EXHIBIT 10.18

CREDIT AGREEMENT

     THIS AGREEMENT is entered into as of December 15th, 2004, by and between
TEKELEC, a California corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Bank”).

RECITALS

     Borrower has requested that Bank extend or continue credit to Borrower as
described below, and Bank has agreed to provide such credit to Borrower on the
terms and conditions contained herein.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Bank and Borrower hereby agree as follows:

As used herein, the following terms have the following meanings:

“Acceptable Securities” means securities and other investments that comply in
all respects with the Investment Policy.

“Business Day” means any day except a Saturday, Sunday or any other day on which
commercial banks in California are authorized or required by law to close.

“Intermediary” means Wells Fargo Capital Management, LLC or any successor
thereto.

“Investment Policy” means Borrower’s investment policy dated as of December
18th, 2003, a copy of which is attached hereto as Exhibit A, without regard to
any changes made after such date to Borrower’s investment policy.

“Letter of Credit” has the meaning set forth in Section 1.1(b) hereof

“Letter of Credit Agreement” has the meaning set forth in Section 1.1(b) hereof

“Line of Credit” has the meaning set forth in Section 1.1(a) hereof.

“Line of Credit Note” has the meaning set forth in Section 1.1(a) hereof.

“OAC” means such lawful currency of a jurisdiction other than the United States
in which Bank, in its sole discretion, agrees to issue and denominate Letters of
Credit.

“Loan Documents” means this Agreement and each promissory note, contract,
instrument and other document required hereby or at any time hereafter delivered
to Bank in connection herewith.

“Pledged Account” means Borrower’s securities account number 15614401 maintained
with Intermediary.

“SEC” means the Securities and Exchange Commission or any successor thereto.

“Spot Rate” means, with respect to any currency, the rate quoted by the Bank as
the spot rate for the purchase by the Bank of such currency with another
currency through its foreign exchange desk at approximately 11:00 A.M. (San
Francisco time) on the date two (2) Business Days prior to the date as of which
the foreign exchange computation is made.

“Sufficient Assets” means cash, cash equivalents and/or Acceptable Securities in
an aggregate face amount equal to 100% of the amount of a requested advance or
USD-denominated Letter of Credit or 120% of the USD Equivalent Amount of a
OAC-denominated Letter of Credit.

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“Tangible Net Worth” means the aggregate of total stockholders’ equity plus
subordinated debt less any intangible assets.

“USD” means United States Dollars.

“USD Equivalent Amount” means, as of any date of determination, with respect to
amounts denominated in USD, the face amount thereof, and, with respect to
amounts denominated in OAC, the equivalent amount in USD as determined by the
Bank at such time on the basis of the Spot Rate for the purchase of USD with the
applicable OAC.

ARTICLE I
CREDIT TERMS

     SECTION 1.1. LINE OF CREDIT.

     (a) Line of Credit. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances to Borrower from time to time up to and
including December 15th, 2005, not to exceed at any time the aggregate principal
amount of Thirty Million Dollars ($30,000,000.00) (“Line of Credit”), the
proceeds of which shall be used for working capital and other general corporate
purposes. Borrower’s obligation to repay advances under the Line of Credit shall
be evidenced by a promissory note dated as of December 15th, 2004 (“Line of
Credit Note”), all terms of which are incorporated herein by this reference.
Each advance shall be in the minimum amount of $1,000,000.00.

     (b) Letter of Credit Subfeature. As a subfeature under the Line of Credit,
Bank agrees from time to time during the term thereof to issue or cause an
affiliate to issue standby letters of credit in either USD or OAC for the
account of Borrower for corporate purposes (each, a “Letter of Credit”);
provided however, that the aggregate undrawn amount of, and the aggregate amount
drawn and not yet reimbursed under, all outstanding Letters of Credit shall not
at any time exceed the USD Equivalent Amount of Twenty Million Dollars
($20,000,000.00). The form and substance of each Letter of Credit shall be
subject to approval by Bank, in its reasonable discretion. Each Letter of Credit
shall be issued for a term not to exceed 12 months, as designated by Borrower;
provided however, that no Letter of Credit shall have an expiration date
subsequent to the maturity date of the Line of Credit. An amount equal to the
sum of 100% of the undrawn amount of outstanding USD-denominated Letters of
Credit and 120% of the undrawn USD Equivalent Amount of outstanding
OAC-denominated Letters of Credit shall be reserved under the Line of Credit and
shall not be available for borrowings thereunder. Each Letter of Credit shall be
subject to the additional terms and conditions of the Letter of Credit
agreements, applications and any related documents required by Bank and agreed
to by Borrower in connection with the issuance thereof. Each drawing paid under
a Letter of Credit shall be deemed an advance under the Line of Credit in the
USD Equivalent Amount of such drawing (which advance, until converted by
Borrower to a “LIBOR”-based advance, shall be a “Prime Rate”-based advance (both
as defined in the Line of Credit Note) and shall be repaid by Borrower in
accordance with the terms and conditions of this Agreement applicable to such
advances; provided however, that if advances under the Line of Credit are not
available, for any reason, at the time any drawing is paid, then Borrower shall
immediately pay to Bank the full USD Equivalent Amount drawn, together with
interest thereon from the date such drawing is paid to the date such amount is
fully repaid by Borrower, at the Prime Rate-based rate of interest applicable to
advances under the Line of Credit. In the event that Borrower fails to pay the
amounts set forth in the preceding sentence within 10 days of Bank’s demand
therefor, Borrower agrees that Bank, in its sole discretion, may debit any
account maintained by Borrower with Bank for the amount of any such drawing. In
the event of a conflict between the terms of the Letter of Credit Agreement and
this Agreement, the terms of this Agreement shall prevail.

     (c) Borrowing and Repayment. Borrower may from time to time during the term
of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total

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outstanding borrowings under the Line of Credit shall not at any time exceed the
maximum principal amount available thereunder, as set forth above.

     SECTION 1.2. INTEREST/FEES.

     (a) Interest. The outstanding principal balance of the Line of Credit shall
bear interest at the rate of interest set forth in the Line of Credit Note.

     (b) Computation and Payment. Interest shall be computed on the basis of a
360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document required
hereby.

     (c) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to twenty
hundredths of one percent (0.20%) per annum (computed on the basis of a 360-day
year, actual days elapsed) on the average daily unused amount of the Line of
Credit, which fee shall be calculated on a quarterly basis by Bank and shall be
due and payable by Borrower in arrears within 10 days after the last day of each
calendar quarter.

     (d) Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon the
issuance of each Letter of Credit equal to four-tenths percent (0.40%) per annum
(computed on the basis of a 360-day year, actual days elapsed) of the face
amount thereof, and (ii) fees upon the payment or negotiation of each drawing
under any Letter of Credit and fees upon the occurrence of any other activity
with respect to any Letter of Credit (including without limitation, the
transfer, amendment or cancellation of any Letter of Credit) determined in
accordance with Bank’s standard fees and charges then in effect for such
activity.

     SECTION 1.3. COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect
all interest and fees due under each credit subject hereto by charging
Borrower’s deposit account with Bank (the number of which shall be assigned when
such deposit account is established), or any other deposit account maintained by
Borrower with Bank, for the full amount thereof. Should there be insufficient
funds in any such deposit account to pay all such sums when due, the full amount
of such deficiency shall be immediately due and payable by Borrower. Until such
deposit account is established at Bank, Borrower shall pay all interest and fees
within 10 days of its receipt of each billing therefor. All principal shall be
due and payable by Borrower at the times specified in this Agreement and the
other Loan Documents.

     SECTION 1.4. COLLATERAL.

     As security for all indebtedness of Borrower to Bank subject hereto,
Borrower hereby grants to Bank security interests of first priority in the
Pledged Account.

All of the foregoing shall be evidenced by and subject to the terms of a
security agreement, and securities account control agreement, all in form and
substance reasonably satisfactory to Bank.

ARTICLE II
REPRESENTATIONS AND WARRANTIES

     Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this Agreement.

     SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly organized and
existing and in good standing under the laws of the State of California, and is
qualified or licensed to do business (and is in good standing as a foreign
corporation, if applicable) in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so licensed
could have a material adverse effect on Borrower.

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     SECTION 2.2. AUTHORIZATION AND VALIDITY. The Loan Documents have been duly
authorized, and upon their execution and delivery in accordance with the
provisions hereof will constitute legal, valid and binding agreements and
obligations of Borrower or the party which executes the same, enforceable in
accordance with their respective terms, except as may be limited by:
(x) bankruptcy, insolvency or similar laws affecting the rights of creditors
generally; and (y) general principles of equity (regardless of whether
considered in a proceeding in equity or at law).

     SECTION 2.3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any
applicable law or regulation, or contravene any provision of the Articles of
Incorporation or By-Laws of Borrower, or result in any breach of or default
under any contract, obligation, indenture or other instrument to which Borrower
is a party or by which Borrower may be bound.

     SECTION 2.4. LITIGATION. There are no pending, or to Borrower’s knowledge
threatened, actions, claims, investigations, suits or proceedings by or before
any governmental authority, arbitrator, court or administrative agency which
could have a material adverse effect on the financial condition or operation of
Borrower other than those disclosed by Borrower to Bank in writing prior to the
date hereof.

     SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The financial statement of
Borrower dated June 30, 2004, a true copy of which has been delivered by
Borrower to Bank prior to the date hereof, (a) is complete and correct and
presents fairly the financial condition of Borrower, (b) discloses all
liabilities of Borrower that are required to be reflected or reserved against
under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance with
generally accepted accounting principles consistently applied. Since the date of
such financial statement there has been no material adverse change in the
financial condition of Borrower.

     SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any pending
assessments or adjustments of its income tax payable with respect to any year.

     SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture, contract
or instrument to which Borrower is a party or by which Borrower may be bound
that requires the subordination in right of payment of any of Borrower’s
obligations subject to this Agreement to any other obligation of Borrower.

     SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will hereafter
possess, all permits, consents, approvals, franchises and licenses required and
rights to all trademarks, trade names, patents, and fictitious names, if any,
necessary to enable it to conduct the business in which it is now engaged in
compliance with applicable law, except to the extent that non-compliance with
any of the foregoing could not reasonably be expected to have a material adverse
effect on Borrower’s financial condition of operations (a “Material Adverse
Effect”).

     SECTION 2.9. ERISA. To the best of Borrower’s knowledge: Borrower is in
compliance in all material respects with all applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended or recodified from
time to time (“ERISA”); Borrower has not violated any provision of any defined
employee pension benefit plan (as defined in ERISA) maintained or contributed to
by Borrower (each, a “Plan”); no Reportable Event as defined in ERISA has
occurred and is continuing with respect to any Plan initiated by Borrower;
Borrower has met its minimum funding requirements under ERISA with respect to
each Plan; and each Plan will be able to fulfill its benefit obligations as they
come due in accordance with the Plan documents and under generally accepted
accounting principles.

     SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default under any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation, which default
could reasonably be expected to have a Material Adverse Effect.

     SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to
Bank in writing prior to the date hereof, to the best of Borrower’s knowledge,
Borrower is in compliance in all material respects with all applicable federal
or state environmental, hazardous waste, health and safety statutes, and any

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rules or regulations adopted pursuant thereto, which govern or affect any of
Borrower’s operations and/or properties, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource
Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control
Act, as any of the same may be amended, modified or supplemented from time to
time. To Borrower’s knowledge, none of the operations of Borrower is the subject
of any federal or state investigation evaluating whether any remedial action
involving a material expenditure is needed to respond to a release of any toxic
or hazardous waste or substance into the environment. Borrower has no material
contingent liability in connection with any release of any toxic or hazardous
waste or substance into the environment.

ARTICLE III
CONDITIONS

     SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of
Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank’s reasonable satisfaction of all of the following
conditions:

     (a) Approval of Bank Counsel. All legal matters incidental to the extension
of credit by Bank shall be reasonably satisfactory to Bank’s counsel.

     (b) Documentation. Bank shall have received, in form and substance
reasonably satisfactory to Bank, each of the following, duly executed:

  (i)   This Agreement.     (ii)   Letter of Credit Agreement.     (iii)   Line
of Credit Note.     (iv)   Corporate Resolution.     (v)   Security Agreement.  
  (vi)   Securities Account Control Agreement.     (vii)   Such other documents
as Bank may require under any other Section of this Agreement.

     (c) Financial Condition. Since December 31, 2003, there shall have been no
material adverse change, as reasonably determined by Bank, in the financial
condition or business of Borrower.

     SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank
to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank’s reasonable satisfaction of each of the
following conditions:

     (a) Compliance. The representations and warranties contained herein and in
each of the other Loan Documents shall be true in all material respects on and
as of the date of the signing of this Agreement and on the date of each
extension of credit by Bank pursuant hereto, with the same effect as though such
representations and warranties had been made on and as of each such date, and on
each such date, no Event of Default as defined herein, and no condition, event
or act which with the giving of notice or the passage of time or both would
constitute such an Event of Default, shall have occurred and be continuing or
shall exist.

     (b) Notice of Borrowing. Bank shall have received a Notice of Borrowing, in
the form of Exhibit B hereto, with respect to each advance or an Application for
Letter of Credit, in the form of Exhibit C hereto, with respect to each Letter
of Credit not later than seven (7) Business Days prior to the date of a
requested advance or Letter of Credit.

     (c) Collateral. Borrower shall have deposited Sufficient Assets into the
Pledged Account not later than seven (7) Business Days prior to the date of a
requested advance or Letter of Credit.

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     (d) Documentation. Bank shall have received all additional documents which
may be required hereunder in connection with such extension of credit.

ARTICLE IV
AFFIRMATIVE COVENANTS

     Borrower covenants that so long as Bank remains committed to extend credit
to Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, unless Bank otherwise consents in writing:

     SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein, and immediately upon written demand
by Bank, the amount by which the outstanding principal balance of any credit
subject hereto at any time exceeds any limitation on borrowings applicable
thereto.

     SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Bank, at any reasonable time and upon
reasonable prior written notice, to inspect, audit and examine such books and
records, to make copies of the same, and to inspect the properties of Borrower.

     SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in
form and detail reasonably satisfactory to Bank:

     (a) not later than 90 days after and as of the end of each fiscal year, an
audited financial statement of Borrower, prepared by certified public
accountants acceptable to Bank, to include balance sheet, income statement,
statement of cash flows and footnotes, and within ten (10) days after filing
with the SEC, copies of Borrower’s filed 10K report for such year;

     (b) not later than 45 days after and as of the end of each fiscal quarter,
a financial statement of Borrower, prepared by Borrower, to include balance
sheet, income statement and statement of cash flows, and within ten (10) days
after filing with the SEC, copies of Borrower’s filed 10Q report for such
quarter;

     (c) not later than ten (10) days after and as of the last day of each
month, a copy of the brokerage statement covering the Pledged Account (provided,
however, that Borrower hereby authorizes Bank to at any time obtain from
Intermediary all details concerning the Pledged Account as may be requested by
Bank);

     (d) from time to time such other information as Bank may reasonably
request.

     SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower’s continued
existence and with the material requirements of all laws, rules, regulations and
orders of any governmental authority applicable to Borrower and/or its business.

     SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the types
and in amounts customarily carried in lines of business similar to that of
Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers’ compensation, with all such
insurance carried with companies and in commercially reasonable amounts, and
deliver to Bank from time to time at Bank’s reasonable (but in no event more
than one (1) time in any 12-month period, unless an Event of Default exists)
request schedules setting forth all insurance then in effect.

     SECTION 4.6. FACILITIES. Keep all properties useful or necessary to
Borrower’s business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements thereto so that such properties
shall be fully and efficiently preserved and maintained.

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     SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except such (a) as Borrower may in good faith
contest or as to which a bona fide dispute may arise, and (b) for which Borrower
has made provision, to Bank’s reasonable satisfaction, for eventual payment
thereof in the event Borrower is obligated to make such payment.

     SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or, to Borrower’s knowledge, threatened against Borrower with
a claim in excess of $5,000,000.00.

     SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower’s consolidated
financial condition as follows using generally accepted accounting principles
consistently applied and used consistently with prior practices (except to the
extent modified by the definitions herein), with compliance determined
commencing with Borrower’s financial statements for the period ending
September 30, 2004:

     (a) Tangible Net Worth, determined as of the end of each fiscal quarter,
not less than an amount equal to 80% of Borrower’s Tangible Net Worth as of
September 30, 2004.

     SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than five
(5) days after the occurrence of each such event or matter) give written notice
to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or
any condition, event or act known to Borrower which with the giving of notice or
the passage of time or both would constitute an Event of Default; (b) any change
in the name or the organizational structure of Borrower; or (c) the occurrence
and nature of any Reportable Event or Prohibited Transaction, each as defined in
ERISA, or any funding deficiency with respect to any Plan.

ARTICLE V
NEGATIVE COVENANTS

     Borrower further covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank’s prior written
consent:

     SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended
hereunder except for the purposes stated in Article I hereof.

     SECTION 5.2. INVESTMENTS. Make any investments other than as permitted in
Section 5.3 or in accordance with Borrower’s investment policy.

     SECTION 5.3. MERGER, CONSOLIDATION, ACQUISITION. Merge into or consolidate
with any other entity unless Borrower is the surviving entity and such merger
has been approved by the Board Of Directors of the other entity; make any
substantial change in the nature of Borrower’s business as conducted as of the
date hereof; acquire the ownership interests in any entity unless the Board of
Directors of such entity has approved the acquisition.

     SECTION 5.4. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a
security interest in, or lien upon, all or any portion of the Pledged Account,
except in favor of Bank

ARTICLE VI
EVENTS OF DEFAULT

     SECTION 6.1. The occurrence of any of the following shall constitute an
“Event of Default” under this Agreement:

     (a) Borrower shall fail to pay when due any principal when due, or any
interest, fees or other amounts payable under any of the Loan Documents within
five (5) days after the applicable due date.

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     (b) Any financial statement or certificate furnished to Bank in connection
with, or any representation or warranty made by Borrower or any other party on
behalf of Borrower under this Agreement or any other Loan Document shall prove
to be incorrect, false or misleading in any material respect when furnished or
made.

     (c) Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default shall
continue for a period of twenty (20) days after written notice from Bank to
Borrower, provided, however, that such written notice and 20 day period shall
not be applicable to a default consisting of a breach of Sections 4.3, 5.1, 5.2,
5.3 or 5.4 hereof, or of Borrower’ s obligation to maintain the Collateral Value
of the Pledged Account as defined and set forth in the Addendum to Security
Agreement executed by Borrower in connection with the Pledged Account.

     (d) Any default in the payment or performance of any obligation, or any
defined event of default, under the terms of any contract or instrument (other
than any of the Loan Documents) pursuant to which Borrower has incurred any debt
or other liability to any person or entity, including Bank, and, if the debt or
other liability is owed to a party other than Bank, the amount thereof exceeds
$5,000,000.00 and as result of such default, the debt or liability is then due
and payable in full or holder of thereof has the right to declare the same due
and payable in full.

     (e) The filing of a notice of judgment lien against Borrower; or the
recording of any abstract of judgment against Borrower in any county in which
Borrower has an interest in real property; or the service of a notice of levy
and/or of a writ of attachment or execution, or other like process, against the
assets of Borrower; or the entry of a judgment against Borrower; and, with
respect to any of the foregoing, the amount involved exceeds $5,000,000.00.

     (f) Borrower shall become insolvent, or shall suffer or consent to or apply
for the appointment of a receiver, trustee, custodian or liquidator of itself or
any of its property, or shall generally fail to pay its debts as they become
due, or shall make a general assignment for the benefit of creditors; Borrower
shall file a voluntary petition in bankruptcy, or seeking reorganization, in
order to effect a plan or other arrangement with creditors or any other relief
under the Bankruptcy Reform Act, Title 11 of the United States Code, as amended
or recodified from time to time (“Bankruptcy Code”), or under any state or
federal law granting relief to debtors, whether now or hereafter in effect; or
any involuntary petition or proceeding pursuant to the Bankruptcy Code or any
other applicable state or federal law relating to bankruptcy, reorganization or
other relief for debtors is filed or commenced against Borrower (and a full
dismissal of such petition or proceeding is not effected within sixty (60) days
after the date of filing of such petition or commencement of such proceeding),
or Borrower shall file an answer admitting the jurisdiction of the court and the
material allegations of any involuntary petition; or Borrower shall be
adjudicated a bankrupt, or an order for relief shall be entered against Borrower
by any court of competent jurisdiction under the Bankruptcy Code or any other
applicable state or federal law relating to bankruptcy, reorganization or other
relief for debtors.

     (g) There shall exist or occur any event or condition which Bank in good
faith believes impairs, or is substantially likely to impair, the prospect of
payment or performance by Borrower of its material obligations under any of the
Loan Documents.

     (h) The dissolution or liquidation of Borrower, or any of its directors,
stockholders or members, shall take action seeking to effect the dissolution or
liquidation of Borrower.

     (i) Any change in ownership of an aggregate of thirty-five percent (35%) or
more of the common stock of Borrower in a single transaction or in a series of
related transactions.

     SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a) all
indebtedness of Borrower under each of the Loan Documents, any term thereof to
the contrary notwithstanding, shall at Bank’s option and without notice become
immediately due and payable without presentment, demand, protest or notice

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of dishonor, all of which are hereby expressly waived by each Borrower; (b) the
obligation, if any, of Bank to extend any further credit under any of the Loan
Documents shall immediately cease and terminate; and (c) Bank shall have all
rights, powers and remedies available under each of the Loan Documents, or
accorded by law, including without limitation the right to resort to any or all
security for any credit subject hereto and to exercise any or all of the rights
of a beneficiary or secured party pursuant to applicable law. All rights, powers
and remedies of Bank may be exercised at any time by Bank and from time to time
after the occurrence of an Event of Default, are cumulative and not exclusive,
and shall be in addition to any other rights, powers or remedies provided by law
or equity.

ARTICLE VII
MISCELLANEOUS

     SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

     SECTION 7.2. NOTICES. All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

     
BORROWER:
  TEKELEC

  Treasury Department

  26580 West Agoura Rd

  Calabasas, CA 91302
 
   
BANK:
  WELLS FARGO BANK, NATIONAL ASSOCIATION

  U.S. Corporate Banking Group, MAC E2818-163

  707 Wilshire Blvd., 16th Floor

  Los Angeles, CA 90017

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by facsimile,
upon receipt.

          SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay
to Bank immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all allocated costs of Bank’s in-house counsel),
expended or incurred by Bank in connection with (a) the negotiation and
preparation of any amendments and waivers to this Agreement and the other Loan
Documents, (b) the enforcement of Bank’s rights and/or the collection of any
amounts which become due to Bank under any of the Loan Documents, and (c) the
prosecution or defense of any action in any way related to any of the Loan
Documents, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower. Notwithstanding any provision in this Agreement to the contrary, in
any action or dispute between the parties arising out of or in any way connected
with this Agreement or any of the other Loan Documents, the prevailing party in
any such action or dispute (whether by way of judgment, arbitration award,
mediation, settlement or otherwise, and whether or not suit is commenced) shall
be entitled to collect from the other party the prevailing party’s costs and
expenses incurred in connection with such action or dispute, including, without
limitation, all litigation costs and reasonable attorneys’ fees.

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     SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interest hereunder without Bank’s prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank’s rights
and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit subject hereto, Borrower or its business, or any
collateral required hereunder.

     SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan
Documents constitute the entire agreement between Borrower and Bank with respect
to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.

     SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

     SECTION 7.7. TIME. Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.

     SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Agreement.

     SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.

     SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.

     SECTION 7.11. ARBITRATION.

          (a) Arbitration. The parties hereto agree, upon demand by any party,
to submit to binding arbitration all claims, disputes and controversies between
or among them (and their respective employees, officers, directors, attorneys,
and other agents), whether in tort, contract or otherwise arising out of or
relating to in any way (i) the loan and related Loan Documents which are the
subject of this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination; or (ii) requests for additional
credit.

          (b) Governing Rules. Any arbitration proceeding will (i) proceed in a
location in California selected by the American Arbitration Association (“AAA”);
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA’s commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA’s optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the “Rules”). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed

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to be a waiver by any party that is a bank of the protections afforded to it
under 12 U.S.C. §91 or any similar applicable state law.

          (c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

     (d) Arbitrator Qualifications and Powers. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three (3) arbitrators; provided however, that all three (3) arbitrators must
actively participate in all hearings and deliberations. The arbitrator will be a
neutral attorney licensed in the State of California or a neutral retired judge
of the state or federal judiciary of California, in either case with a minimum
of 10 years experience in the substantive law applicable to the subject matter
of the dispute to be arbitrated. The arbitrator will determine whether or not an
issue is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator’s discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of California and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

     (e) Discovery. In any arbitration proceeding discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no later
than 20 days before the hearing date and within 180 days of the filing of the
dispute with the AAA. Any requests for an extension of the discovery periods, or
any discovery disputes, will be subject to final determination by the arbitrator
upon a showing that the request for discovery is essential for the party’s
presentation and that no alternative means for obtaining information is
available.

     (f) Class Proceedings and Consolidations. The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.

     (g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all
costs and expenses of the arbitration proceeding.

     (h) Real Property Collateral; Judicial Reference. Notwithstanding anything
herein to the contrary, no dispute shall be submitted to arbitration if the
dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such

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indebtedness and obligations, shall remain fully valid and enforceable. If any
such dispute is not submitted to arbitration, the dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA’s selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

     (i) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

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

                      WELLS FARGO BANK, TEKELEC   NATIONAL ASSOCIATION
 
           
By:
      By:    

       
Title:
      Title:    

       

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