Document:

exv10w13

 

Exhibit 10.13
CONFIDENTIAL
TREATMENT REQUESTED

CROSS LICENSE AGREEMENT

     THIS CROSS LICENSE AGREEMENT (this “Agreement”) is made and entered into effective as of
December 30, 2003 (the “Effective Date”) by and between Broncus Technologies, Inc., a California
corporation having its principal place of business at 1400 N. Shoreline Blvd., Bldg. A, Suite 8,
Mountain View, California 94303 (“Broncus”) and Asthmatx, Inc., a California corporation having its
principal place of business at 1340 Space Park Way, Mountain View, California 94043 (“Asthmatx”).

R E C I T A L S

     A. Broncus formed Asthmatx and, in exchange for the issuance to Broncus of all the outstanding
shares of Asthmatx’s capital stock, Broncus contributed to Asthmatx the assets, properties,
technology and intellectual property owned by Asthmatx as of the Effective Date pursuant to a
Corporate Formation Agreement dated as of December 26, 2003 between Broncus and Asthmatx (the
“Formation Agreement”).

     B. On December 30, 2003, Broncus distributed all the outstanding shares of Asthmatx’s capital
stock to the shareholders of Broncus pursuant to a dividend that Broncus declared and paid to the
Broncus shareholders.

     C. The parties are entering into this Agreement pursuant to the Formation Agreement in order
to grant each other certain licenses to rights under their respective technologies and intellectual
property rights in their respective defined fields of use, subject to all the terms and conditions
of this Agreement. In addition, pursuant to this Agreement the parties are entering into a
separate Sublicense Agreement to set forth the terms and conditions on which Broncus will grant
Asthmatx a sublicense to certain license rights Broncus holds under a license agreement between
Broncus and Ntero Surgical, Inc.

     NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Broncus and Asthmatx hereby agree as follows:

CERTAIN DEFINITIONS

     As used in this Agreement, the following terms shall have the meanings indicated below in this
Section 1:

     1.1 “Affiliate” shall mean any entity that is Controlled by, Controls, or is under common
Control with Broncus or Asthmatx, as applicable.

     1.2 “Asthmatx Existing IP” means, collectively, the following assets and properties of
Asthmatx, all of which were contributed and assigned to Asthmatx by Broncus pursuant to the
Formation Agreement:

          (a) all those Patents (as defined below) that are listed on Exhibit A attached hereto,
which comprise all of the Patents owned by Asthmatx on the Effective Date (collectively, the
“Existing Asthmatx Patents”), each of which has an actual filing date on or prior to the Effective
Date (as indicated on Exhibit A);

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

 

 

          (b) any and all of the copyrightable works owned by Asthmatx on the Effective Date; and

          (c) any and all trade secrets and proprietary information owned by Asthmatx on the Effective
Date.

     1.3 “Asthmatx Field” shall mean, and shall be limited to, the field consisting of devices and
procedures for providing asthma therapy.

     1.4 “Asthmatx Future IP” means, collectively, and is limited to, the following:

          (a) Patents (including but not limited to Improvement Patents as defined in Section 4 below)
that (i) have an actual filing date that occurs within and during the Sharing Period and (ii) are
owned by Asthmatx or assigned to Asthmatx (collectively, “Future Asthmatx Patents”);
provided however, that notwithstanding the foregoing, unless otherwise expressly
agreed by Asthmatx in writing, the term “Future Asthmatx Patents” shall not include any
Patents that Asthmatx may acquire from a third party after the Effective Date pursuant to: (i) a
purchase of such Patents by Asthmatx or an Affiliate of Asthmatx (where, for purposes of this
clause (i), the assignment of a Patent to Asthmatx by an employee or consultant of Asthmatx in
connection with services performed by such employee or consultant for Asthmatx will not be
deemed to be a “purchase” of such Patent by Asthmatx); or (ii) a merger or consolidation of
Asthmatx or an Affiliate of Asthmatx with such third party or an Affiliate of such third party; and

          (b) trade secrets and proprietary information developed during the Sharing Period and owned by
Asthmatx, but only if and to the extent that:

               (i) such trade secret or proprietary information is developed as a result of, or arises out
of, a collaboration between employees of Asthmatx and Broncus that is approved and authorized in
writing by an officer of Asthmatx and an officer of Broncus;

               (ii) such trade secret or proprietary information (A) is developed as a result of, or in the
course of, either Asthmatx or Broncus providing Contract Services (as defined below) to the other
during the Sharing Period or (B) is required to be used to enable Asthmatx or Broncus to provide
Contract Services to the other during the Sharing Period; or

               (iii) such trade secret or proprietary information is identified as Asthmatx Future IP in a
written instrument executed by Asthmatx’s Chief Executive Officer or President (or equivalent) that
is delivered to Broncus by Asthmatx and has been approved by Asthmatx’s Board of Directors.

     1.5 “Broncus Existing IP” means, collectively, the following assets and properties of Broncus:

          (a) all those Patents that are listed on Exhibit B attached hereto, which comprise all
of the Patents owned by Broncus on the Effective Date (collectively, the “Existing Broncus
Patents”), each of which has an actual filing date prior to the Effective Date (as indicated on
Exhibit B);

          (b) any and all of the copyrightable works owned by Broncus on the Effective Date; and

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

2

 

          (c) any and all trade secrets and proprietary information owned by Broncus on the Effective
Date.

     For purposes of clarification, the parties acknowledge and agree that the Existing Broncus
Patents do not include any of the Patents listed on Exhibit A hereto as “Existing Asthmatx
Patents” which Broncus has assigned and contributed to Asthmatx but with respect to which such
assignment has not yet been recorded with applicable governmental or patent authorities

     1.6 “Broncus Field” shall mean, and shall be limited to, the field consisting of devices and
procedures for providing emphysema therapy.

     1.7 “Broncus Future IP” means, collectively, and is limited to, the following:

          (a) Patents (including but not limited to Improvement Patents as defined in Section 4 below)
that (i) have an actual filing date that occurs within and during the Sharing Period and (ii) are
owned by Broncus or assigned to Broncus (collectively, “Future Broncus Patents”); provided
however, that notwithstanding the foregoing, unless otherwise expressly agreed by Broncus
in writing, the term “Future Broncus Patents” shall not include any Patents that Broncus
may acquire from a third party after the Effective Date pursuant to: (i) a purchase of such
Patents by Broncus or an Affiliate of Broncus (where, for purposes of this clause (i), the
assignment of a Patent to Broncus by an employee or consultant of Broncus in connection with
services performed by such employee or consultant for Broncus will not be deemed to be a
“purchase” of such Patent by Broncus); or (ii) a merger or consolidation of Broncus or an Affiliate
of Broncus with such third party or an Affiliate of such third party; and

          (b) trade secrets and proprietary information developed during the Sharing Period and owned by
Broncus, but only if and to the extent that:

               (i) such trade secret or proprietary information is developed as a result of, or arises out
of, a collaboration between employees of Asthmatx and Broncus that is approved and authorized in
writing by an officer of Asthmatx and an officer of Broncus;

               (ii) such trade secret or proprietary information is (A) developed as a result of, or in the
course of, either Asthmatx or Broncus providing Contract Services to the other during the Sharing
Period or (B) necessary to be used to enable Asthmatx or Broncus to provide Contract Services to
the other during the Sharing Period; or

               (iii) such trade secret or proprietary information is identified as Broncus Future IP in a
written instrument executed by Broncus’ Chief Executive Officer or President (or equivalent) that
is delivered to Asthmatx by Broncus and has been approved by Broncus’ Board of Directors.

     1.8 “Change In Control Transaction” shall mean, with respect to Broncus or Asthmatx, as
applicable: (a) the consummation of any statutory merger or consolidation of such party with or
into one or more other corporations or other entities if the shareholders of such party immediately
prior to such merger or consolidation (other than any such shareholder that is an
“Excluded Shareholder,” as defined below) do not together own, immediately after consummation of
such merger or consolidation, voting securities of the Ultimate Survivor (as defined below) of such
merger or consolidation that possess at least a majority of the total voting power (as defined
below) of all the voting stock and other voting securities of such Ultimate

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

3

 

Survivor that are outstanding immediately after such merger or consolidation; (b) the sale or
exchange by shareholders of such party, in a single transaction or in a series of related
transactions, of outstanding shares of such party’s capital stock that together possess more than
fifty percent (50%) of the voting power of all outstanding shares of such party’s capital stock; or
(c) the sale or other disposition (whether in a single transaction or in a series of related
transactions) of all or substantially of such party’s assets and properties. As used in this
Section, the “Ultimate Survivor” of a merger or consolidation means the corporation or other entity
that is the survivor of such merger or consolidation, unless its stock is not publicly traded and
fifty percent (50%) or more of its outstanding stock or other ownership interest is ultimately
owned, directly or indirectly, by another corporation or other entity (“Parent Entity”), in which
case the term “Ultimate Survivor” shall instead mean such Parent Entity. With respect to any
merger or consolidation involving either Broncus or Asthmatx as described in clause (a) of this
Section 1.8, the term “Excluded Shareholder” means any shareholder of such party that: (i) merges
or consolidates with such party in such merger or consolidation; (ii) owns or controls a majority
of the voting power of another corporation or other entity that merges or consolidates with such
party in such merger or consolidation; or (iii) is directly or indirectly Controlled by, Controls,
or is under common Control with, the Ultimate Survivor of such merger or consolidation.

     1.9 “Confidential Information” shall have the meaning set forth for such term in Section 11
below.

     1.10 “Contract Services” means manufacturing or other services provided by Asthmatx or Broncus
to the other pursuant to a written agreement between them that is entered into prior to or during
the Sharing Period.

     1.11 “Control” (including “Controlled,” “Controls” and other forms) shall mean, as to an
entity, direct or indirect ownership of more than fifty percent (50%) of the voting interest in the
entity in question.

     1.12 “Joint Invention” shall mean any patentable invention, idea, process, method, composition
of matter, computer software program or database, which, in connection with the parties’
performance under a joint effort pursuant to, and as defined by, a written agreement executed by
each of Asthmatx and Broncus (other than this Agreement), is jointly invented, as determined under
United States patent law, by at least one (1) Broncus employee or person contractually required to
assign or license patent rights covering such invention to Broncus and at least one (1) Asthmatx
employee or person contractually required to assign or license patent rights covering such
invention to Asthmatx.

     1.13 “Ntero License Agreement” shall mean that certain License Agreement dated as of March 29,
2001 between Broncus and Ntero Surgical, Inc., a Delaware corporation (“Ntero”) pursuant to which
Ntero has licensed Broncus under certain patents and other technology owned by Ntero relating to
the use of thermal energy in modulating the healing response in biological tissues.

     1.14 “Patents” for the purposes of this Agreement shall mean, collectively, in any
jurisdiction throughout the world: (a) all patents, patent applications, provisional applications,
design patents, design patent applications, and applications under the Patent Cooperation Treaty
and any certificates of invention issued thereon; (b) any and all renewals, divisions,
continuations, continued prosecution applications or continuations-in-part of any patents,
certificates and applications described in clause (a) of this Section 1.14, and any and all
certificates of invention issuing thereon; (c) any and all reissues, reexaminations, extensions,
continuations, divisions,

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

4

 

renewals, substitutions, confirmations, registrations, revalidations, revisions, and any
foreign counterparts of any of the foregoing described in clause (a) and/or clause (b) of this
Section 1.14; and (d) any and all inventions and claims that are the subject of, or are contained
or set out in, any of the foregoing described in clauses (a), (b) and/or (c) of this Section 1.14.

     1.15 A “Qualified Public Offering” means, with respect to a party to this Agreement, a firm
commitment underwritten public offering pursuant to an effective registration statement filed under
the Securities Act of 1933, as amended, covering the offer and sale of shares of such party’s
common stock for the account of such party and/or any of its shareholders in which the aggregate
public offering price (before deduction of underwriters’ discounts and commissions) equals or
exceeds Twenty Million Dollars ($20,000,000).

     1.16 “Respective Field” shall mean, with respect to Broncus, the Broncus Field, and with
respect to Asthmatx, the Asthmatx Field, and collectively shall refer to and mean each party’s
respective Field as defined herein.

     1.17 “Sharing Period” shall mean that period of time which begins on the Effective Date and
which terminates and expires on the earliest to occur of the following dates or events:

          (a) June 30, 2005;

          (b) the first date upon which either Broncus or Asthmatx consummates a Change of Control
Transaction;

          (c) the first date upon which either Broncus or Asthmatx closes and consummates a Qualified
Public Offering;

          (d) the first date upon which the Sharing Period is explicitly terminated by the parties
pursuant to a written agreement executed by both Broncus and Asthmatx that is approved by the Board
of Directors of Broncus and the Board of Directors of Asthmatx; or

          (e) the first date upon which the Sharing Period is terminated by a party to this Agreement
pursuant to the provisions of Section 10 of this Agreement due to the material breach of this
Agreement by the other party to this Agreement.

     1.18
  *****.

2. GRANTS OF LICENSES

     2.1 Broncus License Grant to Asthmatx.

          (a) Grant. Subject to the terms and conditions of this Agreement, Broncus hereby
grants to Asthmatx, a perpetual, irrevocable, royalty-free, fully paid up and (except as otherwise
expressly provided in Section 2.1(e) below) non-transferable and non-assignable license, limited to
the Asthmatx Field, to develop, make, have made, reproduce, use, market, sell, have sold, license,
distribute, offer to sell, provide, perform, import or export, any product or service that is both
(i) within the Asthmatx Field and (ii) which, in the absence of this license, would infringe any
Broncus Existing IP and/or any Broncus Future IP.

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

5

 

          (b) Limited Exclusivity. The foregoing license granted by Broncus to Asthmatx under
Section 2.1(a) above will be exclusive to Asthmatx, but only to the following limited extent: (i)
so long as the license granted to Asthmatx under Section 2.1(a) remains in effect, Broncus will not
itself exercise or practice within the Asthmatx Field any of the rights with respect to Broncus
Existing IP that Broncus has granted to Asthmatx under Section 2.1(a); and (ii) so long as the
license granted to Asthmatx under Section 2.1(a) remains in effect, Broncus will not license any
third party to any of the rights with respect to Broncus Existing IP or Broncus Future IP within
the Asthmatx Field that Broncus has granted to Asthmatx under Section 2.1(a). However, it is
expressly acknowledged and agreed that nothing shall restrict or prevent Broncus from transferring
or assigning any and all of its right, title and interest in and to this Agreement, any and all
Broncus Existing IP, Broncus Future IP or any other assets pursuant to, or in connection with (a)
any merger or consolidation to which Broncus is a party or is a constituent corporation or (b) any
sale or other disposition of all or substantially all of Broncus’ assets, in either case so long as
the survivor of such merger or consolidation or such acquiror or successor (as applicable) agrees,
in a writing signed by such acquiror or successor, to be bound by, and to comply with, all Broncus’
obligations under this Agreement and to assume all Broncus’ liabilities and obligations under this
Agreement.

          (c) Ownership; Reservation of Rights. Asthmatx acknowledges and agrees that: (i)
Broncus shall retain its ownership of all Broncus Existing IP and all Broncus Future IP, and all
other assets of Broncus, subject only to the rights and licenses expressly granted by Broncus to
Asthmatx in this Section 2.1; (ii) except for the license rights expressly granted under this
Section 2.1, no right, title, or interest is granted by Broncus to Asthmatx in, to or under any of
the Broncus Existing IP or any of the Broncus Future IP; and (iii) Asthmatx is not acquiring
ownership of any asset or property of Broncus under this Agreement nor any right, title or interest
(including but not limited to any license or similar right) to any asset or property of Broncus
other than the license rights in and to the Broncus Existing IP and Broncus Future IP expressly
granted in this Section 2.1. In addition, Asthmatx acknowledges and agrees that Broncus retains,
and nothing herein shall prevent Broncus from itself exercising or practicing, any and all rights
with respect to Broncus Existing IP or Broncus Future IP that Broncus has not expressly granted to
Asthmatx hereunder including, but not limited to: (i) the right to exercise, use and practice
any and all Broncus Existing IP and/or Broncus Future IP for any purpose, application, use or
function outside the Asthmatx Field; (ii) the right of Broncus to itself exercise, practice and
use any and all Broncus Future IP within the Asthmatx Field; and (iii) the right of Broncus to
license any third party to any right or rights with respect to any Broncus Existing IP or Broncus
Future IP that are (A) not expressly granted to Asthmatx on an exclusive basis under this Agreement
or (B) not within the Asthmatx Field.

          (d) Sublicenses. Asthmatx shall be entitled to sublicense third parties to exercise
any of the rights that are licensed to Asthmatx under Section 2.1(a), provided that (i)
such sublicense is restricted such that it can be exercised by the sublicensee only within the
Asthmatx Field and (ii) such sublicense cannot be assigned or otherwise transferred by the
sublicensee, including but not limited to any transfer by operation of law.

          (e) Restrictions on Transfer. The license and rights granted by Broncus to Asthmatx
herein shall not be transferable or assignable by Asthmatx; provided, however, that
notwithstanding the foregoing, Asthmatx may transfer or assign the license and rights granted to
Asthmatx by Broncus herein only as a whole and only: (i) to a corporation or other entity that
succeeds to all Asthmatx’s assets and liabilities by operation of law pursuant to a merger or
consolidation in which Asthmatx is merged or consolidated with or into one or more other
corporations or entities, provided that such corporation or other entity first agrees with
Broncus,

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

6

 

in a writing signed by such corporation or other entity, to be bound by and to comply with,
all Asthmatx’s obligations under this Agreement and to assume all Asthmatx’s liabilities and
obligations under this Agreement; or (ii) to a purchaser or acquiror who acquires all or
substantially all of Asthmatx’s assets in a single transaction; provided that such
purchaser or acquiror first agrees with Broncus, in a writing signed by such purchaser or acquirer,
to be bound by and to comply with, all Asthmatx’s obligations under this Agreement and to assume
all Asthmatx’s liabilities and obligations under this Agreement.

          (f) Disclosure of Certain Broncus Future IP. Subject to the confidentiality
provisions of Section 11 of this Agreement, Broncus will disclose in confidence to Asthmatx any
Broncus Future IP that is described in Section 1.7(b)(ii) above that may be developed by Broncus.
Such disclosure will be made within a reasonable time after such Broncus Future IP has been
developed and reduced to practice.

     2.2 Asthmatx License Grant to Broncus.

          (a) Grant. Subject to the terms and conditions of this Agreement, Asthmatx hereby
grants to Broncus, a perpetual, irrevocable, royalty-free, fully paid up and (except as otherwise
expressly provided in Section 2.2(e) below) non-transferable and non-assignable license, limited to
the Broncus Field, to develop, make, have made, reproduce, use, market, sell, have sold, license,
distribute, offer to sell, provide, perform, import or export any product or service that is both
(i) within the Broncus Field and (ii) which, in the absence of this license, would infringe any
Asthmatx Existing IP and/or any Asthmatx Future IP.

          (b) Limited Exclusivity. The foregoing license granted by Asthmatx to Broncus under
Section 2.2(a) above will be exclusive to Broncus, but
only to the following limited extent: (i)
so long as the license granted to Broncus under Section 2.2(a) remains in effect, Asthmatx will not
itself exercise or practice within the Broncus Field any of the rights with respect to Asthmatx
Existing IP that Asthmatx has granted to Broncus under Section 2.2(a); and (ii) so long as the
license granted to Asthmatx under Section 2.2(a) remains in effect, Asthmatx will not license any
third party to any of the rights with respect to Asthmatx Existing IP or Asthmatx Future IP within
the Broncus Field that Asthmatx has granted to Broncus under Section 2.2(a). However, it is
expressly acknowledged and agreed that nothing shall restrict or prevent Asthmatx from transferring
or assigning any and all of its right, title and interest in and to this Agreement, any and all
Asthmatx Existing IP, Asthmatx Future IP or any other assets pursuant to, or in connection with (a)
any merger or consolidation to which Asthmatx is a party or is a constituent corporation or (b) any
sale or other disposition of all or substantially all of Asthmatx’s assets, in either case so long
as the survivor of such merger or consolidation or such acquiror or successor (as applicable)
agrees, in a writing signed by such acquiror or successor, to be bound by, and to comply with, all
Asthmatx’s obligations under this Agreement and to assume all Asthmatx’s liabilities and
obligations under this Agreement.

          (c) Ownership; Reservation of Rights. Broncus acknowledges and agrees that: (i)
Asthmatx shall retain its ownership of all Asthmatx Existing IP and all Asthmatx Future IP, and all
other assets of Asthmatx, subject only to the rights and licenses granted by Asthmatx to Broncus in
this Section 2.2; (ii) except for the license rights expressly granted under this Section 2.2, no
right, title, or interest is granted by Asthmatx to Broncus in, to or under the Asthmatx Existing
IP or any of the Asthmatx Future IP; and (iii) Broncus is not acquiring ownership of any asset or
property of Asthmatx under this Agreement nor any right, title or interest (including but not
limited to any license or similar right) to any asset or property of Asthmatx other than the
license rights in and to the Asthmatx Existing IP and Asthmatx Future IP

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

7

 

expressly granted in this Section 2.2. In addition, Broncus acknowledges and agrees that
Asthmatx retains, and nothing herein shall prevent Asthmatx from itself exercising or practicing,
any and all rights with respect to Asthmatx Existing IP or Asthmatx Future IP that Asthmatx has not
expressly granted to Broncus hereunder including, but not limited to: (i) the right to exercise,
use and practice any and all Asthmatx Existing IP and/or Asthmatx Future IP for any purpose,
application, use or function outside the Broncus Field; (ii) the right of Asthmatx to itself
exercise, practice and use any and all Asthmatx Future IP within the Broncus Field; and (iii) the
right of Asthmatx to license any third party to any right or rights with respect to any Asthmatx
Existing IP or Asthmatx Future IP that are (A) not expressly granted to Broncus on an exclusive
basis under this Agreement or (B) not within the Broncus Field.

          (d) Sublicenses. Broncus shall be entitled to sublicense third parties to exercise
any of the rights that are licensed to Broncus under Section 2.2(a), provided that (i) such
sublicense is restricted such that it can be exercised by the sublicensee solely within the Broncus
Field and (ii) such sublicense cannot be assigned or otherwise transferred by the sublicensee,
including but not limited to any transfer by operation of law.

          (e) Restrictions on Transfer. The license and rights granted by Asthmatx to Broncus
herein shall not be transferable or assignable by Broncus; provided, however, that
notwithstanding the foregoing, Broncus may transfer or assign the license and rights granted to
Broncus by Asthmatx herein only: (i) to a corporation or other entity that succeeds to all
Broncus’ assets and liabilities by operation of law pursuant to a merger or consolidation in which
Broncus is merged or consolidated with or into one or more other corporations or entities,
provided that such corporation or other entity first agrees with Asthmatx, in a writing
signed by such corporation or other entity, to be bound by and to comply with, all Broncus’
obligations under this Agreement and to assume all Broncus’ liabilities and obligations under this
Agreement; or (ii) to a purchaser or acquiror who acquires all or substantially all of Broncus’
assets in a single transaction; provided that such purchaser or acquiror first agrees with
Asthmatx, in a writing signed by such purchaser or acquiror, to be bound by and to comply with, all
Broncus’ obligations under this Agreement and to assume all Broncus’ liabilities and obligations
under this Agreement.

          (f) Disclosure of Certain Asthmatx Future IP. Subject to the confidentiality
provisions of Section 11 of this Agreement, Asthmatx will disclose in confidence to Broncus any
Asthmatx Future IP that is described in Section 1.7(b)(ii) that may be developed by Asthmatx. Such
disclosure will be made within a reasonable time after such Asthmatx Future IP has been developed
and reduced to practice.

3. OTHER MATTERS

     3.1 Ntero Sublicense. Concurrently with their execution of this Agreement, Broncus and
Asthmatx will enter into a separate Sublicense Agreement in the form attached hereto as Exhibit
C, pursuant to which Broncus will sublicense Asthmatx to certain rights held by Broncus under
its existing License Agreement with Ntero Surgical, Inc.

     3.2
*****.

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

8

 

4. IMPROVEMENT PATENTS

     4.1 Improvement Patents. During the Sharing Period, a party to this Agreement (“Requesting
Party”) shall have the right to request to have filed, have prosecuted, and/or maintained, at the
Requesting Party’s sole expense, additional continuing Patents (each, an “Improvement Patent”)
based upon (a) Broncus Existing IP and/or Broncus Future IP (if the Requesting Party is Asthmatx)
or (b) Asthmatx Existing IP and/or Asthmatx Future IP (if the Requesting Party is Broncus).

     4.2 Ownership of Improvement Patents. Ownership of an Improvement Patent that is based on or
derived from Broncus Existing IP or Broncus Future IP shall reside with Broncus. Ownership of an
Improvement Patent that is based on or derived from Asthmatx Existing IP or Asthmatx Future IP
shall reside with Asthmatx.

     4.3 Prosecution of Improvement Patents. Unless otherwise agreed, the owner of an Improvement
Patent (the “Owner Party”) shall have the sole right and power to manage or direct prosecution of
such Improvement Patent with reasonable direction from the Requesting Party. The Owner Party shall
reasonably cooperate with the Requesting Party to execute such documents and provide such
assistance as is reasonably necessary to accomplish the foregoing, all at the Requesting Party’s
sole expense. The Owner Party shall provide the Requesting Party with all material documentation
and correspondence from, sent to or filed with patent offices regarding such Improvement Patent and
shall provide the Requesting Party with a reasonable opportunity to review and comment in advance
upon all filings with such patent offices made with respect to such Improvement Patent. The
Requesting Party shall reasonably cooperate with and assist the Owner Party in connection with any
filing, prosecution and maintenance activities undertaken by the Owner Party with respect to an
Improvement Patent.

     4.4 Failure to Maintain Improvement Patents. All services, costs, fees (including but not
limited to maintenance fees, etc.) for an Improvement Patent shall be directly paid or reimbursed
by the Requesting Party. The Owner Party shall not take any action or inaction that results in the
abandonment of the Improvement Patent unless required to do so by court order or the terms of a
bona fide settlement agreement. In the event the Requesting Party fails to directly pay or
reimburse the Owner Party for any service, costs, fees, etc for an Improvement Patent, then (a) the
Requesting Party shall thereafter no longer be licensed under this Agreement to use or practice the
inventions, technologies or claims that are the subject of such Improvement Patent, and (b) the
Owner Party of such Improvement Patent shall have the option to maintain, prosecute or pursue such
Improvement Patent or to abandon and terminate prosecution and maintenance of such Improvement
Patent, without the need for such Owner Party to comply with the provisions of Section 4.5, which
shall be inapplicable to such abandonment of such Improvement Patent.

     4.5 Abandonment Notice. Except as otherwise provided in Section 4.4, the Owner Party shall
give the Requesting Party written notice (“Abandonment Notice”) of its intention to take or not
take an action that results in the abandonment of any Improvement Patent

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

   9

 

(“Abandoned Improvement Patent”) that is under the scope of this Agreement. For this purpose,
“abandonment” of an Improvement Patent will include explicit abandonment thereof, the failure to
pay fees (including maintenance fees) with respect thereto, failure to pay annuities, failure to
take action required before the patent and trademark office with respect to the Improvement Patent,
and/or failure to continue prosecution of a pending application for such Improvement Patent. Such
Abandonment Notice shall be in writing and shall be given to the Requesting Party at least three
(3) months prior to the date the Abandoned Improvement Patent would be considered “abandoned” by
the respective patent office. The Requesting Party shall thereafter have the right (but not the
obligation), at its option and expense, to prosecute and maintain such Abandoned Improvement
Patents. The Owner Party giving the Abandonment Notice shall reasonably cooperate with and assist
the Requesting Party, at the Requesting Party’s sole expense, in connection with any filing,
prosecution and maintenance activities undertaken in accordance with this sub-section with respect
to such Abandoned Improvement Patent. The Requesting Party receiving such Abandonment Notice
agrees to consult with the Owner Party with respect to such filing, prosecution and maintenance
activities.

5. INTELLECTUAL PROPERTY OBLIGATIONS

     5.1 Filing, Maintenance and Prosecution of Patents. Subject to the provisions of Section 4.5
and Section 5.3, each party shall have the right to file, prosecute and maintain all of such
party’s respective Patents.

     5.2 Obligations Regarding Unpublished Applications. Neither party shall have any obligation
to inform the other of any patent applications, provisional applications, or applications under the
Patent Cooperation Treaty so long as such items are unpublished.

     5.3 Obligation Regarding Abandonment of Published Patents. Each party shall have an
obligation to provide written notice (a “Section 5.3 Notice”) of their intent to take or not take
an action that results in the abandonment of any published Patent owned by that party under which
the other party is licensed under this Agreement, other than Improvement Patents (“Abandoned
Patent”). Abandonment includes explicit abandonment, failure to pay fees, failure to pay
annuities, failure to take action required before the patent and trademark office, and/or failure
to continue prosecution of a pending application. Such Section 5.3 Notice shall be provided at
least three (3) months prior to the date the Patent would be considered abandoned by the respective
patent office. The party receiving the Section 5.3 Notice shall have the right but not the
obligation, at its sole option and expense, to prosecute and maintain such Abandoned Patent. The
party providing such Section 5.3 Notice shall reasonably cooperate with and assist the other party
in connection with any filing, prosecution and maintenance activities undertaken in accordance with
this Section. The party receiving such Section 5.3 Notice agrees to consult with the other with
respect to such filing, prosecution and maintenance activities.

6. TRADE SECRETS, PROPRIETARY INFORMATION; JOINT INVENTIONS

     6.1 Post-Effective Date Trade Secrets. Neither party shall have any obligation to disclose
any trade secrets or proprietary information that it develops during the Sharing Period except (a)
in the case of Broncus, to the extent such trade secret or proprietary information is required to
be disclosed by Broncus pursuant to the provisions of Section 2.1(f); and (b) in the case of
Asthmatx, to the extent such trade secret or proprietary information is required to be disclosed by
Asthmatx pursuant to the provisions of Section 2.2(f)..

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

10

 

     6.2 Joint Development: Maintenance and Prosecution. Ownership of any Joint Invention shall
be determined in accordance with a separate agreement entered into by Broncus and Asthmatx
governing the terms of the joint development.

7. ENFORCEMENT

     7.1 No Duty to Enforce. This Agreement does not impose any obligation on Broncus to enforce
any Broncus Existing IP or any Broncus Future IP against any third party or parties party at the
request of Asthmatx or otherwise, or to be joined as a party to any action by Asthmatx to enforce
any Broncus Existing IP or any Broncus Future IP against a third party. This Agreement does not
impose any obligation on Asthmatx to enforce any Asthmatx Existing IP or any Asthmatx Future IP
against any third party or parties at the request of Broncus or otherwise, or to be joined as a
party to any action by Broncus to enforce any Asthmatx Existing IP or any Asthmatx Future IP
against a third party.

     7.2 Right to Bring Infringement Action. Each party shall have the right, but not the
obligation, at its sole option and discretion, to initiate and maintain legal action against any
infringement of its Existing IP or its Future IP and/or Improvement Patents owned by that party
(“Enforcing Party”). The other party to this Agreement shall have no claim or right to any
recovery obtained by the Enforcing Party, whether by judgment, award, decree or settlement.

8. REPRESENTATIONS, WARRANTIES AND COVENANTS

     8.1 Representations, Warranties and Covenants of Broncus. Broncus represents and warrants to
Asthmatx that, as of the Effective Date:

          (a) The execution, delivery and performance of this Agreement by Broncus have been duly
authorized by all necessary corporate action on the part of Broncus;

          (b) Broncus has not granted any right, license or interest in, to or under the Broncus
Existing IP or Broncus Future IP that is in conflict with, or that is inconsistent with, the rights
and licenses granted by Broncus to Asthmatx in this Agreement; and

          (c) To the best of Broncus’ knowledge, without investigation of any particular matter, there
are no actions, suits, investigations, claims or proceedings, either pending or threatened,
relating to the Broncus Existing IP.

     8.2 Representations, Warranties and Covenants of Asthmatx. Asthmatx represents, warrants and
covenants that, as of the Effective Date:

          (a) The execution, delivery and performance of this Agreement by Asthmatx have been duly
authorized by all necessary corporate action on the part of Asthmatx;

          (b) Asthmatx has not granted any right, license or interest in, to or under the Asthmatx
Existing IP or Asthmatx Future IP that is in conflict with, or that is inconsistent with, the
rights and licenses granted by Asthmatx to Broncus under this Agreement; and

          (c) To the best of Asthmatx’s knowledge, without investigation of any particular matter, there
are no actions, suits, investigations, claims or proceedings, either pending or threatened,
relating to the Asthmatx Existing IP.

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

11

 

     8.3 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 8.1 OR SECTION 8.2 OF
THIS AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY HEREBY AFFIRMATIVELY AND EXPRESSLY DISCLAIMS,
ANY AND ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO
THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

     8.4 No Intellectual Property Warranty or Representations. Each party is providing license
rights to the other on an “as is” basis without warranty. Neither party is making any express or
implied warranty to the other (including but not limited to any warranty of non-infringement)
regarding its Existing IP or Future IP.

9. NO OBLIGATION FOR SERVICES

     Nothing in this Agreement shall obligate any party hereto to provide any manufacturing or
other Contract Services or any other services to the other party. Neither party shall have any
obligation to perform services for the other party not expressly contemplated by this Agreement
except as may be provided in a separate written agreement executed by both Broncus and Asthmatx.

10. TERM AND TERMINATION

     10.1 Term. Subject to earlier termination of this Agreement pursuant to Section 10.3 below,
this Agreement and the licenses granted herein will remain in effect with respect to any
intellectual property licensed hereunder until that intellectual property has expired (such as, for
example, with an expired patent) or otherwise ceased to be legally protectable (such as, for
example, a trade secret which is put in the public domain by its owner)..

     10.2 Termination of the Sharing Period. Except as provided in Section 10.3 below, termination
of the Sharing Period will not, in and of itself, terminate this Agreement.

     10.3 Termination of Agreement and Sharing Period. If a party to this Agreement (“Breaching
Party”) materially breaches this Agreement, then the other party (the “Terminating Party”) may give
the Breaching Party written notice of such breach, setting forth the nature of such breach in
reasonable detail. If the Breaching Party fails to cure such breach within thirty (30) days of its
receipt of such notice of breach from the Terminating Party, then the Terminating Party may, at its
option, either (i) terminate this Agreement or (ii) terminate only the Sharing Period, effective
immediately upon giving the Breaching Party a written notice of termination. .Nothing in this
Section 10 is intended to limit any other rights or remedies that a party to this Agreement may
have at law or equity for a breach of this Agreement by the other party.

11. CONFIDENTIAL INFORMATION

     11.1 Confidentiality. In connection with this Agreement, the parties will provide to each
other certain Confidential Information, including but not limited to each party’s know-how,
invention disclosures, proprietary materials and/or technologies, trade secrets and material
embodiments thereof. As used herein, “Confidential Information” means (a) any information of a
confidential or proprietary nature disclosed by a party to this Agreement to the other party (i) in
written form marked “confidential,” or (ii) in oral form if summarized in a writing marked
“confidential” delivered to the receiving party within thirty (30) days after the oral disclosure
and

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

12

 

(b) any non-public information regarding a disclosing party’s Existing IP or Future IP that a
reasonable person familiar with the disclosing party’s business would reasonably expect to be
confidential or proprietary information..

     11.2 Confidentiality and Non-Use. The recipient of a disclosing party’s Confidential
Information shall maintain such Confidential Information in confidence, and shall disclose such
Confidential Information only to its employees, agents, consultants, Affiliates, sublicensees,
attorneys’, accountants and advisors who have a reasonable need to know such Confidential
Information and who are bound by obligations of confidentiality and non-use no less restrictive
then those set forth herein or (in the case of attorneys) have fiduciary duties of confidentiality.
The recipient of the disclosing party’s Confidential Information shall use such Confidential
Information solely to exercise its rights and perform its obligations under this Agreement
(including, without limitation, the right to use and disclose such Confidential Information in
regulatory applications and filings contemplated by this Agreement), unless otherwise mutually
agreed in writing. The recipient of the other party’s Confidential Information shall take the same
degree of care that it uses to protect its own confidential and proprietary information of a
similar nature and importance (but in any event no less than reasonable care). Notwithstanding the
foregoing, each party may disclose only the terms of this agreement to bona fide investors, merger
partners, or funding sources in connection with due diligence activities.

     11.3 Exclusions. Confidential Information shall not include information that: (a) is in the
recipient’s possession prior to receipt from the disclosing party (it being understood however,
that no information shall be disqualified from being Confidential Information of party solely
because such information may have been in the possession of an employee of Broncus or Asthmatx on
or prior to December 30, 2003 as a result of such employee’s employment with Broncus on or prior to
December 30, 2003); (b) is or becomes, through no fault of the recipient, publicly known; (c) is
furnished to the recipient by a third party without breach of a duty to the disclosing party; (d)
is independently developed by the recipient without use of, application of or reference to the
disclosing party’s Confidential Information.

     11.4 Legally Mandated Disclosures. It shall not be a violation of this Section 11 to disclose
Confidential Information required to be disclosed under applicable law, including applicable
securities law, but such disclosure shall be only for the sole purpose of and solely to the extent
required by such law, provided that the recipient, to the extent possible, shall give the
disclosing party prior written notice of the proposed disclosure and cooperate fully with the
disclosing party to minimize the scope of any such required disclosure, to the extent possible and
in accordance with applicable law.

     11.5 Publication. Neither party will publish or otherwise disclose (except subject to
appropriate confidentiality agreements) any Confidential Information regarding the other’s
technology, Existing IP or Future IP that is covered under this Agreement without the prior written
approval from the other party, which approval will not be unreasonably withheld.

12. MISCELLANEOUS

     12.1 Governing Law. This Agreement shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of California without giving effect to any choice
of law rule that would cause the application of the laws of any jurisdiction other than the
internal laws of the State of California to the rights and duties of the parties under this
Agreement.

			

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

13

 

     12.2 Limitation of Liability. EXCEPT WITH RESPECT TO EACH PARTY’S CONFIDENTIALITY OBLIGATIONS
UNDER SECTION 11, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT,
PUNITIVE OR SPECIAL DAMAGES OF THE OTHER PARTY ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER
CAUSED, UNDER ANY THEORY OF LIABILITY.

     12.3 Force Majeure. Neither party shall be held responsible for any delay or failure in
performance hereunder caused by strikes, embargoes, unexpected government requirements, civil or
military authorities, acts of God, earthquake, or by the public enemy or other causes reasonably
beyond such party’s control and without such party’s fault or negligence; provided that the
affected party notifies the unaffected party as soon as reasonably possible, and resumes
performance hereunder as soon as reasonably possible following cessation of such force majeure
event.

     12.4 Notices. Any notice, report, communication or consent required or permitted by this
Agreement shall be in writing and shall be sent (a) by prepaid registered or certified mail, return
receipt requested, (b) by overnight express delivery service by a nationally recognized courier, or
(c) via confirmed facsimile or telecopy, followed within five (5) days by a copy mailed in the
preceding manner, addressed to the other party at the address shown below or at such other address
for which such party gives notice hereunder. Such notice will be deemed to have been given when
delivered or, if delivery is not accomplished by some fault of the addressee, when tendered.

If to Broncus:

Broncus Technologies, Inc.

1400 N. Shoreline Blvd.

Bldg. A, Suite 8

Mountain View, CA 94043

Facsimile: (650) 428-1542

If to Asthmatx:

Asthmatx, Inc.

1340 Space Park Way

Mountain View, CA 94043

Facsimile: (650) 810-1112

     12.5 Modification; Waiver. This Agreement may not be altered, amended or modified in any way
except by a writing signed by both Broncus and Asthmatx. The failure of a party to enforce any
rights or provisions of the Agreement shall not be construed to be a waiver of such rights or
provisions, or a waiver by such party to thereafter enforce such rights or provision or any other
rights or provisions hereunder. No waiver shall be effective unless made in writing and signed by
the waiving party.

     12.6 Severability. If any provision of this Agreement shall be found by a court to be void,
invalid or unenforceable, the same shall be modified to comply with applicable law or stricken if
not so conformable, so as not to affect the validity or enforceability of this Agreement;
provided that no such reformation or striking shall be effective if the result materially
changes the economic benefit of this Agreement to either Broncus or Asthmatx. In the event that
any

			

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

14

 

provision of this Agreement becomes or is declared by a court of competent jurisdiction to be
void, invalid or unenforceable, and reformation or striking of such provision would materially
change the economic benefit of this Agreement to either Broncus or Asthmatx, Broncus and Asthmatx
shall modify such provision in accordance with this Section 12.6 to obtain a legal, valid and
enforceable provision and provide an economic benefit to Broncus and Asthmatx that most nearly
effects Broncus’ and Asthmatx’ intent on entering into this Agreement.

     12.7 Entire Agreement. The parties hereto acknowledge that this Agreement, together with the
exhibits attached hereto, set forth the entire agreement and understanding of the parties hereto as
to the subject matter hereof, and supersedes all prior and contemporaneous discussions, agreements
and writings in respect hereto.

     12.8 Headings. The article, section and paragraph headings contained herein are for the
purposes of convenience only and are not intended to define or limit the contents of the articles,
sections or paragraphs to which such headings apply.

     12.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one instrument.

     IN WITNESS WHEREOF, Broncus and Asthmatx have each executed this Cross License Agreement by
their respective duly authorized representatives.

	 	 	 	 	 	 	 	 	 
	ASTHMATX, INC	 	 	 	BRONCUS TECHNOLOGIES, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Glen French
	 	 	 	By:
	 	/s/ Cary Cole
	 

	 	 
	 	 	 	 	 	 
	 

	 	Glen French, Chief Executive Officer
	 	 	 	 	 	Cary Cole, President

	 	 	 
	Attachments:	 	 
	Exhibit A:

	 	Existing Asthmatx Patents
	Exhibit B:

	 	Existing Broncus Patents
	Exhibit C:

	 	Sublicense Agreement

			

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

15

 

EXHIBIT A

Existing Asthmatx Patents

	 	 	 	 	 	 	 	 	 	 	 
	Docket	 	 	 	Application	 	Application	 	Patent	 	 
	Number	 	Case Type	 	Number	 	Date	 	Number	 	Title
	43571-20001.00

	 	Regular
	 	08/833,550
	 	04/07/97
	 	6,273,907 B1
	 	BRONCHIAL STENTER\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20001.01

	 	Regular
	 	10/232,909
	 	08/30/02
	 	 	 	METHOD OF
INCREASING GAS

EXCHANGE OF A

LUNG\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20001.10

	 	Regular
	 	09/176,899
	 	10/22/98
	 	6,299,633 B1
	 	BRONCHIAL STENTER\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20001.11

	 	Regular
	 	09/280,672
	 	03/29/99
	 	6,283,989 B1
	 	METHOD OF TREATING
A 
BRONCHIAL TUBE
WITH A

BRONCHIAL\nSTENTER

HAVING
DIAMETRICALLY

ADJUSTABLE ELECTR
	 
	 	 	 	 	 	 	 	 	 	 
	*****

	 	*****
	 	*****
	 	*****
	 	 	 	*****
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20001.13

	 	Regular
	 	 	 	 	 	 	 	METHOD OF
INCREASING 
GAS
EXCHANGE OF A

LUNG\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20001.20

	 	Regular
	 	08/994,064
	 	12/19/97
	 	6,083,255
	 	BRONCHIAL STENTER\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20001.21

	 	Regular
	 	09/003,750
	 	01/07/98
	 	5,972,026
	 	BRONCHIAL STENTER

HAVING
DIAMETRICALLY

ADJUSTABLE

ELECTRODES\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20001.22

	 	Regular
	 	09/224,937
	 	12/31/98
	 	6,200,333 B1
	 	BRONCHIAL STENTER\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20001.23

	 	Regular
	 	09/260,401
	 	03/01/99
	 	6,283,988 B1
	 	BRONCHIAL STENTER

HAVING EXPANDABLE

ELECTRODES\n
	 
	 	 	 	 	 	 	 	 	 	 
	*****

	 	*****
	 	 	 	 	 	 	 	*****
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20001.25

	 	Regular
	 	09/349,715
	 	07/08/99
	 	6,488,673 B1
	 	METHOD OF
INCREASING 
GAS
EXCHANGE OF A

LUNG\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20002.00

	 	Regular
	 	08/887,206
	 	07/02/97
	 	5,957,919
	 	BLEB REDUCER\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.00

	 	Regular
	 	09/095,323
	 	06/10/98
	 	 	 	METHOD AND MEANS
FOR 
TREATMENT OF

PULMONARY MUSCLES\n

***** Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

	 	 	 	 	 	 	 	 	 	 	 
	Docket	 	 	 	Application	 	Application	 	Patent	 	 
	Number	 	Case Type	 	Number	 	Date	 	Number	 	Title
	43571-20009.01

	 	Regular
	 	10/414,253
	 	04/14/03
	 	 	 	MODIFICATION OF

AIRWAYS BY
APPLICATION OF
ENERGY
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.02

	 	Regular
	 	10/414,411
	 	04/14/03
	 	 	 	CONTROL SYSTEM AND

PROCESS FOR
APPLICATION 
OF
ENERGY TO AIRWAY

WALLS AND OTHER

MEDIUMS
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.20

	 	Regular
	 	09/296,040
	 	04/21/99
	 	6,411,852
	 	MODIFICATION OF

AIRWAYS BY
APPLICATION OF
ENERGY\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.21

	 	Regular
	 	09/436,455
	 	11/08/99
	 	 	 	DEVICES FOR

MODIFICATION OF

AIRWAYS BY TRANSFER
OF ENERGY\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.22

	 	Regular
	 	09/535,856
	 	03/27/00
	 	6,634,363
	 	METHODS OF TREATING

LUNGS HAVING

REVERSIBLE
OBSTRUCTIVE

PULMONARY DISEASE
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.23

	 	Regular
	 	09/999,851
	 	10/25/01
	 	 	 	METHOD FOR TREATING
AN 
ASTHMA ATTACK\n
	 
	 	 	 	 	 	 	 	 	 	 
	A-004-001

	 	Regular
	 	10/640,967
	 	08/13/03
	 	 	 	METHODS OF TREATING

LUNGS HAVING

REVERSIBLE
OBSTRUCTIVE

PULMONARY DISEASE
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20002.41

	 	Australia
	 	8287198
	 	07/02/98
	 	730013	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20002.42

	 	Japan
	 	11507425
	 	07/02/98	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20002.43

	 	European Patent
Convention
	 	989331392
	 	07/02/98
	 	998233	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.43

	 	Australia
	 	PCT/US99/12986
	 	06/09/99	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.44

	 	Japan
	 	2000553172
	 	06/09/99	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.45

	 	European Patent
Convention
	 	PCT/US99/12986
	 	06/09/99	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.47

	 	Australia
	 	4800700
	 	04/21/00	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.48

	 	Canada
	 	2370223
	 	04/21/00	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.49

	 	Japan
	 	2000611838
	 	04/21/00	 	 	 	 

***** Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

	 	 	 	 	 	 	 	 	 	 	 
	Docket	 	 	 	Application	 	Application	 	Patent	 	 
	Number	 	Case Type	 	Number	 	Date	 	Number	 	Title
	43571-20009.50

	 	European Patent
Convention
	 	9301318
	 	04/21/00	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.54

	 	Canada
	 	2426167
	 	10/17/01	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.55

	 	Japan
	 	2002-535572
	 	10/17/2001	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.56

	 	European Patent
Convention
	 	1979858.6
	 	10/17/2001	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.58

	 	Canada
	 	2426144
	 	10/17/2000	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20009.59

	 	European Patent
Convention
	 	973613.3
	 	10/17/2000	 	 	 	 

***** Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

EXHIBIT B

Existing Broncus Patents

	 	 	 	 	 	 	 	 	 	 	 
	Docket	 	 	 	Application	 	Application	 	Patent	 	 
	Number	 	Case Type	 	Number	 	Date	 	Number	 	Title
	43571-20010.00

	 	Regular
	 	09/680,645
	 	10/06/00
	 	6,514,290 B1
	 	LUNG ELASTIC RECOIL

RESTORING OR TISSUE

COMPRESSING DEVICE
AND 
METHOD\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20011.00

	 	Regular
	 	09/092,727
	 	06/05/98
	 	6,174,323B1
	 	METHOD AND ASSEMBLY
FOR LUNG VOLUME
REDUCTION\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20011.20

	 	Regular
	 	09/576,786
	 	05/23/00
	 	6,599,311
	 	METHOD AND ASSEMBLY
FOR 
LUNG VOLUME
REDUCTION\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.00

	 	Regular
	 	09/633,651
	 	08/07/00
	 	 	 	METHODS AND DEVICES
FOR 
CREATING
COLLATERAL 
CHANNELS
IN THE LUNGS\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.01

	 	Regular
	 	09/908,087
	 	07/18/01
	 	 	 	DEVICES FOR
CREATING 
COLLATERAL
CHANNELS IN 
THE
LUNGS\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.02

	 	Regular
	 	09/908,008
	 	07/18/01
	 	6,629,951
	 	DEVICES FOR
CREATING 
COLLATERAL CHANNELS IN 
THE
LUNGS\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.03

	 	Regular
	 	09/908,177
	 	07/18/01
	 	 	 	CONDUITS FOR
MAINTAINING

OPENINGS IN
TISSUE\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20033.00

	 	Regular
	 	09/947,144
	 	09/04/01
	 	 	 	DEVICES AND METHODS
FOR 
MAINTAINING
COLLATERAL 
CHANNELS
IN TISSUE\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20034.00

	 	Regular
	 	10/235,240
	 	09/04/02
	 	 	 	CONDUITS HAVING
DISTAL 
CAGE
STRUCTURE FOR

MAINTAINING\nCOLLATERAL 
CHANNELS IN
TISSUE AND 
RELATED
MET
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20035.00

	 	Regular
	 	09/946,706
	 	09/04/01
	 	 	 	DEVICES FOR
CREATING 
COLLATERAL
CHANNELS\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20035.20

	 	Regular
	 	10/080,344
	 	02/21/02
	 	 	 	DEVICES FOR
APPLYING 
ENERGY TO
TISSUE\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20035.21

	 	Regular
	 	10/079,605
	 	02/21/02
	 	 	 	DEVICES FOR
APPLYING 
ENERGY TO
TISSUE\n

***** Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

	 	 	 	 	 	 	 	 	 	 	 
	Docket	 	 	 	Application	 	Application	 	Patent	 	 
	Number	 	Case Type	 	Number	 	Date	 	Number	 	Title
	43571-20035.22

	 	Regular
	 	10/280,851
	 	10/25/02
	 	 	 	DEVICES FOR

APPLYING ENERGY TO

TISSUE\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20036.00

	 	Regular
	 	09/947,126
	 	09/04/01
	 	 	 	DEVICES FOR
CREATING 
COLLATERAL
CHANNELS\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20037.00

	 	Regular
	 	10/615,491
	 	07/07/03
	 	 	 	EXTRAPLEURAL AIRWAY

DEVICE AND METHOD\n
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20038.00

	 	Regular
	 	10/458,085
	 	06/09/03
	 	 	 	METHODS AND DEVICES
FOR 
MAINTAINING
PATENCY OF

SURGICALLY CREATED

CHANNELS IN
TISSUE\n
	 
	 	 	 	 	 	 	 	 	 	 
	E-001-004

	 	Regular
	 	10/633,902
	 	08/04/03
	 	 	 	METHODS AND DEVICES
FOR 
CREATING
COLLATERAL 
CHANNELS
IN THE LUNGS
	 
	 	 	 	 	 	 	 	 	 	 
	*****

	 	*****
	 	 	 	 	 	 	 	*****
	 
	 	 	 	 	 	 	 	 	 	 
	E-008-000-P

	 	Provisional Filing
	 	60/488,332
	 	07/18/03
	 	 	 	DEVICES FOR
MAINTAINING 
PATENCY
OF SURGICALLY

CREATED CHANNELS IN

TISSUE
	 
	 	 	 	 	 	 	 	 	 	 
	P-003-000

	 	Regular
	 	10/628,971
	 	07/28/03
	 	 	 	METHOD AND ASSEMBLY
FOR 
LUNG VOLUME
REDUCTION\n
	 
	 	 	 	 	 	 	 	 	 	 
	*****

	 	*****
	 	 	 	 	 	 	 	*****
	 
	 	 	 	 	 	 	 	 	 	 
	*****

	 	*****
	 	*****
	 	*****
	 	 	 	*****
	 
	 	 	 	 	 	 	 	 	 	 
	*****

	 	*****
	 	*****
	 	*****	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	*****

	 	*****
	 	*****
	 	*****	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.42

	 	European Patent
Convention
	 	11137361
	 	08/07/00	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.43

	 	Australia
	 	6530800
	 	08/07/00	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.44

	 	Canada
	 	2393898
	 	08/07/00	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.45

	 	Japan
	 	2001514843
	 	08/07/00	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.46

	 	Patent Cooperation

Treaty
	 	PCT/US03/12323
	 	04/21/03	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20032.47

	 	Patent Cooperation

Treaty
	 	PCT/US03/15609
	 	05/16/03	 	 	 	 

 ***** Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

	 	 	 	 	 	 	 	 	 	 	 
	Docket	 	 	 	Application	 	Application	 	Patent	 	 
	Number	 	Case Type	 	Number	 	Date	 	Number	 	Title
	43571-20033.40

	 	Patent Cooperation

Treaty
	 	PCT/US02/04610
	 	02/14/02	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20034.40

	 	Patent Cooperation

Treaty
	 	PCT/US02/28237
	 	09/04/02	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20035.40

	 	Patent Cooperation

Treaty
	 	PCT/US02/04612
	 	02/14/02	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20035.41

	 	Patent Cooperation

Treaty
	 	PCT/US03/04970
	 	02/21/03	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20035.42

	 	Patent Cooperation

Treaty
	 	PCT/US03/04971
	 	02/21/03	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20036.40

	 	Patent Cooperation

Treaty
	 	PCT/US02/04494
	 	02/14/02	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	43571-20038.40

	 	Patent Cooperation

Treaty
	 	PCT/US03/18182
	 	06/09/03	 	 	 	 

***** Certain portions of this exhibit have been omitted and confidential treatment has been
requested for these omitted portions pursuant to an application for confidential treatment sent to
the Securities and Exchange Commission.

 

 

Exhibit C

SUBLICENSE AGREEMENT

     THIS SUBLICENSE AGREEMENT (this “Agreement”) is made and entered into effective as of December
30, 2003 (the “Effective Date”) by and between Broncus Technologies, Inc., a California corporation
having its principal place of business at 1400 N. Shoreline Blvd., Bldg. A, Suite 8, Mountain View,
California 94303 (“Broncus”) and Asthmatx, Inc., a California corporation having its principal
place of business at 1340 Space Park Way, Mountain View, California 94043 (“Asthmatx”).

R E C I T A L S

     A. Broncus formed Asthmatx and, in exchange for the issuance to Broncus of all the outstanding
shares of Asthmatx’s capital stock, Broncus contributed to Asthmatx certain assets, properties,
technology and intellectual property pursuant to a Corporate Formation Agreement dated as of
December 26,, 2003 between Broncus and Asthmatx (the “Formation Agreement”). On December 30, 2003,
Broncus distributed all the outstanding shares of Asthmatx’s capital stock to the shareholders of
Broncus pursuant to a dividend that Broncus declared and paid to the Broncus shareholders.

     B. Broncus is a party to a certain License Agreement with Ntero Surgical, Inc. that is defined
herein as the Ntero License Agreement. Pursuant to the terms of a Cross License Agreement being
entered into by Broncus and Asthmatx concurrently herewith, the parties have agreed to enter into
this Agreement to set forth the terms and conditions on which Broncus will grant Asthmatx a
sublicense to certain license rights Broncus holds under its License Agreement with Ntero Surgical,
Inc.

     NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Broncus and Asthmatx hereby agree as follows:

1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall have the meanings
indicated below in this Section 1:

     1.1 “Affiliate” shall mean any entity that is Controlled by, Controls, or is under common
Control with Broncus or Asthmatx, as applicable.

     1.2 “Asthmatx Field” shall mean, and shall be limited to, the field consisting of devices and
procedures for providing asthma therapy.

     1.3 “Broncus Field” shall mean, and shall be limited to, the field consisting of devices and
procedures for providing emphysema therapy.

     1.4 “Control” (including “Controlled,” “Controls” and other forms) shall mean, as to an
entity, direct or indirect ownership of more than fifty percent (50%) of the voting interest in the
entity in question.

     1.5 “Ntero License Agreement” shall mean that certain License Agreement dated as of March 29,
2001 between Broncus and Ntero Surgical, Inc., a Delaware corporation (“Ntero”) pursuant to which
Ntero has licensed Broncus under certain patents and other technology owned by Ntero relating to
the use of thermal energy in modulating the healing response in biological tissues. A copy of the
Ntero License Agreement is attached hereto as Exhibit A.

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

 

 

     1.6 “Ntero Field” shall mean the diagnosis or treatment of lung disease.

     1.7 “Ntero Licensed Patents” shall mean the “Licensed Patents” as defined in the Ntero License
Agreement.

     1.8 “Ntero Licensed Product” means a “Licensed Product” as defined in the Ntero License
Agreement.

     1.9 “Ntero Technology” shall mean the “Ntero Technology” as that term is defined in the Ntero
License Agreement.

     1.10 “Asthmatx Net Sales” shall mean the gross amount billed or invoiced by Asthmatx and/or
any Affiliate of Asthmatx for the sale or other disposition of any Ntero Licensed Products
less the following deductions: (a) discounts, chargebacks, allowances for bad debts or
uncollectible amounts, Medicaid/Medicare rebates (other than as described in (d) below) and
allowances actually taken; (b) sales, use, value added and excise taxes, import and customs duties,
tariffs, and any other similar taxes, duties or tariffs, to the extent actually paid by the selling
party; (c) freight, insurance, packaging costs and other transportation charges to the extent added
to the sales price; and (d) amounts repaid or credits taken by reason of rejections, defects or
returns or because of retroactive price reductions or due to recalls or government laws or
regulations requiring rebates. “Asthmatx Net Sales” shall not include amounts for any Ntero
Licensed Product furnished to a third party for which payment is not intended to be received,
including, but not limited to, Ntero Licensed Products used in clinical trials and Ntero Licensed
Products distributed as promotional and free goods.

     Capitalized terms used in this Agreement and not otherwise defined herein will have the
meanings given to such terms in the Ntero License Agreement.

2. SUBLICENSE.

     2.1 Grant. Subject to all of the terms and conditions of the Ntero License Agreement and this
Agreement, to the fullest extent permitted under the Ntero License Agreement, Broncus hereby grants
to Asthmatx, a worldwide sublicense:

          (a) to use and practice the Ntero Technology solely within the Asthmatx Field (but only to the
extent that the Asthmatx Field is within the Ntero Field), including without limitation the right
to use, copy, modify, distribute, make derivative works of and otherwise exploit the Ntero
Technology within the Asthmatx Field to the extent it is within the Ntero Field; and

          (b) under the Ntero Licensed Patents to make, use, sell, distribute, offer to sell, import and
practice products and processes solely within the Asthmatx Field (but only to the extent that it is
within the Ntero Field);

provided however, that notwithstanding the foregoing, (a) in no event shall the
foregoing sublicense provide, or be deemed to provide, Asthmatx with any greater rights than
Broncus is entitled to grant by way of sublicense to Asthmatx under the Ntero License Agreement,
and (b) Asthmatx is not hereby granted any right or license to sublicense any of the rights which
it is granted under this Section 2.1. Asthmatx agrees not to exercise any rights with respect to
the Ntero Technology or any Ntero Licensed Patents that are not expressly sublicensed to Asthmatx
by Broncus under this Agreement.

     2.2 Duration of Sublicense. The foregoing sublicense shall remain in effect only for so long
as (a) Broncus is entitled under the terms of the Ntero License Agreement to grant such sublicense
to

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

2

 

Asthmatx and to keep such sublicense in effect; (b) the Ntero License Agreement and Broncus’
rights thereunder have not been terminated; and (c) neither this Agreement nor such sublicense has
been terminated pursuant to the provisions of Section 6.1.

     2.3 Retention of Rights. Notwithstanding anything herein to the contrary, the sublicense
granted by Broncus to Asthmatx under this Section 2 shall be non-exclusive and it is the agreement,
understanding and intention of the parties that nothing in this Agreement will modify, adversely
affect, restrict or limit Broncus’ right to exercise any and all of the license rights granted to
Broncus under the Ntero License Agreement. Except for the sublicense rights expressly granted by
Broncus to Asthmatx herein, nothing herein is intended to convey any right, title or interest in or
to the Ntero Technology or any of the Ntero Licensed Patents.

3. PAYMENT OF ROYALTIES TO BRONCUS.

     3.1 Royalty Obligation. As a material inducement and consideration to Broncus to grant the
sublicense to Asthmatx pursuant to Section 2, for so long as Broncus has any obligation to pay
royalties to Ntero under the Ntero License Agreement, Asthmatx shall pay to Broncus, with respect
to any Asthmatx Net Sales in such calendar quarter, the full amount payable by Broncus to Ntero
with respect to such Asthmatx Net Sales under the terms of the Ntero License Agreement. As of the
Effective Date, the amount payable by Broncus with respect to such Asthmatx Net Sales is:

          (a) in the event that the relevant Ntero Licensed Product performs the Primary Function (as
that term is defined in the Ntero License Agreement) but does not perform any other material
function, ***** percent (*****%) of the aggregate Asthmatx Net Sales of such Ntero Licensed Product;
and

          (b) in the event that a Ntero Licensed Product performs other material functions in addition
to the Primary Function (as that term is defined in the Ntero License Agreement), ***** percent
(*****%) of the aggregate Asthmatx Net Sales of such Ntero Licensed Product.

     3.2 Royalty Stacking; Credits. If Asthmatx is required (in Asthmatx’s good faith judgment) to
make any Third-Party Payment (as defined below) then such Third-Party Payment or Payments shall be
creditable against royalties otherwise owed by Asthmatx to Broncus under Section 3.1 to the extent
permitted by this Section 3.2; provided that in no one year shall such expenses be credited
by Asthmatx against more than ***** percent (*****%) of the royalty payments otherwise owed by
Asthmatx to Broncus under this Agreement. As used herein, the term “Third-Party Payment” means a
payment made by a party to this Agreement (including but not limited to, royalties or other license
fees) to one or more third parties to obtain a license or similar right, in the absence of which
such party could not legally make, import, use, sell or offer for sale Ntero Licensed Products.
The Ntero License Agreement provides that in no one year shall Third-Party Expenses be credited
against more than ***** percent (*****%) of the royalty payments otherwise owed to Ntero by Broncus.
Accordingly, as among themselves, Broncus and Asthmatx agree to allocate the right to receive a
credit for Third-Party Payments made by them (i) against royalties payable by Asthmatx under this
Agreement as provided herein (in the case of Asthmatx) and (ii) against royalties payable by
Broncus under the Ntero License Agreement (in the case of Broncus) so that, if Broncus and Asthmatx
have royalty obligations against which it can use such credits for Third-Party Payments and the
total amount of such Third-Party Payments by Asthmatx and Broncus exceeds the amount that can be
credited by Broncus against royalties under the Ntero License Agreement, the parties will allocate
such available credits pro rata according to the total amounts of their respective Third-Party
Payments; provided that Asthmatx may not credit Third-Party Payment in any one year against
more than ***** percent (*****%) of the royalty payments otherwise owed by Asthmatx to Broncus under
this Agreement.

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

3

 

     3.3 Payment Terms.

          (a) Time for Payment. Asthmatx shall pay all royalties due and payable on Asthmatx
Net Sales pursuant to this Section 3 within forty-five (45) days after the last day of each quarter
in which the applicable Asthmatx Net Sales underlying such royalties were billed or invoiced by
Asthmatx or an Affiliate of Asthmatx.

          (b) Payment Currency. All payments made by Asthmatx to Broncus under this Agreement
shall be made in United States dollars, and such payments shall be made by check or wire transfer
to one or more bank accounts to be designated in writing by Broncus. In the event that Ntero
Licensed Products are sold or licensed by Asthmatx in currencies other than United States dollars,
Asthmatx Net Sales shall be calculated by conversion of foreign currency to U.S. dollars at the
conversion rate existing in the United States (referencing the “U.S. dollar noon buying rates”, or
its equivalent, published in the Wall Street Journal) on the last working day of each period during
which royalties are calculated, net of applicable exchange related charges, or otherwise in
accordance with generally accepted accounting principles consistently applied.

          (c) Taxes. All applicable taxes levied on account of the royalties and other payments
accruing or made to Broncus pursuant to this Agreement, other than taxes on Broncus’ net income,
shall be paid by Asthmatx. If provision is made in law or regulation for withholding of taxes of
any type, levies or other charges with respect to any royalty or other amounts due and payable
under this Agreement by Asthmatx to Broncus, then Asthmatx shall be entitled to deduct such tax,
levy or charge from the royalty or other payment to be made by it and shall pay such tax, levy or
charge to the proper taxing authority. A receipt of payment of the tax, levy or charge shall be
promptly delivered to Broncus, together with copies of all pertinent communications from or with
such governmental authorities with respect thereto. At Broncus’ reasonable request and at
Asthmatx’s expense, Asthmatx shall reasonably assist Broncus in any effort by Broncus in claiming
any exemption from such deductions or withholdings under any double taxation or similar agreement
or treaty from time to time in force, and in minimizing the amount required to be so withheld or
deducted.

          (d) Records and Reports. All payments made to Broncus by Asthmatx hereunder shall be
accompanied by a written statement setting forth in reasonable detail the calculation thereof,
including the amount of any credits Asthmatx claims for Third-Party Payments pursuant to Section
3.2 (in which case Asthmatx shall provide Broncus with reasonable written verification of such
Third-Party Payments). Asthmatx shall maintain complete and accurate records sufficient to enable
accurate calculation of royalties and other payments due to Broncus hereunder. Asthmatx shall
preserve such records and books of account for a period of three (3) years after the end of the
period covered by such records and books of account, which obligation shall survive expiration or
termination of this Agreement.

     3.4 Audit Rights. Asthmatx shall permit an independent public accountant designated by
Broncus and reasonably acceptable to Asthmatx, to have access, no more than once in each calendar
year during the term of this Agreement and no more than twice during the three (3) calendar years
following the expiration or termination of Asthmatx’s royalty obligations hereunder, during regular
business hours and upon at least ten (10) days prior written notice, to Asthmatx’s records and
books relating to royalties payable hereunder, for the purpose of determining the accuracy of
Asthmatx Net Sales reported, and royalty payments made, by Asthmatx to Broncus within the one (1)
year period immediately preceding such an audit. The independent public accountant shall be under
a confidentiality obligation to Asthmatx to disclose to Broncus only (a) the accuracy of Asthmatx
Net Sales reported and the basis for royalty payments made to Broncus under this Agreement, and (b)
the difference, if any, by which such reported and paid amounts vary from amounts determined as a
result of the audit. If such examination results in a determination that Asthmatx Net Sales or
royalty payments have been understated or overstated, unpaid

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

4

 

amounts or refund of overstatement due shall be paid promptly. The fees and expenses of such
accountant shall be paid by Broncus, unless the accountant’s examination results in a determination
that Asthmatx Net Sales have been understated, or that payments have been underpaid, by more than
ten percent (10%) for the period examined, in which case Asthmatx shall pay all reasonable costs
and expenses incurred by Broncus in the course of making such determination, including the fees and
expenses of such accountant.

     3.5 Intent. The parties acknowledge and agree that under the terms of the Ntero License
Agreement, Broncus has certain obligations to pay royalties to Ntero with respect to Asthmatx Net
Sales, and therefore it is important to Broncus that Asthmatx correctly compute, and timely pay to
Broncus, the royalties payable by Asthmatx under this Agreement.

4. ASTHMATX COMPLIANCE AND INDEMNIFICATION.

     4.1 Compliance. Asthmatx acknowledges and agrees that it has received and reviewed a true
copy of the Ntero License Agreement. Asthmatx hereby agrees with Broncus not to take any action or
omit to take any action, that would cause, or result in, a breach, violation or default by Broncus
under the Ntero License Agreement.

     4.2 Indemnification. As a material inducement to Broncus to grant the sublicense granted
under Section 2.1 of this Agreement, Asthmatx hereby agrees, as Asthmatx’s expense, to defend
Broncus, its directors, officers, employees, and agents, against all third party claims, demands,
damages, liabilities, losses, costs and expenses, including without limitation attorney’s fees
(“Claims’) resulting from or arising out of: (a) any breach or violation by Asthmatx of its
obligations under Section 2 hereof or Sections 3.1 through 3.3 above, (b) any act or omission by
Asthmatx that causes, or results in, a breach, violation or default by Broncus under the Ntero
License Agreement; and/or (c) the development, testing, manufacture, use, sale, offer for sale,
license, importation, exportation, storage, handling, transportation, marketing, distribution or
any other disposition of any Ntero Licensed Product by Asthmatx or any Affiliate of Asthmatx;
provided, however, that Asthmtax’s indemnification obligations under the preceding
clause (c) of this Section 4.2 shall not apply to the extent that any such Claim results from or
arises out of any claim that the Ntero Technology infringes or misappropriates the intellectual
property rights of a third party or results from or arises out of any breach by Ntero of any of
Ntero’s representations, warranties or covenants to Broncus under the Ntero License Agreement
(collectively “Excluded Claims”). Asthmatx will pay any liability, damage, loss or expenses
(including reasonable attorneys’ fees and court costs) imposed upon Broncus in any judgment, award
or settlement attributable to a Claim for which Asthmatx has agreed to indemnify Broncus under this
Section 4.2 except for Excluded Claims.

     4.3 Indemnification Procedure. For purposes of Section 4.2 above, Broncus shall give prompt
written notice to Asthmatx of any Claims for which indemnification may be required under Section
4.2; provided, however, that failure to give such notice shall not relieve Asthmatx
of its obligation to provide indemnification hereunder except, if and to the extent that such
failure materially and adversely affects the ability of Asthmatx to defend the applicable Claim.
Asthmatx shall be entitled to assume the defense and control of any such Claim for which it is
obligated to provide indemnification hereunder at its own cost and expense; provided,
however, that Broncus shall have the right to be represented by its own counsel at its own
cost in connection with the defense of such Claim. Neither Asthmatx nor Broncus shall settle or
dispose of any such Claim in any manner which would adversely affect the rights or interests of the
other party (including the obligation to indemnify hereunder) without the prior written consent of
the other party, which shall not be unreasonably withheld or delayed. Each party shall cooperate
with the other party and its counsel in the course of the defense of any such suit, claim or

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

5

 

demand, such cooperation to include without limitation using reasonable efforts to provide or
make available documents, information and witnesses.

5. COOPERATION AND OTHER MATTERS.

     5.1 Generally. Asthmatx agrees that it will in good faith exercise reasonable efforts to
cooperate with Broncus so that actions taken by Asthmatx pursuant to Section 2 of this Agreement,
will not result in breaches or violations by Broncus of the Ntero License Agreement and will not
result in Claims by Ntero against Broncus under the Ntero License Agreement.

     5.2 Confidentiality. Asthmatx agrees to comply with and faithfully observe and perform, all
of the provisions of Section 10 of the Ntero License Agreement regarding confidential information.

     5.3 Patent Enforcement. Asthmatx will notify Broncus promptly in writing of any infringement
of any Ntero Licensed Patent by a third party in the Ntero Field which becomes known to Asthmatx
and shall cooperate in any suit, proceeding or dispute involving the infringement of any Licensed
Patent to the same extent Broncus is required to do so under Section 6.4 of the Ntero License
Agreement. Nothing in this Agreement will obligate Broncus or Ntero to initiate or maintain any
infringement action or other suit or proceeding with respect to any Ntero Licensed Patent or other
Ntero Technology.

     5.4 Broncus Improvements. Without limiting Asthmatx’s obligations under Sections 4.1 and 5.1
above, in the event that any technology, assets, invention, copyright, trade secret, proprietary
information or other asset owned by Asthmatx on the Effective Date constitutes a “Broncus
Improvement” (as defined in the Ntero License Agreement), then Asthmatx shall cooperate with
Broncus and grant to Ntero the license rights with respect thereto as provided in, and subject to
the terms of, Section 5 of the Ntero License Agreement.

     5.5 Abandoned Patents. Broncus shall promptly notify Asthmatx of any notice Broncus receives
from Ntero with respect to “Abandoned Patents” (as that term is defined in Section 6 of the Ntero
License Agreement). If Broncus declines to take any action to file for, prosecute or maintain any
such Abandoned Patent, then, to the extent permitted by the Ntero License Agreement, if Asthmatx
requests Broncus in writing to do so, Broncus shall, at Asthmatx’s sole cost and expense, take
action to file for, prosecute and maintain such Abandoned Patent, but Broncus shall have no
obligation to incur any cost, expense or liability in connection therewith and may cease any
activity to file for, prosecute or maintain any Abandoned Patent if Asthmatx does not timely pay in
full all costs (such as, without limitation, filing fees, attorneys’ fees and maintenance fees)
associated therewith.

     5.6 Joint Patents. Broncus shall have no obligation whatsoever to Asthmatx to file, prosecute
or maintain any Joint Patent (as that term is defined in Section 6 of the Ntero License Agreement)
and Asthmatx acknowledges that it shall have no rights with respect to any Joint Patent.

6. TERMINATION.

     6.1 Termination of Agreement and Sublicense. If Asthmatx materially breaches any of its
obligations, duties or covenants under this Agreement, then Broncus may give Asthmatx written
notice of such breach, setting forth the nature of the breach in reasonable detail. If Asthmatx
fails to cure such breach within thirty (30) days of its receipt of such notice from Broncus, then
Broncus may terminate this Agreement and the sublicense granted to Asthmatx under Section 2
effective immediately upon giving Asthmatx a written notice of such termination.

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

6

 

     6.2 Effect of Termination. Termination of this Agreement and/or Asthmatx’s sublicense
granted under Section 2.1 shall not release or relieve Asthmatx from any obligation it has accrued
under this Agreement (including but not limited to obligations to pay to Broncus any amount which
became due and payable under this Agreement prior to such termination, such as royalties payable by
Asthmatx under Section 3) or Asthmatx’s obligations to defend and indemnify Broncus under Section
4.2.

7. MISCELLANEOUS

     7.1 Governing Law. This Agreement shall be governed by, and construed and interpreted, in
accordance with the internal laws of the State of California without giving effect to any choice of
law rule that would cause the application of the laws of any jurisdiction other than the internal
laws of the State of California to the rights and duties of the parties.

     7.2 Further Assurances. From time to time on and after the Effective Date, each party shall
at the reasonable request of the other party (a) deliver to such other party such records, data or
other documents consistent with the provisions of this Agreement, (b) execute, and deliver or cause
to be delivered, all such assignments, consents, documents or further instruments of transfer or
license, and (c) take or cause to be taken all such other actions, as such other party may
reasonably deem necessary or desirable in order for such party to obtain the full benefits of this
Agreement and the transactions contemplated thereby.

     7.3 Limitation of Liability. EXCEPT WITH RESPECT TO ASTHMATX’S INDEMNIFICATION OBLIGATIONS
UNDER SECTION 4.2 AND ASTHMATX’S CONFIDENTIALITY OBLIGATIONS UNDER SECTION 5.2, IN NO EVENT SHALL
EITHER PARTY BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, PUNITIVE OR SPECIAL DAMAGES OF THE
OTHER PARTY ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF
LIABILITY.

     7.4 Force Majeure. Neither party shall be held responsible for any delay or failure in
performance hereunder caused by strikes, embargoes, unexpected government requirements, civil or
military authorities, acts of God, earthquake, or by the public enemy or other causes reasonably
beyond such party’s control and without such party’s fault or negligence; provided that the
affected party notifies the unaffected party as soon as reasonably possible, and resumes
performance hereunder as soon as reasonably possible following cessation of such force majeure
event.

     7.5 Notices. Any notice, report, communication or consent required or permitted by this
Agreement shall be in writing and shall be sent (a) by prepaid registered or certified mail, return
receipt requested, (b) by overnight express delivery service by a nationally recognized courier, or
(c) via confirmed facsimile or telecopy, followed within five (5) days by a copy mailed in the
preceding manner, addressed to the other party at the address shown below or at such other address
for which such party gives notice hereunder. Such notice will be deemed to have been given when
delivered or, if delivery is not accomplished by some fault of the addressee, when tendered.

     If to Broncus:

Broncus Technologies, Inc.

1400 N. Shoreline Blvd.

Bldg. A, Suite 8

Mountain View, CA 94043

Facsimile: (650) 428-1542

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

7

 

If to Asthmatx:

Asthmatx, Inc.

1340 Space Park Way.

Mountain View, CA 94043

Facsimile: (650) 810-1112

     7.6 Modification; Waiver. This Agreement may not be altered, amended or modified in any way
except by a writing signed by both parties. The failure of a party to enforce any rights or
provisions of the Agreement shall not be construed to be a waiver of such rights or provisions, or
a waiver by such party to thereafter enforce such rights or provision or any other rights or
provisions hereunder. No waiver shall be effective unless made in writing and signed by the
waiving party.

     7.7 Severability. If any provision of any article of this Agreement shall be found by a court
to be void, invalid or unenforceable, the same shall be reformed to comply with applicable law or
stricken if not so conformable, so as not to affect the validity or enforceability of this
Agreement; provided that no such reformation or striking shall be effective if the result
materially changes the economic benefit of this Agreement to either Broncus or Asthmatx. In the
event that any provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be void, invalid or unenforceable, and reformation or striking of such provision
would materially change the economic benefit of this Agreement to either Broncus or Asthmatx, then
Broncus and Asthmatx shall modify such provision in accordance with this Section 7.7 to obtain a
legal, valid and enforceable provision and provide an economic benefit to Broncus and Asthmatx that
most nearly effects Broncus’ and Asthmatx’ intent on entering into this Agreement.

     7.8 Entire Agreement. The parties hereto acknowledge that this Agreement, together with the
exhibit attached hereto, sets forth the entire agreement and understanding of the parties hereto as
to the subject matter hereof, and supersedes all prior and contemporaneous discussions, agreements
and writings in respect hereto.

     7.9 Headings. The article, section and paragraph headings contained herein are for the
purposes of convenience only and are not intended to define or limit the contents of the articles,
sections or paragraphs to which such headings apply.

     7.10 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one instrument.

     IN WITNESS WHEREOF, Broncus and Asthmatx have each executed this Sublicense Agreement by their
respective duly authorized representatives.

	 	 	 	 	 	 	 	 	 	 	 
	ASTHMATX, INC	 	 	 	BRONCUS TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Glen French, Chief Executive Officer
	 	 	 	 	 	Cary Cole, President	 	 

Attachment:

			
	Exhibit A:	 	Ntero License Agreement

*****   Certain
portions of this exhibit have been omitted and confidential treatment
has been requested for these omitted portions pursuant to an
application for confidential treatment sent to the Securities and
Exchange Commission.

8exv10w0

 

Exhibit 10.0

CREDIT AGREEMENT

          This CREDIT AGREEMENT dated as of July 31, 2006 (this “Agreement”), is entered into by
and among Reliance Steel & Aluminum Co., a California corporation (“RSA”), RSAC Management
Corp., a California corporation (“RSAC Management” and together with RSA, jointly and
severally, “Borrowers” and individually, a “Borrower”), and Bank of America, N.A.
(the “Lender”).

          A. The Borrowers, Bank of America, N.A., as Administrative Agent, and certain lenders are
party to a Credit Agreement dated as of June 13, 2005, as amended by a First Amendment dated as of
February 16, 2006 (such Credit Agreement as so amended and to the extent further amended modified
or waived with the consent of the Lender, the “Syndicated Agreement”) pursuant to which
such lenders have agreed to extend credit to the Borrowers

          B. At the request of the Borrowers, Bank of America, N.A., as the Lender under this
Agreement, has agreed to provide another credit facility to the Borrowers on the terms and subject
to the conditions contained in this Agreement.

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

Section 1

INCORPORATION BY REFERENCE

          1.1 Incorporation by Reference. Except as otherwise expressly provided in this
Agreement, all of the definitions, provisions, representations, warranties, covenants, defaults,
miscellaneous terms and other terms and conditions contained in the Syndicated Agreement are
incorporated herein by reference as though set forth at length, where:

               (a) Those terms that are superfluous to a bi-lateral agreement between the Lender and the
Borrowers whereby Loans are made by the Lender to the Borrowers are disregarded;

               (b) “Administrative Agent” is construed as the Lender hereunder;

               (c) To the extent that the context shall require, terms their correlative meanings, with such
modifications thereto as shall be necessary or appropriate, to give effect thereto in the context
of this Agreement;

               (d) Each reference to “hereof,” “hereunder”, “herein”, “hereby” and other similar reference
and each reference to “this Agreement” and each other similar referenced contained in the
Syndicated Agreement shall, in the context of this Agreement, refer to this Agreement;

1

 

               (e) This Agreement shall not modify or have any effect on the Syndicated Agreement.

Section 2

AMENDMENTS TO INCORPORATED TERMS 

          2.1 Definitions. The definitions of the following terms that have been incorporated
herein by reference are amended to read as follows:

     “‘Availability Period’ means the period commencing on the Closing Date and
ending on the day before the Maturity Date.

     “‘Closing Date’ means the time and Business Day on which the conditions set
forth in Section 3.1 of this Agreement are satisfied or waived. The Lender shall
notify Borrowers of the date that is the Closing Date.

     “‘Commitment’ means $100,000,000.

     “‘Loan Documents’ means this Agreement, each note issued hereunder, the Master
Subsidiary Guaranty, and each document, instrument and agreement executed or delivered in
connection herewith and therewith.

     “‘Master Subsidiary Guaranty’ means a guaranty of the Obligations, executed by
the Guarantor s substantially in the form of Exhibit A.

     “‘Maturity Date’ means July 30, 2007.

     “‘Obligations’ means all present and future obligations of every kind or nature
of Borrowers or any Borrower Party at any time and from time to time owed to the Lender, any
Person entitled to indemnification, or any one or more of them, under any one or more of the
Loan Documents, whether due or to become due, matured or to become mature, liquidated or
unliquidated, or contingent or actual, including obligations of performance as well as
obligations of payment, and including interest that accrues after the commencement of any
proceeding under any Debtor Relief Law by or against Borrowers or any Subsidiary or
Affiliate of Borrowers.”

          2.2 Commitment, Interest, Fees and Payment Procedures. Section 2 of the Credit
Agreement which has been incorporated herein by reference is amended to read as follows:

     “2.1 Committed Loans.

     (a) Subject to the terms and conditions set forth in this Agreement, the Lender agrees,
to make, Convert and Continue Committed Loans during the Availability Period as Borrowers
may request; provided, however, that after giving effect to any Borrowing,
the aggregate Outstanding Amount under this Agreement shall not exceed the Commitment.
Subject to the foregoing and other terms and conditions hereof, Borrowers
may borrow, Convert, Continue, prepay and reborrow Loans as set forth herein without
premium or penalty.

2

 

     (b) Loans made by the Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. Upon the request of the
Lender, its Loans may be evidenced by one or more notes, instead of or in addition to loan
accounts. (The Lender may endorse on the schedules annexed to its note(s) the date, amount
and maturity of Loans and payments with respect thereto. Such loan accounts, records or
note(s) shall be conclusive absent manifest error of the amount of such Loans and payments
thereon. Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of Borrowers to pay any amount owing with respect to the
Loans.

     (c) The Lender’s obligations under this Agreement and the Commitment hereunder shall
not affect the Lender’s Commitment under the Syndicated Agreement.”

     “2.2 Borrowings, Conversions and Continuations of Committed Loans.

     (a) Borrowers may irrevocably request a Borrowing, Conversion or Continuation of
Committed Loans in a Minimum Amount therefor by delivering a duly completed Request for
Extension of Credit therefor by Requisite Notice to the Lender not later than the Requisite
Time therefor. All Borrowings, Conversions or Continuations shall constitute Base Rate
Loans unless properly and timely otherwise designated as set forth in the preceding
sentence.

     (b) Unless the Lender otherwise agrees, Loans with no more than ten different Interest
Periods shall be outstanding at any one time.

     (c) No Loans other than Base Rate Loans may be requested or continued during the
existence of an Event of Default. During the existence of an Event of Default, the Lender
may determine that any or all of the then outstanding Committed Loans under this Agreement
other than Base Rate Loans shall be Converted to Base Rate Loans. Such Conversion shall be
effective upon notice to Borrowers from the Lender and shall continue so long as such Event
of Default continues to exist.

     (d) If a Loan is to be made on the same date that another Loan is due and payable,
Borrowers or the Lender, as the case may be, shall make available to the other the net
amount of funds giving effect to both such Loans and the effect for purposes of this
Agreement shall be the same as if separate transfers of funds had been made with respect to
each such Loan.”

     “2.3 Prepayments.

     (a) Upon Requisite Notice to the Lender not later than the Requisite Time therefor,
Borrowers may at any time and from time to time voluntarily prepay Committed Loans in the
Minimum Amount therefor.

3

 

     (b) If for any reason the Outstanding Amount exceeds the Commitments as in effect or as
reduced or because of any limitation set forth in this Agreement or otherwise, Borrowers
shall immediately prepay Loans in an aggregate amount equal to such excess.

     (c) Any prepayment of a Loan other than a Base Rate Loan shall be accompanied by all
accrued interest thereon, together with the costs set forth in Section 3.6 of the
Syndicated Agreement.”

     “2.4 Voluntary Reduction or Termination of Commitments. Upon Requisite Notice
to the Lender not later than the Requisite Time therefor, Borrowers shall have the right, at
any time and from time to time, without penalty or charge, to permanently and irrevocably
reduce the Commitment in a Minimum Amount therefor, or terminate the then unused portion of
the Commitment, provided, that Borrowers shall not terminate or reduce the
Commitments if, after giving effect thereto and any concurrent prepayment hereunder, the
Outstanding Amount would exceed the Aggregate Commitment; provided further,
that any such reduction or termination shall be accompanied by payment of all accrued and
unpaid commitment fees with respect to the portion of the Commitment being reduced or
terminated.”

     “2.5 Principal and Interest.

     (a) If not sooner paid, Borrowers shall pay, and jointly and severally agree to pay,
the outstanding principal amount of each Committed Loan on the Maturity Date.

     (b) Subject to subsection (c), Borrowers jointly and severally agree to pay interest on
the unpaid principal amount of the Loans (before and after default, before and after
maturity, before and after judgment, and before and after the commencement of any proceeding
under any Debtor Relief Law) from the date borrowed until paid in full (whether by
acceleration or otherwise) on each Interest Payment Date for each type of Loan at a rate per
annum equal to the applicable interest rate determined in accordance with the definition
thereof, plus, if applicable, Applicable Margin.

     (c) If any amount payable by Borrowers under any Loan Document is not paid when due
(without regard to any applicable grace periods), it shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws. Upon the request of the Lender, while any Event of
Default exists, Borrowers shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Accrued and unpaid
interest on past due amounts including, without limitation, interest on past due interest
shall be compounded monthly, on the last day of each calendar month, to the fullest extent
permitted by applicable Laws and payable upon demand.”

     “2.6 Fees. Borrowers jointly and severally agree to pay to the Lender a
commitment fee equal to the Applicable Margin times the actual daily amount by which the
Commitment exceeds the Outstanding Amount. The commitment fee shall accrue at

4

 

all times from the Closing Date until the Maturity Date and shall be payable quarterly
in arrears on the last Business Day of each Quarterly Payment Date. The commitment fee
shall be calculated quarterly in arrears, and if there is any change in the Applicable
Margin during any quarter, the actual daily amount shall be computed and multiplied by the
Applicable Margin separately for each period during such quarter that such Applicable Margin
was in effect. The commitment fee shall accrue at all times, including at any time during
which one or more conditions in Section 4 of the Syndicated Agreement are not met.”

     “2.7 Computation of Interest and Fees. Computation of interest on Base Rate
Loans shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and
the actual number of days elapsed; computation of interest on all other types of Loans and
all fees under this Agreement shall be calculated on the basis of a year of 360 days and the
actual number of days elapsed, which results in a higher yield to the Lender than a method
based on a year of 365 or 366 days. Interest shall accrue on each Loan for the day on which
the Loan is made; interest shall not accrue on a Loan, or any portion thereof, for the day
on which the Loan or such portion is paid. Any Loan that is repaid on the same day on which
it is made shall bear interest for one day. Notwithstanding anything in this Agreement to
the contrary, interest in excess of the maximum amount permitted by applicable Laws shall
not accrue or be payable hereunder, and any amount paid as interest hereunder which would
otherwise be in excess of such maximum permitted amount shall instead be treated as a
payment of principal.”

     “2.8 Manner and Treatment of Payments among Borrowers.

     (a) All payments to be made by Borrowers shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided
herein, all payments by Borrowers shall be made to the Lender at its Lending Office not
later than the Requisite Time for such type of payment in Dollars in immediately available
funds. All payments received after such Requisite Time shall be deemed received on the next
succeeding Business Day. All payments shall be made in immediately available funds in
lawful money of the United States of America.

     (b) Subject to the definition of “Interest Period,” if any payment to be made by
Borrowers or any other Borrower Party shall come due on a day other than a Business Day,
payment shall instead be considered due on the next succeeding Business Day and the
extension of time shall be reflected in computing interest and fees.”

     “2.9 Funding Sources. Nothing in this Agreement shall be deemed to obligate
the Lender to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by the Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.”

     “2.10 Automatic Deduction. On each date when the payment of any principal,
interest or fees are due hereunder, Borrowers agree to maintain on deposit in an ordinary
checking account maintained by Borrowers with the Lender (as such account shall be

5

 

designated by Borrowers in a written notice to the Lender from time to time, the
‘Borrowers Account’) an amount sufficient to pay such principal, interest or fees in
full. Borrowers hereby authorize the Lender (i) to deduct automatically all interest or
fees when due hereunder from the Borrowers Account, and (ii) if and to the extent any
payment under this Agreement or any other Loan Document is not made when due, to deduct
automatically any such amount from any or all of the accounts of Borrowers maintained with
the Lender. The Lender agrees to provide timely notice to Borrowers of any automatic
deduction made pursuant to this Section 2.12 of the Syndicated Agreement.”

          2.3 Events of Default. Immediately after Section 8.1(k) of the Syndicated Agreement, which
has been incorporated herein by reference, a new Event of Default is added to this Agreement to
read as follows:

“(l) An Event of Default shall occur under, and as defined in, the Syndicated Agreement.”

Section 3

CONDITIONS

          3.1 Additional Conditions to Making Loans Under This Agreement. In addition to the
conditions incorporated into this Agreement by reference, the obligation of the Lender to make the
initial Loan to be made by it under this Agreement is subject to the following conditions
precedent, each of which shall be satisfied prior to the making of the initial Loan:

               (a) The Lender shall have received all of the following, each of which shall be originals
unless otherwise specified, each properly executed by a Responsible Officer of each Borrower
(except in the case of the Master Subsidiary Guaranty under subsection (ii)), each dated as of
the Closing Date or, in the case of the documents required under subsection (iv) below, as of a
recent date, and each in form and substance satisfactory to the Lender and its legal counsel,
unless otherwise agreed by the Lender:

          (i) at least one executed counterpart of this Agreement, together with
arrangements satisfactory to the Lender;

          (ii) the Master Subsidiary Guaranty executed by each Guarantor;

          (iii) an Opinion of Counsel; and

          (iv) a copy, certified to be true, of the resolutions or other
authorizing documents of the Borrowers and each Guarantor in form and
substance satisfactory to the Lender and authorizing the execution, delivery
and performance of this Agreement and the other Loan Documents pursuant
hereto together with good standing certificates from the state where each
such Person is organized.

6

 

               (b) Any fees required to be paid on or before the Closing Date shall have been paid.

               (c) Attorney Costs of the Lender to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of Attorney Costs as shall constitute Lender’s reasonable estimate
of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided
that such estimate shall not hereafter preclude final settling of accounts between Borrowers and
Lender) shall have been paid.

               (d) The representations and warranties of Borrowers contained in Section 5 of the
Syndicated Agreement, as in effect as of the date hereof and as incorporated herein by
reference, shall be true and correct.

               (e) Borrowers and any other Borrower Parties shall be in compliance with all the terms and
provisions of the Loan Documents, and no Default or Event of Default shall have occurred and be
continuing under this Agreement or the Syndicated Agreement.

Section 4

MISCELLANEOUS

          4.1 Governing Law; Jurisdiction; Etc.

               (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.

               (b) SUBMISSION TO JURISDICTION. EACH BORROWER AND EACH OTHER BORROWER PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA SITTING IN LOS ANGELES COUNTY AND OF THE
UNITED STATES DISTRICT COURT OF THE CENTRAL DISTRICT, AND ANY APPELLATE COURT FROM ANY THEREOF,
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH CALIFORNIA STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST EITHER
BORROWER OR ANY OTHER BORROWER PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

7

 

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

               (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.2 OF THE SYNDICATED AGREEMENT.
NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

          4.2 Waiver of Jury Trial.

               (a) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (1) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (2) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

               (b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT TO THE
CONTRARY, IF THE FOREGOING IRREVOCABLE WAIVER OF ALL RIGHT TO TRIAL BY JURY IS RULED
INVALID BY A COURT OF LAW, THEN ANY CONTROVERSIES OR CLAIMS BETWEEN THE PARTIES, WHETHER
ARISING IN CONTRACT, TORT OR BY STATUTE, INCLUDING BUT NOT LIMITED TO CONTROVERSIES OR CLAIMS
THAT ARISE OUT OF OR RELATE TO: (1) THIS AGREEMENT (INCLUDING ANY RENEWALS, EXTENSIONS OR
MODIFICATIONS); OR (2) ANY DOCUMENT RELATED TO THIS

8

 

AGREEMENT (COLLECTIVELY A “CLAIM”) SHALL AT THE REQUEST OF ANY PARTY BE DETERMINED BY
BINDING ARBITRATION. FOR THE PURPOSES OF THIS ARBITRATION PROVISION ONLY, THE TERM “PARTIES”
SHALL INCLUDE ANY PARENT CORPORATION, SUBSIDIARY OR AFFILIATE OF THE LENDER INVOLVED IN THE
SERVICING, MANAGEMENT OR ADMINISTRATION OF ANY OBLIGATION DESCRIBED OR EVIDENCED BY THIS
AGREEMENT.

               (c) AT THE REQUEST OF ANY PARTY TO THIS AGREEMENT, ANY CLAIM SHALL BE RESOLVED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (TITLE 9, U.S. CODE) (THE “ACT”).
THE ACT WILL APPLY EVEN THOUGH THIS AGREEMENT PROVIDES THAT IT IS GOVERNED BY THE LAW OF A
SPECIFIED STATE. THE ARBITRATION WILL TAKE PLACE ON AN INDIVIDUAL BASIS WITHOUT RESORT TO ANY
FORM OF CLASS ACTION.

               (d) ARBITRATION PROCEEDINGS WILL BE DETERMINED IN ACCORDANCE WITH THE ACT, THE THEN-CURRENT
RULES AND PROCEDURES FOR THE ARBITRATION OF FINANCIAL SERVICES DISPUTES OF THE AMERICAN
ARBITRATION ASSOCIATION OR ANY SUCCESSOR THEREOF (“AAA”), AND THE TERMS OF THIS SECTION. IN THE
EVENT OF ANY INCONSISTENCY, THE TERMS OF THIS SECTION SHALL CONTROL. IF AAA IS UNWILLING OR
UNABLE TO (1) SERVE AS THE PROVIDER OF ARBITRATION OR (2) ENFORCE ANY PROVISION OF THIS
ARBITRATION CLAUSE, ANY PARTY TO THIS AGREEMENT MAY SUBSTITUTE ANOTHER ARBITRATION ORGANIZATION
WITH SIMILAR PROCEDURES TO SERVE AS THE PROVIDER OF ARBITRATION.

               (e) THE ARBITRATION SHALL BE ADMINISTERED BY AAA AND CONDUCTED, UNLESS OTHERWISE REQUIRED
BY LAW, IN ANY U.S. STATE WHERE REAL OR TANGIBLE PERSONAL PROPERTY COLLATERAL FOR THIS CREDIT IS
LOCATED OR IF THERE IS NO SUCH COLLATERAL, IN THE STATE SPECIFIED IN THE GOVERNING LAW SECTION
OF THIS AGREEMENT. ALL CLAIMS SHALL BE DETERMINED BY ONE ARBITRATOR; HOWEVER, IF CLAIMS EXCEED
FIVE MILLION DOLLARS ($5,000,000), UPON THE REQUEST OF ANY PARTY, THE CLAIMS SHALL BE DECIDED BY
THREE ARBITRATORS. ALL ARBITRATION HEARINGS SHALL COMMENCE WITHIN NINETY (90) DAYS OF THE
DEMAND FOR ARBITRATION AND CLOSE WITHIN NINETY (90) DAYS OF COMMENCEMENT AND THE AWARD OF THE
ARBITRATOR(S) SHALL BE ISSUED WITHIN THIRTY (30) DAYS OF THE CLOSE OF THE HEARING. HOWEVER, THE
ARBITRATOR(S), UPON A SHOWING OF GOOD CAUSE, MAY EXTEND THE COMMENCEMENT OF THE HEARING FOR UP
TO AN ADDITIONAL SIXTY (60) DAYS. THE ARBITRATOR(S) SHALL PROVIDE A CONCISE WRITTEN STATEMENT
OF REASONS FOR THE AWARD. THE ARBITRATION AWARD MAY BE SUBMITTED TO ANY COURT HAVING
JURISDICTION TO BE CONFIRMED, JUDGMENT ENTERED AND ENFORCED.

9

 

               (f) THE ARBITRATOR(S) WILL GIVE EFFECT TO STATUTES OF LIMITATION IN DETERMINING ANY CLAIM
AND MAY DISMISS THE ARBITRATION ON THE BASIS THAT THE CLAIM IS BARRED. FOR PURPOSES OF THE
APPLICATION OF THE STATUTE OF LIMITATIONS, THE SERVICE ON AAA UNDER APPLICABLE AAA RULES OF A
NOTICE OF CLAIM IS THE EQUIVALENT OF THE FILING OF A LAWSUIT. ANY DISPUTE CONCERNING THIS
ARBITRATION PROVISION OR WHETHER A CLAIM IS ARBITRABLE SHALL BE DETERMINED BY THE ARBITRATOR(S).
THE ARBITRATOR(S) SHALL HAVE THE POWER TO AWARD LEGAL FEES PURSUANT TO THE TERMS OF THIS
AGREEMENT.

               (g) THIS SECTION DOES NOT LIMIT THE RIGHT OF ANY PARTY TO: (1) EXERCISE SELF-HELP REMEDIES,
SUCH AS BUT NOT LIMITED TO, SETOFF; (2) INITIATE JUDICIAL OR NON-JUDICIAL FORECLOSURE AGAINST
ANY REAL OR PERSONAL PROPERTY COLLATERAL (IF ANY); (3) EXERCISE ANY JUDICIAL OR POWER OF SALE
RIGHTS, OR (4) ACT IN A COURT OF LAW TO OBTAIN AN INTERIM REMEDY, SUCH AS BUT NOT LIMITED TO,
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR APPOINTMENT OF A RECEIVER, OR ADDITIONAL OR
SUPPLEMENTARY REMEDIES.

               (h) THE PROCEDURE DESCRIBED ABOVE WILL NOT APPLY IF THE CLAIM, AT THE TIME OF THE PROPOSED
SUBMISSION TO ARBITRATION, ARISES FROM OR RELATES TO AN OBLIGATION TO THE LENDER SECURED BY REAL
PROPERTY. IN THIS CASE, ALL OF THE PARTIES TO THIS AGREEMENT MUST CONSENT TO SUBMISSION OF THE
CLAIM TO ARBITRATION. IF ALL SUCH PARTIES DO NOT CONSENT TO ARBITRATION, THE CLAIM WILL BE
RESOLVED AS FOLLOWS: THE PARTIES WILL DESIGNATE A REFEREE (OR A PANEL OF REFEREES) SELECTED
UNDER THE AUSPICES OF AAA IN THE SAME MANNER AS ARBITRATORS ARE SELECTED IN AAA ADMINISTERED
PROCEEDINGS. THE DESIGNATED REFEREE(S) WILL BE APPOINTED BY A COURT AS PROVIDED IN CALIFORNIA
CODE OF CIVIL PROCEDURE SECTION 638 AND THE FOLLOWING RELATED SECTIONS. THE REFEREE (OR
PRESIDING REFEREE OF THE PANEL) WILL BE AN ACTIVE ATTORNEY OR A RETIRED JUDGE. THE AWARD THAT
RESULTS FROM THE DECISION OF THE REFEREE(S) WILL BE ENTERED AS A JUDGMENT IN THE COURT THAT
APPOINTED THE REFEREE, IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE
SECTIONS 644 AND 645.

               (i) THE FILING OF A COURT ACTION IS NOT INTENDED TO CONSTITUTE A WAIVER OF THE RIGHT OF ANY
PARTY, INCLUDING THE SUING PARTY, THEREAFTER TO REQUIRE SUBMITTAL OF THE CLAIM TO ARBITRATION.

10

 

          4.3 USA PATRIOT Act Notice. The Lender hereby notifies each Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies either Borrower, which information includes the name and address of
such Borrower and other information that will allow the Lender to identify such Borrower in
accordance with the Act.

          4.4 Surety Waivers. In the event that either Borrower is deemed to be a guarantor or
a surety with respect to the Obligations under this Agreement, then such Borrower shall be deemed
to have agreed to the provisions of Sections 7 and 8 of the Master Subsidiary Guaranty.

[Remainder of page left intentionally blank]

11

 

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

	 	 	 	 	 	 	 
	 	 	RELIANCE STEEL & ALUMINUM CO.,

a California corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David H. Hannah
 

	 	 
	 

	 	Name:
	 	David H. Hannah	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Karla Lewis
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	RSAC MANAGEMENT CORP.,

a California corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David H. Hannah
 

	 	 
	 

	 	Name:
	 	David H. Hannah	 	 
	 

	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Karla Lewis
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Executive Vice President and

Chief Financial Officer	 	 

-1-

 

	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,

as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Craig McGuire
 

	 	 
	 

	 	Name:
	 	Craig McGuire	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

-2-

 

CERTIFICATE

The undersigned, who is the Executive Vice President and Chief Financial Officer or other
authorized officer of each Borrower and Guarantor and is authorized to deliver this Certificate on
their behalf, certifies to the Lender that (1) since the date of the Syndicated Agreement,
including the First Amendment thereto, there has been no change in the Articles of Incorporation or
By-Laws (or, in the case of a limited liability company, Articles of Organization or Operating
Agreement) of such Person, except for any modifications attached hereto and (2) the Lender may
conclusively rely on this Certificate unless and until superseding documents shall be delivered to
the Lender.

	 	 	 	 	 
	 

	 	 
 

	 	 
	 

	 	Karla Lewis	 	 

-3-

 

EXHIBIT A

MASTER SUBSIDIARY GUARANTY

          This MASTER SUBSIDIARY GUARANTY (this “Guaranty”), dated as of July 31, 2006 is made
by the undersigned entities identified as “Guarantors” on Schedule 5.15 of the Syndicated
Agreement (as defined in the Credit Agreement described below) and the entities becoming a party
hereto pursuant to Section 13 below, in favor of BANK OF AMERICA, N.A. (the “Lender”).

RECITALS

          A. Pursuant to that certain Credit Agreement dated as of July 31, 2006 (as from time to time
amended, extended, further restated, modified or supplemented, the “Credit Agreement”;
capitalized terms used herein shall have the meanings assigned to them in the Credit Agreement),
among Reliance Steel & Aluminum Co. (“RSA”), RSAC Management Corp., a California
corporation (“RSAC Management”, and together with RSA, jointly and severally,
“Borrowers” and individually, a “Borrower”) and the Lender, the Lender has agreed
to extend credit facilities to Borrowers on the terms and conditions set forth therein.

          B. The Credit Agreement provides, as a condition precedent to Lender’s obligations to continue
extending credit facilities to Borrowers, that the Guarantors shall each execute and deliver this
Guaranty in favor of the Lender.

          C. Guarantors expect to realize direct and indirect benefits as the result of the availability
of the aforementioned credit facilities, and as the result of the execution of this Guaranty.

AGREEMENT

          NOW, THEREFORE, in order to induce the Lender to continue extending credit facilities to
Borrowers, and for other good and valuable consideration, the receipt and adequacy of which hereby
is acknowledged, Guarantors hereby represent, warrant, covenant, agree and guaranty as follows:

          1. Definitions.

          “Credit Agreement” means that certain Credit Agreement referred to in Recital A above.
This Guaranty is the Master Subsidiary Guaranty referred to in the Credit Agreement and is one of
the Loan Documents. The following terms, as used herein, shall have the meanings respectively set
forth after each:

          “Guarantied Obligations” means all obligations of Borrowers, and either of them, under
the Loan Documents, whether due or to become due, matured or unmatured, liquidated or unliquidated,
or contingent or absolute, including obligations of performance as

1

 

well as obligations of payment, and including interest that accrues after the
commencement of any bankruptcy or insolvency proceeding by or against Borrowers, a Guarantor or any
other Person.

          2. Guaranty of Guarantied Obligations. (a) Guarantors, jointly and severally,
irrevocably and unconditionally guaranty, as primary obligors and not merely as sureties, the due
and punctual payment in full of all Guarantied Obligations when the same shall become due (after
giving effect to any applicable grace periods), whether at stated maturity, by acceleration, demand
or otherwise (including amounts that would become due but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)).

          Each Guarantor acknowledges that a portion of the Loans may be advanced to it, that Letters of
Credit may be issued for the benefit of its business and that the Guarantied Obligations are being
incurred for and will inure to its benefit.

          Any interest on any portion of the Guarantied Obligations that accrues after the commencement
of any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Borrowers (or, if interest on any portion of the
Guarantied Obligations ceases to accrue by operation of law by reason of the commencement of said
proceeding, such interest as would have accrued on such portion of the Guarantied Obligations if
said proceeding had not been commenced) shall be included in the Guarantied Obligations because it
is the intention of each Guarantor and the Lender that the Guarantied Obligations should be
determined without regard to any rule of law or order that may relieve Borrowers of any portion of
such Guarantied Obligations.

          In the event that all or any portion of the Guarantied Obligations is paid by Borrowers, the
obligations of each Guarantor hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of such payment(s) is rescinded
or recovered directly or indirectly from the Lender as a preference, fraudulent transfer or
otherwise, and any such payments that are so rescinded or recovered shall constitute Guarantied
Obligations.

          Subject to the other provisions of this Section 2, upon the failure of Borrowers to
pay any of the Guarantied Obligations when and as the same shall become due (after giving effect to
any applicable grace periods), each Guarantor will upon demand pay, or cause to be paid, in cash,
to the Lender an amount equal to the aggregate of the unpaid Guarantied Obligations.

          (b) Anything contained in this Guaranty to the contrary notwithstanding, the obligations of
each Guarantor under this Guaranty and the other Loan Documents shall be limited to a maximum
aggregate amount equal to the largest amount that would not render its obligations hereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the
United States Code or any applicable provisions of comparable state law (collectively, the
“Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of such
Guarantor, contingent or otherwise, that are relevant under the Fraudulent

2

 

Transfer Laws (specifically excluding, however, any liabilities of such Guarantor (x) in
respect of intercompany indebtedness to Borrowers or other affiliates of Borrowers to the extent
that such indebtedness would be discharged in an amount equal to the amount paid by such Guarantor
hereunder and (y) under any guaranty of subordinated indebtedness which guaranty contains a
limitation as to maximum amount similar to that set forth in this Section 2(b), pursuant to
which the liability of such Guarantor hereunder is included in the liabilities taken into account
in determining such maximum amount) and after giving effect as assets to the value (as determined
under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Guarantor pursuant to applicable law or
pursuant to the terms of any agreement.

          (c) Each Guarantor under this Guaranty, and each guarantor under other guaranties, if any,
relating to the Credit Agreement (the “Related Guaranties”) that contain a contribution provision
similar to that set forth in this Section 2(c), together desire to allocate among
themselves (collectively, the “Contributing Guarantors”), in a fair and equitable manner, their
obligations arising under this Guaranty and the Related Guaranties. Accordingly, in the event any
payment or distribution is made on any date by a Guarantor under this Guaranty or a guarantor under
a Related Guaranty, each such Guarantor or such other guarantor shall be entitled to a contribution
from each of the other Contributing Guarantors in the maximum amount permitted by law so as to
maximize the aggregate amount of the Guarantied Obligations paid to the Lender.

          3. Nature of Guaranty. This Guaranty is irrevocable and continuing in nature and
relates to any Guarantied Obligations now existing or hereafter arising. This Guaranty is a
guaranty of prompt and punctual payment and performance and is not a guaranty of collection.

          4. Relationship to Other Agreements. Nothing herein shall in any way modify or limit
the effect of terms or conditions set forth in any other document, instrument or agreement executed
by any Guarantor or in connection with the Guarantied Obligations, but each and every term and
condition hereof shall be in addition thereto. All provisions contained in the Credit Agreement or
any other Loan Document that apply to Loan Documents generally are fully applicable to this
Guaranty and are incorporated herein by this reference.

          5. Subordination of Indebtedness of Borrowers to a Guarantor to the Guarantied
Obligations. Each Guarantor agrees that:

     (a) Any indebtedness of Borrowers now or hereafter owed to any Guarantor hereby
is subordinated to the Guarantied Obligations.

     (b) If the Lender so requests, any such indebtedness of Borrowers now or
hereafter owed to any Guarantor shall be collected, enforced and received by
Guarantor as trustee for the Lender and shall be paid over to the Lender in kind on
account of the Guarantied Obligations.

3

 

          6. Statute of Limitations and Other Laws. Until the Guarantied Obligations shall have
been paid and performed in full, all of the rights, privileges, powers and remedies granted to the
Lender hereunder shall continue to exist and may be exercised by the Lender at any time and from
time to time irrespective of the fact that any of the Guarantied Obligations may become barred by
any statute of limitations. Each Guarantor expressly waives the benefit of any and all statutes of
limitation, and any and all laws providing for exemption of property from execution or for
valuation and appraisal upon foreclosure, to the maximum extent permitted by applicable law.

          7. Waivers and Consents. Each Guarantor acknowledges that the obligations undertaken
herein involve the guaranty of obligations of Persons other than such Guarantor and, in full
recognition of that fact, consents and agrees that the Lender may, at any time and from time to
time, without notice or demand, and without affecting the enforceability or continuing
effectiveness hereof: (a) supplement, modify, amend, extend, renew, accelerate or otherwise change
the time for payment or the terms of the Guarantied Obligations or any part thereof,
including any increase or decrease of the rate(s) of interest thereon; (b) supplement,
modify, amend or waive, or enter into or give any agreement, approval or consent with respect to,
the Guarantied Obligations or any part thereof, or any of the Loan Documents or any additional
security or guaranties, or any condition, covenant, default, remedy, right, representation or term
thereof or thereunder; (c) accept new or additional instruments, documents or agreements in
exchange for or relative to any of the Loan Documents or the Guarantied Obligations or any part
thereof; (d) accept partial payments on the Guarantied Obligations; (e) receive and hold security
or additional security or guaranties for the Guarantied Obligations or any part thereof; (f)
release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute,
transfer and/or enforce any security or guaranties, and apply any security and direct the order or
manner of sale thereof as the Lender in its sole and absolute discretion may determine; (g) release
any Person from any liability with respect to the Guarantied Obligations or any part thereof; (h)
settle, release on terms satisfactory to the Lender or by operation of applicable laws or otherwise
liquidate or enforce any Guarantied Obligations and any security or guaranty therefor in any
manner, consent to the transfer of any security and bid and purchase at any sale; and/or (i)
consent to the merger, change or any other restructuring or termination of the corporate existence
of Borrowers, any Guarantor or any other Person, and correspondingly restructure the Guarantied
Obligations, and any such merger, change, restructuring or termination shall not affect the
liability of any Guarantor or the continuing effectiveness hereof, or the enforceability hereof
with respect to all or any part of the Guarantied Obligations.

          Upon the occurrence and during the continuance of any Event of Default, the Lender may enforce
this Guaranty independently of any other remedy or security the Lender at any time may have or hold
in connection with the Guarantied Obligations, and it shall not be necessary for the Lender to
marshal assets in favor of Borrowers, any Guarantor or any other Person or to proceed upon or
against and/or exhaust any security or remedy before proceeding to enforce this Guaranty. Each
Guarantor expressly waives any right to require the Lender to marshal assets in favor of Borrowers,
any Guarantor or any other Person or to proceed against Borrowers, any Guarantor or any collateral
provided by any Person, and agrees that the Lender

4

 

may proceed against Borrowers, any Guarantor and/or any collateral in such order as the Lender
shall determine in its sole and absolute discretion. The Lender may file a separate action or
actions against Borrowers and/or any Guarantor without respect to whether action is brought or
prosecuted with respect to any security or against any other Person, or whether any other Person is
joined in any action or actions. Each Guarantor agrees that the Lender and any Borrower Party may
deal with each other in connection with the Guarantied Obligations or otherwise, or alter any
contracts or agreements now or hereafter existing between any of them, in any manner whatsoever,
all without in any way altering or affecting the enforceability of this Guaranty. The Lender’s
rights hereunder shall be reinstated and revived, and the enforceability of this Guaranty shall
continue, with respect to any amount at any time paid on account of the Guarantied Obligations
which thereafter shall be required to be restored or returned by the Lender upon the bankruptcy,
insolvency or reorganization of Borrowers or any other Person, or otherwise, all as though such
amount had not been paid. The rights of the Lender created or granted herein and the
enforceability of this Guaranty with respect to each Guarantor at all times shall remain effective
to guaranty the full amount of all the Guarantied Obligations even though the Guarantied
Obligations, or any part thereof, or any security or guaranty therefor, may be or hereafter may
become invalid or otherwise unenforceable as against Borrowers or any other guarantor or surety and
whether or not Borrowers shall have any personal liability with respect thereto. Each Guarantor
expressly waives any and all defenses now or hereafter arising or asserted by reason of (a) any
disability or other defense of Borrowers with respect to the Guarantied Obligations, (b) the
unenforceability or invalidity of any security or guaranty for the Guarantied Obligations or the
lack of perfection or continuing perfection or failure of priority of any security for the
Guarantied Obligations, (c) the cessation for any cause whatsoever of the liability of Borrowers or
any other guarantor (other than by reason of the full payment and performance of all Guarantied
Obligations), (d) any failure of the Lender to marshal assets in favor of Borrowers or any other
Person, (e) any failure of the Lender to give notice of sale or other disposition of any collateral
to Borrowers, any Guarantor or any other Person or any defect in any notice that may be given in
connection with any sale or disposition of any collateral, (f) any failure of the Lender to comply
with applicable laws in connection with the sale or other disposition of any collateral or other
security for any Guarantied Obligations, including, without limitation, any failure of the
Lender to conduct a commercially reasonable sale or other disposition of any collateral or other
security for any Guarantied Obligation, (g) any act or omission of the Lender or others that
directly or indirectly results in or aids the discharge or release of Borrowers or the Guarantied
Obligations or any security or guaranty therefor by operation of law or otherwise, (h) any law
which provides that the obligation of a surety or guarantor must neither be large in amount nor in
other respects more burdensome than that of the principal or which reduces a surety’s or
guarantor’s obligation in proportion to the principal obligation, (i) any failure of the Lender to
file or enforce a claim in any bankruptcy or other proceeding with respect to any Person, (j) the
election by the Lender, in any bankruptcy proceeding of any Person, of the application or
non-application of Section 1111(b)(2) of the United States Bankruptcy Code, (k) any extension of
credit or the grant of any lien under Section 364 of the United States Bankruptcy Code, (l) any use
of cash collateral under Section 363 of the United States Bankruptcy Code, (m) any agreement or
stipulation with respect to the provision of adequate protection in any bankruptcy proceeding of
any Person, (n) the avoidance of any lien in favor of the Lender for any reason, (o) any
bankruptcy, insolvency, reorganization, arrangement,

5

 

 readjustment of debt, liquidation or dissolution proceeding commenced by or against any
Person, including any discharge of, or bar or stay against collecting, all or any of the
Guarantied Obligations (or any interest thereof) in or as a result of any such proceeding, (p) any
rights and defenses that are or may become available to any Guarantor by reason of Sections 2787 to
2855, inclusive, of the California Civil Code, or (q) any action taken by the Lender that is
authorized by this Section 7 or any other provision of any Loan Document. Until such time,
if any, as all of the Guarantied Obligations have been paid and performed in full and no commitment
to advance funds to Borrowers remains in effect and all Letters of Credit shall have expired or
been cancelled, no Guarantor shall have any rights of subrogation, contribution, reimbursement or
indemnity with respect to Borrowers, any other Guarantor or any other Person liable for any portion
of the Guarantied Obligations, and until such time, each Guarantor expressly waives any right to
enforce any remedy that the Lender now has or hereafter may have against any other Person and
waives the benefit of, or any right to participate in, any collateral now or hereafter held by the
Lender. Each Guarantor expressly waives all set-offs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with
respect to the Guarantied Obligations, and all notices of acceptance of this Guaranty or of the
existence, creation or incurring of new or additional Guarantied Obligations.

          8. Condition of Borrower Parties. Each Guarantor represents and warrants to the
Lender that it has established adequate means of obtaining financial and other information
pertaining to the businesses, operations and condition (financial and otherwise) of Borrowers and
their properties on a continuing basis, and that such Guarantor now is and hereafter will be
completely familiar with the businesses, operations and condition (financial and otherwise) of
Borrowers and their properties. Each Guarantor hereby expressly waives and relinquishes any duty
on the part of the Lender (should any such duty exist) to disclose to any Guarantor any matter,
fact or thing related to the businesses, operations or condition (financial or otherwise) of
Borrowers or their properties, whether now known or hereafter known by the Lender during the life
of this Guaranty. With respect to any of the Guarantied Obligations, the Lender need not inquire
into the powers of Borrowers or the officers or employees acting or purporting to act on their
behalf, and all Guarantied Obligations made or created in good faith reliance upon the professed
exercise of such powers shall be guarantied hereby.

          9. Liens on Real Property. In the event that all or any part of the Guarantied
Obligations at any time are secured by any one or more deeds of trust or mortgages or other
instruments creating or granting liens on any interests in real property, each Guarantor authorizes
the Lender, upon the occurrence of and during the continuance of any Event of Default, at its sole
option, without notice or demand and without affecting any Guarantied Obligations of any Guarantor,
the enforceability of this Guaranty, or the validity or enforceability of any liens of the Lender
on any collateral, to foreclose any or all of such deeds of trust or mortgages or other instruments
by judicial or nonjudicial sale. Each Guarantor understands and acknowledges that if the Lender
forecloses, either by judicial foreclosure or by exercise of power of sale, any deed of trust
securing the indebtedness, that foreclosure could impair or destroy any ability that any Guarantor
may have to seek reimbursement, contribution

6

 

or indemnification from Borrowers or others based on any right any Guarantor may have of
subrogation, reimbursement, contribution or indemnification for any amounts paid by any Guarantor
under this Guaranty. Each Guarantor further understands and acknowledges that in the absence of
this paragraph, such potential impairment or destruction of any Guarantor’s rights, if any, may
entitle Guarantor to assert a defense to this Guaranty based on Section 580d of the California Code
of Civil Procedure as interpreted in Union Bank v. Gradsky, 265 Cal. App. 2d. 40 (1968). By
executing this Guaranty, each Guarantor freely, irrevocably and unconditionally: (i) waives and
relinquishes that defense and agrees that each Guarantor will be fully liable under this Guaranty
even though the Lender may foreclose, either by judicial foreclosure or by exercise of power of
sale, any deed of trust securing the indebtedness; (ii) agrees that each Guarantor will not assert
that defense in any action or proceeding which the Lender may commence to enforce this Guaranty;
(iii) acknowledges and agrees that the rights and defenses waived by each Guarantor in this
Guaranty include any right or defense that any Guarantor may have or be entitled to assert based
upon or arising out of any one or more of Sections 580a, 580b, 580d or 726 of the California Code
of Civil Procedure or Section 2848 of the California Civil Code; and (iv) acknowledges and agrees
that the Lender is relying on this waiver in creating the indebtedness, and that this waiver is a
material part of the consideration which the Lender is receiving for creating the indebtedness.

          10. Costs and Expenses. Each Guarantor agrees to pay to the Lender all costs and
expenses (including, without limitation, reasonable attorneys’ fees and disbursements, and
costs allocated to in-house counsel) incurred by the Lender in the enforcement or attempted
enforcement of this Guaranty, whether or not an action is filed in connection therewith, and in
connection with any waiver or amendment of any term or provision hereof. All advances, charges,
costs and expenses, including reasonable attorneys’ fees and disbursements, incurred or
paid by the Lender in exercising any right, privilege, power or remedy conferred by this Guaranty,
or in the enforcement or attempted enforcement thereof, shall be subject hereto and shall become a
part of the Guarantied Obligations and shall be paid to the Lender by each Guarantor, immediately
upon demand, together with interest thereon at the rate(s) provided for under the Credit Agreement.

          11. Construction of This Guaranty. This Guaranty is intended to give rise to absolute
and unconditional obligations on the part of each Guarantor; hence, in any construction hereof,
notwithstanding any provision of any Loan Document to the contrary, this Guaranty shall be
construed strictly in favor of the Lender in order to accomplish its stated purpose.

          12. Liability. The liability of each Guarantor hereunder is several and is
independent of any other guaranties at any time in effect with respect to all or any part of the
Guarantied Obligations, and each Guarantor’s liability hereunder may be enforced regardless of the
existence of any such guaranties. Any termination by or release of any Guarantor in whole or in
part (whether it be another Guarantor under this instrument or not) shall not affect the continuing
liability of any Guarantor hereunder, and no notice of any such termination or release shall be
required. The execution hereof by each Guarantor is not founded upon an expectation or
understanding that there will be any other guarantor of the Guarantied Obligations.

7

 

          13. Additional Guarantors. From time to time entities which become Material Domestic
Subsidiaries of Borrowers may become a Guarantor by executing and delivering (i) a Certificate
Regarding Additional Guarantors substantially in the form of Exhibit A attached hereto (the
“Guarantor Certificate”) and (ii) a Certificate of Secretary substantially in the form of
Exhibit B attached hereto (the “Secretary’s Certificate for Guarantor” and together
with the Guarantor Certificate, the “Additional Guarantor Documents”). Upon the Lender’s
receipt of the Additional Guarantor Documents, this Guaranty shall be deemed amended to include
such additional Person as a Guarantor and such Person shall become a party hereto as though a
signatory hereto, with no amendment or further action required hereunder and, thereafter, all
references to Guarantor shall include such additional Person.

          14. Amendment or Waiver of Guaranty; Incorporated Terms. No amendment or waiver of
any provision of this Guaranty, and no consent with respect to any departure by Guarantors shall be
effective unless the same shall be in writing and signed by the Lender and Guarantors, and then any
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given. Sections 9.1, 10.3, 10.4, 10.6,
10.7, 10.8, 10.10, 10.14, 10.15 and 10.16 of the
Syndicated Agreement are hereby incorporated herein by reference as though fully set forth fully
herein.

[Remainder of page left intentionally blank]

8

 

          IN WITNESS WHEREOF, each Guarantor has executed this Guaranty by its duly authorized officer
as of the date first written above.

	 	 	 	 	 	 	 
	 	 	ALLEGHENY STEEL DISTRIBUTORS, INC.

ALUMINUM AND STAINLESS, INC.

CCC STEEL, INC.

CHAPEL STEEL CORP.

CHATHAM STEEL CORPORATION

DURRETT SHEPPARD STEEL CO., INC.

PACIFIC METAL COMPANY

PDM STEEL SERVICE CENTERS, INC.

PHOENIX CORPORATION

TOMA METALS, INC.

VALEX CORP.

VIKING MATERIALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Vice President and Secretary of each of the	 	 
	 

	 	 	 	foregoing	 	 
	 
	 	 	 	 	 	 
	 	 	PRECISION STRIP, INC.

SISKIN STEEL & SUPPLY COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Vice President and Assistant Secretary of	 	 
	 

	 	 	 	each of the foregoing	 	 
	 
	 	 	 	 	 	 
	 	 	LUSK METALS

SERVICE STEEL AEROSPACE CORP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Chief Financial Officer and Secretary of	 	 
	 

	 	 	 	each of the foregoing	 	 

9

 

	 	 	 	 	 	 	 
	 	 	AMERICAN METALS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Vice President, Chief Financial Officer and	 	 
	 

	 	 	 	Secretary of the foregoing	 	 
	 
	 	 	 	 	 	 
	 	 	AMERICAN STEEL, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Chief Financial Officer, Treasurer and	 	 
	 

	 	 	 	Secretary of the foregoing	 	 
	 
	 	 	 	 	 	 
	 	 	AMI METALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Vice President, Chief Financial Officer and	 	 
	 

	 	 	 	Secretary of the foregoing	 	 
	 
	 	 	 	 	 	 
	 	 	CENTRAL PLAINS STEEL CO.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Vice President, Treasurer and Secretary of the	 	 
	 

	 	 	 	foregoing	 	 
	 
	 	 	 	 	 	 
	 	 	LIEBOVICH BROS., INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:
	 	Karla Lewis	 	 
	 

	 	Title:
	 	Vice President, Assistant Treasurer and	 	 
	 

	 	 	 	Assistant Secretary of the foregoing	 	 

10

 

	 	 	 	 	 
	ACKNOWLEDGED:	 	 
	 
	 	 	 	 
	BANK OF AMERICA, N.A.,

as the Lender	 	 
	 
	 	 	 	 
	By:

	 	 
 

	 	 
	Name:

	 	 
 

	 	 
	Title:

	 	 
 

	 	 

11

 

EXHIBIT A TO MASTER SUBSIDIARY GUARANTY

CERTIFICATE REGARDING ADDITIONAL GUARANTORS

Dated:                                         ,                     

          Reference is made to that certain Master Subsidiary Guaranty dated as of July 31, 2006, as
amended (the “Guaranty”), by and among the Guarantors from time to time party thereto in
favor of Bank of America, N.A., as the Lender. Unless otherwise defined herein, capitalized terms
used herein have the respective meanings assigned to them in the Guaranty and the Credit Agreement
referred to therein.

                                                                      , a Material
 Domestic Subsidiary of
                                        , (“Material Domestic Subsidiary”) hereby elects to become a
Guarantor under the Guaranty, and agrees to be bound by all the terms and conditions applicable to
a Guarantor thereunder as of the date hereof.

          The undersigned Material Domestic Subsidiary hereby represents and warrants that the
execution, delivery and performance of any Loan Documents to which it is to be a party will not
violate any law, decree or judgment applicable to the undersigned, except as will not have a
Material Adverse Effect.

          This Certificate Regarding Additional Guarantors is executed by the parties hereto as of the
date first written above.

	 	 	 	 	 	 	 
	 	 	[                    ], as a Material Domestic

Subsidiary and a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	 
 

 
 

	 	  
	 

	 	Title:
	 	 
 

	 	 

	 	 	 	 	 
	ACKNOWLEDGED:	 	 
	 
	 	 	 	 
	BANK OF AMERICA, N.A., as

the Lender	 	 
	 
	 	 	 	 
	By:

	 	 
 

	 	 
	Name:

	 	 
 

	 	 
	Title:

	 	 
 

	 	 

 

 

EXHIBIT B TO MASTER SUBSIDIARY GUARANTY

CERTIFICATE OF SECRETARY

OF

[NAME OF MATERIAL DOMESTIC SUBSIDIARY]

     The undersigned does hereby certify as of [Date] that he/she is the duly elected and acting
Secretary of [Name of Material Domestic Subsidiary], a [State] corporation (the “Company”),
and that:

	 	1.	 	Attached hereto as Exhibit A is a true, correct and complete copy of
the Articles of Incorporation of the Company, certified by the Secretary of State of
the State of [State] (the “Secretary of State”) on the date indicated on such
certification, and all amendments to such Articles of Incorporation on file with the
Secretary of State as of the date hereof.
	 
	 	2.	 	Attached hereto as Exhibit B is a true, correct and complete copy of
the duly adopted Bylaws of the Company, and any amendments thereto, and such Bylaws are
in full force and effect on the date hereof.
	 
	 	3.	 	Attached hereto as Exhibit C is a true, correct and complete copy of
resolutions duly adopted as of [Date] by the Board of Directors of the Company
authorizing the execution and delivery of the Master Subsidiary Guaranty to which it is
a party. Said resolutions have not been amended, rescinded or modified since their
adoption and remain in full force and effect on the date hereto.
	 
	 	4.	 	The authorized officers listed in Exhibit D are duly elected, qualified
and acting officers of the Company holding the office(s) listed opposite their
respective names, and set forth opposite each person’s name is such person’s genuine
signature. Such persons are authorized to sign, on behalf of the Company, all
documents referred to in the resolutions attached hereto as Exhibit D.

     IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand as of the date first written
above.

	 	 	 	 	 
	 

	 	 
 

	 	 
	 

	 	Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]