Exhibit 10.19

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (as the same may from time to time be amended,
modified, supplemented or restated, this “Agreement”) dated as of March 5, 2013
(the “Effective Date”) among OXFORD FINANCE LLC, a Delaware limited liability
company (“Oxford”), as collateral agent (in such capacity, “Collateral Agent”),
the Lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time
to time including Oxford in its capacity as a Lender (each a “Lender” and
collectively, the “Lenders”), and DURATA THERAPEUTICS HOLDING C.V., a limited
partnership (commanditaire vennootschap) organized under the laws of the
Netherlands (“Durata C.V.”) and DURATA THERAPEUTICS INTERNATIONAL B.V., a
private company with limited liability (besloten vennootschap met beperkte
aansprakelijkheid) incorporated under the laws of the Netherlands, having its
corporate seat (statutaire zetel) in Amsterdam, the Netherlands, and which is
registered with the Chamber of Commerce of Amsterdam under registration number
55527221 (“Durata B.V.”; and, individually and collectively, jointly and
severally with Durata C.V., “Borrower”), and DURATA THERAPEUTICS, INC., a
Delaware corporation (“Parent” and, collectively with Borrower, each a “Credit
Party” and collectively, the “Credit Parties”), provides the terms on which the
Lenders shall lend to Borrower and Borrower shall repay the Lenders. The parties
agree as follows:

 

1. ACCOUNTING AND OTHER TERMS

1.1 Accounting terms not defined in this Agreement shall be construed in
accordance with GAAP. Calculations and determinations must be made in accordance
with GAAP. Capitalized terms not otherwise defined in this Agreement shall have
the meanings set forth in Section 13. All other terms contained in this
Agreement, unless otherwise indicated, shall have the meaning provided by the
Code to the extent such terms are defined therein. All references to “Dollars”
or “$” are United States Dollars, unless otherwise noted.

 

2. LOANS AND TERMS OF PAYMENT

2.1 Promise to Pay. Borrower hereby unconditionally promises to pay each Lender,
the outstanding principal amount of all Term Loans advanced to Borrower by such
Lender and accrued and unpaid interest thereon and any other amounts due
hereunder as and when due in accordance with this Agreement.

2.2 Term Loans.

(a) Availability. (i) Subject to the terms and conditions of this Agreement, the
Lenders agree, severally and not jointly, during the First Draw Period, to make
term loans to Borrower in an aggregate amount of Ten Million Dollars
($10,000,000.00) according to each Lender’s Term A Loan Commitment as set forth
on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a
“Term A Loan”, and collectively as the “Term A Loans”). After repayment, no Term
A Loan may be re-borrowed.

(ii) Subject to the terms and conditions of this Agreement, the Lenders agree,
severally and not jointly, during the Second Draw Period, to make term loans to
Borrower in an aggregate amount up to Ten Million Dollars ($10,000,000.00)
according to each Lender’s Term B Loan Commitment as set forth on Schedule 1.1
hereto (such term loans are hereinafter referred to singly as a “Term B Loan”,
and collectively as the “Term B Loans”; each Term A Loan or Term B Loan is
hereinafter referred to singly as a “Term Loan” and the Term A Loans and the
Term B Loans are hereinafter referred to collectively as the “Term Loans”).
After repayment, no Term B Loan may be re-borrowed.

(b) Repayment. Borrower shall make monthly payments of interest only commencing
on the first (1st) Payment Date following the Funding Date of each Term Loan,
and continuing on the Payment Date of each successive month thereafter through
and including the Payment Date immediately preceding the Amortization Date.
Borrower agrees to pay, on the Funding Date of each Term Loan, any initial
partial monthly interest payment otherwise due for the period between the
Funding Date of such Term Loan and the first Payment Date thereof. Commencing on
the Amortization Date, and continuing on the Payment Date of each month
thereafter, Borrower shall make consecutive equal monthly payments of principal
and interest, in arrears, to each Lender, as calculated by Collateral Agent
(which calculations shall be deemed correct absent manifest error) based upon:
(1) the amount of

 

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such Lender’s Term Loan, (2) the effective rate of interest, as determined in
Section 2.3(a), and (3) a repayment schedule equal to thirty (30) months. All
unpaid principal and accrued and unpaid interest with respect to each Term Loan
is due and payable in full on the Maturity Date. Each Term Loan may only be
prepaid in accordance with Sections 2.2(c) and 2.2(d).

(c) Mandatory Prepayments. If the Term Loans are accelerated following the
occurrence of an Event of Default, Borrower shall immediately pay to Lenders,
payable to each Lender in accordance with its respective Pro Rata Share, an
amount equal to the sum of: (i) all outstanding principal of the Term Loans plus
accrued and unpaid interest thereon through the prepayment date, (ii) the Final
Payment, (iii) the Prepayment Fee, plus (iv) all other Obligations that are due
and payable, including Lenders’ Expenses and interest at the Default Rate with
respect to any past due amounts. Notwithstanding (but without duplication with)
the foregoing, on the Maturity Date, if the Final Payment had not previously
been paid in full in connection with the prepayment of the Term Loans in full,
Borrower shall pay to Collateral Agent, for payment to each Lender in accordance
with its respective Pro Rata Share, the Final Payment in respect of the Term
Loan(s). No Prepayment Fee shall be required in connection with any mandatory
prepayment pursuant to Section 6.5 hereof.

(d) Permitted Prepayment of Term Loans. Borrower shall have the option to prepay
all, but not less than all, of the Term Loans advanced by the Lenders under this
Agreement, provided Borrower (i) provides written notice to Collateral Agent of
its election to prepay the Term Loans at least ten (10) days prior to such
prepayment, and (ii) pays to the Lenders on the date of such prepayment, payable
to each Lender in accordance with its respective Pro Rata Share, an amount equal
to the sum of (A) all outstanding principal of the Term Loans plus accrued and
unpaid interest thereon through the prepayment date, (B) the Final Payment,
(C) the Prepayment Fee, plus (D) all other Obligations that are due and payable,
including Lenders’ Expenses and interest at the Default Rate with respect to any
past due amounts.

2.3 Payment of Interest on the Credit Extensions.

(a) Interest Rate. Subject to Section 2.3(b), the principal amount outstanding
under the Term Loans shall accrue interest at a fixed per annum rate (which rate
shall be fixed for the duration of the applicable Term Loan) equal to the Basic
Rate, determined by Collateral Agent on the Funding Date of the applicable Term
Loan, which interest shall be payable monthly in arrears in accordance with
Sections 2.2(b) and 2.3(e). Interest shall accrue on each Term Loan commencing
on, and including, the Funding Date of such Term Loan, and shall accrue on the
principal amount outstanding under such Term Loan through and including the day
on which such Term Loan is paid in full.

(b) Default Rate. Immediately upon the occurrence and during the continuance of
an Event of Default, Obligations shall accrue interest at a fixed per annum rate
equal to the rate that is otherwise applicable thereto plus five percentage
points (5.00%) (the “Default Rate”). Payment or acceptance of the increased
interest rate provided in this Section 2.3(b) is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Collateral Agent.

(c) 360-Day Year. Interest shall be computed on the basis of a three hundred
sixty (360) day year consisting of twelve (12) months of thirty (30) days.

(d) Debit of Accounts. Collateral Agent and each Lender may debit (or ACH) any
deposit accounts, maintained by Borrower, including the Designated Deposit
Account, for principal and interest payments or any other amounts Borrower owes
the Lenders under the Loan Documents when due. Collateral Agent and each Lender
may debit any deposit accounts maintained by any Guarantor if Borrower or any
Guarantor has failed to satisfy the Obligations hereunder or under any of the
Guaranty Documents. Any such debits (or ACH activity) shall not constitute a
set-off. Without limiting the foregoing, Collateral Agent shall use commercially
reasonable efforts to promptly notify Parent of any amounts (other than
principal and interest payments) debited from Borrower’s deposit accounts in
respect of this Agreement.

(e) Payments. Except as otherwise expressly provided herein, all payments by
Borrower under the Loan Documents shall be made to the respective Lender to
which such payments are owed, at such Lender’s office in immediately available
funds on the date specified herein. Unless otherwise provided, interest is

 

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payable monthly in arrears on the Payment Date of each month. Payments of
principal and/or interest received after 12:00 noon Eastern time are considered
received at the opening of business on the next Business Day. When a payment is
due on a day that is not a Business Day, the payment is due the next Business
Day and additional fees or interest, as applicable, shall continue to accrue
until paid. All payments to be made by Borrower hereunder or under any other
Loan Document, including payments of principal and interest, and all fees,
expenses, indemnities and reimbursements, shall be made without set-off,
recoupment or counterclaim, in lawful money of the United States and in
immediately available funds.

2.4 Secured Promissory Notes. The Term Loans shall be evidenced by a Secured
Promissory Note or Notes in the form attached as Exhibit D hereto (each a
“Secured Promissory Note”), and shall be repayable as set forth in this
Agreement. Borrower irrevocably authorizes each Lender to make or cause to be
made, on or about the Funding Date of any Term Loan or at the time of receipt of
any payment of principal on such Lender’s Secured Promissory Note, an
appropriate notation on such Lender’s Secured Promissory Note Record reflecting
the making of such Term Loan or (as the case may be) the receipt of such
payment. The outstanding amount of each Term Loan set forth on such Lender’s
Secured Promissory Note Record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Lender, but the failure to record, or
any error in so recording, any such amount on such Lender’s Secured Promissory
Note Record shall not limit or otherwise affect the obligations of Borrower
under any Secured Promissory Note or any other Loan Document to make payments of
principal of or interest on any Secured Promissory Note when due. Upon receipt
of an affidavit of an officer of a Lender as to the loss, theft, destruction, or
mutilation of its Secured Promissory Note (and including customary lost note
indemnification provisions), Borrower shall issue, in lieu thereof, a
replacement Secured Promissory Note in the same principal amount thereof and of
like tenor.

2.5 Fees. Borrower shall pay to Collateral Agent:

(a) Facility Fee. A fully earned, non-refundable facility fee of One Hundred
Fifty Thousand Dollars ($150,000.00) to be shared between the Lenders pursuant
to their respective Commitment Percentages payable on the Effective Date;

(b) Final Payment. The Final Payment, when due hereunder, to be shared between
the Lenders in accordance with their respective Pro Rata Shares;

(c) Prepayment Fee. The Prepayment Fee, when due hereunder, to be shared between
the Lenders in accordance with their respective Pro Rata Shares; and

(d) Lenders’ Expenses. All Lenders’ Expenses (including reasonable attorneys’
fees and expenses for documentation and negotiation of this Agreement) incurred
through and after the Effective Date, when due.

2.6 Withholding. Payments received by the Lenders from Borrower hereunder will
be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, duties, deductions, withholdings, assessments,
fees or other charges imposed by any governmental authority (including any
interest, additions to tax or penalties applicable thereto). Specifically,
however, if at any time any Governmental Authority, applicable law, regulation
or international agreement requires Borrower to make any withholding or
deduction from any such payment or other sum payable hereunder to the Lenders,
Borrower hereby covenants and agrees that the amount due from Borrower with
respect to such payment or other sum payable hereunder will be increased to the
extent necessary to ensure that, after the making of such required withholding
or deduction, each Lender receives a net sum equal to the sum which it would
have received had no withholding or deduction been required and Borrower shall
pay the full amount withheld or deducted to the relevant Governmental Authority;
provided, that a Lender that shall have become a Lender pursuant to a Lender
Transfer shall be entitled to receive only such additional amounts as such
Lender’s assignor would have been entitled to receive pursuant to this
Section 2.6. Borrower will, upon request, furnish the Lenders with proof
reasonably satisfactory to the Lenders indicating that Borrower has made such
withholding payment; provided, however, that Borrower need not make any
withholding payment if the amount or validity of such withholding payment is
contested in good faith by appropriate and timely proceedings and as to which
payment in full is bonded or reserved against by Borrower. The agreements and
obligations of Borrower contained in this Section 2.6 shall survive the
termination of this Agreement.

 

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3. CONDITIONS OF LOANS

3.1 Conditions Precedent to Initial Credit Extension. Each Lender’s obligation
to make a Term A Loan is subject to the condition precedent that Collateral
Agent and each Lender shall consent to or shall have received, in form and
substance satisfactory to Collateral Agent and each Lender, such documents, and
completion of such other matters, as Collateral Agent and each Lender may
reasonably deem necessary or appropriate, including, without limitation:

(a) original Loan Documents, each duly executed by each Credit Party and each of
their Subsidiaries, as applicable;

(b) duly executed original Control Agreements with respect to any Collateral
Accounts maintained by Parent and each Guarantor, to the extent required under
Section 6.6 hereof;

(c) duly executed original Secured Promissory Notes in favor of each Lender
according to its Term A Loan Commitment Percentage;

(d) the certificate(s) for the Shares, together with Assignment(s) Separate from
Certificate, duly executed in blank;

(e) the Operating Documents and, if this concept exists in the relevant
jurisdiction, good standing certificates of each Credit Party and each of their
Subsidiaries, certified by the Secretary of State (or equivalent agency) of
Parent’s, Borrower’s and each Subsidiaries’ jurisdiction of organization,
incorporation or formation and each jurisdiction in which each Credit Party and
each of their Subsidiaries is qualified to conduct business, each as of a date
no earlier than thirty (30) days prior to the Effective Date;

(f) the Guaranty Documents, duly executed by each Guarantor;

(g) a completed Perfection Certificate for each Credit Party and each of their
Subsidiaries;

(h) the Annual Projections, for the current calendar year;

(i) duly executed original officer’s certificate for each Credit Party and each
of their Subsidiaries that is a party to the Loan Documents, in a form
acceptable to Collateral Agent and the Lenders;

(j) certified copies, dated as of date no earlier than thirty (30) days prior to
the Effective Date, of financing statement searches, as Collateral Agent shall
request, accompanied by written evidence (including any UCC termination
statements) that the Liens indicated in any such financing statements either
constitute Permitted Liens or have been or, in connection with the initial
Credit Extension, will be terminated or released;

(k) a landlord’s consent executed in favor of Collateral Agent in respect of all
of Parent’s, Borrower’s and each Guarantor’s leased locations as of the
Effective Date, as applicable;

(l) a bailee waiver executed in favor of Collateral Agent in respect of each
third party bailee where Parent, Borrower or any Guarantor maintains Collateral
having a book value in excess of Two Hundred Fifty Thousand Dollars
($250,000.00), provided that no bailee waiver shall be required for any location
where Collateral is maintained for sixty (60) days or less as set forth in
Section 6.11 hereof;

(m) a duly executed legal opinion of counsel to each Credit Party and each of
their Subsidiaries which is party to a Loan Document, dated as of the Effective
Date;

(n) evidence satisfactory to Collateral Agent and the Lenders that the insurance
policies required by Section 6.5 hereof are in full force and effect, together
with appropriate evidence showing loss payable and/or additional insured clauses
or endorsements in favor of Collateral Agent, for the ratable benefit of the
Lenders;

 

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(o) a copy of any applicable Registration Rights Agreement or Investors’ Rights
Agreement of Parent, and any amendments thereto;

(p) a subordination agreement, duly executed by each holder of Subordinated
Debt;

(q) the Intercompany Note, legended and/or endorsed to Collateral Agent; and

(r) payment of the fees and Lenders’ Expenses then due as specified in
Section 2.5 hereof.

3.2 Conditions Precedent to all Credit Extensions. The obligation of each Lender
to make each Credit Extension, including the initial Credit Extension, is
subject to the following conditions precedent:

(a) receipt by Collateral Agent of an executed Disbursement Letter in the form
of Exhibit B attached hereto;

(b) the representations and warranties in Section 5 hereof shall be true,
accurate and complete in all material respects on the date of the Disbursement
Letter and on the Funding Date of each Credit Extension; provided, however, that
such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date, and no Event of Default shall have
occurred and be continuing or result from the Credit Extension. Each Credit
Extension is Borrower’s representation and warranty on that date that the
representations and warranties in Section 5 hereof are true, accurate and
complete in all material respects; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date;

(c) in such Lender’s sole but reasonable discretion, there has not been any
Material Adverse Change or any material adverse deviation by Borrower from the
Annual Projections of Borrower presented to and accepted by Collateral Agent and
each Lender;

(d) to the extent not delivered at the Effective Date, duly executed original
Secured Promissory Notes and Warrants, in number, form and content acceptable to
each Lender, and in favor of each Lender according to its Commitment Percentage,
with respect to each Credit Extension made by such Lender after the Effective
Date; and

(e) payment of the fees and Lenders’ Expenses then due as specified in
Section 2.5 hereof.

3.3 Covenant to Deliver. Borrower agrees to deliver to Collateral Agent and the
Lenders each item required to be delivered to Collateral Agent under this
Agreement as a condition precedent to any Credit Extension. Borrower expressly
agrees that a Credit Extension made prior to the receipt by Collateral Agent or
any Lender of any such item shall not constitute a waiver by Collateral Agent or
any Lender of Borrower’s obligation to deliver such item, and any such Credit
Extension in the absence of a required item shall be made in each Lender’s sole
discretion.

3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other
applicable conditions to the making of a Term Loan set forth in this Agreement,
to obtain a Term Loan (other than the Term A Loan), Borrower shall notify the
Lenders (which notice shall be irrevocable) by electronic mail, facsimile, or
telephone by 12:00 noon Eastern time three (3) Business Days prior to the date
the Term Loan is to be made. Together with any such electronic, facsimile or
telephonic notification, Borrower shall deliver to the Lenders by electronic
mail or facsimile a completed Disbursement Letter executed by a Responsible
Officer or his or her designee. The Lenders may rely on any telephone notice
given by a person whom a Lender reasonably believes is a Responsible Officer or
designee. On the Funding Date, each Lender shall credit and/or transfer (as
applicable) to the Designated Deposit Account, an amount equal to its Term Loan
Commitment.

 

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4. CREATION OF SECURITY INTEREST

4.1 Grant of Security Interest. Borrower hereby grants Collateral Agent, for the
ratable benefit of the Lenders, to secure the payment and performance in full of
all of the Obligations, a continuing security interest in, and pledges to
Collateral Agent, for the ratable benefit of the Lenders, the Collateral,
wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof. Borrower represents, warrants, and covenants that
the security interest granted herein is and shall at all times continue to be a
first priority perfected security interest in the Collateral (to the extent
possible under the laws of the jurisdiction of its location), subject only to
Permitted Liens that are permitted by the terms of this Agreement to have
priority to Collateral Agent’s Lien. If Borrower shall acquire a commercial tort
claim (as defined in the Code), Borrower, shall promptly notify Collateral Agent
in a writing signed by Borrower, as the case may be, of the general details
thereof (and further details as may be required by Collateral Agent) and grant
to Collateral Agent, for the ratable benefit of the Lenders, in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance reasonably
satisfactory to Collateral Agent.

If this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall
continue until the Obligations (other than inchoate indemnity obligations) are
repaid in full in cash. Upon payment in full in cash of the Obligations (other
than inchoate indemnity obligations) and at such time as the Lenders’ obligation
to make Credit Extensions has terminated, Collateral Agent shall, at the sole
cost and expense of Borrower, release its Liens in the Collateral and all rights
therein shall revert to Borrower.

4.2 Authorization to File Financing Statements. Borrower hereby authorizes
Collateral Agent to file financing statements or take any other action required
to perfect Collateral Agent’s security interests in the Collateral, without
notice to Borrower, with all appropriate jurisdictions to perfect or protect
Collateral Agent’s interest or rights under the Loan Documents, including a
notice that any disposition of the Collateral, except to the extent permitted by
the terms of this Agreement, by Borrower, or any other Person, shall be deemed
to violate the rights of Collateral Agent under the Code.

4.3 Pledge of Collateral. Borrower hereby pledges, assigns and grants to
Collateral Agent, for the ratable benefit of the Lenders, a security interest in
all the Shares, together with all proceeds and substitutions thereof, all cash,
stock and other moneys and property paid thereon, all rights to subscribe for
securities declared or granted in connection therewith, and all other cash and
noncash proceeds of the foregoing, as security for the performance of the
Obligations. On the Effective Date, or, to the extent not certificated as of the
Effective Date, within ten (10) days of the certification of any Shares, the
certificate or certificates for the Shares will be delivered to Collateral
Agent, accompanied by an instrument of assignment duly executed in blank by
Borrower. To the extent required by the terms and conditions governing the
Shares, Borrower shall cause the books of each entity whose Shares are part of
the Collateral and any transfer agent to reflect the pledge of the Shares. Upon
the occurrence and during the continuance of an Event of Default hereunder,
Collateral Agent may effect the transfer of any securities included in the
Collateral (including but not limited to the Shares) into the name of Collateral
Agent and cause new (as applicable) certificates representing such securities to
be issued in the name of Collateral Agent or its transferee. Borrower will
execute and deliver such documents, and take or cause to be taken such actions,
as Collateral Agent may reasonably request to perfect or continue the perfection
of Collateral Agent’s security interest in the Shares. Unless an Event of
Default shall have occurred and be continuing, Borrower shall be entitled to
exercise any voting rights with respect to the Shares and to give consents,
waivers and ratifications in respect thereof, provided that no vote shall be
cast or consent, waiver or ratification given or action taken which would be
inconsistent with any of the terms of this Agreement or which would constitute
or create any violation of any of such terms. All such rights to vote and give
consents, waivers and ratifications shall terminate upon the occurrence and
continuance of an Event of Default.

 

5. REPRESENTATIONS AND WARRANTIES

Parent and each Borrower represents and warrants to Collateral Agent and the
Lenders as follows at all times:

5.1 Due Organization, Authorization: Power and Authority. Each Credit Party is
duly existing and, if this concept exists in the relevant jurisdiction, in good
standing as a Registered Organization in its

 

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jurisdictions of organization, incorporation or formation and each Credit Party
is qualified and licensed to do business and is in good standing in any
jurisdiction in which the conduct of its businesses or its ownership of property
requires that it be qualified except where the failure to do so could not
reasonably be expected to have a Material Adverse Change. Each of Parent’s
Subsidiaries is duly existing and, if this concept exists in the relevant
jurisdiction, in good standing as a Registered Organization, in its
jurisdictions of organization or formation and each of Parent’s Subsidiaries is
qualified and licensed to do business and is in good standing in any
jurisdiction in which the conduct of its businesses or its ownership of property
requires that it be qualified except, in each case, where the failure to do so
could not reasonably be expected to have a Material Adverse Change. In
connection with this Agreement, each Credit Party and each of their Subsidiaries
has delivered to Collateral Agent a completed perfection certificate signed by a
duly authorized managing director, general partner of other officer of Parent,
Borrower or such Subsidiary (each a “Perfection Certificate” and collectively,
the “Perfection Certificates”). Each of Parent and Borrower represents and
warrants that (a) each Credit Party and each of their Subsidiaries’ exact legal
name is that which is indicated on its respective Perfection Certificate and on
the signature page of each Loan Document to which it is a party; (b) each Credit
Party and each of their Subsidiaries is an organization of the type and is
organized or incorporated in the jurisdiction set forth on its respective
Perfection Certificate; (c) each Perfection Certificate accurately sets forth
each of Borrower’s and its Subsidiaries’ organizational identification number or
accurately states that Borrower or such Subsidiary has none; (d) each Perfection
Certificate accurately sets forth Borrower’s and each of its Subsidiaries’ place
of business, or, if more than one, its chief executive office as well as
Borrower’s and each of its Subsidiaries’ mailing address (if different than its
chief executive office); (e) except as disclosed on the Perfection Certificates,
each Credit Party and each of their Subsidiaries (and each of its respective
predecessors) have not, in the past five (5) years, changed its jurisdiction of
organization, organizational structure or type, or any organizational number
assigned by its jurisdiction; and (f) all other information set forth on the
Perfection Certificates pertaining to each Credit Party and each of their
Subsidiaries, is accurate and complete (it being understood and agreed that each
Credit Party and each of their Subsidiaries may from time to time update certain
information in the Perfection Certificates (including the information set forth
in clause (d) above) after the Effective Date to the extent permitted by one or
more specific provisions in this Agreement which updates may be provided by
Parent to Collateral Agent contemporaneously with the delivery of the Compliance
Certificate delivered by Parent pursuant to Section 6.2 relating to the fiscal
quarter in which such change(s) occurs; the Collateral Agent and Lenders
acknowledge that until the Perfection Certificates are so updated (and provided
the perfection Certificates are so updated as required pursuant to this clause)
the Perfection Certificates shall not be deemed inaccurate or incomplete); such
updated Perfection Certificates subject to the review and approval of Collateral
Agent. If any Credit Party or any of their Subsidiaries is not now a Registered
Organization but later becomes one, Borrower shall notify Collateral Agent of
such occurrence and provide Collateral Agent with such Person’s organizational
identification number within five (5) Business Days of receiving such
organizational identification number.

The execution, delivery and performance by each Credit Party and each of their
Subsidiaries of the Loan Documents to which it is a party have been duly
authorized, and do not (i) conflict with any of Borrower’s or such Subsidiaries’
organizational documents, including its respective Operating Documents,
(ii) contravene, conflict with, constitute a default under or violate any
material Requirement of Law applicable thereto, (iii) contravene, conflict or
violate any applicable order, writ, judgment, injunction, decree, determination
or award of any Governmental Authority by which Borrower or such Subsidiary, or
any of their property or assets may be bound or affected, (iv) require any
action by, filing, registration, or qualification with, or Governmental Approval
from, any Governmental Authority (except such Governmental Approvals which have
already been obtained and are in full force and effect) or are being obtained
pursuant to Section 6.1(b), or (v) constitute an event of default under any
material agreement by which Borrower or any of such Subsidiaries, or their
respective properties, is bound. Neither Borrower nor any of its Subsidiaries is
in default under any agreement to which it is a party or by which it or any of
its assets is bound in which such default could reasonably be expected to have a
Material Adverse Change.

5.2 Collateral.

(a) Each Credit Party and each of their Subsidiaries have good title to, have
rights in, and the power to transfer each item of the Collateral upon which it
purports to grant a Lien under the Loan Documents, free and clear of any and all
Liens except Permitted Liens, and neither Borrower nor any of its Subsidiaries
have any Deposit Accounts, Securities Accounts, Commodity Accounts or other
investment accounts other than the Collateral Accounts or the other investment
accounts, if any, described in the Perfection Certificates delivered to
Collateral

 

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Agent in connection herewith with respect of which Borrower or such Subsidiary
has given Collateral Agent notice and taken such actions as are necessary to
give Collateral Agent a perfected security interest therein (to the extent
required pursuant to Section 6.6 hereof). The Accounts are bona fide, existing
obligations of the Account Debtors.

(b) On the Effective Date, and except as disclosed on the Perfection
Certificates (i) the Collateral is not in the possession of any third party
bailee (such as a warehouse), and (ii) no such third party bailee possesses
components of the Collateral in excess of Two Hundred Fifty Thousand Dollars
($250,000.00). None of the components of the Collateral shall be maintained at
locations other than as disclosed in the Perfection Certificates on the
Effective Date or as permitted pursuant to Section 6.11.

(c) All Inventory is in all material respects of good and marketable quality,
free from material defects.

(d) Each Credit Party and each of their Subsidiaries is the sole owner of the
Intellectual Property each respectively purports to own, free and clear of all
Liens other than Permitted Liens. Except as noted on the Perfection
Certificates, neither Borrower nor any of its Subsidiaries is a party to, nor is
bound by, any material license or other material agreement with respect to which
Borrower or such Subsidiary is the licensee that (i) prohibits or otherwise
restricts any Credit Party or any of their Subsidiaries from granting a security
interest in Borrower’s or such Subsidiaries’ interest in such material license
or material agreement or any other property, or (ii) for which a default under
or termination of could reasonably be expected to interfere with Collateral
Agent’s or any Lender’s right to sell any Collateral. Borrower shall provide
written notice to Collateral Agent and each Lender within twenty (20) days after
any Credit Party or any of their Subsidiaries entering into or becoming bound by
any material license or material agreement with respect to which Borrower or any
Subsidiary is the licensee (other than open source, over the counter software,
prepackaged software or other software that is available to the general public
without customization). Borrower shall, and shall cause its Subsidiaries to,
take such commercially reasonable steps as Collateral Agent and any Lender
requests to obtain the consent of, or waiver by, any Person whose consent or
waiver is necessary for (i) all material licenses or material agreements with
respect to which Borrower or any Subsidiary is the licensee to be deemed
“Collateral” and for Collateral Agent and each Lender to have a security
interest in any such material license or material agreement that might otherwise
be restricted or prohibited by law or by the terms of any such material license
or material agreement, whether now existing or entered into in the future, and
(ii) Collateral Agent and each Lender shall have the ability in the event of a
liquidation of any Collateral to dispose of such Collateral in accordance with
Collateral Agent’s and such Lender’s rights and remedies under this Agreement
and the other Loan Documents.

5.3 Litigation. Except as disclosed (i) on the Perfection Certificates, or
(ii) in accordance with Section 6.9 hereof, there are no actions, suits,
investigations, or proceedings pending or, to the knowledge of the Responsible
Officers, threatened in writing by or against any Credit Party or any of their
Subsidiaries involving more than Two Hundred Fifty Thousand Dollars
($250,000.00).

5.4 No Material Deterioration in Financial Condition; Financial Statements. All
consolidated financial statements for Borrower and its Subsidiaries, delivered
to Collateral Agent fairly present, in conformity with GAAP, in all material
respects the consolidated financial condition of Parent and its Subsidiaries,
and the consolidated results of operations of Parent and its Subsidiaries. There
has not been any material deterioration in the consolidated financial condition
of Parent and its Subsidiaries since the date of the most recent financial
statements submitted to any Lender.

5.5 Solvency. Borrower is Solvent. Parent and its Subsidiaries, taken as a
whole, are Solvent.

5.6 Regulatory Compliance. Neither Borrower nor any of its Subsidiaries is an
“investment company” or a company “controlled” by an “investment company” under
the Investment Company Act of 1940, as amended. Neither Borrower nor any of its
Subsidiaries is engaged as one of its important activities in extending credit
for margin stock (under Regulations X, T and U of the Federal Reserve Board of
Governors). Each Credit Party and each of their Subsidiaries has complied in all
material respects with the Federal Fair Labor Standards Act. Neither Borrower
nor any of its Subsidiaries is a “holding company” or an “affiliate” of a
“holding company” or a “subsidiary company” of a “holding company” as each term
is defined and used in the Public Utility Holding Company Act of 2005. Neither
Borrower nor any of its Subsidiaries has violated any laws, ordinances or rules,
the

 

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violation of which could reasonably be expected to have a Material Adverse
Change. Neither Borrower’s nor any of its Subsidiaries’ properties or assets has
been used by Borrower or such Subsidiary or, to Borrower’s knowledge, by
previous Persons, in disposing, producing, storing, treating, or transporting
any hazardous substance other than in material compliance with applicable laws.
Each Credit Party and each of their Subsidiaries has obtained all consents,
approvals and authorizations of, made all declarations or filings with, and
given all notices to, all Governmental Authorities that are necessary to
continue their respective businesses as currently conducted.

None of Borrower, any of its Subsidiaries, or any of Borrower’s or its
Subsidiaries’ Affiliates or any of their respective agents acting or benefiting
in any capacity in connection with the transactions contemplated by this
Agreement is (i) in violation of any Anti-Terrorism Law, (ii) engaging in or
conspiring to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. None of
Borrower, any of its Subsidiaries, or to the knowledge of Borrower and any of
their Affiliates or agents, acting or benefiting in any capacity in connection
with the transactions contemplated by this Agreement, (x) conducts any business
or engages in making or receiving any contribution of funds, goods or services
to or for the benefit of any Blocked Person, or (y) deals in, or otherwise
engages in any transaction relating to, any property or interest in property
blocked pursuant to Executive Order No. 13224, any similar executive order or
other Anti-Terrorism Law.

5.7 Investments. Neither Borrower nor any of its Subsidiaries owns any stock,
shares, partnership interests or other equity securities except for Permitted
Investments.

5.8 Tax Returns and Payments; Pension Contributions. Each Credit Party and each
of their Subsidiaries has timely filed all required tax returns and reports, and
each Credit Party and each of their Subsidiaries, has timely paid all foreign,
federal, state, and local taxes, assessments, deposits and contributions owed by
Borrower and such Subsidiaries, in all jurisdictions in which Borrower or any
such Subsidiary is subject to taxes, including the United States, unless such
taxes are being contested in accordance with the following sentence. Each Credit
Party and each of their Subsidiaries, may defer payment of any contested taxes,
provided that Borrower or such Subsidiary, (a) in good faith contests its
obligation to pay the taxes by appropriate proceedings promptly and diligently
instituted and conducted, (b) notifies Collateral Agent in writing of the
commencement of, and any material development in, the proceedings, and (c) posts
bonds or takes any other steps required to prevent the Governmental Authority
levying such contested taxes from obtaining a Lien upon any of the Collateral
that is other than a “Permitted Lien.” Neither Borrower nor any of its
Subsidiaries is aware of any claims or adjustments proposed for any of
Borrower’s or such Subsidiaries’, prior tax years which could result in material
additional taxes becoming due and payable by any Credit Party or any of their
Subsidiaries. Each Credit Party and each of their Subsidiaries have paid all
amounts necessary to fund all present pension, profit sharing and deferred
compensation plans in accordance with their terms, and neither Borrower nor any
of its Subsidiaries have, withdrawn from participation in, and have not
permitted partial or complete termination of, or permitted the occurrence of any
other event with respect to, any such plan which could reasonably be expected to
result in any liability of any Credit Party or any of their Subsidiaries,
including any liability to the Pension Benefit Guaranty Corporation or its
successors or any other Governmental Authority.

5.9 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions
solely as working capital and to fund its general business requirements in
accordance with the provisions of this Agreement, and not for personal, family,
household or agricultural purposes.

5.10 Shares. Borrower has full power and authority to create a first lien on the
Shares and no disability or contractual obligation exists that would prohibit
Borrower from pledging the Shares pursuant to this Agreement. To Borrower’s
knowledge, there are no subscriptions, warrants, rights of first refusal or
other restrictions on transfer relative to, or options exercisable with respect
to the Shares. The Shares have been and will be duly authorized and validly
issued, and are fully paid and non-assessable. To Borrower’s knowledge, the
Shares are not the subject of any present or threatened suit, action,
arbitration, administrative or other proceeding, and Borrower knows of no
reasonable grounds for the institution of any such proceedings.

5.11 Full Disclosure. No written representation, warranty or other statement of
any Credit Party or any of their Subsidiaries in any certificate or written
statement given to Collateral Agent or any Lender, as of the date such
representation, warranty, or other statement was made, taken together with all
such written certificates and

 

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written statements given to Collateral Agent or any Lender, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading (it
being recognized that the projections and forecasts provided by any Credit Party
or any of their Subsidiaries in good faith and based upon reasonable assumptions
are not viewed as facts and that actual results during the period or periods
covered by such projections and forecasts may differ from the projected or
forecasted results).

5.12 Definition of “Knowledge.” For purposes of the Loan Documents, whenever a
representation or warranty is made to any Credit Party’s knowledge or awareness,
to the “best of” any Credit Party’s knowledge, or with a similar qualification,
knowledge or awareness means the actual knowledge, after reasonable
investigation, of the Responsible Officers.

 

6. AFFIRMATIVE COVENANTS

Except as otherwise indicated below, each Credit Party shall, and shall cause
each of its Subsidiaries to, do all of the following:

6.1 Government Compliance.

(a) Maintain its and all its Subsidiaries’ legal existence and, if this concept
exists in the relevant jurisdiction, good standing in their respective
jurisdictions of organization or incorporation and maintain qualification in
each jurisdiction in which the failure to so qualify could reasonably be
expected to have a Material Adverse Change. Comply with all laws, ordinances and
regulations to which any Credit Party or any of their Subsidiaries is subject,
the noncompliance with which could reasonably be expected to have a Material
Adverse Change.

(b) Obtain and keep in full force and effect, all of the Governmental Approvals
necessary for the performance by Borrower and its Subsidiaries of their
respective businesses and obligations under the Loan Documents and the grant of
a security interest to Collateral Agent for the ratable benefit of the Lenders,
in all of the Collateral. Borrower shall no less than quarterly provide copies
to Collateral Agent of any material Governmental Approvals obtained by any
Credit Party or any of their Subsidiaries.

6.2 Financial Statements, Reports, Certificates.

(a) Parent shall deliver to each Lender:

(i) as soon as available, but no later than forty five (45) days after the last
day of each fiscal quarter, a company prepared consolidated (and upon Collateral
Agent’s request, consolidating) balance sheet, income statement and cash flow
statement covering the consolidated operations of the Parent and its
Subsidiaries for such quarter certified by a Responsible Officer and in a form
reasonably acceptable to Collateral Agent as fairly presenting in all material
respects the financial condition, results of operations, shareholders’ equity
and cash flows of Parent and its Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes;

(ii) as soon as available, but no later than one hundred twenty (120) days after
the last day of Parent’s fiscal year or within five (5) days of filing with the
SEC, audited consolidated financial statements prepared under GAAP, consistently
applied, together with an unqualified opinion on the financial statements from
an independent certified public accounting firm acceptable to Collateral Agent
in its reasonable discretion (provided that the Collateral Agent and the Lenders
acknowledge that KPMG is an acceptable independent certified public accounting
firm);

(iii) as soon as available after approval thereof by Parent’s Board of
Directors, but no later than thirty one (31) days after the last day of each of
Parent’s fiscal years, Parent’s annual financial projections for the entire
current fiscal year as approved by Parent’s Board of Directors, which such
annual financial projections shall be set forth in a month-by-month format, on a
consolidated (and upon Collateral Agent’s request, consolidating) basis (such
annual financial projections as originally delivered to Collateral Agent and the
Lenders

 

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are referred to herein as the “Annual Projections”; provided that, any revisions
of the Annual Projections approved by Parent’s Board of Directors shall be
delivered to Collateral Agent and the Lenders no later than seven (7) days after
such approval and, the term “Annual Projections” shall include such revisions);

(iv) within five (5) days of delivery, copies of all statements, reports and
notices made available to Parent’s security holders or holders of Subordinated
Debt;

(v) prompt notice of any amendments of or other changes to the Operating
Documents of any Credit Party or any of their Subsidiaries, together with any
copies reflecting such amendments or changes with respect thereto;

(vi) quarterly (unless an Event of Default has occurred and is continuing, in
which case, prompt) notice of (A) any material change in the composition of the
Intellectual Property, (B) the registration of any copyright, including any
subsequent ownership right of any Credit Party or any of their Subsidiaries in
or to any copyright, patent or trademark, including a copy of any such
registration, and (C) Borrower’s knowledge of any event that could reasonably be
expected to materially and adversely affect the value of the Intellectual
Property;

(vii) as soon as available, but no later than forty five (45) days after the
last day of each fiscal quarter, copies of the month-end account statements for
each Collateral Account maintained by any Credit Party or any of their
Subsidiaries, which statements may be provided to Collateral Agent and each
Lender by Borrower or directly from the applicable institution(s); and

(viii) (other than confidential treatment requests) other financial information
as reasonably requested by Collateral Agent or any Lender.

Notwithstanding the foregoing, documents required to be delivered pursuant to
the terms hereof (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date on which Parent
posts such documents, or provides a link thereto, on Parent’s website on the
internet at Parent’s website address.

(b) Concurrently with the delivery of the financial statements specified in
Section 6.2(a)(i) above but no later than forty five (45) days after the last
day of each fiscal quarter, deliver to each Lender, a duly completed Compliance
Certificate signed by a Responsible Officer.

(c) Keep proper books of record and account in accordance with GAAP in all
material respects, in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities. Each
Credit Party shall, and shall cause each of its Subsidiaries to, allow, at the
sole cost of the Credit Parties, Collateral Agent or any Lender, during regular
business hours upon reasonable prior notice (provided that no notice shall be
required when an Event of Default has occurred and is continuing), to visit and
inspect any of its properties, to examine and make abstracts or copies from any
of its books and records, and to conduct a collateral audit and analysis of its
operations and the Collateral. Such audits shall be conducted no more often than
twice every year unless (and more frequently if) an Event of Default has
occurred and is continuing.

6.3 Inventory; Returns. Keep all Inventory in good and marketable condition,
free from material defects. Returns and allowances between any Credit Party, or
any of their Subsidiaries, and their respective Account Debtors shall follow
such Credit Party’s, or such Subsidiary’s, customary practices as they exist at
the Effective Date. Parent must promptly notify Collateral Agent and the Lenders
of any individual return, recovery, written dispute and written claim, in each
case, related to finished goods Inventory that involve more than Two Hundred
Fifty Thousand Dollars ($250,000.00) based on the book value thereof. Borrower
must notify Collateral Agent and the Lenders at least quarterly (within forty
five (45) days after the last day of each such quarter) of all returns,
recoveries, written disputes and written claims, in each case, related to
finished goods Inventory that involve an amount in excess of five percent
(5%) of Borrower’s product revenue, individually or in the aggregate, for the
preceding quarter.

 

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6.4 Taxes; Pensions. Timely file and require each of its Subsidiaries to timely
file, all required tax returns and reports and timely pay, and require each of
its Subsidiaries to timely file, all foreign, federal, state, and local taxes,
assessments, deposits and contributions owed by any Credit Party or any of their
Subsidiaries, except for deferred payment of any taxes contested pursuant to the
terms of Section 5.8 hereof, and shall deliver to Lenders, on demand,
appropriate certificates attesting to such payments, and pay all amounts
necessary to fund all material liabilities under any present pension, profit
sharing and deferred compensation plans in accordance with the terms of such
plans.

6.5 Insurance. Keep each Credit Party’s and each of their Subsidiaries’ business
and the Collateral insured for risks and in amounts standard for companies in
Parent’s, Borrower’s and its Subsidiaries’ industry and location and as
Collateral Agent may reasonably request. Insurance policies shall be in a form,
with companies, and in amounts that are reasonably satisfactory to Collateral
Agent and Lenders. All such property policies shall have a lender’s loss payable
endorsement showing Collateral Agent as lender loss payee and waive subrogation
against Collateral Agent, and all such liability policies shall show, or have
endorsements showing, Collateral Agent, as additional insured. The Collateral
Agent shall be named as lender loss payee and/or additional insured with respect
to any such insurance providing coverage in respect of any Collateral, and each
provider of any such insurance shall agree, by endorsement upon the policy or
policies issued by it or by independent instruments furnished to the Collateral
Agent, that it will give the Collateral Agent thirty (30) days’ prior written
notice before any such policy or policies shall be materially altered or
canceled (and ten (10) days’ notice for cancellation for nonpayment). At
Collateral Agent’s request, Parent shall deliver certified copies of policies
and evidence of all premium payments. Proceeds payable under any policy of a
Credit Party with respect to any loss of Collateral with respect to which the
Collateral Agent has a first priority security interest shall, at Collateral
Agent’s option, be payable to Collateral Agent, for the ratable benefit of the
Lenders, on account of the Obligations. Notwithstanding the foregoing, (a) so
long as no Event of Default has occurred and is continuing, Borrower shall have
the option of applying the proceeds of any casualty policy up to Two Hundred
Fifty Thousand Dollars ($250,000.00) with respect to any loss, but not exceeding
Two Hundred Fifty Thousand Dollars ($250,000.00), in the aggregate for all
losses under all casualty policies in any one year, toward the replacement or
repair of destroyed or damaged property; provided that any such replaced or
repaired property (i) shall be of equal or like value as the replaced or
repaired Collateral and (ii) shall be deemed Collateral in which Collateral
Agent has been granted a first priority security interest (subject to Permitted
Liens), and (b) after the occurrence and during the continuance of an Event of
Default, all proceeds payable under such casualty policy shall, at the option of
Collateral Agent, be payable to Collateral Agent, for the ratable benefit of the
Lenders, on account of the Obligations. If any Credit Party or any of their
Subsidiaries fails to obtain insurance as required under this Section 6.5 or to
pay any amount or furnish any required proof of payment to third persons,
Collateral Agent and/or any Lender may make, at Borrower’s expense, all or part
of such payment or obtain such insurance policies required in this Section 6.5,
and take any action under the policies Collateral Agent or such Lender deems
prudent.

6.6 Operating Accounts.

(a) Maintain all of each Credit Party’s and their Subsidiaries’ (if such
Subsidiaries are a Borrower or Guarantor) Collateral Accounts in accounts which
are subject to a Control Agreement in favor of Collateral Agent (or to the
extent such account is maintained in the Netherlands, subject to a Dutch law
right of pledge in favor of Collateral Agent). The provisions of the previous
sentence shall not apply to deposit accounts exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the benefit
of a Credit Party’s or any of its Subsidiaries’, employees and identified to
Collateral Agent by Borrower as such in the Perfection Certificates as updated
from time to time.

(b) Parent shall provide Collateral Agent five (5) days’ prior written notice
before any Credit Party or any of their Subsidiaries establishes any Collateral
Account at or with any Person other than Deutsche Bank, Morgan Stanley or Bank
of America. In addition, for each Collateral Account that any Credit Party or
any of their Subsidiaries that are a Borrower or Guarantor, at any time
maintains, Parent, Borrower or such Subsidiary shall (unless such account is
maintained in the Netherlands, in which case such account shall be subject to a
Dutch law right of pledge in favor of Collateral Agent) cause the applicable
bank or financial institution at or with which such Collateral Account is
maintained to execute and deliver a Control Agreement or other appropriate
instrument with respect to such Collateral Account to perfect Collateral Agent’s
Lien in such Collateral Account in accordance with the terms hereunder prior to
the establishment of such Collateral Account, which Control Agreement may not be

 

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terminated without prior written consent of Collateral Agent. The provisions of
the previous sentence shall not apply to deposit accounts exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of any Credit Party’s, or any of its Subsidiaries’, employees and
identified to Collateral Agent by Parent as such in the Perfection Certificates
as updated from time to time as permitted hereunder.

(c) Neither any Credit Party nor any of their Subsidiaries shall maintain any
Collateral Accounts except Collateral Accounts maintained in accordance with
Sections 6.6(a) and (b).

6.7 Protection of Intellectual Property Rights. Each Credit Party and each of
their Subsidiaries shall: (a) use commercially reasonable efforts to protect,
defend and maintain the validity and enforceability of its Intellectual Property
that is material to their respective business; (b) promptly advise Collateral
Agent in writing of material infringement of which it is aware by a third party
of its Intellectual Property; and (c) not allow any Intellectual Property
material to their respective business to be abandoned, forfeited or dedicated to
the public without Collateral Agent’s prior written consent; provided that
Collateral Agent’s consent shall not be required if such Credit Party’s decision
to abandon the prosecution of or otherwise not maintain such Intellectual
Property is made for strategic business reasons and such Intellectual Property
was not registered in the United States, the United Kingdom, France, Spain,
Italy or Germany.

6.8 Litigation Cooperation. Commencing on the Effective Date and continuing
through the termination of this Agreement, make available to Collateral Agent
and the Lenders, without expense to Collateral Agent or the Lenders, each Credit
Party and each of their Subsidiaries and each of such Credit Party’s or
Subsidiaries’ officers, employees and agents and Borrower’s Books, at reasonable
times and at reasonable intervals (unless an Event of Default has occurred and
is continuing), to the extent that Collateral Agent or any Lender may reasonably
deem them necessary to prosecute or defend any third-party suit or proceeding
instituted by or against Collateral Agent or any Lender with respect to any
Collateral or relating to any Credit Party or any of their Subsidiaries.

6.9 Notices of Litigation and Default. Parent will give prompt written notice to
Collateral Agent and the Lenders of any litigation or governmental proceedings
pending or threatened (in writing) against any Credit Party or any of their
Subsidiaries, which could reasonably be expected to result in damages or costs
to any Credit Party or any of their Subsidiaries of Two Hundred Fifty Thousand
Dollars ($250,000.00) or more or which could reasonably be expected to have a
Material Adverse Change. Without limiting or contradicting any other more
specific provision of this Agreement, promptly (and in any event within three
(3) Business Days) upon any Credit Party or any Subsidiary becoming aware of the
existence of any Event of Default or event which, with the giving of notice or
passage of time, or both, would constitute an Event of Default, Parent shall
give written notice to Collateral Agent and the Lenders of such occurrence,
which such notice shall include a reasonably detailed description of such Event
of Default or event which, with the giving of notice or passage of time, or
both, would constitute an Event of Default.

6.10 Intentionally Omitted.

6.11 Landlord Waivers; Bailee Waivers. In the event that any Credit Party or any
of their Subsidiaries, after the Effective Date, intends to add any new offices
or business locations, including warehouses, or otherwise store any portion of
the Collateral with, or deliver any portion of the Collateral to, a bailee, in
each case pursuant to Section 7.2, then such Credit Party or such Subsidiary
will first provide written notice to Collateral Agent (except in respect of any
items of Inventory which consist of unfinished active pharmaceutical ingredients
and are maintained or stored in a particular location for a period of no longer
than sixty (60) days all of which such Inventory is then (a) immediately
transferred to a location in which a bailee or landlord waiver is in place (to
the extent that a bailee or landlord waiver is required pursuant to the terms
hereof) or (b) otherwise sold) and, in the event that the Collateral at any new
location is valued in excess of Two Hundred Fifty Thousand ($250,000.00) in the
aggregate based on the book value thereof (other than any items of Inventory
which consist of unfinished active pharmaceutical ingredients and are maintained
or stored in a particular location for a period of no longer than sixty
(60) days all of which such Inventory is then (a) immediately transferred to a
location in which a bailee or landlord waiver is in place (to the extent that a
bailee or landlord waiver is required pursuant to the terms hereof) or
(b) otherwise sold), such bailee or landlord, as applicable, must execute and
deliver a bailee waiver or landlord waiver, as applicable, as reasonably
requested by, and in form and substance reasonably satisfactory to, Collateral
Agent prior to the addition of any such new offices or business locations, or
any such storage with or delivery to any such bailee, as the case may be.

 

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6.12 Creation/Acquisition of Subsidiaries. In the event any Credit Party or any
of their Subsidiaries creates or acquires any Subsidiary, Parent shall provide
prior written notice to Collateral Agent and each Lender of the creation or
acquisition of such new Subsidiary and take all such action as may be reasonably
required by Collateral Agent or any Lender to cause each such Subsidiary to
become a Borrower hereunder or to guarantee the Obligations under the Loan
Documents and, in each case, grant a continuing pledge and security interest in
and to the assets of such Subsidiary (substantially as described on Exhibit A
hereto); and such Credit Party (or its Subsidiary, as applicable) shall grant
and pledge to Collateral Agent, for the ratable benefit of the Lenders, a
perfected security interest in the Shares. Notwithstanding the foregoing, the
parties agree to negotiate in good faith to avoid any materially adverse tax
consequences in connection with the actions described in this Section 6.12 if
Borrower demonstrates to the reasonable satisfaction of Collateral Agent that
any such actions would create a present and existing adverse tax consequence to
Borrower under the U.S. Internal Revenue Code.

6.13 Further Assurances.

(a) Execute any further instruments and take further action as Collateral Agent
or any Lender reasonably requests to perfect or continue Collateral Agent’s Lien
in the Collateral or to effect the purposes of this Agreement.

(b) Deliver to Collateral Agent and Lenders, within five (5) Business Days after
the same are sent or received, copies of all material correspondence, reports,
documents and other filings with any Governmental Authority that could
reasonably be expected to have a material adverse effect on any of the
Governmental Approvals material to any Credit Party’s or any of their
Subsidiaries’ business or otherwise could reasonably be expected to have a
Material Adverse Change.

 

7. NEGATIVE COVENANTS

No Credit Party shall, nor shall any Credit Party permit any of its Subsidiaries
to, do any of the following without the prior written consent of the Required
Lenders:

7.1 Dispositions. Convey, sell, lease, transfer, assign, dispose of or otherwise
make cash payments consisting of (collectively, “Transfer”), or permit any of
its Subsidiaries to Transfer, all or any part of its business or property,
except for Transfers (a) consisting of cash payments to trade creditors in the
ordinary course of business; (b) of Inventory in the ordinary course of
business; (c) of worn-out, surplus or obsolete Equipment; (d) in connection with
Permitted Liens, Permitted Investments and Permitted Licenses; and (e) Transfers
in addition to those specifically enumerated above of no more than Two Hundred
Fifty Thousand Dollars ($250,000.00) in the aggregate in any fiscal year. The
Credit Parties and their Subsidiaries may make Transfers in addition to those
specifically enumerated above to the extent the same are specifically reflected
in the Annual Projections.

7.2 Changes in Business, Management, Ownership, or Business Locations.
(a) Engage in or permit any of its Subsidiaries to engage in any business other
than the businesses engaged in by Parent or Borrower, respectively, as of the
Effective Date or reasonably related thereto; (b) no Credit Party or Guarantor
may liquidate or dissolve; or (c) (i) any Key Person shall cease to be actively
engaged in the management of Parent (unless a replacement for such Key Person is
approved by Parent’s Board of Directors and engaged by Parent within one hundred
twenty (120) days of such change, which period shall be extended to one hundred
eighty (180) days if within the initial one hundred twenty (120) day period an
interim replacement for such Key Person is approved by Parent’s Board of
Directors and engaged by Parent), or (ii) consummate any transaction or series
of related transactions in which the stockholders of Parent who were not
stockholders immediately prior to the first such transaction own more than forty
nine percent (49%) of the voting stock of Parent immediately after giving effect
to such transaction or related series of such transactions (a “Change in
Control”) (other than (x) by the sale of Parent’s equity securities in a public
offering, a private placement of public equity or to venture capital investors
so long as Borrower identifies to Collateral Agent the venture capital investors
prior to the closing of the transaction or (y) a Change in Control, provided
that contemporaneously with any such Change in Control all of the Obligations
have been indefeasibly paid in full in cash and all obligations of the
Collateral Agent and/or Lenders to make loans

 

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or otherwise extend credit to the Company have terminated). Without limiting the
foregoing, neither Borrower nor any Subsidiary of Borrower shall, without
Collateral Agent’s prior written consent, enter into any binding contractual
arrangement with any Person to attempt to facilitate a Change in Control unless
(i) no Event of Default exists when such agreement is entered into, (ii) such
agreement does not give such Person the right to claim any fees, payments or
damages from such Credit Party or any such Subsidiary in excess of Two Hundred
Fifty Thousand Dollars ($250,000), and (iii) Parent notifies Collateral Agent in
advance of entering into such an agreement. No Credit Party or any Guarantor
shall, without at least thirty (30) days’ prior written notice to Collateral
Agent: (A) add any new offices or business locations, including warehouses
(unless such new offices or business locations contain less than Two Hundred
Fifty Thousand Dollars ($250,000.00) in assets or property of any Credit Party
or any of their Subsidiaries, (B) change its jurisdiction of organization,
(C) change its organizational structure or type, (D) change its legal name, or
(E) change any organizational number (if any) assigned by its jurisdiction of
organization.

7.3 Mergers or Acquisitions.

(i) Merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person (unless contemporaneously with the
consummation of any such merger or consolidation all of the Obligations have
been indefeasibly paid in full in cash and all obligations of the Collateral
Agent and/or Lenders to make loans or otherwise extend credit to the Company
have terminated), provided that a Subsidiary may merge or consolidate into
another Subsidiary of Parent (provided such surviving Subsidiary is a “Borrower”
hereunder or has provided a secured Guaranty of Borrower’s Obligations
hereunder) or with (or into) a Credit Party or Guarantor provided such Credit
Party or Guarantor is the surviving legal entity, and as long as no Event of
Default is occurring prior thereto or arises as a result therefrom. Without
limiting the foregoing, no Credit Party nor any Subsidiary shall, without
Collateral Agent’s prior written consent, enter into any binding contractual
arrangement with any Person to attempt to facilitate a merger or acquisition of
any such Credit Party or Subsidiary, unless (i) no Event of Default exists when
such agreement is entered into, (ii) such agreement does not give such Person
the right to claim any fees, payments or damages from such Credit Party or any
such Subsidiary in excess of Two Hundred Fifty Thousand Dollars ($250,000),
(iii) Parent notifies Collateral Agent in advance of entering into such an
agreement and (iv) such agreement provides for the indefeasible payment in full
in cash of all Obligations contemporaneously with the consummation of any such
merger or acquisition; or

(ii) Acquire, or permit any of its Subsidiaries to acquire, all or substantially
all of the capital stock, shares or property of another Person.

7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or
permit any Subsidiary to do so, other than Permitted Indebtedness.

7.5 Encumbrance. (a) Create, incur, allow, or suffer any Lien on any of its
property, or assign or convey any right to receive income, including the sale of
any Accounts, or permit any of its Subsidiaries to do so, except for Permitted
Liens, or permit any Collateral not to be subject to the first priority security
interest granted herein (to the extent possible under the laws of the
jurisdiction of its location) (except for Permitted Liens that are permitted by
the terms of this Agreement to have priority over Collateral Agent’s Lien), or
(b) enter into any agreement, document, instrument or other arrangement (except
with or in favor of Collateral Agent, for the ratable benefit of the Lenders)
with any Person which directly or indirectly prohibits or has the effect of
prohibiting any Credit Party, or any of its Subsidiaries, from assigning,
mortgaging, pledging, granting a security interest in or upon, or encumbering
any of such Credit Party’s or such Subsidiary’s owned Intellectual Property,
except for agreements, documents, instruments or other arrangements as is
otherwise permitted in Section 7.1 hereof and the definition of “Permitted
Liens” and “Permitted Licenses” herein.

7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except
pursuant to the terms of Section 6.6 hereof.

7.7 Distributions; Investments. (a) Pay any dividends (other than dividends
payable solely in capital stock or dividends paid to Parent or Guarantor) or
make any distribution or payment in respect of or redeem, retire or purchase any
capital stock (other than repurchases pursuant to the terms of employee stock
purchase plans, employee restricted stock agreements, stockholder rights plans,
director or consultant stock option plans, or similar

 

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plans, provided such repurchases do not exceed Two Hundred Fifty Thousand
Dollars ($250,000.00) in the aggregate per fiscal year) or (b) directly or
indirectly make any Investment other than Permitted Investments, or permit any
of its Subsidiaries to do so.

7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of any Credit Party or any of
their Subsidiaries, except for (a) transactions that are in the ordinary course
of such Credit Party’s or such Subsidiary’s business, upon fair and reasonable
terms that are no less favorable to such Credit Party or such Subsidiary than
would be obtained in an arm’s length transaction with a non-affiliated Person,
(b) transactions among Credit Parties and Guarantors otherwise permitted
hereunder, and (c) Subordinated Debt or equity investments by Parent’s investors
in Parent.

7.9 Subordinated Debt; Pfizer Debt. (a) Make or permit any payment on any
Subordinated Debt, except under the terms of the subordination, intercreditor,
or other similar agreement to which such Subordinated Debt is subject, or
(b) amend any provision in any document relating to the Subordinated Debt which
would increase the amount thereof or adversely affect the subordination thereof
to Obligations owed to the Lenders. Parent shall not and shall not permit any
Credit Party or any Subsidiary to make any payment to Pfizer arising out of,
related to or in any way in connection with that certain Stock Purchase
Agreement between Pfizer and Parent dated as of December 11, 2009, or otherwise
(including but not limited to any Promissory Note prepared in connection
therewith and which Parent may execute and deliver to Pfizer in accordance with
the terms of such Stock Purchase Agreement).

7.10 Compliance. Become an “investment company” or a company controlled by an
“investment company”, under the Investment Company Act of 1940, as amended, or
undertake as one of its important activities extending credit to purchase or
carry margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System), or use the proceeds of any Credit Extension for that
purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, if the violation could reasonably be expected to have a Material
Adverse Change, or permit any of its Subsidiaries to do so; withdraw or permit
any Subsidiary to withdraw from participation in, permit partial or complete
termination of, or permit the occurrence of any other event with respect to, any
present pension, profit sharing and deferred compensation plan which could
reasonably be expected to result in any liability of any Credit Party or any of
their Subsidiaries, including any material liability to the Pension Benefit
Guaranty Corporation or its successors or any other Governmental Authority.

7.11 Compliance with Anti-Terrorism Laws. Collateral Agent hereby notifies each
Credit Party and each of their Subsidiaries that pursuant to the requirements of
Anti-Terrorism Laws, and Collateral Agent’s policies and practices, Collateral
Agent is required to obtain, verify and record certain information and
documentation that identifies each Credit Party and each of their Subsidiaries
and their principals, which information includes the name and address of each
Credit Party and each of their Subsidiaries and their principals and such other
information that will allow Collateral Agent to identify such party in
accordance with Anti-Terrorism Laws. Neither any Credit Party nor any of its
Subsidiaries shall, nor shall any Credit Party or any of their Subsidiaries
permit any Affiliate to, directly or indirectly, knowingly enter into any
documents, instruments, agreements or contracts with any Person listed on the
OFAC Lists. Each Credit Party and each of their Subsidiaries shall immediately
notify Collateral Agent if such Credit Party or such Subsidiary has knowledge
that any Credit Party, or any Subsidiary or Affiliate of any Credit Party, is
listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to,
(c) is indicted on, or (d) is arraigned and held over on charges involving money
laundering or predicate crimes to money laundering. Neither any Credit Party nor
any of its Subsidiaries shall, nor shall any Credit Party or any of their
Subsidiaries, permit any Affiliate to, directly or indirectly, (i) conduct any
business or engage in any transaction or dealing with any Blocked Person,
including, without limitation, the making or receiving of any contribution of
funds, goods or services to or for the benefit of any Blocked Person, (ii) deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to Executive Order No. 13224 or any
similar executive order or other Anti-Terrorism Law, or (iii) engage in or
conspire to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set
forth in Executive Order No. 13224 or other Anti-Terrorism Law.

 

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8. EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an “Event of
Default”) under this Agreement:

8.1 Payment Default. Borrower fails to (a) make any payment of principal or
interest on any Credit Extension on its due date, or (b) pay any other
Obligations within three (3) Business Days after such Obligations are due and
payable (which three (3) Business Day grace period shall not apply to payments
due on the Maturity Date or the date of acceleration pursuant to Section 9.1
(a) hereof). During the cure period, the failure to cure the payment default is
not an Event of Default (but no Credit Extension will be made during the cure
period);

8.2 Covenant Default.

(a) any Credit Party or any of their Subsidiaries fails or neglects to perform
any obligation in Sections 6.2 (Financial Statements, Reports, Certificates),
6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7 (Protection of
Intellectual Property Rights), 6.9 (Notice of Litigation and Default), 6.11
(Landlord Waivers; Bailee Waivers), 6.12 (Creation/Acquisition of Subsidiaries)
or 6.13 (Further Assurances) or violates any covenant in Section 7; or

(b) any Credit Party or any of their Subsidiaries, fails or neglects to perform,
keep, or observe any other term, provision, condition, covenant or agreement
contained in this Agreement or any Loan Documents, and as to any default (other
than those specified in this Section 8) under such other term, provision,
condition, covenant or agreement that can be cured, has failed to cure the
default within ten (10) days after the occurrence thereof; provided, however,
that if the default cannot by its nature be cured within the ten (10) day period
or cannot after diligent attempts be cured within such ten (10) day period, and
such default is likely to be cured within a reasonable time, then the Credit
Parties shall have an additional period (which shall not in any case exceed
thirty (30) days) to attempt to cure such default, and within such reasonable
time period the failure to cure the default shall not be deemed an Event of
Default (but no Credit Extensions shall be made during such cure period). Grace
periods provided under this Section shall not apply, among other things, to
financial covenants or any other covenants set forth in subsection (a) above;

8.3 Material Adverse Change. A Material Adverse Change occurs;

8.4 Attachment; Levy; Restraint on Business.

(a) (i) The service of process seeking to attach, by trustee or similar process,
any funds of any Credit Party or any of their Subsidiaries or of any entity
under control of any Credit Party or any of their Subsidiaries on deposit with
any Lender or any Lender’s Affiliate or any bank or other institution at which
any Credit Party or any of their Subsidiaries maintains a Collateral Account, or
(ii) a notice of lien, levy, or assessment is filed against any Credit Party or
any of their Subsidiaries or their respective assets by any government agency,
and the same under subclauses (i) and (ii) hereof are not, within fifteen
(15) days after the occurrence thereof, discharged or stayed (whether through
the posting of a bond or otherwise); provided, however, no Credit Extensions
shall be made during any fifteen (15) day cure period; and

(b) (i) any material portion of any Credit Party’s or any of their Subsidiaries’
assets is attached, seized, levied on, or comes into possession of a trustee or
receiver, or (ii) any court order enjoins, restrains, or prevents any Credit
Party or any of their Subsidiaries from conducting any part of its business;

8.5 Insolvency. (a) Either (i) Borrower is or becomes, or (ii) Parent and its
Subsidiaries, taken as a whole, are or become Insolvent; (b) any Credit Party or
any of their Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency
Proceeding is begun against any Credit Party or any of their Subsidiaries and
not dismissed or stayed within forty-five (45) days (but no Credit Extensions
shall be made while any Credit Party or any Subsidiary is Insolvent and/or until
any Insolvency Proceeding is dismissed);

 

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8.6 Other Agreements. There is a default (a) in any agreement to which any
Credit Party or any of their Subsidiaries is a party with a third party or
parties resulting in a right by such third party or parties, whether or not
exercised, to accelerate the maturity of any Indebtedness in an amount in excess
of Two Hundred Fifty Thousand Dollars ($250,000.00) or that could reasonably be
expected to have a Material Adverse Change; or (b) under that certain Stock
Purchase Agreement between Pfizer and Parent dated as of December 11, 2009, or
any Promissory Note issued in connection therewith and/or any obligation arising
out of or related thereto;

8.7 Judgments. One or more judgments, orders, or decrees for the payment of
money in an amount, individually or in the aggregate, of at least Two Hundred
Fifty Thousand Dollars ($250,000.00) (not covered by independent third-party
insurance as to which liability has been accepted by such insurance carrier)
shall be rendered against any Credit Party or any of their Subsidiaries and
shall remain unsatisfied, unvacated, or unstayed for a period of ten
(10) Business Days after the entry thereof (provided that no Credit Extensions
will be made prior to the satisfaction, vacation, or stay of such judgment,
order or decree);

8.8 Misrepresentations. Any Credit Party or any of their Subsidiaries or any
Person acting for any Credit Party or any of their Subsidiaries makes any
representation, warranty, or other statement now or later in this Agreement, any
Loan Document or in any writing delivered to Collateral Agent and/or Lenders or
to induce Collateral Agent and/or the Lenders to enter this Agreement or any
Loan Document, and such representation, warranty, or other statement is
incorrect in any material respect when made;

8.9 Subordinated Debt. A default or breach occurs under any agreement between
any Credit Party or any of their Subsidiaries and any creditor of any Credit
Party or any of their Subsidiaries that signed a subordination, intercreditor,
or other similar agreement with Collateral Agent or the Lenders, or any creditor
that has signed such an agreement with Collateral Agent or the Lenders breaches
any terms of such agreement;

8.10 Guaranty. (a) Any Guaranty terminates or ceases for any reason to be in
full force and effect; (b) any Guarantor does not perform any obligation or
covenant under any Guaranty; (c) any circumstance described in Sections 8.3,
8.4, 8.5, 8.7, or 8.8 occurs with respect to any Guarantor, or (d) the
liquidation, winding up, or termination of existence of any Guarantor;

8.11 Governmental Approvals. Any Governmental Approval shall have been revoked,
rescinded, suspended, modified in an adverse manner, or not renewed in the
ordinary course for a full term and such revocation, rescission, suspension,
modification or non-renewal has resulted in or could reasonably be expected to
result in a Material Adverse Change; or

8.12 Lien Priority. Any Lien created hereunder or by any other Loan Document
shall at any time fail to constitute a valid and perfected Lien on any of the
Collateral purported to be secured thereby, subject to no prior or equal Lien,
other than Permitted Liens which are permitted to have priority in accordance
with the terms of this Agreement.

 

9. RIGHTS AND REMEDIES

9.1 Rights and Remedies.

(a) Upon the occurrence and during the continuance of an Event of Default,
Collateral Agent may, and at the written direction of Required Lenders shall,
without notice or demand, do any or all of the following: (i) deliver notice of
the Event of Default to Borrower, (ii) by notice to Borrower declare all
Obligations immediately due and payable (but if an Event of Default described in
Section 8.5 occurs all Obligations shall be immediately due and payable without
any action by Collateral Agent or the Lenders) or (iii) by notice to Borrower
suspend or terminate the obligations, if any, of the Lenders to advance money or
extend credit for Borrower’s benefit under this Agreement or under any other
agreement between Borrower and Collateral Agent and/or the Lenders (but if an
Event of Default described in Section 8.5 occurs all obligations, if any, of the
Lenders to advance money or extend credit for Borrower’s benefit under this
Agreement or under any other agreement between Borrower and Collateral Agent
and/or the Lenders shall be immediately terminated without any action by
Collateral Agent or the Lenders).

 

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(b) Without limiting the rights of Collateral Agent and the Lenders set forth in
Section 9.1(a) above, upon the occurrence and during the continuance of an Event
of Default, Collateral Agent shall have the right at the written direction of
the Required Lenders, without notice or demand, to do any or all of the
following, in accordance with any requirements of applicable law:

(i) foreclose upon and/or sell or otherwise liquidate, the Collateral;

(ii) apply to the Obligations any (a) balances and deposits of Borrower that
Collateral Agent or any Lender holds or controls, or (b) any amount held or
controlled by Collateral Agent or any Lender owing to or for the credit or the
account of Borrower; and/or

(iii) commence and prosecute an Insolvency Proceeding or consent to Borrower
commencing any Insolvency Proceeding.

(c) Without limiting the rights of Collateral Agent and the Lenders set forth in
Sections 9.1(a) and (b) above, upon the occurrence and during the continuance of
an Event of Default, Collateral Agent shall have the right, without notice or
demand, to do any or all of the following:

(i) settle or adjust disputes and claims directly with Account Debtors for
amounts on terms and in any order that Collateral Agent considers advisable,
notify any Person owing Borrower money of Collateral Agent’s security interest
in such funds, and verify the amount of such account;

(ii) make any payments and do any acts it considers necessary or reasonable to
protect the Collateral and/or its security interest in the Collateral. Borrower
shall assemble the Collateral if Collateral Agent requests and make it available
in a location as Collateral Agent reasonably designates. Collateral Agent may
enter premises where the Collateral is located, take and maintain possession of
any part of the Collateral, and pay, purchase, contest, or compromise any Lien
which appears to be prior or superior to its security interest and pay all
expenses incurred. Borrower grants Collateral Agent a license to enter and
occupy any of its premises, without charge, to exercise any of Collateral
Agent’s rights or remedies;

(iii) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
and/or advertise for sale, the Collateral. Collateral Agent is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower’s and each of its Subsidiaries’ labels, patents, copyrights, mask
works, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any similar property as it pertains to
the Collateral, in completing production of, advertising for sale, and selling
any Collateral and, in connection with Collateral Agent’s exercise of its rights
under this Section 9.1, Borrower’s and each of its Subsidiaries’ rights under
all licenses and all franchise agreements inure to Collateral Agent, for the
benefit of the Lenders;

(iv) place a “hold” on any account maintained with Collateral Agent or the
Lenders and/or deliver a notice of exclusive control, any entitlement order, or
other directions or instructions pursuant to any Control Agreement or similar
agreements providing control of any Collateral;

(v) demand and receive possession of Borrower’s Books;

(vi) appoint a receiver to seize, manage and realize any of the Collateral, and
such receiver shall have any right and authority as any competent court will
grant or authorize in accordance with any applicable law, including any power or
authority to manage the business of any Credit Party or any of their
Subsidiaries; and

(vii) subject to clauses 9.1(a) and (b), exercise all rights and remedies
available to Collateral Agent and each Lender under the Loan Documents or at law
or equity, including all remedies provided under the Code (including disposal of
the Collateral pursuant to the terms thereof).

 

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Notwithstanding any provision of this Section 9.1 to the contrary, upon the
occurrence of any Event of Default, Collateral Agent shall have the right to
exercise any and all remedies referenced in this Section 9.1 without the written
consent of Required Lenders following the occurrence of an Exigent Circumstance.
As used in the immediately preceding sentence, “Exigent Circumstance” means any
event or circumstance that, in the reasonable judgment of Collateral Agent,
imminently threatens the ability of Collateral Agent to realize upon all or any
material portion of the Collateral, such as, without limitation, fraudulent
removal, concealment, or abscondment thereof, destruction or material waste
thereof, or failure of any Credit Party or any of their Subsidiaries after
reasonable demand to maintain or reinstate adequate casualty insurance coverage,
or which, in the judgment of Collateral Agent, could reasonably be expected to
result in a material diminution in value of the Collateral.

9.2 Power of Attorney. Borrower hereby irrevocably appoints Collateral Agent as
its lawful attorney-in-fact, exercisable upon the occurrence and during the
continuance of an Event of Default, to: (a) endorse any Credit Party’s or any of
their Subsidiaries’ name on any checks or other forms of payment or security;
(b) sign any Credit Party’s or any of their Subsidiaries’ name on any invoice or
bill of lading for any Account or drafts against Account Debtors; (c) settle and
adjust disputes and claims about the Accounts directly with Account Debtors, for
amounts and on terms Collateral Agent determines reasonable; (d) make, settle,
and adjust all claims under Borrower’s insurance policies; (e) pay, contest or
settle any Lien, charge, encumbrance, security interest, and adverse claim in or
to the Collateral, or any judgment based thereon, or otherwise take any action
to terminate or discharge the same; and (f) transfer the Collateral into the
name of Collateral Agent or a third party as the Code or any applicable law
permits. Borrower hereby appoints Collateral Agent as its lawful
attorney-in-fact to sign any Credit Party’s or any of their Subsidiaries’ name
on any documents necessary to perfect or continue the perfection of Collateral
Agent’s security interest in the Collateral regardless of whether an Event of
Default has occurred until all Obligations (other than inchoate indemnity
obligations) have been satisfied in full and Collateral Agent and the Lenders
are under no further obligation to make Credit Extensions hereunder. Collateral
Agent’s foregoing appointment as any Credit Party’s or any of their
Subsidiaries’ attorney in fact, and all of Collateral Agent’s rights and powers,
coupled with an interest, are irrevocable until all Obligations (other than
inchoate indemnity obligations) have been fully repaid and performed and
Collateral Agent’s and the Lenders’ obligation to provide Credit Extensions
terminates.

9.3 Protective Payments. If any Credit Party or any of their Subsidiaries fail
to obtain the insurance called for by Section 6.5 or fails to pay any premium
thereon or fails to pay any other amount which any Credit Party or any of their
Subsidiaries is obligated to pay under this Agreement or any other Loan
Document, Collateral Agent may obtain such insurance or make such payment, and
all amounts so paid by Collateral Agent are Lenders’ Expenses and immediately
due and payable, bearing interest at the Default Rate, and secured by the
Collateral. Collateral Agent will make reasonable efforts to provide Borrower
with notice of Collateral Agent obtaining such insurance or making such payment
at the time it is obtained or paid or within a reasonable time thereafter. No
such payments by Collateral Agent are deemed an agreement to make similar
payments in the future or Collateral Agent’s waiver of any Event of Default.

9.4 Application of Payments and Proceeds. Notwithstanding anything to the
contrary contained in this Agreement, and in each case in accordance with any
requirements of applicable law, upon the occurrence and during the continuance
of an Event of Default, (a) Borrower irrevocably waives the right to direct the
application of any and all payments at any time or times thereafter received by
Collateral Agent from or on behalf of any Credit Party or any of their
Subsidiaries of all or any part of the Obligations, and, as between Borrower on
the one hand and Collateral Agent and Lenders on the other, Collateral Agent
shall have the continuing and exclusive right to apply and to reapply any and
all payments received against the Obligations in such manner as Collateral Agent
may deem advisable notwithstanding any previous application by Collateral Agent,
and (b) the proceeds of any sale of, or other realization upon all or any part
of the Collateral shall be applied: first, to the Lenders’ Expenses; second, to
accrued and unpaid interest on the Obligations (including any interest which,
but for the provisions of the United States Bankruptcy Code, would have accrued
on such amounts); third, to the principal amount of the Obligations outstanding;
and fourth, to any other indebtedness or obligations of Borrower owing to
Collateral Agent or any Lender under the Loan Documents. Any balance remaining
shall be delivered to Borrower or to whoever may be lawfully entitled to receive
such balance or as a court of competent jurisdiction may direct. In carrying out
the foregoing, (x) amounts received shall be applied in the numerical order
provided until exhausted prior to the application to the next succeeding
category, and (y) each of the Persons entitled to receive a payment in any
particular category shall receive an amount equal to its pro rata share of
amounts available to be applied pursuant

 

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thereto for such category. Any reference in this Agreement to an allocation
between or sharing by the Lenders of any right, interest or obligation
“ratably,” “proportionally” or in similar terms shall refer to Pro Rata Share
unless expressly provided otherwise. Collateral Agent, or if applicable, each
Lender, shall promptly remit to the other Lenders such sums as may be necessary
to ensure the ratable repayment of each Lender’s portion of any Term Loan and
the ratable distribution of interest, fees and reimbursements paid or made by
Borrower. Notwithstanding the foregoing, a Lender receiving a scheduled payment
shall not be responsible for determining whether the other Lenders also received
their scheduled payment on such date; provided, however, if it is later
determined that a Lender received more than its ratable share of scheduled
payments made on any date or dates, then such Lender shall remit to Collateral
Agent or other Lenders such sums as may be necessary to ensure the ratable
payment of such scheduled payments, as instructed by Collateral Agent. If any
payment or distribution of any kind or character, whether in cash, properties or
securities, shall be received by a Lender in excess of its ratable share, then
the portion of such payment or distribution in excess of such Lender’s ratable
share shall be received by such Lender in trust for and shall be promptly paid
over to the other Lender for application to the payments of amounts due on the
other Lenders’ claims. To the extent any payment for the account of Borrower is
required to be returned as a voidable transfer or otherwise, the Lenders shall
contribute to one another as is necessary to ensure that such return of payment
is on a pro rata basis. If any Lender shall obtain possession of any Collateral,
it shall hold such Collateral for itself and as agent and bailee for Collateral
Agent and other Lenders for purposes of perfecting Collateral Agent’s security
interest therein.

9.5 Liability for Collateral. So long as Collateral Agent and the Lenders comply
with reasonable banking practices regarding the safekeeping of the Collateral in
the possession or under the control of Collateral Agent and the Lenders,
Collateral Agent and the Lenders shall not be liable or responsible for: (a) the
safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any
diminution in the value of the Collateral; or (d) any act or default of any
carrier, warehouseman, bailee, or other Person. The Credit Parties bear all risk
of loss, damage or destruction of the Collateral.

9.6 No Waiver; Remedies Cumulative. Failure by Collateral Agent or any Lender,
at any time or times, to require strict performance by any Credit Party of any
provision of this Agreement or any other Loan Document shall not waive, affect,
or diminish any right of Collateral Agent or any Lender thereafter to demand
strict performance and compliance herewith or therewith. No waiver hereunder
shall be effective unless signed by Collateral Agent and the Required Lenders
and then is only effective for the specific instance and purpose for which it is
given. The rights and remedies of Collateral Agent and the Lenders under this
Agreement and the other Loan Documents are cumulative. Collateral Agent and the
Lenders have all rights and remedies provided under the Code, any applicable
law, by law, or in equity. The exercise by Collateral Agent or any Lender of one
right or remedy is not an election, and Collateral Agent’s or any Lender’s
waiver of any Event of Default is not a continuing waiver. Collateral Agent’s or
any Lender’s delay in exercising any remedy is not a waiver, election, or
acquiescence.

9.7 Demand Waiver. Each Credit Party waives, to the fullest extent permitted by
law, demand, notice of default or dishonor, notice of payment and nonpayment,
notice of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees held by Collateral Agent or any Lender on which any Credit Party or
any Subsidiary is liable.

 

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10. NOTICES

All notices, consents, requests, approvals, demands, or other communication
(collectively, “Communication”) by any party to this Agreement or any other Loan
Document must be in writing and shall be deemed to have been validly served,
given, or delivered: (a) upon the earlier of actual receipt and three
(3) Business Days after deposit in the U.S. mail, first class, registered or
certified mail return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by facsimile transmission; (c) one (1) Business Day
after deposit with a reputable overnight courier with all charges prepaid; or
(d) when delivered, if hand-delivered by messenger, all of which shall be
addressed to the party to be notified and sent to the address, facsimile number,
or email address indicated below. Any of Collateral Agent, Lender or any Credit
Party may change its mailing address or facsimile number by giving the other
party written notice thereof in accordance with the terms of this Section 10.

 

If to Borrower:   

c/o DURATA THERAPEUTICS

HOLDING C.V.

200 South Wacker Drive, Suite 2550

Chicago, Illinois 60606

Attn: Corey N. Fishman, Chief Financial Officer

Fax: (312) 612-5298

Email: cfishman@duratatherapeutics.com

If to Parent:   

DURATA THERAPEUTICS INC.

200 South Wacker Drive, Suite 2550

Chicago, Illinois 60606

Attn: Corey N. Fishman, Chief Financial Officer

Fax: (312) 612-5298

Email: cfishman@duratatherapeutics.com

with a copy (which shall not constitute notice) to:   

WilmerHale

7 World Trade Center

250 Greenwich Street

New York, New York 10007

Attn: Andrew Nagel

Fax: (212) 230-8888

Email: andrew.nagel@wilmerhale.com

If to Collateral Agent:   

OXFORD FINANCE LLC

133 North Fairfax Street

Alexandria, Virginia 22314

Attention: Legal Department

Fax: (703) 519-5225

Email: LegalDepartment@oxfordfinance.com

with a copy (which shall not constitute notice) to:   

DLA Piper LLP (US)

4365 Executive Drive, Suite 1100

San Diego, California 92121-2133

Attn: Troy Zander

Fax: (858) 638-5086

Email: troy.zander@dlapiper.com

 

11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

New York law governs the Loan Documents (other than the UK Share Charge
Documents and the Dutch Security Documents) without regard to principles of
conflicts of law. Each Credit Party, Lenders and Collateral Agent each submit to
the exclusive jurisdiction of the State and Federal courts in the City of New
York, Borough of Manhattan. NOTWITHSTANDING THE FOREGOING, COLLATERAL AGENT AND
THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY
CREDIT PARTY OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH
COLLATERAL AGENT AND THE LENDERS (IN ACCORDANCE WITH THE PROVISIONS OF SECTION
9.1) DEEM NECESSARY OR APPROPRIATE TO REALIZE ON THE COLLATERAL OR TO OTHERWISE
ENFORCE COLLATERAL AGENT’S AND THE LENDERS’ RIGHTS AGAINST ANY CREDIT PARTY OR
ITS PROPERTY. Each Credit Party expressly submits and consents in advance to
such jurisdiction in any action or suit commenced in any such court, and each
Credit Party hereby waives any objection that it may have based upon lack of
personal jurisdiction, improper venue, or forum non conveniens and hereby
consents to the granting of such legal or equitable relief as is deemed
appropriate by such court. Each Credit Party hereby waives personal service of
the summons, complaints, and other process issued in such action or suit and
agrees that service of such summons, complaints, and other process may be made
by registered or certified mail addressed to any Credit Party at the address set
forth in, or subsequently provided by any Credit Party in accordance with,
Section 10 of this Agreement and that service so made shall be

 

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deemed completed upon the earlier to occur of any Credit Party’s actual receipt
thereof or three (3) days after deposit in the U.S. mails, first class,
registered or certified mail return receipt requested, proper postage prepaid.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH CREDIT PARTY, COLLATERAL
AGENT, AND THE LENDERS EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS
OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND
ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER
INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

 

12. GENERAL PROVISIONS

12.1 Successors and Assigns. This Agreement binds and is for the benefit of the
successors and permitted assigns of each party. No Credit Party may transfer,
pledge or assign this Agreement or any rights or obligations under it without
Collateral Agent’s and each Lender’s prior written consent (which may be granted
or withheld in Collateral Agent’s and each Lender’s discretion, subject to
Section 12.6). The Lenders have the right, without the consent of or notice to
any Credit Party, to sell, transfer, assign, pledge, negotiate, or grant
participation in (any such sale, transfer, assignment, negotiation, or grant of
a participation, a “Lender Transfer”) all or any part of, or any interest in,
the Lenders’ obligations, rights, and benefits under this Agreement and the
other Loan Documents; provided, however, that (i) any such Lender Transfer
(other than a transfer, pledge, sale or assignment to an Eligible Assignee) of
its obligations, rights, and benefits under this Agreement and the other Loan
Documents shall require the prior written consent of the Required Lenders (such
approved assignee, an “Approved Lender”); and (ii) (A) the minimum amount of any
Lender Transfer in relation to a loan made to a Borrower incorporated under
Netherlands law shall be in an amount sufficient to ensure that such new Lender
qualifies as a PMP, or (B) such new Lender otherwise qualifies as a PMP. Each
Credit Party and Collateral Agent shall be entitled to continue to deal solely
and directly with such Lender in connection with the interests so assigned until
Collateral Agent shall have received and accepted an effective assignment
agreement in form satisfactory to Collateral Agent executed, delivered and fully
completed by the applicable parties thereto, and shall have received such other
information regarding such Eligible Assignee or Approved Lender as Collateral
Agent reasonably shall require. Notwithstanding anything to the contrary
contained herein, so long as no Event of Default has occurred and is continuing,
no Lender Transfer (other than a Lender Transfer (i) in respect of the Warrants
or (ii) in connection with (x) assignments by a Lender due to a forced
divestiture at the request of any regulatory agency; or (y) upon the occurrence
of a default, event of default or similar occurrence with respect to a Lender’s
own financing or securitization transactions) shall be permitted, without
Borrower’s consent, to any Person which is an Affiliate or Subsidiary of
Borrower, a direct competitor of Borrower or a vulture hedge fund, each as
determined by Collateral Agent.

12.2 Indemnification. Each Credit Party agrees to indemnify, defend and hold
Collateral Agent and the Lenders and their respective directors, officers,
employees, agents, attorneys, or any other Person affiliated with or
representing Collateral Agent or the Lenders (each, an “Indemnified Person”)
harmless against: (a) all obligations, demands, claims, and liabilities
(collectively, “Claims”) asserted by any other party in connection with; related
to; following; or arising from, out of or under, the transactions contemplated
by the Loan Documents; and (b) all losses or Lenders’ Expenses incurred, or paid
by Indemnified Person in connection with; related to; following; or arising
from, out of or under, the transactions contemplated by the Loan Documents
between Collateral Agent, and/or the Lenders and any Credit Party and/or any
Subsidiary of any Credit Party (including reasonable attorneys’ fees and
expenses), except for Claims and/or losses directly caused by such Indemnified
Person’s gross negligence or willful misconduct. Each Credit Party hereby
further indemnifies, defends and holds each Indemnified Person harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including the fees and disbursements of counsel for such
Indemnified Person) in connection with any investigative, response, remedial,
administrative or judicial matter or proceeding, whether or not such Indemnified
Person shall be designated a party thereto and including any such proceeding
initiated by or on behalf of any Credit Party, and the reasonable expenses of
investigation by engineers, environmental consultants and similar technical
personnel and any commission, fee or compensation claimed by any broker (other
than any broker retained by Collateral Agent or Lenders) asserting any right to
payment for the transactions contemplated hereby which may be imposed on,
incurred by or asserted against such Indemnified Person as a result of or in
connection with the transactions

 

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contemplated hereby and the use or intended use of the proceeds of the loan
proceeds except for liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements directly
caused by such Indemnified Person’s gross negligence or willful misconduct.

12.3 Time of Essence. Time is of the essence for the performance of all
Obligations in this Agreement.

12.4 Severability of Provisions. Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.

12.5 Correction of Loan Documents. Collateral Agent and the Lenders may correct
patent errors and fill in any blanks in this Agreement and the other Loan
Documents consistent with the agreement of the parties with notice to the
Borrower; provided that Collateral Agent or any Lender’s failure to provide such
notice shall not constitute a breach of this Agreement.

12.6 Amendments in Writing; Integration. (a) No amendment, modification,
termination or waiver of any provision of this Agreement or any other Loan
Document, no approval or consent thereunder, or any consent to any departure by
any Credit Party or any of their Subsidiaries therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Credit Parties,
Collateral Agent and the Required Lenders, provided that:

(i) no such amendment, waiver or other modification that would have the effect
of increasing or reducing a Lender’s Term Loan Commitment or Commitment
Percentage shall be effective as to such Lender without such Lender’s written
consent;

(ii) no such amendment, waiver or modification that would affect the rights and
duties of Collateral Agent shall be effective without Collateral Agent’s written
consent or signature;

(iii) no such amendment, waiver or other modification shall, unless signed by
all the Lenders directly affected thereby, (A) reduce the principal of, rate of
interest on or any fees with respect to any Term Loan or forgive any principal,
interest (other than default interest) or fees (other than late charges) with
respect to any Term Loan (B) postpone the date fixed for, or waive, any payment
of principal of any Term Loan or of interest on any Term Loan (other than
default interest) or any fees provided for hereunder (other than late charges or
for any termination of any commitment); (C) change the definition of the term
“Required Lenders” or the percentage of Lenders which shall be required for the
Lenders to take any action hereunder; (D) release all or substantially all of
any material portion of the Collateral, authorize any Credit Party to sell or
otherwise dispose of all or substantially all or any material portion of the
Collateral or release any Guarantor of all or any portion of the Obligations or
its guaranty obligations with respect thereto, except, in each case with respect
to this clause (D), as otherwise may be expressly permitted under this Agreement
or the other Loan Documents (including in connection with any disposition
permitted hereunder); (E) amend, waive or otherwise modify this Section 12.6 or
the definitions of the terms used in this Section 12.6 insofar as the
definitions affect the substance of this Section 12.6; (F) consent to the
assignment, delegation or other transfer by any Credit Party of any of its
rights and obligations under any Loan Document or release any Credit Party of
its payment obligations under any Loan Document, except, in each case with
respect to this clause (F), pursuant to a merger or consolidation permitted
pursuant to this Agreement; (G) amend any of the provisions of Section 9.4 or
amend any of the definitions of Pro Rata Share, Term Loan Commitment, Commitment
Percentage or that provide for the Lenders to receive their Pro Rata Shares of
any fees, payments, setoffs or proceeds of Collateral hereunder; (H) subordinate
the Liens granted in favor of Collateral Agent securing the Obligations; or
(I) amend any of the provisions of Section 12.10. It is hereby understood and
agreed that all Lenders shall be deemed directly affected by an amendment,
waiver or other modification of the type described in the preceding clauses (C),
(D), (E), (F), (G) and (H) of the preceding sentence;

(iv) the provisions of the foregoing clauses (i), (ii) and (iii) are subject to
the provisions of any interlender or agency agreement among the Lenders and
Collateral Agent pursuant to which any Lender may agree to give its consent in
connection with any amendment, waiver or modification of the Loan Documents only
in the event of the unanimous agreement of all Lenders.

(b) This Agreement and the Loan Documents represent the entire agreement about
this subject matter and supersede prior negotiations or agreements. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement and the Loan
Documents merge into this Agreement and the Loan Documents.

 

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12.7 Counterparts. This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, is an original, and all taken together, constitute one Agreement.

12.8 Survival. All covenants, representations and warranties made in this
Agreement continue in full force and effect until this Agreement has terminated
pursuant to its terms and all Obligations (other than inchoate indemnity
obligations and any other obligations which, by their terms, are to survive the
termination of this Agreement) have been satisfied. The obligation of the Credit
Parties in Section 12.2 to indemnify each Lender and Collateral Agent, as well
as the confidentiality provisions in Section 12.9 below, shall survive until the
statute of limitations with respect to such claim or cause of action shall have
run.

12.9 Confidentiality. In handling any confidential information of each Credit
Party, the Lenders and Collateral Agent shall exercise the same degree of care
that it exercises for their own proprietary information, but disclosure of
information may be made: (a) subject to the terms and conditions of this
Agreement, to the Lenders’ and Collateral Agent’s Subsidiaries or Affiliates, or
in connection with a Lender’s own financing or securitization transactions and
upon the occurrence of a default, event of default or similar occurrence with
respect to such financing or securitization transaction; (b) to prospective
transferees (other than those identified in (a) above) or purchasers of any
interest in the Credit Extensions (provided, however, the Lenders and Collateral
Agent shall, except upon the occurrence and during the continuance of an Event
of Default, obtain such prospective transferee’s or purchaser’s agreement to the
terms of this provision or to similar confidentiality terms); (c) as required by
law, regulation, subpoena, or other order; (d) to Lenders’ or Collateral Agent’s
regulators or as otherwise required in connection with an examination or audit
(provided, however, the Lenders and Collateral Agent shall use commercially
reasonable efforts to notify Borrower of any disclosure under clauses (c) and
(d), above); (e) as Collateral Agent reasonably considers appropriate in
exercising remedies under the Loan Documents; and (f) to third party service
providers of the Lenders and/or Collateral Agent so long as such service
providers have executed a confidentiality agreement with the Lenders and
Collateral Agent with terms no less restrictive than those contained herein.
Confidential information does not include information that either: (i) is in the
public domain or in the Lenders’ and/or Collateral Agent’s possession when
disclosed to the Lenders and/or Collateral Agent, or becomes part of the public
domain after disclosure to the Lenders and/or Collateral Agent; or (ii) is
disclosed to the Lenders and/or Collateral Agent by a third party, if the
Lenders and/or Collateral Agent does not know that the third party is prohibited
from disclosing the information. Collateral Agent and the Lenders may use
confidential information for any purpose, including, without limitation, for the
development of client databases, reporting purposes, and market analysis, so
long as Collateral Agent or the Lenders do not disclose Borrower’s identity or
the identity of any person associated with Borrower unless otherwise expressly
permitted by this Agreement. The provisions of the immediately preceding
sentence shall survive the termination of this Agreement. The agreements
provided under this Section 12.9 supersede all prior agreements, understanding,
representations, warranties, and negotiations between the parties about the
subject matter of this Section 12.9.

12.10 Right of Set Off. Borrower hereby grants to Collateral Agent and to each
Lender, a lien, security interest and right of set off as security for all
Obligations to Collateral Agent and each Lender hereunder, whether now existing
or hereafter arising upon and against all deposits, credits, collateral and
property constituting Collateral of Borrower (other than accounts exclusively
used for payroll, payroll taxes and other employee wage and benefit payments to
or for the benefit of a Credit Party or Subsidiary’s employees and identified to
Collateral Agent by Borrower as such), now or hereafter in the possession,
custody, safekeeping or control of Collateral Agent or the Lenders or any entity
under the control of Collateral Agent or the Lenders (including a Collateral
Agent affiliate) or in transit to any of them. At any time after the occurrence
and during the continuance of an Event of Default, without demand or notice,
Collateral Agent or the Lenders may set off such Collateral of Borrower or any
part thereof and apply the same to any liability or obligation of Borrower even
though unmatured and regardless of the adequacy of any other collateral securing
the Obligations. ANY AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE
OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.

 

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12.11 Intentionally Omitted.

12.12 Cooperation of Credit Parties. If necessary, each Credit Party agrees to
(i) execute any documents (including any new Secured Promissory Notes to be
executed by Borrower) reasonably required to effectuate and acknowledge each
assignment of a Term Loan Commitment or Loan to an assignee in accordance with
Section 12.1, (ii) make such Credit Party’s management available to meet with
Collateral Agent and prospective participants and assignees of Term Loan
Commitments or Credit Extensions (which meetings shall be conducted no more
often than twice every twelve months unless an Event of Default has occurred and
is continuing), and (iii) assist Collateral Agent or the Lenders in the
preparation of information relating to the financial affairs of any Credit Party
as any prospective participant or assignee of a Term Loan Commitment or Term
Loan reasonably may request. Subject to the provisions of Section 12.9, each
Credit Party authorizes each Lender to disclose to any prospective participant
or assignee of a Term Loan Commitment, any and all information in such Lender’s
possession concerning each Credit Party and its financial affairs which has been
delivered to such Lender by or on behalf of any Credit Party pursuant to this
Agreement, or which has been delivered to such Lender by or on behalf of any
Credit Party in connection with such Lender’s credit evaluation of any Credit
Party prior to entering into this Agreement.

12.13 Borrower Liability. Either Borrower may, acting singly, request Credit
Extensions hereunder. Each Borrower hereby appoints the other as agent for the
other for all purposes hereunder, including with respect to requesting Credit
Extensions hereunder. Each Borrower hereunder shall be jointly and severally
obligated to repay all Credit Extensions made hereunder, regardless of which
Borrower actually receives said Credit Extension, as if each Borrower hereunder
directly received all Credit Extensions. Each Borrower waives (a) any suretyship
defenses available to it under the Code or any other applicable law, and (b) any
right to require Collateral Agent or any Lender to: (i) proceed against any
Borrower or any other person; (ii) proceed against or exhaust any security; or
(iii) pursue any other remedy. Collateral Agent and or any Lender may exercise
or not exercise any right or remedy it has against any Borrower or any security
it holds (including the right to foreclose by judicial or non-judicial sale)
without affecting any Borrower’s liability. Notwithstanding any other provision
of this Agreement or other related document, until the Obligations have been
indefeasibly paid in full in cash and all obligations of the Collateral Agent
and/or Lenders to make loans or otherwise extend credit to Borrower have
terminated, each Borrower irrevocably waives all rights that it may have at law
or in equity (including, without limitation, any law subrogating Borrower to the
rights of Collateral Agent and the Lenders under this Agreement) to seek
contribution, indemnification or any other form of reimbursement from any other
Borrower, or any other Person now or hereafter primarily or secondarily liable
for any of the Obligations, for any payment made by Borrower with respect to the
Obligations in connection with this Agreement or otherwise and all rights that
it might have to benefit from, or to participate in, any security for the
Obligations as a result of any payment made by Borrower with respect to the
Obligations in connection with this Agreement or otherwise. Any agreement
providing for indemnification, reimbursement or any other arrangement prohibited
under this Section shall be null and void. If any payment is made to a Borrower
in contravention of this Section, such Borrower shall hold such payment in trust
for Collateral Agent and the Lenders and such payment shall be promptly
delivered to Collateral Agent for application to the Obligations, whether
matured or unmatured.

 

13. DEFINITIONS

13.1 Definitions. As used in this Agreement, the following terms have the
following meanings:

“Account” is any “account” as defined in the Code with such additions to such
term as may hereafter be made, and includes, without limitation, all accounts
receivable and other sums owing to any Credit Party.

“Account Debtor” is any “account debtor” as defined in the Code with such
additions to such term as may hereafter be made.

“Affiliate” of any Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person’s senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person’s managers and members.

 

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“Agreement” is defined in the preamble hereof.

“Amortization Date” is May 1, 2014; provided that, if Dalbavancin is approved by
the FDA before May 1, 2014, then at Borrower’s election, provided that
Collateral Agent receives written notice of such election no later than April 1,
2014, “Amortization Date” shall mean May 1, 2015.

“Annual Projections” is defined in Section 6.2(a).

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

“Approved Fund” is any (i) investment company, fund, trust, securitization
vehicle or conduit 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 business or (ii) any Person (other than a natural
person) which temporarily warehouses loans for any Lender or any entity
described in the preceding clause (i) and that, with respect to each of the
preceding clauses (i) and (ii), is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) a Person (other than a natural person) or an
Affiliate of a Person (other than a natural person) that administers or manages
a Lender.

“Approved Lender” is defined in Section 12.1.

“Assistance Agreement” is that certain Assistance Agreement (to be entered into)
by and between the State of Connecticut acting by the Department of Economic and
Community Development and Parent, and the security agreement related thereto,
and the other documents, instruments and agreements in connection therewith,
each substantially in the form provided to Collateral Agent prior to the
Effective Date.

“Bank of America CDs” are those certain Certificates of Deposit numbered and
maintained by Parent at Bank of America securing reimbursement obligations under
those certain letters of credit numbered and, each securing security deposit
obligations under the leases in respect of the facilities located at (a) 200
South Wacker Drive, Suite 2550, Chicago IL 60606 and (b) 322 Main Street, 3rd
Floor, Branford, CT 06405, respectively, provided that the value of such
Certificates of Deposit does not exceed One Million Two Hundred Thousand Dollars
($1,200,000) at any time.

“Basic Rate” is, with respect to a Term Loan, the per annum rate of interest
(based on a year of three hundred sixty (360) days) equal to the greater of
(i) eight and fifty-five hundredths percent (8.55%) and (ii) the sum of (a) the
three (3) month U.S. LIBOR rate reported in the Wall Street Journal three
(3) Business Days prior to the Funding Date of such Term Loan (which shall not
be less than thirty-one hundredths percent (0.31%)), plus (b) eight and
twenty-four hundredths percent (8.24%).

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

“Borrower” is defined in the preamble hereof.

“Borrower’s Books” are any Credit Party’s or any of their Subsidiaries’ books
and records including ledgers, federal, and state tax returns, records regarding
such Credit Party’s or its Subsidiaries’ assets or liabilities, the Collateral,
business operations or financial condition, and all computer programs or storage
or any equipment containing such information.

 

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“Business Day” is any day that is not a Saturday, Sunday or a day on which
Collateral Agent is closed.

“Cash Equivalents” are (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency or any State
thereof having maturities of not more than one (1) year from the date of
acquisition; (b) commercial paper maturing no more than one (1) year after its
creation and having the highest rating from either Standard & Poor’s Ratings
Group or Moody’s Investors Service, Inc., (c) money market funds (i) which
provide daily liquidity and (ii) at least ninety five percent (95%) of which
constitute Cash Equivalents of the kinds described in classes (a) and (b) of
this definition, and (d) certificates of deposit maturing no more than one
(1) year after issue provided that the account in which any such certificate of
deposit is maintained is subject to a Control Agreement in favor of Collateral
Agent to the extent required under Section 6.6 hereof. For the avoidance of
doubt, the direct purchase by any Credit Party or any of their Subsidiaries of
any Auction Rate Securities, or purchasing participations in, or entering into
any type of swap or other derivative transaction, or otherwise holding or
engaging in any ownership interest in any type of Auction Rate Security by any
Credit Party or any of their Subsidiaries shall be conclusively determined by
the Lenders as an ineligible Cash Equivalent, and any such transaction shall
expressly violate each other provision of this Agreement governing Permitted
Investments. Notwithstanding the foregoing, Cash Equivalents does not include
and each Credit Party, and each of their Subsidiaries, is prohibited from
purchasing, purchasing participations in, entering into any type of swap or
other equivalent derivative transaction, or otherwise holding or engaging in any
ownership interest in any type of debt instrument, including, without
limitation, any corporate or municipal bonds with a long-term nominal maturity
for which the interest rate is reset through a dutch auction and more commonly
referred to as an auction rate security (each, an “Auction Rate Security”).

“Claims” are defined in Section 12.2.

“Code” is the Uniform Commercial Code, as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that, to the extent
that the Code is used to define any term herein or in any Loan Document and such
term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection, or priority of, or remedies with
respect to, Collateral Agent’s Lien on any Collateral is governed by the Uniform
Commercial Code in effect in a jurisdiction other than the State of New York,
the term “Code” shall mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority, or remedies and for purposes
of definitions relating to such provisions.

“Collateral” is any and all properties, rights and assets of Borrower described
on Exhibit A.

“Collateral Account” is any Deposit Account, Securities Account, or Commodity
Account, or any other bank account maintained by any Credit Party or any
Subsidiary at any time.

“Collateral Agent” is, Oxford, not in its individual capacity, but solely in its
capacity as agent on behalf of and for the benefit of the Lenders.

“Commitment Percentage” is set forth in Schedule 1.1, as amended from time to
time.

“Commodity Account” is any “commodity account” as defined in the Code with such
additions to such term as may hereafter be made.

“Communication” is defined in Section 10.

“Compliance Certificate” is that certain certificate in the form attached hereto
as Exhibit C.

 

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“Connecticut Assets” are all furniture, laptops, telepresence systems and phone
lines of Parent located in Connecticut or Illinois, all silhouette cameras of
Parent located in Connecticut or purchased in connection with DISCOVER-1 or
DISCOVER-2 studies and all televisions of Parent located in Illinois, whether
now owned or hereafter acquired at any time by Parent or in which Parent now has
or at any time in the future may acquire any right, title or interest, all
proceeds (including condemnation proceeds), all accessions and additions
thereto, and all substitutions and replacements therefor and products of any and
all of the foregoing; in each case to the extent such assets are granted by
Parent to the State of Connecticut Acting by the Department of Economic and
Community Development as set forth in the Assistance Agreement substantially in
the form provided to Collateral Agent prior to the Effective Date, for so long
as such grant is in effect.

“Contingent Obligation” is, for any Person, any direct or indirect liability,
contingent or not, of that Person for (a) any indebtedness, lease, dividend,
letter of credit or other obligation of another such as an obligation directly
or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by
that Person, or for which that Person is directly or indirectly liable; (b) any
obligations for undrawn letters of credit for the account of that Person; and
(c) all obligations from any interest rate, currency or commodity swap
agreement, interest rate cap or collar agreement, or other agreement or
arrangement designated to protect a Person against fluctuation in interest
rates, currency exchange rates or commodity prices; but “Contingent Obligation”
does not include endorsements in the ordinary course of business. The amount of
a Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable,
the maximum reasonably anticipated liability for it determined by the Person in
good faith; but the amount may not exceed the maximum of the obligations under
any guarantee or other support arrangement.

“Control Agreement” is any control agreement entered into among the depository
institution at which any Credit Party or any of their Subsidiaries that are a
Borrower or Guarantor maintains a Deposit Account or the securities intermediary
or commodity intermediary at which any Credit Party or any of their Subsidiaries
maintains a Securities Account or a Commodity Account, such Credit Party and
such Subsidiary, and Collateral Agent pursuant to which Collateral Agent obtains
control (within the meaning of the Code) for the benefit of the Lenders over
such Deposit Account, Securities Account, or Commodity Account.

“Copyrights” are any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative
work thereof, whether published or unpublished and whether or not the same also
constitutes a trade secret.

“Credit Extension” is any Term Loan or any other extension of credit by
Collateral Agent or Lenders for Borrower’s benefit.

“Default Rate” is defined in Section 2.3(b).

“Deposit Account” is any “deposit account” as defined in the Code with such
additions to such term as may hereafter be made.

“Designated Deposit Account” is that certain deposit account designated by
Borrower in writing to Collateral Agent at closing.

“Disbursement Letter” is that certain form attached hereto as Exhibit B.

“Dollars,” “dollars” and “$” each mean lawful money of the United States.

“Durata UK” is Durata Therapeutics Limited, an entity organized under the laws
of England and Wales, and a wholly-owned Subsidiary of Durata B.V.

“Dutch Security Documents” is that certain Pledge Deed in respect of the Shares
of Durata B.V.; that certain Pledge Deed in respect of partnership interests in
Durata C.V.; that certain Pledge of Receivables; and such other and further
documents and instruments as Collateral Agent deems reasonably necessary; all in
form and content reasonably acceptable to Collateral Agent.

 

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“Effective Date” is defined in the preamble of this Agreement.

“Eligible Assignee” is (i) a Lender, (ii) an Affiliate of a Lender, (iii) an
Approved Fund and (iv) any commercial bank, savings and loan association or
savings bank or any other entity which is an “accredited investor” (as defined
in Regulation D under the Securities Act of 1933, as amended) and which extends
credit or buys loans as one of its businesses, including insurance companies,
mutual funds, lease financing companies and commercial finance companies, in
each case, which either (A) has a rating of BBB or higher from Standard & Poor’s
Rating Group and a rating of Baa2 or higher from Moody’s Investors Service, Inc.
at the date that it becomes a Lender or (B) has total assets in excess of Five
Billion Dollars ($5,000,000,000.00), and in each case of clauses (i) through
(iv), which, through its applicable lending office, is capable of lending to
Borrower without the imposition of any withholding or similar taxes; provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include,
unless an Event of Default has occurred and is continuing, (i) any Credit Party
or any of any Credit Party’s Affiliates or Subsidiaries or (ii) a direct
competitor of Borrower or a vulture hedge fund, each as determined by Collateral
Agent. Notwithstanding the foregoing, (x) in connection with assignments by a
Lender due to a forced divestiture at the request of any regulatory agency, the
restrictions set forth herein shall not apply and Eligible Assignee shall mean
any Person or party and (y) in connection with a Lender’s own financing or
securitization transactions, the restrictions set forth herein shall not apply
and Eligible Assignee shall mean any Person or party providing such financing or
formed to undertake such securitization transaction and any transferee of such
Person or party upon the occurrence of a default, event of default or similar
occurrence with respect to such financing or securitization transaction;
provided that no such sale, transfer, pledge or assignment under this clause
(y) shall release such Lender from any of its obligations hereunder or
substitute any such Person or party for such Lender as a party hereto until
Collateral Agent shall have received and accepted an effective assignment
agreement from such Person or party in form satisfactory to Collateral Agent
executed, delivered and fully completed by the applicable parties thereto, and
shall have received such other information regarding such Eligible Assignee as
Collateral Agent reasonably shall require.

“Equipment” is all “equipment” as defined in the Code with such additions to
such term as may hereafter be made, and includes without limitation all
machinery, fixtures, goods, vehicles (including motor vehicles and trailers),
and any interest in any of the foregoing.

“ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and
its regulations.

“Event of Default” is defined in Section 8.

“Final Payment” is a payment (in addition to and not a substitution for the
regular monthly payments of principal plus accrued interest) due on the earliest
to occur of (a) the Maturity Date, or (b) the acceleration of any Term Loan, or
(c) the prepayment of a Term Loan pursuant to Section 2.2(c) or (d), equal to
the original principal amount of such Term Loan multiplied by the Final Payment
Percentage, payable to Lenders in accordance with their respective Pro Rata
Shares.

“Final Payment Percentage” is five and ninety-five hundredths percent (5.95%);
provided that, if the Amortization Date is extended to May 1, 2015, then “Final
Payment Percentage” shall mean nine and eighty-five hundredths percent (9.85%).

“First Draw Period” is the period commencing on the Effective Date and ending on
the earlier of (i) March 31, 2013 and (ii) the occurrence of an Event of
Default; provided, however, that the First Draw Period shall not commence if on
the date thereof an Event of Default has occurred and is continuing.

“Funding Date” is any date on which a Credit Extension is made to or on account
of Borrower which shall be a Business Day.

“GAAP” is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other Person as
may be approved by a significant segment of the accounting profession in the
United States and, in relation to any Borrower incorporated under Netherlands
law, generally accepted accounting principles in the Netherlands, including
IFRS, in each case, which are applicable to the circumstances as of the date of
determination.

 

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“General Intangibles” are all “general intangibles” as defined in the Code in
effect on the date hereof with such additions to such term as may hereafter be
made, and includes without limitation, all copyright rights, copyright
applications, copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, any patents,
trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights,
including any rights to unpatented inventions, payment intangibles, royalties,
contract rights, goodwill, franchise agreements, purchase orders, customer
lists, route lists, telephone numbers, domain names, claims, income and other
tax refunds, security and other deposits, options to purchase or sell real or
personal property, rights in all litigation presently or hereafter pending
(whether in contract, tort or otherwise), insurance policies (including without
limitation key man, property damage, and business interruption insurance),
payments of insurance and rights to payment of any kind.

“Governmental Approval” is any consent, authorization, approval, order, license,
franchise, permit, certificate, accreditation, registration, filing or notice,
of, issued by, from or to, or other act by or in respect of, any Governmental
Authority.

“Governmental Authority” is any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.

“Guarantor” is any Person providing a Guaranty in favor of Collateral Agent,
including, as of the Effective Date, Parent and Vicuron.

“Guaranty” is any guarantee of all or any part of the Obligations, as the same
may from time to time be amended, restated, modified or otherwise supplemented.

“Guaranty Documents” means that certain Unconditional Guaranty and that certain
Security Agreement, and such other instruments as Collateral Agent may
reasonably request to evidence the secured guarantee by any Guarantor of the
Obligations; each in form and content reasonably acceptable to Collateral Agent,
duly executed by each Guarantor.

“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of
property or services, such as reimbursement and other obligations for surety
bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations (it being
understood and agreed that the term “capital leases” shall have the meaning
under GAAP on the Effective Date), and (d) Contingent Obligations.

“Indemnified Person” is defined in Section 12.2.

“Insolvency Proceeding” is any proceeding by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief, including, in relation to any procedure or step
taken in the Netherlands bankruptcy (failissement), suspension of payments
(surséance van betaling), emergency procedure (noodregeling) or any other
procedure having the effect that the entity to which it applies loses the free
management or ability to dispose of its property (irrespective of whether that
procedure is provisional or final; and dissolution (ontbinding) or any other
procedure having the effect that the entity to which it applies ceases to exist.

“Insolvent” means not Solvent.

 

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“Intellectual Property” means all of Borrower’s or any Subsidiary’s right, title
and interest in and to the following:

(a) its Copyrights, Trademarks and Patents;

(b) any and all trade secrets and trade secret rights, including, without
limitation, any rights to unpatented inventions, know-how, operating manuals;

(c) any and all source code;

(d) any and all design rights which may be available to Borrower;

(e) any and all claims for damages by way of past, present and future
infringement of any of the foregoing, with the right, but not the obligation, to
sue for and collect such damages for said use or infringement of the
Intellectual Property rights identified above; and

(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks
or Patents.

“Intercompany Note” means that certain Promissory Note made by Durata C.V. to
Parent dated as of June 8, 2012 in the face amount of Seventy Five Million
Dollars ($75,000,000).

“Inventory” is all “inventory” as defined in the Code in effect on the date
hereof with such additions to such term as may hereafter be made, and includes
without limitation all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products, including without
limitation such inventory as is temporarily out of any Person’s custody or
possession or in transit and including any returned goods and any documents of
title representing any of the above.

“Investment” is any beneficial ownership interest in any Person (including
stock, partnership interest or other securities), and any loan, advance, payment
or capital contribution to any Person.

“Key Person” is each of Parent’s (i) Chief Executive Officer, who is Paul Edick
as of the Effective Date, (ii) Chief Financial Officer, who is Corey Fishman as
of the Effective Date and (iii) Chief Medical Officer, who is Michael Dunne as
of the Effective Date.

“Lender” is any one of the Lenders.

“Lenders” are the Persons identified on Schedule 1.1 hereto and each assignee
that becomes a party to this Agreement pursuant to Section 12.1.

“Lenders’ Expenses” are all audit fees and expenses, costs, and expenses
(including reasonable attorneys’ fees and expenses, as well as appraisal fees,
fees incurred on account of lien searches, inspection fees, and filing fees) for
preparing, amending, negotiating, administering, defending and enforcing the
Loan Documents (including, without limitation, those incurred in connection with
appeals or Insolvency Proceedings) or otherwise incurred by Collateral Agent
and/or the Lenders in connection with the Loan Documents.

“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security
interest, or other encumbrance of any kind, whether voluntarily incurred or
arising by operation of law or otherwise against any property.

“Loan Documents” are, collectively, this Agreement, the Warrants, the Perfection
Certificates, each Compliance Certificate, each Disbursement Letter, the Post
Closing Letter, each Guaranty, the Dutch Security Documents, the UK Share Charge
Documents, any subordination agreements, any note, or notes or guaranties
executed by any Credit Party or any other Person, and any other present or
future agreement entered into by any Credit Party, any Guarantor or any other
Person for the benefit of the Lenders and Collateral Agent in connection with
this Agreement; all as amended, restated, or otherwise modified.

“Material Adverse Change” is (a) a material impairment in the perfection or
priority of Collateral Agent’s Lien in the Collateral or in the value of such
Collateral; (b) a material adverse change in the business, operations or
condition (financial or otherwise) of any Credit Party or any of their
Subsidiaries; or (c) a material impairment of the prospect of repayment of any
portion of the Obligations.

 

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“Maturity Date” is, for each Term Loan, the date which is twenty-nine
(29) months after the Amortization Date with respect to such Term Loan.

“Obligations” are all of Borrower’s obligations to pay when due any debts,
principal, interest, Lenders’ Expenses, the Prepayment Fee, the Final Payment,
and other amounts Borrower owes the Lenders now or later, in connection with,
related to, following, or arising from, out of or under, this Agreement or, the
other Loan Documents (other than the Warrants), or otherwise, and including
interest accruing after Insolvency Proceedings begin (whether or not allowed)
and debts, liabilities, or obligations of Borrower assigned to the Lenders
and/or Collateral Agent, and the performance of Borrower’s duties under the Loan
Documents (other than the Warrants).

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

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

“Operating Documents” are, for any Person, such Person’s formation or
constitutional documents, (including, in relation to Durata B.V., a recent
extract from the Dutch trade register (handelsregister) relating to it), to the
extent required as certified by the Secretary of State (or equivalent agency) of
such Person’s jurisdiction of organization on a date that is no earlier than
thirty (30) days prior to the Effective Date, and, (a) if such Person is a
corporation, its bylaws in current form, (b) if such Person is a limited
liability company, its limited liability company agreement (or similar
agreement) or articles of association, and (c) if such Person is a partnership,
its partnership agreement (or similar agreement), each of the foregoing with all
current amendments or modifications thereto.

“Parent” means Durata Therapeutics, Inc., a Delaware corporation.

“Patents” means all patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.

“Payment Date” is the first (1st) calendar day of each calendar month,
commencing on May 1, 2013.

“Perfection Certificate” and “Perfection Certificates” is defined in
Section 5.1.

“Permitted Indebtedness” is:

(a) Each Credit Party’s or other Guarantor’s Indebtedness to the Lenders and
Collateral Agent under this Agreement and the other Loan Documents;

(b) Indebtedness existing on the Effective Date and disclosed on the Perfection
Certificate(s);

(c) Subordinated Debt;

(d) unsecured Indebtedness to trade creditors incurred in the ordinary course of
business;

(e) Indebtedness consisting of capitalized lease obligations and purchase money
Indebtedness, in each case incurred by any Credit Party or any of their
Subsidiaries to finance the acquisition, repair, improvement or construction of
fixed or capital assets of such person, provided that (i) the aggregate
outstanding principal amount of all such Indebtedness does not exceed Two
Hundred Fifty Thousand Dollars ($250,000.00) at any time and (ii) the principal
amount of such Indebtedness does not exceed the lower of the cost or fair market
value of the property so acquired or built or of such repairs or improvements
financed with such Indebtedness (each measured at the time of such acquisition,
repair, improvement or construction is made);

 

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(f) unsecured Indebtedness owing to Pfizer arising out of, related to or in any
way in connection with that certain Stock Purchase Agreement between Pfizer and
Parent dated as of December 11, 2009, or otherwise (including but not limited to
any Promissory Note prepared in connection therewith), not to exceed the
aggregate principal amount of Twenty Five Million Dollars ($25,000,000.00), plus
accrued or capitalized interest thereon; provided that no payments on account of
such unsecured Indebtedness may be made during the term of this Agreement
without Collateral Agent’s prior written consent, which may be granted or
withheld in Collateral Agent’s sole discretion;

(g) unsecured reimbursement obligations under corporate credit cards not to
exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate at any
time.

(h) Indebtedness in connection with Parent’s obligations under the Assistance
Agreement with respect to a grant to be made available to Parent in the amount
of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000.00);

(i) Indebtedness incurred as a result of endorsing negotiable instruments
received in the ordinary course of Borrower’s business;

(j) other Indebtedness in an amount not to exceed One Hundred Thousand Dollars
($100,000.00) at any time outstanding;

(k) Indebtedness constituting Permitted Investments;

(l) Indebtedness incurred in connection with interest rate and other swap
arrangements that are entered into to mitigate risk and not for speculative
purposes; and

(m) extensions, refinancings, modifications, amendments and restatements of any
items of Permitted Indebtedness (a) through (e) above, provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose materially more burdensome terms upon any Credit Party or its
Subsidiary, as the case may be.

“Permitted Investments” are:

(a) Investments disclosed on the Perfection Certificate(s) and existing on the
Effective Date;

(b) (i) Investments consisting of cash and Cash Equivalents, and (ii) any
Investments permitted by Parent’s investment policy, as amended from time to
time, provided that such investment policy (and any such amendment thereto) has
been approved in writing by Collateral Agent;

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

(d) Investments maintained in accordance with Section 6.6 hereof;

(e) Investments in connection with Transfers permitted by Section 7.1;

(f) (i) Investments by any Credit Party or any Guarantor in any other Credit
Party or Guarantor; and (ii) Investments in any other Subsidiary not to exceed
Fifty Thousand Dollars ($50,000.00) in the aggregate in any fiscal year;

(g) Investments consisting of (i) travel advances and employee relocation loans
and other employee loans and advances in the ordinary course of business, and
(ii) loans to employees, officers or directors relating to the purchase of
equity securities of any Credit Party or any of their Subsidiaries pursuant to
employee stock purchase plans or agreements approved by Parent’s Board of
Directors; not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in the
aggregate for (i) and (ii) in any fiscal year;

 

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

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

(j) joint ventures, partnerships, strategic alliances, corporate collaborations
or other relationships in the ordinary course of Parent’s business or as
approved by Parent’s board of directors (“JV Arrangements”) consisting of the
non-exclusive licensing of technology; the development, manufacture or
commercialization of technology; or the providing of technical support,
services, and/or related activates; provided that any cash investments by any
Credit Party or any of its Subsidiaries do not exceed Two Hundred Fifty Thousand
Dollars ($250,000.00) in the aggregate in any fiscal year; provided further that
a Credit Party or its Subsidiary may enter into a JV Arrangement with respect to
the exclusive licensing of technology and/or make cash investments in excess of
Two Hundred Fifty Thousand Dollars ($250,000.00) in the aggregate in any fiscal
year, so long as (i) no Event of Default exists when such JV Arrangement is
entered into, (ii) such JV Arrangement does not give such Person the right to
claim any fees, payments or damages from such Credit Party or any such
Subsidiary in excess of Two Hundred Fifty Thousand Dollars ($250,000.00),
(iii) Parent notifies Collateral Agent in advance of entering into such JV
Arrangement and (iv) contemporaneously with the entry into of any such JV
Arrangement all of the Obligations have been indefeasibly paid in full in cash
and all obligations of the Collateral Agent and/or Lenders to make loans or
otherwise extend credit to the Company have terminated.

“Permitted Licenses” are (A) licenses of open source, over-the-counter software,
prepackaged software and other software that is commercially available to the
public, (B) licenses among Credit Parties and Guarantors, and (C) non-exclusive
and exclusive licenses for the use of the Intellectual Property of any Credit
Party or any of their Subsidiaries entered into in the ordinary course of
business, provided, that, with respect to each such license described in clause
(C), (i) no Event of Default has occurred or is continuing at the time of such
license; (ii) the license constitutes an arms-length transaction, the terms of
which, on their face, do not, with respect to non-exclusive licenses of
Intellectual Property within the United States, the United Kingdom, France,
Spain, Italy or Germany, provide for a sale or assignment of any Intellectual
Property and do not restrict the ability of any Credit Party or any of their
Subsidiaries, as applicable, to pledge, grant a security interest in or lien on,
or assign or otherwise Transfer any Intellectual Property; (iii) in the case of
any exclusive license, (x) Parent delivers ten (10) days’ prior written notice
and a brief summary of the terms of the proposed license to Collateral Agent and
the Lenders and delivers to Collateral Agent and the Lenders copies of the final
executed licensing documents in connection with the exclusive license promptly
upon consummation thereof (in each case, subject to any confidentiality
provisions in such documents), (y) any such license is made in connection with a
bona fide corporate collaboration or partnership, and is approved by Parent’s
(or the applicable Subsidiary’s) board of directors, and (z) any such license of
Intellectual Property within the United States, the United Kingdom, France,
Spain, Italy or Germany could not result in a legal transfer of title of the
licensed property but may be exclusive in respects other than territory and may
be exclusive as to territory only as to discrete geographical areas outside of
the United States, the United Kingdom, France, Spain, Italy and Germany (and may
be exclusive as to discrete geographical areas inside the United States, the
United Kingdom, France, Spain, Italy or Germany so long as (a) no Event of
Default exists when such license is entered into, (b) such license does not give
any Person the right to claim any fees, payments or damages from such Credit
Party or any such Subsidiary in excess of Two Hundred Fifty Thousand Dollars
($250,000), (c) Parent notifies Collateral Agent in advance of entering into
such license and (d) contemporaneously with the entry into of any such license
all of the Obligations have been indefeasibly paid in full in cash and all
obligations of the Collateral Agent and/or Lenders to make loans or otherwise
extend credit to the Company have terminated); and (iv) all upfront payments,
royalties, milestone payments or other proceeds arising from the licensing
agreement that are payable to any Credit Party or any of their Subsidiaries are
paid to a Deposit Account that is governed by a Control Agreement to the extent
such Credit Party or Subsidiary is required to provide a Control Agreement under
Section 6.6 hereof.

 

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“Permitted Liens” are:

(a) Liens existing on the Effective Date and disclosed on the Perfection
Certificates or arising under this Agreement and the other Loan Documents;

(b) Liens for taxes, fees, assessments or other government charges or levies,
either (i) not due and payable or (ii) being contested in good faith and for
which Parent maintains adequate reserves on its Books, provided that no notice
of any such Lien has been filed or recorded under the Internal Revenue Code of
1986, as amended, and the Treasury Regulations adopted thereunder;

(c) liens securing Indebtedness permitted under clause (e) of the definition of
“Permitted Indebtedness,” provided that (i) such liens exist prior to the
acquisition of, or attach substantially simultaneous with, or within twenty
(20) days after, the acquisition, lease, repair, improvement or construction of,
such property financed or leased by such Indebtedness and (ii) such liens do not
extend to any property of any Credit Party or any Subsidiary other than the
property (and proceeds thereof) acquired, leased or built, or the improvements
or repairs, financed by such Indebtedness;

(d) Liens of carriers, mechanics, materialmen, warehousemen, suppliers, or other
Persons that are possessory in nature arising in the ordinary course of business
so long as such Liens attach only to Inventory, securing liabilities in the
aggregate amount not to exceed One Hundred Thousand Dollars ($100,000.00), and
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;

(e) Liens securing Indebtedness permitted under clause (h) of the definition of
“Permitted Indebtedness,” provided such Liens are limited to the Connecticut
Assets;

(f) Liens to secure payment of workers’ compensation, employment insurance,
old-age pensions, social security and other like obligations incurred in the
ordinary course of business (other than Liens imposed by ERISA);

(g) leases or subleases of real property granted in the ordinary course of
Borrower’s business (or, if referring to another Person, in the ordinary course
of such Person’s business), and leases, subleases, non-exclusive licenses or
sublicenses of personal property (other than Intellectual Property) granted in
the ordinary course of Borrower’s business (or, if referring to another Person,
in the ordinary course of such Person’s business), if the leases, subleases,
licenses and sublicenses do not prohibit granting Collateral Agent or any Lender
a security interest therein;

(h) banker’s liens, rights of setoff and Liens in favor of financial
institutions incurred in the ordinary course of business arising in connection
with Borrower’s deposit accounts or securities accounts held at such
institutions solely to secure payment of fees and similar costs and expenses and
provided such accounts are maintained in compliance with Section 6.6(b) hereof;

(i) Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Section 8.4 or 8.7;

(j) Liens consisting of Permitted Licenses;

(k) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business so
long as they do not materially impair the value or marketability of the related
property; and

(l) Liens incurred in the extension, renewal or refinancing of the indebtedness
secured by Liens described in (a) through (k), but any extension, renewal or
replacement Lien must be limited to the property encumbered by the existing Lien
and the principal amount of the indebtedness may not increase.

 

36

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“Person” is any individual, sole proprietorship, partnership, limited liability
company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

“Pfizer” is Pfizer, Inc., a Delaware corporation, and any successor or assign or
Pfizer, Inc.

“PMP” is a professional market party (professionele marktpartij) as defined in
the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht), as
amended from time to time.

“Post Closing Letter” is that certain Post Closing Letter dated as of the
Effective Date by and between Collateral Agent and any Credit Party.

“Prepayment Fee” is, with respect to any Term Loan subject to prepayment prior
to the Maturity Date, whether by mandatory or voluntary prepayment, acceleration
or otherwise, an additional fee payable to the Lenders in amount equal to:

(i) for a prepayment made on or after the Funding Date of such Term Loan through
and including the first anniversary of the Funding Date of such Term Loan, two
and one-half percent (2.50%) of the principal amount of such Term Loan prepaid;

(ii) for a prepayment made after the date which is after the first anniversary
of the Funding Date of such Term Loan through and including the second
anniversary of the Funding Date of such Term Loan, one and one-half percent
(1.50%) of the principal amount of the Term Loans prepaid;

(iii) for a prepayment made after the date which is after the second anniversary
of the Funding Date of such Term Loan and prior to the Maturity Date, one-half
of one percent (0.50%) of the principal amount of the Term Loans prepaid.

“Pro Rata Share” is, as of any date of determination, with respect to each
Lender, a percentage (expressed as a decimal, rounded to the ninth decimal
place) determined by dividing the outstanding principal amount of Term Loans
held by such Lender by the aggregate outstanding principal amount of all Term
Loans.

“Registered Organization” is any “registered organization” as defined in the
Code with such additions to such term as may hereafter be made.

“Required Lenders” means (i) for so long as all of the Persons that are Lenders
on the Effective Date (each an “Original Lender”) have not assigned or
transferred any of their interests in their Term Loan, Lenders holding one
hundred percent (100%) of the aggregate outstanding principal balance of the
Term Loan, or (ii) at any time from and after any Original Lender has assigned
or transferred any interest in its Term Loan, Lenders holding at least sixty six
percent (66%) of the aggregate outstanding principal balance of the Term Loan
and, in respect of this clause (ii), (A) each Original Lender that has not
assigned or transferred any portion of its Term Loan, (B) each assignee or
transferee of an Original Lender’s interest in the Term Loan, but only to the
extent that such assignee or transferee is an Affiliate or Approved Fund of such
Original Lender, and (C) any Person providing financing to any Person described
in clauses (A) and (B) above; provided, however, that this clause (C) shall only
apply upon the occurrence of a default, event of default or similar occurrence
with respect to such financing.

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

 

37

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“Responsible Officer” is the managing directors (directeuren) of Durata B.V.,
acting jointly, and the general partner of Durata C.V.; and any of the
President, Chief Executive Officer, or Chief Financial Officer of Parent acting
alone.

“Second Draw Period” is the period commencing on the Effective Date and ending
on the earlier of (i) March 31, 2013 and (ii) the occurrence of an Event of
Default; provided, however, that the Second Draw Period shall not commence if on
the date thereof an Event of Default has occurred and is continuing.

“Secured Promissory Note” is defined in Section 2.4.

“Secured Promissory Note Record” is a record maintained by each Lender with
respect to the outstanding Obligations owed by Borrower to Lender and credits
made thereto.

“Securities Account” is any “securities account” as defined in the Code with
such additions to such term as may hereafter be made.

“Shares” is one hundred percent (100%) of the issued and outstanding capital
stock, membership units or other securities owned or held of record by Borrower
or Borrower’s Subsidiary, in any Subsidiary.

“Solvent” is, with respect to any Person: the fair salable value of such
Person’s consolidated assets (including goodwill minus disposition costs)
exceeds the fair value of such Person’s liabilities; such Person is not left
with unreasonably small capital after the transactions in this Agreement; and
such Person is able to pay its debts (including trade debts) as they mature.

“Subordinated Debt” is indebtedness incurred by any Credit Party or any of their
Subsidiaries subordinated to all Indebtedness of any such Credit Party and/or
its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or
other similar agreement in form and substance satisfactory to Collateral Agent
and the Lenders entered into between Collateral Agent, any Credit Party, and/or
any of its Subsidiaries, and the other creditor), on terms acceptable to
Collateral Agent and the Lenders.

“Subsidiary” is, with respect to any Person, any Person of which more than fifty
percent (50%) of the voting stock or other equity interests (in the case of
Persons other than corporations) is owned or controlled, directly or indirectly,
by such Person or one or more Affiliates of such Person.

“Term Loan” is defined in Section 2.2(a)(ii) hereof.

“Term A Loan” is defined in Section 2.2(a)(i) hereof.

“Term B Loan” is defined in Section 2.2(a)(ii) hereof.

“Term Loan Commitment” is, for any Lender, the obligation of such Lender to make
a Term Loan, up to the principal amount shown on Schedule 1.1. “Term Loan
Commitments” means the aggregate amount of such commitments of all Lenders.

“Trademarks” means any trademark and servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks.

“Transfer” is defined in Section 7.1.

“UK Share Charge Documents” means that certain Charge Over Shares, by Durata
B.V. in favor of Collateral Agent, over the Shares of Durata UK, and such other
and further documents and instruments as Collateral Agent deems reasonably
necessary; all in form and content reasonably acceptable to Collateral Agent.

 

38

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“Vicuron” is Vicuron Pharmaceuticals Inc., a Delaware corporation and
wholly-owned Subsidiary of Parent.

“Warrants” are those certain Warrants to Purchase Stock dated as of the
Effective Date, or any date thereafter, issued by Parent in favor of each Lender
or such Lender’s Affiliates.

[Balance of Page Intentionally Left Blank]

 

39

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date.

 

BORROWER:     BORROWER:

DURATA THERAPEUTICS HOLDING C.V.,

represented by its General Partner, Durata Therapeutics, Inc. by,

    DURATA THERAPEUTICS INTERNATIONAL B.V. By:  

/s/ Corey N. Fishman

    By:  

/s/ Corey N. Fishman

Name:   Corey N. Fishman     Name:   Corey Neal Fishman Title:   Chief Operating
Officer and Chief Financial Officer     Its:   Authorised signatory PARENT:    
  DURATA THERAPEUTICS, INC.       By:  

/s/ Corey N. Fishman

      Name:   Corey N. Fishman       Title:   Chief Operating Officer and Chief
Financial Officer       COLLATERAL AGENT AND LENDER:       OXFORD FINANCE LLC  
    By:  

/s/ Mark Davis

      Name:   Mark Davis       Title:   Vice President – Finance, Secretary &
Treasurer      

[Signature Page to Loan and Security Agreement]

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

SCHEDULE 1.1

Lenders and Commitments

Term A Loans

 

Lender

   Term Loan
Commitment      Commitment
Percentage  

OXFORD FINANCE LLC

   $ 10,000,000.00         100.00 %    

 

 

    

 

 

 

TOTAL

   $ 10,000,000.00         100.00 %    

 

 

    

 

 

 

Term B Loans

 

Lender

   Term Loan
Commitment      Commitment
Percentage  

OXFORD FINANCE LLC

   $ 10,000,000.00         100.00 %    

 

 

    

 

 

 

TOTAL

   $ 10,000,000.00         100.00 %    

 

 

    

 

 

 

Aggregate (all Term Loans)

 

Lender

   Term Loan
Commitment      Commitment
Percentage  

OXFORD FINANCE LLC

   $ 20,000,000.00         100.00 %    

 

 

    

 

 

 

TOTAL

   $ 20,000,000.00         100.00 %    

 

 

    

 

 

 

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

EXHIBIT A

Description of Collateral

The Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:

All goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles (except as noted below), commercial
tort claims, documents, instruments (including any promissory notes), chattel
paper (whether tangible or electronic), cash, deposit accounts and other
Collateral Accounts, all certificates of deposit, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing),
securities, and all other investment property, supporting obligations, and
financial assets, whether now owned or hereafter acquired, wherever located; and

All Borrower’s Books relating to the foregoing, and any and all claims, rights
and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include any Intellectual
Property; provided, however, the Collateral shall include all Accounts and all
proceeds of Intellectual Property. If a judicial authority (including a U.S.
Bankruptcy Court) would hold that a security interest in the underlying
Intellectual Property is necessary to have a security interest in such Accounts
and such property that are proceeds of Intellectual Property, then the
Collateral shall automatically, and effective as of the Effective Date, include
the Intellectual Property to the extent necessary to permit perfection of
Collateral Agent’s security interest in such Accounts and such other property of
Borrower that are proceeds of the Intellectual Property.

Notwithstanding any provision in this Agreement or any Loan Document to the
contrary, the grant of security interest herein shall not extend to and the term
“Collateral” shall not include (i) any “intent-to-use” trademarks at all times
prior to the first use thereof, whether by the actual use thereof in commerce,
the recording of a statement of use with the United States Patent and Trademark
Office or otherwise, (ii); the Bank of America CDs; (iii) the Connecticut
Assets; and (iv) any equipment subject to a Lien described in clauses (c) and
(h) of the definition of Permitted Liens, in each case if the granting of a Lien
in such equipment is prohibited by or would constitute a default under the
agreement governing such equipment (but (A) only to the extent such prohibition
is enforceable under applicable law and (B) other than to the extent that any
such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408
or 9-409 of the Code); provided that upon the termination, lapsing or expiration
of any such prohibition, such equipment, as applicable, shall automatically be
subject to the security interest granted in favor of Lender hereunder and become
part of the “Collateral.”

Pursuant to the terms of a certain negative pledge arrangement with Collateral
Agent and the Lenders, Borrower has agreed not to encumber any of its
Intellectual Property except as otherwise permitted under the Loan Agreement.

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

EXHIBIT B

Form of Disbursement Letter

[see attached]

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

DISBURSEMENT LETTER

March 5, 2013

The undersigned, being the duly elected and acting Chief Operating Officer and
Chief Financial Officer of Durata Therapeutics, Inc., a Delaware corporation,
the General Partner of DURATA THERAPEUTICS HOLDING C.V., a limited partnership
(commanditaire vennootschap) organized under the laws of the Netherlands with
offices located at 4th Floor, Harbour Place, 103 South Church Street, George
Town, Grand Cayman, KY-1102 Cayman Islands (for itself and on behalf of each
Borrower under the Loan Agreement (as defined below), collectively, “Borrower”),
does hereby certify to OXFORD FINANCE LLC (“Oxford” and “Lender”), as collateral
agent (the “Collateral Agent”) in connection with that certain Loan and Security
Agreement dated as of March 5, 2013, by and among Borrower, Collateral Agent and
the Lenders from time to time party thereto (the “Loan Agreement”; with other
capitalized terms used below having the meanings ascribed thereto in the Loan
Agreement) that:

1. The representations and warranties made by Borrower in Section 5 of the Loan
Agreement and in the other Loan Documents are true and correct in all material
respects as of the date hereof.

2. No event or condition has occurred that would constitute an Event of Default
under the Loan Agreement or any other Loan Document.

3. Borrower is in compliance with the covenants and requirements contained in
Sections 4, 6 and 7 of the Loan Agreement.

4. All conditions referred to in Section 3 of the Loan Agreement to the making
of the Loan to be made on or about the date hereof have been satisfied or waived
by Collateral Agent.

5. No Material Adverse Change has occurred.

6. The undersigned is a Responsible Officer.

[Balance of Page Intentionally Left Blank]

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

7. The proceeds of the Term A Loan shall be disbursed as follows:

 

Disbursement from Oxford:

  

Loan Amount

   $ 10,000,000.00   

Plus:

  

—Deposit Received

   $                

Less:

  

—Facility Fee

   ($              ) 

—Interim Interest

   ($              ) 

—Lender’s Legal Fees

   ($              )* 

Total Term A Loan Net Proceeds due from Oxford:

   $                

8. The Term A Loan shall amortize in accordance with the Amortization Table
attached hereto.

9. The aggregate net proceeds of the Term Loans shall be transferred to the
Designated Deposit Account as follows:

 

Account Name:    Bank Name:    Bank Address:    Account Number:    IBAN:   

[Balance of Page Intentionally Left Blank]

 

* Legal fees and costs are through the Effective Date. Post-closing legal fees
and costs, payable after the Effective Date, to be invoiced and paid
post-closing.

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

Dated as of the date first set forth above.

 

BORROWER:     BORROWER:

DURATA THERAPEUTICS HOLDING C.V.,

represented by its General Partner, Durata Therapeutics, Inc. by,

    DURATA THERAPEUTICS INTERNATIONAL B.V. By:  

 

    By:  

 

Name:   Corey N. Fishman     Name:   Corey Neal Fishman Title:   Chief Operating
Officer and Chief Financial Officer     Its:   Authorised signatory COLLATERAL
AGENT AND LENDER:       OXFORD FINANCE LLC       By:  

 

      Name:  

 

      Title:  

 

     

[Signature Page to Disbursement Letter]

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

AMORTIZATION TABLE

(Term A Loan)

[see attached]

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

EXHIBIT C

Compliance Certificate

 

TO:    OXFORD FINANCE LLC, as Collateral Agent and Lender FROM:    DURATA
THERAPEUTICS HOLDING C.V.

The undersigned authorized officer (“Officer”) of DURATA THERAPEUTICS HOLDING
C.V. (for itself and on behalf of each Borrower under the Loan Agreement (as
defined below), collectively, “Borrower”), hereby certifies that in accordance
with the terms and conditions of the Loan and Security Agreement by and among
Borrower, Collateral Agent, and the Lenders from time to time party thereto (the
“Loan Agreement;” capitalized terms used but not otherwise defined herein shall
have the meanings given them in the Loan Agreement),

(a) Borrower is in complete compliance for the period ending             with
all required covenants except as noted below;

(b) There are no Events of Default, except as noted below;

(c) Except as noted below, all representations and warranties of Borrower stated
in the Loan Documents are true and correct in all material respects on this date
and for the period described in (a), above; provided, however, that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in
all material respects as of such date.

(d) Borrower, and each of Borrower’s Subsidiaries, has timely filed all required
tax returns and reports, Borrower, and each of Borrower’s Subsidiaries, has
timely paid all foreign, federal, state, and local taxes, assessments, deposits
and contributions owed by Borrower, or Subsidiary, except as otherwise permitted
pursuant to the terms of Section 5.8 of the Loan Agreement;

(e) No Liens have been levied or claims made against any Credit Party or any of
their Subsidiaries relating to unpaid employee payroll or benefits of which
Borrower has not previously provided written notification to Collateral Agent
and the Lenders.

Attached are the required documents, if any, supporting our certification(s).
The Officer, on behalf of Borrower, further certifies, in its capacity as an
officer of the Borrower, that the attached financial statements are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes and except, in the case of unaudited financial
statements, for the absence of footnotes and subject to year-end audit
adjustments as to the interim financial statements.

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

Please indicate compliance status since the last Compliance Certificate by
circling Yes, No, or N/A under “Complies” column.

 

     Reporting Covenant    Requirement    Actual   Complies 1)    Financial
statements    Quarterly within 45 days          Yes           No      
    N/A     2)    Annual (CPA Audited) statements    Within 120 days after FYE
     Yes   No   N/A 3)    Annual Financial Projections/Budget (prepared on a
monthly basis)    Annually (within 31 days of FYE), and when revised      Yes  
No   N/A 4)    A/R & A/P agings    If applicable          Yes           No      
    N/A     5)    8-K, 10-K and 10-Q Filings    If applicable, within 5 days of
filing      Yes   No   N/A 6)    Compliance Certificate    Quarterly within 45
days      Yes   No   N/A 7)    IP Report    When required      Yes   No   N/A 8)
   Total amount of each Credit Party’s cash and cash equivalents at the last day
of the measurement period       $               Yes   No   N/A 9)    Total
amount of Parent’s Subsidiaries’ cash and cash equivalents at the last day of
the measurement period       $               Yes   No   N/A

Deposit and Securities Accounts

(Please list all accounts; attach separate sheet if additional space needed)

 

     Institution Name    Account Number    New Account?   
Account Control Agreement in place? 1)          Yes    No    Yes    No 2)      
   Yes    No    Yes    No 3)          Yes    No    Yes    No 4)          Yes   
No    Yes    No

Financial Covenants

(None)

Other Matters

 

1)    Have there been any changes in Key Persons since the last Compliance
Certificate?        Yes            No     2)    Have there been any
transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan
Agreement?    Yes    No 3)    Have there been any new or pending claims or
causes of action against Borrower that involve more than Two Hundred Fifty
Thousand Dollars ($250,000.00)?    Yes    No 4)    Have there been any
amendments of or other changes to the capitalization table of Borrower and to
the Operating Documents of any Credit Party or any of their Subsidiaries? If
yes, provide copies of any such amendments or changes with this Compliance
Certificate.    Yes    No

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

Exceptions

Please explain any exceptions with respect to the certification above: (If no
exceptions exist, state “No exceptions.” Attach separate sheet if additional
space needed.)

 

DURATA THERAPEUTICS HOLDING C.V., For itself and on behalf of all Borrowers
Represented by its General Partner, Durata Therapeutics, Inc. by, By:  

 

Name:   Corey N. Fishman Title:   Chief Operating Officer and Chief Financial
Officer Date:  

 

 

LENDER USE ONLY Received by:  

 

    Date:  

 

Verified by:  

 

    Date:  

 

Compliance Status:            Yes            No

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

EXHIBIT D

Form of Secured Promissory Note

[see attached]

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

SECURED PROMISSORY NOTE

(Term A Loan – Note No. 1)

 

$5,000,000.00    Dated: March     , 2013

FOR VALUE RECEIVED, the undersigned, DURATA THERAPEUTICS HOLDING C.V., a limited
partnership (commanditaire vennootschap) organized under the laws of the
Netherlands with offices located at 4th Floor, Harbour Place, 103 South Church
Street, George Town, Grand Cayman, KY-1102 Cayman Islands and DURATA
THERAPEUTICS INTERNATIONAL B.V., a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) incorporated under the
laws of the Netherlands, having its corporate seat (statutaire zetel) in
Amsterdam, the Netherlands and with offices located at Prins Bernhardplein 200,
1097 JB Amsterdam, The Netherlands, and which is registered with the Chamber of
Commerce of Amsterdam under registration number 55527221 (individually and
collectively, jointly and severally, “Borrower”) HEREBY PROMISES TO PAY to the
order of OXFORD FINANCE LLC (“Lender”) the principal amount of FIVE MILLION
DOLLARS ($5,000,000.00) or such lesser amount as shall equal the outstanding
principal balance of the Term A Loan made to Borrower by Lender, plus interest
on the aggregate unpaid principal amount of such Term A Loan, at the rates and
in accordance with the terms of the Loan and Security Agreement dated March
    , 2013 by and among Borrower, Lender, Oxford Finance LLC, as Collateral
Agent, and the other Lenders from time to time party thereto (as amended,
restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”). If not sooner paid, the entire principal amount and all accrued and
unpaid interest hereunder shall be due and payable on the Maturity Date as set
forth in the Loan Agreement. Any capitalized term not otherwise defined herein
shall have the meaning attributed to such term in the Loan Agreement.

Principal, interest and all other amounts due with respect to the Term A Loan,
are payable in lawful money of the United States of America to Lender as set
forth in the Loan Agreement and this Secured Promissory Note (this “Note”). The
principal amount of this Note and the interest rate applicable thereto, and all
payments made with respect thereto, shall be recorded by Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which is part of this
Note.

The Loan Agreement, among other things, (a) provides for the making of a secured
Term A Loan by Lender to Borrower, and (b) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events.

This Note may not be prepaid except as set forth in Section 2.2 (c) and
Section 2.2(d) of the Loan Agreement.

This Note and the obligation of Borrower to repay the unpaid principal amount of
the Term A Loan, interest on the Term A Loan and all other amounts due Lender
under the Loan Agreement is secured under the Loan Agreement.

Presentment for payment, demand, notice of protest and all other demands and
notices of any kind in connection with the execution, delivery, performance and
enforcement of this Note are hereby waived.

Borrower shall pay all reasonable fees and expenses, including, without
limitation, reasonable attorneys’ fees and costs, incurred by Lender in the
enforcement or attempt to enforce any of Borrower’s obligations hereunder not
performed when due.

This Note shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of New York.

The ownership of an interest in this Note shall be registered on a record of
ownership maintained by Lender or its agent. Notwithstanding anything else in
this Note to the contrary, the right to the principal of, and stated interest
on, this Note may be transferred only if the transfer is registered on such
record of ownership and the transferee is identified as the owner of an interest
in the obligation. Borrower shall be entitled to treat the registered holder of
this Note (as recorded on such record of ownership) as the owner in fact thereof
for all purposes and shall not be bound to recognize any equitable or other
claim to or interest in this Note on the part of any other person or entity.

[Balance of Page Intentionally Left Blank]

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

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of
its officers thereunto duly authorized on the date hereof.

 

BORROWER:     BORROWER:

DURATA THERAPEUTICS HOLDING C.V.,

represented by its General Partner, Durata Therapeutics, Inc. by,

    DURATA THERAPEUTICS INTERNATIONAL B.V. By:  

 

    By:  

 

Name:   Corey N. Fishman     Name:   Corey Neal Fishman Title:   Chief Operating
Officer and Chief Financial Officer     Its:   Authorised signatory

Oxford Finance LLC

Secured Promissory Note

Term A Loan – Note No. 1

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

LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL

 

Date

   Principal
Amount    Interest Rate    Scheduled
Payment Amount    Notation By                                    

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

SECURED PROMISSORY NOTE

(Term A Loan – Note No. 2)

 

$5,000,000.00    Dated: March     , 2013

FOR VALUE RECEIVED, the undersigned, DURATA THERAPEUTICS HOLDING C.V., a limited
partnership (commanditaire vennootschap) organized under the laws of the
Netherlands with offices located at 4th Floor, Harbour Place, 103 South Church
Street, George Town, Grand Cayman, KY-1102 Cayman Islands and DURATA
THERAPEUTICS INTERNATIONAL B.V., a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) incorporated under the
laws of the Netherlands, having its corporate seat (statutaire zetel) in
Amsterdam, the Netherlands and with offices located at Prins Bernhardplein 200,
1097 JB Amsterdam, The Netherlands, and which is registered with the Chamber of
Commerce of Amsterdam under registration number 55527221 (individually and
collectively, jointly and severally, “Borrower”) HEREBY PROMISES TO PAY to the
order of OXFORD FINANCE LLC (“Lender”) the principal amount of FIVE MILLION
DOLLARS ($5,000,000.00) or such lesser amount as shall equal the outstanding
principal balance of the Term A Loan made to Borrower by Lender, plus interest
on the aggregate unpaid principal amount of such Term A Loan, at the rates and
in accordance with the terms of the Loan and Security Agreement dated March
    , 2013 by and among Borrower, Lender, Oxford Finance LLC, as Collateral
Agent, and the other Lenders from time to time party thereto (as amended,
restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”). If not sooner paid, the entire principal amount and all accrued and
unpaid interest hereunder shall be due and payable on the Maturity Date as set
forth in the Loan Agreement. Any capitalized term not otherwise defined herein
shall have the meaning attributed to such term in the Loan Agreement.

Principal, interest and all other amounts due with respect to the Term A Loan,
are payable in lawful money of the United States of America to Lender as set
forth in the Loan Agreement and this Secured Promissory Note (this “Note”). The
principal amount of this Note and the interest rate applicable thereto, and all
payments made with respect thereto, shall be recorded by Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which is part of this
Note.

The Loan Agreement, among other things, (a) provides for the making of a secured
Term A Loan by Lender to Borrower, and (b) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events.

This Note may not be prepaid except as set forth in Section 2.2 (c) and
Section 2.2(d) of the Loan Agreement.

This Note and the obligation of Borrower to repay the unpaid principal amount of
the Term A Loan, interest on the Term A Loan and all other amounts due Lender
under the Loan Agreement is secured under the Loan Agreement.

Presentment for payment, demand, notice of protest and all other demands and
notices of any kind in connection with the execution, delivery, performance and
enforcement of this Note are hereby waived.

Borrower shall pay all reasonable fees and expenses, including, without
limitation, reasonable attorneys’ fees and costs, incurred by Lender in the
enforcement or attempt to enforce any of Borrower’s obligations hereunder not
performed when due.

This Note shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of New York.

The ownership of an interest in this Note shall be registered on a record of
ownership maintained by Lender or its agent. Notwithstanding anything else in
this Note to the contrary, the right to the principal of, and stated interest
on, this Note may be transferred only if the transfer is registered on such
record of ownership and the transferee is identified as the owner of an interest
in the obligation. Borrower shall be entitled to treat the registered holder of
this Note (as recorded on such record of ownership) as the owner in fact thereof
for all purposes and shall not be bound to recognize any equitable or other
claim to or interest in this Note on the part of any other person or entity.

[Balance of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of
its officers thereunto duly authorized on the date hereof.

 

BORROWER:     BORROWER:

DURATA THERAPEUTICS HOLDING C.V.,

represented by its General Partner, Durata Therapeutics, Inc. by,

    DURATA THERAPEUTICS INTERNATIONAL B.V. By:  

 

    By:  

 

Name:   Corey N. Fishman     Name:   Corey Neal Fishman Title:   Chief Operating
Officer and Chief Financial Officer     Its:   Authorised signatory COLLATERAL
AGENT AND LENDER:       OXFORD FINANCE LLC       By:  

 

      Name:  

 

      Title:  

 

     

Oxford Finance LLC

Secured Promissory Note

Term A Loan – Note No. 2

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LOAN INTEREST RATE AND PAYMENTS OF PRINCIPAL

 

Date

   Principal
Amount    Interest Rate    Scheduled
Payment Amount    Notation By