Document:

exv10w1

Exhibit 10.1

SANTARUS, INC.

2010 BONUS PLAN*

 

			
	*	 	Excludes those covered under the Field Sales Incentive Plans

 

 

Santarus, Inc.

2010 Bonus Plan

The Santarus, Inc. (“Santarus” or the “Company”) Bonus Plan is designed to offer employees a
performance-based plan that rewards the achievement of corporate goals, as well as individual goals
that are consistent with the corporate goals. The objective of the Bonus Plan is to create an
environment that focuses employees on the achievement of the 2010 corporate and individual goals.
A combination of corporate performance and individual performance will determine individual bonus
payouts.

Purpose of the Plan

The Santarus, Inc. 2010 Bonus Plan (the “Plan”) is designed to:

	 	•	 	Provide a bonus program that helps achieve overall corporate goals and enhances
shareholder value
	 
	 	•	 	Reward individuals for achievement of corporate and individual goals
	 
	 	•	 	Encourage teamwork among all disciplines within the Company
	 
	 	•	 	Offer an attractive bonus program to help attract and retain key employees

Plan Governance

The Compensation Committee of the Board of Directors is responsible for reviewing and approving the
Plan and any proposed modifications to the Plan. The President and CEO of Santarus is responsible
for administration of the Plan; provided that the Compensation Committee of the Board of Directors
is responsible for reviewing and approving all compensation, including compensation under this
Plan, for all officers, vice presidents and any other employees with an annual base salary greater
than or equal to $200,000.

Eligibility

All regular employees of the Company who are regularly scheduled to work at least 20 hours per week
will be eligible to participate in the Plan, other than any employee eligible to participate in the
Company’s Field Sales Incentive Plans. Temporary employees and part-time employees (who are
regularly scheduled to work less than 20 hours per week) are not included in this Plan. In order
to be eligible to receive any bonus award (or “Bonus”) under this Plan, a participant: (a) must
have commenced their employment with the Company prior to November 15, 2010 and remained
continuously employed through December 31, 2010 and until the time Bonuses are paid; and (b) must
be an employee in good standing (e.g., not on a performance improvement plan as of December 31,
2010 or an Unacceptable performer as determined during the 2010 review cycle), as

 

 

determined by the Compensation Committee of the Board of Directors or the President and CEO of
Santarus, as applicable in their sole discretion.

Corporate and Individual Performance

The President and CEO will present to the Compensation Committee of the Board of Directors a list
of the overall corporate goals for the Plan year, which is subject to approval by both the
Compensation Committee and the independent members of the Board of Directors. All participants in
the Plan will then develop a list of key individual goals, which will be approved by the
responsible vice president or the Compensation Committee of the Board of Directors, as applicable.

The total bonus pool for the Plan will be based on achievement of the 2010 corporate goals and
individual goals that have been approved as indicated above.

Bonus Awards

The Bonus will be paid in cash and is based on achievement of the 2010 corporate goals and
achievement of individual goals. The Bonus will be calculated by using the base salary as of
December 31, 2010, weighting factor, target bonus percentage and goal multipliers as identified
below:

Weighting Factor

The relative weight between the corporate and individual Bonus components will vary based on levels
within the organization. The weighting factors will be reviewed annually and adjusted, as
necessary or appropriate. The weighting for 2010 will be as follows:

	 	 	 	 	 	 	 	 	 
	Position	 	Corporate	 	Individual
	President and CEO
	 	 	100	%	 	 	 	 
	Group J (Officers)
	 	 	100	%	 	 	 	 
	Group I (Non-Officer VPs)
	 	 	80	%	 	 	20	%
	Group H (Executive Directors)
	 	 	80	%	 	 	20	%
	Group G (Senior Directors)
	 	 	80	%	 	 	20	%
	Group F (Directors)
	 	 	80	%	 	 	20	%
	Group E (Senior Managers)
	 	 	60	%	 	 	40	%
	Group D (Managers)
	 	 	60	%	 	 	40	%
	Group C
	 	 	40	%	 	 	60	%
	Group A & B
	 	 	20	%	 	 	80	%

Target Bonus Percentages

Bonus amounts will be determined by applying a “target bonus percentage” to the base salary of
employees in the Plan. Following are the 2010 target bonus percentages:

 

 

	 	 	 	 	 
	Position	 	Target Bonus Percentages
	President and CEO
	 	 	60	%
	Group J
	 	 	40	%
	Group I
	 	 	35	%
	Group H
	 	 	30	%
	Group G
	 	 	25	%
	Group F
	 	 	22	%
	Group E
	 	 	17	%
	Group D
	 	 	15	%
	Group C
	 	 	12	%
	Group B
	 	 	8	%
	Group A
	 	 	7	%

The base salary as of December 31, 2010 times the target bonus percentage will be used to establish
the target Bonus amount for the 2010 year.

Goal Multipliers

Corporate Goal Multiplier: The following scale will be used by the Compensation Committee
of the Board of Directors and the independent members of the Board of Directors to determine the
actual “corporate goal multiplier” based upon measurement of actual corporate performance versus
the pre-established corporate goals. The goal multiplier will be used with the calculated target
Bonus amount and the weighting factor to determine the actual Bonus amount for each individual
based on corporate performance.

	 	 	 	 	 
	Performance Category	 	Goal Multiplier
	1. Performance for the year exceeded the goal
or was excellent in view of prevailing conditions
	 	 	110% - 150	%
	 
	 	 	 	 
	2. Performance met the year’s goal
or is considered achieved in view of prevailing conditions
	 	 	90% - 109	%
	 
	 	 	 	 
	3. Performance for the year met some aspects of the goal
but not all.
	 	 	40% - 89	%
	 
	 	 	 	 
	4. The goal was not achieved and performance was
not acceptable in view of prevailing conditions.
	 	 	0	%

Individual Goal Multiplier: The “individual goal multiplier” will be determined by taking
into account the performance rating (Pinnacle, Standing Ovation, Great Performance, etc.) given to
the individual through the 2010 review cycle as well as any

 

 

other relevant criteria relating to the individual’s job performance during 2010. The specific
multipliers for each performance rating level are as follows:

	 	 	 	 	 
	Performance Rating:	 	Multiplier
	Pinnacle
	 	 	120	%
	Standing Ovation
	 	 	105	%
	Great Performance
	 	 	90	%
	Too New
	 	 	70	%
	Fair Performance
	 	 	50	%

Calculation of Bonus Amount

The example below shows a sample Bonus amount calculation under the Plan. First, a target Bonus
amount is calculated for each Plan participant by multiplying the employee’s base salary by the
target bonus percentage. This dollar figure is then divided between the corporate component and
the individual component based on the weighting factor for that position. This calculation
establishes specific dollar target Bonus amounts for the performance period for each of the
corporate and individual components.

At the end of the performance period, corporate and individual goal multipliers will be established
using the criteria described above. The corporate goal multiplier, which is based on overall
corporate performance, is used to calculate the corporate component of the Bonus amount for all
Plan participants. This is accomplished by multiplying the target corporate Bonus amount
established for each individual by the actual corporate goal multiplier. The individual goal
multiplier, which is based on an individual’s performance rating, is used in the same way to
calculate the actual individual component of the Bonus amount.

Example: Actual Bonus Amount Calculation

	 	 	 	 	 
	Group Level

	 	B	 
	Position

	 	Executive Assistant

	Base Salary as of December 31, 2009

	 	$50,000 

	Target Bonus Percentage

	 	8% 

	Performance Rating

	 	Standing Ovation

	Target Bonus Amount

	 	$4,000 

	 
	Target Bonus Amount Components:
	 	 	 	 
	Target Bonus Amount based on corporate performance (20%):

	 	$ 800	 
	Target Bonus Amount based on individual performance (80%):

	 	$ 3,200	 
	 
	Corporate Goal Multiplier

	 	80% 		
	Individual Goal Multiplier

	 	105% 		

 

 

	 	 	 	 	 	 	 
	Actual Bonus Amount Calculation:	 	 	 	 		
	Corporate Bonus Amount

	 	 	  	 	$640 ($800 x 80%)	
	Individual Bonus Amount

	 	 	  	 	$3,360 ($3,200 x 105%)	
	Total Actual Cash Bonus Amount

	 	 		 	$4,000 	 

Payment of the Bonus Amounts

Annual performance reviews for Plan participants will be completed by February 28, 2011. Payments
of actual Bonus amounts will be made as soon as practical, but not later than March 15, 2011.
Participants’ entitlement to Bonuses under this Plan does not vest until the Bonuses are actually
paid. This plan is not intended to be subject to Section 409A of the Internal Revenue Code of 1986,
as amended.

Participants who join the Company prior to November 15, 2010 and remain continuously employed
through December 31, 2010 will be eligible to participate in the Plan and have their actual Bonus
amount prorated based on their actual time with the Company during the Plan year.

A participant whose employment terminates voluntarily prior to the payment of a Bonus award will
not be eligible to receive the Bonus award. Continued employment is a condition of vesting. If a
participant’s employment is terminated involuntarily during the Plan year, or prior to payment of
Bonus awards, it will be at the absolute discretion of the Company whether or not a Bonus award
payment is made. A participant must also be an employee in good standing (not on a performance
improvement plan, other disciplinary status or Unacceptable performer) in order to be eligible to
receive a Bonus payment.

Company’s Absolute Right to Alter or Abolish the Plan

The Compensation Committee of the Board of Directors reserves the right in its absolute discretion
to terminate and/or abolish all or any portion of the Plan at any time or to alter the terms and
conditions under which a Bonus will be paid. In the event of the Plan’s termination prior to the
payment of a Bonus, such Bonus will not be payable under this Plan. Such discretion may be
exercised any time before, during, and after the Plan year is completed. No participant shall have
any vested right to receive any payment until actual delivery of such compensation.
Notwithstanding the generality of the foregoing, at the Company’s discretion all or a portion of a
Bonus payment may be made in shares of the Company’s common stock.

Employment Duration/Employment Relationship

This Plan does not, and the Company’s policies and practices in administering this Plan do not,
constitute an express or implied contract or other agreement concerning the

 

 

duration of any participant’s employment with the Company. The employment relationship of each
participant is “at will” and may be terminated at any time by the Company or by the participant
with or without cause.exv10w1

Exhibit 10.1

QUIDEL CORPORATION

FIRST AMENDMENT TO CREDIT AGREEMENT

AND TO SECURITY AGREEMENT

          This FIRST AMENDMENT TO CREDIT AGREEMENT AND TO SECURITY AGREEMENT (this “Amendment”) is dated
as of February 19, 2010 and entered into by and among QUIDEL CORPORATION, a Delaware corporation
(“Borrower”), the financial institutions listed on the signature pages hereof (“Lenders”), and BANK
OF AMERICA, N.A., a national banking association, as agent for Lenders (in such capacity, “Agent”),
and, for purposes of Sections 2, 4 and 6 hereof, each of the Guarantors listed on the signature
pages hereof (“Guarantors”), and is made with reference to (i) that certain Credit Agreement dated
as of October 8, 2008 (the “Credit Agreement”), by and among Borrower, Lenders, U.S. Bank N.A., as
Syndication Agent, and Bank of America, N.A., as Agent, Swing Line Lender and L/C Issuer and (ii)
that certain Security Agreement dated as of October 8, 2008 (the “Security Agreement”) by and among
Borrower, Guarantors and Bank of America, N.A., as Secured Party. Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the Credit Agreement.

RECITALS

          WHEREAS, Borrower and Lenders desire to (i) amend the Credit Agreement and the Security
Agreement to permit the proposed acquisition by Borrower (through a merger with a Subsidiary of
Borrower) of all of the capital stock of Diagnostic Hybrids, Inc., an Ohio corporation, and to
allow certain Indebtedness and Liens related thereto to remain outstanding after consummation of
such acquisition, in each case on the terms and conditions set forth below, and (ii) amend the
Credit Agreement to increase the aggregate amount of Permitted Stock Repurchases permitted under
the Credit Agreement on the terms and conditions set forth below and to make certain other
amendments as set forth below;

          NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows:

Section 1. AMENDMENTS TO THE CREDIT AGREEMENT

1.1 Amendments to Article I: Definitions and Accounting Terms

     A. Section 1.1 of the Credit Agreement is hereby amended by adding thereto the
following definitions, which shall be inserted in proper alphabetical order:

          “DHI” means Diagnostic Hybrids, Inc., an Ohio corporation.

          “DHI Acquisition” means the transactions contemplated by the DHI Acquisition Agreement.

 

 

          “DHI Acquisition Agreement” means the Agreement and Plan of Merger, dated as of January 10,
2010, among Borrower, DHI, Fairway Acquisition Corporation, an Ohio corporation, and David R.
Scholl, Ph.D., as Securityholder Agent (as thereinafter defined), in the form delivered to Agent
and Lenders prior to their execution of the First Amendment, as such agreement may be amended from
time to time consistent with the terms hereof and thereof.

          “DHI Acquisition Certificate of Merger” means the Certificate of Merger, dated as of February
19, 2010 by and between Fairway Acquisition Corporation, an Ohio corporation, and DHI, in the form
delivered to Agent and Lenders prior to their execution of the First Amendment, as such certificate
may be amended from time to time consistent with the terms hereof and thereof.

          “DHI Acquisition Documents” means the DHI Acquisition Agreement, the DHI Acquisition
Certificate of Merger, and the other agreements, documents and instruments entered into or
delivered in connection therewith, in each case in the form delivered to Agent and Lenders prior to
their execution of the First Amendment, in each case as the same may be amended from time to time
consistent with the terms hereof and thereof.

          “First Amendment” means the First Amendment to Credit Agreement and to Security Agreement
dated as of February 19, 2010 among Borrower, Lenders party thereto, Agent and Guarantors.

          “First Amendment Effective Date” has the meaning specified in the First Amendment.

          “Prior DHI Intercreditor Agreement” means the the Intercreditor Agreement dated as of February
15, 2008 by and between the Director of Deveopment of the State of Ohio, acting on behalf of the
State of Ohio, and JPMorgan Chase Bank, N.A., acknowledged by DHI.

          “State of Ohio Encumbered Assets” means the “Collateral” as defined in the State of Ohio
Security Agreement as in effect on the First Amendment Effective Date.

          “State of Ohio Loan Agreement” means the Loan Agreement, dated as of February 15, 2008,
between DHI and the Director of Development of the State of Ohio, acting on behalf of the State of
Ohio, in the form delivered to Agent and Lenders prior to their execution of the First Amendment,
as the same may be amended from time to time consistent with the terms hereof and thereof.

          “State of Ohio Loan Documents” means the State of Ohio Loan Agreement, the State of Ohio
Security Agreement, and the other agreements, documents and instruments entered into or delivered
in connection therewith, in each case in the form delivered to Agent and Lenders prior to their
execution of the First Amendment, in each case as the same may be amended from time to time
consistent with the terms hereof and thereof.

2

 

          “State of Ohio Security Agreement” means the Security Agreement, dated as of February 15,
2008, between DHI and the Director of Development of the State of Ohio, in the form delivered to
Agent and Lenders prior to their execution of the First Amendment, as the same may be amended from
time to time consistent with the terms hereof and thereof.

     B. The definition of “Permitted Acquisition” in Section 1.1 of the Credit Agreement is hereby
amended by inserting the following text at the end of clause (d) thereof:

          “provided that the Total Consideration paid or payable with respect to the DHI
Acquisition (excluding consideration paid or payable with Equity Interests of Borrower) shall not
exceed $133,000,000, subject to adjustment as set forth in the DHI Acquisition Agreement so long as
after giving effect to all such adjustments, the Total Consideration does not exceed $138,000,000
without Agent’s prior consent in its sole discretion;”

     C. The definition of “Permitted Acquisition” in Section 1.1 of the Credit Agreement is
hereby amended by inserting the following text immediately after the phrase “Section 7.3(e)”
appearing in clause (f) thereof:

          “and, in the case of the DHI Acquisition only, except for Liens permitted under Section
7.1(j).”

     D. The definition of “Total Consideration” in Section 1.1 of the Credit Agreement is
hereby amended by amending and restating clause (c) thereof as follows:

          “(c) such amount of direct and contingent liabilities assumed in connection with such
Acquisition (excluding normal trade payables, accruals and indemnities); provided that such
contingent liabilities are known, probable and can be estimated in accordance with GAAP by Borrower
on the closing date of such Acquisition,”

1.2 Amendments to Article V: Representations and Warranties

     A. Section 5.18(a) of the Credit Agreement is hereby amended by deleting the phrase
“under clauses (b) through (i) of Section 7.1” in three places therein and substituting the
following therefor: “under clauses (b) through (j) of Section 7.1”.

     B. Section 5.18(c) of the Credit Agreement is hereby amended by deleting clause (iii)
therein and substituting the following therefor:

     “(iii) financing statements related to Liens permitted by Section 7.1(b),
(h), (i) or (j),”

3

 

1.3 Amendments to Article VI: Affirmative Covenants

     A. Additional Guarantors.

          Section 6.13 of the Credit Agreement is hereby amended by deleting the phrase “under
clause (b) through (i) of Section 7.1” therein and substituting the following therefor:
“under clauses (b) through (j) of Section 7.1”.

     B. Security Interests.

          Section 6.16 of the Credit Agreement is hereby amended by deleting the phrase “under
clauses (b) through (i) of Section 7.1” therein and substituting the following therefor:
“under clauses (b) through (j) of Section 7.1”.

     C. DHI Acquisition Post Closing Matters. Article VI of the Credit Agreement is hereby amended
by adding at the end thereof the following Section 6.21:

          “6.21 DHI Acquisition Post Closing Matters.

     (a) Landlord Waivers; Control Agreements. Within 45 days after the First
Amendment Effective Date or such later date as Agent may agree in its sole discretion,
deliver to Agent (i) a fully executed Landlord Waiver with respect to the following
Leasehold Properties of DHI: (A) 7100 Euclid Avenue, Cleveland, Ohio and (B) 1055 East State
Street, Athens, Ohio and (ii) fully executed control agreements, in the form and substance
satisfactory to Agent, with respect to all Deposit Accounts and Securities Accounts of DHI,
pursuant to which the applicable financial institution or securities intermediary confirms
and acknowledges Agent’s security interest in such account and agrees that the financial
institution or securities intermediary, as the case may be, will comply with instructions
originated by Agent as to disposition of funds in such account, without further consent by
DHI and , for the avoidance of doubt, notwithstanding any contrary provision hereof or of
any other Loan Document which requires delivery of such Landlord Waivers or control
agreements within such 45 days, no default or Event of Default shall occur solely as a
result of any failure to deliver such Landlord Waivers and control agreements prior to such
45th day (or such later date, if applicable).

     (b) Loss Payee Endorsement. Within 45 days after the First Amendment Effective
Date or such later date as Agent may agree in its sole discretion, deliver to Agent loss
payee endorsements or other documents reasonably acceptable to the Agent showing that Agent
on behalf of the Lenders has been named as additional insured, mortgagee and loss payee to
the extent required by Section 6.7 with respect to any tangible assets acquired in the DHI
Acquisition.

     (c) Intercreditor Agreement. Within 45 days after the First Amendment
Effective Date or such later date as Agent may agree in its sole discretion, deliver to
Agent a fully executed intercreditor agreement among the Director of Development of the
State of Ohio, acting on behalf of the State of Ohio, the Agent and DHI, in the form and
substance satisfactory to Agent, with respect to the State of Ohio Encumbered Assets,

4

 

pursuant to which the Director of Development of the State of Ohio, acting on behalf of
the State of Ohio, will agree to have a first priority lien on the State of Ohio Encumbered
Assets, the Agent will agree to have a second priority lien on the State of Ohio Encumbered
Assets, DHI will agree not to commingle the State of Ohio Encumbered Assets with the
Collateral and other matters customarily governed by an intercreditor agreement in form
substantially similar to the Prior DHI Intercreditor Agreement other than (1) changing the
pro rata sharing provisions to provisions where the State of Ohio will have first priority
as to payment, (2) deletion of the provisions in Sections 4 and 10 of the Prior DHI
Intercreditor Agreement and (3) such other changes thereto as the Agent may reasonably
require.”

1.4 Amendments to Article VII: Negative Covenants

     A. Liens.

          Section 7.1 of the Credit Agreement is hereby amended by deleting the word “and” at
the end of Section 7.1(h), deleting the period at the end of Section 7.1(i) and
substituting therefor “; and”, and inserting the following new Section 7.1(j):

     “(j) Liens granted pursuant to the State of Ohio Loan Documents securing Indebtedness
permitted under Section 7.3(i) (but not any refinancing, refunding or extension
thereof); provided that neither the State of Ohio Encumbered Assets nor the
principal amount of Indebtedness secured by such Liens (as such amount is reduced from time
to time as a result of payments made thereon) is increased from and after the date of
consummation of the DHI Acquisition.”

     B. Indebtedness.

          Section 7.3 of the Credit Agreement is hereby amended by deleting the word “and” at
the end of Section 7.3(g), deleting the period at the end of Section 7.3(h) and
substituting therefor “; and”, and inserting the following new Section 7.3(i):

     “(i) DHI may remain liable for Indebtedness under the State of Ohio Loan Agreement (but
not any refinancing, refunding or extension thereof), so long as (i) the aggregate principal
amount outstanding under the State of Ohio Loan Agreement does not exceed $2,000,000 at any
time (as such amount is reduced from time to time by repayment or prepayment thereof or
otherwise), (ii) no Loan Party guarantees such Indebtedness, (iii) no Liens to secure such
Indebtedness attach to assets of any Loan Party other than DHI, (iv) no Liens to secure such
Indebtedness attach to any assets of DHI other than the State of Ohio Encumbered Assets, (v)
the State of Ohio Loan Documents do not prohibit the creation in favor of Agent for the
benefit of Lenders of a valid and perfected First Priority Lien on all of the Collateral of
DHI and the other Loan Parties other than the State of Ohio Encumbered Assets, subject to
Liens permitted under clauses (b) through (i) of Section 7.1, and (vi) the Loan
Parties can prepay such Indebtedness at any time without premium or penalty.”

5

 

     C. Fundamental Changes.

          Section 7.4 of the Credit Agreement is hereby amended by deleting the word “and” at
the end of Section 7.4(a), deleting the period at the end of Section 7.4(b) and
substituting therefor “; and”, and inserting the following new Section 7.4(c):

     “(c) the DHI Acquisition may be consummated on or before February 19, 2010 in
accordance with the terms of this Agreement (including without limitation the definition of
the term ‘Permitted Acquisition’) and the terms of the DHI Acquisition Documents.”

     D. Restricted Payments.

          Section 7.6(e) of the Credit Agreement is hereby amended by deleting it in its
entirety and substituting the following therefor:

     “(e) Borrower may make any Permitted Stock Repurchase; provided that, after
giving effect to such Permitted Stock Repurchase, (i) the aggregate amount of cash paid or
payable for all Permitted Stock Repurchases consummated from the Closing Date to and
including February 18, 2010 shall not exceed $50,000,000 and (ii) the aggregate amount of
cash paid or payable for all Permitted Stock Repurchases consummated during the remaining
term of this Agreement from and after February 19, 2010 shall not exceed $75,000,000.”

     E. Amendments of Certain Agreements.

          Article VII of the Credit Agreement is hereby amended by adding at the end thereof the
following Section 7.16:

          “7.16. Amendments of Certain Agreements. Agree to any amendment, restatement,
supplement or other modification to, or waiver of, any of the State of Ohio Loan Documents
or any of the DHI Acquisition Documents after the date of consummation of the DHI
Acquisition without in each case obtaining the prior written consent of Required Lenders to
such amendment, restatement, supplement or other modification or waiver, other than an
amendment, restatement, supplement or other modification or waiver that is not adverse in
any material respect to the interests of the Lenders.”

1.5 Amendments to Article VIII: Events of Default

          Section 8.1(j) of the Credit Agreement is hereby amended by deleting the phrase “under
clauses (b) through (i) of Section 7.1” therein and substituting the following therefor:
“under clauses (b) through (j) of Section 7.1”.

6

 

1.6 Amendments to Article X: Miscellaneous

          Section 10.4(b) of the Credit Agreement is hereby amended by deleting clause (i)
therein in its entirety and substituting the following therefor: “(i) the execution or delivery of
this Agreement, any other Loan Document, any DHI Acquisition Documents, any State of Ohio Loan
Documents or any agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto or thereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, or, in the case of Agent (and any
sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other
Loan Documents,”.

Section 2. AMENDMENTS TO THE SECURITY AGREEMENT

2.1 Amendments to Section 1: Grant of Security

          Section 1 of the Security Agreement is hereby amended by deleting the word “and” at
the end of clause (a) set forth in the last paragraph thereof, deleting the period at the end of
the last paragraph thereof and substituting therefor “, and” and inserting the following new clause
(c) at the end of the last paragraph thereof:

          “(c) until an intercreditor agreement between the Secured Party and the Director of
Development of the State of Ohio, acting for the State of Ohio, is entered into with respect to the
State of Ohio Encumbered Assets which is required to be entered into pursuant to Section 6.21(c) of
the Credit Agreement, any State of Ohio Encumbered Assets to the extent such State of Ohio
Encumbered Assets are subject to any Lien permitted under Section 7.1(j) of the Credit
Agreement.”

2.2 Amendments to Section 2: Security for Obligations

          Section 2 of the Security Agreement is hereby amended by amending and restating clause
(b) thereof as follows:

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

2.3 Amendments to Section 4: Representations and Warranties

          Section 4(b) of the Security Agreement is hereby amended by deleting the phrase
“except for Liens permitted by clauses (b) through (i) of subsection 7.1 of the Credit Agreement”
set forth therein and substituting the following therefor: “except for Liens permitted by clauses
(b) through (j) of subsection 7.1 of the Credit Agreement”.

7

 

Section 3. CONDITIONS TO EFFECTIVENESS

          Sections 1 and 2 of this Amendment shall become effective only upon the satisfaction of all of
the following conditions precedent (the date of satisfaction of such conditions being referred to
herein as the “First Amendment Effective Date”):

     A. On or before the First Amendment Effective Date, Borrower shall deliver to Lenders (or to
Agent for Lenders with sufficient originally executed copies, where appropriate, for each Lender
and its counsel) the following, each, unless otherwise noted, dated the First Amendment Effective
Date:

     (i) A certificate, dated as of the First Amendment Effective Date, of its corporate
secretary or an assistant secretary of Borrower, certifying that there have been no changes
in its Certificate of Incorporation and its Bylaws from the form of Certificate of
Incorporation and Bylaws previously delivered to Lenders (or attaching copies of any such
amendments or other modifications), and a certificate of good standing from Borrower’s state
of organization;

     (ii) Resolutions of its Board of Directors approving and authorizing the execution,
delivery, and performance of this Amendment and the DHI Acquisition Documents and the
transactions contemplated hereby and thereby, certified as of the First Amendment Effective
Date by its corporate secretary or an assistant secretary as being in full force and effect
without modification or amendment;

     (iii) Signature and incumbency certificates of its officers executing this Amendment;

     (iv) Executed copies of this Amendment executed by Borrower and each Guarantor;

     (v) A Certificate of a Responsible Officer of Borrower to the effect that (a) each of
the DHI Acquisition Documents and State of Ohio Loan Documents (a copy of each of which
shall be attached thereto) is in full force and effect and each such attached copy is a true
and correct copy of the executed version of such document; (b) the DHI Acquisition satisfies
all of the conditions set forth in the definition of the term “Permitted Acquisition” set
forth in the Credit Agreement (after giving effect to the amendments set forth herein) and
that the Compliance Certificate attached thereto (which Compliance Certificate shall show in
reasonable detail that the DHI Acquisition satisfies the requirements set forth in clause
(e)(ii) of the term “Permitted Acquisition”) is true and correct; (c) the Schedules to the
Credit Agreement and the other Loan Documents have been revised to take into account the
consummation of the DHI Acquisition and the other transactions contemplated by this
Amendment and are attached thereto (which revised Schedules shall be in form and substance
satisfactory to Agent); (d) attached thereto are Lien searches reasonably satisfactory to
Agent with respect to the assets of DHI; (e) attached thereto is a certificate from
Borrower’s insurance broker that all insurance required to be maintained pursuant to Section
6.7 of the Credit Agreement is in full force and effect with respect to any tangible assets
being acquired in the DHI Acquisition; (f)

8

 

attached thereto are all of the items required to be delivered by clause (n) of the
term “Permitted Acquisition” (including without limitation (1) all available financial
statements of DHI, and (2) a copy of each material services agreement, consulting agreement,
lease, credit or financing agreement or other material agreement relating to the DHI
Acquisition that will be in effect after the consummation of the DHI Acquisition); (g) after
giving effect to the DHI Acquisition, the Indebtedness of DHI (other than Indebtedness under
the Loan Documents) shall consist of (1) approximately $2,000,000 in aggregate principal
amount of outstanding Indebtedness under the State of Ohio Loan Agreement, and (2) other
Indebtedness in an aggregate amount not to exceed $35,000; (h) before and after giving
effect to the DHI Acquisition, (1) DHI is not in default in its performance or compliance
with any of the terms or provisions thereof, and (2) the terms of the State of Ohio Loan
Documents and the DHI Acquisition Documents do not conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any Loan Document or
any other Contractual Obligation of any Loan Party or any of its Subsidiaries; (i) no Loan
Party is receiving any opinion of counsel relating to the DHI Acquisition or the
transactions contemplated thereby from counsel to the seller of DHI; (j) simultaneously with
the consummation of the DHI Acquisition, the Prior DHI Intercreditor Agreement will be
terminated; (k) attached thereto is a consent from the Director of Development of the State
of Ohio, acting on behalf of the State of Ohio, which consent shall be in form and substance
satisfactory to Agent and the Lenders; (l) on the First Amendment Effective Date, in the
good faith judgment of Borrower, the fair market value of the State of Ohio Encumbered
Assets is $5,000,000 in the aggregate and the original purchase price thereof is $5,000,000
in the aggregate and including a description of the State of Ohio Encumbered Assets in
detail satisfactory to Agent, (m) attached thereto is an officers’ certificate of each Loan
Party dated as of the First Amendment Effective Date substantially in the form of Exhibit J
annexed to the Credit Agreement and with appropriate attachments, in each case demonstrating
that, after giving effect to the consummation of the transactions contemplated by DHI
Acquisition Documents and this Amendment, such Loan Party on a consolidated basis will be
Solvent; and (n) each of the conditions set forth in Section 3 of this Amendment have been
satisfied;

     (vi) Such agreements, documents, instruments and opinions (including without limitation
originals of stock certificates, stock powers, UCC-1 financing statements, pledge supplement
of Borrower, counterparts of the Guaranty and the Collateral Documents executed by DHI)
contemplated by clause (f) of the term “Permitted Acquisition” and/or by Section 6.13, 6.14
and/or 6.15 of the Credit Agreement;

     (vii) Certificates of resolutions or other action, incumbency certificates and/or other
certificates of Responsible Officers of DHI as Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with counterparts of the Guaranty, the Collateral
Documents and the other Loan Documents executed by DHI;

     (viii) Copies of Organization Documents of DHI certified, in the case of articles of
incorporation, by the Secretary of State of its jurisdiction of incorporation or its
corporate secretary or assistant secretary if a copy certified by the Secretary of State of
its

9

 

jurisdiction of incorporation is not available, and, in the case of its bylaws, by its
corporate secretary or assistant secretary, and a good standing certificate from the
Secretary of State of its jurisdiction of incorporation and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of such jurisdiction, each
dated a recent date prior to the First Amendment Effective Date;

     (ix) One or more favorable opinions of counsel to the Loan Parties substantially in the
form of Exhibits K annexed to the Credit Agreement acceptable to Agent addressed to
Agent and each Lender, as to the matters set forth in such Exhibits and such other matters
concerning the Loan Parties and/or the Loan Documents as the Required Lenders may reasonably
request; and

     (x) Evidence of (a) repayment in full of all Indebtedness outstanding under the
Business Loan Agreement (Asset Based), dated as of April 2, 2009, between DHI, as borrower,
and JPMorgan Chase Bank, N.A., as lender, (b) termination of any commitments to lend or make
other extensions of credit thereunder, and (c) release of all Liens securing Indebtedness or
other obligations of DHI thereunder.

     B. Substantially concurrently with the effectiveness of this Amendment on the First Amendment
Effective Date, the DHI Acquisition and the Merger (as defined in the DHI Acquisition Agreement)
shall have become effective in accordance with the terms of the DHI Acquisition Agreement, the DHI
Acquisition Certificate of Merger, and the laws of the State of Ohio, and as soon as available from
the Secretary of State of the State of Ohio, Borrower shall have delivered to Agent a copy of the
DHI Acquisition Certificate of Merger, file stamped by the Secretary of State of the State of Ohio.

     C. On or before the First Amendment Effective Date, Borrower shall pay to counsel to Agent all
outstanding Attorney Costs owing to counsel to Agent (including Attorney Costs incurred in
connection with this Amendment) to the extent invoiced prior to the date hereof.

     D. On or before the First Amendment Effective Date, all corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all documents incidental
thereto required to be, and not previously found to be, acceptable by Agent, acting on behalf of
Lenders, and its counsel shall be satisfactory in form and substance to Agent and such counsel, and
Agent and such counsel shall have received all such counterpart originals or certified copies of
such documents as Agent may reasonably request.

     E. Borrower shall pay to each Lender executing this Amendment on or before the First Amendment
Effective Date, by 5:00 PM, California time, on the First Amendment Effective Date, an amendment
fee equal 0.05% of the sum of such Lender’s Commitment.

Section 4. BORROWER’S REPRESENTATIONS AND WARRANTIES

          In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement and
the Security Agreement in the manner provided herein, Borrower represents and warrants to each
Lender that the following statements are true, correct and complete:

10

 

     A. Corporate Power and Authority. Each Loan Party has all requisite corporate power and
authority to enter into this Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Credit Agreement as amended by this Amendment (the “Amended
Agreement”), the Security Agreement as amended by this Amendment (the “Amended Security Agreement”)
and the other Loan Documents.

     B. Authorization of Agreements. The execution and delivery of this Amendment and the
performance of the Amended Agreement and the Amended Security Agreement have been duly authorized
by all necessary corporate action on the part of each Loan Party.

     C. No Conflict. The execution and delivery by each Loan Party of this Amendment and the
performance by such Loan Party of the Amended Agreement, the Amended Security Agreement and the
other Loan Documents do not and will not (i) violate any provision of any law or any governmental
rule or regulation applicable to such Loan Party or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of such Loan Party or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on such Loan Party or any of
its Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any Contractual Obligation of such Loan Party or any of its
Subsidiaries or any of the State of Ohio Loan Documents, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of such Loan Party or any of its
Subsidiaries (other than Liens created under any of the Loan Documents in favor of Agent on behalf
of Lenders), or (iv) require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of such Loan Party or any of its Subsidiaries, except for such
approvals or consents which have been obtained on or before the First Amendment Effective Date and
disclosed in writing to Lenders.

     D. Governmental Consents. The execution and delivery by Borrower and Guarantors of this
Amendment and the performance by Borrower and Guarantors of the Amended Agreement, the Amended
Security Agreement and the other Loan Documents do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body except for filings and registrations of the types
referred to in Section 4.1(f) of the Credit Agreement.

     E. Binding Obligation. This Amendment has been duly executed and delivered by each Loan Party
and this Amendment, the Amended Agreement and the Amended Security Agreement are the legally valid
and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable
principles relating to enforceability.

     F. Incorporation of Representations and Warranties From Loan Documents. The representations
and warranties contained in Article V of the Credit Agreement and in the other Loan Documents are
and will be true, correct and complete in all material respects on and as of the First Amendment
Effective Date (both before and after giving effect to the DHI Acquisition and this Amendment) to
the same extent as though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in

11

 

which case they were true, correct and complete in all material respects on and as of such
earlier date.

     G. Absence of Default. Both before and after giving effect to the DHI Acquisition and this
Amendment, no event has occurred and is continuing or will result from the consummation of the
transactions contemplated by this Amendment that would constitute a Default or an Event of Default.

     H. Merger. Concurrently with the filing of the DHI Acquisition Certificate of Merger with the
Secretary of State of the State of Ohio, the Merger (as defined in the DHI Acquisition Agreement)
and the DHI Acquisition will be consummated and DHI shall become a wholly owned direct Subsidiary
of Borrower.

Section 5. MISCELLANEOUS

     A. Waiver Regarding Delivery of a Consent to Assignment of the DHI Acquisition Agreement to
Agent For Collateral Purposes.

     (i) Only with respect to the DHI Acquisition, the Agent and the Lenders hereby waive
delivery of a consent to the assignment of the DHI Acquisition Agreement to Agent for
collateral purposes which is required under clause (n)(iii)(2) of the definition of
“Permitted Acquisition” in the Credit Agreement.

     (ii) Without limiting the generality of the provisions of Section 10.1 of the Credit
Agreement, the waiver set forth above shall be limited precisely as written and relates
solely to the noncompliance by the Loan Parties with clause (n)(iii)(2) of the definition of
“Permitted Acquisition” in the Credit Agreement in the manner and to the extent described
above, and nothing in the waiver set forth above shall be deemed to: (A) constitute a waiver
of compliance by any Loan Party with respect to (1) clause (n)(iii)(2) of the definition of
“Permitted Acquisition” in the Credit Agreement in any other instance or (2) any other term,
provision or condition of the Credit Agreement or any other instrument or agreement referred
to therein or (B) prejudice any right or remedy that Agent or any Lender may now have or may
have in the future under or in connection with the Credit Agreement or any other instrument
or agreement referred to therein.

     B. Reference to and Effect on the Credit Agreement, Security Agreement and the Other Loan
Documents.

     (i) On and after the First Amendment Effective Date, each reference in the Credit
Agreement or the Security Agreement, as applicable, to “this Agreement”, “hereunder”,
“hereof”, “herein” or words of like import referring to the Credit Agreement or the Security
Agreement, as applicable, and each reference in the other Loan Documents to the “Credit
Agreement”, “Security Agreement” “thereunder”, “thereof” or words of like import referring
to the Credit Agreement or Security Agreement, as applicable, shall mean and be a reference
to the Amended Agreement or the Amended Security Agreement, as applicable.

12

 

     (ii) Except as specifically amended by this Amendment, the Credit Agreement, the
Security Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.

     (iii) The execution, delivery and performance of this Amendment shall not, except as
expressly provided herein, constitute a waiver of any provision of, or operate as a waiver
of any right, power or remedy of Agent or any Lender under, the Credit Agreement or any of
the other Loan Documents.

     C. Fees and Expenses. Borrower acknowledges that all costs, fees and expenses as described in
Section 10.4 of the Credit Agreement incurred by Agent and its counsel with respect to this
Amendment and the documents and transactions contemplated hereby shall be for the account of
Borrower.

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

     E. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF CALIFORNIA (INCLUDING WITHOUT LIMITATION SECTION 1646.5 OF THE CIVIL CODE OF THE STATE
OF CALIFORNIA), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

     F. Counterparts; Effectiveness. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically attached to the same
document. This Amendment (other than the provisions of Sections 1 and 2 hereof, the effectiveness
of which is governed by Section 3 hereof) shall become effective upon the execution of a
counterpart hereof by Borrower, each Guarantor and Required Lenders and receipt by Borrower and
Agent of written or telephonic notification of such execution and authorization of delivery
thereof.

Section 6. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS

          Each Guarantor hereby acknowledges that it has read this Amendment and consents to the terms
thereof, and hereby confirms and agrees that, notwithstanding the effectiveness of this Amendment,
the obligations of each Guarantor under each Loan Document to which it is a party or otherwise
bound (i) shall continue in full force and effect, (ii) shall be valid and enforceable, (iii) shall
not be impaired or affected by the execution or effectiveness of this Amendment, and (iv) are
hereby confirmed and ratified in all respects. Each Guarantor acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor is not
required by the terms of the Credit Agreement or any other Loan Document to consent to the
amendments to the Credit Agreement effected pursuant to this

13

 

Amendment, and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document
shall be deemed to require the consent of such Guarantor to any future amendments to the Credit
Agreement.

[signature pages follow]

14

 

          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered by their respective officers thereunto duly authorized as of the date first written
above.

	 	 	 	 	 
	 	BORROWER:

QUIDEL CORPORATION

 	 
	 	By:  	/s/
DOUGLAS BRYANT	 
	 	 	Name:  	DOUGLAS BRYANT	 
	 	 	Title:  	PRESIDENT	 
	 
	 	GUARANTORS:

PACIFIC BIOTECH, INC.

 	 
	 	By:  	/s/
DOUGLAS BRYANT	 
	 	 	Name:  	DOUGLAS BRYANT	 
	 	 	Title:  	PRESIDENT	 
	 
	 	METRA BIOSYSTEMS, INC.

 	 
	 	By:  	/s/
DOUGLAS BRYANT	 
	 	 	Name:  	DOUGLAS BRYANT	 
	 	 	Title:  	PRESIDENT	 
	 
	 	OSTEO SCIENCES CORPORATION

 	 
	 	By:  	/s/
DOUGLAS BRYANT	 
	 	 	Name:  	DOUGLAS BRYANT	 
	 	 	Title:  	PRESIDENT	 
	 
	 	LITMUS CONCEPTS, INC.

 	 
	 	By:  	/s/
DOUGLAS BRYANT	 
	 	 	Name:  	DOUGLAS BRYANT	 
	 	 	Title:  	PRESIDENT	 
	 

[Signature Page to First Amendment]

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Agent

 	 
	 	By:  	/s/
TIFFANY SHIN	 
	 	 	Name:  	TIFFANY SHIN	 
	 	 	Title:  	ASSISTANT
VICE PRESIDENT	 
	 

[Signature Page to First Amendment]

 

 

	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Lender

 	 
	 	By:  	/s/
GEOFFREY C. WILSON	 
	 	 	Name:  	Geoffrey C. Wilson 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	U.S. BANK N.A., as Lender

 	 
	 	By:  	/s/
MAUREEN SULLIVAN	 
	 	 	Name:  	MAUREEN SULLIVAN	 
	 	 	Title:  	VICE
PRESIDENT	 
	 

[Signature Page to First Amendment]

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Lender

 	 
	 	By:  	/s/
LING
LI	 
	 	 	Name:  	LING
LI	 
	 	 	Title:  	VICE
PRESIDENT	 
	 

[Signature Page to First Amendment]

 

 

	 	 	 	 	 
	 	UNION BANK, N.A., as Lender

 	 
	 	By:  	/s/
GLENN FORTIN	 
	 	 	Name:  	Glenn Fortin 	 
	 	 	Title:  	Vice President 	 
	 

[Signature Page to First Amendment]

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