Document:

Exhibit 10.1

 

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

 

This First
Amendment To Amended And Restated Credit Agreement (hereinafter referred to as
the “Amendment”) executed as of the 18th day of July, 2005,
by and among Clayton Williams Energy Inc., a Delaware corporation (“CWEI”),  Southwest Royalties, Inc. (successor by
merger to CWEI-SWR, Inc.), a Delaware corporation (“SWR”, and together
with CWEI and each of their respective successors and permitted assigns, the “Borrowers”
and each a “Borrower”), Warrior Gas Co., a Texas corporation (“Warrior”),
CWEI Acquisitions, Inc. a Delaware corporation (“CWEI Acquisitions”),
Romere Pass Acquisition L.L.C., a Delaware limited liability company (“Romere”),
CWEI Romere Pass Acquisition Corp., a Delaware corporation (“Romere Corp”),
Blue Heel Company, a Delaware corporation (“Blue Heel”), and Tex-Hal
Partners, Inc., a Delaware corporation (“Tex-Hal” and together with
Warrior, CWEI Acquisitions, Romere, Romere Corp and Blue Heel and each of their
successors and permitted assigns, the “Guarantors” and each a “Guarantor”),
JPMorgan Chase Bank, N.A. (successor by merger to Bank One, N.A. (Illinois)), a
national banking association (“JPMorgan Chase”), each of the financial
institutions which is a party hereto (as evidenced by the signature pages to
this Amendment) or which may from time to time become a party to the Agreement
pursuant to the provisions of Section 14.3 thereof or any successor or
permitted assignee thereof (hereinafter collectively referred to as “Lenders”,
and individually, “Lender”), JPMorgan Chase, as Administrative Agent (in
its capacity as Administrative Agent and together with its successors in such
capacity, “Administrative Agent”). 
Capitalized terms used but not defined in this Amendment have the
meanings assigned to such terms in that certain Amended and Restated Credit
Agreement dated as of May 21, 2004, by and among Borrowers, Guarantors,
Administrative Agent and Lenders (as amended, supplemented or otherwise
modified from time to time, the “Agreement”).

 

WITNESSETH:

 

WHEREAS, the Borrowers and the Guarantors have
requested that the Administrative Agent and the Lenders amend the Agreement to
permit the Borrowers and the Guarantors to incur up to $225,000,000 in
additional unsecured indebtedness and the Administrative Agent and the Lenders
(or at least the requisite percentage thereof) 
have agreed to do so on the terms and conditions hereinafter set forth;
and

 

NOW, THEREFORE, for
and in consideration of the mutual covenants and agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and confessed, the Borrowers, the Guarantors, the
Administrative Agent and the Lenders, hereby agree as follows:

 

SECTION 1.         Amendments to the Agreement.  Subject to the satisfaction or waiver in
writing of each condition precedent set forth in Section 3 hereof, and
in reliance on the representations, warranties, covenants and agreements
contained in this Amendment, the 
Agreement shall be amended in the manner provided in this Section 1.

 

1

 

1.1          Additional Definitions.
Article I of the Agreement shall be and it hereby is amended by adding the
following definitions in the correct alphabetical order:

 

“First Amendment” means the First Amendment to Amended and Restated
Credit Agreement, dated July 18, 2005, among Borrowers, Guarantors,
Administrative Agent and Lenders.

 

“Permitted Refinancing Indebtedness” means Indebtedness (for purposes
of this definition, “new Indebtedness”) incurred in exchange for, or proceeds
of which are used to refinance, all of any other permitted Indebtedness (the “Refinanced
Indebtedness”); provided that (a) such new Indebtedness is in an aggregate
principal amount not in excess of the sum of (i) the aggregate principal amount
then outstanding of the Refinanced Indebtedness (or, if the Refinanced
Indebtedness is exchanged or acquired for an amount less than the principal
amount thereof to be due and payable upon a declaration of acceleration
thereof, such lesser amount) and (ii) an amount necessary to pay any fees and
expenses, including premiums, related to such exchange or refinancing; (b) such
new Indebtedness has a stated maturity no earlier than the stated maturity of
the Refinanced Indebtedness and an average life to maturity no shorter than the
average life to maturity of the Refinanced Indebtedness; (c) such new
Indebtedness does not have a stated interest rate in excess of the stated
interest rate of the Refinanced Indebtedness and is not payable more frequently
than the Refinanced Indebtedness; (d) such new Indebtedness is incurred by only
those Persons that are obligors on the Refinanced Indebtedness; and (e) such
new Indebtedness does not contain any material terms, conditions, covenants or
defaults other than those which then exist in the Senior Note Documents or
could be included in the Senior Note Documents by an amendment or other
modification permitted under Section 8.18.

 

“Senior Note Documents” means the Senior Notes and the indenture
pursuant to which the Senior Notes are issued and the Senior Notes evidencing
any Permitted Refinancing Indebtedness and the indenture pursuant to which such
Senior Notes are issued, in each case, as amended, modified or supplemented
from time to time except as prohibited by Section 8.18 (unless waived or
consented to by the Required Lenders in accordance with Section 10.2).

 

“Senior Notes” means the notes evidencing the Indebtedness permitted
under Section 8.11(viii) and any notes evidencing Permitted Refinancing
Indebtedness with respect thereto.

 

1.2          Deleted
Definitions.  Article I of the Agreement shall be and it
hereby is amended by deleting the definitions of “Capital Markets Event” and “Unsecured
Notes” in their entirety.

 

1.3          Mandatory
Prepayments. 
Section 2.7.2 of the Agreement shall be and it hereby is amended by
deleting the second sentence of such Section in its entirety.

 

2

 

1.4          Borrowing Base.  Section
4.1 of the Agreement shall be and it hereby is amended by adding the
following at the end of such Section:

 

Effective upon
the issuance of any Senior Notes permitted by Section 8.11(viii) at any time
prior to July 29, 2005, the Borrowing Base then in effect shall automatically
be adjusted to be an amount equal to (i) $200,000,000 minus (ii) an amount
equal to the product of 0.30 multiplied by the stated principal amount of such
issued Senior Notes, and such amount shall become the new Borrowing Base
immediately upon the date of such issuance, effective and applicable to the
Borrowers, the Administrative Agent and the Lenders on such date until the next
redetermination or modification thereof hereunder.  If no Senior Notes permitted by Section 8.11(viii)
are issued prior to July 29, 2005, then the Borrowing Base then in effect shall
automatically be adjusted to be $200,000,000 effective July 29, 2005, and such
amount shall become the new Borrowing Base, effective and applicable to the
Borrowers, the Administrative Agent and the Lenders on such date until the next
redetermination or modification thereof hereunder, in which case, the Borrowers
jointly and severally agree to pay to the Administrative Agent, for the account
of each Lender then a party to this Agreement, ratably in accordance with its
Pro Rata Share, a Borrowing Base increase fee equal to 0.25% on the amount of
any increase of the Borrowing Base over the Borrowing Base previously in
effect, payable within five Business Days after the effective date of such increase
of the Borrowing Base.  Notwithstanding
anything to the contrary contained herein, effective upon the issuance of any
Senior Notes (but excluding any Permitted Refinancing Indebtedness described in
Section 8.11(x)) permitted by Section 8.11(viii) at any time on or after July
29, 2005, the Borrowing Base then in effect shall automatically be reduced by
an amount equal to the product of 0.30 multiplied by the stated principal
amount of such issued Senior Notes, and the Borrowing Base as so reduced shall become
the new Borrowing Base immediately upon the date of such issuance, effective
and applicable to the Borrowers, the Administrative Agent and the Lenders on
such date until the next redetermination or modification thereof hereunder.

 

1.5          Redetermination of the Borrowing Base. 
Section 4.2 of the Agreement shall be and it hereby is amended by
amending and restating the third sentence of such Section in its entirety to read
as follows:

 

By October 1 of each year beginning October 1, 2004, or within thirty
(30) days after (i) the receipt by the Borrowers of notice from the
Administrative Agent that the Lenders require a Special Redetermination, or
(ii) the Borrowers give notice to the Administrative Agent of their desire
to have a Special Redetermination performed, the Borrowers shall furnish to the
Lenders a Reserve Report in form and substance reasonably satisfactory to the
Administrative Agent, said Reserve Report to utilize economic and pricing
parameters used by the Administrative Agent as established from to time,
together with such other information, reports and data concerning the value of
such Borrowing Base Properties as the Administrative Agent shall deem
reasonably necessary to determine the value of such Borrowing Base Properties.

 

3

 

1.6          Dividends.  Section 8.10
of the Agreement shall be and it hereby is amended in its entirety to read as
follows:

 

8.10         Dividends.  No Borrower will, nor will any Borrower
permit any of its Subsidiaries to, declare or pay any dividends or make any
distributions on its Capital Stock (other than dividends payable in its own
common stock) or redeem, repurchase or otherwise acquire or retire any of its
Capital Stock at any time outstanding, except, any Subsidiary of CWEI may
declare and pay dividends or make distributions with respect to its Capital
Stock to the holders thereof.

 

1.7          Indebtedness.  Section
8.11 of the Agreement shall be and it hereby is amended in its entirety to
read as follows:

 

8.11         Indebtedness.  No Borrower will, nor will any Borrower
permit any of its Subsidiaries to, create, incur or suffer to exist any
Indebtedness, except:

 

(i)            The Loans, the
Guaranties and the Reimbursement Obligations.

 

(ii)           Indebtedness
existing on the date hereof and described in Schedule 8.11.

 

(iii)          Indebtedness
arising under Rate Management Transactions permitted under clause (v) of
Section 8.15.

 

(iv)          At any time prior to
the incurrence of the Indebtedness permitted under clause (viii) of this
Section 8.11 and the prepayment of the Senior Term Indebtedness with the
proceeds thereof, Indebtedness of any Borrower and any Guarantor arising under
the Senior Term Credit Documents.

 

(v)           Indebtedness of any
Borrower to any other Borrower, or of any Guarantor to any Borrower or to any other
Guarantor, or of any Borrower to any Guarantor; provided, that all such
Indebtedness shall be unsecured and subordinated in right of payment to the
payment in full of all of the Obligations in a manner and on terms and
conditions reasonably satisfactory to the Administrative Agent, provided
further, that, upon the written request of the Administrative Agent and within
thirty (30) days of such request, the Credit Parties shall cause such
intercompany Indebtedness to be evidenced by promissory notes reasonably
satisfactory to the Administrative Agent, and shall cause such promissory notes
to be subject to a first priority Lien in favor of the Collateral Agent for the
benefit of the Lenders and, if any Senior Term Indebtedness is still
outstanding, the Senior Term Lenders, on terms and conditions reasonably
satisfactory to the Administrative Agent.

 

(vi)          Indebtedness
consisting of Vendor Financings.

 

(vii)         Purchase Money
Indebtedness and Capitalized Lease Obligations in an aggregate amount at any
time outstanding not to exceed $1,000,000.

 

4

 

(viii)        Indebtedness
consisting of senior unsecured notes in an aggregate outstanding principal
balance at any time not to exceed $225,000,000 and any guarantees thereof; provided
that (a) upon the incurrence thereof, no Unmatured Default or Default has
occurred and is continuing or would result therefrom, (b) such Indebtedness is
unsecured, (c) all Persons incurring such Indebtedness are Borrowers and/or
Guarantors, (d) the stated maturity date with respect to such Indebtedness is
not earlier than the seventh anniversary of the initial issuance of Senior
Notes, (e) the annual coupon interest rate with respect to such
Indebtedness is fixed at a rate that does not exceed 9.50% per annum and is
payable no more frequently than quarterly, (f) the negative covenants and
events of default in the Senior Note Documents (or other provisions which have
the same effect as negative covenants or events of default) are not more
restrictive on any Borrower or any Guarantor than those set forth in the draft
of the Description of the Notes provided to the Lenders prior to the date of
the First Amendment, (g) except in connection with a “change of control” put
option or certain other triggering events relative to asset dispositions as set
forth in such Description of the Notes, the Senior Note Documents do not
provide for or otherwise require any mandatory redemption, repayment,
defeasance, repurchase or other amortization of principal prior to scheduled
maturity, and (h) promptly after the date such Indebtedness is initially
incurred and in any event within ten (10) days after such Indebtedness is
initially incurred, the net proceeds thereof are first used to pay in full the
Indebtedness permitted under the foregoing clause (iv) of this Section 8.11,
and any remaining net proceeds are applied to prepay, without premium or
penalty but subject to the funding indemnification amounts required by Section
3.4, the outstanding Loans.

 

(ix)           Unsecured Indebtedness
not included in the foregoing clauses (i) through (viii) which does not exceed
at any time outstanding $5,000,000.

 

(x)            Indebtedness which
constitutes Permitted Refinancing Indebtedness of Indebtedness described in
clause (viii) of this Section 8.11 and any guarantees thereof.

 

(xi)           Indebtedness
arising under renewals or extensions of (but not increases in the principal
amount) of the Indebtedness described in any of the foregoing clauses (ii) and
(iv).

 

1.8          Amendment of Certain Documents.  Section
8.18 shall be and it hereby is amended in its entirety to read as follows:

 

8.18         Amendments to
Organizational and Other Documents. 
No Borrower will, nor will any Borrower permit any other Credit Party
to, enter into or permit any modification or amendment of, or waive any
material right or obligation of any Person under (a) its Organizational
Documents other than amendments, modifications and waivers which will not,
individually or in the aggregate, have a Material Adverse Effect, or
(b) any Senior Term Credit Document or Senior Note Document if the effect
of any such modification or amendment is to (i) increase the maximum principal
amount of the Senior Term Indebtedness or Senior Notes or rate of interest on
any of the Senior Term Indebtedness or Senior Notes (other than as a result of
the imposition of a default rate of

 

5

 

interest in
accordance with the terms of the Senior Term Credit Documents and the Senior
Note Documents), (ii) change or add any event of default or any covenant
with respect to the Senior Term Indebtedness or the Senior Note Documents if
the effect of such change or addition is to cause any one or more of the Senior
Term Credit Documents or the Senior Note Documents to be more restrictive on
any Credit Party than such Senior Term Credit Documents or such Senior Note
Documents were prior to such change or addition, (iii) change the dates upon
which payments of principal or interest on the Senior Term Indebtedness or the
Senior Note Documents are due, (iv) change any redemption or prepayment
provisions of the Senior Term Indebtedness or the Senior Note Documents, or (v)
grant any Liens in any assets or properties of any Credit Party, other than the
Liens granted to secure the Senior Term Indebtedness under the Loan Documents.

 

1.9          Consolidated
Current Ratio. 
Section 8.22.1 of the Agreement shall be and it hereby is amended in its
entirety to read as follows:

 

8.22.1.     Consolidated Current Ratio. CWEI
will not permit the Consolidated Current Ratio as of the end of any Fiscal
Quarter to be less than 1.00 to 1.00.

 

1.10        Restrictions on Prepayment.
Section 8.27 of the Agreement shall be and it hereby is amended in its
entirety to read as follows:

 

8.27         Restriction on
Payments of Certain Indebtedness. 
Prior to the termination of all Commitments and the payment and
performance in full of the Obligations, CWEI will not, nor will CWEI permit any
other Credit Party to, directly or indirectly, retire, redeem, defease,
repurchase or prepay prior to the scheduled maturity thereof any part of the
principal of, or interest on, the Senior Term Indebtedness, the Senior Notes or
any Permitted Refinancing Indebtedness thereof; provided that (i) so long as
(a) no Default or Unmatured Default exists on the date any such payment is made
or would be caused thereby, and (b) before and after giving effect to any such
payment, the Available Aggregate Commitment is not less than ten percent (10%)
of the Borrowing Base then in effect, the Borrowers may prepay all or any portion
of the outstanding principal balance of the Senior Term Indebtedness and any
accrued but unpaid interest required to be paid in connection with such
prepayment; (ii) so long as (a) no Default or Unmatured Default exists on the
date such payment is made or would be caused thereby and (b) the Borrowers are
in compliance with Section 2.7.2 after giving effect to such payment, the
Borrowers may retire, redeem, defease, repurchase or prepay all or any portion
of the Senior Term Indebtedness, the Senior Notes and/or any Permitted
Refinancing Indebtedness thereof, and any accrued but unpaid interest or any
premium required to be paid in connection with such prepayment, with the net
proceeds of any sale of Capital Stock (other than Disqualified Capital Stock)
of CWEI or the net proceeds of any Permitted Refinancing Indebtedness; and
(iii) so long as (a) no Default or Unmatured Default exists on the date such
payment is made or would be caused thereby and (b) the Borrowers are in
compliance with Section 2.7.2 after giving effect to such prepayment, upon the
initial issuance of any Senior Notes, the Borrowers shall retire, redeem,
defease, repurchase or prepay in full the outstanding principal balance of the
Senior Term

 

6

 

Indebtedness, and any accrued but unpaid
interest thereon with the net proceeds of the issuance of the Senior Notes.

 

SECTION 2.         Consent and Reaffirmation of Guarantors.  By their execution hereof, each Guarantor
hereby (i) acknowledges receipt of this Amendment, (ii) consents to the
Borrowers’ execution and delivery hereof; (iii) agrees to be bound hereby; (iv)
affirms that nothing contained therein shall modify in any respect whatsoever
its guaranty of the obligations of the Borrowers to Lenders pursuant to the
terms of its Guaranty in favor of Administrative Agent and the Lenders and (v)
reaffirms that its Guaranty is and shall continue to remain in full force and
effect.

 

SECTION 3.         Conditions. 
The amendments to the Agreement contained in Section
1 of this Amendment shall be effective upon the satisfaction of each of the
conditions set forth in this Section 3.

 

3.1          Execution and Delivery.  Each Borrower and each Guarantor shall have
executed and delivered this Amendment.

 

3.2          Representations and Warranties.  The representations and warranties of each
Borrower under the Agreement, as amended by the Amendment are true and correct
in all material respects as of such date, as if then made (except to the extent
that such representations and warranties relate solely to an earlier date).

 

3.3          No Event of Default.  No Event of Default shall have occurred and
be continuing nor shall any event have occurred or failed to occur which, with
the passage of time or service of notice, or both, would constitute an Event of
Default.

 

3.4          Other Documents.  The Administrative Agent shall have received
such other instruments and documents incidental and appropriate to the
transaction provided for herein as the Administrative Agent or its special
counsel may reasonably request, and all such documents shall be in form and
substance satisfactory to the Administrative Agent.

 

3.5          Senior
Term Indebtedness Consent.  The Administrative Agent shall have received
a copy of a consent to the incurrence of the Indebtedness under the Senior
Notes (as defined in the Agreement after giving effect to this Amendment), in
form and substance satisfactory to the Administrative Agent and executed by the
holders of the Senior Term Indebtedness (or at least the requisite percentage
thereof).

 

SECTION 4.         Representations and Warranties of Borrowers.  To induce the Lenders to enter into this
Amendment, the Borrowers hereby represent and warrant to the Lenders as
follows:

 

4.1          Reaffirmation of Representations and
Warranties/Further Assurances.  After giving effect to the amendments herein,
each representation and warranty of any Borrower or any Guarantor contained in
the Agreement or in any of the other Loan Documents is true and correct in all
material respects on the date hereof (except to the extent such representations
and warranties relate solely to an earlier date).

 

7

 

4.2          Corporate Authority; No Conflicts.  The execution, delivery and performance by
each Borrower and each Guarantor (to the extent a party hereto or thereto) of
this Amendment and all documents, instruments and agreements contemplated
herein are within each such Borrower’s or such Guarantor’s corporate or other
organizational powers, have been duly authorized by necessary action, require
no action by or in respect of, or filing with, any court or agency of
government and do not violate or constitute a default under any provision of
any applicable law or other agreements binding upon any Borrower or any
Guarantor or result in the creation or imposition of any Lien upon any of the
assets of any Borrower or any Guarantor except for Permitted Liens and
otherwise as permitted in the Agreement.

 

4.3          Enforceability.  This Amendment constitutes the valid and
binding obligation of each Borrower and each Guarantor enforceable in
accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditor’s rights
generally, and (ii) the availability of equitable remedies may be limited by
equitable principles of general application.

 

SECTION 5.         Miscellaneous.

 

5.1          Reaffirmation of Loan Documents and Liens.  Any and all of the terms and provisions of
the Agreement and the Loan Documents shall, except as amended and modified
hereby, remain in full force and effect. 
Each Borrower hereby agrees that the amendments and modifications herein
contained shall in no manner affect or impair the liabilities, duties and
obligations of such Borrower or any Guarantor under the Agreement and the other
Loan Documents or the Liens securing the payment and performance thereof.

 

5.2          Parties in Interest.  All of the terms and provisions of this
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.

 

5.3          Legal Expenses.  The Borrowers hereby agree, jointly and
severally, to pay all reasonable fees and expenses of counsel to the
Administrative Agent incurred by the Administrative Agent in connection with
the preparation, negotiation and execution of this Amendment and all related
documents.

 

5.4          Counterparts.  This Amendment may be executed in one or more
counterparts and by different parties hereto in separate counterparts each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.  However,
this Amendment shall bind no party until the Borrowers, the Guarantors, the
Lenders (or at least the requisite percentage thereof), and the Administrative
Agent have executed a counterpart. 
Delivery of photocopies of the signature pages to this Amendment by
facsimile or electronic mail shall be effective as delivery of manually
executed counterparts of this Amendment.

 

5.5          Complete Agreement.  THIS AMENDMENT, THE AGREEMENT, AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE

 

8

 

PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

5.6          Headings.  The headings, captions and arrangements used
in this Amendment are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify or modify the terms of this Amendment,
nor affect the meaning thereof.

 

[Signature Pages Follow]

 

9

 

IN WITNESS WHEREOF,
the parties have caused this First Amendment to Amended and Restated Credit
Agreement to be duly executed as of the date first above written.

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  CLAYTON WILLIAMS ENERGY, INC.

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Tisdale

  
	
   

  	
   

  	
  Mark
  Tisdale, Vice President and General

  Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SOUTHWEST ROYALTIES, INC.

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Tisdale

  
	
   

  	
   

  	
  Mark
  Tisdale, Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  WARRIOR GAS CO.

  
	
   

  	
  a Texas
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Tisdale

  
	
   

  	
   

  	
  Mark
  Tisdale, Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CWEI ACQUISITIONS, INC.

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Tisdale

  
	
   

  	
   

  	
  Mark
  Tisdale, Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROMERE PASS ACQUISITION L.L.C.

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Tisdale

  
	
   

  	
   

  	
  Mark
  Tisdale, Vice President

  

 

 

	
   

  	
  CWEI ROMERE PASS ACQUISITION CORP.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Tisdale

  
	
   

  	
   

  	
  Mark
  Tisdale, Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLUE HEEL COMPANY

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Tisdale

  
	
   

  	
   

  	
  Mark
  Tisdale, Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TEX-HAL PARTNERS, INC.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Tisdale

  
	
   

  	
   

  	
  Mark
  Tisdale, Vice President

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  (successor
  by merger to Bank One, N.A. (Illinois)),

  
	
   

  	
  as
  Administrative Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wm. Mark
  Cranmer

  
	
   

  	
  Name:  Wm. Mark Cranmer

  
	
   

  	
  Title:    Vice
  President

  

 

 

	
   

  	
  BANK OF SCOTLAND

  
	
   

  	
  as Co-Agent
  and a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Amena Nabi

  
	
   

  	
  Name:

  	
  AMENA NABI

  
	
   

  	
  Title:

  	
  ASSISTANT VICE PRESIDENT

  

 

 

	
   

  	
  UNION BANK OF CALIFORNIA, N.A.

  
	
   

  	
  as
  Syndication Agent and a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kimberly Coil

  
	
   

  	
  Name:

  	
  Kimberly Coil

  
	
   

  	
  Title:

  	
  Assistant Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ali Ahmed

  
	
   

  	
  Name:

  	
  Ali Ahmed

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
  BNP PARIBAS

  
	
   

  	
  as
  Documentation Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Betsy Jocher

  
	
   

  	
  Name:

  	
  Betsy Jocher

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry Robinson

  
	
   

  	
  Name:

  	
  Larry Robinson

  
	
   

  	
  Title:

  	
  Director

  

 

 

	
   

  	
  FORTIS CAPITAL CORP.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michele Jones

  
	
   

  	
  Name:

  	
  Michele Jones

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Darrell Holley

  
	
   

  	
  Name:

  	
  Darrell Holley

  
	
   

  	
  Title:

  	
  Managing Director

  

 

 

	
   

  	
  COMERICA BANK

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alison Fuqua

  
	
   

  	
  Name:

  	
  Alison J. Fuqua

  
	
   

  	
  Title:

  	
  Corporate Banking Officer

  

 

 

	
   

  	
  GUARANTY BANK

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kelly L. Elmore III

  
	
   

  	
  Name:

  	
  Kelly L. Elmore III

  
	
   

  	
  Title:

  	
  Senior Vice President

  

 

 

	
   

  	
  NATEXIS BANQUES POPULAIRES

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donovan C. Broussard

  
	
   

  	
  Name:

  	
  Donovan C. Broussard

  
	
   

  	
  Title:

  	
  Vice President and Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel Payer

  
	
   

  	
  Name:

  	
  Daniel Payer

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

	
   

  	
  BANK OF TEXAS, N.A.

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Michael Delbridge

  
	
   

  	
  Name:

  	
  J. Michael Delbridge

  
	
   

  	
  Title:

  	
  Senior Vice PresidentExhibit 10.1

 

QUIDEL CORPORATION

 

FIRST AMENDMENT TO CREDIT
AGREEMENT

 

This FIRST AMENDMENT TO CREDIT
AGREEMENT (this “Amendment”) is
dated as of June 24, 2005 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 Section 5 hereof, each of the Guarantors listed on the signature
pages hereof (“Guarantors”),
and is made with reference to that certain Credit Agreement dated as of January 31,
2005, as amended to the date hereof by that certain Limited Waiver of Credit
Agreement dated as of May 10, 2005 (as so amended, the “Credit
Agreement”), by and
among Borrower, Lenders and Agent. 
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 amend the Credit Agreement 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 Section 1.1:  Definitions

 

A.                                    Definition of “EBITDA” is hereby amended
by adding the following proviso at the end thereof:

 

“; provided  further, that EBITDA for the
quarter ended March 31, 2005 only shall be increased (to the extent not
already included therein) by up to $17,000,000 of litigation settlement
expenses actually paid to Inverness”

 

B.                                    Definition of “Material Adverse Effect”
is hereby amended to read in full as follows:

 

““Material Adverse Effect”
means (a) a material adverse change in, or a material adverse effect upon,
the business operations, properties, liabilities (actual or contingent),
condition (financial or otherwise) or prospects of Borrower and its
Subsidiaries, taken as a whole; (b) a material impairment of the ability
of any Loan Party to perform its obligations under any Loan Document to which
it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or

 

1

 

enforceability against any Loan Party of any Loan
Document to which it is a party.”

 

C.                                    Definition of “Specified Event” is hereby
deleted in its entirety.

 

1.2                               Amendments to Article V:  Representations and Warranties 

 

A.                                    Section 5.5(c) of the Credit
Agreement is hereby amended to read in full as follows:

 

“(c)                            Other
than the filing and entry into the settlement agreement with Inverness Medical
Innovations, Inc. (“Inverness”) with the respect to the settlement of the
lawsuits between Inverness and Inverness’ affiliates as described in item
number 1 in Schedule 5.6, since December 31, 2003, there has
been no event or circumstance, either individually or in the aggregate, that
has had or could reasonably be expected to have a Material Adverse Effect.”

 

B.                                    Article V of the Credit Agreement is
hereby amended by adding the following new Section 5.19 at the end
thereof:

 

“5.19                  Settlement Agreement.  Borrower has entered into a settlement
agreement with Inverness with respect to the settlement of those lawsuits
between Borrower and Inverness and Inverness’ affiliates (which does not
include the litigation between Borrower and Armkel LLC, currently known as
Church & Dwight) as described in item number 1 of Schedule  5.6,
which settlement agreement is attached to the Form  8-K filed by
Borrower with the Securities and Exchange Commission on May 3, 2005, and
which settlement agreement constitutes the only settlement agreement, as of the
date hereof, relating to the litigation described in Schedule 5.6.  To the best of Borrower’s knowledge, as of June 24,
2005 such litigation between Borrower and Armkel LLC could not reasonably be
expected to have a Material Adverse Effect.”

 

1.3                               Amendments to Article VI:  Affirmative Covenants

 

A.                                    Section 6.2(b) of the Credit
Agreement is hereby amended to read in full as follows:

 

“(b)                           concurrently
with the delivery of the financial statements referred to in Sections 6.1(a) and
(b), a duly completed Compliance Certificate signed by a Responsible
Officer of Borrower;”

 

B.                                    Section 6.3 of the Credit Agreement
is hereby amended by deleting paragraph (c) and redesignating paragraphs (d) and
(e) as paragraphs (c) and (d), respectively.

 

C.                                    Section 6.12(a) of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting the
following therefor:

 

“Net Worth.  Maintain on a consolidated basis Net Worth
equal to at least the sum of the following:

 

2

 

(i)                                     Sixty
Seven Million Five Hundred Thousand Dollars ($67,500,000); plus

 

(ii)                                  the sum
of 50% of net income after income taxes (without subtracting losses) earned in
each fiscal year ending after December 31, 2004 (but, in the case of the
fiscal year ending on December 31, 2005 only, 50% of net income after
income taxes for the period starting on April 1, 2005 and ending on December 31,
2005); plus

 

(iii)                               the
sum of 75% of the net proceeds from any equity securities issued after the date
of this Agreement and on or before the last day of the most recently ended
fiscal quarter; minus

 

(iv) up to
$10,000,000 in Restricted Payments made in cash in fiscal year ending December 31,
2005 to the extent allowed by Section 7.6(d)(i).”

 

D.                                    Section 6.12(b) of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting the
following therefor:

 

“Funded Debt to EBITDA
Ratio.  Maintain on a consolidated
basis a Funded Debt to EBITDA Ratio not exceeding the ratios indicated for each period specified below:

 

	
  Fiscal quarter ending on

  	
   

  	
  Ratios

  	
   

  
	
  December 31, 2004

  	
   

  	
  3.50:1.00

  	
   

  
	
  March 31, 2005

  	
   

  	
  3.50:1.00

  	
   

  
	
  June 30, 2005

  	
   

  	
  3.50:1.00

  	
   

  
	
  September 30, 2005

  	
   

  	
  3.50:1.00

  	
   

  
	
  December 31, 2005

  	
   

  	
  2.25:1.00

  	
   

  
	
  March 31, 2006

  	
   

  	
  2.25:1.00

  	
   

  
	
  June 30, 2006

  	
   

  	
  2.25:1.00

  	
   

  
	
  September 30, 2006

  	
   

  	
  2.25:1.00

  	
   

  
	
  December 31, 2006 and each fiscal quarter
  thereafter

  	
   

  	
  2.00:1.00

  	
   

  

 

This
ratio will be calculated at the end of each reporting period for which this
Agreement requires Borrower to deliver financial statements, using the results
of the four-fiscal quarter period ending with that reporting period.  Notwithstanding the foregoing, if the
Borrower issues Subordinated Indebtedness on terms and conditions acceptable to
Agent and the Required Lenders in their sole discretion in accordance with Section 7.3(e),
(i) Borrower shall maintain on a consolidated basis a Senior Debt to
EBITDA Ratio not exceeding 2.00:1.00 for all periods thereafter and (ii) Borrower
shall maintain on a consolidated basis a Funded Debt to EBITDA Ratio not
exceeding the ratios indicated for each period specified below occurring after
such issuance (in lieu of the ratios specified above):

 

3

 

	
  Fiscal quarter ending on

  	
   

  	
  Ratios

  	
   

  
	
  December 31, 2004

  	
   

  	
  3.50:1.00

  	
   

  
	
  March 31, 2005

  	
   

  	
  3.25:1.00

  	
   

  
	
  June 30, 2005

  	
   

  	
  3.25:1.00

  	
   

  
	
  September 30, 2005

  	
   

  	
  3.25:1.00

  	
   

  
	
  December 31, 2005

  	
   

  	
  3.00:1.00

  	
   

  
	
  March 31, 2006 and each fiscal quarter
  thereafter

  	
   

  	
  3.00:1.00”

  	
   

  

 

E.                                      Section 6.12(d) of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting the
following therefor:

 

“Minimum EBITDA.

 

(i)                                     As of the last date of each period set
forth below, maintain EBITDA for such period in an amount in excess of the
amount set forth below for the period set forth below:

 

	
  Trailing 4 Quarter period Ending On

  	
   

  	
  Minimum EBITDA

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  8,000,000

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  8,000,000

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  13,000,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  13,000,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
  December 31, 2007 and each fiscal quarter end
  occurring thereafter

  	
   

  	
  $

  	
  20,000,000

  	
   

  

 

(ii)                                  Commencing
with December 31, 2007 and as of December 31 for each fiscal year
thereafter, maintain EBITDA for the fiscal year ending on such date (the “Applicable
Fiscal Year”) to be not less than the sum (without duplication) of (x) 80%
of EBITDA for the immediately preceding fiscal year (without giving effect to
any Permitted Acquisition consummated during the Applicable Fiscal Year) plus (ii) 75%
of EBITDA for the Applicable Fiscal Year of Persons acquired pursuant to a
Permitted Acquisition during the Applicable Fiscal Year as set forth on the
audited financial statements of such Persons for such period.”

 

1.4                               Amendment to Article VII:
Negative Covenants

 

Section 7.6 of the Credit Agreement is
hereby amended by (1) deleting the word “and” appearing at the end of
paragraph (b) thereof, (2) deleting the period appearing at the end
of paragraph (c) thereof and substituting in lieu thereof “; and”, and (3) adding
the following new paragraph (d):

 

4

 

“(d) so long as no
Default or Event of Default shall have occurred and is continuing or shall be
caused thereby, Borrower may purchase, redeem or otherwise acquire shares of
its common stock or other common equity interests for cash consideration not
exceeding (i) $10,000,000 during the fiscal year ending December 31,
2005 and (ii) $25,000,000 in the aggregate during the period beginning on January 1,
2005 and ending on December 31, 2007 (including any amount described in
clause (i) above).”

 

1.5                               Amendment to Article VIII:
Events of Default and Remedies

 

A.                                    Section 8.1(h) of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting the
following therefor:

 

“(h)                           Judgments.  There is entered
against Borrower or any Subsidiary (i) a judgment or order for the payment
of money in an aggregate amount exceeding the Threshold Amount (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage), or (ii) any one or more non-monetary judgments that
have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B) there
is a period of 30 days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or”

 

B.                                    Section 8.1(l) of the Credit Agreement
is hereby amended by deleting it in its entirety and substituting the following
therefor:

 

“(l)                               Material
Adverse Effect.  There occurs any event or circumstance that
has a Material Adverse Effect; or”

 

Section 2.                                          CONDITIONS TO EFFECTIVENESS

 

Section 1 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 good standing certificate of Borrower
from the Secretary of State of the State of Delaware, dated a recent date prior
to the First Amendment Effective Date;

 

(ii)                                  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;

 

5

 

(iii)                               Resolutions of its Board of Directors
approving and authorizing the execution, delivery, and performance of this
Amendment, 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;

 

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

 

(v)                                 Executed copies of this Amendment
executed by Borrower and each Guarantor.

 

B.                                    Lenders shall have received an amendment
fee equal to $10,000.

 

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).

 

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 not previously found 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.

 

Section 3.                                          BORROWER’S REPRESENTATIONS AND
WARRANTIES

 

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

 

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”) and the other
Loan Documents.

 

B.                                    Authorization of Agreements. 
The execution and delivery of this Amendment and the performance of the
Amended 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 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, (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

 

6

 

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.

 

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 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.

 

E.                                      Binding Obligation. 
This Amendment has been duly executed and delivered by each Loan Party
and this Amendment and the Amended 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 Credit Agreement.  The
representations and warranties contained in Section 5 of the Credit
Agreement are and will be true, correct and complete in all material respects
on and as of the First Amendment Effective Date 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 which case they were
true, correct and complete in all material respects on and as of such earlier
date.

 

G.                                    Absence of Default. 
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.

 

Section 4.                                          MISCELLANEOUS

 

A.                                    Reference to and Effect on the
Credit Agreement and the Other Loan Documents.

 

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

 

(ii)                                        Except as specifically amended by this
Amendment, the Credit 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.

 

7

 

B.                                    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.

 

C.                                    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.

 

D.                                    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.

 

E.                                      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 Section 1 hereof, the effectiveness of which is
governed by Section 2 hereof) shall become effective upon the execution of
a counterpart hereof by Borrower and Required Lenders and receipt by Borrower
and Agent of written or telephonic notification of such execution and
authorization of delivery thereof.

 

Section 5.                                          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 its applicable Guaranty and the Collateral
Documents shall not be impaired or affected and the applicable Guaranty and the
Collateral Documents are, and shall continue to be, in full force and effect
and is hereby confirmed and ratified in all respects.  Each Guarantor further agrees that 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 amendment to the Credit
Agreement.

 

8

 

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/ Paul E.
  Landers

  	
   

  
	
   

  	
  Title: SVP/CFO

  
	
   

  	
  Name: Paul E.
  Landers

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  PACIFIC
  BIOTECH, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul E.
  Landers

  	
   

  
	
   

  	
  Title: Secretary
  and Treasurer

  
	
   

  	
  Name: Paul E.
  Landers

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  METRA
  BIOSYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul E.
  Landers

  	
   

  
	
   

  	
  Title: Secretary
  and Treasurer

  
	
   

  	
  Name: Paul E.
  Landers

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OSTEO
  SCIENCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul E.
  Landers

  	
   

  
	
   

  	
  Title: Secretary
  and Treasurer

  
	
   

  	
  Name: Paul E.
  Landers

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LITMUS
  CONCEPTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul E.
  Landers

  	
   

  
	
   

  	
  Title: Secretary
  and Treasurer

  
	
   

  	
  Name: Paul E.
  Landers

  

 

 

[Signature Page to First Amendment]

 

 

	
   

  	
    BANK
  OF AMERICA, N.A., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Prochaska

  	
   

  
	
   

  	
  Title: Senior
  Vice President

  
	
   

  	
  Name: John
  Prochaska

  

 

 

[Signature Page to First Amendment]

 

 

	
   

  	
    BANK
  OF AMERICA, N.A., as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Prochaska

  	
   

  
	
   

  	
  Title: Senior
  Vice President

  
	
   

  	
  Name: John
  Prochaska

  

 

 

[Signature Page to First Amendment]

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