Exhibit 10.2

Execution Version

AMENDED AND RESTATED SECURITY AGREEMENT

This AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”) is dated as of
August 10, 2012 and entered into by and among QUIDEL CORPORATION, a Delaware
corporation (“Borrower”), each of THE UNDERSIGNED DIRECT AND INDIRECT
SUBSIDIARIES of Borrower (each of such undersigned Subsidiaries being a
“Subsidiary Grantor” and collectively “Subsidiary Grantors”) and each ADDITIONAL
GRANTOR that may become a party hereto after the date hereof in accordance with
Section 21 hereof (each of Borrower, each Subsidiary Grantor, and each
Additional Grantor being a “Grantor” and collectively the “Grantors”) and BANK
OF AMERICA, N.A., as Administrative Agent for and representative of (in such
capacity herein called “Secured Party”) the Beneficiaries (as hereinafter
defined).

PRELIMINARY STATEMENTS

A. Pursuant to the Amended and Restated Credit Agreement dated as of August 10,
2012 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Credit Agreement;” the terms defined therein and
not otherwise defined in Section 32, the UCC or elsewhere herein being used
herein as therein defined), by and among Borrower, the financial institutions
listed therein as Lenders, and Bank of America, N.A., as Agent (in such
capacity, “Agent”), Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Borrower.

B. Any Loan Party may from time to time enter, or may from time to time have
entered, into one or more Secured Hedge Agreements with one or more Hedge Banks
in accordance with the terms of the Credit Agreement, and it is desired that the
obligations of Loan Parties under the Secured Hedge Agreements, including,
without limitation, the obligation of Loan Parties to make payments thereunder
in the event of early termination thereof, together with all obligations of
Borrower under the Credit Agreement and the other Loan Documents, be secured
hereunder.

C. Any Loan Party may from time to time enter, or may from time to time have
entered, into one or more Secured Cash Management Agreements with one or more
Cash Management Banks in accordance with the terms of the Credit Agreement, and
it is desired that the obligations of Loan Parties under the Secured Cash
Management Agreements, together with all obligations of Borrower under the
Credit Agreement and the other Loan Documents, be secured hereunder.

D. Subsidiary Grantors have executed and delivered the Guaranty, in each case in
favor of Secured Party for the benefit of Lenders, any Hedge Banks and any Cash
Management Banks, pursuant to which each Subsidiary Grantor has guarantied the
prompt payment and performance when due of all obligations of Borrower under the
Credit Agreement and all obligations of Loan Parties under the Secured Hedge
Agreements and Secured Cash Management Agreements.

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E. It is a condition precedent to the initial extensions of credit by Lenders
under the Credit Agreement that Grantors listed on the signature pages hereof
shall have granted the security interests and undertaken the obligations
contemplated by this Agreement.

F. This Agreement amends and restates in its entirety that certain Security
Agreement dated as of October 8, 2008 (as amended and supplemented, the
“Existing Security Agreement”), among Borrower and certain Subsidiaries of
Borrower party thereto, as grantors and Administrative Agent.

NOW, THEREFORE, in consideration of the agreements set forth herein and in the
Credit Agreement and in order to induce Lenders to make Loans and other
extensions of credit under the Credit Agreement, to induce Hedge Banks to enter
into the Secured Hedge Agreements and to induce Cash Management Banks to enter
into the Secured Cash Management Agreements, each Grantor hereby agrees with
Secured Party as follows:

SECTION 1. Grant of Security.

Each Grantor hereby assigns to Secured Party, and hereby grants to Secured
Party, for the ratable benefit of Lenders, Hedge Banks and Cash Management
Banks, a security interest in, all of such Grantor’s right, title and interest
in and to all of the personal property of such Grantor, in each case whether now
or hereafter existing, whether tangible or intangible, whether now owned or
hereafter acquired, wherever the same may be located and whether or not subject
to the Uniform Commercial Code as it exists on the date of this Agreement, or as
it may hereafter be amended in the State of California (the “UCC”), including
the following (the “Collateral”):

(a) all Accounts;

(b) all Chattel Paper;

(c) all Money and all Deposit Accounts, together with all amounts on deposit
from time to time in such Deposit Accounts;

(d) all Documents;

(e) all General Intangibles, including all intellectual property, Payment
Intangibles and Software;

(f) all Goods, including Inventory, Equipment and Fixtures;

(g) all Instruments;

(h) all Investment Property;

(i) all Letter-of-Credit Rights and other Supporting Obligations;

(j) all Records;

 

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(k) all Commercial Tort Claims, including those set forth on Schedule 1 annexed
hereto; and

(l) all Proceeds and Accessions with respect to any of the foregoing Collateral.

Each category of Collateral set forth above shall have the meaning set forth in
the UCC (to the extent such term is defined in the UCC), it being the intention
of Grantors that the description of the Collateral set forth above be construed
to include the broadest possible range of assets.

Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in, any of such Grantor’s rights or interests in or under, any license,
contract, permit, Instrument, Security or franchise to which such Grantor is a
party or any of its rights or interests thereunder to the extent, but only to
the extent, that such a grant would, under the terms of such license, contract,
permit, Instrument, Security or franchise, result in a breach of the terms of,
or constitute a default under, such license, contract, permit, Instrument,
Security or franchise (other than to the extent that any such term would be
rendered ineffective pursuant to the UCC or any other applicable law (including
the Bankruptcy Code) or principles of equity); provided, that immediately upon
the ineffectiveness, lapse or termination of any such provision the Collateral
shall include, and such Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.

Notwithstanding the foregoing, the Collateral shall not include (a) any Equity
Interests issued by a Person if such Person is a controlled foreign corporation
(used hereinafter as such term is defined in Section 957(a) or any successor
provision of the Internal Revenue Code), in excess of the amount of such Equity
Interests possessing up to but not exceeding 65% of the voting power of all
classes of such Equity Interests entitled to vote of such Person and (b) assets
subject to any Lien permitted under Section 7.01(i) of the Credit Agreement
where the security agreement or other instrument creating such purchase money
Lien prohibits the granting of a security interest in such assets to Secured
Party or results in an event of default under such security agreement or
instrument (other than to the extent that such term would be rendered
ineffective pursuant to the UCC or any other applicable law (including the
Bankruptcy Code)); provided that the security interest in any such assets shall
automatically attach hereunder when and after any such Liens are discharged or
released or when the assets encumbered by such Liens are no longer subject to
such restrictions; provided further, that in any event any Account or any money
or other amounts due or to become due under any such contract, agreement,
instrument or indenture shall not be excluded from the definition of Collateral
to the extent that any of the foregoing is (or if it contained a provision
limiting the transferability or pledge thereof would be) subject to
Section 9-406 of the UCC.

SECTION 2. Security for Obligations.

This Agreement secures, and the Collateral is collateral security for, the
prompt payment or performance in full when due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise, of all
Secured Obligations of each Grantor. “Secured Obligations” means:

 

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(a) with respect to Borrower, all obligations and liabilities of every nature of
Borrower now or hereafter existing under or arising out of or in connection with
the Credit Agreement and the other Loan Documents and any Secured Hedge
Agreement and any Cash Management Agreement (including all Obligations (as
defined in the Credit Agreement)); and

(b) with respect to each Subsidiary Grantor and Additional Grantor, all
obligations and liabilities of every nature of such Grantor now or hereafter
existing under or arising out of or in connection with the Guaranty (including
all Guarantied Obligations (as defined in the Guaranty));

in each case together with all extensions or renewals thereof, whether for
principal, interest, reimbursement of amounts drawn under Letters of Credit,
payments for early termination of Secured Hedge Agreements, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender or
Hedge Bank or Cash Management Bank as a preference, fraudulent transfer or
otherwise, and all obligations of every nature of Grantors now or hereafter
existing under this Agreement (including, without limitation, interest and other
amounts that, but for the filing of a petition in bankruptcy with respect to
Borrower or any other Grantor, would accrue on such obligations, whether or not
a claim is allowed against Borrower or such Grantor for such amounts in the
related bankruptcy proceeding).

SECTION 3. Grantors Remain Liable.

Anything contained herein to the contrary notwithstanding, (a) each Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts, licenses, and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

SECTION 4. Representations and Warranties.

Each Grantor represents and warrants as follows:

(a) Ownership of Collateral. Except as expressly permitted by the Credit
Agreement, such Grantor owns its interests in the Collateral free and clear of
any Lien and no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office, including any IP Filing Office.

 

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(b) Perfection. The security interests in the Collateral granted to Secured
Party for the ratable benefit of Lenders, Hedge Banks and Cash Management Banks
hereunder constitute valid security interests in the Collateral, securing the
payment of the Secured Obligations. Upon (i) the filing of UCC financing
statements naming each Grantor as “debtor”, naming Secured Party as “secured
party” and describing the Collateral in the filing offices with respect to such
Grantor set forth on Schedule 2 annexed hereto, (ii) in the case of the Pledged
Collateral consisting of certificated Securities or evidenced by Instruments, in
addition to filing of such UCC financing statements, delivery of the
certificates representing such certificated Securities and delivery of such
Instruments to Secured Party, and in the case of Pledged Collateral issued by a
foreign issuer, any actions required under foreign law to perfect a security
interest in such Pledged Collateral), in each case duly endorsed or accompanied
by duly executed instruments of assignment or transfer in blank, (iii) in the
case of the Intellectual Property Collateral described in clause (a) of the
definition thereof, in addition to the filing of such UCC financing statements,
the recordation of a Grant with the applicable IP Filing Office, (iv) in the
case of Equipment that is covered by a certificate of title, the filing with the
registrar of motor vehicles or other appropriate authority in the applicable
jurisdiction of an application requesting the notation of the security interest
created hereunder on such certificate of title, (v), in the case of any Deposit
Account and any Investment Property constituting a Security Entitlement,
Securities Account, Commodity Contract or Commodity Account, the execution and
delivery to Secured Party of an agreement providing for control by Secured Party
thereof, (vi) in the case of Letter-of-Credit Rights (other than
Letter-of-Credit Rights consisting of Supporting Obligations for Collateral as
to which Secured Party otherwise has a perfected security interest), the issuer
of the applicable letter of credit has consented to the assignment of proceeds
thereof under Section 5-114(c) of the UCC, and (vii) in the case of Commercial
Tort Claims, the sufficient identification thereof in filed UCC financing
statements, the security interests in the Collateral (except for security
interests in Collateral that cannot be perfected by the filing of financing
statements) granted to Secured Party for the ratable benefit of Lenders, Hedge
Banks and Cash Management Banks will constitute perfected security interests
therein prior to all other Liens (except for Liens permitted by clauses
(b) through (o) of Section 7.01 of the Credit Agreement), and all filings and
other actions required under this Agreement and necessary to perfect and protect
such security interests have been duly made or taken.

(c) Office Locations; Type and Jurisdiction of Organization; Locations of
Equipment and Inventory. Such Grantor’s name as it appears in official filings
in the jurisdiction of its organization, type of organization (i.e. corporation,
limited partnership, etc.), jurisdiction of organization, principal place of
business, chief executive office, office where such Grantor keeps its Records
regarding the Accounts, Intellectual Property and originals of Chattel Paper,
and organization number provided by the applicable Governmental Authority of the
jurisdiction of organization are set forth on Schedule 3 annexed hereto. All of
the Equipment and Inventory is located at the places set forth on Schedule 4
annexed hereto, except for Inventory which, in the ordinary course of business,
is in transit either (i) from a supplier to a Grantor, (ii) between the
locations set forth on Schedule 4 annexed hereto, or (iii) to customers of a
Grantor.

(d) Names. No Grantor (or predecessor by merger or otherwise of such Grantor)
has, within the five year period preceding the date hereof, or, in the case of
an Additional Grantor, the

 

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date of the applicable Counterpart, had a different name from the name of such
Grantor listed on the signature pages hereof, except the names set forth on
Schedule 5 annexed hereto.

(e) Delivery of Certain Collateral. All certificates or Instruments (excluding
checks) evidencing, comprising or representing the Collateral having a value or
face amount in excess of $25,000 have been delivered to Secured Party duly
endorsed or accompanied by duly executed instruments of transfer or assignment
in blank.

(f) Pledged Collateral. All of the Pledged Subsidiary Equity set forth on
Schedule 6 annexed hereto has been duly authorized and validly issued and is
fully paid and non assessable; all of the Pledged Subsidiary Debt set forth on
Schedule 7 annexed hereto has been duly authorized and is the legally valid and
binding obligation of the issuers thereof and is not in default; there are no
outstanding warrants, options or other rights to purchase, or other agreements
outstanding with respect to, or property that is now or hereafter convertible
into, or that requires the issuance or sale of, any Pledged Subsidiary Equity;
Schedule 6 annexed hereto sets forth all of the Equity Interests and the Pledged
Equity owned by each Grantor, and the percentage ownership in each issuer
thereof; and Schedule 7 annexed hereto sets forth all of the Pledged Debt owned
by such Grantor.

(g) Intellectual Property Collateral. A true and complete list of all Trademark
Registrations and applications for any Trademark owned, held or used by such
Grantor, in whole or in part (other than those held or used pursuant to a
license and those not yet required to be set forth on an update to
Schedule 5.17(a) to the Credit Agreement pursuant to Section 6.02(f) of the
Credit Agreement), is set forth on Schedule 8 annexed hereto; a true and
complete list of all Patents owned, held or used by such Grantor, in whole or in
part (other than those held or used pursuant to a license and those not yet
required to be set forth on an update to Schedule 5.17(a) to the Credit
Agreement pursuant to Section 6.02(f) of the Credit Agreement), is set forth on
Schedule 9 annexed hereto; a true and complete list of all Copyright
Registrations and applications for Copyright Registrations held by such Grantor,
in whole or in part (other than those held pursuant to a license and those not
yet required to be set forth on an update to Schedule 5.17(a) to the Credit
Agreement pursuant to Section 6.02(f) of the Credit Agreement), is set forth on
Schedule 10 annexed hereto; and such Grantor is not aware of any material
pending or threatened claim by any third party that any of the Intellectual
Property Collateral owned, held or used by such Grantor is invalid or
unenforceable.

(h) Deposit Accounts, Securities Accounts, Commodity Accounts. Schedule 11
annexed hereto lists all Deposit Accounts, Securities Accounts and Commodity
Accounts owned by each Grantor, and indicates the institution or intermediary at
which the account is held and the account number.

(i) Chattel Paper. Such Grantor has no interest in any Chattel Paper, except as
set forth in Schedule 12 annexed hereto.

(j) Letter-of-Credit Rights. Such Grantor has no interest in any
Letter-of-Credit Rights, except as set forth on Schedule 13 annexed hereto.

 

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(k) Documents. No negotiable Documents are outstanding with respect to any of
the Inventory, except as set forth on Schedule 14 annexed hereto.

The representations and warranties as to the information set forth in Schedules
referred to herein are made as to each Grantor (other than Additional Grantors)
as of the date hereof and as to each Additional Grantor as of the date of the
applicable Counterpart, except that, in the case of a Pledge Supplement,
supplemental Grant or notice delivered pursuant to Section 5(d) hereof, such
representations and warranties are made as of the date of such supplement or
notice.

SECTION 5. Further Assurances.

(a) Generally. Each Grantor agrees that from time to time, at the expense of
Grantors, such Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary, or that
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable Secured
Party to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, each Grantor
will: (i) notify Secured Party in writing of receipt by such Grantor of any
interest in Chattel Paper having a value or face amount in excess of $25,000 and
at the request of Secured Party, mark conspicuously each item of Chattel Paper
and each of its records pertaining to the Collateral, with a legend, in form and
substance satisfactory to Secured Party, indicating that such Collateral is
subject to the security interest granted hereby, (ii) deliver to Secured Party
all promissory notes and other Instruments having a value or face amount in
excess of $25,000 and, at the request of Secured Party, all original
counterparts of Chattel Paper, duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Secured Party, (iii) to the extent requested by the Secured Party, (A) file such
financing or continuation statements, or amendments thereto, (B) execute and
deliver, and cause to be executed and delivered, agreements establishing that
Secured Party has control of Deposit Accounts other than Excluded Accounts and
Investment Property of such Grantor, (C) deliver such documents, instruments,
notices, records and consents, and take such other actions, necessary to
establish that Secured Party has control over electronic Chattel Paper and
Letter-of-Credit Rights of such Grantor and (D) deliver such other instruments
or notices, in each case, as may be necessary, or as Secured Party may request,
in order to perfect and preserve the security interests granted or purported to
be granted hereby, (iv) furnish to Secured Party from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may reasonably
request, all in reasonable detail, (v) at any reasonable time, upon request by
Secured Party, exhibit the Collateral to and allow inspection of the Collateral
by Secured Party, or persons designated by Secured Party, (vi) at Secured
Party’s request, appear in and defend any action or proceeding that may affect
such Grantor’s title to or Secured Party’s security interest in all or any part
of the Collateral, and (vii) use commercially reasonable efforts to obtain any
necessary consents of third parties to the creation and perfection of a security
interest in favor of Secured Party with respect to any Collateral. Each Grantor
hereby authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral (including any financing statement indicating that it covers “all
assets” or “all personal property” of such Grantor) without the signature of any
Grantor.

 

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(b) Pledged Collateral. Without limiting the generality of the foregoing
Section 5(a), each Grantor agrees that (i) all certificates or Instruments
representing or evidencing the Pledged Collateral having a value or face amount
in excess of $25,000 shall be delivered to and held by or on behalf of Secured
Party pursuant hereto and shall be in suitable form for transfer by delivery or,
as applicable, shall be accompanied by such Grantor’s endorsement, where
necessary, or duly executed instruments of transfer or assignments in blank, all
in form and substance satisfactory to Secured Party and (ii) it will, upon
obtaining any additional Equity Interests or Indebtedness having a value or face
amount in excess of $25,000, promptly (and in any event within five Business
Days) deliver to Secured Party a Pledge Supplement, duly executed by such
Grantor, in respect of such additional Pledged Equity or Pledged Debt; provided,
that the failure of any Grantor to execute a Pledge Supplement with respect to
any additional Pledged Equity or Pledged Debt shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights and
remedies of Secured Party hereunder with respect thereto. Upon each such
acquisition, the representations and warranties contained in Section 4(f) hereof
shall be deemed to have been made by such Grantor as to such Pledged Equity or
Pledged Debt, whether or not such Pledge Supplement is delivered.

(c) Intellectual Property Collateral. As soon as available but in any event
within 30 days after the end of each fiscal year, Borrower shall deliver any
update to Schedule 5.17(a) to the Credit Agreement required by Section 6.02(f)
of the Credit Agreement and, together therewith, with respect to any registered
Intellectual Property Collateral acquired by a Grantor during the fiscal year
covered by such update, such Grantor shall execute and deliver to Secured Party
a Grant for recordation with respect thereto in the applicable IP Filing Office;
provided, the failure of any Grantor to execute and submit a Grant for
recordation with respect to any additional Intellectual Property Collateral
shall not impair the security interest of Secured Party therein or otherwise
adversely affect the rights and remedies of Secured Party hereunder with respect
thereto. Upon delivery to Secured Party of a supplemental Grant, Schedules 8, 9
and 10 annexed hereto, as applicable, shall be deemed modified to include a
reference to any right, title or interest in any existing Intellectual Property
Collateral or any Intellectual Property Collateral set forth on Schedule A to
such Grant. Upon each such acquisition, the representations and warranties
contained in Section 4(g) hereof shall be deemed to have been made by such
Grantor as to such Intellectual Property Collateral.

(d) Commercial Tort Claims. Grantors have no Commercial Tort Claims asserted in
any judicial action as of the date hereof, except as set forth on Schedule 1
annexed hereto. In the event that a Grantor shall at any time after the date
hereof have any material Commercial Tort Claims asserted in any judicial action,
such Grantor shall promptly notify Secured Party thereof in writing, which
notice shall (i) set forth in reasonable detail the basis for and nature of such
Commercial Tort Claim and (ii) constitute an amendment to this Agreement by
which such Commercial Tort Claim shall constitute part of the Collateral.

 

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SECTION 6. Certain Covenants of Grantors.

Each Grantor shall:

(a) not use or permit any Collateral to be used unlawfully or in violation of
any provision of this Agreement or any applicable statute, regulation or
ordinance or any policy of insurance covering the Collateral;

(b) give Secured Party at least 30 days’ prior written notice of (i) any change
in such Grantor’s name, identity or corporate structure and (ii) any
reincorporation, reorganization or other action that results in a change of the
jurisdiction of organization of such Grantor;

(c) if Secured Party gives value to enable such Grantor to acquire rights in or
the use of any Collateral, use such value for such purposes;

(d) keep correct and accurate Records of Collateral at the locations described
in Schedule 3 annexed hereto; and

(e) permit representatives of Secured Party at any time during normal business
hours to inspect and make abstracts from such Records, and each Grantor agrees
to render to Secured Party, at such Grantor’s cost and expense, such clerical
and other assistance as may be reasonably requested with regard thereto.

SECTION 7. Special Covenants With Respect to Equipment and Inventory. Each
Grantor shall:

(a) if any Inventory is in possession or control of any of such Grantor’s agents
or processors, if the aggregate book value of all such Inventory exceeds
$100,000, and in any event upon the occurrence of an Event of Default, instruct
such agent or processor to hold all such Inventory for the account of Secured
Party and subject to the instructions of Secured Party;

(b) subject to Section 6.15(b) of the Credit Agreement, if any Inventory is
located on premises leased by such Grantor, deliver to Secured Party a fully
executed Landlord Waiver; and

(c) promptly upon the issuance and delivery to such Grantor of any negotiable
Document having a value or face amount in excess of $25,000, deliver such
Document to Secured Party.

SECTION 8. Special Covenants with respect to Accounts.

(a) Each Grantor shall, for not less than three years from the date on which
each Account of such Grantor arose, maintain (i) complete Records of such
Account, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.

(b) Except as otherwise provided in this subsection (b), each Grantor shall
continue to collect, at its own expense, all amounts due or to become due to
such Grantor under the Accounts. In connection with such collections, each
Grantor may take (and, upon the occurrence

 

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and during the continuance of an Event of Default at Secured Party’s direction,
shall take) such action as such Grantor or Secured Party may deem necessary or
advisable to enforce collection of amounts due or to become due under the
Accounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default and
upon written notice to such Grantor of its intention to do so, to (i) notify the
account debtors or obligors under any Accounts of the assignment of such
Accounts to Secured Party and to direct such account debtors or obligors to make
payment of all amounts due or to become due to such Grantor thereunder directly
to Secured Party, (ii) notify each Person maintaining a lockbox or similar
arrangement to which account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing collections on checks
and other payment items from time to time sent to or deposited in such lockbox
or other arrangement directly to Secured Party, (iii) enforce collection of any
such Accounts at the expense of Grantors, and (iv) adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done. After receipt by such Grantor of the notice from
Secured Party referred to in the proviso to the preceding sentence, (A) all
amounts and proceeds (including checks and other Instruments) received by such
Grantor in respect of the Accounts shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 17 hereof, and (B) such Grantor shall not,
without the written consent of Secured Party, adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account debtor
or obligor thereof, or allow any credit or discount thereon.

SECTION 9. Special Covenants With Respect to the Pledged Collateral.

(a) Form of Pledged Collateral. Secured Party shall have the right at any time
to exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations.
If any Pledged Collateral is not a security pursuant to Section 8-103 of the
UCC, no Grantor shall take any action that, under such Section, converts such
Pledged Collateral into a security without causing the issuer thereof to issue
to it certificates or instruments evidencing such Pledged Collateral, which it
shall promptly deliver to Secured Party as provided in this Section 9(a).

(b) Covenants. Each Grantor shall (i) not, except as expressly permitted by the
Credit Agreement, permit any issuer of Pledged Subsidiary Equity to merge or
consolidate unless all the outstanding Equity Interests of the surviving or
resulting Person are, upon such merger or consolidation, subject to the
provisions of the last paragraph of Section 1 pledged and become Collateral
hereunder and no cash, securities or other property is distributed in respect of
the outstanding Equity Interests of any other constituent corporation;
(ii) cause each issuer of Pledged Subsidiary Equity not to issue Equity
Interests in addition to or in substitution for the Pledged Subsidiary Equity
issued by such issuer, except to such Grantor; (iii) immediately upon its
acquisition (directly or indirectly) of any Equity Interests, including
additional Equity Interests in each issuer of Pledged Equity, comply with
Section 5(b) subject to the provisions of the last paragraph of Section 1;
(iv) immediately upon issuance of any and all Instruments or other evidences of
additional Indebtedness from time to time owed to such Grantor by any obligor on
the Pledged Debt, comply with Section 5; (v) promptly deliver to Secured Party
all

 

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written notices received by it with respect to the Pledged Collateral; (vi) at
its expense (A) perform and comply in all material respects with all terms and
provisions of any agreement related to the Pledged Collateral required to be
performed or complied with by it, (B) maintain all such agreements in full force
and effect and (C) enforce all such agreements in accordance with their terms;
and (vii) at the request of Secured Party, promptly execute and deliver to
Secured Party an agreement providing for control by Secured Party of all
Securities Entitlements, Securities Accounts, Commodity Contracts and Commodity
Accounts of such Grantor.

(c) Voting and Distributions. So long as no Event of Default shall have occurred
and be continuing, (i) each Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not prohibited by the terms of this Agreement or
the Credit Agreement; provided, no Grantor shall exercise or refrain from
exercising any such right if Secured Party shall have notified such Grantor
that, in Secured Party’s judgment, such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof; and (ii) each
Grantor shall be entitled to receive and retain any and all dividends, other
distributions, principal and interest paid in respect of the Pledged Collateral.

Upon the occurrence and during the continuation of an Event of Default, (x) upon
written notice from Secured Party to any Grantor, all rights of such Grantor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights; (y) except as otherwise
specified in the Credit Agreement, upon written notice from Secured Party to any
Grantor of any exercise of remedies under Section 8.02 of the Credit Agreement,
all rights of such Grantor to receive the dividends, other distributions,
principal and interest payments which it would otherwise be authorized to
receive and retain pursuant hereto shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the sole right
to receive and hold as Collateral such dividends, other distributions, principal
and interest payments; and (z) all dividends, principal, interest payments and
other distributions which are received by such Grantor contrary to the
provisions of clause (y) above shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of such Grantor and shall
forthwith be paid over to Secured Party as Collateral in the same form as so
received (with any necessary endorsements).

In order to permit Secured Party to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant hereto and to receive all
dividends and other distributions which it may be entitled to receive hereunder,
(I) each Grantor shall promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment orders and other
instruments as Secured Party may from time to time reasonably request, and (II)
without limiting the effect of clause (I) above, each Grantor hereby grants to
Secured Party an irrevocable proxy to vote the Pledged Equity and to exercise
all other rights, powers, privileges and remedies to which a holder of the
Pledged Equity would be entitled (including giving or withholding written
consents of holders of Equity Interests, calling special meetings of holders of
Equity Interests and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Equity on the record books of the issuer thereof) by any other
Person (including the

 

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issuer of the Pledged Equity or any officer or agent thereof), upon the
occurrence of an Event of Default and which proxy shall only terminate upon the
payment in full of the Secured Obligations, the cure of such Event of Default or
waiver thereof as evidenced by a writing executed by Secured Party.

SECTION 10. Special Covenants With Respect to the Intellectual Property
Collateral.

(a) Each Grantor shall:

(i) use reasonable efforts so as not to permit the inclusion in any contract to
which it hereafter becomes a party of any provision that could or might in any
way impair or prevent the creation of a security interest in, or the assignment
of, such Grantor’s rights and interests in any property included within the
definitions of any Intellectual Property Collateral acquired under such
contracts;

(ii) take any and all reasonable steps to protect the secrecy of all trade
secrets relating to the products and services sold or delivered under or in
connection with the Intellectual Property Collateral, including, without
limitation, where appropriate entering into confidentiality agreements with
employees and labeling and restricting access to secret information and
documents;

(iii) use proper statutory notice in connection with its use of any of the
Intellectual Property Collateral and products and services covered by the
Intellectual Property Collateral; and

(iv) use a commercially appropriate standard of quality (which may be consistent
with such Grantor’s past practices) in the manufacture, sale and delivery of
products and services sold or delivered under or in connection with the
Trademarks.

(b) Except as otherwise provided in this Section 10, each Grantor shall continue
to collect, at its own expense, all amounts due or to become due to such Grantor
in respect of the Intellectual Property Collateral or any portion thereof. In
connection with such collections, each Grantor may take (and, after the
occurrence and during the continuance of any Event of Default at Secured Party’s
reasonable direction, shall take) such action as such Grantor or Secured Party
may deem reasonably necessary or advisable to enforce collection of such
amounts; provided, Secured Party shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default and upon written
notice to such Grantor of its intention to do so, to notify the obligors with
respect to any such amounts of the existence of the security interest created
hereby and to direct such obligors to make payment of all such amounts directly
to Secured Party, and, upon such notification and at the expense of such
Grantor, to enforce collection of any such amounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by any Grantor of the
notice from Secured Party referred to in the proviso to the preceding sentence
and upon the occurrence and during the continuance of any Event of Default,
(i) all amounts and proceeds (including checks and Instruments) received by each
Grantor in respect of amounts due to such Grantor in respect of the Intellectual
Property Collateral or any portion thereof shall be received in trust for the
benefit of Secured Party hereunder, shall be segregated from other funds

 

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of such Grantor and shall be forthwith paid over or delivered to Secured Party
in the same form as so received (with any necessary endorsement) to be held as
cash Collateral and applied as provided by Section 17 hereof, and (ii) such
Grantor shall not adjust, settle or compromise the amount or payment of any such
amount or release wholly or partly any obligor with respect thereto or allow any
credit or discount thereon.

(c) Each Grantor shall have the duty diligently, through counsel reasonably
acceptable to Secured Party, to prosecute, file and/or make, unless and until
such Grantor, in its commercially reasonable judgment, decides otherwise,
(i) any application for registration relating to any of the Intellectual
Property Collateral owned, held or used by such Grantor and set forth on
Schedules 8, 9 or 10 annexed hereto, as applicable, that is pending as of the
date of this Agreement, (ii) any Copyright Registration on any existing or
future unregistered but copyrightable works (except for works of nominal
commercial value or with respect to which such Grantor has determined in the
exercise of its commercially reasonable judgment that it shall not seek
registration), (iii) any application on any future patentable but unpatented
innovation or invention comprising Intellectual Property Collateral, and
(iv) any Trademark opposition and cancellation proceedings, renew Trademark
Registrations and Copyright Registrations and do any and all acts which are
necessary or desirable to preserve and maintain all rights in all Intellectual
Property Collateral. Any expenses incurred in connection therewith shall be
borne solely by Grantors. Subject to the foregoing, each Grantor shall give
Secured Party prior written notice of any abandonment of any material
Intellectual Property Collateral.

(d) Except as provided herein, each Grantor shall have the right to commence and
prosecute in its own name, as real party in interest, for its own benefit and at
its own expense, such suits, proceedings or other actions for infringement,
unfair competition, dilution, misappropriation or other damage, or reexamination
or reissue proceedings as are necessary to protect the Intellectual Property
Collateral. Each Grantor shall promptly, following its becoming aware thereof,
notify Secured Party of the institution of, or of any adverse determination in,
any proceeding (whether in an IP Filing Office or any federal, state, local or
foreign court) or regarding such Grantor’s ownership, right to use, or interest
in any material Intellectual Property Collateral. Each Grantor shall provide to
Secured Party any information with respect thereto requested by Secured Party.

(e) In addition to, and not by way of limitation of, the granting of a security
interest in the Collateral pursuant hereto, each Grantor, effective upon the
occurrence and during the continuance of an Event of Default, hereby assigns,
transfers and conveys to Secured Party the nonexclusive right and license to use
all Trademarks, tradenames, Copyrights, Patents or technical processes
(including, without limitation, the Intellectual Property Collateral) owned or
used by such Grantor that relate to the Collateral, together with any goodwill
associated therewith, all to the extent necessary to enable Secured Party to
realize on the Collateral in accordance with this Agreement and to enable any
transferee or assignee of the Collateral to enjoy the benefits of the
Collateral. This right shall inure to the benefit of all successors, assigns and
transferees of Secured Party and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right and license
shall be granted free of charge, without requirement that any monetary payment
whatsoever be made to such Grantor.

 

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SECTION 11. Collateral Account.

(a) Secured Party is hereby authorized to establish and maintain as a blocked
account under the sole dominion and control of Secured Party, a restricted
Deposit Account designated as “Quidel Corporation Collateral Account”. All
amounts at any time held in the Collateral Account shall be beneficially owned
by Grantors but shall be held in the name of Secured Party hereunder, for the
benefit of Beneficiaries, as collateral security for the Secured Obligations
upon the terms and conditions set forth herein. Grantors shall have no right to
withdraw, transfer or, except as expressly set forth herein or in the Credit
Agreement, otherwise receive any funds deposited into the Collateral Account.
Anything contained herein to the contrary notwithstanding, the Collateral
Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or Governmental Authority, as may now or hereafter be
in effect. All deposits of funds in the Collateral Account shall be made by wire
transfer (or, if applicable, by intra-bank transfer from another account of a
Grantor) of immediately available funds, in each case addressed in accordance
with instructions of Secured Party. Each Grantor shall, promptly after
initiating a transfer of funds to the Collateral Account, give notice to Secured
Party by telefacsimile or E-mail (if and when confirmed by telephone) of the
date, amount and method of delivery of such deposit. Cash held by Secured Party
in the Collateral Account shall not be invested by Secured Party but instead
shall be maintained as a cash deposit in the Collateral Account pending
application thereof as elsewhere provided in this Agreement or in the Credit
Agreement. To the extent permitted under Regulation Q of the Board of Governors
of the Federal Reserve System, any cash held in the Collateral Account shall
bear interest at the standard rate paid by Secured Party to its customers for
deposits of like amounts and terms. Subject to Secured Party’s rights hereunder,
any interest earned on deposits of cash in the Collateral Account shall be
deposited directly in, and held in, the Collateral Account.

(b) In the event that Borrower is required to Cash Collateralize any Letter of
Credit or Letters of Credit pursuant to the Credit Agreement, other than
pursuant to Article VIII of the Credit Agreement, in which case the provisions
of Section 15(c) of this Agreement shall apply, subject to the provisions of the
Credit Agreement, such Cash Collateral shall be retained by Secured Party until
such time as such Letter of Credit or Letters of Credit shall have expired or
been surrendered and any drawings under such Letter of Credit or Letters of
Credit paid in full, whether by reason of application of funds in the Collateral
Account or otherwise. Secured Party is authorized to apply any amount in the
Collateral Account to pay any drawing on a Letter of Credit. Subject to the
provisions of Section 15(c) of this Agreement and the Credit Agreement, if any
such Cash Collateral is no longer required to be retained in the Collateral
Account, it shall be paid by Secured Party to Borrower or at Borrower’s
direction.

SECTION 12. Secured Party Appointed Attorney-in-Fact.

Each Grantor hereby irrevocably appoints Secured Party as such Grantor’s
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, Secured Party or otherwise, from time to time in
Secured Party’s discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:

 

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(a) upon the occurrence and during the continuance of an Event of Default, to
obtain and adjust insurance required to be maintained by such Grantor or paid to
Secured Party pursuant to the Credit Agreement;

(b) upon the occurrence and during the continuance of an Event of Default, to
ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;

(c) upon the occurrence and during the continuance of an Event of Default, to
receive, endorse and collect any drafts or other Instruments, Documents, Chattel
Paper and other documents in connection with clauses (a) and (b) above;

(d) upon the occurrence and during the continuance of an Event of Default, to
file any claims or take any action or institute any proceedings that Secured
Party may deem necessary for the collection of any of the Collateral or
otherwise to enforce or protect the rights of Secured Party with respect to any
of the Collateral;

(e) to pay or discharge taxes or Liens (other than taxes not required to be
discharged pursuant to the Credit Agreement and Liens permitted under this
Agreement or the Credit Agreement) levied or placed upon or threatened against
the Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its sole discretion, any
such payments made by Secured Party to become obligations of such Grantor to
Secured Party, due and payable immediately without demand;

(f) upon the occurrence and during the continuance of an Event of Default, to
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and

(g) upon the occurrence and during the continuance of an Event of Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party’s option and Grantors’ expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect, preserve or
realize upon the Collateral and Secured Party’s security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.

SECTION 13. Secured Party May Perform.

If any Grantor fails to perform any agreement contained herein, Secured Party
may itself perform, or cause performance of, such agreement, and the expenses of
Secured Party incurred in connection therewith shall be payable by Grantors
under Section 18(b) hereof.

SECTION 14. Standard of Care.

The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting

 

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for moneys actually received by it hereunder, Secured Party shall have no duty
as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral.
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.

SECTION 15. Remedies.

(a) Generally. If any Event of Default shall have occurred and be continuing,
Secured Party may, subject to Section 20 hereof, exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral), and also may (i) require each Grantor to, and each Grantor hereby
agrees that it will at its expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured Party and make it
available to Secured Party at a place to be designated by Secured Party that is
reasonably convenient to both parties, (ii) enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process, (iii) prior to the disposition of the Collateral, store, process,
repair or recondition the Collateral or otherwise prepare the Collateral for
disposition in any manner to the extent Secured Party deems appropriate,
(iv) take possession of any Grantor’s premises or place custodians in exclusive
control thereof, remain on such premises and use the same and any of such
Grantor’s equipment for the purpose of completing any work in process, taking
any actions described in the preceding clause (iii) and collecting any Secured
Obligation, (v) without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any of
Secured Party’s offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as Secured Party may deem commercially reasonable, (vi) exercise dominion
and control over and refuse to permit further withdrawals from any Deposit
Account maintained with Secured Party or any Lender and provide instructions
directing the disposition of funds in Deposit Accounts not maintained with
Secured Party or any Lender and (vii) provide entitlement orders with respect to
Security Entitlements and other Investment Property constituting a part of the
Collateral and, without notice to any Grantor, transfer to or register in the
name of Secured Party or any of its nominees any or all of the Pledged
Collateral. Secured Party or any Lender, Hedge Bank or Cash Management Bank may
be the purchaser of any or all of the Collateral at any such sale and Secured
Party, as agent for and representative of Lenders, Hedge Banks and Cash
Management Banks (but not any Lender, Hedge Bank or Cash Management Bank in its
individual capacity unless Requisite Obligees shall otherwise agree in writing),
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at any such
public sale, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Collateral payable by Secured Party at
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Grantor, and each
Grantor hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Each Grantor agrees that, to the extent notice of sale shall be required by law,
at least ten days’ notice to such Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated to make

 

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any sale of Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Grantor hereby
waives any claims against Secured Party arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if Secured
Party accepts the first offer received and does not offer such Collateral to
more than one offeree. If the proceeds of any sale or other disposition of the
Collateral are insufficient to pay all the Secured Obligations, Grantors shall
be jointly and severally liable for the deficiency and the fees of any attorneys
employed by Secured Party to collect such deficiency. Each Grantor further
agrees that a breach of any of the covenants contained in this Section 15 will
cause irreparable injury to Secured Party, that Secured Party has no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section shall be specifically enforceable
against such Grantor, and each Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated maturities.

(b) Pledged Collateral. Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws, Secured Party may be compelled, with respect to any sale of all or any
part of the Pledged Collateral conducted without prior registration or
qualification of such Pledged Collateral under the Securities Act and/or such
state securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Pledged Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. Each Grantor
acknowledges that any such private placement may be at prices and on terms less
favorable than those obtainable through a sale without such restrictions
(including an offering made pursuant to a registration statement under the
Securities Act) and, notwithstanding such circumstances, each Grantor agrees
that any such private placement shall not be deemed, in and of itself, to be
commercially unreasonable and that Secured Party shall have no obligation to
delay the sale of any Pledged Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of sale requiring
registration under the Securities Act or under applicable state securities laws,
even if such issuer would, or should, agree to so register it. If Secured Party
determines to exercise its right to sell any or all of the Pledged Collateral,
upon written request, each Grantor shall and shall cause each issuer of any
Pledged Collateral to be sold hereunder from time to time to furnish to Secured
Party all such information as Secured Party may request in order to determine
the amount of Pledged Collateral which may be sold by Secured Party in exempt
transactions under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.

(c) Collateral Account. If an Event of Default has occurred and is continuing,
any amounts on deposit in the Collateral Account, except for funds deposited in
the Collateral Account as described in the next sentence, shall be held by Agent
and applied as Obligations become due. If, in accordance with Article VIII of
the Credit Agreement, Borrower is required to pay to Secured Party an amount
(the “Aggregate Available Amount”) equal to the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding under the Credit
Agreement, Borrower shall deliver funds in such an amount for deposit in the
Collateral

 

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Account. Following such deposit in the Collateral Account, (i) upon any drawing
under any outstanding Letter of Credit, Secured Party shall apply any amount in
the Collateral Account to reimburse the L/C Issuer for the amount of such
drawing and (ii) in the event of cancellation or expiration of any Letter of
Credit, or in the event of any reduction in the maximum available amount under
any Letter of Credit, Secured Party shall apply the amount then on deposit in
the Collateral Account in excess of the Aggregate Available Amount (calculated
giving effect to such cancellation, expiration or reduction) as provided in
Section 17.

SECTION 16. Additional Remedies for Intellectual Property Collateral.

(a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default, (i) Secured Party
shall have the right (but not the obligation) to bring suit, in the name of any
Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents required by Secured
Party in aid of such enforcement and each Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in Section 10.04 of the Credit
Agreement and Section 18 hereof, as applicable, in connection with the exercise
of its rights under this Section 16, and, to the extent that Secured Party shall
elect not to bring suit to enforce any Intellectual Property Collateral as
provided in this Section, each Grantor agrees to use all reasonable measures,
whether by action, suit, proceeding or otherwise, to prevent the infringement of
any of the material Intellectual Property Collateral by others and for that
purpose agrees to use its commercially reasonable judgment in maintaining any
action, suit or proceeding against any Person so infringing reasonably necessary
to prevent such infringement; (ii) upon written demand from Secured Party, each
Grantor shall execute and deliver to Secured Party an assignment or assignments
of the Intellectual Property Collateral and such other documents as are
necessary or appropriate to carry out the intent and purposes of this Agreement;
(iii) each Grantor agrees that such an assignment and/or recording shall be
applied to reduce the Secured Obligations outstanding only to the extent that
Secured Party (or any Lender) receives cash proceeds in respect of the sale of,
or other realization upon, the Intellectual Property Collateral; and (iv) within
five Business Days after written notice from Secured Party, each Grantor shall
make available to Secured Party, to the extent within such Grantor’s power and
authority, such personnel in such Grantor’s employ as Secured Party may
reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell the
products and services sold or delivered by such Grantor under or in connection
with the Trademarks, Trademark Registrations and Trademark Rights, such persons
to be available to perform their prior functions on Secured Party’s behalf and
to be compensated by Secured Party at such Grantor’s expense on a per diem,
pro-rata basis consistent with the salary and benefit structure applicable to
each as of the date of such Event of Default.

(b) If (i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, Secured Party shall promptly execute and deliver
to such Grantor such assignments as may be necessary to reassign to such Grantor
any such rights, title and

 

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interests as may have been assigned to Secured Party as aforesaid, subject to
any disposition thereof that may have been made by Secured Party; provided,
after giving effect to such reassignment, Secured Party’s security interest
granted pursuant hereto, as well as all other rights and remedies of Secured
Party granted hereunder, shall continue to be in full force and effect; and
provided further, the rights, title and interests so reassigned shall be free
and clear of all Liens other than Liens (if any) encumbering such rights, title
and interest at the time of their assignment to Secured Party and Liens
permitted under Section 7.01 of the Credit Agreement.

SECTION 17. Application of Proceeds.

Except as expressly provided elsewhere in this Agreement, all proceeds received
by Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in Section 8.03 of the Credit Agreement.

SECTION 18. Indemnity and Expenses.

(a) Grantors jointly and severally agree to indemnify Secured Party, each
Lender, each Hedge Bank and each Cash Management Bank from and against any and
all claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result from Secured Party’s or such
Lender’s, Hedge Bank’s or Cash Management Bank’s gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.

(b) Grantors jointly and severally agree to pay to Secured Party upon demand the
amount of any and all costs and expenses in accordance with Section 10.04 of the
Credit Agreement.

(c) The obligations of Grantors in this Section 18 shall (i) survive the
termination of this Agreement and the discharge of Grantors’ other obligations
under this Agreement, the Secured Hedge Agreements, the Secured Cash Management
Agreements, the Credit Agreement and the other Loan Documents and (ii), as to
any Grantor that is a party to a Guaranty, be subject to the provisions of
Section 1(b) thereof.

SECTION 19. Continuing Security Interest; Transfer of Loans; Termination and
Release.

(a) This Agreement shall create a continuing security interest in the Collateral
and shall (i) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit (or the securing
of reimbursement Obligations in respect thereof with cash collateral or letters
of credit in a manner satisfactory to Secured Party), (ii) be binding upon
Grantors and their respective successors and assigns, and (iii) inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), (A) but subject to the provisions of
Section 10.06 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or

 

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otherwise, (B) any Hedge Bank may assign or otherwise transfer any Secured Hedge
Agreement to which it is a party to any other Person in accordance with the
terms of such Secured Hedge Agreement, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Hedge Banks
herein or otherwise and (C) any Cash Management Bank may assign or otherwise
transfer any Secured Cash Management Agreement to which it is a party to any
other Person in accordance with the terms of such Secured Cash Management
Agreement, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Cash Management Banks herein or
otherwise.

(b) Upon the payment in full of all Secured Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit (or the securing of reimbursement Obligations in
respect thereof with Cash Collateral or letters of credit in a manner
satisfactory to Secured Party), the security interest granted hereby (other than
with respect to any Cash Collateral in respect of Letters of Credit) shall
terminate and all rights to the Collateral shall revert to the applicable
Grantors. Upon any such termination Secured Party will, at Grantors’ expense,
execute and deliver to Grantors such documents as Grantors shall reasonably
request to evidence such termination. In addition, upon the proposed sale or
other disposition or other permitted release of any Collateral by a Grantor in
accordance with the Credit Agreement for which such Grantor desires a security
interest release from Secured Party, such a release, and any documents as such
Grantor may reasonably request to evidence such release, may be obtained
pursuant to the provisions of Section 9.10 of the Credit Agreement.

SECTION 20. Secured Party as Administrative Agent.

(a) Secured Party has been appointed to act as Secured Party hereunder by
Lenders and, by their acceptance of the benefits hereof, Hedge Banks and Cash
Management Banks. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 15 hereof in accordance with the instructions of Requisite Obligees. In
furtherance of the foregoing provisions of this Section 20(a), each Hedge Bank
and each Cash Management Bank, by its acceptance of the benefits hereof, agrees
that it shall have no right individually to realize upon any of the Collateral
hereunder, it being understood and agreed by such Hedge Bank that all rights and
remedies hereunder may be exercised solely by Secured Party for the benefit of
Lenders, Hedge Banks and Cash Management Banks in accordance with the terms of
this Section 20(a).

(b) Secured Party shall at all times be the same Person that is Administrative
Agent under the Credit Agreement. Written notice of resignation by
Administrative Agent pursuant to Section 9.06 of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; and
appointment of a successor Administrative Agent pursuant to Section 9.06 of the
Credit Agreement shall also constitute appointment of a successor Secured Party
under this Agreement. Upon the acceptance of any appointment as Administrative
Agent under Section 9.06 of the Credit Agreement by a successor Administrative
Agent, that successor

 

20

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Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Secured Party under this
Agreement, and the retiring Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums, securities and other
items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) deliver to
such successor Secured Party such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring Secured Party shall be discharged from its
duties and obligations under this Agreement. After any retiring Administrative
Agent’s resignation hereunder as Secured Party, the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was Secured Party hereunder.

(c) Secured Party shall not be deemed to have any duty whatsoever with respect
to any Hedge Bank or any Cash Management Bank until it shall have received
written notice in form and substance satisfactory to Secured Party from a
Grantor or the Hedge Bank or the Cash Management Bank as to the existence and
terms of the applicable Secured Hedge Agreement or Secured Cash Management
Agreement.

SECTION 21. Additional Grantors.

The initial Grantors hereunder shall be Borrower and such of the Subsidiaries of
Borrower as are signatories hereto on the date hereof. From time to time
subsequent to the date hereof, additional Subsidiaries of Borrower may become
Additional Grantors, by executing a Counterpart. Upon delivery of any such
Counterpart to Secured Party, notice of which is hereby waived by Grantors, each
such Additional Grantor shall be a Grantor and shall be as fully a party hereto
as if such Additional Grantor were an original signatory hereto. Each Grantor
expressly agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by any
election of Secured Party not to cause any Subsidiary of Borrower to become an
Additional Grantor hereunder. This Agreement shall be fully effective as to any
Grantor that is or becomes a party hereto regardless of whether any other Person
becomes or fails to become or ceases to be a Grantor hereunder.

SECTION 22. Amendments; Etc.

No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Grantors;
provided this Agreement may be modified by the execution of a Counterpart by an
Additional Grantor in accordance with Section 21 hereof and Grantors hereby
waive any requirement of notice of or consent to any such amendment. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.

 

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SECTION 23. Notices.

Any notice or other communication herein required or permitted to be given shall
be in writing and may be personally served or sent by telefacsimile or United
States mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telefacsimile, or
three Business Days after depositing it in the United States mail, certified or
registered, with postage prepaid and properly addressed; provided that notices
to Secured Party shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as provided in Section 10.02 of the
Credit Agreement or as set forth under such party’s name on the signature pages
hereof or such other address as shall be designated by such party in a written
notice delivered to the other parties hereto.

SECTION 24. Failure or Indulgence Not Waiver; Remedies Cumulative.

No failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.

SECTION 25. Severability.

In case any provision in or obligation under this Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

SECTION 26. Headings.

Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.

SECTION 27. Governing Law; Rules of Construction.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA (INCLUDING, WITHOUT LIMITATION, SECTION
1646.5 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT
THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF CALIFORNIA, IN WHICH CASE THE LAWS OF SUCH JURISDICTION
SHALL GOVERN WITH RESPECT TO THE PERFECTION OF THE SECURITY INTEREST IN, OR THE
REMEDIES WITH

 

22

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RESPECT TO, SUCH PARTICULAR COLLATERAL. The rules of construction set forth in
Section 1.02 of the Credit Agreement shall be applicable to this Agreement
mutatis mutandis.

SECTION 28. Consent to Jurisdiction and Service of Process.

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF CALIFORNIA. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 23 HEREOF; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GRANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES
THAT THE PROVISIONS OF THIS SECTION 28 RELATING TO JURISDICTION AND VENUE SHALL
BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER CALIFORNIA
CODE OF CIVIL PROCEDURE SECTION 410.40 OR OTHERWISE.

SECTION 29. Waiver of Jury Trial.

GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH GRANTOR AND SECURED PARTY ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT FOR GRANTORS AND SECURED PARTY TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT GRANTORS AND SECURED PARTY HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING
INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR
RELATED FUTURE DEALINGS. EACH GRANTOR AND SECURED PARTY FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING

 

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(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 29
AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
In the event of litigation, this Agreement may be filed as a written consent to
a trial by the court.

SECTION 30. Counterparts.

This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.

SECTION 31. Amendment and Restatement.

The parties hereto agree that the Existing Security Agreement is hereby amended
and restated in this Security Agreement, and this Security Agreement shall
constitute neither a release nor novation of any lien or security interest
arising under the Existing Security Agreement nor a refinancing of any
indebtedness or obligations arising thereunder or under either of the Existing
Credit Agreements or related documents, but rather the liens and security
interests in effect under the Existing Security Agreement shall continue in
effect on the terms hereof.

SECTION 32. Definitions.

(a) Each capitalized term utilized in this Agreement that is not defined in the
Credit Agreement or in this Agreement, but that is defined in the UCC, including
the categories of Collateral listed in Section 1 hereof, shall have the meaning
set forth in Divisions 1, 8 or 9 of the UCC.

(b) In addition, the following terms used in this Agreement shall have the
following meanings:

“Additional Grantor” means a Subsidiary of Borrower that becomes a party hereto
after the date hereof as an additional Grantor by executing a Counterpart.

“Beneficiary” means Agent, each Lender, each Hedge Bank and each Cash Management
Bank.

“Collateral” has the meaning set forth in Section 1 hereof.

“Collateral Account” means the “Quidel Corporation Collateral Account”
established pursuant to Section 11.

“Copyright Registrations” means all copyright registrations issued to any
Grantor and applications for copyright registration that have been or may
hereafter be issued to, or applied for thereon by, any Grantor in the United
States and any state thereof and in foreign countries

 

24

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(including, without limitation, the registrations set forth on Schedule 10
annexed hereto, as the same may be amended pursuant hereto from time to time).

“Copyright Rights” means all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright licenses,
only to the extent permitted by such licensing arrangements), the right (but not
the obligation) to renew and extend Copyright Registrations and any such rights
and to register works protectable by copyright and the right (but not the
obligation) to sue in the name of any Grantor or in the name of Secured Party or
Lenders for past, present and future infringements of the Copyrights and any
such rights.

“Copyrights” means all items under copyright in various published and
unpublished works of authorship including, without limitation, computer
programs, computer data bases, other computer software layouts, trade dress,
drawings, designs, writings, and formulas (including, without limitation, the
works set forth on Schedule 10 annexed hereto, as the same may be amended
pursuant hereto from time to time).

“Counterpart” means a counterpart to this Agreement entered into by a Subsidiary
of Borrower pursuant to Section 21 hereof.

“Credit Agreement” has the meaning set forth in the Preliminary Statements of
this Agreement.

“Equity Interests” means all shares of stock, partnership interests, interests
in joint ventures, limited liability company interests and all other equity
interests in a Person, whether such stock or interests are classified as
Investment Property or General Intangibles under the UCC.

“Event of Default” means any Event of Default as defined in the Credit Agreement
or, after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the cancellation or expiration of all Letters of Credit
and the termination of the Commitments, the occurrence of an Early Termination
Date (as defined in a Master Agreement in the form prepared by the International
Swap and Derivatives Association, Inc. or a similar event under any similar swap
agreement) under any Secured Hedge Agreement or the occurrence of a default
under a Cash Management Agreement.

“Grant” means a Grant of Trademark Security Interest, substantially in the form
of Exhibit I annexed hereto, and a Grant of Patent Security Interest,
substantially in the form of Exhibit II annexed hereto, and a Grant of Copyright
Security Interest, substantially in the form of Exhibit III annexed hereto.

“Hedge Bank” means any Person that, at the time it enters into a Swap Contract
permitted under Article VII of the Credit Agreement, is a Lender or an Affiliate
of a Lender, in its capacity as a party to such Swap Contract.

“Intellectual Property Collateral” means, with respect to any Grantor all right,
title and interest (including rights acquired pursuant to a license or otherwise
but only to the extent permitted by agreements governing such license or other
use) in and to all

 

25

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(a) Copyrights, Copyright Registrations and Copyright Rights, including, without
limitation, each of the Copyrights, rights, titles and interests in and to the
Copyrights, all derivative works and other works protectable by copyright, which
are presently, or in the future may be, owned, created (as a work for hire for
the benefit of such Grantor), authored (as a work for hire for the benefit of
such Grantor), or acquired by such Grantor, in whole or in part, and all
Copyright Rights with respect thereto and all Copyright Registrations therefor,
heretofore or hereafter granted or applied for, and all renewals and extensions
thereof, throughout the world;

(b) Patents;

(c) Trademarks, Trademark Registrations, the Trademark Rights and goodwill of
such Grantor’s business symbolized by the Trademarks and associated therewith;

(d) all trade secrets, trade secret rights, know-how, customer lists, processes
of production, ideas, confidential business information, techniques, processes,
formulas, and all other proprietary information; and

(e) all proceeds thereof (such as, by way of example and not by limitation,
license royalties and proceeds of infringement suits).

“Patents” means all patents and patent applications and rights and interests in
patents and patent applications under any domestic or foreign law that are
presently, or in the future may be, owned or held by a Grantor and all patents
and patent applications and rights, title and interests in patents and patent
applications under any domestic or foreign law that are presently, or in the
future may be, owned by such Grantor in whole or in part (including, without
limitation, the patents and patent applications set forth on Schedule 9 annexed
hereto), all rights (but not obligations) corresponding thereto to sue for past,
present and future infringements and all reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof.

“Pledged Collateral” means, with respect to any Grantor, the Pledged Equity, the
Pledged Debt and any other Investment Property in which such Grantor has an
interest.

“Pledged Debt” means the Indebtedness from time to time owed to a Grantor,
including the Indebtedness set forth on Schedule 7 annexed hereto and issued by
the obligors named therein, the Instruments and certificates evidencing such
Indebtedness and all interest, cash or other property received, receivable or
otherwise distributed in respect of or exchanged therefor.

“Pledged Equity” means all Equity Interests now or hereafter owned by a Grantor,
including all securities convertible into, and rights, warrants, options and
other rights to purchase or otherwise acquire, any of the foregoing, including
those owned on the date hereof and set forth on Schedule 6 annexed hereto, the
certificates or other instruments representing any of the foregoing and any
interest of such Grantor in the entries on the books of any securities
intermediary pertaining thereto and all distributions, dividends and other
property received, receivable or otherwise distributed in respect of or
exchanged therefor but excluding any Equity Interests that would be excluded
from the Collateral on the basis of clause (a) of the last paragraph of
Section 1 hereof.

 

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“Pledged Subsidiary Debt” means Pledged Debt owed to a Grantor by any obligor
that is, or becomes, a direct or indirect Subsidiary of such Grantor, of which
such Grantor is a direct or indirect Subsidiary or that controls, is controlled
by or under common control with such Grantor.

“Pledged Subsidiary Equity” means Pledged Equity in a Person that is, or becomes
a direct Subsidiary of a Grantor.

“Pledge Supplement” means a Pledge Supplement, in substantially the form of
Exhibit IV annexed hereto, in respect of the additional Pledged Equity or
Pledged Debt pledged pursuant to this Agreement.

“Requisite Obligees” means either (i) Required Lenders or (ii), after payment in
full of all Obligations under the Credit Agreement and the other Loan Documents,
the cancellation or expiration of all Letters of Credit and the termination of
the Commitments, the holders of a majority of the aggregate amount then due and
payable (exclusive of expenses and similar payments but including, with respect
to Secured Hedge Agreements, any early termination payments then due) under the
Secured Hedge Agreements and Secured Cash Management Agreements.

“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between any Loan Party and any Cash Management Bank.

“Secured Hedge Agreement” means any Swap Contract permitted under Article VII of
the Credit Agreement that is entered into by and between any Loan Party and any
Hedge Bank.

“Secured Obligations” has the meaning set forth in Section 2 hereof.

“Trademark Registrations” means all registrations that have been or may
hereafter be issued or applied for thereon in the United States and any state
thereof and in foreign countries (including, without limitation, the
registrations and applications set forth on Schedule 8 annexed hereto).

“Trademark Rights” means all common law and other rights (but in no event any of
the obligations) in and to the Trademarks in the United States and any state
thereof and in foreign countries.

“Trademarks” means all trademarks, service marks, designs, logos, indicia,
tradenames, trade dress, corporate names, company names, business names,
fictitious business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned by a Grantor, or
hereafter adopted and used, in its business (including, without limitation, the
trademarks specifically set forth on Schedule 8 annexed hereto).

 

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IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

QUIDEL CORPORATION

By: /s/ Douglas C. Bryant

Name: Douglas C. Bryant

Title: President and CEO

DIAGNOSTIC HYBRIDS, INC.

By: /s/ Douglas C. Bryant

Name: Douglas C. Bryant

Title: Chairman of the Board, President

Notice Address for each Grantor:

10165 McKellar Court

San Diego, CA 92121

Attention: Chief Financial Officer

Telephone: (858) 552-1100

Facsimile: (858) 646-8028

Electronic Mail: rsteward@quidel.com

with a copy to:

10165 McKellar Court

San Diego, CA 92121

Attention: Legal Department

Telephone: (858) 552-1100

Facsimile: (858) 646-8028

Electronic Mail: rbujarski@quidel.com

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

BANK OF AMERICA, N.A.

as Administrative Agent and Secured Party

By: /s/ Tiffany Shin

Name: Tiffany Shin

Title: Assistant Vice President

Notice Address:

Bank of America, N.A.

Agency Management

Global Product Solutions

WA1-501-17-32

800 Fifth Avenue, Floor 17

Seattle WA 98104

Attn: Tiffany Shin

Assistant Vice President Telephone: 206-358-0078

Telecopier: 415-343-0561

Electronic Mail: tiffany.shin@baml.com

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EXHIBIT I TO

SECURITY AGREEMENT

FORM OF GRANT OF TRADEMARK SECURITY INTEREST

WHEREAS, [NAME OF GRANTOR], a                     corporation (“Grantor”), owns
and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and

WHEREAS, Quidel Corporation, a Delaware corporation (“Borrower”), has entered
into an Amended and Restated Credit Agreement dated as of August 10, 2012 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, being the “Credit Agreement”) with the financial institutions
named therein (collectively, together with their respective successors and
assigns party to the Credit Agreement from time to time, the “Lenders”), and
Bank of America, N.A., as Administrative Agent for the Lenders (in such
capacity, “Secured Party”) pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Borrower; and

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more swap
agreements (collectively, the “Secured Hedge Agreements”) with one or more
Persons that are Lenders or Affiliates of Lenders at the time such Secured Hedge
Agreements are entered into (in such capacity, collectively, “Hedge Banks”);

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more cash
management agreement (collectively, the “Secured Cash Management Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Secured Cash Management Agreements are entered into (in such capacity,
collectively, “Cash Management Banks”); and

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and
delivered that certain Amended and Restated Guaranty dated as of August 10, 2012
(said Amended and Restated Guaranty, as it may heretofore have been and as it
may hereafter be further amended, restated, supplemented or otherwise modified
from time to time, being the “Guaranty”) in favor of Secured Party for the
benefit of Lenders, any Hedge Banks and any Cash Management Banks, pursuant to
which Grantor has guarantied the prompt payment and performance when due of all
obligations of Borrower under the Credit Agreement and the other Loan Documents
(as defined in the Credit Agreement) and all obligations of Loan Parties (as
defined in the Credit Agreement) under the Secured Hedge Agreements and the
Secured Cash Management Agreements, including, without limitation, the
obligation of Loan Parties to make payments under the Secured Hedge Agreements
in the event of early termination thereof; and]

WHEREAS, pursuant to the terms of an Amended and Restated Security Agreement
dated as of August 10, 2012 (said Amended and Restated Security Agreement, as it
may heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, being the “Security
Agreement”), among Grantor,

 

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Secured Party and the other grantors named therein, Grantor has created in favor
of Secured Party a security interest in, and Secured Party has become a secured
creditor with respect to, the Trademark Collateral;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, subject to the terms and conditions of the
Security Agreement, to evidence further the security interest granted by Grantor
to Secured Party pursuant to the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor’s right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the “Trademark Collateral”) to secure the Secured Obligations
(as defined in the Security Agreement):

(i) all rights, title and interest (including rights acquired pursuant to a
license or otherwise but only to the extent permitted by agreements governing
such license or other use) in and to all trademarks, service marks, designs,
logos, indicia, tradenames, trade dress, corporate names, company names,
business names, fictitious business names, trade styles and/or other source
and/or business identifiers and applications pertaining thereto, owned by such
Grantor, or hereafter adopted and used, in its business (including, without
limitation, the trademarks set forth on Schedule A annexed hereto)
(collectively, the “Trademarks”), all registrations that have been or may
hereafter be issued or applied for thereon in the United States and any state
thereof and in foreign countries (including, without limitation, the
registrations and applications set forth on Schedule A annexed hereto), all
common law and other rights (but in no event any of the obligations) in and to
the Trademarks in the United States and any state thereof and in foreign
countries, and all goodwill of such Grantor’s business symbolized by the
Trademarks and associated therewith; and

(ii) all proceeds, products, rents and profits of or from any and all of the
foregoing Trademark Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Trademark
Collateral. For purposes of this Grant of Trademark Security Interest, the term
“proceeds” includes whatever is receivable or received when Trademark Collateral
or proceeds are sold, licensed, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.

Grantor does hereby further acknowledge and affirm that the rights and remedies
of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security Interest
to be duly executed and delivered by its officer thereunto duly authorized as of
the day of             ,             .

 

[NAME OF GRANTOR] By:     Name:  

 

Title:  

 

 

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SCHEDULE A

TO

GRANT OF TRADEMARK SECURITY INTEREST

 

Owner

  

Trademark

Description

  

Registration/

Appl. Number

  

Registration/

Appl. Date

 

 

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EXHIBIT II TO

SECURITY AGREEMENT

FORM OF GRANT OF PATENT SECURITY INTEREST

WHEREAS, [NAME OF GRANTOR], a                     corporation (“Grantor”), owns
and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and

WHEREAS, Quidel Corporation, a Delaware corporation (“Borrower”), has entered
into an Amended and Restated Credit Agreement dated as of August 10, 2012 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement”) with the financial institutions named
therein (collectively, together with their respective successors and assigns
party to the Credit Agreement from time to time, the “Lenders”), and Bank of
America, N.A., as Administrative Agent for the Lenders (in such capacity,
“Secured Party”), pursuant to which Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Borrower; and

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more swap
agreements (collectively, the “Secured Hedge Agreements”) with one or more
Persons that are Lenders or Affiliates of Lenders at the time such Secured Hedge
Agreements are entered into (in such capacity, collectively, “Hedge Banks”);

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more cash
management agreement (collectively, the “Secured Cash Management Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Secured Cash Management Agreements are entered into (in such capacity,
collectively, “Cash Management Banks”); and

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and
delivered that certain Amended and Restated Guaranty dated as of August 10, 2012
(said Amended and Restated Guaranty, as it may heretofore have been and as it
may hereafter be further amended, restated, supplemented or otherwise modified
from time to time, being the “Guaranty”) in favor of Secured Party for the
benefit of Lenders, any Hedge Banks and any Cash Management Banks, pursuant to
which Grantor has guarantied the prompt payment and performance when due of all
obligations of Borrower under the Credit Agreement and the other Loan Documents
(as defined in the Credit Agreement) and all obligations of Loan Parties (as
defined in the Credit Agreement) under the Secured Hedge Agreements and Secured
Cash Management Agreements, including, without limitation, the obligation of
Loan Parties to make payments under the Secured Hedge Agreements in the event of
early termination thereof; and]

WHEREAS, pursuant to the terms of an Amended and Restated Security Agreement
dated as of August 10, 2012 (said Amended and Restated Security Agreement, as it
may heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, being the “Security
Agreement”), among Grantor,

 

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Secured Party and the other grantors named therein, Grantor created in favor of
Secured Party a security interest in, and Secured Party has become a secured
creditor with respect to, the Patent Collateral;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, subject to the terms and conditions of the
Security Agreement, to evidence further the security interest granted by Grantor
to Secured Party pursuant to the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor’s right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the “Patent Collateral”) to secure the Secured Obligations (as
defined in the Security Agreement):

(i) all rights, title and interest (including rights acquired pursuant to a
license or otherwise but only to the extent permitted by agreements governing
such license or other use) in and to all patents and patent applications and
rights and interests in patents and patent applications under any domestic or
foreign law that are presently, or in the future may be, owned or held by such
Grantor and all patents and patent applications and rights, title and interests
in patents and patent applications under any domestic or foreign law that are
presently, or in the future may be, owned by such Grantor in whole or in part
(including, without limitation, the patents and patent applications set forth on
Schedule A annexed hereto), all rights (but not obligations) corresponding
thereto to sue for past, present and future infringements and all re-issues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof; and

(ii) all proceeds, products, rents and profits of or from any and all of the
foregoing Patent Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Patent Collateral.
For purposes of this Grant of Patent Security Interest, the term “proceeds”
includes whatever is receivable or received when Patent Collateral or proceeds
are sold, licensed, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.

Grantor does hereby further acknowledge and affirm that the rights and remedies
of Secured Party with respect to the security interest in the Patent Collateral
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.

[The remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest to
be duly executed and delivered by its officer thereunto duly authorized as of
the              day of             ,             .

 

[NAME OF GRANTOR] By:     Name:  

 

Title:  

 

 

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SCHEDULE A

TO

GRANT OF PATENT SECURITY INTEREST

Patents Issued:

 

Patent No.

  

Issue Date

  

Invention

  

Inventor(s)

Patents Pending:

 

Applicant’s Name

  

Date Filed

  

Application

Number

  

Invention

  

Inventor(s)

 

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EXHIBIT III TO

SECURITY AGREEMENT

FORM OF GRANT OF COPYRIGHT SECURITY INTEREST

WHEREAS, [NAME OF GRANTOR], a             corporation (“Grantor”), owns and uses
in its business, and will in the future adopt and so use, various intangible
assets, including the Copyright Collateral (as defined below); and

WHEREAS, Quidel Corporation, a Delaware corporation (“Borrower”), has entered
into an Amended and Restated Credit Agreement dated as of August 10, 2012 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement”) with the financial institutions named
therein (collectively, together with their respective successors and assigns
party to the Credit Agreement from time to time, the “Lenders”), and Bank of
America, N.A., as Administrative Agent for the Lenders (in such capacity,
“Secured Party”), pursuant to which Lenders have made certain commitments,
subject to the terms and conditions set forth in the Credit Agreement, to extend
certain credit facilities to Borrower; and

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more swap
agreements (collectively, the “Secured Hedge Agreements”) with one or more
Persons that are Lenders or Affiliates of Lenders at the time such Secured Hedge
Agreements are entered into (in such capacity, collectively, “Hedge Banks”);

WHEREAS, any Loan Party (as defined in the Credit Agreement) may from time to
time enter, or may from time to time have entered, into one or more cash
management agreement (collectively, the “Secured Cash Management Agreements”)
with one or more Persons that are Lenders or Affiliates of Lenders at the time
such Secured Cash Management Agreements are entered into (in such capacity,
collectively, “Cash Management Banks”); and

[Insert if Grantor is a Subsidiary:] [WHEREAS, Grantor has executed and
delivered that certain Amended and Restated Guaranty dated as of August 10, 2012
(said Amended and Restated Guaranty, as it may heretofore have been and as it
may hereafter be further amended, restated, supplemented or otherwise modified
from time to time, being the “Guaranty”) in favor of Secured Party for the
benefit of Lenders, any Hedge Banks and any Cash Management Banks pursuant to
which Grantor has guarantied the prompt payment and performance when due of all
obligations of Borrower under the Credit Agreement and the other Loan Documents
(as defined in the Credit Agreement) and all obligations of Loan Parties (as
defined in the Credit Agreement) under the Secured Hedge Agreements and the
Secured Cash Management Agreements, including, without limitation, the
obligation of Loan Parties to make payments under the Secured Hedge Agreements
in the event of early termination thereof; and]

WHEREAS, pursuant to the terms of an Amended and Restated Security Agreement
dated as of August 10, 2012 (said Amended and Restated Security Agreement, as it
may heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time, being the “Security
Agreement”), among Grantor,

 

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Secured Party and the other grantors named therein, Grantor created in favor of
Secured Party a security interest in, and Secured Party has become a secured
creditor with respect to, the Copyright Collateral;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, subject to the terms and conditions of the
Security Agreement, to evidence further the security interest granted by Grantor
to Secured Party pursuant to the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor’s right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the “Copyright Collateral”) to secure the Secured Obligations
(as defined in the Security Agreement):

(i) all rights, title and interest (including rights acquired pursuant to a
license or otherwise but only to the extent permitted by agreements governing
such license or other use) under copyright in various published and unpublished
works of authorship including, without limitation, computer programs, computer
data bases, other computer software layouts, drawings, designs, writings, and
formulas (including, without limitation, the works set forth on Schedule A
annexed hereto, as the same may be amended pursuant hereto from time to time)
(collectively, the “Copyrights”), all copyright registrations issued to Grantor
and applications for copyright registration that have been or may hereafter be
issued or applied for thereon in the United States and any state thereof and in
foreign countries (including, without limitation, the registrations set forth on
Schedule A annexed hereto, as the same may be amended pursuant hereto from time
to time) (collectively, the “Copyright Registrations”), all common law and other
rights in and to the Copyrights in the United States and any state thereof and
in foreign countries including all copyright licenses (but with respect to such
copyright licenses, only to the extent permitted by such licensing arrangements)
(the “Copyright Rights”), including, without limitation, each of the Copyrights,
rights, titles and interests in and to the Copyrights, all derivative works and
other works protectable by copyright, which are presently, or in the future may
be, owned, created (as a work for hire for the benefit of Grantor), authored (as
a work for hire for the benefit of Grantor), or acquired by Grantor, in whole or
in part, and all Copyright Rights with respect thereto and all Copyright
Registrations therefor, heretofore or hereafter granted or applied for, and all
renewals and extensions thereof, throughout the world, including all proceeds
thereof (such as, by way of example and not by limitation, license royalties and
proceeds of infringement suits), the right (but not the obligation) to renew and
extend such Copyright Registrations and Copyright Rights and to register works
protectable by copyright and the right (but not the obligation) to sue in the
name of such Grantor or in the name of Secured Party or Lenders for past,
present and future infringements of the Copyrights and Copyright Rights; and

(ii) all proceeds, products, rents and profits of or from any and all of the
foregoing Copyright Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Copyright
Collateral. For purposes of this Grant of Copyright Security Interest, the term
“proceeds” includes whatever is receivable or

 

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received when Copyright Collateral or proceeds are sold, licensed, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary or
involuntary.

Grantor does hereby further acknowledge and affirm that the rights and remedies
of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.

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IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security Interest
to be duly executed and delivered by its officer thereunto duly authorized as of
the              day of             ,             .

 

[NAME OF GRANTOR] By:     Name:  

 

Title:  

 

 

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SCHEDULE A

TO

GRANT OF COPYRIGHT SECURITY INTEREST

U.S. Copyright Registrations:

 

Title

  

Registration No.

  

Date of Issue

  

Registered Owner

Foreign Copyright Registrations:

 

Country

  

Title

  

Registration No.

  

Date of Issue

Pending U.S. Copyright Registration Applications:

 

Title

  

Appl. No.

  

Date of Application

  

Copyright Claimant

Pending Foreign Copyright Registration Applications:

 

Country

  

Title

  

Appl. No.

  

Date of Application

 

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EXHIBIT IV TO

SECURITY AGREEMENT

PLEDGE SUPPLEMENT

This Pledge Supplement, dated as of                     , is delivered pursuant
to the Amended and Restated Security Agreement, dated as of August 10, 2012
between                     , a                     (“Grantor”), the other
Grantors named therein, and Bank of America, N.A., as Secured Party (said
Amended and Restated Security Agreement, as it may heretofore have been and as
it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the “Security Agreement”). Capitalized terms
used herein not otherwise defined herein shall have the meanings ascribed
thereto in the Security Agreement.

Grantor hereby agrees that the [Pledged Equity] [Pledged Debt] set forth on
Schedule A annexed hereto shall be deemed to be part of the [Pledged Equity]
[Pledged Debt] and shall become part of the Pledged Collateral and shall secure
all Secured Obligations.

IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be duly
executed and delivered by its duly authorized officer as of
                    .

 

[GRANTOR] By:     Name:  

 

Title:  

 

 

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SCHEDULE A

TO

PLEDGE SUPPLEMENT

 

IV - 2

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EXHIBIT V TO

SECURITY AGREEMENT

FORM OF COUNTERPART

COUNTERPART (this “Counterpart”), dated as of             , is delivered
pursuant to Section 21 of the Security Agreement referred to below. The
undersigned hereby agrees that this Counterpart may be attached to the Amended
and Restated Security Agreement, dated as of August 10, 2012 (said Amended and
Restated Security Agreement, as it may heretofore have been and as it may
hereafter be further amended, restated, supplemented or otherwise modified from
time to time being the “Security Agreement”; capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed therein), among Quidel
Corporation, the other Grantors named therein, and Bank of America, N.A., as
Secured Party. The undersigned by executing and delivering this Counterpart
hereby becomes a Grantor under the Security Agreement in accordance with
Section 21 thereof and agrees to be bound by all of the terms thereof. Without
limiting the generality of the foregoing, the undersigned hereby:

(i) authorizes the Secured Party to add the information set forth on the
Schedules to this Agreement to the correlative Schedules attached to the
Security Agreement;

(ii) agrees that all Collateral of the undersigned, including the items of
property described on the Schedules hereto, shall become part of the Collateral
and shall secure all Secured Obligations; and

(iii) makes the representations and warranties set forth in the Security
Agreement, as amended hereby, to the extent relating to the undersigned.

 

[NAME OF ADDITIONAL GRANTOR] By:     Name:  

 

Title:  

 

 

V - 1