Agreement, (ii) the Supply
Agreement, dated as of September 20, 2012, between the Borrower and Siemens,
(iii) the Amended and Restated License Agreement, dated as of August 19, 2011,
between the Borrower and LifeScan, and (iv) the LifeScan Master Services and
Supply Agreement, in each case as amended from time to time, and any other
future material Contractual Obligations between any Transaction Party, on the
one hand, and Siemens or LifeScan or any of their Affiliates, on the other hand.

“knowledge” with respect to the Transaction Parties as of any given date of
determination shall mean the knowledge of any Responsible Officer.

“Landlord Consent” means a consent to security or right of entry granted by
Bowmayne Pty. Ltd. in favor of the Administrative Agent (for the benefit of the
holders of the Obligations).

“Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“Lender” means each Person identified as a “Lender” on the signature pages
hereto and its successors and permitted assigns.

“Lending Office” means, as to any Lender, the office address of such Lender and,
as appropriate, account of such Lender set forth on Schedule 12.02 or such other
address or account as such Lender may from time to time notify the Borrower and
the Administrative Agent.

 

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“Letter of Credit” means the Standby Letter of Credit number L80000111 in favor
of Solutia Inc.

“Lien” means any “security interest” (as defined in the PPS Law), mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, right of set-off, assignment of income, garnishee order or monetary
claim and flawed deposit arrangement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“LifeScan” means LifeScan, Inc.

“LifeScan Master Services and Supply Agreement” means the Amended and Restated
Master Services and Supply Agreement, dated as of May 14, 2009, between Cilag
GmbH International, the Borrower and the Parent, as amended as of the Closing
Date.

“Liquidation” means (a) a winding up, dissolution, liquidation, provisional
liquidation, administration, bankruptcy or other proceeding for which an
External Administrator is appointed, or an analogous or equivalent event or
proceeding in any jurisdiction, or (b) an arrangement, moratorium, assignment or
composition with or for the benefit of creditors or any class or group of them.

“Loan” has the meaning specified in Section 2.01(b).

“Loan Documents” means this Agreement, each Note, the Disclosure Letter, each
Joinder Agreement and the Collateral Documents, and any other document
designated as a “Loan Document” by the Borrower and the Administrative Agent.

“Loan Notice” means a notice of a Borrowing of the Loans pursuant to
Section 2.02(a), which shall be substantially in the form of Exhibit A.

“Major Markets” means, collectively, the United States, Canada, Japan, the
United Kingdom, France, Germany, Spain and Italy.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, assets, properties, liabilities
(actual or contingent), or condition (financial or otherwise) of the Transaction
Parties taken as a whole; (b) a material impairment of the rights and remedies
of any Lender under any Loan Document, or of the ability of the Transaction
Parties taken as a whole to perform their material obligations under any Loan
Document; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Transaction Party of any Loan Document to
which it is a party.

“Material IP Rights” means IP Rights that (a) are material to the operations,
business, property or condition (financial or otherwise) of the Transaction
Parties or (b) the loss of which would reasonably be expected to have a Material
Adverse Effect.

“Material Product” means any Product which generated revenues equal to 10% or
more of the total Verio Quarterly Service Fees and Coagulation Manufacturing
Revenues for the twelve (12) month period most recently ended for which
financial statements have been delivered pursuant to Section 5.01(c) or
Section 7.01, as the case may be.

“Maturity Date” means December 19, 2018.

 

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“Maximum Rate” has the meaning specified in Section 12.09.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgages” means the mortgages, deeds of trust or deeds to secure debt that
purport to grant to the Administrative Agent, for the benefit of the holders of
the Obligations, a security interest in, or charge or mortgage of, the fee
interest and/or leasehold interests of any Transaction Party in real property.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five full plan
years, has made or been obligated to make contributions or has any liability.

“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including the Borrower or any ERISA Affiliate) at least two of whom
are not under common control, as such a plan is described in Section 4064 of
ERISA.

“Net Cash Proceeds” means the aggregate cash or Cash Equivalents proceeds
(including from insurance) received by any Transaction Party in respect of any
Disposition, Involuntary Disposition or Extraordinary Receipts, or the
incurrence of any Indebtedness, net of (a) in the case of any Disposition,
Involuntary Disposition or incurrence of Indebtedness, (i) direct costs incurred
in connection therewith paid to non-Affiliates (including, without limitation,
reasonable legal, accounting and investment banking fees, and sales
commissions), and (ii) taxes paid or payable as a result thereof and (b) in the
case of any Disposition or Involuntary Disposition, the amount necessary to
retire any Indebtedness secured by a Permitted Lien (ranking senior to any Lien
of the Administrative Agent) on the related property, and (c) in the case of any
Extraordinary Receipt, (i) reasonable direct costs incurred in connection with
the collection of such proceeds, awards or other payments, and (ii) taxes paid
or payable as a result thereof. It is understood and agreed that “Net Cash
Proceeds” shall include, without limitation, any cash or Cash Equivalents
received upon the sale or other disposition of any non-cash consideration
received by any Transaction Party in any Disposition, Involuntary Disposition or
Extraordinary Receipt.

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (a) requires the approval of all Lenders or all
affected Lenders in accordance with the terms of Section 12.01 and (b) has been
approved by the Required Lenders.

“Note” or “Notes” has the meaning specified in Section 2.08.

“Notified Body” means an entity licensed, authorized or approved by the
applicable government agency, department or other authority to assess and
certify the conformity of a medical device with the requirements of EU Directive
93/42/EEC concerning medical devices and/or EU Directive 98/79/EC on in vitro
diagnostic medical devices, each as amended from time to time, and applicable
harmonized standards.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Transaction Party arising under any Loan Document
or otherwise with respect to any Loan, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Transaction Party or any Affiliate thereof of
any proceeding under any Debtor Relief Laws

 

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naming such Person as the debtor in such proceeding or any proceedings arising
out of or in connection with an Insolvency Event, regardless of whether such
interest and fees are allowed claims in such proceeding. For the avoidance of
doubt, the term “Obligations” shall not include the obligations of the Parent
under the Warrants.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation or certificate of registration and the
bylaws (or equivalent or comparable constitutive documents with respect to any
non-U.S. jurisdiction (including the constitution and any amendments to the
constitution with respect to any Transaction Party incorporated in Australia));
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Intellectual Property” means all worldwide intellectual property rights,
industrial property rights, proprietary rights and common-law rights, whether
registered or unregistered, which are not otherwise included in Confidential
Information, Copyrights, Copyright Licenses, Domain Names, Governmental
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses,
Proprietary Databases, Proprietary Software, Websites, Website Agreements and
Trade Secrets, including, without limitation, all rights to and under all new
and useful algorithms, concepts, data (including all clinical data), databases,
designs, discoveries, inventions, know-how, methods, processes, protocols,
show-how, software (other than commercially available, off-the-shelf software
that is not assignable in connection with a Change of Control), product
specifications, techniques, technology, trade dress and all improvements thereof
and thereto, which is owned by any Transaction Party or which any Transaction
Party is licensed, authorized or otherwise granted rights under or to as of the
Closing Date, or subsequent thereto.

“Other IP Agreements” means any agreement, whether written or oral, providing
for the grant of any right under any Confidential Information, Governmental
Licenses, Proprietary Database, Proprietary Software, and/or Trade Secret, to
the extent that the grant of any such right is not otherwise the subject of a
Copyright License, Trademark License, Patent License or Website Agreement.

“Other Taxes” has the meaning specified in Section 3.01(b).

“Outstanding Amount” means with respect to any Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of any Loans occurring on such date.

“Parent” means Universal Biosensors, Inc., a Delaware corporation.

“Participant” has the meaning specified in Section 12.06(d).

“Participant Register” has the meaning specified in Section 12.06(d).

“Patent License” means any agreement, whether written or oral, providing for the
grant of any right under any Patent.

“Patents” means all letters patent and patent applications and invention
disclosures in the United States and all other countries (and all letters patent
that issue therefrom), including all provisionals,

 

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reissues, reexaminations, extensions, renewals, substitutions, divisions and
continuations (including continuations-in-part and continuing prosecution
applications), for the full term thereof, together with the right to claim
priority therefrom or the benefit thereof, and the inventions disclosed or
claimed in any of the foregoing, which are owned by any Transaction Party or
which any Transaction Party is licensed, authorized or otherwise granted rights
under or to as of the Closing Date, or subsequent thereto.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Pension Act” means the Pension Protection Act of 2006, as amended.

“Pension Funding Rules” means the rules of the Internal Revenue Code and ERISA
regarding minimum required contributions (including any installment payment
thereof) to Pension Plans and set forth, with respect to plan years ending prior
to the effective date of the Pension Act, in Section 412 of the Internal Revenue
Code and Section 302 of ERISA, each as in effect prior to the Pension Act and,
thereafter, Sections 412, 430, 431, 432 and 436 of the Internal Revenue Code and
Sections 302, 303, 304 and 305 of ERISA.

“Pension Plan” means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that (a) is maintained or is contributed
to by the Borrower or any ERISA Affiliate, and (b) is either covered by Title IV
of ERISA or subject to minimum funding standards under Section 412 of the
Internal Revenue Code.

“Permitted Acquisitions” means any Investments consisting of any Acquisition by
any Transaction Party, provided that (a) no Default or Event of Default shall
have occurred and be continuing or would result from such Acquisition, (b) the
property acquired (or the property of the Person acquired) in such Acquisition
is used or useful in the same or a related or complimentary line of business as
the Transaction Parties were engaged in on the Closing Date (or any reasonable
extensions or expansions thereof), (c) the Administrative Agent shall have
received all items in respect of the Equity Interests and property acquired
(including the property of any Person acquired) in such Acquisition required to
be delivered by the terms of Section 7.12 and/or Section 7.14 , (d) in the case
of an Acquisition of the Equity Interests of another Person, the board of
directors (or other comparable governing body) of such other Person shall have
duly approved such Acquisition, (e) the Borrower shall have delivered to the
Administrative Agent pro forma financial statements for the Borrower and its
Subsidiaries after giving effect to such Acquisition for the twelve month period
ending as of the most recent fiscal quarter for which financial statements are
required to be provided hereunder in a form reasonably satisfactory to the
Administrative Agent, and (f) the representations and warranties made by the
Transaction Parties in each Loan Document shall be true and correct in all
material respects at and as if made as of the date of such Acquisition (after
giving effect thereto), except to the extent such representations and warranties
expressly relate to an earlier date, in which case they shall be so true and
correct as of such earlier date.

“Permitted Liens” means, at any time, Liens in respect of property of any
Transaction Party permitted to exist at such time by the terms of Section 8.01.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Personal Property Securities Register” means the register established under
section 147 of the PPSA.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan), maintained for employees of the Borrower or
any ERISA Affiliate, or any such Plan to which the Borrower or any ERISA
Affiliate is required to contribute on behalf of any of its employees or has any
liability.

 

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“PPS Law” means (a) the PPSA and any regulation made at any time under the PPSA,
including the PPS Regulations (each as amended from time to time), and (b) any
amendment made at any time to any other legislation as a consequence of a law or
regulation referred to in clause (a).

“PPS Regulations” means the Personal Property Securities Regulations 2010 (Cth).

“PPSA” means the Personal Property Securities Act 2009 (Cth).

“Product” means any test strips manufactured and/or sold by or on behalf of any
Transaction Party or services rendered developing test strips by any Transaction
Party.

“Product Authorizations” means any and all approvals or clearances (including
applicable supplements, amendments, pre and post approvals, drug master files,
governmental price and reimbursement approvals and approvals of applications for
regulatory exclusivity), licenses, notifications, registrations, certifications
or authorizations of any Governmental Authority or Notified Body necessary for
the manufacture, development, distribution, use, storage, import, export,
transport, promotion, marketing, sale or other commercialization of a Product in
any country or jurisdiction.

“Proprietary Databases” means any material non-public proprietary database that
is owned by any Transaction Party or that any Transaction Party is licensed,
authorized or otherwise granted rights under or to as of the Closing Date, or
subsequent thereto.

“Proprietary Software” means any proprietary software, other than any software
that is generally commercially available, off-the-shelf and/or open source
including, without limitation, the object code and source code forms of such
software and all associated documentation, which is owned by any Transaction
Party or which any Transaction Party is licensed, authorized or otherwise
granted rights under or to as of the Closing Date, or subsequent thereto.

“Purchase Money Debt” has the meaning specified in Section 8.03(e).

“Purchase Money Liens” has the meaning specified in Section 8.01(i).

“Register” has the meaning specified in Section 12.06(c).

“Regulatory Agency” means any Governmental Authority that is concerned with the
use, control, safety, efficacy, reliability, manufacturing, marketing,
distribution, sale, research, development, importation, storage, labeling,
promotion, testing, packaging, purchasing or other commercialization activities
relating to any Product of any of the Transaction Parties, including the FDA and
all similar agencies in other jurisdictions.

“Regulatory Authorizations” means any and all approvals, clearances,
notifications, authorizations, orders, exemptions, registrations,
certifications, licenses and permits granted by, submitted to or filed with any
Regulatory Agency or Notified Body, including all Product Authorizations.

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of
such Person’s Affiliates.

 

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“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the thirty-day notice period has been waived.

“Representative Member” has the meaning specified in the GST Act.

“Required Lenders” means, at any time, Lenders having Total Credit Exposures
representing more than 50% of the Total Credit Exposures of all Lenders. The
Total Credit Exposure of any Defaulting Lender shall be disregarded in
determining Required Lenders at any time.

“Responsible Officer” means the chief executive officer, chief operating
officer, chief financial officer, chief scientific officer or treasurer of a
Transaction Party and, solely for purposes of the delivery of certificates
pursuant to Sections 5.01 or 7.12(b) (and, by way of example and for purposes of
clarification, not for purposes of determining the “knowledge” of any
Transaction Party), the secretary, any assistant secretary or any director of a
Transaction Party. Any document delivered hereunder that is signed by a
Responsible Officer of a Transaction Party shall be conclusively presumed to
have been authorized by all necessary corporate, partnership and/or other action
on the part of such Transaction Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Transaction Party.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests of any
Transaction Party, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests or on account of any return of capital to the
Borrower’s stockholders, partners or members (or the equivalent Person thereof),
or any setting apart of funds or property for any of the foregoing.

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw-Hill Companies, Inc., and any successor thereto.

“Sale and Leaseback Transaction” means, with respect to any Transaction Party,
any arrangement, directly or indirectly, with any Person whereby the Transaction
Party shall sell or transfer any property used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property being sold or transferred.

“Sanctions” means any international economic sanction administered or enforced
by the United States government (including, without limitation, OFAC), the
United Nations Security Council, the European Union, Her Majesty’s Treasury or
other relevant sanctions authority.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Securities Act” means the Securities Act of 1933, as amended.

“Securitization Transaction” means, with respect to any Person, any financing
transaction or series of financing transactions (including factoring
arrangements) pursuant to which such Person or any Subsidiary of such Person may
sell, convey or otherwise transfer, or grant a security interest in, accounts,
payments, receivables, rights to future lease payments or residuals or similar
rights to payment to a special purpose subsidiary or affiliate of such Person.

 

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“Security Agreement” means the Pledge and Security Agreement, dated as of the
Closing Date, executed in favor of the Administrative Agent, for the benefit of
the holders of the Obligations, by the Parent, as amended or modified from time
to time in accordance with the terms hereof.

“Service Fee Reports” means reports received by the Borrower from LifeScan
pursuant to Section 11.1(c) of the LifeScan Master Services and Supply
Agreement.

“Siemens” means Siemens Healthcare Diagnostics, Inc.

“Siemens Collaboration Agreement” means the Collaboration Agreement, dated as of
September 9, 2011, between the Borrower and Siemens, as amended as of the
Closing Date.

“Siemens Milestone Payments” means milestone payments paid by Siemens to the
Borrower after the date of this Agreement as set out in Annex 7.1 (as may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof) to the Siemens Collaboration Agreement.

“Solvent” or “Solvency” means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
ordinary course of business, (b) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to
pay as such debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person’s property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is to
engage, (d) the fair value of the property of such Person is greater than the
total amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (e) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.

“Specific Security Deed” means the specific security deed dated on or about the
date of this Agreement granted by the Parent in favor of the Administrative
Agent (for the benefit of the holders of the Obligations).

“Subsidiary” of a Person means (a) in respect of the Borrower and any
Transaction Party incorporated in Australia, a subsidiary as defined in section
46 of the Corporations Act, or (b) in respect of each other Transaction Party, a
corporation, partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of Voting Stock is at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise specified, all references herein to a “Subsidiary” or
to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Parent.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the

 

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foregoing), whether or not any such transaction is governed by or subject to any
master agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s) and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Synthetic Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing arrangement
whereby the arrangement is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease or does not otherwise appear on
a balance sheet under GAAP.

“TAA” means the Taxation Administration Act 1953 (Cth).

“Tax Act” means the Income Tax Assessment Act 1936 (Cth) or the Income Tax
Assessment Act 1997 (Cth) (as applicable).

“Tax Consolidated Group” means a “consolidated group” or “MEC group” (as defined
in the Tax Act) of which a Transaction Party is or becomes a member.

“Taxes” has the meaning specified in Section 3.01(a).

“Threshold Amount” means, at any time, the greater of $1,500,000 and an amount
equal to five percent (5%) of the total annual revenue of the Parent and the
Transaction Parties reflected in the audited consolidated statements of
comprehensive income of the Parent and the Transaction Parties for the last
fiscal year ended prior to such time and delivered pursuant to Section 5.01(c)
or Section 7.01, as the case may be, except that the “Threshold Amount” for the
purposes of Section 9.01(f) shall mean $1,000,000.

“Title Documents” means each certificate, confirmation, grant, assurance,
conveyance, deed and other document of title or evidencing title to, or rights
to acquire, possess, use or dispose of, any Collateral.

“TFA” means a tax funding agreement between members of a Tax Consolidated Group
which includes: (a) reasonably appropriate arrangements for the funding of tax
payments by the head company (as defined in the Tax Act) having regard to the
position of each member of the Tax Consolidated Group; (b) an undertaking from
each member of the Tax Consolidated Group to compensate each other member
adequately for loss of tax attributes (including tax losses and tax offsets) as
a result of being a member of the Tax Consolidated Group; and (c) an undertaking
from the head company to pay all group liabilities (as described in section
721-10 of the Tax Act) of the Tax Consolidated Group before the members of the
Tax Consolidated Group make any payments to the head company under the
agreement.

 

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“Total Credit Exposure” means, as to any Lender at any time, the unused
Commitments, the Outstanding Amount of the Initial Term Loans, and the
Outstanding Amount of all Delayed Draw Loans, in each case, of such Lender at
such time.

“Trademark License” means any agreement, written or oral, providing for the
grant of any right to use any Trademark.

“Trademarks” means all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos
and other source or business identifiers, and the goodwill associated therewith,
now existing or hereafter adopted or acquired, all common law rights that can be
claimed therefrom, all registrations and recordings thereof, and all
applications to register in connection therewith, under the laws of the United
States, any state thereof or any other country or any political subdivision
thereof, or otherwise, for the full term and all renewals thereof, which are
owned by any Transaction Party or which any Transaction Party is licensed,
authorized or otherwise granted rights under or to as of the Closing Date, or
subsequent thereto.

“Trade Secrets” means any data or information that is not commonly known by or
available to the public, and which (a) derives economic value, actual or
potential, from not being generally known to and not being readily ascertainable
by proper means by other Persons who can obtain economic value from its
disclosure or use; (b) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy; and (c) which are owned by any
Transaction Party or which any Transaction Party is licensed, authorized or
otherwise granted rights under or to as of the Closing Date, or subsequent
thereto.

“Transaction Parties” means, collectively, the Borrower and each Guarantor.

“Treasury Regulations” means the regulations, including temporary regulations,
promulgated by the United States Treasury Department under the Internal Revenue
Code, as such regulations may be amended from time to time (including the
corresponding provisions of any future regulations).

“TSA” means an agreement between the members of a Tax Consolidated Group which
takes effect as a tax sharing agreement under section 721-25 of the Tax Act and
complies with the Tax Act and any applicable law, official directive, request,
guideline or policy (whether or not having the force of law) issued in
connection with the Tax Act.

“United States” and “U.S.” mean the United States of America.

“Unrestricted Cash” means unrestricted cash and Cash Equivalents held by the
Transaction Parties in one or more deposit accounts subject to Account Control
Deeds or Deposit Account Control Agreements in favor of the Administrative Agent
for the benefit of the Lenders.

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Internal Revenue Code.

“Verio Quarterly Service Fees” means, with respect to any fiscal quarter,
Quarterly Service Fees, as defined in the LifeScan Master Services and Supply
Agreement, earned by the Borrower in such fiscal quarter.

“Voting Stock” means, with respect to any Person, Equity Interests issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
may have been suspended by the happening of such a contingency.

 

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“Warrants” means those certain warrants to purchase common stock of the Parent
issued to the Lenders on the Closing Date and substantially in the form of
Exhibit B-4 (the “Warrants”). The Warrants shall have the rights set forth
therein and shall be in the respective amounts set forth on Schedule 2.01.

“Websites” means all websites that any Transaction Party shall operate, manage
or control through a Domain Name, including, with respect thereto and without
limitation, all associated content, elements, data, information, materials,
hypertext markup language (HTML), programming code, works of authorship, textual
works, visual works, aural works, audiovisual works and functionality embodied
in, published or available through each such website and all IP Rights in each
of the foregoing.

“Website Agreement” means all agreements between any Transaction Party and any
other Person pursuant to which such Person provides any services relating to the
hosting, design, operation, management or maintenance of any Website, including
without limitation, all agreements with any Person providing website hosting,
database management or maintenance or disaster recovery services to any
Transaction Party and all agreements with any domain name registrar, as all such
agreements may be amended, supplemented or otherwise modified from time to time.

“Work” means any work or subject matter that is subject to protection pursuant
to Title 17 of the United States Code (or any equivalent provision of any other
Law).

1.02 Other Interpretive Provisions.

With reference to this Agreement and each other Investment Document, unless
otherwise specified herein or in such other Investment Document:

(a) 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 or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other
Investment Document), (ii) any reference herein to any Person shall be construed
to include such Person’s successors and assigns, (iii) the words “hereto”,
“herein,” “hereof” and “hereunder,” and words of similar import when used in any
Investment Document, shall be construed to refer to such Investment Document in
its entirety and not to any particular provision thereof, (iv) all references in
an Investment Document to Clauses, Articles, Sections, Exhibits and Schedules
shall be construed to refer to Clauses, Articles and Sections of, and Exhibits
and Schedules to, the Investment Document in which such references appear,
(v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all real and personal property
(having its ordinary meaning) and tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

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(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(c) Section and clause headings herein and in the other Investment Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Investment Document.

1.03 Accounting Terms.

(a) Generally. Except as otherwise specifically prescribed herein, all
accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP, as in effect from time to
time, applied on a consistent basis and in a manner consistent with that used in
preparing the Audited Financial Statements.

(b) Changes in GAAP. The Borrower will provide a written summary of material
changes in GAAP and in the consistent application thereof with each annual and
quarterly financial statement delivered in accordance with Section 7.01. If at
any time any change in GAAP would affect the computation of any financial
requirement set forth in any Loan Document, and either the Borrower or the
Required Lenders shall so request, the Administrative Agent, the Lenders and the
Borrower shall negotiate in good faith to amend such requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (i) such requirement
shall continue to be computed in accordance with GAAP prior to such change
therein and (ii) the Borrower shall provide to the Administrative Agent and the
Lenders financial statements and other documents required under this Agreement
or as requested hereunder setting forth a reconciliation between calculations of
such requirement made before and after giving effect to such change in GAAP.

1.04 Times of Day.

Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable) in the United
States.

ARTICLE II.

THE COMMITMENTS

2.01 Commitments and Warrants.

(a) Initial Term Loan. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make its portion of an initial term loan (the
“Initial Term Loan”) on the Closing Date in Dollars in an amount equal to such
Lender’s Initial Term Loan Commitment.

(b) Delayed Draw Loans. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make (i) its portion of a delayed draw term loan
(the “Delayed Draw Tranche A Loan”) on the Delayed Draw Tranche A Closing Date
in Dollars in an amount equal to such Lender’s Delayed Draw Tranche A Commitment
and (ii) its portion of a delayed draw term loan (the “Delayed Draw Tranche B
Loan,” together with the Initial Term Loan and the Delayed Draw Tranche A Loan,
collectively, the “Loans”) on the Delayed Draw Tranche B Closing Date in Dollars
in an amount equal to such Lender’s Delayed Draw Tranche B Commitment. Amounts
repaid on the Loans may not be reborrowed.

 

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(c) The Borrower and Lenders hereby acknowledge and agree that, for United
States income tax purposes, for an aggregate purchase price of $15,000,000, on
the Closing Date (i) the Borrower shall sell to the Lenders, and the Lenders
shall purchase from the Borrower, the Initial Term Notes and (ii) the Borrower
shall sell to the Lenders, and the Lenders shall purchase from the Borrower, the
Warrants, in each case, in the respective amounts and purchase prices set forth
opposite each Lender’s name on Schedule 2.01. Furthermore, the Borrower and the
Lenders hereby acknowledge and agree that (i) the issue price (within the
meaning of Section 1273(b) of the Internal Revenue Code) of each Initial Term
Note is determined pursuant to Section 1272-1275 of the Internal Revenue Code
and the Treasury Regulations thereunder and (ii) for United States federal
income tax purposes, the issue price of the Warrants within the meaning of
Section 1273(b) of the Internal Revenue Code, which issue price was determined
pursuant to Section 1.1273-2(h)(1) of the Treasury Regulations, is equal to
$985,095. The parties hereto agree to report all income tax matters with respect
to the issuance of the Notes and the Warrants consistent with the provisions of
this Section 2.01(c) unless otherwise required due to a change in applicable
Law.

2.02 Borrowings.

(a) Each Borrowing shall be made upon the Borrower’s irrevocable notice (in the
form of a written Loan Notice, appropriately completed and signed by a
Responsible Officer of the Borrower) to the Administrative Agent, which must be
given not later than 11:00 a.m. (i) on the requested date of the Borrowing of
the Initial Term Loan, and (ii) at least fifteen (15) Business Days in advance
of the requested date of the Borrowing of the Delayed Draw Tranche A Loan or the
Delayed Draw Tranche B Loan, as the case may be. Such Loan Notice (whether
telephonic or written) shall specify the requested date of the Borrowing (which
shall be a Business Day) and shall be for the entire amount of the Initial Term
Loan, the Delayed Draw Tranche A Loan or the Delayed Draw Tranche B Loan, as the
case may be.

(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Applicable Percentage of the applicable
Loans. Each Lender shall make the amount of its Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent’s Office not later than 1:00 p.m. on the Business Day specified in the
applicable Loan Notice. Upon satisfaction of the applicable conditions set forth
in Sections 5.01, 5.02, 5.03 and 5.04, the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent by wire transfer of such funds in accordance with
instructions provided to (and acceptable to) the Administrative Agent by the
Borrower.

2.03 Prepayments.

(a) Voluntary Prepayments. The Loans may not be voluntarily prepaid on or prior
to the second anniversary of the Closing Date, except pursuant to
Section 2.03(c). After the second anniversary of the Closing Date, subject to
the payment of any prepayment premium as required under Section 2.03(d), the
Borrower may, upon notice from the Borrower to the Administrative Agent,
voluntarily prepay the Obligations, in whole or in part; provided that (i) such
notice must be received not later than 11:00 a.m. three (3) Business Days prior
to the date of prepayment and (ii) any such prepayment shall be in a minimum
principal amount of $2,500,000 and integral multiples of $500,000 in excess
thereof (in each case, if less, the entire principal amount thereof

 

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then outstanding). Each such notice shall specify the date and amount of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment pursuant to this
Section 2.03(a) shall be accompanied by all accrued interest on the amount
prepaid (it being understood and agreed that if any prepayment is made on a day
other than the last Business Day of a calendar month, such prepayment shall be
accompanied by, in addition to all accrued interest on the amount prepaid, all
interest that would have accrued on the amount prepaid had such prepayment been
made on the last Business Day of such calendar month rather than the date upon
which such prepayment was actually made), and the prepayment premium required
under Section 2.03(d). Each such prepayment shall be applied first to all costs,
expenses, indemnities and other amounts due and payable hereunder, if any, then
to payment of default interest, if any, then to payment of prepayment premium
required by Section 2.03(d), then to payment of accrued interest and thereafter
to the payment of principal. Each such prepayment shall be applied to the
Initial Term Loan and Delayed Draw Loans of the Lenders on a pro rata basis, and
shall be paid to the Lenders in accordance with their respective Applicable
Percentages.

(b) Mandatory Prepayments.

(i) Incurrence of Indebtedness. The Borrower shall prepay the Obligations
(including amounts due pursuant to Section 2.03(d)) in an aggregate amount equal
to 100% of the Net Cash Proceeds of any incurrence of Indebtedness by any
Transaction Party, other than Indebtedness permitted by Section 8.03. Any
prepayment pursuant to this clause (i) shall be applied as set forth in clause
(iv) below.

(ii) Dispositions and Involuntary Dispositions. The Borrower shall prepay the
Obligations (including amounts due pursuant to Section 2.03(d)) in an aggregate
amount equal to (x) 100% of the Net Cash Proceeds of any Disposition (other than
an Involuntary Disposition) by any Transaction Party; and (y) 100% of the Net
Cash Proceeds of any Involuntary Disposition by any Transaction Party, to the
extent such Net Cash Proceeds from such Involuntary Disposition are not
reinvested (or committed to be reinvested) in Eligible Assets within 3 months of
the date of such Involuntary Disposition (and, if so committed to be reinvested,
such reinvestment is not completed within 3 months thereafter); provided,
however, that, to the extent no Default or Event of Default exists at the time
prepayment would otherwise be required pursuant to this Section 2.03(b)(ii), the
Borrower shall not be required to prepay the Obligations pursuant to this
Section 2.03(b)(ii) with Net Cash Proceeds received in connection with the
following events: (A) Dispositions (including Involuntary Dispositions for which
the Net Cash Proceeds are not reinvested as provided above) in an aggregate
amount not to exceed $500,000 in any fiscal year or $2,500,000 during the term
of this Agreement and (B) Dispositions (including Involuntary Dispositions) of
the assets set forth on Schedule 8.05. Any prepayment pursuant to this clause
(ii) shall be applied as set forth in clause (iv) below.

(iii) Extraordinary Receipts. The Borrower shall prepay the Obligations
(including amounts due pursuant to Section 2.03(d)) in an aggregate amount equal
to 100% of the Net Cash Proceeds of any Extraordinary Receipt (other than any
receipts of any Disposition or Involuntary Disposition), to the extent, with
respect to any property insurance proceeds constituting Extraordinary Receipts,
such proceeds are not reinvested (or committed to be reinvested) in assets to
repair or replace the assets that caused such insurance proceeds to be paid
within 3 months of the date of receipt of such proceeds

 

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(and, if so committed to be reinvested, such reinvestment is not completed
within 3 months thereafter). Any prepayment pursuant to this clause (iii) shall
be applied as set forth in clause (iv) below.

(iv) Application of Mandatory Prepayments. All payments under
Section 2.03(b)(i), (ii) and (iii) shall be applied first to all costs,
expenses, indemnities and other amounts due and payable hereunder, if any, then
proportionately (based on the relation of such amounts to the total amount of
the relevant payment under this Section 2.03(b)) to the payment or prepayment
(as applicable) of the following amounts: default interest, if any, prepayment
premium required by Section 2.03(d), and accrued interest and principal. Each
such prepayment shall be applied to the Initial Term Loan and Delayed Draw Loans
of the Lenders on a pro rata basis, and shall be paid to the Lenders in
accordance with their respective Applicable Percentages.

(c) Change of Control. Upon the occurrence of a Change of Control, the Borrower
may, at its option and upon notice from the Borrower to the Administrative
Agent, and shall, at the direction of the Required Lenders sent to the Borrower
within ten Business Days after such Change of Control, immediately prepay the
Outstanding Amount of the Loans together with all accrued and unpaid interest
thereon plus the prepayment premium required by Section 2.03(d), all outstanding
costs, expenses, indemnities and other Obligations outstanding at such time.
Each such notice shall specify the date and amount of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein. Each such prepayment shall be paid to the Lenders in
accordance with their respective Applicable Percentages.

(d) Prepayment Premiums.

(i) Prepayments on or Before Second Anniversary. If all or any portion of the
Obligations become due and payable pursuant to Section 2.03(b), Section 2.03(c)
or Section 9.02 on or prior to the second anniversary of the Closing Date, the
Borrower shall pay to the Lenders for their respective ratable accounts, on the
date on which such prepayment is due and payable, in addition to the other
Obligations so repaid, a prepayment premium in an amount equal to twenty percent
(20%) multiplied by the principal amount of the Loans due and payable on such
date.

(ii) Prepayments After Second Anniversary. If all or any portion of the
Obligations becomes due and payable pursuant to Section 2.03(a) upon delivery of
a notice of prepayment, Section 2.03(b), Section 2.03(c) or Section 9.02 after
the second anniversary of the Closing Date, then the Borrower shall pay to the
Lenders for their respective ratable accounts, on the date on which such
prepayment is due and payable, in addition to accrued and unpaid interest on the
principal amount so repaid and other Obligations repaid pursuant to such
Sections, a prepayment premium determined in accordance with the following:

pp=pmt times (0.15 – (months times (0.15 divided by 36)))

 

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Where,

“pp” = prepayment premium payable

“pmt” = the amount of principal of the prepayment

“months” = the number of months (rounded down to the nearest whole number)
elapsed from the second anniversary of the Closing Date to the date upon which
the prepayment is made

2.04 Repayment of Loans.

The Borrower shall repay the outstanding principal amount of the Loans, together
with all accrued and unpaid interest thereon and all other Obligations (other
than contingent indemnification obligations for which no claim has been
asserted), on the Maturity Date.

2.05 Interest.

(a) Pre-Default Rate. Subject to the provisions of subsection (b) below, the
Loans shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to ten and one-half percent
(10.5%) per annum.

(b) Default Rate. During the existence of any Event of Default, all outstanding
Obligations at all times during the existence of such Event of Default shall
bear interest at an interest rate per annum equal to thirteen percent
(13.0%) per annum (the “Default Rate”), to the fullest extent permitted by
applicable Laws.

(c) Interest on the Loans shall be due and payable in arrears on each Interest
Payment Date and at such other times as may be specified herein. Interest
hereunder shall be due and payable in accordance with the terms hereof before
and after judgment, and before and after the commencement of any proceeding
under any Debtor Relief Law or any proceedings arising out of or in connection
with an Insolvency Event. Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be due and payable on demand.

2.06 Fees.

(a) Upon the funding of the Initial Term Loan, the Borrower shall pay to the
Lenders for their respective ratable accounts, a fee equal to two and one-half
percent (2.5%) of their aggregate Commitments (as of immediately prior to their
funding of the Initial Term Loan). Such fee, shall be fully earned when paid and
shall be non-refundable for any reason whatsoever.

(b) The Borrower shall pay to the Lenders for their respective ratable accounts
a commitment fee, accruing at a rate equal to two percent (2.0%) per annum of
the aggregate unfunded Commitments of the Lenders during the period from and
including the date hereof to but excluding the earlier of January 30, 2015 and
the date on which such aggregate unfunded Commitments are reduced to zero (the
“Commitment Fee Termination Date”). Commitment fees under this clause
(b) accrued through and including any Interest Payment Date shall be paid on
such Interest Payment Date, and Commitment fees under this clause (b) accrued
through the Commitment Fee Termination Date shall be paid on such date.

(c) The Borrower shall pay to the Lenders in the aggregate for their respective
ratable accounts, an amount equal to thirty percent (30.0%) of the Siemens
Milestone Payments,

 

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payable within ten Business Days after such amounts are paid (including any
payment by way of setoff or other credit against amounts owed by the Borrower or
any of its Affiliates to Siemens or any of its Affiliates), up to a maximum of
$600,000 in the aggregate.

2.07 Computation of Interest.

All computations of interest and fees shall be made on the basis of a 360-day
year and actual days elapsed. Interest shall accrue on the Loans for the day on
which such Loan is made, and shall not accrue on the Loans, or any portion
thereof, for the day on which such Loan or such portion is paid.

2.08 Evidence of Debt.

The Loans made by each Lender shall be evidenced by one or more accounts or
records maintained by such Lender in the ordinary course of business. The
accounts or records maintained by each Lender shall be conclusive absent
manifest error of the amount of Loans made by the Lenders to the Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. Upon
the request of any Lender made through the Administrative Agent, the Borrower
shall execute and deliver to such Lender a promissory note, which shall evidence
such Lender’s Loans in addition to such accounts or records. Each such
promissory note shall (i) in the case of the Initial Term Loan, be in the form
of Exhibit B-1 (an “Initial Term Note”), (ii) in the case of the Delayed Draw
Tranche A Loan, be in the form of Exhibit B-2 (a “Delayed Draw Tranche A Note”)
and (iii) in the case of the Delayed Draw Tranche B Loan, be in the form of
Exhibit B-3 (a “Delayed Draw Tranche B Note”, and, together with the Initial
Term Notes and the Delayed Draw Tranche A Notes, the “Notes”). Each Lender may
attach schedules to its Note and endorse thereon the date, amount and maturity
of its Loans and payments with respect thereto.

2.09 Payments Generally.

(a) General. All payments to be made by the Borrower shall be made free and
clear of and without condition or deduction for any counterclaim, defense,
recoupment or setoff. Subject to Section 9.03, all payments of principal,
interest and prepayment premiums on the Loans and all other Obligations payable
by any Transaction Party under the Loan Documents shall be due, without any
presentment thereof, directly to the Lenders, at the respective Lending Offices
of the Lenders. The Transaction Parties will make such payments in Dollars, in
immediately available funds not later than 2:00 p.m. on the date due, marked for
attention as indicated, or in such other manner or to such other account in any
United States bank as the Lenders may from time to time direct in writing. All
payments received by the Lenders after 2:00 p.m. shall be deemed received on the
next succeeding Business Day and any applicable interest or fee shall continue
to accrue. If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest.

(b) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans and to make payments pursuant to Section 12.04(c) are several and not
joint. The failure of any Lender to make any Loan or to make any payment under
Section 12.04(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan or
to make its payment under Section 12.04(c).

 

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(c) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

2.10 Sharing of Payments by Lenders.

If any Lender shall, by exercising any right of setoff or otherwise, obtain
payment in respect of any principal of or interest on its portion of any of the
Loans or prepayment premium in connection therewith resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of the Loans and
accrued interest thereon and prepayment premium in connection therewith greater
than its pro rata share thereof as provided herein, then the Lender shall
(a) notify the Administrative Agent of such fact and (b) purchase (for cash at
face value) participations in the portions of the Loans of the other Lenders, or
make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of, accrued interest on and prepayment premium in
connection with their respective portions of the Loans and other amounts owing
them; provided that:

(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest; and

(ii) the provisions of this Section 2.10 shall not be construed to apply to
(x) any payment made by or on behalf of the Borrower pursuant to and in
accordance with the express terms of this Agreement (including the application
of funds arising from the existence of a Defaulting Lender) or (y) any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its portion of the Loans to any assignee or participant,
other than an assignment to a Transaction Party (as to which the provisions of
this Section shall apply).

Each Transaction Party consents to the foregoing and agrees, to the extent it
may effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may, subject to its
compliance with the other terms and conditions hereof, exercise against such
Transaction Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such
Transaction Party in the amount of such participation.

2.11 Defaulting Lenders.

(a) Adjustments. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable Law:

(i) Waivers and Amendment. The Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 12.01.

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other
amount received by the Administrative Agent for the account of that Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or
otherwise, and including any amounts made available to the Administrative Agent
by that Defaulting Lender pursuant to Section 12.08), shall be applied at such
time or times as

 

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may be determined by the Administrative Agent as follows: first, to the payment
of any amounts owing by that Defaulting Lender to the Administrative Agent
hereunder; second, as the Borrower may request (so long as no Default or Event
of Default exists), to the funding of any Loan in respect of which that
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Administrative Agent; third, if so determined by
the Administrative Agent and the Borrower, to be held in a non-interest bearing
deposit account and released in order to satisfy obligations of that Defaulting
Lender to fund Loans under this Agreement; fourth, to the payment of any amounts
owing to the Lenders as a result of any judgment of a court of competent
jurisdiction obtained by any Lender against that Defaulting Lender as a result
of that Defaulting Lender’s breach of its obligations under this Agreement;
fifth, so long as no Default or Event of Default exists, to the payment of any
amounts owing to the Borrower as a result of any judgment of a court of
competent jurisdiction obtained by the Borrower against that Defaulting Lender
as a result of that Defaulting Lender’s breach of its obligations under this
Agreement; and sixth, to that Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if (x) such payment is a payment
of the principal amount of any Loans in respect of which that Defaulting Lender
has not fully funded its appropriate share and (y) such Loans were made at a
time when the conditions set forth in Section 5.02 were satisfied or waived,
such payment shall be applied solely to pay the Loans of all non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any Loans
of that Defaulting Lender. Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender pursuant to this Section 2.11(a)(ii) shall be deemed paid to
and redirected by that Defaulting Lender, and each Lender irrevocably consents
hereto.

(b) Defaulting Lender Cure. If the Borrower and the Administrative Agent agree
in writing in their sole discretion that a Defaulting Lender should no longer be
deemed to be a Defaulting Lender, the Administrative Agent will so notify the
parties hereto, whereupon as of the effective date specified in such notice and
subject to any conditions set forth therein, that Lender will cease to be a
Defaulting Lender; provided that no adjustments will be made retroactively with
respect to fees accrued or payments made by or on behalf of the Borrower while
that Lender was a Defaulting Lender; provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from that Lender having been a Defaulting
Lender.

ARTICLE III.

TAXES

3.01 Taxes.

(a) Subject to Section 3.01(d), any and all payments by or on behalf of the
Transaction Parties hereunder and under any Loan Document shall be made, free
and clear of and without deduction for any and all current or future taxes,
levies, imposts, deductions, charges or withholdings that are or would be
applicable to the Lenders or to any payments to be made by the Transaction
Parties under the Loan Documents, and all liabilities with respect thereto,
excluding, (i) income taxes imposed on the net income of a Lender,
(ii) franchise taxes imposed on the net income of a Lender, in each case by the
jurisdiction under the laws of which such Lender is organized or qualified to do
business or a jurisdiction or any political subdivision thereof in

 

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which the Lender engages in business activity other than any activity arising
solely from the Lender having executed this Agreement and having enjoyed its
rights and performed its obligations under this Agreement or any Loan Document,
and (iii) United States backup withholding taxes (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities, collectively
or individually, being called “Taxes”). All sums payable by any Transaction
Party under this Agreement shall be paid in full without set-off or counterclaim
and free and clear of and without any deduction or withholding for or on account
of any tax. If any Transaction Party or any other person is required by any law
or regulation to make any deduction or withholding from any payment, such
Transaction Party shall together with such payment pay an additional amount so
that each of the Lenders receives free and clear of any tax the full amount
which it would have received if no such deduction or withholding had been
required. Such Transaction Party shall pay to the relevant taxing or other
authority the full amount of the deduction or withholding made by it and
promptly forward to each of the Lenders copies of official receipts or other
evidence showing that the full amount of any such deduction or withholding has
been paid over to the relevant taxation or other authority before the date on
which penalties attach thereto.

(b) Subject to Section 3.01(d), the Transaction Parties will pay to the relevant
Governmental Authority in accordance with applicable Law any current or future
stamp duties or transaction taxes that arise in relation to any Loan Documents
or transactions contemplated by such Loan Documents or any other excise or
property taxes, charges or similar levies that arise from payment made hereunder
or under any Loan Document, or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any Loan Document that are or
would be applicable to the Lenders (“Other Taxes”). For purposes of
clarification, the payment of any taxes relating to the Warrant, including
without limitation any stamp duties, stamp duty taxes or other transaction taxes
that relate to the Warrant and any shares issuable upon the exercise thereof or
in connection therewith, are addressed in the Warrant and shall not be deemed to
be Taxes or Other Taxes for purposes hereof.

(c) The Transaction Parties jointly and severally agree to indemnify each Lender
for the full amount of Taxes and Other Taxes paid by such Lender and any
liability (including penalties, interest and expenses (including reasonable
attorneys’ fees and expenses)) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant Governmental Authority. A certificate as to the amount of such
payment or liability prepared by such Lender absent manifest error, shall be
conclusive and binding for all purposes. Such indemnification shall be made
within thirty (30) days after the date such Lender makes written demand
therefor. The Transaction Parties shall have the right to receive that portion
of any refund of any Taxes or Other Taxes received by a Lender for which any
Transaction Party has previously paid any additional amount or indemnified such
Lender and which leaves the Lender, after such Transaction Party’s receipt
thereof, in no better or worse financial position than if no such Taxes or Other
Taxes had been imposed or additional amounts or indemnification paid to the
Lender. The Lender shall have sole discretion as to whether (and shall in no
event be obligated) to make any such claim for any refund of any Taxes or Other
Taxes; provided, however, that if the Borrower requests that the Lender make a
claim for any refund of any Taxes or Other Taxes, the Lender shall use
reasonable efforts to make such a claim at the expense of the Borrower. For the
avoidance of doubt, if any GST is payable in relation to any supply that is made
(or deemed to be made) by a Lender under or in connection with this Agreement,
the Loan Documents or the transactions contemplated hereby and thereby, the
Transaction Parties shall pay to the Lender an additional amount equal to the
GST payable on the supply at the same time and in the same manner as the
consideration for the supply, or the first part of the consideration for the
supply (as the case may be), is to be provided.

 

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(d) Notwithstanding anything in this Section 3.01 to the contrary, in the event
of an assignment by a Lender of all or a portion of its rights and obligations
under this Agreement and the other Loan Documents, the Borrower shall not be
obligated to pay additional amounts or Other Taxes pursuant to Section 3.01(a)
or Section 3.01(b) hereof, or otherwise indemnify an assignee of a Lender for
Taxes or Other Taxes pursuant to Section 3.01(c) hereof, to the extent such
payment or indemnity would be in excess of what Borrower would have been
required to pay or indemnify absent such assignment.

(e) If, after the date hereof, any Lender is entitled to an exemption from, or
reduction in the rate of, the imposition, deduction or withholding of any Taxes
with respect to payments hereunder or under any other Loan Document, such Lender
shall deliver to the Borrower, at the time or times reasonably requested by the
Borrower, such properly completed and duly executed documentation provided to
such Lender by Borrower as will permit such payments to be made without
imposition, deduction or withholding of such Taxes or at a reduced rate provided
that completing such documentation does not result in any adverse effect to such
Lender, as reasonably determined by such Lender.

3.02 Survival.

Each party’s obligations under this Article III shall survive the resignation or
replacement of the Administrative Agent or any assignment of rights by, or the
replacement of, a Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all other Obligations.

ARTICLE IV.

GUARANTY

4.01 The Guaranty.

Each of the Guarantors hereby jointly and severally guarantees to each Lender
and the Administrative Agent as hereinafter provided, as primary obligor and not
as surety, the prompt payment of the Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise), the
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Obligations, the same will be promptly paid in
full when due (whether at extended maturity, as a mandatory prepayment, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.

Notwithstanding any provision to the contrary contained herein or in any other
of the Loan Documents, the obligations of each Guarantor under this Agreement
and the other Loan Documents shall be limited to an aggregate amount equal to
the largest amount that would not render such obligations subject to avoidance
under the Debtor Relief Laws or any comparable provisions of any applicable
state law.

4.02 Obligations Unconditional.

The obligations of the Guarantors under Section 4.01 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Loan Documents, or any other
agreement or instrument referred to therein, or any substitution, release,

 

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impairment or exchange of any other guarantee of or security for any of the
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any law or regulation or other circumstance whatsoever which
might otherwise constitute a legal or equitable discharge or defense of a surety
or guarantor (other than the payment in full of the Obligations (other than
contingent indemnification obligations for which no claim has been asserted)),
it being the intent of this Section 4.02 that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Each Guarantor agrees that such Guarantor shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrower or any other
Guarantor for amounts paid under this Article IV until such time as the
Obligations have been paid in full (other than contingent indemnification
obligations for which no claim has been asserted) and the Commitments have
expired or terminated. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of any
Guarantor hereunder, which shall remain absolute and unconditional as described
above until the payment in full of the Obligations (other than contingent
indemnification obligations for which no claim has been asserted):

(a) at any time or from time to time, without notice to any Guarantor, the time
for any performance of or compliance with any of the Obligations shall be
extended, or such performance or compliance shall be waived;

(b) any of the acts mentioned in any of the provisions of any of the Loan
Documents, or any other agreement or instrument referred to in the Loan
Documents shall be done or omitted;

(c) the maturity of any of the Obligations shall be accelerated, or any of the
Obligations shall be modified, supplemented or amended in any respect, or any
right under any of the Loan Documents, or any other agreement or instrument
referred to in the Loan Documents shall be waived or any other guarantee of any
of the Obligations or any security therefor shall be released, impaired or
exchanged in whole or in part or otherwise dealt with;

(d) any Lien granted to, or in favor of, the Administrative Agent or any Lender
or Lenders as security for any of the Obligations shall fail to attach or be
perfected; or

(e) any of the Obligations shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of any
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Loan Documents, or any other agreement or instrument referred to in the Loan
Documents, or against any other Person under any other guarantee of, or security
for, any of the Obligations.

4.03 Reinstatement.

The obligations of the Guarantors under this Article IV shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Person in respect of the Obligations is rescinded or must be otherwise
restored by any holder of any of the Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and each Guarantor
agrees that it will indemnify the Administrative Agent and each Lender on demand
for all reasonable costs and expenses (including, without limitation, the
reasonable fees, charges and disbursements of external (but not internal)
counsel) incurred by the Administrative Agent or such Lender in connection with
such rescission

 

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or restoration, including any such reasonable costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.

4.04 Certain Additional Waivers.

Each Guarantor agrees that such Guarantor shall have no right of recourse to
security for the Obligations, except through the exercise of rights of
subrogation pursuant to Section 4.02 and through the exercise of rights of
contribution pursuant to Section 4.06.

4.05 Remedies.

The Guarantors agree that, to the fullest extent permitted by law, as between
the Guarantors, on the one hand, and the Administrative Agent and the Lenders,
on the other hand, the Obligations may be declared to be forthwith due and
payable as provided in Section 9.02 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said
Section 9.02) for purposes of Section 4.01 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or preventing the Obligations
from becoming automatically due and payable) as against any other Person and
that, in the event of such declaration (or the Obligations being deemed to have
become automatically due and payable), the Obligations (whether or not due and
payable by any other Person) shall forthwith become due and payable by the
Guarantors for purposes of Section 4.01. The Guarantors acknowledge and agree
that their obligations hereunder are secured in accordance with the terms of the
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.

4.06 Rights of Contribution.

The Guarantors agree among themselves that, in connection with payments made
hereunder, each Guarantor shall have contribution rights against the other
Guarantors as permitted under applicable law. Such contribution rights shall be
subordinate and subject in right of payment to the obligations of such
Guarantors under the Loan Documents and no Guarantor shall exercise such rights
of contribution until all Obligations have been paid in full (other than
contingent indemnification obligations for which no claim has been asserted) and
the Commitments have terminated.

4.07 Guarantee of Payment; Continuing Guarantee.

The guarantee in this Article IV is a guaranty of payment and not of collection,
is a continuing guarantee, and shall apply to all Obligations whenever arising.

ARTICLE V.

CONDITIONS PRECEDENT TO BORROWING

5.01 Conditions of Borrowing of Initial Term Loan and Purchase of Warrants.

This Agreement shall become effective upon and the obligation of each Lender to
make its portion of the Initial Term Loan on the Closing Date and to purchase
the Warrants is subject to satisfaction of the following conditions precedent:

(a) Investment Documents. Receipt by the Administrative Agent of executed
counterparts of this Agreement and the other Investment Documents, each properly
executed by

 

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the Borrower in accordance with section 127 of the Corporations Act and by a
Responsible Officer of each other signing Transaction Party and each other party
to such Investment Documents, including, without limitation, the Warrants duly
executed and issued by the Parent, in each case in form and substance
satisfactory to the Administrative Agent and the Lenders.

(b) Opinions of Counsel. Receipt by the Administrative Agent of favorable
opinions of (i) legal counsel to the Transaction Parties and (ii) any special or
local counsel as the Lenders may reasonably require, in each case, addressed to
the Administrative Agent and each Lender, dated as of the Closing Date, and in
form and substance satisfactory to the Administrative Agent.

(c) Financial Statements. The Administrative Agent shall have received:

(i) the Audited Financial Statements;

(ii) unaudited consolidated financial statements of the Parent and the other
Transaction Parties for the fiscal quarters ended March 31, 2013 and June 30,
2013, including consolidated condensed balance sheets and consolidated condensed
statements of comprehensive income, consolidated condensed statements of changes
in stockholders’ equity and comprehensive income, and consolidated condensed
statements of cash flows (the “Interim Financial Statements”); and

(iii) a summary of the aggregate number of blood glucose strips sold and the
Verio Quarterly Service Fees earned by the Borrower included in all Service Fee
Reports with respect to the monthly periods ended July 31, 2013, August 31, 2013
and September 30, 2013.

(d) No Material Adverse Change. There shall not have occurred a material adverse
change since December 31, 2012 in the operations, business, assets, properties,
liabilities (actual or contingent) or condition (financial or otherwise) of the
Transaction Parties, taken as a whole.

(e) Litigation. There shall not exist any action, suit, investigation or
proceeding pending or, to the knowledge of the Transaction Parties, threatened
in any court or before an arbitrator or Governmental Authority against any
Transaction Party or its assets, and there shall be no legal or regulatory
development that would reasonably be expected to have a Material Adverse Effect.

(f) Organization Documents, Resolutions, Etc. Receipt by the Administrative
Agent of the following, in form and substance satisfactory to the Administrative
Agent and its legal counsel:

(i) in relation to the Borrower, a verification certificate for the Borrower in
substantially the form of Exhibit F, properly completed and with all required
attachments, duly signed by two directors of the Borrower and dated no earlier
than two Business Days before the Closing Date;

(ii) copies of the Organization Documents of each Transaction Party certified to
be true and complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its incorporation or
organization, where applicable, and certified by a Responsible Officer of such
Transaction Party to be true and correct as of the Closing Date;

 

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(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Transaction Party as
the Administrative Agent may reasonably require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to act as
a Responsible Officer in connection with this Agreement and the other Investment
Documents to which such Transaction Party is a party; and

(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Transaction Party is duly organized or
formed, and is validly existing, in good standing and qualified to engage in
business in its state of organization or formation (to the extent that the
concept of good standing is applicable in such state).

(g) Perfection and Priority of Liens. Receipt by the Administrative Agent of the
following:

(i) searches of Uniform Commercial Code filings in the jurisdiction of formation
of each Transaction Party or where a filing would need to be made in order to
perfect the Administrative Agent’s security interest in the Collateral, copies
of the financing statements on file in such jurisdictions and evidence that no
Liens exist other than Permitted Liens;

(ii) Uniform Commercial Code and Personal Property Securities Register financing
statements for each appropriate jurisdiction as is necessary, in the
Administrative Agent’s sole discretion, to perfect the Administrative Agent’s
security interest in the Collateral;

(iii) all certificates evidencing any certificated Equity Interests pledged to
the Administrative Agent pursuant to the Security Agreement, together with duly
executed and undated blank transfer forms attached thereto;

(iv) each Title Document in respect of the Collateral, which the parties hereto
agree shall consist solely of share certificates for all the issued share
capital of the Borrower, together with executed undated blank transfer forms for
all shares;

(v) a certified copy of the share register maintained by the Borrower and any
Subsidiary of the Borrower in respect of all shares issued by it;

(vi) satisfactory results of all searches, enquires and requisitions on the
Administrative Agent’s behalf with respect to the Parent and the Borrower and
the Collateral of the Parent and the Borrower, including all searches of the
Personal Property Securities Register in respect of the Collateral and the
Parent and the Borrower;

(vii) searches of ownership of, and Liens on, IP Rights of each Transaction
Party in the appropriate governmental offices;

(viii) duly executed notices of grant of security interest in the form required
by the Security Agreement as are necessary, in the Administrative Agent’s sole
discretion, to perfect the Administrative Agent’s security interest in the IP
Rights of the Transaction Parties;

 

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(ix) duly executed consents as are necessary, in the Administrative Agent’s sole
discretion, to perfect the Administrative Agent’s security interest in the
Collateral; and

(x) duly executed Account Control Deeds and Deposit Account Control Agreements,
as required by Section 7.16.

(h) Evidence of Insurance. Receipt by the Administrative Agent of copies of
insurance policies or certificates of insurance of the Transaction Parties
evidencing liability and casualty insurance meeting the requirements set forth
in Section 7.07.

(i) Closing Certificate. Receipt by the Administrative Agent of a certificate
signed by a Responsible Officer of the Borrower certifying that (i) the
conditions specified in Sections 5.01(d), (e) and (k) and Sections 5.02(a) and
(b) have been satisfied, (ii) the Transaction Parties (after giving effect to
the transactions contemplated hereby and the incurrence of Indebtedness related
thereto) are Solvent, individually and on a consolidated basis, and (iii) as of
the Closing Date, the Transaction Parties have no Indebtedness for borrowed
money, other than Indebtedness under the Loan Documents, and Indebtedness
permitted by Section 8.03.

(j) Disqualified Stock. Receipt by the Administrative Agent of a certificate of
a Responsible Officer of the Borrower, in form and substance satisfactory to the
Administrative Agent, that as of the Closing Date no Transaction Party has
outstanding any Disqualified Stock.

(k) Governmental and Third Party Approvals. The Transaction Parties shall have
received all material governmental, shareholder and third party consents and
approvals necessary in connection with the transactions contemplated by this
Agreement and the other Investment Documents and the other transactions
contemplated hereby and all applicable waiting periods shall have expired
without any action being taken by any Person that could reasonably be expected
to restrain, prevent or impose any material adverse conditions on any
Transaction Party or such other transactions or that could seek to threaten any
of the foregoing, and no law or regulation shall be applicable which could
reasonably be expected to have such effect.

(l) [Reserved].

(m) Fees. Receipt by the Lenders of any fees required to be paid on or before
the Closing Date (it being understood that certain such fees shall be paid on
the Closing Date from the proceeds of the Initial Term Loan).

(n) [Reserved].

(o) Attorney Costs. The Borrower shall have paid all reasonable out-of-pocket
fees, charges and disbursements of the Administrative Agent and the Lenders
(including of outside counsel) incurred prior to the Closing Date, plus such
additional amounts of such fees, charges and disbursements as shall constitute
its reasonable estimate of such fees, charges and disbursements incurred or to
be incurred by it through the closing proceedings, not to exceed $200,000.

(p) Other. Receipt by the Administrative Agent and the Lenders of such other
customary documents, instruments, agreements and information as reasonably
requested by the Administrative Agent or any Lender.

 

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Without limiting the generality of the provisions of the last paragraph of
Section 10.03, for purposes of determining compliance with the conditions
specified in this Section 5.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

5.02 Conditions Precedent to All Borrowings.

The obligation of each Lender to make its portion of each advance of the Loans
is subject to the following conditions precedent:

(a) The representations and warranties of the Borrower and each other
Transaction Party contained in Article VI or any other Investment Document, or
which are contained in any document furnished at any time under or in connection
herewith or therewith, shall be true and correct in all material respects on and
as of the date of such Borrowing, except that (x) any such representation and
warranty that is qualified by materiality or a reference to Material Adverse
Effect shall be true and correct in all respects on and as of the date of such
Borrowing and (y) to the extent that such representations and warranties
specifically refer to an earlier date, they shall be true and correct in all
material respects as of such earlier date (except that any such representation
and warranty that is qualified by materiality or by reference to Material
Adverse Effect shall be true and correct in all respects as of such earlier
date).

(b) No Default shall exist, or would result from such Borrowing or from the
application of the proceeds thereof.

(c) The Administrative Agent shall have received a Loan Notice in accordance
with the requirements hereof.

The Loan Notice submitted by the Borrower shall be deemed to be a representation
and warranty that the conditions specified in Sections 5.02(a) and (b) have been
satisfied on and as of the date of such Borrowing.

5.03 Additional Conditions Precedent to Delayed Draw Tranche A Borrowing.

The obligation of each Lender to make its portion of the Delayed Draw Tranche A
Loan on the Delayed Draw Tranche A Closing Date is subject to the following
conditions precedent (in addition to the conditions set forth in Section 5.02):

(a) Revenue Threshold. Verio Quarterly Service Fees and Coagulation
Manufacturing Revenues for the immediately preceding fiscal quarter of the
Borrower shall not be less than $1,800,000 in the aggregate.

(b) Certificate. Receipt by the Administrative Agent of a certificate signed by
a Responsible Officer of the Borrower certifying that the condition specified in
Section 5.03(a) has been satisfied, attaching any backup documentation
reasonably requested by the Administrative Agent supporting such calculations.

(c) Delayed Draw Tranche A Closing Date. The Delayed Draw Tranche A Closing Date
shall be (i) within 30 days after the end of any fiscal quarter of the Borrower
in which the condition set forth in Section 5.03(a) above has been met, and
(ii) on or before January 30, 2015.

 

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5.04 Additional Conditions Precedent to Delayed Draw Tranche B Borrowing.

The obligation of each Lender to make its portion of the Delayed Draw Tranche B
Loan on the Delayed Draw Tranche B Closing Date is subject to the following
conditions precedent (in addition to the conditions listed in Section 5.02):

(a) Revenue Threshold. Verio Quarterly Service Fees and Coagulation
Manufacturing Revenues for the immediately preceding fiscal quarter of the
Borrower shall not be less than $2,500,000 in the aggregate.

(b) Certificate. Receipt by the Administrative Agent of a certificate signed by
a Responsible Officer of the Borrower certifying that the condition specified in
Section 5.04(a) has been satisfied, attaching any backup documentation
reasonably requested by the Administrative Agent supporting such calculations.

(c) Delayed Draw Tranche B Closing Date. The Delayed Draw Tranche B Closing Date
shall be (i) within 30 days after the end of any fiscal quarter of the Borrower
in which the condition set forth in Section 5.04(a) above has been met, and
(ii) on or before January 30, 2015.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

The Transaction Parties represent and warrant to the Administrative Agent and
the Lenders that:

6.01 Existence, Qualification and Power.

Each Transaction Party (a) is duly organized or formed, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation or
organization (to the extent that the concept of good standing is applicable in
such jurisdiction), (b) has (x) all requisite power and authority and (y) all
requisite governmental licenses, authorizations, consents and approvals to
(i) own or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Investment Documents to which it is a
party, and (c) is duly qualified and is licensed and in good standing under the
Laws of each jurisdiction where its ownership, lease or operation of properties
or the conduct of its business requires such qualification or license (to the
extent that the concept of good standing is applicable in such jurisdiction);
except in each case referred to in clause (b)(y)(i) or (c), to the extent that
failure to do so would not reasonably be expected to have a Material Adverse
Effect.

6.02 Authorization; No Contravention.

The execution, delivery and performance by each Transaction Party of each
Investment Document to which such Person is party have been duly authorized by
all necessary corporate or other organizational action, and do not
(a) contravene the terms of any of such Person’s Organization Documents; (b) in
any material respect, conflict with or result in any breach or contravention of,
or the creation of any Lien under, or require any payment to be made under
(i) any Contractual Obligation to which such Person is a party or affecting such
Person or the properties of such Person or any of its Subsidiaries or (ii) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject; or (c) violate in any
material respect any Law (including, without limitation, Regulation U or
Regulation X issued by the FRB).

 

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6.03 Governmental Authorization; Other Consents.

No approval, consent, exemption, authorization, or other action by, or notice
to, or filing with, any Governmental Authority or any other Person is necessary
or required in connection with the execution, delivery or performance by, or
enforcement against, any Transaction Party of this Agreement or any other
Investment Document other than (a) those that have already been obtained and are
in full force and effect, (b) filings to perfect the Liens created by the
Collateral Documents and (c) the filing of any applicable notices pursuant to
federal and state securities laws with respect to the Warrants.

6.04 Binding Effect.

Each Investment Document has been duly executed and delivered by each
Transaction Party that is party thereto. Each Investment Document constitutes a
legal, valid and binding obligation of each Transaction Party that is party
thereto, enforceable against each such Transaction Party in accordance with its
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally.

6.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (ii) fairly present the financial condition of the
Transaction Parties as of the date thereof and their results of operations for
the period covered thereby in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein.

(b) The Interim Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby; and (ii) fairly
present the financial condition of the Transaction Parties as of the date
thereof and their results of operations for the period covered thereby, subject
to the absence of footnotes and to normal year-end audit adjustments.

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or would
reasonably be expected to have a Material Adverse Effect.

6.06 Litigation; Labor Matters.

(a) There are no actions, suits, proceedings, claims or disputes pending,
threatened in writing or, to the knowledge of the Transaction Parties,
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against any Transaction Party or against any of their
properties or revenues that (a) purport to affect or pertain to this Agreement
or any other Investment Document, or any of the transactions contemplated hereby
or (b) if determined adversely would reasonably be expected to have a Material
Adverse Effect.

(b) There are no labor controversies pending, threatened in writing or, to the
knowledge of the Transaction Parties, contemplated against any Transaction Party
that would reasonably be expected to have a Material Adverse Effect.

6.07 No Default.

(a) No Transaction Party is in default under or with respect to any Contractual
Obligation that could reasonably be expected to have a Material Adverse Effect.

 

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(b) No Default has occurred and is continuing.

6.08 Ownership of Property; Liens.

Each Transaction Party has good record and marketable title in fee simple to, or
valid leasehold interests in, all real property necessary or used in the
ordinary conduct of its business, except for such defects in title as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of each Transaction Party is subject to no Liens,
other than Permitted Liens.

6.09 Environmental Compliance.

Except as would not reasonably be expected to have a Material Adverse Effect:

(a) Each of the Facilities and all operations at the Facilities are in
compliance with all applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the Facilities or the Businesses, and
there are no conditions relating to the Facilities or the Businesses that could
give rise to liability under any applicable Environmental Laws.

(b) None of the Facilities contains, or has previously contained, any Hazardous
Materials at, on or under the Facilities in amounts or concentrations that
constitute or constituted a violation of, or could give rise to liability under,
Environmental Laws.

(c) No Transaction Party has received any written notice or inquiry, or to the
knowledge of the Transaction Parties any verbal notice or inquiry, from any
Governmental Authority regarding, any violation, alleged violation,
non-compliance, liability or potential liability regarding Hazardous Materials
or compliance with any applicable Environmental Laws with regard to any of the
Facilities or the Businesses, nor to the knowledge of the Transaction Parties is
any such notice being threatened.

(d) Hazardous Materials have not been transported or disposed of from the
Facilities, or generated, treated, stored or disposed of at, on or under any of
the Facilities or any other location, in each case by or on behalf of any
Transaction Party in violation of, or in a manner that would be reasonably
likely to give rise to liability under, any applicable Environmental Law.

(e) No judicial proceeding or governmental or administrative action is pending
or, to the knowledge of the Transaction Parties, threatened, under any
applicable Environmental Law to which any Transaction Party is or will be named
as a party, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any applicable Environmental Law with respect to
any Transaction Party, the Facilities or the Businesses.

(f) There has been no release or threat of release of Hazardous Materials at or
from the Facilities, or arising from or related to the operations (including,
without limitation, disposal) of any Transaction Party in connection with the
Facilities or otherwise in connection with the Businesses, in violation of or in
amounts or in a manner that could give rise to liability under any applicable
Environmental Laws.

 

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6.10 Insurance.

The properties of the Transaction Parties are insured with financially sound and
reputable insurance companies not Affiliates of such Persons, in such amounts,
with such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties in
localities where the applicable Transaction Party operates. The insurance
coverage of the Transaction Parties as in effect on the Closing Date is outlined
as to carrier, policy number, expiration date, type, amount and deductibles on
Schedule 6.10.

6.11 Taxes.

(a) The Transaction Parties have filed all federal, state and other material tax
returns and reports required to be filed in each jurisdiction in which it is
incorporated or operates, and have paid all federal, state and other material
taxes, assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable in each
jurisdiction in which it is incorporated or operates, except those which are
being contested in good faith by appropriate proceedings diligently conducted
and for which adequate reserves have been provided in accordance with GAAP. The
Transaction Parties have not received any written notice of, and do not
otherwise have knowledge of, any proposed tax assessment against any Transaction
Party that would, if made, reasonably be expected to have a Material Adverse
Effect. No Transaction Party is party to any tax sharing agreement.

6.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Internal Revenue Code and other applicable Laws. Each
Pension Plan that is intended to be qualified under Section 401(a) of the
Internal Revenue Code (if any) has received a favorable and up-to-date
determination letter from the Internal Revenue Service, or is a pre-approved
plan that is permitted to rely on a favorable up-to-date opinion letter, to the
effect that the form of such Plan is qualified under Section 401(a) of the
Internal Revenue Code and the trust related thereto has been determined by the
Internal Revenue Service to be exempt from federal income tax under
Section 501(a) of the Internal Revenue Code or an application for such a letter
is pending with the Internal Revenue Service. To the knowledge of the
Transaction Parties, with respect to any Pension Plan that is qualified or
intended to be qualified under Section 401(a) of the Internal Revenue Code,
nothing has occurred that could reasonably be expected to prevent, or cause the
loss of, such tax-qualified status.

(b) There are no pending or, to the knowledge of the Transaction Parties,
threatened claims, actions or lawsuits, or action by any individual or
Governmental Authority with respect to any Plan, other than participant claims
for benefits in the ordinary course, that would reasonably be expected to have a
Material Adverse Effect. There has been no non-exempt prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan that
has resulted or would reasonably be expected to result in a Material Adverse
Effect.

(c) (i) To the extent ERISA is applicable to any Transaction Party or Plan,
(i) no ERISA Event has occurred and neither the Borrower nor any ERISA Affiliate
is aware of any fact, event or circumstance that would reasonably be expected to
constitute or result in an ERISA Event; (ii) the Borrower and each ERISA
Affiliate has met all applicable requirements under the Pension Funding Rules in
respect of each Pension Plan, and no waiver of the minimum funding standards
under the Pension Funding Rules has been applied for or obtained; (iii) as of
the most recent valuation date for any Pension Plan, the funding target
attainment percentage (as defined in Section 430(d)(2) of the Internal Revenue
Code) was eighty percent (80%) or higher, and neither the Borrower nor any other
Transaction Party has knowledge of any facts or circumstances that

 

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would reasonably be expected to cause the funding target attainment percentage
for any such plan to drop below eighty percent (80%) since the most recent
valuation date; (iv) neither the Borrower nor any ERISA Affiliate has incurred
any liability to the PBGC other than for the payment of premiums, and there are
no premium payments that have become due that are unpaid; (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or Section 4212(c) of ERISA; and (vi) no Pension Plan
has been terminated by the plan sponsor or administrator thereof nor by the
PBGC, and no event or circumstance has occurred or exists that would reasonably
be expected to cause the PBGC to institute proceedings under Title IV of ERISA
to terminate any Pension Plan.

6.13 Subsidiaries and Capitalization.

(a) Set forth on Schedule 6.13(a) is a complete and accurate list as of the
Closing Date of the Parent and each of its Subsidiaries (including the
Borrower), together with (i) jurisdiction of formation, (ii) number of shares of
each class of Equity Interests outstanding, (iii) number and percentage of
outstanding shares of each class owned (directly or indirectly) by any
Transaction Party and (iv) number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and all other similar rights
with respect thereto. The outstanding Equity Interests of each Transaction Party
are validly issued, fully paid and non-assessable.

(b) As of the Closing Date, except as described on Schedule 6.13(b)(i), there
are no outstanding commitments or other obligations of any Transaction Party to
issue, and no rights of any Person to acquire from a Transaction Party, any
shares of any Equity Interests of any Transaction Party. Except as set forth on
Schedule 6.13(b)(ii) and as contained in the Warrants, there are no statutory or
contractual preemptive rights, rights of first refusal, anti-dilution rights or
any similar rights held by equity holders or option holders of the Parent with
respect to the issuance of the Warrants and all such rights have been
effectively waived with regard to the issuance of the Warrants. There are no
agreements (voting or otherwise) among the Transaction Parties’ equity holders
and any Transaction Party with respect to any other aspect of the Transaction
Parties’ affairs, except as set forth on Schedule 6.13(b)(iii).

6.14 Margin Regulations; Investment Company Act; Federal Fair Labor Standards
Act

(a) The Borrower is not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock.

(b) None of any Transaction Party or any Person Controlling any Transaction
Party is or is required to be registered as an “investment company” under the
Investment Company Act of 1940.

(c) To the extent applicable to the Borrower, the Borrower has complied in all
material respects with the Federal Fair Labor Standards Act.

6.15 Disclosure.

No report, financial statement, certificate or other written information (other
than information of a general economic or industry specific nature) furnished by
or on behalf of any Transaction Party to the Administrative Agent or any Lender
in connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Investment Document (in
each

 

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case, as modified or supplemented by other information so furnished), when taken
as a whole, contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to financial projections, estimates, budgets or other forward-looking
information, the Transaction Parties represent only that such information was
prepared in good faith based upon assumptions believed by the Borrower to be
reasonable at the time such information was prepared (it being understood that
such information is as to future events and is not to be viewed as facts, is
subject to significant uncertainties and contingencies, many of which are beyond
the control of the Transaction Parties, that no assurance can be given that any
particular projection, estimate, budget, forecast or forward looking statement
will be realized and that actual results during the period or periods covered by
any such projections, estimate, budgets, forecasts or forward looking statements
may differ significantly from the projected results and such differences may be
material).

6.16 Compliance with Laws.

Each Transaction Party is in compliance with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith would not reasonably be expected to have a Material Adverse Effect.

6.17 Intellectual Property; Licenses, Etc.

(a) Set forth on Schedule 6.17(a) is a complete and accurate list of all
Material IP Rights in each the following categories, together with relevant
identifying information for each item (with respect to items under or to which
any Transaction Party is licensed, authorized or otherwise granted rights, to
the extent such information is in the possession of the Transaction Parties):
(i) Copyrights, (ii) Trademarks, (iii) Patents, (iv) Domain Names,
(v) Proprietary Software, (vi) Websites, and (vii) Copyright Licenses, Trademark
Licenses, Patent Licenses, Website Agreements and Other IP Agreements.

(b) All Material IP Rights which are owned by any Transaction Party and, to the
knowledge of the Transaction Parties, all Material IP Rights under or to which
any Transaction Party is licensed, authorized or otherwise granted rights are in
full force and effect, and have not expired, lapsed or been forfeited, cancelled
or abandoned. Each of the Transaction Parties has, since taking title to the
Material IP Rights which are owned by any Transaction Party, performed all acts
and have paid all required annuities, fees, costs, expenses and taxes to
maintain such Material IP Rights in full force and effect in applicable
countries throughout the world, or have caused others to do the same. All
documents filed or recorded with a patent office or other relevant intellectual
property registry for registration, recordation or issuance of Material IP
Rights which are owned by any Transaction Party and, to the knowledge of the
Transaction Parties, Material IP Rights under or to which any Transaction Party
is licensed, authorized or otherwise granted rights have been duly and properly
filed and recorded. No Transaction Party (and to the knowledge of the
Transaction Parties no other Person) has received any written notice, or, to the
knowledge of the Transaction Parties, any oral notice, that any of the Material
IP Rights which are owned by any Transaction Party or, to the knowledge of the
Transaction Parties, any of the Material IP Rights under or to which any
Transaction Party is licensed, authorized or otherwise granted rights have been
or are subject to any pending or outstanding injunction, directive, order,
judgment, or other disposition of dispute that adversely restricts, or when any
such pending dispute is concluded may adversely restrict, the use, transfer,
registration, licensing or other exploitation of any such Material IP Rights, or
otherwise adversely affects, or may adversely affect, the scope, validity, use,
right to use, registrability, or enforceability of such Material IP Rights. No
action or proceeding is pending that could result in any of the foregoing.

 

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(c) The Transaction Parties own all Material IP Rights which are owned by any
Transaction Party, free and clear of any and all Liens (except Permitted Liens),
and the Transaction Parties have a valid license to all Material IP Rights under
or to which any Transaction Party is licensed, authorized or otherwise granted
rights, free and clear of any and all Liens (except Permitted Liens). To the
extent any of the Material IP Rights owned by the Transaction Parties were
authored, developed, conceived or created, in whole or in part, for or on behalf
of a Transaction Party by any Person (other than a Transaction Party), then such
Transaction Party has entered into a written agreement with such Person in which
such Person has assigned all right, title and interest in and to such Material
IP Rights to such Transaction Party. Except as otherwise indicated on Schedule
6.17(c), each Transaction Party is the sole and exclusive owner of all right,
title and interest in and to all such Material IP Rights that are owned by it.

(d) No Transaction Party has made any assignment or agreement in conflict with
the security interest in the IP Rights of such Transaction Party hereunder and
no license agreement with respect to any of the Material IP Rights conflicts
with the security interest granted to the Administrative Agent, on behalf of the
Lenders, pursuant to the terms of the Collateral Documents. Except as described
on Schedule 6.17(d), and except for software that is commercially available to
the public, no Transaction Party is a party to, nor is bound by, any inbound
license or other similar agreement, the failure, breach or termination of which
would reasonably be expected to cause a Material Adverse Effect, or that
prohibits or otherwise restricts the Transaction Parties from granting a
security interest in the applicable Transaction Party’s interest in such license
or agreement or any other property.

(e) Except as set forth on Schedule 6.17(e), to the Borrower’s knowledge, no
Person is infringing, misappropriating, violating or diluting any Material IP
Rights, and the Borrower has not given notice to any third party alleging that
such third party is infringing, misappropriating, violating, or diluting any
Material IP Rights.

(f) With respect to each Copyright License, Trademark License, Patent License,
Website Agreement, and other IP Rights Agreement listed on Schedule 6.17(a),
such agreement (i) is in full force and effect and is binding upon and
enforceable against the Transaction Parties party thereto and all other parties
thereto in accordance with its terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors’ rights generally, (ii) has not
been amended or otherwise modified in any material respect (except as set forth
on Schedule 6.17(a)) and (iii) is not currently suffering any default or breach
thereunder by the Transaction Parties or, to the knowledge of the Transaction
Parties, any other party thereto.

(g) Except as set forth on Schedule 6.17(g), no written claim, and, to the
Borrower’s knowledge, no other claim, has been made that alleges that the
Material IP Rights which are owned by any Transaction Party or, to the knowledge
of the Transaction Parties, the Material IP Rights under or to which any
Transaction Party is licensed, authorized or otherwise granted rights, or the
conduct or operation of Transaction Parties’ business, including the
development, manufacture, use, sale or other commercialization of any Product,
materially infringes, misappropriates, violates, or dilutes any intellectual
property or proprietary or other rights of that third party.

 

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(h) The Transaction Parties have used commercially reasonable efforts and
precautions to protect their interests in, and the value and confidentiality of
their respective Confidential Information and Trade Secrets, including any
source code for Proprietary Software.

6.18 Regulatory Matters.

(a) To the Transaction Parties’ knowledge, all material Regulatory
Authorizations related to LifeScan’s OneTouch Verio System (including the test
strips manufactured by Borrower) have been lawfully obtained and maintained, are
validly registered and on file with the applicable Governmental Authority or
Notified Body, are in compliance with all filing and maintenance requirements
(including any fee requirements) thereof, and are in good standing, valid and
enforceable with the applicable Governmental Authority or Notified Body.

(b) Except as set forth on Schedule 6.18(b) and without limiting the generality
of any other representations and warranties made by the Transaction Parties,
(i) the Products of the Transaction Parties comply in all material respects with
(A) all applicable laws, rules, regulations, orders, injunctions and decrees of
the FDA and other applicable Governmental Authorities, including all applicable
requirements of state authorities and the FD&C Act and (B) all Product
Authorizations and other Regulatory Authorizations; (ii) the Transaction
Parties, and to the knowledge of the Transaction Parties, their respective
suppliers and purchasers of the Products, including LifeScan, have not received
any written notification from any Governmental Authority or Notified Body
asserting that any Product lacks a required Product Authorization; (iii) there
is no pending regulatory action, investigation or inquiry (other than
non-material routine or periodic inspections or reviews) against any Transaction
Party, or, to the knowledge of the Transaction Parties, their respective
suppliers or purchasers of the Products, including LifeScan, with respect to the
Products, and, to the knowledge of the Borrower, no events or circumstances have
occurred or exist which could reasonably be expected to result in any adverse
regulatory action against any Transaction Party or, to the knowledge of the
Borrower, their respective suppliers or purchasers of the Products, including
LifeScan, with respect to the Products; and (iv) without limiting the foregoing,
(A) within the three (3) years prior to the Closing Date, the Delayed Draw
Tranche A Closing Date or the Delayed Draw Tranche B Closing Date, as the case
may be, no product recalls, safety alerts, corrections, withdrawals, marketing
suspensions, removals or the like have been requested, demanded or ordered by
any Governmental Authority or Notified Body with respect to any Products, and
(B) within the three (3) years prior to the Closing Date, the Delayed Draw
Tranche A Closing Date or the Delayed Draw Tranche B Closing Date, as the case
may be, no criminal, injunctive, seizure, detention or civil penalty actions
have at any time been commenced or threatened in writing by any Governmental
Authority with respect to or in connection with any Products, there are no
consent decrees (including plea agreements) which relate to any Products, and,
to the knowledge of the Transaction Parties, no events or circumstances have
occurred or exist which could reasonably be expected to result in the
commencement of any criminal injunctive, seizure, detention or civil penalty
actions by any Governmental Authority relating to the Products or for the
issuance of any consent decrees. None of the Transaction Parties or, to the
Borrower’s knowledge, any of their respective suppliers or purchasers of the
Products, including LifeScan, is employing or utilizing the services of any
individual who has been debarred or temporarily suspended under any applicable
law, rule or regulation that would reasonably be expected to have a Material
Adverse Effect.

(c) Except as set forth in Schedule 6.18(c), in all material respects with
respect to Products, (i) all design, manufacturing, storage, distribution,
packaging, labeling, recordkeeping and other supply activities by the
Transaction Parties and, to the Borrower’s knowledge, their respective suppliers
relating to such Products have been conducted, and are currently being

 

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conducted, in material compliance with the applicable requirements of the FD&C
Act and other requirements of the FDA and all other Governmental Authorities,
including the applicable requirements of the Quality System Regulations of 21
C.F.R. Part 820 and any comparable requirements of other Governmental
Authorities, (ii) none of the Transaction Parties, or, to the knowledge of the
Borrower, any of their respective suppliers or purchasers of the Products,
including LifeScan, has received written notice or threat of commencement of
action by any Governmental Authority or Notified Body to withdraw its approval
of or to enjoin production of the Products at any facility, and (iii) all
applicable material post-approval and post-clearance procedures and activities
applicable to the Transaction Parties have been carried out in accordance with
the requirements of the Regulatory Authorizations and all applicable laws, rules
and regulations. No Product sold by or in the inventory of any Transaction Party
is adulterated or misbranded, all labeling, packaging (including inserts),
product information, advertising and promotional materials and activities are in
compliance in all material respects with applicable FDA and other Governmental
Authority requirements (provided that, to the extent that any such inventory is
currently subject to being re-labeled in the Borrower’s ordinary course of
business, such re-labeling will not materially adversely affect any Transaction
Party), and the Products are in material compliance with all classification,
registration, listing, marking, tracking and audit requirements of the FDA and
any other Governmental Authority.

(d) All studies, tests and preclinical and clinical trials conducted relating to
the Products, in all material respects, by or on behalf of the Transaction
Parties and, to the knowledge of the Borrower, their respective licensees,
licensors and third party services providers and consultants, have been
conducted, and are currently being conducted, in accordance with, where
applicable, current Good Clinical Practices and current Good Laboratory
Practices and other applicable laws, rules and regulations. None of the
Transaction Parties, or, to the knowledge of the Borrower, any of their
respective licensees, licensors or third party services providers or
consultants, has received from the FDA or other applicable Governmental
Authority any written notices or correspondence requiring the termination,
suspension, material modification or clinical hold of any studies, tests or
clinical trials in any material respect with respect to or in connection with
the Products.

6.19 Solvency.

The Transaction Parties are Solvent individually and on a consolidated basis.

6.20 Perfection of Security Interests in the Collateral.

The Collateral Documents create valid security interests in, and Liens on, the
Collateral purported to be covered thereby, which security interests and Liens
will be, upon the timely and proper filings, deliveries, notations and other
actions contemplated in the Collateral Documents, perfected security interests
and Liens, prior to all other Liens other than Permitted Liens.

6.21 Key Contracts.

Full, complete and correct copies of the Key Contracts (including all exhibits
and schedules thereto) have been provided to the Administrative Agent. The Key
Contracts are legal, valid and binding obligations of the parties thereto,
enforceable against such parties in accordance with their terms, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally. No Transaction Party or, to the knowledge of the Transaction
Parties, any other party to the Key Contracts is in breach thereof or in default
thereunder.

 

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6.22 Business Locations.

Set forth on Schedule 6.22(a) is a list of all real property that is owned or
leased by the Transaction Parties as of the Closing Date. Set forth on Schedule
6.22(b) is the tax payer identification number, if any, and organizational
identification number, if any, of each Transaction Party as of the Closing Date.
The exact legal name and state of organization of each Transaction Party is as
set forth on the signature pages hereto. No Transaction Party has during the
five years preceding the Closing Date (i) changed its legal name, (ii) changed
its state of formation, or (iii) been party to a merger, consolidation or other
change in structure.

6.23 OFAC.

No Transaction Party, nor any Related Party, (i) is currently the subject of any
Sanctions, (ii) is located, organized or residing in any Designated
Jurisdiction, or (iii) is or has been (within the previous five (5) years)
engaged in any transaction with any Person who is now or was then the subject of
Sanctions or who is located, organized or residing in any Designated
Jurisdiction. No Loan, nor the proceeds from any Loan, has been used to lend,
contribute, provide or has been otherwise made available to fund any activity or
business in any Designated Jurisdiction or to fund any activity or business of
any Person located, organized or residing in any Designated Jurisdiction or who
is the subject of any Sanctions, or in any other manner that will result in any
violation by any Person (including any Lender, Athyrium or the Administrative
Agent) of Sanctions.

6.24 Registration Rights; Issuance Taxes.

(a) The Borrower is under no requirement to register under the Securities Act,
or the Trust Indenture Act of 1939, as amended, any of its presently outstanding
securities or any of its securities that may subsequently be issued.

(b) All taxes imposed on the Borrower in connection with the issuance, sale and
delivery of the Loans and the Warrants have been or will be fully paid, and all
laws imposing such taxes have been or will be fully satisfied by the Borrower.

6.25 Holding Company.

Except as set forth on Schedule 6.25, the Parent is a passive holding company
with no operations, no assets (other than ownership of Equity Interests of the
Borrower or other Subsidiaries and such immaterial assets as are incidental to
its status as a holding company) and no liabilities (other than the Obligations
under the Loan Documents and such immaterial liabilities as are incidental to
its status as a holding company).

 

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ARTICLE VII.

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied (other than contingent
indemnification obligations for which no claim has been asserted), the
Transaction Parties shall:

7.01 Financial Statements.

Deliver to the Administrative Agent and each Lender, in form and detail
reasonably satisfactory to the Administrative Agent and the Required Lenders:

(a) as soon as available, and in any event within one hundred and twenty
(120) days after the end of each fiscal year of the Borrower, audited
consolidated balance sheets of the Parent and the Transaction Parties for the
fiscal year ended, and the related consolidated statements of comprehensive
income, consolidated statements of changes in stockholders’ equity and
comprehensive income, and consolidated statements of cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, audited and accompanied by a report and opinion of PricewaterhouseCoopers
or any of the other so-called “Big 4” public accounting firms, or another
independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and shall not
be subject to any “going concern”, “qualified opinion report” or “adverse
opinion report”; and

(b) as soon as available, and in any event within sixty (60) days after the end
of each of the first three fiscal quarters of each fiscal year of the Borrower,
including consolidated condensed balance sheets of the Parent and the other
Transaction Parties as at the end of such fiscal quarter and the related
consolidated condensed statements of comprehensive income, consolidated
condensed statements of changes in stockholders’ equity and comprehensive
income, and consolidated condensed statements of cash flows for such fiscal
quarter and for the portion of the fiscal year then ended, setting forth in each
case in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year
(as appropriate), all in reasonable detail and certified by a Responsible
Officer of the Borrower as fairly presenting the financial condition, results of
operations, shareholders’ equity and cash flows of the Transaction Parties in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.

7.02 Certificates; Other Information.

Deliver to the Administrative Agent and each Lender, in form and detail
reasonably satisfactory to the Administrative Agent and the Required Lenders:

(a) concurrently with the delivery of the financial statements referred to in
Sections 7.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower;

(b) as soon as available, and in any event within seventy-five (75) days after
the end of each fiscal year of the Borrower, an annual business plan and budget
of the Transaction Parties containing, among other things, projections for each
quarter of such fiscal year during which such business plan and budget is
delivered, with evidence of approval thereof by Borrower’s board of directors;

(c) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the equity
holders of any Transaction Party, debenture holders, any market licensee
operating a financial market (as defined in Chapter 7 of the Corporations Act)
or any overseas stock exchange or its creditors generally and copies of all
annual, regular, periodic and special reports and registration statements which
a Transaction Party files with the SEC under Section 13 or 15(d) of the Exchange
Act, and not otherwise required to be delivered to the Administrative Agent
pursuant hereto;

 

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(d) concurrently with the delivery of the financial statements referred to in
Sections 7.01(a) and (b), a certificate of a Responsible Officer of the Borrower
containing information regarding the amount of all Dispositions, Involuntary
Dispositions, Extraordinary Receipts and Acquisitions that occurred during the
period covered by such financial statements;

(e) promptly after any request by the Administrative Agent or any Lender, copies
of any detailed audit reports, management letter or recommendations submitted to
the board of directors (or the audit committee of the board of directors) of the
Borrower by independent accountants in connection with the accounts or books of
any Transaction Party, or any audit of any of them;

(f) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of, or lender to, any Transaction
Party pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
Section 7.01 or any other clause of this Section 7.02;

(g) promptly, and in any event within five (5) Business Days after receipt
thereof by any Transaction Party, (x) copies of each written notice or other
written correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Transaction Party and (y) copies of any material
written correspondence or any other material written communication from any
Regulatory Agency or other Governmental Authority addressed to a Transaction
Party;

(h) promptly, such additional information regarding the business, financial or
corporate affairs of any Transaction Party, or compliance with the terms of the
Investment Documents, as the Administrative Agent or the Required Lenders may
from time to time reasonably request; and

(i) promptly (and in any event, within ten (10) Business Days) after the
delivery of the financial statements referred to in Sections 7.01(a) and (b), a
certificate of a Responsible Officer of the Borrower (i) listing (A) all
applications by any Transaction Party, if any, for Copyrights, Patents or
Trademarks made since the date of the prior certificate (or, in the case of the
first such certificate, the Closing Date), (B) all issuances of registrations or
letters on existing applications by any Transaction Party for Copyrights,
Patents and Trademarks received since the date of the prior certificate (or, in
the case of the first such certificate, the Closing Date), and (C) all Trademark
Licenses, Copyright Licenses and Patent Licenses entered into by any Transaction
Party since the date of the prior certificate (or, in the case of the first such
certificate, the Closing Date), and (ii) attaching the insurance binder or other
evidence of insurance for any insurance coverage of any Transaction Party that
was renewed, replaced or modified during the period covered by such financial
statements.

Documents required to be delivered pursuant to Section 7.01(a) or (b) or
Section 7.02 may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto on the Borrower’s website on the Internet
at the website address listed on Schedule 12.02; or (ii) on which such documents
are posted on the Borrower’s behalf on an Internet or intranet website, if any,
to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (i) the Borrower shall deliver paper copies of such
documents to the Administrative Agent or any Lender upon its request to the
Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such

 

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Lender and (ii) the Borrower shall notify the Administrative Agent and each
Lender (by facsimile or electronic mail) of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. The Administrative Agent shall have no
obligation to request the delivery of or to maintain paper copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery by a
Lender, and each Lender shall be solely responsible for requesting delivery to
it or maintaining its copies of such documents.

7.03 Notices.

(a) Promptly (and in any event, within five (5) Business Days) notify the
Administrative Agent and each Lender of the occurrence of any Default.

(b) Promptly (and in any event, within five (5) Business Days) notify the
Administrative Agent and each Lender of any matter that has resulted or would
reasonably be expected to result in a Material Adverse Effect.

(c) Promptly (and in any event, within ten (10) Business Days) notify the
Administrative Agent and each Lender of the occurrence of any ERISA Event.

(d) Promptly (and in any event, within fifteen (15) Business Days) notify the
Administrative Agent and each Lender of any material change in accounting
policies or financial reporting practices by any Transaction Party.

(e) Promptly (and in any event, within ten (10) Business Days) notify the
Administrative Agent and each Lender of: (i) any action, suit, proceeding, claim
or dispute pending, threatened in writing or, to the knowledge of the
Transaction Parties, contemplated, at law, in equity, in arbitration or before
any Governmental Authority, by or against any Transaction Party or against any
of their properties or revenues that (a) purports to affect or pertain to this
Agreement or any other Investment Document, or any of the transactions
contemplated hereby or (b) if determined adversely would reasonably be expected
to have a Material Adverse Effect; (ii) any proposal by any Governmental
Authority to compulsorily acquire or assume all or any portion of any
Transaction Party’s assets or any Collateral; (iii) any native title claim being
proposed or made in respect of any Transaction Party’s real property; or
(iv) the acquisition by any Transaction Party of any interest in real property
(other than a lease for a term (including options) of less than three years).

(f) Upon the reasonable written request of the Administrative Agent following
the occurrence of any event or the discovery of any condition which the
Administrative Agent or the Required Lenders reasonably believe has caused (or
could be reasonably expected to cause) the representations and warranties set
forth in Section 6.09 to be untrue in any material respect, furnish or cause to
be furnished to the Administrative Agent, at the Transaction Parties’ expense, a
report of an environmental assessment of reasonable scope, form and depth,
(including, where appropriate, invasive soil or groundwater sampling) by a
consultant reasonably acceptable to the Administrative Agent as to the nature
and extent of the presence of any Hazardous Materials on any real properties and
as to the compliance by any Transaction Party with Environmental Laws at such
real properties. If the Transaction Parties fail to deliver such an
environmental report within seventy-five (75) days after receipt of such written
request then the Administrative Agent may arrange for the same, and the
Transaction Parties hereby grant to the Administrative Agent and its
representatives access to the real properties to undertake such an assessment
(including, where appropriate, invasive soil or groundwater sampling). The
reasonable cost of any

 

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assessment arranged for by the Administrative Agent pursuant to this provision
will be payable by the Transaction Parties on demand and added to the
obligations secured by the Collateral Documents.

(g) No more than ten Business Days prior, and no less than five Business Days
prior, to a Change of Control, notify the Administrative Agent and each Lender
of any pending Change of Control.

(h) Promptly (and in any event, within ten (10) Business Days following the
receipt by, or delivery by, a Transaction Party, as the case may be), (a) a
summary of the aggregate number of blood glucose strips sold and the Verio
Quarterly Service Fees earned by the Borrower included in any Service Fee
Reports and (b) copies of any material written notice or material written
correspondence relating to, or involving, the Key Contracts, including any
notice alleging any breach of any Key Contract by any party thereto.

In connection with each notice pursuant to this Section 7.03(a) through (h),
upon the request of the Administrative Agent and upon reasonable advance notice,
the Borrower shall make available a Responsible Officer of the Borrower to
discuss details of the occurrence referred to therein and what action the
applicable Transaction Party has taken and proposes to take with respect
thereto.

7.04 Payment of Obligations.

Pay and discharge, as the same shall become due and payable, all its obligations
and liabilities, including (a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets; (b) all lawful claims
which, if unpaid, would by law become a Lien (other than Permitted Liens) upon
its property; and (c) all Indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness, unless (in the case of clauses (a), (b) and (c))
the same are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are being maintained by
such Transaction Party.

7.05 Preservation of Existence, Etc.

(a) Preserve, renew and maintain in full force and effect its legal existence
under the Laws of the jurisdiction of its organization or registration except in
a transaction permitted by Section 8.04 or 8.05.

(b) Preserve, renew and maintain in full force and effect its good standing
under the Laws of the jurisdiction of its organization (to the extent that the
concept of good standing is applicable in such jurisdiction), except to the
extent the failure to do so would not reasonably be expected to have a Material
Adverse Effect.

(c) Take commercially reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of
its business, except to the extent that the failure to do so would not
reasonably be expected to have a Material Adverse Effect.

(d) Preserve or renew all of its registered IP Rights, which are owned by any
Transaction Party, or IP Rights, which are owned by any Transaction Party, in
respect of which an application for registration has been filed or recorded with
the United States Copyright Office or the United States Patent and Trademark
Office, the non-preservation or non-recourse of which would reasonably be
expected to have a Material Adverse Effect.

 

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7.06 Maintenance of Properties.

(a) Except to the extent that the failure to do so would not reasonably be
expected to have a Material Adverse Effect, maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted.

(b) Make all necessary repairs thereto and renewals and replacements thereof,
except where the failure to do so would not reasonably be expected to have a
Material Adverse Effect.

(c) Use the standard of care typical in the industry in the operation and
maintenance of its facilities.

7.07 Maintenance of Insurance.

Maintain in full force and effect insurance (including worker’s compensation
insurance, liability insurance, casualty insurance and business interruption
insurance) with financially sound and reputable insurance companies not
Affiliates of any Transaction Party, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the applicable
Transaction Party operates. The Administrative Agent shall be named as a named
insured or loss payee, as its interests may appear, with respect to any casualty
and property insurance, and additional insured, with respect to any liability
insurance, and the Borrower shall use commercially reasonable efforts to cause
the broker of any such insurance to use commercially reasonable efforts to give
the Administrative Agent thirty (30) days’ prior written notice (or prompt
written notice if the insurer provides less than thirty (30) days’ notice of the
event to the broker) before any such policy or policies shall be adversely
altered or canceled.

7.08 Compliance with Laws.

Comply with the requirements of all Laws and all orders, writs, injunctions and
decrees applicable to it or to its business or property, except in such
instances in which (a) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted; or (b) the failure to comply therewith would not reasonably be
expected to have a Material Adverse Effect.

7.09 Books and Records.

(a) Maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
requisite financial transactions and matters involving the assets and business
of such Transaction Party, as the case may be.

(b) Maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over such Transaction Party.

 

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7.10 Inspection Rights.

Permit representatives and independent contractors of the Administrative Agent
and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at the expense of the Borrower
and at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, excluding any such visits and inspections during the continuation of an
Event of Default, (a) only the Administrative Agent on behalf of the Lenders may
exercise rights under this Section 7.10, (b) the Administrative Agent shall not
exercise such rights to discuss any matters with the Borrower’s independent
public accountants more often than one time during any calendar year absent the
existence of an Event of Default, and (c) the Borrower shall reimburse the
Administrative Agent only for reasonable travel and travel-related expenses of
up to two individuals related to one visit or inspection during any calendar
year absent the existence of an Event of Default; provided, further, that when
an Event of Default exists the Administrative Agent or any Lender (or any of
their respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.

7.11 Use of Proceeds.

Use the proceeds of the Loans (a) to finance working capital and capital
expenditures, (b) to refinance existing Indebtedness of the Borrower, (c) to pay
fees and expenses incurred in connection with the Loans and the Investment
Documents and (d) for other general corporate purposes, provided that in no
event shall the proceeds of the Loans be used in contravention of any Law or of
any Investment Document.

7.12 Additional Subsidiaries.

Within thirty (30) days after the acquisition or formation of any Subsidiary:

(a) notify the Administrative Agent thereof in writing, together with the
(i) jurisdiction of formation, (ii) number of shares of each class of Equity
Interests outstanding, (iii) number and percentage of outstanding shares of each
class owned (directly or indirectly) by any Transaction Party and (iv) number
and effect, if exercised, of all outstanding options, warrants, rights of
conversion or purchase and all other similar rights with respect thereto; and

(b) cause such Subsidiary to (i) become a Guarantor by executing and delivering
to the Administrative Agent a Joinder Agreement or such other customary
documents as the Administrative Agent shall reasonably request for such purpose,
and (ii) deliver to the Administrative Agent documents of the types referred to
in Sections 5.01(f) and (g) and favorable opinions of counsel to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to in clause (i)), all in form,
content and scope reasonably satisfactory to the Administrative Agent.

7.13 ERISA Compliance.

Do, and cause each of its ERISA Affiliates to do, each of the following:
(a) maintain each Plan in compliance in all material respects with the
applicable provisions, if any, of ERISA, the Internal Revenue Code, if any, and
other applicable Law; (b) cause each Plan that is qualified under Section 401(a)
of the Internal Revenue Code, if any, to maintain such qualification; and
(c) make all required contributions to any Plan subject to Section 412,
Section 430 or Section 431 of the Internal Revenue Code, if any.

 

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7.14 Pledged Assets.

(a) Equity Interests. Cause 100% of the issued and outstanding Equity Interests
of each Subsidiary to be subject at all times to a first priority, perfected
Lien in favor of the Administrative Agent, for the benefit of the holders of the
Obligations, pursuant to the terms and conditions of the Collateral Documents,
together with opinions of counsel and any filings and deliveries necessary in
connection therewith to perfect the security interests therein, all in form and
substance reasonably satisfactory to the Administrative Agent.

(b) Other Property. (i) Cause all of its owned and leased real and personal
property (having its ordinary meaning), other than Excluded Property, to be
subject at all times to a perfected, first priority and, in the case of real
property located in the United States, title insured Liens (it being understood
and agreed that the Transaction Parties shall only be required to provide title
insured Liens for leased real property upon the reasonable request of the
Administrative Agent) in favor of the Administrative Agent, for the benefit of
the holders of the Obligations, to secure the Obligations pursuant to the terms
and conditions of the Collateral Documents or, with respect to any such property
acquired subsequent to the Closing Date, such other additional security
documents as the Administrative Agent shall reasonably request, subject in any
case to Permitted Liens, and (ii) deliver such other documentation as the
Administrative Agent may reasonably request in connection with the foregoing,
including, without limitation, appropriate UCC-1 and Personal Property
Securities Register financing statements, Title Documents (solely with respect
to property acquired after the date hereof and, with respect to property located
in Australia, to the extent required under Section 8.2(g) or (h) of the General
Security Deed or Section 7.3(c) or (d) of the Specific Security Deed), real
estate title insurance policies with respect to real property located in the
United States, certificates of title, lease agreements, consents to lease
agreements, surveys, environmental reports, landlord’s access agreements and
waivers, certified resolutions and other organizational and authorizing
documents of such Person, customary opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above and the perfection of the
Administrative Agent’s Liens thereunder) and other items of the types required
to be delivered pursuant to Section 5.01(g), all in form, content and scope
reasonably satisfactory to the Administrative Agent.

7.15 Key Contracts and Material Contracts.

Comply in all material respects with each material Contractual Obligation of
such Person (including, without limitation, each Contractual Obligation with
respect to the Material IP Rights), except, with respect to material Contractual
Obligations other than Key Contracts, in such instances in which the failure to
comply therewith would not reasonably be expected to have a Material Adverse
Effect.

7.16 Accounts.

Cause all lock-box accounts, deposit accounts, securities accounts and
commodities accounts of each Transaction Party to be subject to an Account
Control Deed or a Deposit Account Control Agreement in favor of the
Administrative Agent for the benefit of the Lenders.

7.17 Post-Closing Deliverables.

(a) The Transaction Parties shall use commercially reasonable efforts to deliver
a fully executed Landlord Consent in favor of the Administrative Agent for the
benefit of the Lenders as soon as reasonably practicable after the Closing Date
(which the parties expect will be within sixty (60) days after the Closing
Date).

 

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(b) The Parent shall close all of its existing bank accounts as soon as
reasonably practicable after the Closing Date (which the parties expect will be
within thirty (30) days after the Closing Date).

(c) Within sixty (60) days after the Closing Date the Transaction Parties shall
provide the Administrative Agent with:

(i) confirmation of the Transaction Parties’ membership of a GST Group and a Tax
Consolidated Group and the identity of the Head Company of the Tax Consolidated
Group and the Representative Member of the GST Group; and

(ii) external advice from an advisor that is reasonably acceptable to the
Administrative Agent in relation to:

1. the eligibility of the Transaction Parties to be a member of a GST Group and
a Tax Consolidated Group;

2. the eligibility of the Head Company of the Tax Consolidated Group to be the
Head Company of the Tax Consolidated Group; and

3. the eligibility of the Representative Member of the GST Group to be the
Representative Member of the GST Group.

If following receipt of the advice referred to in Section 7.17(c)(ii), the
Administrative Agent reasonably determines that the Transaction Parties require
any of an ITSA, a TSA or a TFA, then within seven (7) days of receipt of written
notice of such determination from the Administrative Agent, the Transaction
Parties will provide to the Administrative Agent with a draft of such agreement
or agreements for approval by the Administrative Agent, acting reasonably.
Promptly following approval of the form of the draft agreement or agreements by
the Administrative Agent, the Borrower will provide a certified copy of the ITSA
for each GST Group of which a Transaction Party is a member and a certified copy
of each of the TSA and TFA for each Tax Consolidated Group of which a
Transaction Party is a member, as applicable.

7.18 Further Assurances.

At the Transaction Parties’ expense and upon the reasonable request of the
Administrative Agent, duly execute and deliver, or cause to be duly executed and
delivered, to the Administrative Agent any further instruments or documents and
do and cause to be done any further acts that may be necessary or proper to
carry out more effectively the provisions and purposes of this Agreement and
each other Investment Document and to better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Lenders the rights granted now or
hereafter intended to be granted to the Lenders under any Investment Document.

7.19 Tax Matters.

(a) ITSA.

If and to the extent that the Transaction Parties or the Administrative Agent
determines pursuant to Section 7.17(c) that an ITSA is required, then once such
an agreement has been executed the Transaction Parties shall:

(i) Ensure that all members of the GST Group are parties to a valid ITSA;

 

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(ii) Ensure that all members of the GST Group comply with the terms of the ITSA
of which it is a party.

(iii) Ensure that the ITSA is validly executed and is maintained in full force
and effect while the GST Group is in existence.

(iv) Not amend or vary the ITSA without the Administrative Agent’s consent (such
consent not to be unreasonably withheld where the amendment or variation would
not materially adversely affect a Transaction Party’s cash flows or financial
condition or materially increase its present or prospective indirect tax
liabilities or liabilities under the ITSA).

(v) Provide a copy of the executed ITSA to the Administrative Agent within five
(5) Business Days of the Administrative Agent’s request therefor.

(vi) Not cease to be a party to, or replace or terminate the ITSA, without the
Administrative Agent’s consent.

(vii) Ensure that the ITSA is in the approved form as determined by the
Commissioner of Taxation from time to time.

(viii) Ensure that Contribution Amounts are determined on a reasonable basis.

(ix) Ensure that the Representative Member provides a copy of the ITSA to the
Commissioner of Taxation in the approved form required under section 388-50 in
Schedule 1 of the Taxation Administration Act 1953 (Cth) within fourteen
(14) days of request or within such other time required by the Commissioner of
Taxation.

(b) TSA and TFA.

If and to the extent that the Transaction Parties or the Administrative Agent
determines pursuant to Section 7.17(c) that any of a TSA and TFA is required
then once such an agreement has been executed the Transaction Parties shall:

(i) Ensure that all members of the Tax Consolidated Group are parties to a valid
TSA and TFA;

(ii) Not amend the TSA where such variation or amendment may result in it not
being a TSA for the purposes of the Tax Act.

(iii) Not amend or vary the TSA or the TFA without the Administrative Agent’s
consent (such consent not to be unreasonably withheld where the amendment or
variation would not materially adversely affect a Transaction Party’s cash flows
or financial condition or materially increase its present or prospective tax
liabilities or liabilities under the TSA or TFA).

(iv) Not cease to be a party to, or replace or terminate, the TSA or TFA,
without the Administrative Agent’s consent.

 

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(v) Ensure that the Head Company provides a copy of the TSA to the Commissioner
of Taxation in the approved form required under section 388-50 in Schedule 1 of
the Taxation Administration Act 1953 (Cth) within 14 days of request or within
such other time required by the Commissioner of Taxation.

ARTICLE VIII.

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied (other than contingent
indemnification obligations for which no claim has been asserted), no
Transaction Party shall, directly or indirectly:

8.01 Liens.

Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than the
following:

(a) Liens pursuant to any Loan Document;

(b) Liens existing on the date hereof and listed on Schedule 8.01 (including any
extensions or renewals thereof, provided there is no increase in the amount
thereof or other significant change in the terms thereof unless otherwise
specified in Schedule 8.01);

(c) Liens (other than Liens imposed under ERISA) for taxes, assessments or
governmental charges or levies not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

(d) statutory or common law Liens of landlords; provided that such landlords
shall have waived their respective rights with respect to such liens pursuant to
a landlord waiver agreement between such landlord and the Administrative Agent
reasonably satisfactory to the Administrative Agent;

(e) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance, old-age pensions, social security
and other like obligations, other than any Lien imposed by ERISA;

(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
indemnity and performance bonds and other obligations of a like nature incurred
in the ordinary course of business;

(g) Liens in favor of customs and revenue authorities arising as a matter of
law, in the ordinary course of business, to secure payment of customs duties in
connection with the importation of goods;

(h) Liens securing judgments for the payment of money (or appeal or other surety
bonds relating to such judgments) not constituting an Event of Default under
Section 9.01(i);

(i) Liens securing Purchase Money Debt (“Purchase Money Liens”); provided that
(i) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness (or any replacement or proceeds of such property)
and (ii) such Liens attach to such property concurrently with or within ninety
days after the acquisition thereof;

 

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(j) leases or subleases of property granted in the ordinary course of business
which do not secure payment or performance of an obligation;

(k) Liens of carriers, warehousemen, mechanics, materialmen, vendors, artisans
and suppliers and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary course of business,
provided that such Liens secure only amounts not yet past due more than thirty
(30) days or, if past due more than thirty (30) days, are unfiled and no other
action has been taken to enforce the same or are being contested in good faith
by appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established;

(l) Liens consisting of zoning restrictions, easements or other restrictions on
the use of real property, none of which materially impairs the use of such
property or the value thereof, and none of which is violated in any material
respect by existing or proposed structures or land use;

(m) Liens representing the interest of any Person (other than any Transaction
Party) in any property leased by such Person to a Transaction Party; and

(n) normal and customary rights of setoff upon deposits of cash in favor of
banks or other depository institutions.

8.02 Investments.

Make any Investments, except:

(a) Investments held by a Transaction Party in the form of cash or Cash
Equivalents;

(b) Investments existing as of the Closing Date and set forth in Schedule 8.02;

(c) Investments (other than cash Investments) by any Transaction Party in any
other Person that is a Transaction Party prior to giving effect to such
Investment;

(d) Cash Investments by a Transaction Party in another Transaction Party;

(e) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

(f) Guarantees permitted by Section 8.03 (which guarantees, if applicable, shall
be subordinated in a manner similar to the underlying Indebtedness);

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

 

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(h) Investments not to exceed $500,000 in the aggregate in any fiscal year of
the Borrower consisting of (i) travel advances and employee relocation loans and
other employee loans and advances in the ordinary course of business and
(ii) loans to employees, officers or directors relating to the purchase of
Equity Interests of a Transaction Party pursuant to employee stock purchase plan
agreements approved by such Transaction Party’s board of directors;

(i) Investments consisting of any issuance by the Borrower to the Parent of any
Borrower Equity Interest in connection with any payment made to the Borrower by
or on behalf of any employee or director of any Transaction Party with respect
to the issuance of any Parent Equity Interest to such employee or director; and

(j) Permitted Acquisitions and other Investments (including the aggregate
consideration paid by the Transaction Parties for any Permitted Acquisitions,
which aggregate consideration shall include, without limitation, all Earn-Out
Obligations in respect of such Permitted Acquisitions) not exceeding $2,000,000
in any fiscal year of the Borrower, or $8,000,000 during the term of this
Agreement.

8.03 Indebtedness.

Create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness of the Transaction Parties described on Schedule 8.03 and any
extensions, renewals or replacements of such Indebtedness to the extent the
principal amount of such Indebtedness is not increased (except by an amount
equal to fees and expenses reasonably incurred and provided that this
prohibition against increases to the principal amount of Indebtedness shall not
apply to Indebtedness solely to finance premium payments for insurance with
respect to the Transaction Parties), neither the final maturity nor the weighted
average life to maturity of such Indebtedness is decreased, such Indebtedness,
if subordinated to the Obligations, remains so subordinated to the Obligations
on terms no less favorable to the Lenders and the original obligors in respect
of such Indebtedness remain the only obligors thereon;

(c) Indebtedness owing by any Transaction Party to any other Transaction Party,
as a result of any Investment permitted under Section 8.02;

(d) obligations (contingent or otherwise) of any Transaction Party existing or
arising under any Swap Contract, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a “market view;” and (ii) such Swap Contract
does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;

(e) purchase money Indebtedness (including obligations in respect of Capital
Leases or Synthetic Leases) hereafter incurred by the Transaction Parties to
finance the purchase of machinery and equipment, and renewals, refinancings and
extensions thereof, provided that (i) the total of all such Indebtedness for all
such Persons taken together shall not exceed an aggregate principal amount of
$500,000 at any one time outstanding; (ii) such Indebtedness when incurred shall
not exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall

 

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be refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing, plus an amount equal to a
reasonable prepayment premium or other similar reasonable amount paid, plus fees
and expenses reasonably incurred (collectively, “Purchase Money Debt”);

(f) Indebtedness in respect of (i) surety and appeal bonds, performance bonds,
bid bonds, appeal bonds, completion guarantees and similar obligations, and
(ii) customary indemnification obligations to purchasers in connection with
Dispositions permitted by Section 8.05;

(g) Guarantees with respect to Indebtedness of the Transaction Parties permitted
hereunder; provided that if the Indebtedness being Guaranteed is subordinated to
the Obligations, such Guarantee shall be subordinated to the Guarantee of the
Obligations on terms at least as favorable to the Lenders as those contained in
the subordination of such Indebtedness;

(h) other unsecured Indebtedness not permitted by any other clause of this
Section 8.03 in an aggregate principal amount not to exceed $1,000,000 at any
one time outstanding; provided that such amount shall be increased to $3,000,000
at any one time outstanding if, and for so long as the sum of the Verio
Quarterly Service Fees and Coagulation Manufacturing Revenues for the
immediately preceding fiscal quarter of the Borrower exceeds $5,000,000 in the
aggregate; and

(i) (i) a liability on the balance sheet of the Parent and the other Transaction
Parties from time to time which represents potential “make good” under the
Borrower’s existing lease for real property in Australia and (ii) accruals on
the balance sheet of the Parent and the other Transaction Parties from time to
time for employee entitlements (including, without limitation, so called “long
serve leave” and annual leave).

8.04 Fundamental Changes.

Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person; provided that, notwithstanding the foregoing provisions
of this Section 8.04 but subject to the terms of Sections 7.12 and 7.14, any
Transaction Party may merge or consolidate with any other Transaction Party that
is organized in the same jurisdiction.

8.05 Dispositions.

Make any Disposition (other than a Disposition of any of the assets listed on
Schedule 8.05) unless (a) the Disposition is not of the Key Contracts, any
rights thereunder, or any assets of the Borrower (including IP Rights) used or
necessary thereunder, (b) the consideration paid in connection therewith shall
be cash or Cash Equivalents paid contemporaneous with consummation of the
transaction and shall be in an amount not less than the fair market value of the
property disposed of, (c) no Default or Event of Default has occurred and is
continuing both immediately prior to and after giving effect to such Disposition
and (d) the fair market value of all of the assets sold or otherwise disposed of
by the Transaction Parties in all such transactions occurring during the term of
this Agreement shall not exceed $250,000 during any fiscal year of the Borrower.

 

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8.06 Restricted Payments.

Declare or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except that:

(a) each Transaction Party may make Restricted Payments to any other Transaction
Party;

(b) each Transaction Party other than the Parent may declare and make dividend
payments or other distributions payable solely in the Equity Interests of such
Person;

(c) each Transaction Party and each Subsidiary may make payments in respect of
permitted Earn Out Obligations incurred in connection with any Permitted
Acquisition permitted under Section 8.03;

(d) each Transaction Party may convert Equity Interests thereof (including
warrants) into other Equity Interests thereof (other than Disqualified Stock)
pursuant to the terms of such convertible Equity Interests (including pursuant
to cashless exercise provisions); and

(e) a Transaction Party may repurchase stock from former employees or directors
(or Persons who become former employees or directors) of such Transaction Party
at or below market price at the time of repurchase pursuant to the terms of the
applicable repurchase agreements (i) for cash in an aggregate amount not to
exceed $250,000 in any fiscal year; provided that, in each case, no Event of
Default has occurred or would exist after giving effect to any such repurchase,
and (ii) as a cancellation of Indebtedness owed by such Persons to such
Transaction Party, in an aggregate amount not to exceed the amount loaned by
such Transaction Party to such Persons pursuant to Section 8.02(h)(ii),
regardless of whether an Event of Default then exists.

8.07 Change in Nature of Business.

Engage in any material line of business substantially different from those lines
of business conducted by the Transaction Parties on the Closing Date or any
business substantially related or incidental thereto.

8.08 Transactions with Affiliates and Insiders.

Enter into or permit to exist any transaction or series of transactions with any
officer, director or Affiliate of such Person other than (a) transactions
between and among the Transaction Parties that are otherwise permitted
hereunder, (b) normal and reasonable compensation and reimbursement of expenses
of officers and directors in the ordinary course of business, (c) employment
arrangements with executive officers approved by the Borrower’s board of
directors and entered into in the ordinary course of Borrower’s business and
(d) except as otherwise specifically limited in this Agreement, other
transactions which are entered into in the ordinary course of such Person’s
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director or Affiliate.

8.09 Burdensome Agreements.

(a) Enter into, or permit to exist, any Contractual Obligation that encumbers or
restricts the ability of any such Person to (i) pay dividends or make any other
distributions to any Transaction Party on its Equity Interests or with respect
to any other interest or participation in, or measured by, its profits, (ii) pay
any Indebtedness or other obligation owed to any Transaction

 

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Party, (iii) make loans or advances to any Transaction Party, (iv) sell, lease
or transfer any of its property to any Transaction Party, (v) pledge its
property pursuant to the Loan Documents or any renewals, refinancings,
exchanges, refundings or extensions thereof or (vi) act as a Transaction Party
pursuant to the Loan Documents or any renewals, refinancings, exchanges,
refundings or extensions thereof, except (in respect of any of the matters
referred to in clauses (i)-(iv) above) for (1) this Agreement and the other
Investment Documents, (2) any document or instrument governing Indebtedness
incurred pursuant to Section 8.03(e) or governing any Purchase Money Debt
described on Schedule 8.03 pursuant to Section 8.03(b), provided that any such
restriction contained therein relates only to the asset or assets constructed or
acquired in connection therewith, (3) any Permitted Lien or any document or
instrument governing any Permitted Lien, provided that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien, (4) customary restrictions and conditions contained in any agreement
relating to the sale of any property permitted under Section 8.05 pending the
consummation of such sale, and (5) customary provisions regarding
confidentiality or restricting assignment, pledges or transfer of any agreement
entered into in the ordinary course of business.

(b) Enter into, or permit to exist, any Contractual Obligation that prohibits or
otherwise restricts the existence of any Lien upon any of its property in favor
of the Administrative Agent (for the benefit of the holders of the Obligations)
for the purpose of securing the Obligations, whether now owned or hereafter
acquired, or requiring the grant of any security for any obligation if such
property is given as security for the Obligations, except (i) any document or
instrument governing Indebtedness incurred pursuant to Section 8.03(e), provided
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (ii) in connection with any
Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (iii) pursuant to customary
restrictions and conditions contained in any agreement relating to the sale of
any property permitted under Section 8.05, pending the consummation of such sale
and (iv) customary provisions restricting assignment or transfer of any
agreement entered into in the ordinary course of business.

8.10 Use of Proceeds.

Use the proceeds of any Loan, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB) or to extend credit to others
for the purpose of purchasing or carrying margin stock or to refund indebtedness
originally incurred for such purpose.

8.11 Prepayment of Other Indebtedness.

Make (or give any notice with respect thereto) any voluntary or optional payment
or prepayment or redemption or acquisition for value of (including without
limitation, by way of depositing money or securities with the trustee with
respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any Indebtedness of any Transaction Party (other than
Indebtedness arising under the Loan Documents, and/or any refinancing of
Indebtedness permitted by Section 8.03(e)).

8.12 Organization Documents; Fiscal Year; Legal Name, State of Formation and
Form of Entity; Certain Amendments.

(a) Amend, modify or change its Organization Documents in a manner adverse to
the Lenders.

 

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(b) Change its fiscal year.

(c) Without providing thirty (30) days prior written notice to the
Administrative Agent, change its name, state of formation or form of
organization.

(d) Replace its chief executive officer or chief financial officer without
written notification to the Administrative Agent within thirty (30) days
thereafter.

(e) (i) Without the consent of the Administrative Agent (which such consent, so
long as no Event of Default has occurred and is continuing, shall not be
unreasonably withheld, conditioned or delayed), amend, modify or change any Key
Contract, agree to any waiver or departure of performance thereunder by any
other party thereto, or fail to enforce the rights of any Transaction Party
thereunder, in any respect that could reasonably be expected to affect the
amount or timing of payments to be made thereunder or in any other material
respect, (ii) terminate or agree to the termination thereof for any reason or
(iii) agree to any assignment or transfer of any Key Contract, or any rights or
obligations thereunder, by any party thereto.

8.13 Ownership of Subsidiaries.

Notwithstanding any other provisions of this Agreement to the contrary,
(a) permit any Person (other than any Transaction Party) to own any Equity
Interests of any Subsidiary of any Transaction Party, except to qualify
directors where required by applicable law, (b) permit any Transaction Party to
issue or have outstanding any Disqualified Stock or (c) create, incur, assume or
suffer to exist any Lien on any Equity Interests of any Subsidiary of any
Transaction Party, except for Permitted Liens.

8.14 Sale Leasebacks.

Enter into any Sale and Leaseback Transaction.

8.15 Sanctions.

Permit any Loan or the proceeds of any Loan (a) to be lent, contributed or
otherwise made available to fund any activity or business in any Designated
Jurisdiction; (b) to fund any activity or business in any Designated
Jurisdiction; (c) to fund any activity or business of any Person located,
organized or residing in any Designated Jurisdiction or who is the subject of
any Sanctions; or (d) in any other manner that will result in any violation by
any Person (including any Lender, Athyrium or the Administrative Agent) of any
Sanctions.

8.16 Holding Company.

Except as set forth on Schedule 6.25, permit the Parent to have any operations,
own any assets (other than Equity Interests of the Borrower or other
Subsidiaries and such immaterial assets as are incidental to its status as a
holding company) or incur any liabilities (other than its Obligations under the
Loan Documents and such immaterial liabilities as are incidental to its status
as a holding company).

8.17 Financial Covenant.

Permit Unrestricted Cash (held in a single account subject to an Account Control
Deed) to be less than $2,000,000 at any time, it being understood that the terms
of such Account Control Deed shall require at least $2,000,000 to be in such
account at all times.

 

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ARTICLE IX.

EVENTS OF DEFAULT AND REMEDIES

9.01 Events of Default.

Any of the following shall constitute an Event of Default:

(a) Non-Payment. The Borrower or any other Transaction Party fails to pay
(i) when and as required to be paid herein, any amount of principal of any Loan,
(ii) within three (3) Business Days after the same becomes due, any interest on
any Loan, any fee due hereunder or (iii) within five (5) Business Days after the
same becomes due, any other amount payable hereunder or under any other Loan
Document; or

(b) Specific Covenants. Any Transaction Party fails to perform or observe any
term, covenant or agreement contained in any of Section 7.01, 7.02, 7.03,
7.05(a), 7.07, 7.10, 7.11, 7.12, 7.14 or 7.17 or Article VIII; or

(c) Australian Law Covenants. Any Transaction Party fails to perform or observe
any term, covenant or agreement contained in any of clause 8.1(c) (only with
respect to a change of name or ACN) or (d), 8.2(c), (d), (g) or (i) or 8.4 to
8.6 (other than with respect to clause 8.6(k)) of the General Security Deed, or
any of clause 7.1(c) (only with respect to a change of name or ARBN or obtaining
an ACN), 7.2, 7.3(c), (d), (e), (h), (i) or (j) or 7.5 of the Specific Security
Deed on its part to be performed or observed and such failure continues for five
(5) Business Days after the earlier of the date on which (i) the Borrower has
knowledge of such failure; or (ii) written notice thereof shall have been given
to the Borrower by the Administrative Agent or any Lender; or

(d) Other Defaults. Any Transaction Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for forty-five (45) days after the earlier of the date on which
(i) the Borrower has knowledge of such failure; or (ii) written notice thereof
shall have been given to the Borrower by the Administrative Agent or any Lender;
or

(e) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower or any
other Transaction Party herein, in any other Investment Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; provided that the
representations and warranties in Section 6.18 shall not be deemed incorrect or
misleading for purposes of this Section 9.01(e) as a result of the occurrence
and continuation of any matter listed in Section 9.01(m) that is specifically
excluded from the definition of “Event of Default” under the last sentence of
Section 9.01(m); or

(f) Cross-Default. (i) Any Transaction Party (A) fails to make any payment when
due (whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) in respect of any Indebtedness or Guarantee having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto,

 

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or any other event occurs, the effect of which default or other event, after
giving effect to any applicable grace periods, is to cause, or to permit the
holder or holders of any such Indebtedness or the beneficiary or beneficiaries
of any such Guarantee (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, any such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem any such Indebtedness to be made,
prior to its stated maturity, or any such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any
Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which any
Transaction Party is the Defaulting Party (as defined in such Swap Contract) or
(B) any Termination Event (as so defined) under such Swap Contract as to which
any Transaction Party is an Affected Party (as so defined) and, in either event,
the Swap Termination Value owed by such Transaction Party as a result thereof is
greater than the Threshold Amount; or

(g) Insolvency Proceedings, Etc. (i) Any Transaction Party (other than the
Borrower) institutes or consents to the institution of any proceeding under any
Debtor Relief Law occurs with respect to a Transaction Party (other than the
Borrower), or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, receiver and manager, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for sixty (60) calendar days; or any proceeding under
any Debtor Relief Law relating to any such Person or to all or any material part
of its property is instituted without the consent of such Person and continues
undismissed or unstayed for sixty (60) calendar days, or an order for relief is
entered in any such proceeding; or (ii) an Insolvency Event occurs with respect
to the Borrower; or

(h) Inability to Pay Debts; Attachment. (i) Any Transaction Party becomes unable
or admits in writing its inability or fails generally to pay its debts as they
become due, or (ii) any writ or warrant of attachment or execution or similar
process is issued or levied against all or any material part of the property of
any such Person and is not released, vacated or fully bonded within thirty
(30) days after its issue or levy; or

(i) Judgments. There is entered against any Transaction Party (i) one or more
final, non-appealable judgments, orders or decrees for the payment of money in
an aggregate amount exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final, non-appealable judgments,
orders or decrees that have, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of thirty (30) consecutive days during which a
stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or

(j) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan subject to
ERISA or Multiemployer Plan subject to ERISA that, when aggregated with all
other ERISA Events that occur, has resulted or could reasonably be expected to
result in liability of any Transaction Party under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay
when due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan subject to ERISA in an aggregate amount in excess of
the Threshold Amount; or

 

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(k) Invalidity of Investment Documents. Any Investment Document, at any time
after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder, ceases to be in full force and effect; or any
Transaction Party contests in any manner the validity or enforceability of any
Investment Document; or any Transaction Party denies that it has any or further
liability or obligation under any Investment Document, or purports to revoke,
terminate or rescind any Investment Document; or

(l) Priority of Liens. Any Loan Document purporting to grant Liens to secure the
Obligations shall at any time fail to create and maintain valid and enforceable
Liens in the priority contemplated therein with respect to the Collateral.

(m) Regulatory Matters. If any of the following occurs: (i) the FDA or any other
applicable Governmental Authority or Notified Body (A) issues a letter or other
communication asserting that any Material Product lacks a required Product
Authorization and the Borrower fails to take reasonable actions to contest such
assertion, (B) initiates enforcement action against, or issues a warning letter
with respect to any Transaction Party, or any of their Material Products or the
manufacturing facilities therefor, that causes any Transaction Party to
discontinue marketing or withdraw any of its Material Products from the Major
Markets, or causes a delay in the manufacture of any of its Material Products
for the Major Markets, which discontinuance, withdrawal or delay could
reasonably be expected to last for more than three months, or (C) withdraws, or
requires the withdrawal of, any Material Product from the Major Markets for
safety or effectiveness reasons, or otherwise imposes restrictions on the
distribution or use of any Material Product in the Major Markets, which
restrictions on distribution or use would reasonably be expected to
significantly impact commercial sales of such Material Product in the Major
Markets, in each case, for more than three consecutive months, except that this
clause (C) will in no event apply in instances where the Borrower is selling a
replacement product in the same commercial quantities as the withdrawn Material
Product; (ii) a recall of any Product in the Major Markets which would
reasonably be expected to result in liability of the Transaction Parties to any
third parties in excess of the Threshold Amount, except that any portion of such
liability that is covered by the Borrower’s insurance will not count towards the
Threshold Amount; or (iii) any Transaction Party enters into a settlement
agreement with the FDA or any other Governmental Authority with respect to any
Product and relating to the Major Markets, that results in aggregate liability
to any third parties as to any single or related series of transactions,
incidents or conditions in excess of the Threshold Amount, except that any
portion of such liability that is covered by the Borrower’s insurance will not
count towards the Threshold Amount. The occurrence and continuation of any
matter listed in clauses (i)-(iii) above shall not constitute an Event of
Default for so long as the Unrestricted Cash, at all times following such
occurrence until the circumstances giving rise to such occurrence have been
resolved to the reasonable satisfaction of the Administrative Agent, is no less
than the applicable amount set forth below, or such lesser amount as the
Administrative Agent deems acceptable in its reasonable discretion (taking into
account the aggregate principal amount of the Loan funded as of such measurement
date, as set forth below):

 

Aggregate Principal Amount
of Loan Funded      Unrestricted
Cash   $ 15,000,000       $ 4,500,000    $ 20,000,000       $ 6,000,000    $
25,000,000       $ 7,000,000   

 

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(n) Material Adverse Change. Any circumstance or series of circumstances
(whether related or not) occurs that has had or would reasonably be expected to
have a Material Adverse Effect; provided, however, that solely for the purposes
of this Section 9.01(n), “Material Adverse Effect” shall not include any event,
occurrence, fact, condition, change or effect that is primarily caused by
(i) general conditions applicable to the economy of Australia, the United States
and/or elsewhere, including changes in interest rates and changes in the stock
or other financial markets, in each case that do not have a disproportionate
effect on the Transaction Parties; or (ii) changes in the political climate in
Australia, the United States and/or elsewhere, including acts of war (whether or
not declared), sabotage or terrorism, military actions or the escalation
thereof, in each case that do not have a disproportionate effect on the
Transaction Parties; or

(o) Key Contracts. Any material default or material breach by any Transaction
Party occurs and is continuing under any of the Key Contracts, which material
default or material breach is not cured within any express grace period therein
provided, or any of the Key Contracts is terminated for any reason, other than
any expiration of such Key Contract in accordance with its terms; provided,
however, that, with respect to Key Contracts with Siemens or any of its
Affiliates, the occurrence and continuation of any of the foregoing shall not
constitute an Event of Default for so long as the Unrestricted Cash, at all
times following such occurrence until the circumstances giving rise to such
occurrence have been resolved to the reasonable satisfaction of the
Administrative Agent, is no less than the applicable amount set forth below, or
such lesser amount as the Administrative Agent deems acceptable in its
reasonable discretion (taking into account the aggregate principal amount of the
Loan funded as of such measurement date, as set forth below):

 

Aggregate Principal Amount
of Loan Funded      Unrestricted
Cash   $ 15,000,000       $ 4,500,000    $ 20,000,000       $ 6,000,000    $
25,000,000       $ 7,000,000   

9.02 Remedies Upon Event of Default.

If any Event of Default occurs and is continuing, the Administrative Agent
shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans to be terminated,
whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; and

(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to

 

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make Loans shall automatically terminate, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, in each case without further act of the
Administrative Agent or any Lender.

9.03 Application of Funds.

After the exercise of remedies provided for in Section 9.02 (or after the Loans
have automatically become immediately due and payable as set forth in the
proviso to Section 9.02), any amounts received by any Lender or the
Administrative Agent on account of the Obligations shall be applied by the
Administrative Agent, subject to Section 2.11, in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including fees, charges and disbursements of counsel to the respective
Lenders) arising under the Investment Documents and amounts payable under
Article III, ratably among them in proportion to the respective amounts
described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on and prepayment premium on the Loans, ratably among the
Lenders in proportion to the respective amounts described in this clause Third
held by them;

Fourth, to payment of that portion of the Obligations constituting accrued and
unpaid principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full (other than contingent indemnification obligations for which no
claim has been asserted), to the Borrower or as otherwise required by Law.

ARTICLE X.

ADMINISTRATIVE AGENT

10.01 Appointment and Authority.

(a) Each of the Lenders hereby irrevocably appoints Athyrium Opportunities Fund
(A) LP to act on its behalf as the Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are incidental thereto. The provisions of this Article are solely
for the benefit of the Administrative Agent and the Lenders, and neither the
Borrower nor any other Transaction Party shall have rights as a third party
beneficiary of any of such provisions except that the Borrower shall have third
party beneficiary rights with respect to Section 10.06. It is understood and
agreed that the use of the term “agent” herein or in any other Loan Documents
(or any other similar term) with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead such term is used
as a matter of market custom, and is intended to create or reflect only an
administrative relationship between contracting parties.

 

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(b) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders hereby irrevocably appoints and
authorizes the Administrative Agent to act as the agent of such Lender for
purposes of acquiring, holding and enforcing any and all Liens on Collateral
granted by any of the Transaction Parties to secure any of the Obligations,
together with such powers and discretion as are incidental thereto. In this
connection, the Administrative Agent, as “collateral agent” (and any co-agents,
sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant
to Section 10.05 for purposes of holding or enforcing any Lien on the Collateral
(or any portion thereof) granted under the Collateral Documents, or for
exercising any rights and remedies thereunder at the direction of the
Administrative Agent), shall be entitled to the benefits of all provisions of
this Article X and Article XII (including Section 12.04(c), as though such
co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under
the Loan Documents) as if set forth in full herein with respect thereto.

10.02 Rights as a Lender.

The Person serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity. Such Person and its Affiliates may
accept deposits from, lend money to, own securities of, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with any Transaction Party or any Affiliate thereof as if such
Person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders.

10.03 Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents, and its duties
hereunder shall be administrative in nature. Without limiting the generality of
the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law, including for the avoidance of
doubt any action that may be in violation of the automatic stay under any Debtor
Relief Law or that may affect a forfeiture, modification or termination of
property of a Defaulting Lender in violation of any Debtor Relief Law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Transaction Party or any of its
Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity.

 

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The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.01 and 9.02) or (ii) in the absence of
its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction by final and non-appealable judgment. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given in writing to the Administrative Agent
by the Borrower, or a Lender.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article V or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

10.04 Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, that by its
terms must be fulfilled to the satisfaction of a Lender, the Administrative
Agent may presume that such condition is satisfactory to such Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender
prior to the making of such Loan. The Administrative Agent may consult with
legal counsel (who may be counsel for the Transaction Parties), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

10.05 Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as
Administrative Agent. The Administrative Agent shall not be responsible for the
negligence or misconduct of any sub-agents except to the extent that a court of
competent jurisdiction determines in a final and non-appealable judgment that
the Administrative Agent acted with gross negligence or willful misconduct in
the selection or oversight of such sub-agents.

 

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10.06 Resignation of Administrative Agent.

The Administrative Agent may resign as Administrative Agent at any time by
giving thirty (30) days advance notice thereof to the Lenders and the Borrower
and, thereafter, the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. Upon any such resignation, the Required
Lenders shall have the right, subject to the approval of the Borrower (so long
as no Event of Default has occurred and is continuing; such approval not to be
unreasonably withheld, conditioned or delayed), to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders, been approved (so long as no Event of Default
has occurred and is continuing) by the Borrower or have accepted such
appointment within thirty (30) days after the Administrative Agent’s giving of
notice of resignation, then the Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent reasonably acceptable to the
Borrower (so long as no Default or Event of Default has occurred and is
continuing). Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Administrative Agent. After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Section 10.06 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent. If no successor has accepted appointment as Administrative
Agent by the date which is thirty (30) days following a retiring Administrative
Agent’s notice of resignation, the retiring Administrative Agent’s resignation
shall nevertheless thereupon become effective and the Required Lenders shall
perform all of the duties of the Administrative Agent hereunder until such time,
if any, as the Required Lenders appoint a successor agent as provided for above.

10.07 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

10.08 Administrative Agent May File Proofs of Claim.

In case of the pendency of any Liquidation, receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to any Transaction Party, the Administrative
Agent (irrespective of whether the principal of any Loan shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 12.04) allowed in such judicial proceeding;
and

 

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(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any External Administrator, custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Section 12.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

10.09 Collateral and Guaranty Matters.

The Lenders irrevocably authorize the Administrative Agent, at its option and in
its discretion,

(a) to release any Lien on any Collateral granted to or held by the
Administrative Agent under any Loan Document (i) upon payment in full of all
Obligations (other than contingent indemnification obligations for which no
claim has been asserted), (ii) that is sold or otherwise disposed of or to be
sold or otherwise disposed of as part of or in connection with any sale or other
Disposition permitted hereunder or under any other Loan Document or any
Involuntary Disposition, or (iii) as approved in accordance with Section 12.01;

(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 8.01(i); and

(c) to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted under
the Loan Documents.

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty, pursuant to this
Section 10.09.

The Administrative Agent shall not be responsible for or have a duty to
ascertain or inquire into any representation or warranty regarding the
existence, value or collectability of the Collateral, the existence, priority or
perfection of the Administrative Agent’s Lien thereon, or any certificate
prepared by any Transaction Party in connection therewith, nor shall the
Administrative Agent be responsible or liable to the Lenders for any failure to
monitor or maintain any portion of the Collateral.

Upon confirmation by the Administrative Agent that all Obligations have been
paid in full (other than contingent indemnification obligations for which no
claim has been asserted) and the Commitments have terminated, the Administrative
Agent shall, upon the request and at the expense of the Transaction Parties,
promptly execute and deliver a deed of release terminating the Liens of the
Administrative Agent and the Lenders under the Loan Documents, and promptly
execute and deliver all Uniform Commercial Code termination statements and/or
other documents reasonably requested by the Transaction Parties evidencing such
termination and return to the Transaction Parties all Collateral in its
possession.

 

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ARTICLE XI.

PROTECTION OF ADMINISTRATIVE AGENT AND LENDERS

11.01 Protection for Statutory Proscriptions.

Notwithstanding any other provisions of any Investment Document to the contrary,
the Administrative Agent and each Lender is not obliged to do or omit to do
anything if it would, or might in its reasonable opinion, constitute a breach of
any applicable law or regulation, including without limitation the Charter of
the United Nations Act 1945 (Cth), the Charter of the United Nations (Dealing
with Assets) Regulations 2008 (Cth), the Autonomous Sanctions Regulations 2011
(Cth) and any other applicable sanctions legislation.

11.02 PPSA Further Assurances.

(a) Whenever the Administrative Agent reasonably requests a Transaction Party to
do anything (i) to ensure any Lien is fully effective, enforceable and perfected
with the contemplated priority; (ii) for more satisfactorily assuring or
securing to the Administrative Agent the Collateral in a manner consistent with
the Loan Documents; and (iii) for aiding the exercise of any power in connection
with any such Lien, the Transaction Party shall do it promptly at its own cost.
This may include obtaining consents, getting documents completed and signed,
supplying information, delivering documents and evidence of title and executed
blank transfers, and giving possession or control with respect to any property
the subject of any such Lien.

(b) Each of the Parent and the Borrower agrees to notify the Administrative
Agent at least 14 days before the occurrence of any of the following: (i) the
Parent changes its name; (ii) any ABN, ARBN or ARSN allocated to the Borrower or
the Parent changes, is cancelled or otherwise ceases to apply to it (or if it
does not have an ABN, ARBN or ARSN, one is allocated, or otherwise starts to
apply, to it); or (iii) the Parent or the Borrower becomes trustee of a trust,
or a partner in a partnership, not stated in this Agreement.

11.03 PPSA Waivers.

(a) Without limiting any other provision of this Agreement, or any other Loan
Document, each Transaction Party waives its right to receive any verification
statement (or notice of any verification statement) in respect of any financing
statement or financing change statement relating to any Lien created under this
document or any other Loan Document.

(b) Each Transaction Party and the Administrative Agent agree that, to the
extent permitted by law and in respect of each Loan Document and each Lien
created under a Collateral Document:

(i) each Transaction Party and the Administrative Agent contract out of (a) the
Administrative Agent’s obligation to (x) dispose of or retain personal property
under section 125 of the PPSA, and (y) include details of amounts paid to other
secured parties in a statement of account under section 132(3)(d) of the PPSA,
(b) section 142 of the PPSA, and section 143 of the PPSA; and

(ii) each Transaction Party and the Administrative Agent contract out of each
Transaction Party’s rights to (and each Transaction Party waives its rights to):
(a) receive notice of the decision of the Administrative Agent to enforce any
Lien in accordance with

 

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land law decisions under section 118 of the PPSA, (b) receive notice of any
action of the Administrative Agent to enforce any Lien in liquid assets under
section 121(4) of the PPSA, (c) receive notice of the Administrative Agent’s
proposal to dispose of personal property under section 130 of the PPSA,
(d) receive a statement of account under section 132(4) of the PPSA, and (e) any
other provision of the PPSA notified to the Transaction Party by the
Administrative Agent after the date of this Agreement; and

(c) each Transaction Party and the Administrative Agent contract out of the
application of Part 4.3 of the PPSA (other than sections 126, 128, 129(1), 133,
134(1), 138B and 138C) if that Part would apply by virtue of section 116(2) of
the PPSA.

11.04 Other Rights.

Where the Administrative Agent has powers in addition to, or existing separately
from, those in Chapter 4 of the PPSA, those powers will continue to apply and
are not limited or excluded (or otherwise adversely affected) by the PPSA. This
is despite Section 11.03 or any other provision of a Loan Document.

11.05 PPSA Undertaking.

Each of the Parent and the Borrower will promptly take all reasonable steps
which are prudent for its business under or in relation to the PPSA including
doing anything reasonably requested by the Administrative Agent for that
purpose. For example, it will (a) create and implement appropriate policies and
systems; and (b) where appropriate, take reasonable steps to identify Liens in
its favor and to perfect and protect them, with the highest priority reasonably
available.

11.06 Interpretation.

In this Article, the following words and expressions have the same meanings
given to them in the PPSA: control, financing change statement, financing
statement, personal property, purchase money security interest, serial number
and verification statement.

ARTICLE XII.

MISCELLANEOUS

12.01 Amendments, Etc.

No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrower or any other
Transaction Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrower or the applicable Transaction Party, as the
case may be, and acknowledged by the Administrative Agent, and each such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, further, that

(a) no such amendment, waiver or consent shall:

(i) extend or increase the Commitment of a Lender (or reinstate any Commitment
terminated pursuant to Section 9.02) without the written consent of such Lender
whose Commitment is being extended or increased (it being understood and agreed
that a waiver of any condition precedent set forth in Section 5.01, 5.02, 5.03
or 5.04, or a waiver of any Default or a mandatory reduction in Commitments is
not considered an extension or increase in Commitments of any Lender);

 

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(ii) postpone any date fixed by this Agreement or any other Loan Document for
any payment of principal (excluding mandatory prepayments), interest, prepayment
premiums, fees or other amounts due to the Lenders (or any of them) or any
scheduled or mandatory reduction of the Commitments hereunder or under any other
Loan Document without the written consent of each Lender entitled to receive
such payment or whose Commitments are to be reduced;

(iii) reduce the principal of, the rate of interest specified herein on or the
prepayment premium specified herein on any Loan, or any fees or other amounts
payable hereunder or under any other Loan Document without the written consent
of each Lender entitled to receive such payment of principal, interest, fees or
other amounts; provided, however, that only the consent of the Required Lenders
shall be necessary to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest at the Default Rate;

(iv) change any provision of this Section 12.01(a) or the definition of
“Required Lenders” without the written consent of each Lender directly affected
thereby;

(v) release all or substantially all of the Collateral without the written
consent of each Lender directly affected thereby;

(vi) release the Borrower or, except in connection with a merger or
consolidation permitted under Section 8.04 or a Disposition permitted under
Section 8.05, all or substantially all of the Guarantors without the written
consent of each Lender directly affected thereby, except to the extent the
release of any Guarantor is permitted pursuant to Section 10.09 (in which case
such release may be made by the Administrative Agent acting alone); and

(b) unless also signed by the Administrative Agent, no amendment, waiver or
consent shall affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document;

provided, however, that notwithstanding anything to the contrary herein, (i) no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder (and any amendment, waiver or consent which by its
terms requires the consent of all Lenders or each affected Lender may be
effected with the consent of the applicable Lenders other than Defaulting
Lenders), except that (x) the Commitment of any Defaulting Lender may not be
increased or extended without the consent of such Lender and (y) any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender more adversely than other
affected Lenders shall require the consent of such Defaulting Lender, (ii) each
Lender is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender acknowledges that
the provisions of Section 1126(c) of the Bankruptcy Code of the United States
supersedes the unanimous consent provisions set forth herein and (iii) the
Required Lenders shall determine whether or not to allow a Transaction Party to
use cash collateral in the context of a bankruptcy or insolvency proceeding and
such determination shall be binding on all of the Lenders.

 

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12.02 Notices and Other Communications; Facsimile Copies.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), 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 facsimile as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower or any other Transaction Party or the Administrative
Agent, to the address, facsimile number, electronic mail address or telephone
number specified for such Person on Schedule 12.02; and

(ii) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number of its Lending Office (whether specified on Schedule
12.02 or separately specified to the Borrower and the Administrative Agent).

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may each, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

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

(c) Change of Address, Etc. Each of the Borrower, the Lenders and the
Administrative Agent may change its address, facsimile or telephone number for
notices and other communications hereunder by notice to the other parties
hereto. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, facsimile number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

 

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(d) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic or electronic Loan Notices) purportedly given by or on behalf of any
Transaction Party even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Transaction Parties shall
indemnify the Administrative Agent, each Lender and the Related Parties of each
of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of a
Transaction Party; provided that such indemnity shall not, as to any Person be
available to the extent that such losses, costs, expenses or liabilities are
determined by a court of competent jurisdiction by final and non-appealable
judgment to have resulted from the gross negligence or willful misconduct of
such Person. All telephonic notices to and other telephonic communications with
the Administrative Agent may be recorded by the Administrative Agent, and each
of the parties hereto hereby consents to such recording.

12.03 No Waiver; Cumulative Remedies; Enforcement.

No failure by any Lender or the Administrative Agent to exercise, and no delay
by any such Person in exercising, any right, remedy, power or privilege
hereunder or under any other Investment Document 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. The rights, remedies,
powers and privileges herein provided, and provided under each other Investment
Document, are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other
Investment Document, the authority to enforce rights and remedies hereunder and
under the other Investment Documents against the Transaction Parties or any of
them shall be vested exclusively in, and all actions and proceedings at law in
connection with such enforcement shall be instituted and maintained exclusively
by, the Administrative Agent in accordance with Section 10.01 for the benefit of
all the Lenders; provided, however, that the foregoing shall not prohibit
(a) the Administrative Agent from exercising on its own behalf the rights and
remedies that inure to its benefit (solely in its capacity as Administrative
Agent) hereunder and under the other Loan Documents, (b) any Lender from
exercising setoff rights in accordance with Section 12.08 (subject to the terms
of Section 2.10), or (c) any Lender from filing proofs of claim or appearing and
filing pleadings on its own behalf during the pendency of a proceeding relative
to any Transaction Party under any Debtor Relief Law or any proceedings arising
out of or in connection with an Insolvency Event; and provided, further, that if
at any time there is no Person acting as Administrative Agent hereunder and
under the other Loan Documents, then (i) the Required Lenders shall have the
rights otherwise ascribed to the Administrative Agent pursuant to Section 10.01
and (ii) in addition to the matters set forth in clauses (b) and (c) of the
preceding proviso and subject to Section 2.10, any Lender may, with the consent
of the Required Lenders, enforce any rights and remedies available to it and as
authorized by the Required Lenders.

12.04 Expenses; Indemnity; and Damage Waiver.

(a) Costs and Expenses. The Transaction Parties shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of external (but not
internal) counsel for the Administrative

 

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Agent), in connection with the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Investment Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated) and (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, any Lender, any receiver or receiver and manager appointed
under the General Security Deed or the Specific Security Deed or any attorney
appointed by the Borrower under the General Security Deed or the Parent under
the Specific Security Deed (including the reasonable fees, charges and
disbursements of any external (but not internal) counsel for the Administrative
Agent or any Lender), in connection with the enforcement or protection of its
rights (A) in connection with this Agreement and the other Investment Documents,
including its rights under this Section, or (B) in connection with the Loans
made hereunder, including all such reasonable out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans.
Notwithstanding the foregoing, it is understood and agreed that the Borrower
shall not be required to pay any costs, fees and expenses incurred in connection
with the preparation, negotiation, execution and delivery of this Agreement, the
other Investment Documents dated as of the Closing Date and the funding of the
Initial Term Loan in excess of $200,000 (including amounts payable in connection
with Section 5.01(m).

(b) Indemnification by the Transaction Parties. The Transaction Parties shall
indemnify the Administrative Agent (and any sub-agent thereof) and each Lender,
each Related Party of any of the foregoing Persons, and any receiver or receiver
and manager appointed under the General Security Deed or the Specific Security
Deed (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related reasonable out-of-pocket expenses (including the reasonable fees,
charges and disbursements of any external counsel for any Indemnitee), incurred
by any Indemnitee or asserted against any Indemnitee by any Person (including
the Borrower or any other Transaction Party) other than the Indemnitee and its
Related Parties arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Investment Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, or, in the case
of the Administrative Agent (and any sub-agent thereof) and its Related Parties
only, the administration of this Agreement and the other Investment Documents,
(ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by a Transaction Party, or any Environmental
Liability related in any way to a Transaction Party, or (iv) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Transaction Party, and regardless of
whether any Indemnitee is a party thereto, in all cases, whether or not caused
by or arising, in whole or in part, out of the comparative, contributory or sole
negligence of the Indemnitee; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and non-appealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee or breach of this
Agreement, any other Investment Document or any agreement or instrument
contemplated hereby or thereby by such Indemnitee.

(c) Reimbursement by Lenders. To the extent that the Transaction Parties for any
reason fail to indefeasibly pay any amount required under subsection (a) or
(b) of this Section to be paid by them to the Administrative Agent (or any
sub-agent thereof) or any Related Party thereof, each Lender severally agrees to
pay to the Administrative Agent (or any such sub-agent)

 

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or such Related Party, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought based on each Lender’s share of the Total Credit Exposure at
such time) of such unpaid amount (including any such unpaid amount in respect of
a claim asserted by such Lender), such payment to be made severally among them
based on such Lenders’ Applicable Percentages (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought), provided,
further, that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent), or against any Related
Party thereof acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.09(b).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, no party hereto shall assert, and each party hereto hereby
waives, and acknowledges that no other Person shall have, any claim against any
Indemnitee or Transaction Party, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Investment Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or the use of
the proceeds thereof. No Transaction Party or Indemnitee referred to in
subsection (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Investment Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of any
Transaction Party or any such Indemnitee (as applicable).

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

(f) Survival. The agreements in this Section and the indemnity provisions of
Section 12.02(d) shall survive the resignation of the Administrative Agent, the
replacement of any Lender, the termination of the Commitments and the repayment,
satisfaction or discharge of all the other Obligations.

12.05 Payments Set Aside.

To the extent that any payment by or on behalf of any Transaction Party is made
to the Administrative Agent or any Lender, or the Administrative Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver, receiver and manager, External
Administrator or any other party, in connection with any proceeding under any
Debtor Relief Law, any proceedings arising out of or in connection with an
Insolvency Event or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender severally agrees to pay to the
Administrative Agent upon demand its applicable share (without duplication) of
any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.

 

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12.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement and the
other Loan Documents shall be binding upon and inure to the benefit of the
parties hereto and thereto and their respective successors and assigns permitted
hereby, except that the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder or thereunder without the prior written consent
of the Administrative Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection
(d) of this Section or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (e) of this Section (and any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
and the other Loan Documents (including all or a portion of its Commitment and
the Loans at the time owing to it); provided that any such assignment shall be
subject to the following conditions:

(i) Minimum Amounts.

A. in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and/or the Loans at the time owing to it or contemporaneous
assignments to related Approved Funds that equal at least the amount specified
in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

B. in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $2,500,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld,
conditioned or delayed);

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all of the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned;

 

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(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

1. the consent of the Borrower (such consent not to be unreasonably withheld,
conditioned or delayed) shall be required unless (1) an Event of Default has
occurred and is continuing at the time of such assignment or (2) such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that
(x) the consent of the Borrower shall always be required for any assignment to
an Affiliate of a Lender or an Approved Fund that is not a U.S. Person if the
Transaction Parties would be materially adversely affected as a result of such
assignment unless an Event of Default has occurred and is continuing at the time
of such assignment (it being understood and agreed that, for the avoidance of
doubt, withholding consent with respect to any assignment to a Person that is
not a U.S. Person shall not be considered unreasonable if following such
assignment the Borrower would be required to pay more Taxes or additional
amounts pursuant to Section 3.01 than prior to such assignment with respect to
any payment made to such assignee under this Agreement or the Transaction
Parties would otherwise be materially adversely affected as a result of such
assignment) and (y) the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the
Administrative Agent within five (5) Business Days after having received notice
thereof; and

2. the consent of the Administrative Agent (such consent not to be unreasonably
withheld, conditioned or delayed) shall be required for assignments to a Person
that is not a Lender, an Affiliate of a Lender or an Approved Fund;

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption. The assignee,
if it is not a Lender, shall deliver to the Administrative Agent such
information, including notice information, as the Administrative Agent shall
reasonably require.

(v) No Assignment to Certain Persons. No such assignment shall be made (A) to a
Transaction Party or any Affiliate or Subsidiary of a Transaction Party, (B) to
any Defaulting Lender or any of its Subsidiaries or any Person who, upon
becoming a Lender hereunder, would constitute any of the foregoing Persons
described in this clause (B) or (C) to a natural Person.

(vi) Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent or any Lender
hereunder (and interest accrued thereon) and (y) acquire (and fund

 

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as appropriate) its full pro rata share of all Loans in accordance with its
Applicable Percentage. Notwithstanding the foregoing, in the event that any
assignment of rights and obligations of any Defaulting Lender hereunder shall
become effective under applicable Law without compliance with the provisions of
this paragraph, then the assignee of such interest shall be deemed to be a
Defaulting Lender for all purposes of this Agreement until such compliance
occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.02 and 12.04 with respect to
facts and circumstances occurring prior to the effective date of such
assignment; provided that except to the extent otherwise expressly approved by
the affected parties, no assignment of a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender. Upon request, the Borrower (at its expense)
shall execute and deliver a Note to the assignee Lender. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower (and such agency being solely for tax purposes), shall
maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it (or the equivalent thereof in electronic form) and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts (and stated interest) of the Loans owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive absent manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement. In addition, the Administrative
Agent shall maintain on the Register information regarding the designation, and
revocation of designation, of any Lender as a Defaulting Lender. The Register
shall be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural Person, a Defaulting Lender, a Person that is not a
U.S. Person or a Transaction Party or any Affiliate or Subsidiary of a
Transaction Party) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. For
the avoidance of doubt, each Lender shall be responsible for the indemnity under
Section 12.04(c) without regard to the existence of any participation.

 

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Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in clauses (i) through
(vi) of Section 12.01(a) that affects such Participant. The Borrower agrees that
each Participant shall be entitled to the benefits of Sections 3.01 and 3.02 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section so long as such
Participant complies with the obligations set forth in Article III with respect
thereto; provided that such Participant (A) agrees to be subject to the
provisions of Section 12.13 and (B) shall not be entitled to receive any greater
payment under Section 3.01, with respect to any participation than its
participating Lender would be entitled to receive. To the fullest extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 12.08 as though it were a Lender; provided that such Participant agrees
to be subject to Section 2.10 as though it were a Lender.

Each Lender that sells a participation shall, acting solely for this purpose as
an agent of the Borrower, maintain a register on which it enters the name and
address of each Participant and the principal amounts (and stated interest) of
each Participant’s interest in the Loans or other Obligations (each, a
“Participant Register”); provided that no Lender shall have any obligation to
disclose all or any portion of its Participant Register (including the identity
of any Participant or any information relating to a Participant’s interest in
any commitments, loans or its other obligations under any Loan Documents) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan or other obligation is in registered form under
Section 5f.103-1(c) of the Treasury Regulations. The entries in the Participant
Registers shall be conclusive absent manifest error and each Lender shall treat
each Person whose name is recorded in its Participant Register as the owner of
such participation for all purposes of this Agreement notwithstanding any notice
to the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining
any Participant Register.

(e) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

12.07 Treatment of Certain Information; Confidentiality.

Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality and not disclose to any Person or entity any of the Information
(as defined below) and not use the Information except in connection with
fulfilling its obligations or exercising its rights hereunder, except that
Information may be disclosed (a) to its Affiliates and to its Related Parties
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential and, to the extent that any such Person uses such
information or fails to keep such information confidential in any manner that
would constitute a breach of this Section 12.07 if such Person was a party
hereto, the disclosing party shall be responsible for such use

 

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or failure by its Affiliate or Related Party), (b) to the extent required or
requested by any regulatory authority purporting to have jurisdiction over such
Person or its Related Parties (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Investment Document or any action or
proceeding relating to this Agreement or any other Investment Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights and obligations under this Agreement or
(ii) any actual or prospective party (or its Related Parties) to any swap,
derivative or other transaction under which payments are to be made by reference
to a Transaction Party and its obligations, this Agreement or payments hereunder
(provided that the disclosing party shall be responsible to the Borrower for any
breach of any such agreement, unless the Borrower is a third party beneficiary
to such agreement), (g) on a confidential basis to (i) any rating agency in
connection with rating the Transaction Parties or the credit facilities provided
hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection
with the issuance and monitoring of CUSIP numbers or other market identifiers
with respect to the credit facilities provided hereunder, (h) with the consent
of the Borrower or (i) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this Section or (y) becomes
available to the Administrative Agent, any Lender or any of their respective
Affiliates on a nonconfidential basis from a source that does not owe
obligations of confidentiality in connection with such Information. In the case
of disclosures under clause (b) or (c) above of this Section 12.07, to the
extent reasonably practicable and it may legally do so, the Person wishing to
make the disclosure shall give reasonable advance notice to the Transaction
Parties of such proposed disclosure and, at the reasonable request and expense
of the Transaction Parties, the such Person shall use its reasonable efforts to
secure confidential treatment of such Information prior to its disclosure
(whether through protective orders or otherwise).

Notwithstanding anything to the contrary in this Agreement, a Transaction Party
will be entitled to injunctive relief to restrain the breach or threatened
breach by the Administrative Agent or any of the Lenders without having to prove
actual damages or threatened irreparable harm.

For purposes of this Section, “Information” means all information received from
or on behalf of any Transaction Party or any of its Affiliates or agent or
professional advisors or learned through observation during visit(s) to the
facilities of a Transaction Party, including without limitation information
relating to any of the Transaction Parties or any of their contractors,
customers and suppliers or any of their respective businesses, other than any
such information that is available to the Administrative Agent or any Lender on
a nonconfidential basis prior to disclosure by such Transaction Party. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

To the extent permitted by section 275 of the PPSA, the parties hereto agree to
keep all information of the kind referred to in section 275(1) of the PPSA
confidential and to not disclose such information to any other Person, except to
the extent disclosure is otherwise permitted or authorized under the Investment
Documents or is required to be made by applicable law or the listing rules of a
recognized stock exchange.

12.08 Set-off.

If an Event of Default shall have occurred and be continuing, each Lender and
each of their respective Affiliates is hereby authorized at any time and from
time to time, after obtaining the prior

 

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written consent of the Administrative Agent, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of the Borrower or any other
Transaction Party against any and all of the obligations of the Borrower or such
Transaction Party now or hereafter existing under this Agreement or any other
Loan Document to such Lender or its Affiliates, irrespective of whether or not
such Lender or Affiliate shall have made any demand under this Agreement or any
other Loan Document and although such obligations of the Borrower or such
Transaction Party may be contingent or unmatured or are owed to a branch office
or Affiliate of such Lender different from the branch office or Affiliate
holding such deposit or obligated on such indebtedness; provided that, in the
event that any Defaulting Lender shall exercise any such right of setoff,
(x) all amounts so set off shall be paid over immediately to the Administrative
Agent for further application in accordance with the provisions of Section 2.11
and, pending such payment, shall be segregated by such Defaulting Lender from
its other funds and deemed held in trust for the benefit of the Administrative
Agent and the Lenders and (y) the Defaulting Lender shall provide promptly to
the Administrative Agent a statement describing in reasonable detail the
Obligations owing to such Defaulting Lender as to which it exercised such right
of setoff. The rights of each Lender and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender or their respective Affiliates may have. Each Lender
agrees to notify the Borrower and the Administrative Agent promptly after any
such setoff and application, provided that the failure to give such notice shall
not affect the validity of such setoff and application.

12.09 Interest Rate Limitation.

Notwithstanding anything to the contrary contained in any Investment Document,
the interest paid or agreed to be paid under the Investment Documents shall not
exceed the maximum rate of non-usurious interest permitted by applicable Law
(the “Maximum Rate”). If the Administrative Agent or any Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Administrative Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by applicable
Law, (a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

12.10 Counterparts; Integration; Effectiveness.

This Agreement may be executed in counterparts (and by different parties hereto
in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement
and the other Investment Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 5.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

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12.11 Survival of Representations and Warranties.

All representations and warranties made hereunder and in any other Investment
Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Borrowing, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid
or unsatisfied.

12.12 Severability.

If any provision of this Agreement or the other Investment Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other
Investment Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without limiting the foregoing provisions of this
Section 12.12, if and to the extent that the enforceability of any provisions in
this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief
Laws, as determined in good faith by the Administrative Agent, then such
provisions shall be deemed to be in effect only to the extent not so limited.

12.13 Replacement of Lenders.

If any Lender is or becomes a Defaulting Lender or a Non-Consenting Lender, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 12.06), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an Eligible
Assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:

(a) such Lender shall have received payment of an amount equal to one hundred
percent (100%) of the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts);

(b) such assignment does not conflict with applicable Laws; and

(c) in the case of any such assignment resulting from a Non-Consenting Lender’s
failure to consent to a proposed change, waiver, discharge or termination with
respect to any Loan Document, the applicable replacement bank or financial
institution consents to the proposed change, waiver, discharge or termination;

provided that the failure by such Non-Consenting Lender to execute and deliver
an Assignment and Assumption shall not impair the validity of the removal of
such Non-Consenting Lender and the mandatory assignment of such Non-Consenting
Lender’s Commitments and outstanding Loans pursuant to this Section 12.13 shall
nevertheless be effective without the execution by such Non-Consenting Lender of
an Assignment and Assumption.

 

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A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

12.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER INVESTMENT DOCUMENTS AND ANY
CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
INVESTMENT DOCUMENT (EXCEPT, AS TO ANY AUSTRALIAN LAW DOCUMENT, AS EXPRESSLY SET
FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

(b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER TRANSACTION PARTY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION,
LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY,
WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT,
ANY LENDER OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS
AGREEMENT OR ANY OTHER INVESTMENT DOCUMENT (OTHER THAN THE AUSTRALIAN LAW
DOCUMENTS) OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY OTHER FORUM
OTHER THAN THE COURTS OF THE STATE OF NEW YORK AND ANY UNITED STATES DISTRICT
COURT IN THE STATE OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER INVESTMENT DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER INVESTMENT
DOCUMENT (OTHER THAN THE AUSTRALIAN LAW DOCUMENTS) AGAINST THE BORROWER OR ANY
OTHER TRANSACTION PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER TRANSACTION PARTY IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
INVESTMENT DOCUMENT (OTHER THAN THE AUSTRALIAN LAW DOCUMENTS) IN ANY COURT
REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

 

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(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 12.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW. THE BORROWER HEREBY APPOINTS THE
PARENT AS ITS AGENT FOR SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER INVESTMENT DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION, AND THE PARENT HEREBY
ACCEPTS SUCH APPOINTMENT AND ACKNOWLEDGES AND AGREES THAT ITS APPOINTMENT MAY
NOT BE REVOKED WITHOUT THE ADMINISTRATIVE AGENT’S CONSENT.

12.15 Waiver of Right to Trial by Jury.

EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR ANY OTHER
INVESTMENT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON 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 AND
THE OTHER INVESTMENT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

12.16 Conversion of Currencies.

(a) If, for the purpose of obtaining judgment in any court, it is necessary to
convert a sum owing hereunder in one currency into another currency, each party
hereto agrees, to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the first currency could be purchased
with such other currency on the Business Day immediately preceding the day on
which final judgment is given.

(b) The obligations of any Transaction Party in respect of any sum due to any
party hereto or any holder of the Obligations owing hereunder (the “Applicable
Creditor”) shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than the currency in which such sum is stated to be due
hereunder (the “Agreement Currency”), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, each Transaction Party agrees, as
a separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Transaction
Parties contained in this Section 12.16 shall survive the termination of this
Agreement and the payment of all other amounts owing hereunder.

 

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12.17 Electronic Execution of Assignments and Certain Other Documents.

The words “execute,” “execution,” “signed,” “signature” and words of like import
in any Assignment and Assumption or in any amendment or other modification
hereof (including waivers and consents) shall be deemed to include electronic
signatures, the electronic matching of assignment terms and contract formations
on electronic platforms approved by the Administrative Agent, or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

12.18 USA PATRIOT Act.

Each Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender), to the extent
it is subject to the Act, hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender or
the Administrative Agent, as applicable, to identify the Borrower in accordance
with the Act. The Borrower shall, promptly following a request by the
Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender requests in order to
comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Act.

12.19 No Advisory or Fiduciary Relationship.

In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof
or of any other Investment Document), the Borrower acknowledges and agrees, and
acknowledges its Affiliates’ understanding, that: (a)(i) the arranging and other
services regarding this Agreement provided by the Administrative Agent,
Athyrium, and the Lenders are arm’s-length commercial transactions between the
Borrower and its Affiliates, on the one hand, and the Administrative Agent,
Athyrium and the Lenders on the other hand, (ii) the Borrower has consulted its
own legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate, and (iii) the Borrower is capable of evaluating, and understands
and accepts, the terms, risks and conditions of the transactions contemplated
hereby and by the other Investment Documents; (b)(i) the Administrative Agent,
Athyrium and each Lender is and has been acting solely as a principal and,
except as expressly agreed in writing by the relevant parties, has not been, is
not and will not be acting as an advisor, agent or fiduciary, for the Borrower
or any of Affiliates or any other Person and (ii) neither the Administrative
Agent nor any Lender has any obligation to the Borrower or any of its Affiliates
with respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Investment Documents; and (c) the
Administrative Agent, Athyrium and the Lenders and their respective Affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Borrower and its Affiliates, and neither the
Administrative Agent, Athyrium nor any Lender has any obligation to disclose any
of such interests to the Borrower or its Affiliates. To the fullest extent
permitted by law, the Borrower hereby waives and releases, any claims that it
may have against the Administrative Agent, Athyrium or any Lender with respect
to any breach or alleged breach of agency or fiduciary duty in connection with
any aspect of any transaction contemplated hereby.

 

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12.20 Acknowledgment.

The Borrower acknowledges and agrees that each of Athyrium Opportunities Fund
(A) LP and Athyrium Opportunities Fund (B) LP is a limited partnership under
Delaware law, and, accordingly, the limited partners of such Persons have
limited liability under Delaware law.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

BORROWER:     UNIVERSAL BIOSENSORS PTY LTD,    

a proprietary limited company incorporated in Australia,

executed in accordance with Section 127 of the Corporations Act

    By:   /s/ Paul Wright     Name:   Paul Wright     Title:   Director     By:
  /s/ Salesh Balak     Name:   Salesh Balak     Title:   Director GUARANTORS:  
  UNIVERSAL BIOSENSORS, INC.,     a Delaware corporation     By:   /s/ Paul
Wright     Name:   Paul Wright     Title:   Director

[Signature Page to Credit Agreement]

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ADMINISTRATIVE       AGENT:  

ATHYRIUM OPPORTUNITIES FUND (A) LP,

a Delaware limited partnership

   

By: ATHYRIUM OPPORTUNITIES

ASSOCIATES LP, its General Partner

   

By: ATHYRIUM OPPORTUNITIES ASSOCIATES GP

LLC, the General Partner of Athyrium Opportunities

Associates LP

    By:   /s/ Jeffrey A. Ferrell     Name:   Jeffrey A. Ferrell     Title:  
President LENDERS:  

ATHYRIUM OPPORTUNITIES FUND (A) LP,

a Delaware limited partnership

   

By: ATHYRIUM OPPORTUNITIES

ASSOCIATES LP, its General Partner

   

By: ATHYRIUM OPPORTUNITIES ASSOCIATES GP

LLC, the General Partner of Athyrium Opportunities

Associates LP

    By:   /s/ Jeffrey A. Ferrell     Name:   Jeffrey A. Ferrell     Title:  
President  

ATHYRIUM OPPORTUNITIES FUND (B) LP,

a Delaware limited partnership

   

By: ATHYRIUM OPPORTUNITIES

ASSOCIATES LP, its General Partner

   

By: ATHYRIUM OPPORTUNITIES ASSOCIATES GP

LLC, the General Partner of Athyrium Opportunities

Associates LP

    By:   /s/ Jeffrey A. Ferrell     Name:   Jeffrey A. Ferrell     Title:  
President