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Exhibit 10.22  

 
 

CREDIT AGREEMENT    

Dated
as of September 21, 2007 

among

PROMETHEUS
LABORATORIES INC.,

as the Borrower, 

THE
DOMESTIC SUBSIDIARIES OF THE BORROWER

FROM TIME TO TIME PARTY HERETO,

as the Guarantors, 

BANK
OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender and L/C Issuer, 

COMERICA
BANK,

as Syndication Agent, 

US
BANK NA,

as Documentation Agent 

and

THE
OTHER LENDERS PARTY HERETO 

   

   

    

BANC
OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Book Manager 

TABLE OF CONTENTS 

	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS	 	1
	        1.01	 	Defined Terms.	 	1
	        1.02	 	Other Interpretive Provisions.	 	23
	        1.03	 	Accounting Terms.	 	24
	        1.04	 	Rounding.	 	25
	        1.05	 	Times of Day.	 	25
	        1.06	 	Letter of Credit Amounts.	 	25
	ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS	 	25
	        2.01	 	Revolving Loans and Term Loan.	 	25
	        2.02	 	Borrowings, Conversions and Continuations of Loans.	 	25
	        2.03	 	Letters of Credit.	 	28
	        2.04	 	Swing Line Loans.	 	35
	        2.05	 	Prepayments.	 	37
	        2.06	 	Termination or Reduction of Commitments.	 	39
	        2.07	 	Repayment of Loans.	 	39
	        2.08	 	Interest.	 	40
	        2.09	 	Fees.	 	40
	        2.10	 	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.	 	41
	        2.11	 	Evidence of Debt.	 	41
	        2.12	 	Payments Generally; Administrative Agent's Clawback.	 	42
	        2.13	 	Sharing of Payments.	 	43
	ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY	 	44
	        3.01	 	Taxes.	 	44
	        3.02	 	Illegality.	 	46
	        3.03	 	Inability to Determine Rates.	 	46
	        3.04	 	Increased Cost and Reduced Return; Capital Adequacy.	 	47
	        3.05	 	Funding Losses.	 	48
	        3.06	 	Matters Applicable to all Requests for Compensation.	 	48
	        3.07	 	Survival.	 	49
	ARTICLE IV GUARANTY	 	49
	        4.01	 	The Guaranty.	 	49
	        4.02	 	Obligations Unconditional.	 	49
	        4.03	 	Reinstatement.	 	50
	        4.04	 	Certain Additional Waivers.	 	50
	        4.05	 	Remedies.	 	51
	        4.06	 	Rights of Contribution.	 	51
	        4.07	 	Guarantee of Payment; Continuing Guarantee.	 	51
	ARTICLE V CONDITIONS PRECEDENT TO CREDIT EXTENSIONS	 	51
	        5.01	 	Conditions of Closing.	 	51
	        5.02	 	Conditions to all Credit Extensions.	 	53
	ARTICLE VI REPRESENTATIONS AND WARRANTIES	 	54
	        6.01	 	Existence, Qualification and Power.	 	54
	        6.02	 	Authorization; No Contravention.	 	54
	        6.03	 	Governmental Authorization; Other Consents.	 	54
	        6.04	 	Binding Effect.	 	55
	        6.05	 	Financial Statements; No Material Adverse Effect.	 	55
	        6.06	 	Litigation.	 	56
	        6.07	 	No Default.	 	56
	        6.08	 	Ownership of Property; Liens.	 	56
	        6.09	 	Environmental Compliance.	 	56
	        6.10	 	Insurance.	 	57
	 	 	 	 	 

 

	        6.11	 	Taxes.	 	57
	        6.12	 	ERISA Compliance.	 	57
	        6.13	 	Subsidiaries.	 	58
	        6.14	 	Margin Regulations; Investment Company Act.	 	58
	        6.15	 	Disclosure.	 	58
	        6.16	 	Compliance with Laws and Material Contractual Obligations.	 	58
	        6.17	 	Intellectual Property; Licenses, Etc.	 	58
	        6.18	 	Solvency.	 	59
	        6.19	 	Perfection of Security Interests in the Collateral.	 	59
	        6.20	 	Business Locations.	 	59
	        6.21	 	Labor Matters.	 	59
	ARTICLE VII AFFIRMATIVE COVENANTS	 	59
	        7.01	 	Financial Statements.	 	60
	        7.02	 	Certificates; Other Information.	 	60
	        7.03	 	Notices.	 	62
	        7.04	 	Payment of Obligations.	 	63
	        7.05	 	Preservation of Existence, Etc.	 	63
	        7.06	 	Maintenance of Properties.	 	63
	        7.07	 	Maintenance of Insurance.	 	63
	        7.08	 	Compliance with Laws.	 	63
	        7.09	 	Books and Records.	 	64
	        7.10	 	Inspection Rights.	 	64
	        7.11	 	Use of Proceeds.	 	64
	        7.12	 	Additional Subsidiaries.	 	64
	        7.13	 	ERISA Compliance.	 	65
	        7.14	 	Pledged Assets.	 	65
	        7.15	 	Landlord Consents.	 	66
	ARTICLE VIII NEGATIVE COVENANTS	 	66
	        8.01	 	Liens.	 	66
	        8.02	 	Investments.	 	68
	        8.03	 	Indebtedness.	 	68
	        8.04	 	Fundamental Changes.	 	69
	        8.05	 	Dispositions.	 	70
	        8.06	 	Restricted Payments.	 	70
	        8.07	 	Change in Nature of Business.	 	71
	        8.08	 	Transactions with Affiliates and Insiders.	 	71
	        8.09	 	Burdensome Agreements.	 	71
	        8.10	 	Use of Proceeds.	 	72
	        8.11	 	Financial Covenants.	 	72
	        8.13	 	Prepayment of Other Indebtedness, Etc.	 	73
	        8.14	 	Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity.	 	73
	        8.15	 	Ownership of Subsidiaries.	 	73
	        8.16	 	Sale Leasebacks.	 	73
	ARTICLE IX EVENTS OF DEFAULT AND REMEDIES	 	73
	        9.01	 	Events of Default.	 	73
	        9.02	 	Remedies Upon Event of Default.	 	75
	        9.03	 	Application of Funds.	 	76
	ARTICLE X ADMINISTRATIVE AGENT	 	77
	        10.01	 	Appointment and Authority.	 	77
	        10.02	 	Rights as a Lender.	 	77
	 	 	 	 	 

ii

 

	        10.03	 	Exculpatory Provisions.	 	77
	        10.04	 	Reliance by Administrative Agent.	 	78
	        10.05	 	Delegation of Duties.	 	78
	        10.06	 	Resignation of the Administrative Agent.	 	78
	        10.07	 	Non-Reliance on Administrative Agent and Other Lenders.	 	79
	        10.08	 	No Other Duties; Etc.	 	80
	        10.09	 	Administrative Agent May File Proof of Claims.	 	80
	        10.10	 	Collateral and Guaranty Matters.	 	80
	ARTICLE XI MISCELLANEOUS	 	81
	        11.01	 	Amendments, Etc.	 	81
	        11.02	 	Notices and Other Communications; Facsimile Copies.	 	83
	        11.03	 	No Waiver; Cumulative Remedies.	 	84
	        11.04	 	Expenses; Indemnity; Damage Waiver.	 	85
	        11.05	 	Payments Set Aside.	 	86
	        11.06	 	Successors and Assigns.	 	86
	        11.07	 	Confidentiality.	 	90
	        11.08	 	Set-off.	 	91
	        11.09	 	Interest Rate Limitation.	 	91
	        11.10	 	Counterparts.	 	91
	        11.11	 	Integration.	 	91
	        11.12	 	Survival of Representations and Warranties.	 	91
	        11.13	 	Severability.	 	92
	        11.14	 	Replacement of Lenders.	 	92
	        11.15	 	Governing Law; Jurisdiction, Etc.	 	93
	        11.16	 	California Judicial Reference.	 	93
	        11.17	 	Waiver of Right to Trial by Jury.	 	94
	        11.18	 	USA PATRIOT Act Notice.	 	94
	        11.19	 	No Advisory or Fiduciary Relationship	 	94

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	SCHEDULES	 	 
	

        2.01	
 	

Commitments and Pro Rata Shares	
 	

 
	        6.06	 	Litigation	 	 
	        6.10	 	Insurance	 	 
	        6.13	 	Subsidiaries	 	 
	        6.17	 	IP Rights	 	 
	        6.20(a)	 	Locations of Tangible Personal Property	 	 
	        6.20(b)	 	Location of Chief Executive Office, Etc.	 	 
	        8.01	 	Existing Liens	 	 
	        8.02(b)	 	Existing Investments	 	 
	        8.02(c)	 	Borrower Investment Policy	 	 
	        8.03	 	Existing Indebtedness	 	 
	        11.02	 	Certain Addresses for Notices	 	 
	

EXHIBITS	
 	

 
	

        A	
 	

Form of Loan Notice	
 	

 
	        B	 	Form of Swing Line Loan Notice	 	 
	        C-1	 	Form of Revolving Note	 	 
	        C-2	 	Form of Swing Line Note	 	 
	        C-3	 	Form of Term Note	 	 
	        D	 	Form of Compliance Certificate	 	 
	        E	 	Form of Assignment and Assumption	 	 
	        F	 	Form of Joinder Agreement	 	 

iv

CREDIT AGREEMENT  

        This CREDIT AGREEMENT is entered into as of September 21, 2007 among PROMETHEUS LABORATORIES INC., a California corporation (the
"Borrower"), the Guarantors (defined herein), each Lender from time to time party hereto (collectively, the
"Lenders" and individually, a "Lender") and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line
Lender and L/C Issuer. 

        The
Borrower has requested that the Lenders provide certain credit facilities for the purposes set forth herein, and the Lenders are willing to do so on the terms and conditions set
forth herein. 

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

ARTICLE I  

 DEFINITIONS AND ACCOUNTING TERMS  

1.01    Defined Terms.    

        As
used in this Agreement, the following terms shall have the meanings set forth below: 

        "1996 License Agreement" means that certain Exclusive License Agreement, dated as of August 14, 1996, by and among Cedars-Sinai
Medical Center, the Regents of the University of California acting through its campus at Los Angeles, and the Borrower. 

        "Acquisition", by any Person, means the acquisition by such Person on or after the Closing Date, in a single transaction or in a series of
related transactions, of (a) all or any substantial portion of the Property of another Person or at least a majority of the Voting Stock of another Person, in each case whether or not involving
a merger or consolidation with such other Person and whether for cash,
Property, services, assumption of Indebtedness, securities or otherwise and (b) any patents, patent rights, licenses or other intellectual property rights of any Person or agreements or
contracts related thereto outside the ordinary course of business. 

        "Additional Term Loan" has the meaning provided in Section 2.02(f). 

        "Administrative Agent" means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor
administrative agent. 

        "Administrative Agent's Office" means the Administrative Agent's address and, as appropriate, account as set forth on  Schedule 11.02 or such other address or
account as the Administrative Agent may from time to time notify the Borrower and the Lenders.
 

        "Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent. 

        "Affiliate" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with the Person specified. 

        "Aggregate Revolving Commitments" means the Revolving Commitments of all the Lenders. The initial amount of the Aggregate Revolving
Commitments in effect on the Closing Date is TWENTY-FIVE MILLION DOLLARS ($25,000,000). 

        "Agreement" means this Credit Agreement, as amended, modified, supplemented or extended from time to time. 

 

        "Applicable Rate" means the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section 7.02(b): 

	Pricing Tier
 
	 	Consolidated Leverage Ratio
	 	Eurodollar Rate Loans
	 	Letter of Credit Fee
	 	Base Rate Loans
	 	Commitment Fee

	1	 	3 2.0:1.0	 	2.00%	 	2.00%	 	1.00%	 	0.50%
	2	 	< 2.0:1.0 but 3 1.5:1.0	 	1.75%	 	1.75%	 	0.75%	 	0.375%
	3	 	< 1.5:1.0 but 3 1.0:1.0	 	1.50%	 	1.50%	 	0.50%	 	0.25%
	4	 	< 1.0:1.0	 	1.25%	 	1.25%	 	0.25%	 	0.20%

        Any
increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the
date a Compliance Certificate is required to be delivered pursuant to Section 7.02(b); provided,  however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then upon request
of the Required Lenders, Pricing Tier 1 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall continue to apply
until the first Business Day immediately following the date a Compliance Certificate is delivered in accordance with Section 7.02(b), whereupon
the Applicable Rate shall be adjusted based upon the calculation of the Consolidated Leverage Ratio contained in such Compliance Certificate. Subject to the following proviso, the Applicable Rate in
effect from the Closing Date through the first Business Day immediately following the date a Compliance Certificate is required to be delivered pursuant to  Section 7.02(b) for the fiscal quarter
ending March 31, 2008 shall be determined based upon Pricing Tier 3;  provided, however, in the event that any Compliance Certificate delivered by the
Borrower for any fiscal
quarter ending prior to March 31, 2008 or any Pro Forma Compliance Certificate delivered by the Borrower prior to such date demonstrates that the Consolidated Leverage Ratio as of the end of
the applicable fiscal quarter referenced in such certificate is (a) equal to or greater than 1.5 to 1.0 but less than 2.0 to 1.0 or (b) equal to or greater than 2.0 to 1.0, then,
effective as of the first Business Day immediately following the date of the delivery of such certificate, the Applicable Rate shall thereafter be determined based upon Pricing Tier 2 or Pricing Tier
1, respectively, in each case until such time as the Applicable Rate is subsequently eligible for adjustment in accordance with the first sentence of this paragraph. Notwithstanding anything to the
contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of  Section 2.10(b). 

        "Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or
(c) an entity or an Affiliate of an entity that administers or manages a Lender. 

        "Assignee Group" means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same
investment advisor. 

        "Assignment and Assumption" means an Assignment and Assumption substantially in the form of  Exhibit E. 

        "Attorney Costs" means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel. 

        "Attributable Indebtedness" means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof
that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease, the capitalized amount of the remaining lease
payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease,
(c) in respect of any Securitization Transaction of any Person, the outstanding principal amount of such financing, after taking into account reserve accounts and making appropriate
adjustments, determined by the Administrative Agent in its reasonable judgment and (d) in the case of 

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any
Sale and Leaseback Transaction, the present value (discounted in accordance with GAAP at the debt rate implied in the applicable lease) of the obligations of the lessee for rental payments during
the term of such lease). 

        "Audited Financial Statements" means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended
December 31, 2006, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the
notes thereto. 

        "Availability Period" means, with respect to the Revolving Commitments, the period from and including the Closing Date to the earliest of
(a) the Maturity Date, (b) the date of termination of the Aggregate Revolving Commitments pursuant to Section 2.06, and
(c) the date of termination of the commitment of each Lender to make Revolving Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to  Section 9.02. 

        "Bank of America" means Bank of America, N.A. and its successors. 

        "BAS" means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager. 

        "Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus
1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate." The "prime rate" is a rate set by
Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public
announcement of such change. 

        "Base Rate Loan" means a Loan that bears interest based on the Base Rate. 

        "Borrower" has the meaning specified in the introductory paragraph hereto. 

        "Borrower Materials" has the meaning specified in Section 7.02. 

        "Borrowing" means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same
Interest Period made by each of the Lenders pursuant to Section 2.01. 

        "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws
of, or are in fact closed in, the state where the Administrative Agent's Office is located and, if such day relates to any Eurodollar Rate Loan, means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market. 

        "Businesses" means, at any time, a collective reference to the businesses operated by the Borrower and its Subsidiaries at such time. 

        "Capital Lease" means, as applied to any Person, any lease of any Property by that Person as lessee which, in accordance with GAAP, is
required to be accounted for as a capital lease on the balance sheet of that Person. 

        "Cash Collateralize" has the meaning specified in Section 2.03(g). 

        "Cash Equivalents" means, as at any date, (a) securities issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of
acquisition, (b) Dollar denominated time deposits and certificates of deposit 

3

 

of
(i) any Lender, (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (iii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the equivalent thereof (any such bank being an "Approved Bank"),
in each case with maturities of not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the
equivalent thereof) or better by Moody's and maturing within six months of the date of acquisition, (d) repurchase agreements entered into by any Person with a bank or trust company (including
any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States in which such Person
shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase
obligations and (e) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940, as amended, which
are administered by reputable financial institutions having capital of at least $500,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing
subdivisions (a) through (d). 

        "Change in Law" means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect
of any Law, (b) any change in any Law or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request,
guideline or directive (whether or not having the force of Law) by any Governmental Authority. 

        "Change of Control" means an event or series of events by which: 

        (a)   any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but excluding any employee benefit plan
of such person or its subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have "beneficial ownership" of all securities that such
person or group has the right to acquire (such right, an "option right"), whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of thirty-five percent (35%) or more of the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing
body of the Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or 

        (b)   during
any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease
to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors). 

4

 

        "Closing Date" means the date hereof. 

        "Collateral" means a collective reference to all real and personal Property with respect to which Liens in favor of the Administrative
Agent are purported to be granted pursuant to and in accordance with the terms of the Collateral Documents. 

        "Collateral Documents" means a collective reference to the Security Agreement, the Pledge Agreement, the Mortgages and other security
documents as may be executed and delivered by the Loan Parties pursuant to the terms of Section 7.14. 

        "Commitment" means, as to each Lender, the Revolving Commitment of such Lender and/or the Term Loan Commitment of such Lender. 

        "Compliance Certificate" means a certificate substantially in the form of  Exhibit D. 

        "Consolidated Capital Expenditures" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, all expenditures
in respect of the purchase of any fixed or capital assets which are required to be capitalized in accordance with GAAP. 

        "Consolidated Cash Taxes" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the aggregate of all
income Taxes, as determined in accordance with GAAP, to the extent the same are paid in cash during such period. 

        "Consolidated EBITDA" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to
Consolidated Net Income for such period plus (a) the following to the extent deducted in calculating such Consolidated Net Income:
(i) Consolidated Interest Expense for such period, (ii) the provision for federal, state, local and foreign income Taxes payable by the Borrower and its Subsidiaries for such period,
(iii) the amount of depreciation and amortization expense for such period and (iv) all non-cash, non-recurring charges incurred during such period (including,
without limitation, any non-cash stock-based compensation charges and option-based severance expenses); provided that (A) such
charges were not a cash item in the twelve (12) month period prior to such incurrence and (B) any non-cash impairment charges related to the write-off of
intangible assets shall not exceed (1) $6,000,000 in the aggregate for any four fiscal quarter period and (2) $20,000,000 in the aggregate during the term of this Agreement  minus (b) to
the extent included in calculating such Consolidated Net Income, (i) federal, state, local and foreign income tax credits of
the Borrower and its Subsidiaries for such period and (ii) interest income of the Borrower and its Subsidiaries on a consolidated basis for such period, all as determined in accordance with
GAAP. Notwithstanding the foregoing, for purposes of calculating Consolidated EBITDA for any period, the amount of Consolidated EBITDA attributable to Non-Guarantor Subsidiaries for such
period shall not exceed fifteen percent (15%) of total Consolidated EBITDA for such period. 

        "Consolidated Fixed Charge Coverage Ratio" means, as of any date of determination, the ratio of (a) the sum of
(i) Consolidated EBITDA for the period of the four (4) prior fiscal quarters ending on such date minus (ii) Consolidated Cash Taxes
for such period to (b) the sum of (i) cash Consolidated Interest Expense for the period of the four (4) prior fiscal quarters ending on such date,  plus (ii) Consolidated Scheduled
Funded Debt Payments for the period of the four (4) fiscal quarters immediately succeeding such date.
Notwithstanding the foregoing, (x) for purposes of calculating the Consolidated Fixed Charge Coverage Ratio as of the fiscal quarter period ending December 31, 2007, cash Consolidated
Interest Expense for the four (4) fiscal quarter period ending on such date shall be deemed to be cash Consolidated Interest Expense for the fiscal quarter period ending on such date multiplied
by four, (y) for purposes of calculating the Consolidated Fixed Charge Coverage Ratio as of the fiscal quarter period ending March 31, 2008, cash Consolidated Interest Expense for the
four (4) fiscal quarter period ending on such date shall be deemed to be cash Consolidated Interest Expense for the two (2) fiscal quarter period ending on such date multiplied by two
and (z) for purposes of calculating the Consolidated Fixed Charge Coverage Ratio as of the fiscal quarter ending June 30, 

5

 

2008,
cash Consolidated Interest Expense for the four (4) fiscal quarter period ending on such date shall be deemed to be cash Consolidated Interest Expense for the three (3) fiscal
quarter period ending on such date multiplied by one and one third. 

        "Consolidated Funded Indebtedness" means the Funded Indebtedness of the Borrower and its Subsidiaries on a consolidated basis determined
in accordance with GAAP. For the purposes of
clarification, Consolidated Funded Indebtedness shall not include any obligations of the Borrower to purchase the Warrants or the Warrant Shares pursuant to the Securities Purchase Agreement. 

        "Consolidated Interest Expense" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to
the sum of all interest, premium payments, debt discount, fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including (a) payments
consisting of interest in respect of any Capital Lease or any Synthetic Lease or in connection with the deferred purchase price of assets and (b) any interest expense related to the mark to
market of the Warrants or the Warrant Shares), in each case to the extent treated as interest in accordance with GAAP. 

        "Consolidated Leverage Ratio" means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such
date to (b) Consolidated EBITDA for the period of the four (4) fiscal quarters most recently ended for which the Borrower has delivered financial statements pursuant to  Section 7.01(a) or
(b). 

        "Consolidated Net Income" means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income or loss of
the Borrower and its Subsidiaries (excluding extraordinary gains and extraordinary losses) for that period. 

        "Consolidated Scheduled Funded Debt Payments" means for any period for the Borrower and its Subsidiaries on a consolidated basis, the sum
of all scheduled payments of principal on Consolidated Funded Indebtedness, as determined in accordance with GAAP; provided, however, for purposes of calculating the Consolidated Fixed Charge Coverage
Ratio, the installment payments due after December 31, 2011 shall be deemed to be equal to the installment payment for the quarter ended December 31, 2011. For purposes of this
definition, "scheduled payments of principal" (a) shall be determined without giving effect to any reduction of such scheduled payments resulting from the application of any voluntary or
mandatory prepayments made during the applicable period, (b) shall be deemed to include the Attributable Indebtedness in respect of Capital Leases, Synthetic Leases and Sale and Leaseback
Transactions and (c) shall not include any voluntary prepayments or mandatory prepayments required pursuant to Section 2.05. 

        "Consolidated Total Assets" means, as of any date of determination, all assets of the Borrower and its Subsidiaries as determined
according to the consolidated balance sheet contained in the most recent financial statements delivered pursuant to Section 7.01(a) or  (b).

        "Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any of its property is bound. 

        "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another
Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors, managing general partners or the
equivalent. 

        "Credit Extension" means each of the following: (a) a Borrowing and (b) an L/C Credit Extension. 

6

 

        "Debt Issuance" means the issuance by the Borrower or any Subsidiary of any Indebtedness other than Indebtedness permitted under  Section 8.03. 

        "Debtor Relief Laws" means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment
for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to
time in effect and affecting the rights of creditors generally. 

        "Default" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time,
or both, would be an Event of Default. 

        "Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) two percent (2%) per annum;  provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest
rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus two percent (2%) per annum, in each case to the fullest extent permitted by applicable Laws. 

        "Defaulting Lender" means any Lender who (a) has failed to fund any portion of the Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within one (1) Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith
dispute, or (c) has been deemed insolvent or become the subject of a proceeding under the Debtor Relief Laws. 

        "Disposition" or "Dispose" means the sale, transfer, license, lease or other disposition
(including any Sale and Leaseback Transaction) of any Property by the Borrower or any Subsidiary (including the Equity Interests of any Subsidiary), including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, but excluding (i) the sale, lease, license, transfer or other disposition
of inventory in the ordinary course of business of the Borrower and its Subsidiaries, (ii) the sale, lease, license, transfer or other disposition of machinery and equipment no longer used or
useful in the conduct of business of the Borrower and its Subsidiaries, (iii) any sale, lease, license, transfer or other disposition of Property by the Borrower or any Subsidiary to any Loan
Party, provided that the Loan Parties shall cause to be executed and delivered such documents, instruments and certificates as the Administrative Agent
may request so as to cause the Loan Parties to be in compliance with the terms of Section 7.14 after giving effect to such transaction,
(iv) any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any Property of the Borrower or any of its Subsidiaries (or any settlement in lieu
thereof), (v) any Permitted Investment, (vi) any sale, lease, license, transfer or other disposition of Property by any Foreign Subsidiary to another Foreign Subsidiary, (vii) any
sale or other disposition by the Borrower or any Subsidiary of accounts receivable related to diagnostic receivables that are more than one hundred twenty (120) days past due in the ordinary
course of business, (viii) any Equity Issuance and any transaction described in clauses (a) through (g) of the definition of Equity Issuance set forth herein, (ix) any
sale, transfer, license, lease or other disposition of any Property permitted by Section 8.04 or  Section 8.06, (x) any termination of a
lease or sublease with respect to real property or any other termination of any interest in leased
real property, (xi) any sale, transfer or other disposition of cash and Cash Equivalents pursuant to transactions permitted hereunder (xii) any termination of any contract, license or
other agreement, (xiii) the incurrence of any Permitted Lien, (xiv) with respect to any Property that is the subject of and used, developed or created by the Borrower in connection with
the Entocort® EC Distribution Agreement or 1996 License Agreement, respectively, any sale, lease, license, transfer or other disposition of such Property pursuant to the
Entocort® EC Distribution Agreement or 1996 License Agreement, respectively, and (xv) any licensing of IP Rights by a Loan Party to another Person,  provided that (A) any such licensing is
on an arms-length basis on 

7

 

commercially
reasonable terms and (B) the Borrower shall deliver prior written notice to the Administrative Agent of any such transaction that provides annual revenue to the Borrower and/or any
of its Subsidiaries in excess of $500,000 per year. 

        "Dollar" and "$" mean lawful money of the United States. 

        "Domestic Subsidiary" means any Subsidiary that is organized under the Laws of any political subdivision of the United States. 

        "Earn Out Obligations" means, with respect to an Acquisition, all obligations of the Borrower or any Subsidiary to make earn out or other
contingency payments pursuant to the documentation relating to such Acquisition (excluding (a) any such obligations or contingency payments required to be paid with common stock or
nonredeemable preferred stock (or warrants to purchase such securities) of the Borrower and (b) any Milestone Payments). For the avoidance of doubt, Earn Out Obligations shall not
include any contractual royalty payments. The amount of any Earn Out Obligation shall be deemed to be the aggregate liability in respect thereof as recognized on the consolidated balance sheet of the
Borrower and its Subsidiaries in accordance with GAAP. 

        "Eligible Assets" means Property that is used or useful in the same or similar lines of businesses as the Borrower and its Subsidiaries
were engaged in on the Closing Date (or any reasonable extensions or expansions thereof). 

        "Eligible Assignee" means any Person that meets the requirements to be an assignee under  Section 11.06(b)(iii), (v)
and (vi) (subject to
such consents, if any, as may be required under Section 11.06(b)(iii)). 

        "Entocort® EC Distribution Agreement" means that certain Distribution Agreement dated as of November 19, 2004 by and
between AstraZeneca LP, a Delaware limited partnership, and the Borrower. 

        "Environmental Laws" means any and all federal, state, local, foreign and other applicable Laws, decrees, concessions, grants, franchises,
agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to Hazardous
Materials, air emissions and discharges to waste or public systems. 

        "Environmental Liability" means any liability, contingent or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of
any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing. 

        "Equity Interests" means, with respect to any Person, all of the shares of equity interests of (or other ownership or profit interests in)
such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of equity interests of (or other ownership or profit interests in) such Person, all
of the securities convertible into or exchangeable for shares of equity interests of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein),
whether voting or nonvoting. 

        "Equity Issuance" means any issuance by any Loan Party or any Subsidiary to any Person of its Equity Interests, other than (a) any
issuance of its Equity Interests to the Borrower or any other Loan Party, (b) any issuance of its Equity Interests pursuant to the exercise of options or warrants, (c) any 

8

 

issuance
of its Equity Interests pursuant to the conversion of any debt securities to equity or the conversion of any class of equity securities to any other class of equity securities, (d) any
issuance of options, rights or warrants relating to its Equity Interests, (e) any issuance of its Equity Interests in connection with a Public Offering, (f) any issuance by the Borrower
of its Equity Interests pursuant to the Product Acquisition Documents and (g) any issuance by a Loan Party of its Equity Interests to an existing shareholder of such Loan Party. The term
"Equity Issuance" shall not be deemed to include any Disposition. 

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 

        "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412 of the
Internal Revenue Code). 

        "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate. 

        "Eurodollar Liabilities" has the meaning specified in Section 3.04(c). 

        "Eurodollar Rate" means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers
Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by
the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available
at such time for any reason, then the "Eurodollar Rate" for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for
delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the commencement of such Interest Period. 

        "Eurodollar Rate Loan" means a Loan that bears interest at a rate based on the Eurodollar Rate. 

        "Event of Default" has the meaning specified in Section 9.01. 

        "Excluded Property" means, with respect to any Loan Party, (a) any owned or leased real or personal Property which is located
outside of the United States unless otherwise requested by the Administrative Agent or the Required Lenders, (b) any personal Property (including, without limitation, motor vehicles) in respect
of which perfection of a Lien is not either (i) governed by the Uniform Commercial Code or (ii) effected by appropriate evidence of the Lien being filed in either the United States
Copyright Office or the United States Patent and Trademark Office, unless otherwise 

9

 

requested
by the Administrative Agent or the Lenders, (c) any Property which, subject to the terms of Section 8.09, is subject to a Lien
of the type described in Section 8.01(i) pursuant to documents which prohibit such Loan Party from granting any other Liens in such Property,
(d) the Entocort® EC Distribution Agreement, (e) any Equity Interests of Proprius, Inc. acquired by the Borrower pursuant to the Proprius License Agreement,
(f) any Property released from the Lien of the Administrative Agent pursuant to and in accordance with the Loan Documents, (g) any Property to the extent that and for as long as (but
only for so long as) the assignment thereof or the creation of a security interest therein (i) would constitute a breach or default under, result in a termination of or require any consent not
obtained under, (A) if the applicable Property is a contract or other agreement, such contract or other agreement, or (B) in the case of any Property, any lease, permit, license or
agreement related to such Property (in each case as such lease, permit, license or agreement is in effect on the date of this Agreement or the date on which such lease, permit, license or agreement is
first entered into by or issued to the applicable Loan Party) (ii) is prohibited by any Law, or (iii) requires a filing with or consent from any Governmental Authority that has not been
made or obtained, except to the extent that such Law or provisions of any such lease, license or agreement is ineffective under applicable Law or would be ineffective under Sections 9-406,
9-407, 9-408 or 9-409 of the Uniform Commercial Code in the State of New York to prevent the attachment of such security interest, (h) any leased or
subleased office space of any Loan Party and (i) any automobile lease of any Loan Party. 

        "Excluded Taxes" means, with respect to the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) Taxes imposed on or measured by its overall net income (however denominated), and
franchise Taxes imposed on it (in lieu of net income Taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits Taxes imposed by the United States or any similar Taxes imposed by any
other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under  Section 11.14), any withholding
Tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party
hereto (or designates a new Lending Office) or is attributable to such Foreign Lender's failure or inability (other than as a result of a Change in Law) to comply with  Section 3.01(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new
Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding Tax pursuant to Section 3.01(a). 

        "Existing Preferred Stock" means any of the outstanding Series A, B, C, D or E preferred stock of the Borrower (or warrants for
such preferred stock) issued pursuant to the Amended and Restated Articles of Incorporation of the Borrower as in effect on the Closing Date. 

        "Existing Credit Agreement" means that certain Credit Agreement dated as of August 19, 2005 among the Borrower, the lenders party
thereto and Bank of America, as agent, as amended or modified from time to time. 

        "Extraordinary Receipt" means any cash received by or paid to or for the account of the Borrower or any Subsidiary from pension plan
reversions, proceeds of insurance (including, without limitation, any key man life insurance but excluding proceeds of business interruption insurance) and any loss of, damage to or destruction of, or
any condemnation or other taking for public use of, any Property of the Borrower or any of its Subsidiaries (and payments in lieu thereof); provided,  however, that for the purposes of this Agreement and the other Loan Documents, the following shall not be deemed to be an Extraordinary Receipt
(a) any termination payment received by the Borrower pursuant to the Entocort® EC Distribution Agreement or (b) cash receipts by any Loan Party in the ordinary course of
business. 

10

 

        "Facilities" means, at any time, a collective reference to the facilities and real properties owned, leased or operated by the Borrower or
any Subsidiary. 

        "Federal Funds Rate" means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as
so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate
(rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent. 

        "Fee Letter" means the letter agreement, dated August 17, 2007 among the Borrower, the Administrative Agent and BAS. 

        "First-Tier Foreign Subsidiary" means each Foreign Subsidiary that is owned directly by the Borrower or a Guarantor. 

        "Foreign Lender" means any Lender that is organized under the Laws of a jurisdiction other than that in which the Borrower is resident for
Tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. 

        "Foreign Subsidiary" means any Subsidiary that is not a Domestic Subsidiary. 

        "FRB" means the Board of Governors of the Federal Reserve System of the United States. 

        "Fully Satisfied" means, with respect to the Obligations as of any date, that, as of such date, (a) all principal of and interest
accrued to such date which constitute Obligations shall have been irrevocably paid in full in cash, (b) all fees, expenses and other amounts then due and payable which constitute Obligations
shall have been irrevocably paid in cash, (c) all outstanding Letters of Credit shall have been (i) terminated, (ii) fully irrevocably Cash Collateralized or (iii) secured
by one or more letters of credit on terms and conditions, and with one or more financial institutions, reasonably satisfactory to the L/C Issuer and (d) the Commitments shall have expired or
been terminated in full. 

        "Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing
in commercial loans and similar extensions of credit in the ordinary course of its activities. 

        "Funded Indebtedness" means, as to any Person at a particular time, without duplication, all of the following, whether or not included as
indebtedness or liabilities in accordance with GAAP: 

        (a)   all
obligations for borrowed money, whether current or long-term (including the Obligations) and all obligations of such Person evidenced by bonds,
debentures, notes, loan agreements or other similar instruments; 

        (b)   all
purchase money indebtedness; 

        (c)   all
direct obligations arising under letters of credit (including standby and commercial), bankers' acceptances, bank guaranties, surety bonds and similar instruments; 

        (d)   all
obligations in respect of the deferred purchase price of Property or services, including without limitation, any Earn Out Obligations; 

        (e)   all
Attributable Indebtedness; 

11

  

        (f)    all
obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests (excluding the Warrants and Warrant
Shares) in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; 

        (g)   all
Guarantees with respect to Funded Indebtedness of the types specified in clauses (a) through (f) above of another Person; and 

        (h)   all
Funded Indebtedness of the types referred to in clauses (a) through (g) above of any partnership or joint venture (other than a joint venture that is
itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, except to the extent that Funded Indebtedness is expressly made non-recourse
to such Person. 

For
purposes hereof, (x) the amount of any direct obligation arising under letters of credit (including standby and commercial), bankers' acceptances, bank guaranties, surety bonds and similar
instruments shall be the maximum amount available to be drawn thereunder and (y) the amount of any Guarantee shall be the amount of the indebtedness subject to such Guarantee. In addition, for
the avoidance of doubt, the term "Funded Indebtedness" shall not include (i) obligations of a Person under purchase agreements pertaining to potential Acquisitions of such Person prior to
consummation of any such Acquisition, (ii) accrued Taxes, accrued compensation or other accruals of any Person incurred in the ordinary course of business, (iii) trade accounts payable
of any Person incurred in the ordinary course of business, (iv) obligations with respect to the Warrants or Warrant Shares, (v) any such obligations or contingency payments of the type
referred to in clause (d) above required to be paid with common stock or nonredeemable preferred stock (or warrants to purchase such securities), (vi) any Milestone Payments or
(vii) any contractual royalty payments). 

        "GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, consistently applied. 

        "Governmental Authority" means the government of the United States or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank). 

        "Guarantee" means, as to any Person, without duplication (a) any obligation, contingent or otherwise, of such Person guaranteeing
or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation,
(ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee on any given date
shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in 

12

 

respect
thereof as determined by the guaranteeing Person in good faith. The term "Guarantee" as a verb has a corresponding meaning. 

        "Guaranty" means the Guaranty made by the Guarantors in favor of the Administrative Agent and the Lenders pursuant to  Article IV. 

        "Guarantors" means each Domestic Subsidiary of the Borrower identified as a "Guarantor" on the signature pages hereto and each other
Person that joins as a Guarantor pursuant to Section 7.12, together with their successors and permitted assigns. 

        "Hazardous Materials" means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law. 

        "Honor Date" has the meaning specified in Section 2.03(c). 

        "Indebtedness" means, as to any Person at a particular time, without duplication, all of the following, whether or not included as
indebtedness or liabilities in accordance with GAAP: 

        (a)   all
Funded Indebtedness; 

        (b)   net
obligations under any Swap Contract; 

        (c)   all
Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (b) above of any other Person; and 

        (d)   all
Indebtedness of the types referred to in clauses (a) through (c) above of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which the Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the
Borrower or such Subsidiary. 

For
purposes hereof (y) the amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date and (z) the amount
of any Guarantee shall be the amount of the Indebtedness subject to such Guarantee. 

        "Indemnified Taxes" means Taxes other than Excluded Taxes. 

        "Indemnitees" has the meaning specified in Section 11.04(b). 

        "Interest Payment Date" means (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to
such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate
Loan exceeds three (3) months, the respective dates that fall every three (3) months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as
to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date. 

        "Interest Period" means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or
converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice;  provided that: 

          (i)  any
Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next preceding Business Day; 

         (ii)  any
Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at
the end of such 

13

 

Interest
Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and 

        (iii)  no
Interest Period shall extend beyond the Maturity Date. 

        "Interim Financial Statements" has the meaning specified in Section 5.01(c). 

        "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended. 

        "Investment" means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the
purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any
other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) an Acquisition. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment. 

        "IP Rights" has the meaning specified in Section 6.17. 

        "IRS" means the United States Internal Revenue Service. 

        "ISP" means, with respect to any Letter of Credit, the "International Standby Practices 1998" published by the Institute of International
Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance). 

        "Issuer Documents" means with respect to any Letter of Credit, the Letter Credit Application, and any other document, agreement and
instrument entered into by the L/C Issuer and the Borrower or in favor of the L/C Issuer and relating to any such Letter of Credit. 

        "Joinder Agreement" means a joinder agreement substantially in the form of  Exhibit F executed and delivered by a Domestic Subsidiary in accordance with the
provisions of  Section 7.12. 

        "Laws" means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law. 

        "L/C Advance" means, with respect to each Lender, such Lender's funding of its participation in any L/C Borrowing in accordance with its
Pro Rata Share. 

        "L/C Borrowing" means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date
when made or refinanced as a Borrowing of Revolving Loans. 

        "L/C Credit Extension" means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the
renewal or increase of the amount thereof. 

        "L/C Issuer" means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit
hereunder. 

        "L/C Obligations" means, as at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit  plus the aggregate of all Unreimbursed
Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. For all purposes of this Agreement, if
on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such 

14

 

Letter
of Credit shall be deemed to be "outstanding" in the amount so remaining available to be drawn. 

        "Lenders" means (a) each of the Persons identified as a "Lender" on the signature pages hereto and their successors and assigns
and, as the context requires, includes the L/C Issuer and the Swing Line Lender, and (b) each of the Persons who becomes a Lender hereunder pursuant to  Section 2.02(f) and their successors and
assigns. 

        "Lending Office" means, as to any Lender, the office or offices of such Lender described as such in such Lender's Administrative
Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent. 

        "Letter of Credit" means any standby letter of credit issued hereunder. 

        "Letter of Credit Application" means an application and agreement for the issuance or amendment of a letter of credit in the form from
time to time in use by the L/C Issuer. 

        "Letter of Credit Expiration Date" means the day that is thirty (30) days prior to the Maturity Date then in effect (or, if such
day is not a Business Day, the next preceding Business Day). 

        "Letter of Credit Sublimit" means an amount equal to the lesser of (a) the Aggregate Revolving Commitments and
(b) $10,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments. 

        "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease
having substantially the same economic effect as any of the foregoing). 

        "Loan" means an extension of credit by a Lender to the Borrower under Article II in
the form of a Revolving Loan, Swing Line Loan or Term Loan. 

        "Loan Documents" means this Agreement, each Note, each Letter of Credit, each Issuer Document, each Joinder Agreement, the Collateral
Documents, each Request for Credit Extension, each Compliance Certificate, the Fee Letter and each other document, instrument or agreement from time to time executed by the Borrower or any of its
Subsidiaries or any Responsible Officer thereof and delivered in connection with this Agreement. 

        "Loan Notice" means a notice of (a) a Borrowing of Revolving Loans or any portion of the Term Loan, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall
be substantially in the form of Exhibit A. 

        "Loan Parties" means, collectively, the Borrower and each Guarantor. 

        "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the business, assets,
properties, liabilities (actual or contingent), condition (financial or otherwise), operations or prospects of the 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
enforceability against any Loan Party of any Loan Document to which it is a party; provided that in no event shall the repurchase by the Borrower of the
Warrants and/or Warrant Shares pursuant to the terms of Sections 8.08 and/or 8.09 of the Securities Purchase Agreement be considered to be, or result in, a Material Adverse Effect. 

        "Maturity Date" means September 21, 2012; provided that if such date is not a
Business Day, the Maturity Date shall be the next preceding Business Day. 

15

 

        "Mayo Litigation" means the patent litigation between the Borrower and Mayo Collaborative Services as described on Schedule 6.06. 

        "Milestone Payments" means, with respect to the Product Acquisition, all obligations of the Borrower or any Subsidiary to make earn out or
other contingency payments to the Product Seller pursuant to the Product Acquisition Agreement. 

        "Moody's" means Moody's Investors Service, Inc. and any successor thereto. 

        "Mortgages" means the mortgages, deeds of trust or deeds to secure debt that purport to grant to the Administrative Agent a security
interest in the fee interest and/or leasehold interests of any Loan Party in each real Property (other than Excluded Property) acquired or leased by a Loan Party, as the same may be amended, modified,
restated or supplemented from time to time. 

        "Multiemployer Plan" means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or
any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years, has made or been obligated to make contributions. 

        "Net Cash Proceeds" means: 

        (a)   with
respect to any Disposition by any Loan Party or any of its Subsidiaries, any Extraordinary Receipt received or paid to the account of any Loan Party or any of its
Subsidiaries or any Debt Issuance by any Loan Party or any of its Subsidiaries, the excess, if any, of the aggregate cash or Cash Equivalents proceeds received by the Borrower or any Subsidiary in
respect of such Disposition, Extraordinary Receipt, or Debt Issuance, net of (i) direct costs incurred in connection therewith (including, without limitation, legal, accounting and investment
banking fees, and sales commissions), (ii) Taxes paid or payable as a result thereof, (iii) in the case of any Disposition, the amount necessary to retire any Indebtedness secured by a
Permitted Lien (ranking senior to any Lien of the Administrative Agent) on the related Property and (iv) in the case of any Disposition, a reasonable reserve for (A) any adjustment in
respect of the sale price of the applicable Property required pursuant to GAAP and/or (B) the after-tax costs of any liabilities associated with the applicable Property and retained
by the Borrower or a Subsidiary after the sale or other disposition thereof; it being understood that (x) "Net Cash Proceeds" shall include, without limitation, any cash or Cash Equivalents
received upon the sale or other disposition of any non-cash consideration received by the Borrower or any Subsidiary in any Disposition, Debt Issuance or Extraordinary Receipt and
(y) any amounts excluded pursuant to the foregoing clause (iv) shall be included as Net Cash Proceeds at such time as any such reserve is no longer required. 

        (b)   with
respect to the sale or issuance of any Equity Interest by any Loan Party or any of its Subsidiaries, the excess of (i) the sum of the cash and Cash
Equivalents received in connection with such transaction over (ii) the underwriting discounts and commissions, and other reasonable and customary out-of-pocket expenses,
incurred by such Loan Party or such Subsidiary in connection therewith. 

        "Non-Guarantor Subsidiary" means any Subsidiary of the Borrower that is not a Loan Party. 

        "Note" or "Notes" means the Revolving Notes, the Swing Line Note and/or the Term Notes,
individually or collectively, as appropriate. 

        "Obligations" means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party of any proceeding under any Debtor Relief Laws naming such Loan Party as the debtor in
such proceeding, regardless of whether such interest and fees are 

16

 

allowed
claims in such proceeding. The foregoing shall also include any Swap Contract between any Loan Party and any Lender or Affiliate of a Lender. 

        "Organization Documents" means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws
(or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable
Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity. 

        "Other Taxes" means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document
established by a Governmental Authority (but excluding Excluded Taxes). 

        "Outstanding Amount" means (i) with respect to any Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of any Loans occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any
reimbursements by the Borrower of Unreimbursed Amounts. 

        "Participant" has the meaning specified in Section 11.06(d). 

        "PBGC" means the Pension Benefit Guaranty Corporation. 

        "Pension Plan" means any "employee pension benefit plan" (as such term is defined in Section 3(2) of ERISA), other than a
Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five
(5) plan years. 

        "Permitted Acquisitions" means Investments consisting of an Acquisition (other than the Product Acquisition) by the Borrower or any
Subsidiary of the Borrower, provided that (i) if the aggregate consideration for such Acquisition exceeds $5,000,000, the Borrower has provided
the Administrative Agent with prior written notice of such Acquisition, which notice shall include a reasonably detailed description of such Acquisition, (ii) the Property acquired (or the
Property of the Person acquired) in such Acquisition is used or useful in the same or a similar line of business as the Borrower and its Subsidiaries were engaged in on the Closing Date (or any
reasonable extensions or expansions thereof), (iii) the Administrative Agent shall have received all items in respect of the Equity Interests or Property acquired in such Acquisition required
to be delivered by the terms of Section 7.12 and/or Section 7.14, (iv) in the case
of an Acquisition of the Equity Interests of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition, (v) if
the aggregate consideration for such Acquisition exceeds $5,000,000 the Borrower shall have delivered to the Administrative Agent a Pro Forma Compliance Certificate demonstrating that, upon giving
effect to such Acquisition on a Pro Forma Basis, the Loan Parties would be in compliance with the financial covenants set forth in Section 8.11
as of the end of the most recent fiscal quarter for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or  (b),
(vi) if the aggregate consideration for such Acquisition exceeds $5,000,000 the representations and 

17

 

warranties
made by the Loan Parties in any Loan Document shall be true and correct in all material respects at and as if made as of the date of such Acquisition (after giving effect thereto) except to
the extent such representations and warranties expressly relate to an earlier date, (vii) if such transaction involves the purchase of an interest in a partnership between the Borrower (or a
Subsidiary of the Borrower) as a general partner and entities unaffiliated with the Borrower or such Subsidiary as the other partners, such transaction shall be effected by having such equity interest
acquired by a corporate holding company directly or indirectly wholly-owned by the Borrower newly formed for the sole purpose of effecting such transaction and (viii) the aggregate
consideration (including cash and non-cash consideration, any assumption of Indebtedness, deferred purchase price and any Earn Out Obligations) for all such Acquisitions occurring during
(A) any fiscal year shall not exceed $40,000,000 and (B) the term of this Agreement shall not exceed $75,000,000; provided, that the aggregate consideration (including cash and
non-cash consideration, any assumption of Indebtedness, deferred purchase price and any Earn Out Obligations) for (1) any Acquisition of less than all of the Voting Stock of any
Person shall not exceed $15,000,000 and (2) all Acquisitions of less than all of the Voting Stock of any Person shall not exceed $40,000,000 in the aggregate during the term of this Agreement. 

        "Permitted Investments" means, at any time, Investments by the Borrower or any of its Subsidiaries permitted to exist at such time
pursuant to the terms of Section 8.02. 

        "Permitted Liens" means, at any time, Liens in respect of Property of the Borrower or any of its Subsidiaries permitted to exist at such
time pursuant to the terms of Section 8.01. 

        "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity. 

        "Plan" means any "employee benefit plan" (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with
respect to any such plan that is subject to Section 412 of the Internal Revenue Code or Title IV of ERISA, any ERISA Affiliate. 

        "Platform" has the meaning specified in Section 7.02. 

        "Pledge Agreement" means the pledge agreement dated as of the Closing Date executed in favor of the Administrative Agent by each of the
Loan Parties. 

        "Product Acquisition" means the Acquisition by the Borrower of a therapeutic product (the "Product
Assets") from a global pharmaceutical company (the "Product Seller"); provided
that (i) the Administrative Agent shall receive, prior to or within thirty (30) days following the closing of the Product Acquisition, all items in respect of the Property acquired in
the Product Acquisition required to be delivered by the terms of Section 7.12 and/or  Section 7.14, (ii) on or before the date of the
execution of the Product Acquisition Agreement, the Borrower shall have delivered to the
Administrative Agent a Pro Forma Compliance Certificate demonstrating that as of such execution date, upon giving effect to the Product Acquisition on a Pro Forma Basis, (A) the Loan Parties
would be in compliance with the financial covenants set forth in Section 8.11 and (B) the Consolidated Leverage Ratio would be equal to or
less than 1.75 to 1.00, in each case as of the end of the most recent fiscal quarter for which the Borrower has delivered financial statements pursuant to Sections
7.01(a) or (b), (iii) the representations and warranties made by the Loan Parties in any Loan Document shall be true and
correct in all material respects at and as if made as of the date of the execution of the Product Acquisition Agreement except to the extent such representations and warranties expressly relate to an
earlier date, (iv) prior to execution by the Borrower, the Administrative Agent shall have received and reviewed the final draft of the Product Acquisition Agreement (which may include an
escrow payment in an aggregate amount not to exceed $80,000,000) and the other material Product Acquisition Documents, the terms of which shall be reasonably satisfactory to the Administrative Agent
and the Required Lenders (including all exhibits and schedules thereto, all representations and warranties contained therein with respect to the Product Assets and the 

18

 

escrow
provisions, if any), (v) promptly following the execution of the Product Acquisition Agreement, the Administrative Agent shall receive an executed copy of the Product Acquisition
Agreement and the other material Product Acquisition Documents then in effect, certified by a Responsible Officer of the Borrower to be true, correct and complete, (vi) (A) the Product
Acquisition Agreement and the other Product Acquisition Documents shall not have been altered, amended or otherwise changed or supplemented in any material respect from the drafts thereof delivered to
the Administrative Agent pursuant to the foregoing clause (iv) and (B) no material condition in the Product Acquisition Agreement shall have been waived, in each case on or before the
closing date of the Product Acquisition without the written consent of the Administrative Agent and the Required Lenders, and (vii) the Product Acquisition shall be consummated in accordance
with the material terms of the Product Acquisition Agreement and in material compliance with applicable law and regulatory approvals, and all material governmental, shareholder and third party
consents necessary to purchase the Product Assets shall be obtained. 

        "Product Acquisition Agreement" means the purchase agreement between the Borrower and Product Seller with respect to the Product Assets,
together with all exhibits and schedules thereto. 

        "Product Acquisition Documents" means the Product Acquisition Agreement and all other agreements, instruments and documents executed and
delivered in connection with the Product Acquisition. 

        "Product Assets" has the meaning specified in the definition of "Product Acquisition" set forth in this  Section 1.01. 

        "Product Seller" has the meaning specified in the definition of "Product Acquisition" set forth in this  Section 1.01. 

        "Pro Forma Basis" means, for purposes of calculating the Consolidated Leverage Ratio and the Consolidated Fixed Charge Coverage Ratio
(including for purposes of determining the Applicable Rate) that any Disposition, Extraordinary Receipt or Acquisition shall be deemed to have occurred as of the first day of the most recent four
fiscal quarter period preceding the date of such transaction for which the Borrower has delivered financial statements pursuant to  Section 7.01(a) or (b). In connection with the foregoing, (a) with respect to any
Disposition or Extraordinary Receipt, income statement and cash flow statement items (whether positive or negative) attributable to the Property disposed of shall be excluded to the extent relating to
any period occurring prior to the date of such transaction and (b) with respect to any Acquisition, income statement items (whether positive or negative) attributable to the Person or Property
acquired shall be included to the extent relating to any period applicable in such calculations to the extent (i) such items are not otherwise included in such income statement items for the
Borrower and its Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth in Section 1.01 and (ii) such
items are supported by audited financial statements or other information reasonably satisfactory to the Administrative Agent. 

        "Pro Forma Compliance Certificate" means a certificate of a Responsible Officer of the Borrower containing reasonably detailed calculation
of the financial covenants set forth in Section 8.11 as of the most recent fiscal quarter end for which the Borrower has delivered financial
statements pursuant to Section 7.01(a) or (b) after giving effect to the applicable transaction
on a Pro Forma Basis. 

        "Pro Rata Share" means, as to each Lender at any time, (a) with respect to such Lender's Revolving Commitment at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Revolving Commitment of such Lender at such time and the denominator of which
is the amount of the Aggregate Revolving Commitments at such time; provided that if the commitment of each Lender to make Revolving Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 9.02, then the Pro Rata Share of each Lender
shall be determined based on the Pro Rata Share 

19

 

of
such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof, and (b) with respect to such Lender's outstanding
Term Loan at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the principal amount of the Term Loan held by such Lender at such time
and the denominator of which is the aggregate principal amount of the Term Loan at such time. The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on  Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable. 

        "Property" means any interest of any kind in any property or asset, whether real, personal or mixed, or tangible or intangible. 

        "Proprius License Agreement" means that certain License Agreement entered into as of September 19, 2007 by and between the Borrower
and Proprius, Inc. 

        "Public Lender" has the meaning specified in Section 7.02. 

        "Public Offering" means a public offering of any Equity Interests of the Borrower pursuant to an effective registration statement under
the Securities Act of 1933. 

        "Register" has the meaning specified in Section 11.06(c). 

        "Related Parties" means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents and
advisors of such Person and of such Person's Affiliates. 

        "Reorganization" has the meaning specified in Section 8.04. 

        "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty
(30)-day notice period has been waived. 

        "Request for Credit Extension" means (a) with respect to a Borrowing, conversion or continuation of Loans, a Loan Notice,
(b) with respect to an L/C Credit Extension, a Letter of Credit Application and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice. 

        "Required Lenders" means, at any time, Lenders holding in the aggregate more than fifty percent (50%) of (a) the Revolving
Commitments and the outstanding Term Loans or (b) if the Revolving Commitments have been terminated, the outstanding Loans, L/C Obligations, Swing Line Loans and participations therein. The
Revolving Commitments of, and the outstanding Term Loans held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders. 

        "Required Revolving Lenders" means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total
Revolving Outstandings (with the aggregate amount of each Lender's risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed "held" by such Lender for purposes
of this definition) and (b) aggregate unused Revolving Commitments; provided that the unused Revolving Commitment of, and the portion of the
Total Revolving
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders. 

        "Responsible Officer" means the chief executive officer, president or chief financial officer of a Loan Party. Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. 

        "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other Property) with respect to any capital
stock or other Equity Interest of the Borrower or any Subsidiary, 

20

 

or
any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of any return of capital to the Borrower's stockholders, partners or members (or the equivalent Person thereof). 

        "Revolving Commitment" means, as to each Lender, its obligation to (a) make Revolving Loans to the Borrower pursuant to  Section 2.01 and shall include any
commitments made by such Lender to make revolving loans pursuant to the terms of  Section 2.02(f), (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing
Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. 

        "Revolving Loan" has the meaning specified in Section 2.01(a). 

        "Revolving Note" has the meaning specified in Section 2.11(a). 

        "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor
thereto. 

        "Sale and Leaseback Transaction" means, with respect to the Borrower or any Subsidiary, any arrangement, directly or indirectly, with any
Person whereby the Borrower or such Subsidiary shall sell or transfer any Property, used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such Property or other Property that it intends to use for substantially the same purpose or purposes as the Property being sold or transferred. 

        "SEC" means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions. 

        "Securities Purchase Agreement" means that certain Securities Purchase Agreement dated as of April 30, 2001, with respect to the
purchase and sale of the 13% senior notes due April 30, 2006 in an aggregate principal amount of $60 million and warrants for 4,466,224 shares of the Borrower's common stock, by and
between the Borrower and the purchasers party thereto. 

        "Securitization Transaction" means any financing transaction or series of financing transactions (including factoring arrangements)
pursuant to which the Borrower or any Subsidiary may sell, convey or otherwise transfer, or grant a security interest in, accounts, payments, receivables, rights to future lease payments or residuals
or similar rights to payment to a special purpose Affiliate of the Borrower. 

        "Security Agreement" means the security agreement dated as of the Closing Date executed in favor of the Administrative Agent by each of
the Loan Parties. 

        "Solvent" or "Solvency" means, with respect to any Person as of a particular date, that on
such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the ordinary course of business, (b) such Person
does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person's Property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair market value of the Property of such Person is greater than the
total amount of liabilities, including, without limitation, contingent liabilities, of such Person (other than, with respect to the Borrower, any liability relating to the Existing Preferred Stock,
Warrants or Warrant Shares) and (e) the present fair market value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured (other than, with respect to the Borrower, 

21

 

any
liability relating to the Existing Preferred Stock, Warrants or Warrant Shares). In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be
computed at the amount which is recognized by such Person on the balance sheet of such Person in accordance with GAAP. 

        "Subsidiary" of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a
majority of the shares of Voting Stock is at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower. 

        "Swap Contract" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, related cap transactions, floor transactions and collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into
any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"),
including any such obligations or liabilities under any Master Agreement. 

        "Swap Termination Value" means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance
therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for
such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender). 

        "Swing Line Lender" means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder. 

        "Swing Line Loan" has the meaning specified in Section 2.04(a). 

        "Swing Line Loan Notice" means a notice of a Borrowing of Swing Line Loans pursuant to  Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B. 

        "Swing Line Note" has the meaning specified in Section 2.11(a). 

        "Swing Line Sublimit" means an amount equal to the lesser of (a) $5,000,000 and (b) the Aggregate Revolving Commitments. The
Swing Line Sublimit is part of, and not in addition to, the Aggregate Revolving Commitments. 

        "Synthetic Lease" means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing arrangement whereby the arrangement is considered borrowed money indebtedness for Tax purposes but is classified as an operating lease or does not otherwise
appear on the balance sheet under GAAP. 

22

   
        "Tax" or "Taxes" means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto. 

        "Term Loan" has the meaning specified in Section 2.01(b);  provided, however, the term shall also include any
additional term loans made to the Borrower pursuant to the terms of  Section 2.02(f) in the form of an increase to the Term Loan. 

        "Term Loan Commitment" means, as to each Lender, its obligation to make its portion of the Term Loan to the Borrower pursuant to  Section 2.01(b), in the principal
amount set forth opposite such Lender's name on  Schedule 2.01 and shall include any commitments made by such Lender to make term loans pursuant to the terms of  Section 2.02(f) in the form of an increase to the Term Loan. The aggregate principal amount of the Term Loan Commitments of all of the Lenders as
in effect on the Closing Date is SEVENTY-FIVE MILLION DOLLARS ($75,000,000). 

        "Term Note" has the meaning specified in Section 2.11(a). 

        "Threshold Amount" means $5,000,000. 

        "Total Revolving Outstandings" means the aggregate Outstanding Amount of all Revolving Loans, all Swing Line Loans and all L/C
Obligations. 

        "Type" means, with respect to any Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan. 

        "Unfunded Pension Liability" means the excess of a Pension Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Pension Plan's assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Internal Revenue Code for the
applicable plan year. 

        "United States" and "U.S." mean the United States of America. 

        "Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i). 

        "Voting Stock" means, with respect to any Person, Equity Interests issued by such Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening
of such a contingency. 

        "Warrant Shares" means the "Warrant Shares" as defined in the Securities Purchase Agreement. 

        "Warrants" means the "Warrants" as defined in the Securities Purchase Agreement. 

        "Wholly Owned Subsidiary" means any Person 100% of whose Equity Interests are at the time owned by the Borrower directly or indirectly
through other Persons 100% of whose Equity Interests are at the time owned, directly or indirectly, by the Borrower. 

1.02    Other Interpretive Provisions.    

        With
reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: 

        (a)   The
definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be
construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise, (i) any definition of or reference to
any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other 

23

 

document
as from time to time amended, restated, supplemented, extended or otherwise modified (subject to any restrictions on such amendments, restatements, supplements, extensions or modifications
set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person's successors and assigns, (iii) the words
"herein," "hereof" and "hereunder," and words of similar
import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any
reference to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law and any reference to any Law shall, unless
otherwise specified, refer to such Law as amended, modified or supplemented from time to time, and (vi) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer to any and all real and personal property and tangible and intangible
assets and properties, including cash, securities, accounts and contract rights. 

        (b)   In
the computation of periods of time from a specified date to a later specified date, the word "from" means
"from and including;" the words "to" and "until" each
mean "to but excluding;" and the word "through" means "to and
including." 

        (c)   Section
headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any
other Loan Document. 

1.03    Accounting Terms.    

        (a)   Except
as otherwise specifically prescribed herein, all accounting terms not specifically or completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations derived therefrom) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time as specified in Section 1.03(b) below, applied in a manner consistent with that used in
preparing the Audited Financial Statements; provided, however, that calculations of Attributable Indebtedness under any Synthetic Lease or the implied interest component of any Synthetic Lease shall
be made by the Borrower in accordance with accepted financial practice and consistent with the terms of such Synthetic Lease. 

        (b)   The
Borrower will provide a written summary of material changes in GAAP affecting the Borrower's financial statements and in the consistent application thereof with each
annual and quarterly Compliance Certificate delivered in accordance with Section 7.02(b). If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the
Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders,
which shall not be unreasonably withheld, delayed or conditioned); provided that, until so amended, (i) such ratio or requirement shall continue
to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change
in GAAP. 

        (c)   Notwithstanding
the above, the parties hereto acknowledge and agree that all calculations of the Consolidated Leverage Ratio (including for purposes of determining the
Applicable Rate) and the Consolidated Fixed Charge Coverage Ratio shall be made on a Pro Forma Basis. 

24

 

1.04    Rounding.    

        Any
financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the
result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number). 

1.05    Times of Day.    

        Unless
otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable). 

1.06    Letter of Credit Amounts.    

        Unless
otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time;  provided, however, that with respect
to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time. 

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS  

2.01    Revolving Loans and Term Loan.    

        (a)    Revolving Loans.    Subject to the terms and conditions set forth herein, each Lender severally agrees to make
loans (each such loan, a "Revolving Loan") to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an
aggregate amount not to exceed at any time outstanding the amount of such Lender's Revolving Commitment; provided,  however, that after giving effect to any
Borrowing of Revolving Loans, (i) the Total Revolving Outstandings shall not exceed the Aggregate
Revolving Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Pro Rata Share of the
Outstanding Amount of all L/C Obligations plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such
Lender's Revolving Commitment. Within the limits of each Lender's Revolving Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow under this  Section 2.01, prepay
under Section 2.05, and reborrow under this  Section 2.01. Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein, provided, however, all Borrowings made
on the Closing Date shall be made as Base Rate Loans. 

        (b)    Term Loan.    Subject to the terms and conditions set forth herein, each Lender severally agrees to make its
portion of a term loan (the "Term Loan") to the Borrower in Dollars on the Closing Date in an amount not to exceed such Lender's Term Loan Commitment.
Amounts repaid on the Term Loan may not be reborrowed. The Term Loan may consist of Base Rate Loans or Eurodollar Rate Loans, as further provided herein,  provided, however, all Borrowings made on the Closing Date shall be made as Base Rate Loans. 

2.02    Borrowings, Conversions and Continuations of Loans.    

        (a)   Each
Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower's irrevocable notice
to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 10:00 a.m. (i) three (3) Business Days
prior to the requested date of any Borrowing of, conversion to or continuation of, Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the
requested date of any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower pursuant to this Section 2.02(b) must be 

25

 

confirmed
promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $100,000 in excess thereof. Except as provided in Sections
2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to
the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of a Loan in a Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest
Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any Loan Notice, but
fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one (1) month. 

        (b)   Following
receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Pro Rata Share of the applicable Loans, and if no
timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans as described
in the preceding subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in  Section 5.02 (and, if such
Borrowing is the initial Credit Extension, Section 5.01), the
Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower; provided, however, that if, on the date of a Borrowing of
Revolving Loans, there are L/C Borrowings outstanding, then the proceeds of such Borrowing shall be applied, first, to the payment in full of any such
L/C Borrowings, and second, to the Borrower as provided above. 

        (c)   Except
as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of the Interest Period for such Eurodollar Rate Loan.
During the existence of a Default or Event of Default, no Loans may be requested as Eurodollar Rate Loans without the consent of the Required Lenders, and the Required Lenders may demand that any or
all of the then outstanding Eurodollar Rate Loans be converted immediately to Base Rate Loans. 

        (d)   The
Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon
determination of such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be conclusive in the absence of manifest error. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public
announcement of such change. 

        (e)   After
giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than
three (3) Interest Periods in effect with respect to Revolving Loans and three (3) Interest Periods in effect with respect to the Term Loan. 

26

 

        (f)    The
Borrower may at any time and from time to time prior to the Maturity Date, upon prior written notice by the Borrower to the Administrative Agent, request
(1) an increase to the Revolving Commitments, (2) an increase to the Term Loan and/or (3) additional commitments to make term loans to be structured as a separate term loan
tranche with terms different from the Term Loan (any such separate term loan, an "Additional Term Loan"), in an amount (for all such requests made
pursuant to this Section 2.02(f)) not to exceed FIFTY MILLION DOLLARS ($50,000,000) with additional Revolving Commitments, Term Loan Commitments
or commitments to make Additional Term Loans, as applicable, from any existing Lender or new Revolving Commitments, Term Loan Commitments or commitments for Additional Term Loans, as applicable, from
any other Person selected by the Borrower and approved by the Administrative Agent in its reasonable discretion; provided that: 

          (i)  any
such increase shall be in a minimum principal amount of $5,000,000 and in integral multiples of $1,000,000 in excess thereof; 

         (ii)  no
Default or Event of Default shall be continuing at the time of any such increase; 

        (iii)  no
existing Lender shall be under any obligation to increase its Commitment and any such decision whether to increase its Commitment shall be in such Lender's sole and
absolute discretion; 

        (iv)  (A)
any new Lender shall join this Agreement by executing such joinder and/or commitment documents reasonably required by the Administrative Agent and reflecting such
Person's commitment (it being understood that each such Person shall become a "Lender" hereunder upon executing such joinder documents), and (B) any existing Lender electing to increase its
Commitment shall have executed a commitment agreement reasonably satisfactory to the Administrative Agent; 

         (v)  prior
to the funding of any such increase of the Term Loan or any such Additional Term Loan, the Borrower shall have delivered to the Administrative Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect to the funding of any such increase to the Term Loan or Additional Term Loan, as applicable, on a Pro Forma Basis, the Loan Parties would
be in compliance with the financial covenants set forth in Section 8.11 as of the end of the most recent fiscal quarter for which the Borrower
has delivered financial statements pursuant to Section 7.01(a) or (b); 

        (vi)  the
Borrower shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the date of such increase (in sufficient copies for each Lender)
signed by a Responsible Officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) in the case
of the Borrower, certifying that, before and after giving effect to such increase, (1) the representations and warranties contained in  Article VI and the other Loan Documents are true and
correct in all material respects on and as of the date of such increase, except to the
extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and except that for
purposes of this Section 2.02(f), the representations and warranties contained in subsections (a) and (b) of  Section 6.05 shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of  Section 7.01, and (2) no Default or Event of Default exists; and 

       (vii)  with
respect to any Additional Term Loan, (A) the obligations of the Loan Parties in respect of such Additional Term Loan shall constitute Obligations under the
Loan Documents, and shall be entitled to all of the benefits afforded by this Agreement and the other Loan Documents, and shall, without limiting the foregoing, benefit ratably from the Guaranty set
forth in Article IV hereunder and the security interests and Liens created by the Collateral Documents (and the 

27

 

Borrower
shall take any actions reasonably required by the Administrative Agent to ensure and/or demonstrate that the requirements of this clause (A) are satisfied after the establishment of
any such Additional Term Loan), (B) the final maturity of such Additional Term Loan shall be no earlier than the Maturity Date of the Term Loan or the final maturity date of any then existing
Additional Term Loan, (C) the initial principal amount of such Additional Term Loan shall not amortize (pursuant to scheduled amortization) during any calendar year in a percentage amount
greater than the percentage of the outstanding principal amount of the Term Loan scheduled to amortize during such calendar year in accordance with  Section 2.07(c), (D) the Lenders providing
such Additional Term Loan shall be entitled to voting rights on a pro rata basis with the
Lenders holding the Term Loan and any Additional Term Loan then existing and shall be entitled to receive proceeds of prepayments on a pro rata basis with the Lenders holding the Term Loan and any
Additional Term Loans then existing, (E) the Borrower shall execute a promissory note in favor of any new Lender or any existing Lender providing additional commitments hereunder and requesting
a note and (F) the yield applicable to such Additional Term Loan (taking into account the interest rate applicable to such Additional Term Loan, any original issue discount and any upfront fees
payable to the Lenders making such Additional Term Loan, with such upfront fees or original issue discount, as applicable, to be equated to interest based on an assumed three year average life) may be
higher than the then-current Applicable Rate on the Term Loan, but by no more than 0.25% (it being understood that the pricing of the Term Loan may be increased and/or additional fees may
be paid to existing Lenders holding the Term Loan to the extent necessary to satisfy such requirement). 

Upon
any increase of the Revolving Commitments or the Term Loan, as applicable, the outstanding Loans held by each Lender thereunder (and, in the case of an increase of the Revolving Commitments, the
participation interests of the Lenders having Revolving Commitments in outstanding L/C Obligations and Swing Line Loans) shall be reallocated (through assignments and purchases of the necessary
Commitments and outstanding Loans) amongst the applicable Lenders such that after giving affect to such reallocation, each of the applicable Lenders will hold Revolving Loans or Term Loans, as
applicable (and, in the case of an increase of the Revolving Commitments, the participation interests of the Lenders having Revolving Commitments in outstanding L/C Obligations and Swing Line Loans)
based on its Pro Rata Share of the applicable facility after giving effect to such increase. Such assignments shall not be subject to any processing and/or recordation fees among the applicable
Lenders, and the Borrower shall be responsible for any costs arising under Section 3.05 resulting from such reallocation, it being understood
that the parties hereto shall use commercially reasonable efforts to avoid prepayment or assignment of any affected Loan that is a Eurodollar Rate Loan on a day other than the last day of the Interest
Period applicable thereto. 

2.03    Letters of Credit.    

        (a)    The Letter of Credit Commitment.    

          (i)  Subject
to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this  Section 2.03, (1) from time to time on any
Business Day during the period from the Closing Date until the Letter of Credit Expiration
Date, to issue Letters of Credit for the account of the Borrower, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor
drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower and any drawings thereunder;  provided that after
giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Revolving Outstandings shall
not exceed the Aggregate Revolving Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Pro
Rata Share of the Outstanding Amount of all L/C Obligations plus such Lender's Pro Rata Share of the 

28

 

Outstanding
Amount of all Swing Line Loans shall not exceed such Lender's Revolving Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies
with the conditions set forth in clauses (x) and (z) in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's
ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or
that have been drawn upon and reimbursed. 

         (ii)  The
L/C Issuer shall not issue any Letter of Credit, if: 

        (A)  subject
to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve
months after the date of issuance, unless the Required Revolving Lenders have approved such expiry date; or 

        (B)  the
expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders having Revolving Commitments have
approved such expiry date. 

        (iii)  The
L/C Issuer shall not be under any obligation to issue any Letter of Credit if: 

        (A)  any
order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of
Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of Law) from any Governmental Authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or
shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect
on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to
it; 

        (B)  the
issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally; 

        (C)  except
as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than $100,000; 

        (D)  such
Letter of Credit is to be denominated in a currency other than Dollars; or 

        (E)  a
default of any Lender's obligations to fund under Section 2.03(c) exists or any Lender is at such time a
Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer's risk with respect to such Lender. 

        (iv)  The
L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the
terms hereof. 

         (v)  The
L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of
Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit. 

        (vi)  The
L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall
have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any 

29

 

acts
taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully
as if the term "Administrative Agent" as used in Article X included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer. 

        (b)    Procedures for Issuance and Amendment of Letters of Credit.    

          (i)  Each
Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer
and the Administrative Agent not later than 11:00 a.m. at least two (2) Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a
particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day);
(B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of
any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of
Credit; and (H) such other matters as the L/C Issuer may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day);
(C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may reasonably require. Additionally, the Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative
Agent may require. 

         (ii)  Promptly
after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C
Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one (1) Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained in Article V shall not then be satisfied, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each
case in accordance with the L/C Issuer's usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender's Pro Rata Share  times the amount of such Letter of
Credit. 

        (iii)  If
the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit
that has automatic extension provisions (each, an "Auto-Extension Letter of Credit");  provided that any such Auto-Extension Letter of Credit must permit
the L/C Issuer to prevent any such extension at least once in each
twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the
"Non-Extension Notice Date") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by the L/C Issuer, the Borrower shall not be required to make a 

30

 

specific
request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the
L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided,  however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would
have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of  Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven
(7) Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or
(2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 5.02 is
not then satisfied, and in each case directing the L/C Issuer not to permit such extension. 

        (iv)  Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the
L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. 

        (c)    Drawings and Reimbursements; Funding of Participations.    

          (i)  Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an "Honor
Date"), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the
L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the "Unreimbursed
Amount"), and the amount of such Lender's Pro Rata Share thereof. In such event, the Borrower shall be deemed to have requested a Borrowing of Revolving Loans that are Base
Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in  Section 2.02 for the principal amount of Base
Rate Loans, but subject to the conditions set forth in  Section 5.02 (other than the delivery of a Loan Notice) and provided that, after giving effect to such Borrowing, the Total Revolving
Outstandings shall not exceed the Aggregate Revolving Commitments.
Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice. 

         (ii)  Each
Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent
for the account of the L/C Issuer at the Administrative Agent's Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified
in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer. 

        (iii)  With
respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Base Rate Loans because the conditions set forth in  Section 5.02 cannot be satisfied or for any other reason, the
Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in
the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such
event, each Lender's payment to the Administrative Agent for the 

31

 

account
of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03. 

        (iv)  Until
each Lender funds its Revolving Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C
Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Pro Rata Share of such amount shall be solely for the account of the L/C Issuer. 

         (v)  Each
Lender's obligation to make Revolving Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this  Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided,  however, that each Lender's
obligation to make Revolving Loans pursuant to this Section 2.03(c)
is subject to the conditions set forth in Section 5.02 (other than delivery by the Borrower of a Loan Notice). No such making of an L/C Advance
shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as
provided herein. 

        (vi)  If
any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in
accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. If such
Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender's Revolving Loan included in the relevant Borrowing or L/C Advance in respect of the
relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi)
shall be conclusive absent manifest error. 

        (d)    Repayment of Participations.    

          (i)  At
any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender's L/C Advance in respect of such payment in
accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of cash collateral applied thereto by the Administrative Agent), the Administrative Agent
will distribute to such Lender its Pro Rata Share thereof in the same funds as those received by the Administrative Agent. 

         (ii)  If
any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to  Section 2.03(c)(i) is required to be returned under any of the circumstances described in 
Section 11.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement. 

32

   
        (e)    Obligations Absolute.    The obligation of the Borrower to reimburse the L/C Issuer for each drawing under
each
Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances,
including the following: 

          (i)  any
lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document; 

         (ii)  the
existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; 

        (iii)  any
draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit; 

        (iv)  any
payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit
of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under
any Debtor Relief Law; or 

         (v)  any
other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower or any Subsidiary. 

        The
Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower's
instructions or other irregularity, the Borrower will promptly notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid. 

        (f)    Role of L/C Issuer.    Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit,
the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by such Letter of Credit) or to ascertain or inquire
as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective
Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with
the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the
matters described in clauses (i) through (v) of Section 2.03(e); provided,  however, that
anything in such clauses to the contrary 

33

 

notwithstanding,
the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower that were caused by the L/C Issuer's willful misconduct or gross negligence or the L/C Issuer's willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the
contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. 

        (g)    Cash Collateral.    Upon the request of the Administrative Agent, (i) if the L/C Issuer has honored any
full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any
reason remains outstanding, the Borrower shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations. Sections
2.05 and 9.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this  Section 2.03, Section 2.05 and  Section 9.02(c), "Cash Collateralize" means to pledge and deposit with
or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower hereby grants
to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a security interest in all such
cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, interest bearing deposit accounts at Bank of America. 

        (h)    Applicability of ISP.    Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of
Credit is issued, the rules of the ISP shall apply to each Letter of Credit. 

        (i)    Letter of Credit Fees.    The Borrower shall pay to the Administrative Agent for the account of each Lender in
accordance with its Pro Rata Share a Letter of Credit fee (the "Letter of Credit Fee") for each Letter of Credit equal to the Applicable Rate  times the
daily amount available to be drawn under such Letter of Credit, calculated in accordance with  Section 2.10. For purposes of computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit
shall be determined in accordance with Section 1.06. Letter of Credit Fees shall be (i) computed on a quarterly basis in arrears and
(ii) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of
Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary
contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at an amount equal to the Applicable Rate plus two percent (2%). 

        (j)    Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.    The Borrower shall pay directly
to the L/C Issuer for its own account a fronting fee, with respect to each Letter of Credit, at the rate per annum specified in the Fee Letter, computed on the actual daily maximum amount available to
be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit) on a quarterly basis in arrears, and due and payable on the first Business Day
after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with 

34

 

the
first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be
drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. In addition, the
Borrower shall pay directly to the L/C Issuer for its own account the reasonable and customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the
L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable. 

        (k)    Conflict with Issuer Documents.    In the event of any conflict between the terms hereof and the terms of any
Issuer Document, the terms hereof shall control. 

2.04    Swing Line Loans.    

        (a)    Swing Line Facility.    Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in
reliance upon the agreements of the other Lenders set forth in this Section 2.04, to make loans (each such loan, a "Swing
Line Loan") to the Borrower in Dollars from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the
amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of Revolving Loans and L/C Obligations of the
Lender acting as Swing Line Lender, may exceed the amount of such Lender's Revolving Commitment; provided,  however, that after giving effect to any Swing
Line Loan, (i) the Total Revolving Outstandings shall not exceed the Aggregate Revolving
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding
Amount of all L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Revolving Commitment, and provided, further, that the Borrower shall not use the proceeds of any Swing
Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrower may borrow under this  Section 2.04, prepay
under Section 2.05, and reborrow under this  Section 2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing
Line Loan, each Lender shall be deemed to,
and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender's Pro Rata Share  times the amount of such Swing Line Loan. 

        (b)    Borrowing Procedures.    Each Borrowing of Swing Line Loans shall be made upon the Borrower's irrevocable
notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum principal amount of $100,000 and integral multiples of $100,000 in
excess thereof, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Swing Line Lender of any telephonic
Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and,
if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing)
from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Borrowing of Swing Line Loans (A) directing the Swing Line Lender
not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04(a), or
(B) that one or more of the applicable conditions specified in Article V is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later 

35

 

than
3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower. 

        (c)    Refinancing of Swing Line Loans.    

          (i)  The
Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably requests and authorizes the Swing
Line Lender to so request on its behalf), that each Lender make a Revolving Loan that is a Base Rate Loan in an amount equal to such Lender's Pro Rata Share of the amount of Swing Line Loans then
outstanding. Such request shall be made in writing (which written request shall be deemed to be a Loan Notice for purposes hereof) and in accordance with the requirements of  Section 2.02, without
regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the
conditions set forth in Section 5.02 (other than the delivery of a Loan Notice) and provided that, after giving effect to such Borrowing, the
Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments. The Swing Line Lender shall furnish the Borrower with a copy of the applicable Loan Notice promptly after delivering
such notice to the Administrative Agent. Each Lender shall make an amount equal to its Pro Rata Share of the amount specified in such Loan Notice available to the Administrative Agent in immediately
available funds for the account of the Swing Line Lender at the Administrative Agent's Office not later than 1:00 p.m. on the day specified in such Loan Notice, whereupon, subject to  Section 2.04(c)(ii)
, each Lender that so makes funds available shall be deemed to have made a Revolving Loan that is a Base Rate Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender. 

         (ii)  If
for any reason any Swing Line Loan cannot be refinanced by such a Borrowing of Revolving Loans in accordance with  Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing Line
Lender as set forth herein shall be deemed to be a request by the
Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender's payment to the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation. 

        (iii)  If
any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to
the foregoing provisions of this Section 2.04(c) by the time specified in  Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover
from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to
the greater of Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar
fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such
Lender's Revolving Loan included in the relevant Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error. 

        (iv)  Each
Lender's obligation to make Revolving Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this  Section 2.04(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense or other right that such Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided,  however, that
each Lender's obligation to make Revolving Loans 

36

 

pursuant
to this Section 2.04(c) is subject to the conditions set forth in Section 5.02.
No such purchase or funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein. 

        (d)    Repayment of Participations.    

          (i)  At
any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing
Line Loan, the Swing Line Lender will distribute to such Lender its Pro Rata Share of such payment in the same funds as those received by the Swing Line Lender. 

         (ii)  If
any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under
any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount
is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this
clause shall survive the payment in full of the Obligations and the termination of this Agreement. 

        (e)    Interest for Account of Swing Line Lender.    The Swing Line Lender shall be responsible for invoicing the
Borrower for interest on the Swing Line Loans. Until each Lender funds its Revolving Loans that are Base Rate Loans or risk participation pursuant to this  Section 2.04 to refinance such Lender's
Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the
account of the Swing Line Lender. 

        (f)    Payments Directly to Swing Line Lender.    The Borrower shall make all payments of principal and interest in
respect of the Swing Line Loans directly to the Swing Line Lender. 

2.05    Prepayments.    

        (a)    Voluntary Prepayments of Loans.    

          (i)  Revolving Loans and Term Loans. The Borrower may, upon notice from the Borrower to the Administrative Agent, at any time
or from time to time voluntarily prepay the Revolving Loans and the Term Loan in whole or in part without premium or penalty; provided that
(A) such notice must be received by the Administrative Agent not later than 11:00 a.m. (1) three (3) Business Days prior to any date of prepayment of Eurodollar Rate Loans
and (2) on the date of prepayment of Base Rate Loans; (B) any such prepayment of Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $100,000 in
excess thereof (or, if less, the entire principal amount thereof then outstanding); (C) any prepayment of Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of
$100,000 in excess thereof (or, if less, the entire principal amount thereof then outstanding) and (D) any prepayment of the Term Loan shall be applied in the direct order of maturity. Each
such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The
Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender's Pro Rata Share of such prepayment. If such notice is given by the Borrower,
the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be
accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05. Each such prepayment shall
be applied to the Loans of the Lenders in accordance with their respective Pro Rata Shares. 

37

 

         (ii)  Swing Line Loans. The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at
any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice
must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof (or, if less, the entire principal thereof then outstanding). Each such notice shall specify the date and amount of such
prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. 

        (b)    Mandatory Prepayments of Loans.    

          (i)  Revolving Commitments. If for any reason the Total Revolving Outstandings at any time exceed the Aggregate Revolving
Commitments then in effect, the Borrower shall immediately prepay Revolving Loans and/or the Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate
amount equal to such excess; provided, however, that the Borrower shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.05(b)(i) unless after the prepayment in full of the Revolving Loans and the Swing
Line Loans the Total Revolving Outstandings exceed the Aggregate Revolving Commitments then in effect. If at any time after the Borrower delivers Cash Collateral pursuant to this  Section 2.05(b)(i),
 the Total Revolving Outstandings no longer exceed the aggregate of such Cash Collateral and the Aggregate Revolving
Commitments then in effect, such Cash Collateral, to the extent of any such excess, shall be returned to the Borrower promptly after the Administrative Agent's receipt of a written request from the
Borrower. 

         (ii)  Dispositions. No later than the date that is three hundred sixty-five (365) days following receipt by
the Borrower or any Subsidiary of Net Cash Proceeds of any Disposition, the Borrower shall prepay the Loans and Cash Collateralize the L/C Obligations as hereafter provided in an aggregate amount
equal to 100% of such Net Cash Proceeds, but only to the extent such Net Cash Proceeds are not reinvested in Eligible Assets within such three hundred sixty-five (365) day period;  provided,
however, that no amount shall be required to be applied under this
Section 2.05(b)(ii) until the aggregate Net Cash Proceeds from Dispositions that have not previously been applied as a mandatory prepayment
during the then current fiscal year exceeds $500,000, and then only the excess thereof shall be required to be applied. Any prepayment pursuant to this clause (ii) shall be applied as set forth
in clause (vi) below. 

        (iii)  Debt Issuances. Within five (5) Business Days following receipt by the Borrower or any Subsidiary of the Net
Cash Proceeds of any Debt Issuance, the Borrower shall prepay the Loans and Cash Collateralize the L/C Obligations as hereafter provided in an aggregate amount equal to 100% of such Net Cash Proceeds
(such prepayment to be applied as set forth in clause (vi) below). 

        (iv)  Extraordinary Receipts. Within five (5) Business Days following receipt by the Borrower or any Subsidiary of the
Net Cash Proceeds of any Extraordinary Receipt (unless such Net Cash Proceeds constitute condemnation or insurance proceeds in which case the Borrower or such Subsidiary shall have three hundred
sixty-five (365) days from the date of such Extraordinary Receipt to reinvest such Net Cash Proceeds in Eligible Assets prior to being required to make any such prepayment), the
Borrower shall prepay the Loans and Cash Collateralize the L/C Obligations as hereafter provided in an aggregate amount equal to 100% of such Net Cash Proceeds (such prepayment to be applied as set
forth in clause (vi) below). 

         (v)  Equity Issuances. Within five (5) Business Days following receipt by the Borrower or any Subsidiary of the Net
Cash Proceeds of any Equity Issuance, the Borrower shall prepay the Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to 50% of such Net Cash Proceeds (such prepayment
shall be applied as set forth in clause (vi) below). 

38

 

        (vi)  Application of Mandatory Prepayments. All amounts required to be paid pursuant to this  Section 2.05(b) shall be applied as follows: 

        (A)  with
respect to all amounts prepaid pursuant to Section 2.05(b)(i), to the Revolving Loans and the Swing Line
Loans and (after all Revolving Loans and all Swing Line Loans have been repaid) to ratably Cash Collateralize any L/C Obligations; 

        (B)  with
respect to all amounts prepaid pursuant to Sections 2.05(b)(ii),  (iii), (iv) and (v), first to the Term Loan (ratably to
the remaining principal amortization payments thereof), then (after the Term Loan has been repaid in full) to the Revolving Loans and the Swing Line Loans (without a corresponding reduction of the
Aggregate Revolving Commitments) and then (after all Revolving Loans and all Swing Line Loans have been repaid) to ratably Cash Collateralize any L/C Obligations. 

Within
the parameters of the applications set forth above, prepayments shall be applied first to Base Rate Loans and then to Eurodollar Rate Loans in direct order of Interest Period maturities. All
prepayments under this Section 2.05(b) shall be subject to Section 3.05, but otherwise
without premium or penalty, and shall be accompanied by interest on the principal amount prepaid through the date of prepayment. 

2.06    Termination or Reduction of Commitments.    

        The
Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Revolving Commitments, or from time to time permanently reduce the Aggregate Revolving Commitments to
an amount not less than the Outstanding Amount of Revolving Loans, Swing Line Loans and L/C Obligations; provided that (i) any such notice shall
be received by the Administrative Agent not later than 12:00 noon five (5) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $2,000,000 or any whole multiple of $500,000 in excess thereof and (iii) if, after giving effect to any reduction of the Aggregate Revolving Commitments, the Swing Line
Sublimit or the Letter of Credit Sublimit exceeds the amount of the Aggregate Revolving Commitments, such sublimit shall be automatically reduced by the amount of such excess. The Administrative Agent
will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Revolving Commitments. Any reduction of the Aggregate Revolving Commitments shall be applied to the
Revolving Commitment of each Lender according to its Pro Rata Share. All fees accrued with respect thereto until the effective date of any termination of the Aggregate Revolving Commitments shall be
paid on the effective date of such termination. 

2.07    Repayment of Loans.    

        (a)    Revolving Loans.    The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount
of all Revolving Loans outstanding on such date. 

        (b)    Swing Line Loans.    The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) the
date within one (1) Business Day of demand therefor by the Swing Line Lender and (ii) the Maturity Date. 

        (c)    Term Loan.    The Borrower shall repay the outstanding principal amount of the Term Loan in installments on the
dates and in amounts equal to the percentage of the principal amount of the Term Loan outstanding on such date as set forth in the table below (as such installments may hereafter be 

39

 

adjusted
as a result of prepayments made pursuant to Section 2.05), unless accelerated sooner pursuant to  Section 9.02: 

	Payment Dates
	 	Principal Amortization

Payment
	 
	March 31, 2008	 	1.25	%
	June 30, 2008	 	1.25	%
	September 30, 2008	 	1.25	%
	December 31, 2008	 	1.25	%
	March 31, 2009	 	2.50	%
	June 30, 2009	 	2.50	%
	September 30, 2009	 	2.50	%
	December 31, 2009	 	2.50	%
	March 31, 2010	 	2.50	%
	June 30, 2010	 	2.50	%
	September 30, 2010	 	2.50	%
	December 31, 2010	 	2.50	%
	March 31, 2011	 	3.75	%
	June 30, 2011	 	3.75	%
	September 30, 2011	 	3.75	%
	December 31, 2011	 	3.75	%
	March 31, 2012	 	15.00	%
	June 30, 2012	 	15.00	%
	Maturity Date	 	Outstanding Principal Balance

of Term Loan	 

2.08    Interest.    

        (a)   Subject
to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the sum of (A) the Eurodollar Rate for such Interest Period plus (B) the Applicable Rate;
(ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate  plus the Applicable Rate; and
(iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate. 

        (b)   Upon
the occurrence and during the continuation of an Event of Default, the Borrower shall pay interest on the principal amount of all outstanding Loans at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. 

        (c)   Interest
on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest
hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law. 

2.09    Fees.    

        In
addition to certain fees described in subsections (i) and (j) of Section 2.03: 

        (a)    Commitment Fee.    The Borrower shall pay to the Administrative Agent, for the account of each Lender in
accordance with its Pro Rata Share of the Revolving Commitments, a commitment fee equal to the product of (i) the Applicable Rate times
(ii) the actual daily amount by which the Aggregate Revolving Commitments exceed the sum of (y) the Outstanding Amount of Revolving Loans and (z) the Outstanding Amount of L/C
Obligations. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in 

40

 

 Article V is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first
such date to occur after the Closing Date, and on the last day of the Availability Period. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. For
purposes of clarification, Swing Line Loans shall not be considered outstanding for purposes of determining the unused portion of the Aggregate Revolving Commitments. 

        (b)    Fee Letter.    The Borrower shall pay to BAS and the Administrative Agent for their own respective accounts
fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall be non-refundable for any reason whatsoever. 

2.10    Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.    

        (a)   All
computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America's "prime rate" shall be made on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the
same day on which it is made shall, subject to Section 2.12(a), bear interest for one (1) day. Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error. 

        (b)   If,
as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Borrower or the Lenders determine that
(i) the Consolidated Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Leverage Ratio would have
resulted in higher pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders, promptly on
demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States,
automatically and without further action by the Administrative Agent, any Lender or the L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for
such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the L/C Issuer, as the case may be,
under Section 2.03(c)(iii), 2.03(i) or 2.08(b) or
under Article IX. The Borrower's obligations under this paragraph shall survive the termination of the Commitments of all of the Lenders and the
repayment of all other Obligations hereunder. 

2.11    Evidence of Debt.    

        (a)   The
Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary
course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders
to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay
any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the
Borrower shall execute and deliver to such Lender (through the Administrative Agent) a promissory note, which shall 

41

 

evidence
such Lender's Loans in addition to such accounts or records. Each such promissory note shall (i) in the case of Revolving Loans, be in the form of  Exhibit C-1 (a "Revolving Note"), (ii) in the case of Swing Line Loans, be in
the form of Exhibit C-2 (a "Swing Line Note") and (iii) in the case of the
Term Loan, be in the form of Exhibit C-3 (a "Term Note"). Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto. 

        (b)   In
addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice
accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records
maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of
manifest error. 

2.12    Payments Generally; Administrative Agent's Clawback.    

        (a)   All
payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative
Agent's Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata
Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after
2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. 

        (b)   (i) Unless
the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available
to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with  Section 2.02
and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not
in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing
and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent
for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of
the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender's Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to
any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent. 

42

  

         (ii)  Unless
the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith
and may, in reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in
immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. 

        A
notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error. 

        (c)   Subject
to the definition of "Interest Period", if any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be. 

        (d)   If
at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then
due hereunder, such funds shall be applied (i) first, toward costs and expenses (including Attorney Costs and amounts payable under  Article III)
incurred by the Administrative Agent and each Lender, (ii) second, toward
repayment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and
(iii) third, toward repayment of principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal and L/C Borrowings then due to such parties. 

        (e)   If
any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this  Article II, and such funds are not made available
to the Borrower by the Administrative Agent because the conditions to the applicable Credit
Extension set forth in Article V are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such
funds (in like funds as received from such Lender) to such Lender, without interest. 

        (f)    The
obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to  Section 11.04(c) are several and not joint. The
failure of any Lender to make any Loan, to fund any such participation or to make any payment
under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under  Section 11.04(c). 

        (g)   Nothing
herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender
that it has obtained or will obtain the funds for any Loan in any particular place or manner. 

2.13    Sharing of Payments.    

        If,
other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Loans made by it, or the participations in L/C Obligations or in Swing Line Loans held by
it (but not including any amounts applied by the Swing Line Lender to outstanding Swing Line Loans), any payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in 

43

 

excess
of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the
other Lenders such participations in the Loans made by them and/or such subparticipations in the participations in L/C Obligations or Swing Line Loans held by them, as the case may be, as shall be
necessary to cause such purchasing Lender to share the excess payment in respect of such Loans or such participations, as the case may be, pro rata with each of them;  provided, however, that if all or any portion of such excess payment is thereafter recovered from the
purchasing Lender under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by the purchasing
Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to
such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to (ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon. The Borrower agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent permitted by Law, exercise all its rights of payment (including the right of set-off, but subject to  Section 11.08) with
respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such
participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in each case
notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give all
notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. 

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY  

3.01    Taxes.    

        (a)   Payments Free of Taxes.    Any and all payments by or on account of any obligation of the Borrower hereunder or
under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided
that if the Borrower shall be required by applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or L/C Issuer, as the case may be,
receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the full
amount deducted to the relevant Governmental Authority in accordance with applicable Law. 

        (b)   Payment of Other Taxes by the Borrower.    Without limiting the provisions of subsection (a) above, the
Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law. 

        (c)   Indemnification by the Borrower.    The Borrower shall indemnify the Administrative Agent, each Lender and the
L/C Issuer, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable
to amounts payable under this Section) paid by the Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto (but only to the extent such Taxes and penalties were not caused by the gross negligence or willful misconduct of the Administrative Agent, such Lender or the L/C Issuer), 

44

 

whether
or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that
the Borrower shall not be required to indemnify the Administrative Agent, such Lender or the L/C Issuer pursuant to the foregoing provision for any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) for which written notice was received by the Administrative Agent, such Lender or the L/C
Issuer from the appropriate Governmental Authority more than six months prior to the date that the Administrative Agent, such Lender or the L/C Issuer, as the case may be, notifies the Borrower of
such Indemnified Taxes or Other Taxes. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the L/C Issuer (with a copy to the Administrative Agent), or
by the Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, together with any other documentation reasonably requested by the Borrower, shall be conclusive absent
manifest error. 

        (d)   Evidence of Payments.    As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a copy of a receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. 

        (e)   Status of Lenders.    Any Foreign Lender that is entitled to an exemption from or reduction of withholding Tax
under the Law of the jurisdiction in which the Borrower is resident for Tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan
Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent,
such properly completed and executed documentation prescribed by applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any
Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. 

        Without
limiting the generality of the foregoing, in the event that the Borrower is resident for Tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and
the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to
time thereafter
upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable: 

        (i)    duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income Tax treaty to which the United States is
a party, 

        (ii)   duly
completed copies of Internal Revenue Service Form W-8ECI, 

        (iii)  in
the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a "bank" within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of the Borrower within the
meaning of section 881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation" described in section 881(c)(3)(C) of the Code and (y) duly completed copies of
Internal Revenue Service Form W-8BEN, or 

        (iv)  any
other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in United States Federal withholding Tax duly completed together with
such supplementary documentation as may be prescribed by applicable Law to permit the Borrower to determine the withholding or deduction required to be made. 

45

 

        (f)    Forms W-9.    The Administrative Agent, the L/C Issuer and each Lender that is a United States
person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended) for United States federal income tax purposes (a "U.S.
Lender") shall deliver to the Administrative Agent and the Borrower on or prior to the Closing Date (or, if later, on or prior to the date on which such Lender becomes a party
to this Agreement) two original copies of Internal Revenue Service Form W-9 (or any successor form), properly completed and duly executed by such Lender, certifying that such U.S.
Lender is entitled to an exemption from United States backup withholding tax. Borrower shall not be required to pay any additional amounts to any U.S. Lender under this Agreement if such amounts arise
as a result of such Lender's failure to comply with the preceding sentence; provided, however, that
Borrower shall not be relieved of its obligation to pay any such additional amounts after such time as any such Lender shall have cured any such failure. 

        (g)   Treatment of Certain Refunds.    If the Administrative Agent, any Lender or the L/C Issuer determines, in its
sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section
with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the L/C Issuer (to the
extent not due to the gross negligence or willful misconduct of the Administrative Agent, such Lender or the L/C Issuer, respectively), as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative
Agent, such Lender or the L/C Issuer, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the L/C Issuer in the event the Administrative Agent, such Lender or the L/C Issuer is required to repay such refund to such Governmental Authority. This
subsection shall not be construed to require the Administrative Agent, any Lender or the L/C Issuer to make available its Tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person. 

3.02    Illegality.  

        If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable
Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies
the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid
the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. 

3.03    Inability to Determine Rates.  

        If the Administrative Agent determines that for any reason adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested
Interest Period with respect to a proposed 

46

 

Eurodollar
Rate Loan, or that the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to the Lenders of
funding such Loan, the Administrative Agent will promptly notify the Borrower and all Lenders. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended
until the Administrative Agent revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing, conversion or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein. 

3.04    Increased Cost and Reduced Return; Capital Adequacy.  

        (a)   If
any Lender determines that as a result of the introduction of or any change in or in the interpretation of any Law, or such Lender's compliance therewith, there shall
be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Loans or (as the case may be) issuing or participating in Letters of Credit, or a
reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this subsection (a) any such increased costs or reduction in
amount resulting from (i) Indemnified Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis of
taxation of overall net income or overall gross income by the United States or any foreign jurisdiction or any political subdivision thereof under the Laws of which such Lender is organized or has its
Lending Office, and (iii) reserve requirements utilized, as to Eurodollar Rate Loans, in the determination of the Eurodollar Rate), then from time to time upon demand of such Lender (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction. 

        (b)   If
any Lender determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, or compliance by such Lender
(or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations
hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time upon demand of such Lender (with a copy of such
demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction. 

        (c)   The
Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including
Eurodollar funds or deposits (currently known as "Eurodollar Liabilities"), additional interest on the unpaid principal amount of each Eurodollar Rate
Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest error), which
shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least fifteen (15) days prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice fifteen (15) days prior to the relevant Interest Payment Date, such additional interest
shall be due and payable fifteen (15) days from receipt of such notice. 

        (d)   A
certificate of a Lender or the L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case
may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof. 

        (e)   Failure
or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of
such Lender's or 

47

 

the
L/C Issuer's right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant
to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than six months prior to the date that such Lender or the L/C Issuer, as the case may be,
notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's or the L/C Issuer's intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect
thereof). 

3.05    Funding Losses.  

        Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender
harmless from any actual, direct loss, cost or expense incurred by it as a result of: 

        (a)   any
continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); 

        (b)   any
failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate
Loan on the date or in the amount notified by the Borrower; or 

        (c)   any
assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to  Section 11.14; 

including
any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay any reasonable and customary administrative fees charged by such Lender in connection with the foregoing. 

        For
purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to
have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank
eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded. 

3.06    Matters Applicable to all Requests for Compensation.  

        (a)   Designation of a Different Lending Office. If any Lender requests compensation under  Section 3.04, or the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then
such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to  Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice
pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. 

        (b)   Replacement of Lenders. If any Lender requests compensation under  Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for 

48

 

the
account of any Lender pursuant to Section 3.01, or if any Lender delivers a notice pursuant to  Section 3.02, the Borrower may replace such Lender
in accordance with Section 11.14. 

3.07    Survival.  

        All of the Borrower's obligations under this Article III shall survive termination of the Aggregate
Revolving Commitments and repayment of all other Obligations hereunder. 

ARTICLE IV

GUARANTY  

4.01    The Guaranty.  

        Each of the Guarantors hereby jointly and severally guarantees to each Lender, each Affiliate of a Lender that enters into a Swap Contract with a Loan Party, and
the Administrative Agent as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors
hereby further agree that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of
the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in
accordance with the terms of such extension or renewal. 

        Notwithstanding
any provision to the contrary contained herein or in any other of the Loan Documents or Swap Contracts between any Loan Party and any Lender, or any Affiliate of a
Lender, the obligations of each Guarantor under this Agreement and the other Loan Documents shall be limited to an aggregate amount equal to the largest amount that would not render such obligations
subject to avoidance under the Debtor Relief Laws or any comparable provisions of any applicable state Law. 

4.02    Obligations Unconditional.  

        The obligations of the Guarantors under Section 4.01 are joint and several, absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents, Swap Contracts between any Loan Party and any Lender, or any Affiliate of a Lender, or any
other agreement or instrument referred to therein, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent
permitted by applicable Law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent
of this Section 4.02 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each
Guarantor agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor for amounts paid under this  Article IV
until such time as the Obligations have been paid in full and the Commitments have expired or terminated. Without limiting the
generality of the foregoing, it is agreed that, to the fullest extent permitted by Law, the occurrence of any one or more of the 

49

 

following
shall not alter or impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as described above: 

        (a)   at
any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations shall be extended, or such
performance or compliance shall be waived; 

        (b)   any
of the acts mentioned in any of the provisions of any of the Loan Documents, any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender,
or any other agreement or instrument referred to in the Loan Documents or such Swap Contracts shall be done or omitted; 

        (c)   the
maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any
of the Loan Documents, any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, or any other agreement or instrument referred to in the Loan Documents or such Swap
Contracts shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with; 

        (d)   any
Lien granted to, or in favor of, the Administrative Agent or any Lender, or Lenders as security for any of the Obligations shall fail to attach or be perfected; or 

        (e)   any
of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall be
subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor). 

        With
respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that
the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents, any Swap Contract between any Loan Party and any Lender, or any
Affiliate of a Lender, or any other agreement or instrument referred to in the Loan Documents or such Swap Contracts, or against any other Person under any other guarantee of, or security for, any of
the Obligations. 

4.03    Reinstatement.  

        The obligations of the Guarantors under this Article IV shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, Attorney Costs) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar Law;  provided that such
costs and expenses were not caused by the gross negligence or willful misconduct of the Administrative Agent or any Lender. 

4.04    Certain Additional Waivers.  

        Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation
pursuant to Section 4.02 and through the exercise of rights of contribution pursuant to  Section 4.06. 

50

 

4.05    Remedies.  

        The Guarantors agree that, to the fullest extent permitted by Law, as between the Guarantors, on the one hand, and the Administrative Agent and the Lenders, on
the other hand, the Obligations may be declared to be forthwith due and payable as provided in Section 9.02 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.02) for purposes of  Section 4.01 notwithstanding any stay,
injunction or other prohibition preventing such declaration (or preventing the Obligations from becoming
automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become automatically due and payable), the Obligations
(whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of Section 4.01. The
Guarantors acknowledge and agree that their obligations hereunder are secured in accordance with the terms of the Collateral Documents and that the Lenders may exercise their remedies thereunder in
accordance with the terms thereof. 

4.06    Rights of Contribution.  

        The Guarantors hereby agree as among themselves that, in connection with payments made hereunder, each Guarantor shall have a right of contribution from each
other Guarantor in accordance with applicable Law. Such contribution rights shall be subordinate and subject in right of payment to the Obligations until such time as the Obligations have been Fully
Satisfied, and none of the Guarantors shall exercise any such contribution rights until the Obligations have been Fully Satisfied. 

4.07    Guarantee of Payment; Continuing Guarantee.  

        The guarantee in this Article IV is a guaranty of payment and not of collection, is a continuing guarantee,
and shall apply to all Obligations whenever arising. 

ARTICLE V

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS  

5.01    Conditions of Closing.  

        The obligation of the Administrative Agent, the L/C Issuer and each Lender to enter into this Agreement and to make the initial Credit Extension hereunder on the
Closing Date is subject to the satisfaction of the following conditions precedent: 

        (a)   Loan Documents.    Receipt by the Administrative Agent of executed counterparts of this Agreement and the other
Loan Documents required to be entered into on the Closing Date, each properly executed by a Responsible Officer of the signing Loan Party and, in the case of this Agreement, by each Lender. 

        (b)   Opinions of Counsel.    Receipt by the Administrative Agent of opinions of legal counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, dated as of the Closing Date, and in form and substance reasonably satisfactory to the Administrative Agent. 

        (c)   Financial Statements.    The Administrative Agent shall have received: 

        (i)    the
Audited Financial Statements; 

        (ii)   the
unaudited balance sheets, statements of operations and cash flows of the Borrower and its Subsidiaries for the fiscal quarters ended March 31, 2007 and
June 30, 2007 (the "Interim Financial Statements"); and 

51

 

        (iii)  a
pro forma financial model as to the Borrower and its Subsidiaries and forecasts prepared by management of the Borrower, each in form satisfactory to the Lenders, of
balance sheets, income statements and cash flow statements of the Borrower and its Subsidiaries (including the Product Assets), each on an annual basis beginning January 1, 2008 and ending with
the fiscal year ended December 31, 2011. 

        (d)   No Material Adverse Change.    There shall not have occurred a material adverse change in the business, assets,
properties, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole, since December 31, 2006 (it
being understood and agreed that (i) the repurchase by the Borrower of the Warrants and Warrant Shares pursuant to the terms of Sections 8.8 and 8.9 of the Securities Purchase Agreement shall
not be considered to be, or result in, such a material adverse change and (ii) the existence of the Mayo Litigation is not presently considered to be, or to have resulted in, such a material
adverse change; provided, however, that the Lenders shall not be obligated to enter into this Agreement and make their initial Credit Extension on the
Closing Date if the Mayo Litigation shall have resulted in such a material adverse change prior to the Closing Date). 

        (e)   Litigation.    There shall not exist any action, suit, investigation or proceeding pending or, to the knowledge
of the Borrower, the Administrative Agent or the Lenders, threatened in any court or before an arbitrator or Governmental Authority that could reasonably be expected to have a Material Adverse Effect,
except as set forth on Schedule 6.06 (it being understood and agreed that the existence of the Mayo Litigation is not presently considered to be,
or to have resulted in, a Material Adverse Effect; provided, however, that the Lenders shall not be
obligated to enter into this Agreement and make their initial Credit Extension on the Closing Date if the Mayo Litigation shall have resulted in a Material Adverse Effect prior to the Closing Date). 

        (f)    Organization Documents, Resolutions, Etc.    Receipt by the Administrative Agent of the following in form and
substance satisfactory to the Administrative Agent and its legal counsel: 

        (i)    the
Organization Documents of each Loan Party certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state or other
jurisdiction of its incorporation or organization (it being understood that each Loan Party's bylaws will not be certified by a Governmental Authority), where applicable, and certified by a secretary
or assistant secretary of such Loan Party to be true and correct as of the Closing Date; 

        (ii)   such
certificates of resolutions or other action, incumbency certificates (including specimen signatures) and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Loan Party is a party; and 

        (iii)  certification
from the state of organization or formation of each Loan Party stating that such Loan Party is in "good standing" in such state. 

        (g)   Perfection and Priority of Liens.    Receipt by the Administrative Agent of the following: 

        (i)    (A)
searches of Uniform Commercial Code filings in the jurisdiction of formation of each Loan Party or where a filing would need to be made in order to perfect the
Administrative Agent's security interest in the Collateral, and copies of the financing statements on file in such jurisdictions evidencing that no Liens exist other than Permitted Liens and
(B) tax lien, judgment and pending litigation searches. 

        (ii)   all
certificates evidencing any certificated Equity Interests pledged to the Administrative Agent pursuant to the Pledge Agreement, together with duly executed in
blank, undated stock powers attached thereto; 

52

 

        (iii)  searches
of ownership of, and Liens on, intellectual property of each Loan Party in the appropriate governmental offices; and 

        (iv)  duly
executed notices of grant of security interest in the form required by the Security Agreement as are necessary, in the Administrative Agent's sole discretion, to
perfect the Administrative Agent's security interest in the intellectual property of the Loan Parties. 

        (h)   Evidence of Insurance. Receipt by the Administrative Agent of copies of insurance policies or certificates of insurance
of the Loan Parties evidencing liability and casualty insurance meeting the requirements set forth in the Loan Documents, including, but not limited to, naming the Administrative Agent as additional
insured (in the case of liability insurance) or loss payee (in the case of hazard insurance) on behalf of the Lenders. 

        (i)    Closing Certificate.    Receipt by the Administrative Agent of a certificate signed by a Responsible Officer of
the Borrower certifying that the conditions specified in Sections 5.01(d) and (e) and  Sections 5.02(a) and
(b) have been satisfied as of the Closing Date. 

        (j)    Consents.    All governmental, shareholder and third party consents and approvals necessary in connection with
this Agreement shall have been obtained; all such consents and approvals shall be in force and effect; and all applicable waiting periods shall have expired without any action being taken by any
authority that could restrain, prevent or impose any material adverse condition on this Agreement or that could seek or threaten any of the foregoing, and no Law shall be applicable which has, or
could reasonably be expected to have, such effect. 

        (k)   Termination of Existing Credit Agreement.    Receipt by the Administrative Agent of evidence that the Existing
Credit Agreement has been or concurrently with the Closing Date is being terminated and that provisions acceptable to the Administrative Agent shall have been made for the termination and release of
all Liens securing obligations under the Existing Credit Agreement. 

        (l)    Fees.    Receipt by the Administrative Agent and the Lenders of any fees required to be paid on or before the
Closing Date. 

        (m)  Attorney Costs.    Unless waived by the Administrative Agent, the Borrower shall have paid all Attorney Costs
of the Administrative Agent to the extent invoiced prior to or on the Closing Date. 

        Without
limiting the generality of the provisions of the last paragraph of Section 10.03, for purposes of determining compliance
with the conditions specified in this Section 5.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, or waived, each document or other matter required thereunder to be consented to, approved by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto. 

5.02    Conditions to all Credit Extensions.  

        The obligation of each Lender to honor any Request for Credit Extension (excluding a Loan Notice requesting a conversion of a Loan of one Type to the other Type,
or a continuation of Eurodollar Rate Loan) is subject to the following conditions precedent: 

        (a)   The
representations and warranties of the Borrower and each other Loan Party contained in Article VI or any other
Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date of
such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of
such earlier date, and except that for purposes of this Section 5.02, the representations and warranties contained in subsections (a) and
(b) of 

53

 

 Section 6.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of  Section 7.01.

        (b)   No
Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof. 

        (c)   There
shall not have been commenced against the Borrower or any Subsidiary an involuntary case under any applicable Debtor Relief Law, now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such involuntary case or other case, proceeding or other action shall remain undismissed. 

        (d)   The
Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the
requirements hereof. 

        Each
Request for Credit Extension (excluding a Loan Notice requesting a conversion of a Loan of one Type to the other Type, or a continuation of Eurodollar Rate Loan) submitted by the
Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02(a),  (b) and (c)
 have been satisfied on and as of the date of the applicable Credit Extension. 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES  

        The Loan Parties represent and warrant to the Administrative Agent and the Lenders that: 

6.01    Existence, Qualification and Power.  

        Each Loan Party (a) is a corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to
(i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and
is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except
in each case referred to in clause (b)(i) or (c), to the extent that the failure to have any such power and authority, license, authorization, consent, approval or qualification, or to
be so licensed or in good standing, could not reasonably be expected to have a Material Adverse Effect. 

6.02    Authorization; No Contravention.  

        The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary
corporate or other organizational action, and do not (a) contravene the terms of any of such Person's Organization Documents; (b) conflict with or result in any breach or contravention
of, or the creation of any Lien under (i) any Contractual Obligation to which such Person is a party or (ii) any order, injunction, writ or decree of any Governmental Authority or any
arbitral award to which such Person or its Property is subject; or (c) violate any Law (including, without limitation, Regulation U or Regulation X issued by the FRB) except in
each case referred to in clause (b) or (c), to the extent that such any such conflict, breach, contravention, creation of a Lien or violation could not reasonably be expected to have a Material
Adverse Effect. 

54

 

6.03    Governmental Authorization; Other Consents.  

        No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document other than (i) those that have already
been obtained and are in full force and effect and (ii) filings to perfect the Liens created by the Collateral Documents. 

6.04    Binding Effect.  

        This Agreement and each other Loan Document has been duly executed and delivered by each Loan Party that is party thereto. This Agreement and each other Loan
Document constitutes a legal, valid and binding obligation of each Loan Party that is party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may
be limited by Debtor Relief Laws or by other equitable remedies as a matter of judicial discretion. 

6.05    Financial Statements; No Material Adverse Effect.  

        (a)   The
Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness
and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for Taxes, commitments and Indebtedness required to be shown thereon in
accordance with GAAP. 

        (b)   The
Interim Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the
period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to year-end audit adjustments; and (iii) show all material indebtedness
and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for Taxes, material commitments and Indebtedness required to be shown
thereon in accordance with GAAP. 

        (c)   From
the date of the Audited Financial Statements to and including the Closing Date, there has been no Disposition by the Borrower or any Subsidiary, or any
Extraordinary Receipt, of any material part of the business or Property of the Borrower and its Subsidiaries, taken as a whole, and no purchase or other acquisition by any of them of any business or
Property (including any Equity Interests of any other Person) material in relation to the consolidated financial condition of the Borrower and its Subsidiaries, taken as a whole, in each case, which
is not reflected in the foregoing financial statements (including the Interim Financial Statements) or in the notes thereto or has not otherwise been disclosed in writing to the Lenders on or prior to
the Closing Date. 

        (d)   The
forecasts delivered pursuant to Section 5.01(c)(iii) were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were reasonable in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, the Borrower's
good faith estimate of its future financial performance during the period covered by such forecasts. The Administrative Agent, the L/C Issuer and the Lenders hereby acknowledge that forecasts and
estimates of future financial performance are inherently uncertain and no assurances have been given, and no representations or warranties have been made by any Loan Party, that the results reflected
in the forecasts will be achieved. 

        (e)   Since
the date of the Audited Financial Statements, 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. 

55

   
6.06    Litigation.    

        There
are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Responsible Officers of the Loan Parties, threatened in writing, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to
this Agreement or any other Loan Document, or any of the transactions contemplated hereby or (b) except as set forth on Schedule 6.06, if
determined adversely, could reasonably be expected to have a Material Adverse Effect. The Loan Parties further represent and warrant that, and the Administrative Agent, L/C Issuer and each of the
Lenders hereby acknowledge that, none of the actions, suits, claims, disputes, proceedings, arbitrations or governmental investigations identified on  Schedule 6.06 have resulted in a Material
Adverse Effect as of the Closing Date. For the avoidance of doubt, if any actions, suits, proceedings,
arbitrations or governmental investigations identified on Schedule 6.06 (including, without limitation, the Mayo Litigation) shall result in a
Material Adverse Effect, the Loan Parties hereby agree that the Lenders shall be under no obligation to make any Loan and the L/C Issuer shall be under no obligation to issue or extend any Letter of
Credit hereunder. 

6.07    No Default.    

        (a)   Neither
the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation that could reasonably be expected to have a Material Adverse
Effect. 

        (b)   No
Default has occurred and is continuing. 

6.08    Ownership of Property; Liens.    

        Each
of the Borrower and its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of the Borrower and its
Subsidiaries is subject to no Liens, other than Permitted Liens. 

6.09    Environmental Compliance.    

        Except
as could not reasonably be expected to have a Material Adverse Effect: 

        (a)   To
the knowledge of the Responsible Officers of the Loan Parties, (i) all operations at the Facilities and each of the Facilities are in compliance with all
applicable Environmental Laws, (ii) there is no violation of any Environmental Law with respect to the Facilities or the Businesses, and (iii) there are no conditions relating to the
Facilities or the Businesses that could give rise to liability under any applicable Environmental Laws. 

        (b)   To
the knowledge of the Responsible Officers of the Loan Parties, none of the Facilities contains, or has previously contained, any Hazardous Materials at, on or under
the Facilities in amounts or concentrations that constitute or constituted a violation of, or could give rise to liability under, Environmental Laws. 

        (c)   Neither
the Borrower nor any Subsidiary has received any written or to the knowledge of the Responsible Officers of the Loan Parties, oral notice of, or inquiry from any
Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Facilities or the Businesses. 

        (d)   Hazardous
Materials have not been transported or disposed of from the Facilities, or generated, treated, stored or disposed of at, on or under any of the Facilities or
any other location, in each case by or on behalf the Borrower or any Subsidiary in violation of, or in a manner that would be reasonably likely to give rise to liability under, any applicable
Environmental Law. 

56

 

        (e)   No
judicial proceeding or governmental or administrative action is pending or, to the knowledge of the Responsible Officers of the Loan Parties, threatened in writing,
under any Environmental Law to which the Borrower or any Subsidiary is or will be named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the Borrower, any Subsidiary, the Facilities or the Businesses. 

        (f)    To
the knowledge of the Responsible Officers of the Loan Parties, there has been no release or, threat of release of Hazardous Materials at or from the Facilities, or
arising from or related to the
operations (including, without limitation, disposal) of the Borrower or any Subsidiary in connection with the Facilities or otherwise in connection with the Businesses, in violation of or in amounts
or in a manner that could give rise to liability under Environmental Laws. 

6.10    Insurance.    

        The
properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not, to the knowledge of the Responsible Officers of the Loan
Parties, Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties
in localities where the Borrower or the applicable Subsidiary operates. The insurance coverage of the Loan Parties as in effect on the Closing Date is outlined as to carrier, policy number, expiration
date, type, amount and deductibles on Schedule 6.10. 

6.11    Taxes.    

        The
Borrower and its Subsidiaries have (a) filed all federal Tax returns and reports required to be filed, (b) filed or will file all material state and other material Tax
returns and reports required to be filed, and (c) paid all federal taxes and have paid or accrued all material state and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and
for which adequate reserves have been provided in accordance with GAAP. To the knowledge of the Responsible Officers of the Borrower, there is no proposed Tax assessment against the Borrower or any
Subsidiary that would, if made, have a Material Adverse Effect. No Loan Party nor any Subsidiary thereof is party to any Tax sharing agreement. 

6.12    ERISA Compliance.    

        (a)   Each
Plan is in compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code and other federal or state Laws. The IRS has
issued to each Plan that is intended to qualify under Section 401(a) of the Internal Revenue Code a favorable determination or opinion letter and, to the knowledge of the Responsible Officers
of the Loan Parties, nothing has occurred which would prevent, or cause the loss of, such qualification. Each Loan Party and each ERISA Affiliate have made all required contributions to each Plan
subject to Section 412 of the Internal Revenue Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Internal Revenue
Code has been made with respect to any Plan. 

        (b)   There
are no pending or, to the knowledge of the Responsible Officers of the Loan Parties, threatened in writing, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could be reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect. 

        (c)   (i) No
ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Loan Party
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan 

57

 

(other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) no Loan Party nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA. 

6.13    Subsidiaries.    

        Set
forth on Schedule 6.13 is a complete and accurate list as of the Closing Date of each Subsidiary, together with
(i) jurisdiction of formation, (ii) number of shares of each class of Equity Interests outstanding, (iii) number and percentage of outstanding shares of each class owned (directly
or indirectly) by the Borrower or any Subsidiary and (iv) number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights
with respect thereto. The outstanding Equity Interests of each Subsidiary are validly issued, fully paid and non-assessable. 

6.14    Margin Regulations; Investment Company Act.    

        (a)   The
Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock. Following the application of the proceeds of each Borrowing or drawing
under each Letter of Credit, not more than 25% of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a consolidated basis), subject to the provisions of  Section 8.01 or Section 8.05 or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness will be margin stock. 

        (b)   None
of the Borrower or any Subsidiary is or is required to be registered as an "investment company" under the Investment Company Act of 1940, as amended. 

6.15    Disclosure.    

        No
report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;  provided that,
with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based
upon assumptions believed by them to be reasonable at the time. 

6.16    Compliance with Laws and Material Contractual Obligations.    

        Each
of the Borrower and each Subsidiary is in compliance with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, and all
Contractual Obligations, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect. 

6.17    Intellectual Property; Licenses, Etc.    

        The
Borrower and its Subsidiaries own, or possess the legal right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP Rights") that are reasonably necessary for the operation of their Businesses. Set forth on  Schedule 6.17 is a list of all IP Rights registered or pending registration with 

58

 

the
United States Copyright Office or the United States Patent and Trademark Office and owned by each Loan Party as of the Closing Date. Except for such claims and infringements that could not
reasonably be expected to have a Material Adverse Effect and except for such claim set forth on Schedule 6.17, (a) no claim has been
asserted and is pending by any Person challenging or questioning the use of any IP Rights or the validity or effectiveness of any IP Rights, and (b) to the knowledge of the Responsible Officers
of the Loan Parties, the use of any IP Rights by the Borrower or any Subsidiary or the granting of a right or a license in respect of any IP Rights from the Borrower or any Subsidiary does not
infringe on the rights of any Person. As of the Closing Date, none of the IP Rights owned by any of the Loan Parties is subject to any licensing agreement, franchise agreement or similar arrangement
except as set forth on Schedule 6.17. For the avoidance of doubt, if the claim on  Schedule 6.17 shall result in a Material Adverse Effect, the
Loan Parties hereby agree that the Lenders shall be under no obligation to make any
Loan and the L/C Issuer shall be under no obligation to issue or extend any Letter of Credit hereunder. 

6.18    Solvency.    

        The
Loan Parties are Solvent on a consolidated basis. 

6.19    Perfection of Security Interests in the Collateral.    

        The
Collateral Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby, which security interests and Liens upon filing of all
applicable financing statements or filing of notices with respect to intellectual property or delivery of Collateral, as applicable, and except as otherwise contemplated or otherwise not required by
the Collateral Documents, will be perfected security interests and Liens, prior to all other Liens other than Permitted Liens. 

6.20    Business Locations.    

        As
of the Closing Date, no Loan Party owns any real Property. Set forth on Schedule 6.20(a) is a list of all locations where any
tangible personal property of any Loan Party (other than any tangible personal Property in the possession of a sales representative of any Loan Party) is located as of the Closing Date. Set forth on  Schedule 6.20(b)
 is the chief executive office, federal tax payer identification number and organizational identification number of each Loan
Party as of the Closing Date. The exact legal
name and state of organization of each Loan Party as of the Closing Date is as set forth on the signature pages hereto. 

6.21    Labor Matters.    

        There
are no collective bargaining agreements or Multiemployer Plans covering the employees of the Borrower or any Subsidiary as of the Closing Date and neither the Borrower nor any
Subsidiary has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five (5) years prior to the Closing Date. Neither the business nor properties of
any Loan Party are affected by any strikes, walkouts, work stoppages or other labor dispute that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. 

ARTICLE VII  

 AFFIRMATIVE COVENANTS  

        So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than
(x) contingent reimbursement or indemnification obligations and (y) obligations under Swap Contracts that, at any time, are allowed by the terms thereof to remain outstanding), or any
Letter of Credit shall remain outstanding (except for 

59

 

Letters
of Credit that have been Cash Collateralized), the Loan Parties shall and shall cause each Subsidiary to: 

7.01    Financial Statements.    

        Deliver
to the Administrative Agent for the Administrative Agent to deliver to each Lender, in form and detail reasonably satisfactory to the Administrative Agent: 

        (a)   as
soon as available, but in any event within ninety (90) days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations and cash flows for such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and
opinion of an independent certified public accounting firm of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any "going concern" or like qualification or exception or any qualification or exception as to the scope of such audit; and 

        (b)   as
soon as available, but in any event within forty-five (45) days after the end of each of the first three (3) fiscal quarters of each fiscal
year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations and cash
flows for such fiscal quarter and for the portion of the Borrower's fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of the Borrower as fairly presenting in all material
respects the financial condition, results of operations, shareholders' equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to year-end audit
adjustments and the absence of footnotes. 

As
to any information contained in materials furnished pursuant to Section 7.02(d), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in
subsections (a) and (b) above at the times specified therein. 

7.02    Certificates; Other Information.    

        Deliver
to the Administrative Agent for the Administrative Agent to deliver to each Lender, in form and detail reasonably satisfactory to the Administrative Agent and the Required
Lenders: 

        (a)   concurrently
with the delivery of the financial statements referred to in Section 7.01(a), a certificate of its
independent certified public accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Event of Default under  Section 8.11 or, if any such Event of Default shall exist, stating the nature and status of such event; 

        (b)   concurrently
with the delivery of the financial statements referred to in Sections 7.01(a) and  (b), a duly completed Compliance Certificate signed by a Responsible
Officer of the Borrower; 

        (c)   at
least thirty (30) days prior to the end of each fiscal year of the Borrower, beginning with the fiscal year ending December 31, 2007, an annual budget
of the Borrower and its Subsidiaries containing, among other things, financial information for each quarter of the next fiscal year. 

        (d)   concurrently
with the delivery of the financial statements referred to in Sections 7.01(a) and  (b), a certificate of a Responsible Officer of the Borrower containing
information regarding 

60

 

the
amount of all Dispositions, Debt Issuances, Extraordinary Receipts and Acquisitions that occurred during the period covered by such financial statements; 

        (e)   promptly
after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board
of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of
any of them; 

        (f)    promptly
after the same are available (but in any event not later than ten (10) Business Days after delivery), (i) copies of each annual report, proxy or
financial statement sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to
file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, or sent to a holder of any Indebtedness owed by the Borrower or any Subsidiary in its capacity as
such a holder and not otherwise required to be delivered to the Administrative Agent pursuant hereto and (ii) upon the request of the Administrative Agent, all reports and written information
to and from the United States Environmental Protection Agency, or any state or local agency responsible for environmental matters, the United States Occupational Health and Safety Administration, or
any state or local agency responsible for health and safety matters, or any successor agencies or authorities concerning environmental, health or safety matters; 

        (g)   promptly,
such additional information regarding the business, financial or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan
Documents, as the Administrative Agent or any Lender may from time to time reasonably request; and 

        (h)   concurrently
with the delivery of the financial statements referred to in Section 7.01(a) and  Section 7.01(b) for the quarter ending June 30 of each
fiscal year, a certificate of a Responsible Officer of the Borrower
(i) listing (A) all applications, if any, for Copyrights, Patents or Trademarks (each such term as defined in the Security Agreement) made since the date of the prior certificate (or, in
the case of the first such certificate, the Closing Date), (B) all issuances of registrations or letters on existing applications for Copyrights, Patents and Trademarks (each such term as
defined in the Security Agreement) received since the date of the prior certificate (or, in the case of the first such certificate, the Closing Date), (C) all Trademark Licenses, Copyright
Licenses and Patent Licenses (each such term as defined in the Security Agreement) entered into since the date of the prior certificate (or, in the case of the first such certificate, the Closing
Date) and (D) each material Copyright, Trademark and Patent (each such term as defined in the Security Agreement) that has expired or become unenforceable since the date of the prior
certificate (or, in the case of the first such certificate, the Closing Date), and (ii) attaching the insurance binder or other evidence of insurance for any insurance coverage of the Borrower
or any Subsidiary that was renewed, replaced or modified during the period covered by such financial statements. 

        Documents
required to be delivered pursuant to Section 7.01(a) or (b) or  Section 7.02(f) (to the extent any
such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower's website on the Internet at the
website address listed on Schedule 11.02; or (ii) on which such documents are posted on the Borrower's behalf on IntraLinks/IntraAgency or
another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent);  provided
that: (A) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower
to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (B) the Borrower shall notify (which may be by
facsimile or electronic mail) 

61

 

the
Administrative Agent and each Lender of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper
copies of the Compliance Certificates required by Section 7.02(b) to the Administrative Agent. Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents. 

        The
Borrower hereby acknowledges that (a) the Administrative Agent and/or BAS will make available to the Lenders and the L/C Issuer materials and/or information provided by or on
behalf of the Borrower hereunder (collectively, the "Borrower Materials") by posting the Borrower Materials on IntraLinks or another similar electronic system (the "Platform") and (b) certain
of the Lenders (each, a "Public Lender") may have personnel who do not wish to receive material non-public information with respect to the
Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Person's securities. The
Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean that
the word "PUBLIC" shall appear prominently on the first page thereof; (x) by marking Borrower Materials "PUBLIC," the Borrower shall be deemed to have authorized the Administrative Agent, BAS
and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States federal
and state securities laws (provided, however, that to the extent such Borrower Materials constitute
Information (as defined in Section 11.07), they shall be treated as set forth in  Section 11.07); (y) all Borrower Materials marked "PUBLIC"
are permitted to be made available through a portion of the Platform designated
as "Public Investor;" and (z) the Administrative Agent and BAS shall be entitled to treat any Borrower Materials that are not marked "PUBLIC" as being suitable only for posting on a portion of
the Platform not marked as "Public Investor." Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials "PUBLIC". 

7.03    Notices.    

        Promptly
notify the Administrative Agent, for further dissemination to the Lenders, of: 

        (a)   The
occurrence of any Default. 

        (b)   Any
matter that has resulted in a Material Adverse Effect, including, if applicable (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws. 

        (c)   The
occurrence of any ERISA Event. 

        (d)   Any
material change in accounting policies or financial reporting practices by the Borrower or any Subsidiary, including any determination by the Borrower referred to in  Section 2.10(b). 

        Each
notice pursuant to this Section 7.03(a) through (e) shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. 

62

 

7.04    Payment of Obligations.    

        Pay
and discharge as the same shall become due and payable, all its material obligations and liabilities, including (a) all material Tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and reserves reasonably believed by the
Responsible Officers of the Borrower or such Subsidiary to be adequate and in accordance with GAAP are being maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if
unpaid, would by Law become a Lien upon its property (other than any Permitted Lien); and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions
contained in any instrument or agreement evidencing such Indebtedness. 

7.05    Preservation of Existence, Etc.    

        (a)   Preserve,
renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a
transaction permitted by Section 8.04 or 8.05. 

        (b)   Take
all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to
the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect. 

        (c)   Preserve
or renew all of its material registered patents, trademarks, trade names and service marks, the non-preservation or non-renewal of which
could reasonably be expected to have a Material Adverse Effect. 

7.06    Maintenance of Properties.    

        (a)   Maintain,
preserve and protect in a commercially reasonable manner all of its material properties and equipment necessary in the operation of its business in good
working order and condition, ordinary wear and tear excepted. 

        (b)   Make
all necessary repairs thereto and renewals and replacements thereof, except where the failure to do so could not reasonably be expected to have a Material Adverse
Effect. 

        (c)   Use
the standard of care typical in the industry in the operation and maintenance of its facilities. 

7.07    Maintenance of Insurance.    

        Maintain
in full force and effect insurance (including worker's compensation insurance, liability insurance, casualty insurance and business interruption insurance) with financially
sound and reputable insurance companies not, to the knowledge of the Responsible Officers of the Loan Parties, Affiliates of the Borrower, in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates. The Administrative
Agent shall be named as loss payee or mortgagee, as its interest may appear, and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral. The Borrower
agrees that it shall provide
prompt notice to the Administrative Agent of any material alteration or cancellation of any the above-referenced insurance, together with a reasonably detailed description of such alteration or
cancellation. 

7.08    Compliance with Laws.    

        Comply
with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently 

63

 

conducted;
or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect. 

7.09    Books and Records.    

        (a)   Maintain
proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be. 

        (b)   Maintain
such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the
Borrower or such Subsidiary, as the case may be. 

7.10    Inspection Rights.    

        (a)   Permit
representatives and independent contractors of the Administrative Agent, at the reasonable expense of the Borrower no more than once in any calendar year, and
each Lender, at such Lender's expense, as often as may be reasonably desired, to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants at such reasonable times during normal business
hours, upon reasonable advance notice to the Borrower; provided, however, that when an Event of Default
exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during
normal business hours upon advance notice of at least one (1) Business Day. 

        (b)   If
an Event of Default has occurred and is continuing, (i) permit the Administrative Agent, and its representatives, upon reasonable advance notice to the
Borrower, to conduct an audit of the Collateral at the expense of the Borrower and (ii) promptly deliver to the Administrative Agent (to the extent requested by the Administrative Agent in its
sole discretion) (A) asset appraisal reports with respect to the Collateral, and (B) a written audit of the accounts receivable, inventory, payables, controls and systems of the Borrower
and its Subsidiaries. 

7.11    Use of Proceeds.    

        Use
the proceeds of the Credit Extensions for any or all of the following purposes: (a) to refinance Indebtedness outstanding under the Existing Credit Agreement and to pay fees
and expenses incurred in connection with the transactions contemplated by this Agreement, (b) to finance the Product Acquisition (and costs and expenses related thereto) or (c) for
working capital, capital expenditures and other lawful corporate purposes; provided that in no event shall the proceeds of the Credit Extensions be used
in contravention of any Law or of any Loan Document. 

7.12    Additional Subsidiaries.    

        Within
thirty (30) days after the acquisition or formation of any Subsidiary: 

        (a)   notify
the Administrative Agent thereof in writing, together with the (i) jurisdiction of formation, (ii) number of shares of each class of Equity
Interests outstanding, (iii) number and percentage of outstanding shares of each class owned (directly or indirectly) by the Borrower or any Subsidiary and (iv) number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto; and 

        (b)   if
such Subsidiary is (A) a Domestic Subsidiary that is a Wholly-Owned Subsidiary or (B) a Domestic Subsidiary that is not wholly-owned (directly or
indirectly) by the Borrower but could become a Guarantor without violating the terms of its organizational documents, cause such Person to (1) become a Guarantor by executing and delivering to
the Administrative Agent a Joinder Agreement or such other documents as the Administrative Agent shall deem appropriate 

64

 

for
such purpose, and (2) if requested by the Administrative Agent, deliver to the Administrative Agent documents of the types referred to in Sections
5.01(b), (f) and (g), all in form, content and scope reasonably satisfactory to
the Administrative Agent. 

7.13    ERISA Compliance.    

        Do,
and cause each of its ERISA Affiliates to do, each of the following: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the
Internal Revenue Code and other federal or state Law; (b) cause each Plan that is qualified under Section 401(a) of the Internal Revenue Code to maintain such qualification; and
(c) make all required contributions to any Plan subject to Section 412 of the Internal Revenue Code. 

7.14    Pledged Assets.    

        (a)   Each
Loan Party will (i) cause all of its owned and leased real and personal Property other than Excluded Property to be subject at all times to first priority,
perfected (other than deposit accounts and cash and except as otherwise contemplated or otherwise not required by the Collateral Documents) and, in the case of real Property which is ground leased or
owned, title insured Liens in favor of the Administrative Agent to secure the Obligations pursuant to the terms and conditions of the Collateral Documents or, with respect to any such Property
acquired subsequent to the Closing Date, such other additional security documents as the Administrative Agent shall reasonably request, subject in any case to Permitted Liens and (ii) deliver
such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate UCC-1 financing statements, real
estate title insurance policies, surveys, environmental reports, landlord's waivers, certified resolutions and other organizational and authorizing documents of such Person, favorable opinions of
counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above and the perfection of the Administrative
Agent's Liens thereunder) and other items of the types required to be delivered pursuant to Section 5.01(g), all in form, content and scope
reasonably satisfactory to the Administrative Agent. 

        (b)   Each
Loan Party will cause 100% of the issued and outstanding Equity Interests owned by it of each Domestic Subsidiary and sixty-five percent (65%) (or such
greater percentage that, due to a change in applicable Law after the date hereof, (A) could not reasonably be expected to cause the undistributed earnings of such First-Tier Foreign
Subsidiary as determined for United States federal income Tax purposes to be treated as a deemed dividend to such First-Tier Foreign Subsidiary's United States parent and (B) could
not reasonably be expected to cause any material adverse Tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and one hundred percent (100%) of the issued and outstanding Equity Interests owned by it that are not entitled to vote of each First-Tier Foreign
Subsidiary (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent pursuant to
the terms and conditions of the Collateral Documents or such other security documents as the Administrative Agent shall reasonably request. 

        (c)   Notwithstanding
anything to the contrary in this Section 7.14, paragraphs (a) and (b) of this  Section 7.14 shall not require the creation or perfection
of a security interest in favor of the Administrative Agent or any holder of any
Obligation in, or the obtaining of title insurance, surveys or any other documents with respect to, any Property acquired after the Closing Date if and for so long as the Administrative Agent has
determined in its sole discretion that the collateral value thereof is insufficient to justify the cost of creating or perfecting such security interests in such Property or obtaining title insurance,
surveys or such other documents in respect of such Property. 

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7.15    Landlord Consents.    

        The
Loan Parties shall use commercially reasonable efforts to obtain and deliver to the Administrative Agent, in the case of any personal Property Collateral located at a premises not
owned by a Loan Party (other than leased office space), estoppel letters, consents and waivers from the landlords, warehousemen or bailees, as applicable, with respect to such personal Property in
form and substance reasonably satisfactory to the Administrative Agent. 

ARTICLE VIII  

 NEGATIVE COVENANTS  

        So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than
(x) contingent reimbursement or indemnification obligations and (y) obligations under Swap Contracts that, at any time, are allowed by the terms thereof to remain outstanding), or any
Letter of Credit shall remain outstanding (except for Letters of Credit that have been Cash Collateralized), no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly: 

8.01    Liens.    

        Create,
incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following: 

        (a)   Liens
pursuant to any Loan Document; 

        (b)   Liens
existing on the date hereof and listed on Schedule 8.01 and any renewals or extensions thereof,  provided that (i) the property covered thereby is
not changed, (ii) the amount secured or benefited thereby is not materially increased,
(iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by  Section 8.03(b); 

        (c)   Liens
(other than Liens imposed under ERISA) for taxes, assessments or governmental charges or levies not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP; 

        (d)   statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and other Liens imposed by Law or pursuant to customary
reservations or retentions of title arising in the ordinary course of business, provided that such Liens secure only amounts not yet due and payable or,
if due and payable, are unfiled and no other action has been taken to enforce the same or are being contested in good faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established; 

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        (e)   pledges
or deposits in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation, other than
any Lien imposed by ERISA; 

        (f)    deposits
to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business; 

        (g)   easements,
rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in
amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person; 

        (h)   Liens
securing judgments for the payment of money (or appeal or other surety bonds relating to such judgments) not constituting an Event of Default under  Section 9.01(i); 

        (i)    Liens
securing Indebtedness permitted under Section 8.03(e);  provided that (i) such Liens do not at any time encumber any Property other than the
Property financed by such Indebtedness, (ii) the
Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the Property being acquired on the date of acquisition and (iii) such Liens attach to such
Property concurrently with or within ninety (90) days after the acquisition thereof; 

        (j)    licenses,
leases or subleases granted to others in the ordinary course of business not interfering in any material respect with the business of the Borrower or any of
its Subsidiaries; 

        (k)   any
interest of title of a lessor or a licensor (or any secured creditor of any such lessor or licensor) under, and Liens arising from UCC financing statements (or
equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases and/or licenses permitted by this Agreement; 

        (l)    Liens
deemed to exist in connection with Investments in repurchase agreements permitted under Section 8.02; 

        (m)  normal
and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions; 

        (n)   Liens
of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection; 

        (o)   Liens
of sellers of goods to the Borrower and any of its Subsidiaries arising under Article II of the Uniform Commercial Code or similar provisions of applicable
Law in the ordinary course of business, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses; 

        (p)   Liens
on any Property subject to an escrow arrangement entered into in connection with the Product Acquisition (subject in the case of cash or Cash Equivalents to the
applicable limitation on the amount of such escrow deposit set forth in the definition thereof); 

        (q)   Liens
consisting of or incurred pursuant to an agreement to sell, transfer, lease or dispose of any Property in a sale, lease transfer or other disposition, solely to
the extent such sale, lease transfer or other disposition would have been permitted on the date of the creation of such Lien; 

        (r)   with
respect to any Property that is the subject of and used, developed or created by the Borrower in connection with the Entocort® EC Distribution Agreement
or 1996 License Agreement, respectively, Liens on such Property arising under the Entocort® EC Distribution Agreement or 1996 License Agreement, respectively; and 

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        (s)   additional
Liens not otherwise permitted by this Section 8.01 and not securing Indebtedness;  provided that neither (i) the aggregate outstanding amount of
the applicable obligations secured thereby nor (ii) the aggregate book value
(determined, in the case of each such Lien, as of the date such Lien is incurred) of the assets subject thereto exceeds $500,000. 

8.02    Investments.    

        Make
any Investments, except: 

        (a)   Investments
held by the Borrower or such Subsidiary in the form of cash or Cash Equivalents; 

        (b)   Investments
existing as of the Closing Date and set forth in Schedule 8.02(b); 

        (c)   Investments
made in compliance with the investment policy identified in Schedule 8.02(c) (including any
Investments existing on the Closing Date made pursuant to such investment policy); 

        (d)   Investments
in any Person that is a Loan Party; 

        (e)   Investments
consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of
business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss; 

        (f)    Guarantees
permitted by Section 8.03; 

        (g)   Permitted
Acquisitions; 

        (h)   Investments
consisting of advances or loans to directors, officers or employees in an aggregate principal amount not to exceed $500,000 in the aggregate at any time
outstanding; provided, that all such advances shall be in compliance with all Laws; 

        (i)    Investments
made by the Borrower in connection with its employee deferred compensation plans; and 

        (j)    the
Product Acquisition; 

        (k)   promissory
notes and other non-cash consideration received in connection with Dispositions and any other sale, transfer or other disposition of any Property
permitted hereunder; and 

        (l)    Investments
of a nature not contemplated in the foregoing clauses in an amount not to exceed $5,000,000 in the aggregate at any time outstanding. 

8.03    Indebtedness.    

        Create,
incur, assume or suffer to exist any Indebtedness, except: 

        (a)   Indebtedness
under the Loan Documents; 

        (b)   Indebtedness
of the Borrower and its Subsidiaries set forth in Schedule 8.03 (and renewals, refinancings and
extensions thereof on terms and conditions not materially less favorable to the applicable debtor(s)); 

        (c)   intercompany
Indebtedness permitted under Section 8.02(d); 

        (d)   obligations
(contingent or otherwise) of the Borrower or any Subsidiary existing or arising under any Swap Contract,  provided that (i) such obligations are (or were) entered into by such Person in the ordinary
course of business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person,
and not for purposes of 

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speculation
or taking a "market view;" and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party; 

        (e)   purchase
money Indebtedness (including obligations in respect of Capital Leases or Synthetic Leases) hereafter incurred by the Borrower or any of its Subsidiaries to
finance the purchase of fixed assets, and renewals, refinancings and extensions thereof, provided that (i) the total of all such Indebtedness for
all such Persons taken together shall not exceed an aggregate principal amount of $5,000,000 at any one time outstanding; (ii) such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed; (iii) no such Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing; 

        (f)    Indebtedness
that may exist or may be deemed to exist under the Product Acquisition Documents, the Entocort® EC Distribution Agreement, the 1996 License
Agreement and any other agreements providing for indemnification, purchase price adjustments and similar obligations (including Earn-Out Obligations) in connection with the lease, license,
purchase or sale of assets effected in accordance with the requirements of this Agreement; 

        (g)   other
unsecured Indebtedness of the Borrower or any Subsidiary in an aggregate principal amount not to exceed $5,000,000 at any one time outstanding;  provided, that (i) the Loan Parties shall be in
compliance with Section 8.11 after giving
effect to such additional Indebtedness, (ii) no Default or Event of Default exists prior to or after giving effect to such Indebtedness and (iii) if such Indebtedness results from seller
financing, such Indebtedness is not evidenced by a demand note but rather has a stated maturity; and 

        (h)   Guarantees
with respect to Indebtedness permitted under clauses (a) through (g) of this  Section 8.03. 

8.04    Fundamental Changes.    

        Merge,
dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to or in favor of any Person; provided that, notwithstanding the foregoing provisions of this  Section 8.04 but subject to the terms of Sections 7.12 and  7.14, (a) the Borrower may merge or consolidate with any of its Subsidiaries provided that the Borrower shall be the continuing or surviving
corporation, (b) any Loan Party other than the Borrower may merge or consolidate with any other Loan Party other than the Borrower, (c) any Foreign Subsidiary may be merged or
consolidated with or into any Loan Party provided that such Loan Party shall be the continuing or surviving Person, (d) any Foreign Subsidiary may be merged or consolidated with or into any
other Foreign Subsidiary, (e) any Subsidiary of the Borrower may merge with any Person that is not a Loan Party in connection with a Permitted Acquisition provided that, if such Permitted
Acquisition involves the Borrower, the Borrower shall be the continuing or surviving corporation, (f) any Loan Party may Dispose of any or all of its Property (upon voluntary liquidation or
otherwise) to the Borrower, and (g) the Borrower may consummate the Reorganization pursuant to and in accordance with the following paragraph of this  Section 8.04. 

Notwithstanding
the foregoing, but subject to the following provisions of this paragraph, the Borrower will be permitted to effect an internal reorganization that will result in the parent company
(currently the Borrower) changing its state of incorporation from California to Delaware and that will be accomplished either by (a) the Borrower merging with and into a new wholly-owned
Subsidiary of the Borrower, which Subsidiary (i) will be incorporated in the state of Delaware and the surviving corporation of such merger, (ii) shall, as a result of such merger,
assume by operation of law all of the rights and obligations of the Borrower under the Agreement, and (iii) shall, immediately after the 

69

 

consummation
of such merger, have management and controlling ownership substantially similar to that of the Borrower immediately prior to the consummation of such merger or (b) the Borrower
becoming a wholly-owned Subsidiary of a new holding company incorporated in the State of Delaware, the outstanding capital stock of which holding company will be owned by the current shareholders of
the Borrower (either such transaction, the "Reorganization"). The Lenders hereby agree that the Borrower shall be permitted to consummate the
Reorganization so long as (i) the consummation of the Reorganization shall not result in a material and adverse impact to the interests of the Administrative Agent and/or the Lenders under this
Agreement and the other Loan Documents and (ii) the management and controlling ownership of the Borrower (or new parent corporation, if applicable) immediately after the consummation of the
Reorganization are substantially similar to that of the Borrower immediately prior to the consummation of the Reorganization. The Loan Parties hereby agree (i) to provide the Administrative
Agent and the Lenders with such additional information and documents related to the Reorganization as may be reasonably requested by the Administrative Agent and/or any Lender and (ii) to
execute and deliver (or to cause to be executed and delivered) prior to or concurrently with the consummation of the Reorganization such appropriate amendments, corporate authority documents and other
supporting documents to or under this Agreement or the other Loan Documents evidencing any changes made necessary by the consummation of the Reorganization (including, without limitation,
(A) in the event the Borrower merges with and into a new wholly-owned Subsidiary of the Borrower, a legal opinion of Borrower's counsel, in form and substance reasonably acceptable to the
Administrative Agent's legal counsel, addressing the enforceability of the Loan Documents with respect to such surviving Subsidiary and (B) in the event that the Borrower becomes a wholly-owned
subsidiary of a new parent holding company incorporated in Delaware, such new parent holding company will become a Guarantor hereunder and, subject to any applicable limitations set forth in  Section 7.14 and/or the Collateral Documents, cause all of its owned and leased real and personal Property to be subject to a first priority,
perfected lien in favor of the Administrative Agent to secure the Obligations, including without limitation 100% of the issued and outstanding Equity Interests of the Borrower owned by such new parent
holding company) and such other changes as may be mutually agreed to by the Borrower (or its successor, if applicable) and the Administrative Agent, each in form and substance reasonably acceptable to
the Borrower (or its successor, if applicable), the Administrative Agent and the Required Lenders. The Borrower acknowledges that the agreement of the Lenders evidenced in this paragraph is given in
reliance upon the foregoing conditions and agreements and shall be deemed revoked if any such condition or agreement is breached. 

8.05    Dispositions.    

        Make
any Disposition unless (a) the consideration paid shall be cash or Cash Equivalents paid contemporaneously with consummation of the transaction and shall be in an amount not
less than the fair market value of the Property disposed of, (b) if such transaction is a Sale and Leaseback
Transaction, such transaction is not prohibited by the terms of Section 8.16, (c) such transaction does not involve the sale or other
disposition of a minority equity interest in any Subsidiary, (d) such transaction does not involve a sale or other disposition of receivables other than receivables owned by or attributable to
other Property concurrently being disposed of in a transaction otherwise permitted under this Section 8.05 and (e) the aggregate fair
market value of all the assets sold or otherwise disposed of by the Borrower and its Subsidiaries in all such transactions during the term of this Agreement shall not exceed 10% of Consolidated Total
Assets at the time of any such Disposition. 

8.06    Restricted Payments.    

        Declare
or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that: 

        (a)   each
Subsidiary may make Restricted Payments (directly or indirectly) to any Loan Party; 

70

 

        (b)   the
Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the Equity Interests of such Person; 

        (c)   the
Borrower may make cash payments to its shareholders in an aggregate amount not to exceed $500,000 during the term of this Agreement;  provided that such payments are not dividend payments or similar type
distributions; and 

        (d)   the
Borrower may repurchase (i) Warrants and Warrant Shares for fair market value pursuant to the terms of Section 8.8 of the Securities Purchase
Agreement; provided that the Borrower does not use any proceeds of any Credit Extension (which term is intended to include Borrowings made under any additional commitments provided pursuant to  Section 2.02(f)
) to repurchase any such Warrants and Warrant Shares and (ii) Warrants and Warrant Shares based on any notice given by, or
received from, any holders of Warrants or Warrant Shares between April 30, 2007 and April 30, 2008 for fair market value pursuant to the terms of Section 8.9 of the Securities
Purchase Agreement; provided that the Borrower does not use any proceeds of any Credit Extension (which term is intended to include Borrowings made under any additional commitments provided pursuant
to Section 2.02(f)) to repurchase any such Warrants and Warrant Shares. 

8.07    Change in Nature of Business.    

        Engage
in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the Closing Date or any business
substantially related or incidental thereto. 

8.08    Transactions with Affiliates and Insiders.    

        Enter
into or permit to exist any transaction or series of transactions with any officer or director of such Person or with any Person known to be an Affiliate of such Person other than
(a) advances of working capital to any Loan Party, (b) transfers of cash and assets to any Loan Party and any other transactions among the Loan Parties, (c) intercompany
transactions expressly permitted by Section 8.02, Section 8.03,  Section 8.04, Section 8.05 or  Section 8.06, (d) normal and reasonable compensation and reimbursement of expenses of officers and directors and (e) except as
otherwise specifically limited in this Agreement, other transactions which are entered into on terms and conditions substantially as favorable to such Person as would be obtainable by it in a
comparable arms-length transaction with a Person other than an officer, director or Affiliate. 

8.09    Burdensome Agreements.    

        (a)   Enter
into, or permit to exist, any Contractual Obligation that encumbers or restricts the ability of any such Person to (i) pay dividends or make any other
distributions to any Loan Party on its Equity Interests or with respect to any other interest or participation in, or measured by, its profits, (ii) pay any Indebtedness or other obligation
owed to any Loan Party, (iii) make loans or advances to any Loan Party, (iv) sell, lease or transfer any of its Property to any Loan Party, (v) pledge its Property pursuant to the
Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof (provided that the Loan Parties may enter into and permit to exist Contractual Obligations that contain
customary "no assignment" provisions) or (vi) act as a Loan Party pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of
any of the matters referred to in clauses (i)-(v) above) for (1) this Agreement and the other Loan Documents, (2) any document or instrument governing Indebtedness incurred
pursuant to Section 8.03(e), provided that any such restriction contained therein relates only to
the asset or assets constructed or acquired in connection therewith, (3) any Permitted Lien or any document or instrument governing any Permitted Lien,  provided that any such restriction contained
therein relates only to the asset or assets subject to such Permitted Lien, (4) customary
restrictions and conditions contained in any agreement relating to the sale of any Property permitted under Section 8.05 pending the 

71

 

consummation
of such sale, (5) the Product Acquisition Documents (to the extent received and approved by the Administrative Agent and Required Lenders prior to the consummation of the Product
Acquisition), (6) the Securities Purchase Agreement, Warrants and/or Warrant Shares, (7) the Proprius License Agreement; provided that any
such restriction contained in the Proprius License Agreement relates only to the Equity Interests of Proprius, Inc. owned by the Borrower and (8) customary provisions restricting
assignment or transfer of any license for intellectual property permitted hereunder or any other agreement entered into in the ordinary course of business. 

        (b)   Enter
into, or permit to exist, any Contractual Obligation that prohibits or otherwise restricts the existence of any Lien upon any of its Property in favor of the
Administrative Agent (for the benefit of the Lenders) for the purpose of securing the Obligations, whether now owned or hereafter acquired, or requiring the grant of any security for any obligation if
such Property is given as security for the Obligations, except (i) any document or instrument governing Indebtedness incurred pursuant to  Section 8.03(e), provided that any such restriction contained therein relates only to the
Property constructed or acquired in connection therewith, (ii) in connection with any Permitted Lien or any document or instrument governing any Permitted Lien,  provided that any such restriction
contained therein relates only to the Property subject to such Permitted Lien, (iii) pursuant to customary
restrictions and conditions contained in any agreement relating to the sale of any Property permitted under Section 8.05, pending the
consummation of such sale, (iv) the Product Acquisition Documents (to the extent received and approved by the Administrative Agent and Required Lenders prior to the consummation of the Product
Acquisition), (v) the Proprius License Agreement; provided that any such restriction contained in the Proprius License Agreement relates only to
the Equity Interests of Proprius, Inc. owned by the Borrower, and (vi) customary provisions restricting assignment or transfer of any license for intellectual property permitted
hereunder or any other agreement entered into in the ordinary course of business. 

8.10    Use of Proceeds.    

        Use
the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose. 

8.11    Financial Covenants.    

        (a)   Consolidated Leverage Ratio.    Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of
the Borrower (beginning with the fiscal quarter ending December 31, 2007) to be greater than 2.50:1.0. 

        (b)   Consolidated Fixed Charge Coverage Ratio.    Permit the Consolidated Fixed Charge Coverage Ratio as of the end
of any fiscal quarter of the Borrower (beginning with the fiscal quarter ending December 31, 2007) to be less than 2.0 to 1.0. 

        (c)   Minimum Liquidity.    During the period from June 30, 2010 until December 31, 2011, the Loan
Parties shall have available at all times unrestricted cash, Cash Equivalents or marketable securities that are not subject to any Lien (other than a Lien created by the Collateral Documents) in an
amount equal to the lesser of (i) $30,000,000 and (ii) the aggregate Outstanding Amount of all Loans and L/C Obligations. 

8.12    Capital Expenditures.    

        Permit
Consolidated Capital Expenditures in any fiscal year, commencing with the fiscal year ending December 31, 2007, to exceed the sum of (a) $5,000,000  plus (b) any unused amount available
for Consolidated Capital Expenditures under this  Section 8.12 for the immediately preceding fiscal year (excluding any carry forward available from any prior fiscal year).
 

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8.13    Prepayment of Other Indebtedness, Etc.    

        (a)   Amend
or modify any of the terms of any Indebtedness existing on the Closing Date of the Borrower or any Subsidiary (excluding Indebtedness arising under the Loan
Documents) if such amendment or modification would (i) add or change any terms in a manner materially adverse to the Borrower or any Subsidiary or (ii) shorten the final maturity or
average life to maturity or require any payment to be made sooner than originally scheduled or increase the interest rate applicable thereto. 

        (b)   Make
(or give any notice with respect thereto) any voluntary or optional payment, prepayment, redemption or acquisition for value of (including without limitation, by
way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), refund, refinance or exchange of (i) any Indebtedness of the Borrower
or any Subsidiary (other than Indebtedness arising under the Loan Documents) or (ii) the Existing Preferred Stock. For the purposes of clarification, this  Section 8.13(b) shall not prohibit
any such voluntary or optional payment, prepayment, redemption or acquisition for value of, refund, refinance
or exchange of the Warrants and/or Warrant Shares. 

        (c)   Amend
or modify any of the terms of the Securities Purchase Agreement, the Warrants, the Warrant Shares, the Entocort® EC Distribution Agreement and/or the
1996 License Agreement, in each case if such amendment or modification would add or change any terms in a manner materially adverse to the Borrower, any Subsidiary or any Lender. 

8.14    Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity.    

        (a)   Amend,
modify or change its Organization Documents in a manner materially adverse to the Lenders. 

        (b)   Change
its fiscal year. 

        (c)   Without
providing ten (10) days prior written notice to the Administrative Agent, change its name, state of formation or form of organization. 

        provided, however, that this  Section 8.14 shall not be construed to prohibit the consummation of a Reorganization
permitted pursuant to  Section 8.04 hereof. 

8.15    Ownership of Subsidiaries.    

        Notwithstanding
any other provisions of this Agreement to the contrary, (a) permit any Subsidiary of the Borrower to issue or have outstanding any shares of preferred Equity
Interests or (b) create, incur, assume or suffer to exist any Lien on any Equity Interests of any Subsidiary of the Borrower owned directly or indirectly by the Borrower, except for Permitted
Liens. 

8.16    Sale Leasebacks.    

        Enter
into any Sale and Leaseback Transaction. 

ARTICLE IX  

 EVENTS OF DEFAULT AND REMEDIES  

9.01    Events of Default.    

        Any
of the following shall constitute an Event of Default: 

        (a)   Non-Payment.    The Borrower or any other Loan Party fails to pay (i) when and as required
to be paid herein, any amount of principal of any Loan or any L/C Obligation, or (ii) within three (3) days after the same becomes due, any interest on any Loan or on any L/C Obligation,
or any commitment fee or other fee due hereunder, or (iii) within five (5) days after 

73

 

the
same becomes due, any other amount payable hereunder or under any other Loan Document; or 

        (b)   Specific Covenants.    Any Loan Party fails to perform or observe any term, covenant or agreement contained in
any of Sections 7.02(a), (b) or (d),  7.03(a), 7.05(a), 7.10 or  7.11 or Article VIII; or
 

        (c)   Other Covenants.    Any Loan Party fails to perform or observe any term, covenant or agreement contained in  Section 7.01 or subsections (b),
(c) or (d) of Section 7.03 and such failure
continues for five (5) Business Days; 

        (d)   Other Defaults.    Any Loan Party fails to perform or observe any other covenant or agreement (not specified in
subsection (a), (b) or (c) above) contained in any Loan Document on its part to be performed or observed and such failure continues for thirty (30) days after the earlier of
(i) the date on which a Responsible Officer of a Loan Party becomes aware of such failure or (ii) the date on which notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender; or 

        (e)   Representations and Warranties.    Any representation, warranty, certification or statement of fact made or
deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or 

        (f)    Cross-Default.    (i) The Borrower or any Subsidiary (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder and Indebtedness under Swap Contracts between
any Loan Party and any Lender or any Affiliate of a Lender) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under
any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or to become
payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from
(A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as
so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such
Subsidiary as a result thereof is greater than the Threshold Amount; or 

        (g)   Insolvency Proceedings, Etc.    Any Loan Party or any of its Subsidiaries institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor
Relief Law relating to any such Person or to all or any material part 

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of
its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or 

        (h)   Inability to Pay Debts; Attachment.    (i) The Borrower or any Subsidiary becomes unable or admits in
writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any
material part of the property of any such Person and is not released, vacated or fully bonded within thirty (30) days after its issue or levy; or 

        (i)    Judgments.    There is entered against the Borrower or any Subsidiary (i) one or more final judgments or
orders 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 final 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 ten (10) consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or 

        (j)    ERISA.    (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has
resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the
Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or 

        (k)   Invalidity of Loan Documents.    Any Loan Document, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests
in any manner the validity or enforceability of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate
or rescind any Loan Document; or 

        (l)    Change of Control.    There occurs any Change of Control. 

9.02    Remedies Upon Event of Default.    

        If
any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following
actions: 

        (a)   declare
the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and
obligation shall be terminated; 

        (b)   declare
the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; 

        (c)   require
that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and 

        (d)   exercise
on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable Law; 

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each 

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Lender
to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each
case without further act of the Administrative Agent or any Lender. 

9.03    Application of Funds.    

        After
the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 9.02), any
amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order: 

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity as such; 

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to
the Lenders (including Attorney Costs and amounts payable under Article III), ratably among them in proportion to the amounts described in this
clause Second payable to them; 

Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and L/C Borrowings and fees, premiums and
scheduled periodic payments, and any interest accrued thereon, due under any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, to the extent such Swap Contract is
permitted by Section 8.03(d), ratably among the Lenders (and, in the case of such Swap Contracts, Affiliates of Lenders) in proportion to the
respective amounts described in this clause Third held by them; 

Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings and breakage, termination or other
payments, and any interest accrued thereon, due under any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, to the extent such Swap Contract is permitted by  Section 8.03(d), and to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit,
ratably among the Lenders (and, in the case of such Swap Contracts, Affiliates of Lenders) in proportion to the respective amounts described in this clause  Fourth held by them; and 

Last, the balance, if any, after all of the Obligations (other than contingent reimbursement or indemnification obligations) have been indefeasibly paid
in full, to the Borrower or as otherwise required by Law. 

        Subject
to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause  Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after
all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above. 

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   ARTICLE X  

 ADMINISTRATIVE AGENT  

10.01    Appointment and Authority.    

        (a)   Each
of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and neither
the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions. 

        (b)   The
Administrative Agent shall also act as the "collateral agent" under the Loan Documents, and each of the Lenders and
the L/C Issuer hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any and all
Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the
Administrative Agent, as "collateral agent" and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to  Section 10.05 for purposes of holding or enforcing
any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or
for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this  Article X and Article XI (including  Section 11.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the "collateral
agent" under the Loan Documents) as if set forth in full herein with respect thereto. 

10.02    Rights as a Lender.    

        The
Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were
not the Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally
engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to
the Lenders. 

10.03    Exculpatory Provisions.    

        The
Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the
foregoing, the Administrative Agent: 

        (a)   shall
not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing; 

        (b)   shall
not have any duty to take any discretionary action or exercise any discretionary powers, except with respect to the Administrative Agent's discretionary rights and
powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law; and 

77

 

        (c)   shall
not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to any Loan Party or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity. 

        The
Administrative Agent shall not be liable to any Lender for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in  Sections 11.01 and
9.02) or (ii) in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender or the L/C Issuer. 

        The
Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in, or in connection with,
this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith,
(iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in  Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. 

10.04    Reliance by Administrative Agent.    

        The
Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have
received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any
such counsel, accountants or experts. 

10.05    Delegation of Duties.    

        The
Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this Section shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Administrative Agent. 

10.06    Resignation of the Administrative Agent.    

        The
Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Borrower. Upon receipt of any such notice of resignation, the Required
Lenders shall 

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have
the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above;  provided
that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with
all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent's resignation hereunder and under the other Loan
Documents, the provisions of this Section and Section 11.04 shall continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative
Agent. 

        Any
resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer and Swing Line Lender. Upon the acceptance of a
successor's appointment as Administrative Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer
and Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and
(c) the successor L/C Issuer and Swing Line Lender shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other
arrangements satisfactory to the retiring L/C Issuer and Swing Line Lender to effectively assume the obligations of the retiring L/C Issuer and Swing Line Lender with respect to such Letters of
Credit. 

10.07    Non-Reliance on Administrative Agent and Other Lenders.    

        Each
Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on
such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Credit Agreement. Each Lender and the L/C Issuer also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished
hereunder or thereunder. 

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10.08    No Other Duties; Etc.    

        Anything
herein to the contrary notwithstanding, none of the bookrunners, arrangers, syndication agents, documentation agents or co-agents shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder. 

10.09    Administrative Agent May File Proof of Claims.    

        In
case of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any
Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise: 

        (a)   to
file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations (other
than obligations under Swap Contracts between a Loan Party and any Lender, or any Affiliate of a Lender, to which the Administrative Agent is not a party) that are owing and unpaid and to file such
other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the
Administrative Agent under Sections 2.03(i) and (j),  2.09 and 11.04) allowed in such judicial proceeding; and 

        (b)   to
collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; 

and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such
payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 11.04. 

        Nothing
contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in
any such proceeding. 

10.10    Collateral and Guaranty Matters.    

        The
Lenders and the L/C Issuer irrevocably authorize the Administrative Agent at its option and in its discretion: 

        (a)   to
release any Lien on any property granted to or held by the Administrative Agent, as applicable, under any Loan Document (i) upon termination of the Commitments
and payment in full of all Obligations (other than (A) contingent indemnification or reimbursement obligations and (B) obligations under Swap Contracts that, at any time, are allowed by
the terms thereof to remain outstanding) and the expiration or termination of all Letters of Credit (other than Letters of Credit that have been Cash Collateralized), (ii) that is sold or to be
sold as part of or in connection with any sale permitted hereunder or under any other Loan Document, or (iii) subject to Section 11.01, if
approved, authorized or ratified in writing by the Required Lenders; 

80

 

        (b)   to
subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is
permitted by Section 8.01(i); and 

        (c)   to
release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. 

        Upon
request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent's authority to release or subordinate its interest in
particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 10.10. 

ARTICLE XI  

 MISCELLANEOUS  

11.01    Amendments, Etc.    

        No
amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be
effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific purpose for which given; provided,  however, that no such amendment, waiver or
consent shall: 

        (a)   extend
or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.02)
without the written consent of such Lender (it being understood and agreed that a waiver of any condition precedent set forth in Section 5.02 or
of any Default or Event of Default or a mandatory reduction in Commitments is not considered an extension or increase in Commitments of any Lender); 

        (b)   postpone
any date fixed by this Agreement or any other Loan Document for any payment of principal (excluding mandatory prepayments), interest, fees or other amounts due
to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; 

        (c)   reduce
the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or any fees or other amounts payable hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby; provided, however, that
only the consent of the
Required Lenders shall be necessary (i) to amend the definition of "Default Rate" or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any
financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable
hereunder; 

        (d)   change
Section 2.13 or Section 9.03 in a manner that would
alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby; 

        (e)   waive
or amend Section 8.13(b)(ii) without the written consent of each Lender; 

        (f)    change
any provision of this Section or the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders required to
amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender directly affected thereby; 

81

 

        (g)   except
in connection with a Disposition permitted under Section 8.05, release all or substantially all of the
Collateral without the written consent of each Lender directly affected thereby; 

        (h)   release
the Borrower or, except in connection with a merger or consolidation permitted under Section 8.04 or a
Disposition permitted under Section 8.05, all or substantially all of the Guarantors, from its or their obligations under the Loan Documents
without the written consent of each Lender directly affected thereby; 

        (i)    without
the consent of Lenders (other than Defaulting Lenders) holding in the aggregate at least a majority of the Revolving Commitments (or if the Revolving Commitments
have been terminated, the outstanding Revolving Loans (and participations in any Swing Line Loans and L/C Obligations)), (i) waive any Default or Event of Default for purposes of  Section 5.02
for purposes of any Revolving Loan borrowing or L/C Credit Extension and (ii) amend, change, waive, discharge or terminate  Section 2.01(a), 2.02,
2.03,  2.05(b)(i) or 2.06 or any term, covenant or agreement contained in  Article VIII or Article IX;
 

        (j)    without
the consent of Lenders (other than Defaulting Lenders) holding in the aggregate at least a majority of the outstanding Term Loan (and participations therein),
amend, change, waive, discharge or terminate Section 2.05(b)(vi) so as to alter the manner of application of proceeds of any mandatory prepayment
required by Section 2.05(b)(ii), (iii), (iv) or  (v)
hereof; or 

        (k)   change,
amend, modify or waive Section 8.06(d) without the consent of each Lender; 

and,
provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders
required above, affect the rights or duties of the L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this
Agreement or any other Loan Document, (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing
executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended without the consent of such Lender. 

        Notwithstanding
the fact that the consent of all the Lenders is required in certain circumstances as set forth above, (x) each Lender is entitled to vote as such Lender sees fit
on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders shall determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and
such determination shall be binding on all of the Lenders. 

        Notwithstanding
anything herein to the contrary, the Administrative Agent is authorized by the Lenders and the L/C Issuer to enter into amendments to this Agreement and any other Loan
Document with any Loan Party or its Subsidiaries, without any further consent of the Lenders or the L/C Issuer, for the purpose of (a) implementing the additional Commitments (and any
extensions of credit thereunder) and/or to implement and set forth the terms of any Additional Term Loans, in each case as contemplated by and subject to the limitations set forth in  Section 2.02(f), including without limitation such amendments as may be necessary to (i) provide for ratable sharing of benefits of this
Agreement and the other Loan Documents in respect of the extensions of credit from time to time 

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outstanding
in the form of Additional Term Loans (including changes to Section 2.05 to provide any Additional Term Loan the right to ratable
(with the Term Loan and each other Additional Term Loan then outstanding) prepayment in connection with any voluntary or mandatory prepayment), (ii) include appropriately the lenders providing
any Additional Term Loan in any determination of the Required Lenders and/or the determination of the requisite Lenders under subsections (f) and (j) of  Section 11.01 corresponding to the
consent rights of the other Lenders thereunder and (iii) make such other changes as the Borrower and
the Administrative Agent shall deem necessary or advisable in connection with the establishment of any Additional Term Loan, or (b) curing any typographical error, incorrect cross-reference,
defect in form, inconsistency, omission or ambiguity in this Agreement or any other Loan Document to which it is a party. 

11.02    Notices and Other Communications; Facsimile Copies.    

        (a)    Notices Generally.    Except in the case of notices and other communications expressly permitted to be given by
telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows: 

          (i)  if
to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 11.02; and 

         (ii)  if
to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire. 

        Notices
sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed
to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the
recipient).
Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b). 

        (b)    Electronic Communications.    Notices and other communications to the Lenders and the L/C Issuer hereunder may
be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent;  provided that the foregoing shall
not apply to notices to any Lender or the L/C Issuer pursuant to  Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving
notices under
such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. 

        Unless
the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt
of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement);  provided that if such notice or
other communication is not sent during the normal business hours of the recipient, such notice or communication shall be
deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor. 

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        (c)    The Platform.    THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE AGENT PARTIES (AS DEFINED BELOW) DO
NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY
OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the
"Agent Parties") have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses
of any kind (whether in tort, contract or otherwise) arising out of the Borrower's or the Administrative Agent's transmission of Borrower Materials through the Internet, except to the extent that such
losses, claims, damages, liabilities or expenses result from the gross negligence or willful misconduct of such Agent Party; provided,  however, that in no
event shall any Agent Party have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for indirect,
special, incidental, consequential or punitive damages (as opposed to direct or actual damages). 

        (d)    Change of Address, Etc.    Each of the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line
Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to
notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one
individual at or on behalf of such Public Lender to at all times have selected the "Private Side Information" or similar designation on the content declaration screen of the Platform in order to
enable such Public Lender or its delegate, in accordance with such Public Lender's compliance procedures and applicable Law, including United States Federal and state securities Laws, to make
reference to Borrower Materials that are not made available through the "Public Side Information" portion of the Platform and that may contain material non-public information with respect
to the Borrower or its securities for purposes of United States Federal or state securities laws. 

        (e)    Reliance by Administrative Agent, L/C Issuer and Lenders.    The Administrative Agent, the L/C Issuer and the
Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by
the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with
the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording. 

11.03    No Waiver; Cumulative Remedies.    

        No
failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The 

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rights,
remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 

11.04    Expenses; Indemnity; Damage Waiver.    

        (a)    Costs and Expenses.    The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication
of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the Attorney Costs for the Administrative Agent, any Lender or the L/C
Issuer), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or
(B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. 

        (b)    Indemnification by the Borrower.    The Borrower shall indemnify the Administrative Agent (and any
sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the
Attorney Costs of any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as
a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of
their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent
thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or
related expenses (x) resulted from the gross negligence or willful misconduct of such Indemnitee or (y) resulted from a claim brought by the Borrower or any other Loan Party against an
Indemnitee for breach in bad faith of such Indemnitee's obligations hereunder or under any other Loan Document. 

        (c)    Reimbursement by Lenders.    To the extent that the Borrower for any reason fails to indefeasibly pay any
amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of
any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender's Pro
Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related 

85

 

expense,
as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of
any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders under this subsection
(c) are subject to the provisions of Section 2.12(d). 

        (d)    Waiver of Consequential Damages, Etc.    To the fullest extent permitted by applicable Law, the Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising
out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or
Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any
information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such
Indemnitee. 

        (e)    Payments.    All amounts due under this Section shall be payable not later than ten (10) Business Days
after demand therefor. 

        (f)    Survival.    The agreements in this Section shall survive the resignation of the Administrative Agent, the
replacement of any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all the other Obligations. 

11.05    Payments Set Aside.    

        To
the extent that any payment by or on behalf of any Loan Party is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of
set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and
(b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon
from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. 

11.06    Successors and Assigns.    

        (a)    Successors and Assigns Generally.    The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Loan Party may assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of the Administrative Agent and each Lender other than in connection with a Reorganization permitted by  Section 8.04 hereof, and no Lender
may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee
in accordance with the provisions of Section 11.06(b), (ii) by way of participation in accordance with the provisions of  Section 11.06(d),
or (iii) by way of pledge or assignment of a security interest subject to the restrictions of  Section 11.06(f) (and any other attempted assignment or transfer by any party hereto shall be null
and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and 

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assigns
permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. 

        (b)    Assignments by Lenders.    Any Lender may at any time assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its Commitment(s) and the Loans (including for purposes of this  Section 11.06(b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it);  provided that any such assignment shall be subject to the following conditions:
 

        (i)    Minimum Amounts.    

        (A)  in
the case of an assignment of the entire remaining amount of the assigning Lender's Commitment under the revolving or term loan credit facility hereunder together with
the Loans at the time owing to
it under such facility or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and 

        (B)  in
any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than
$2,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably
withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and
concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for
purposes of determining whether such minimum amount has been met; 

        (ii)    Proportionate Amounts.    Each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender's rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not (A) apply to the Swing
Line Lender's rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations among the revolving or term loan
credit facility hereunder on a non-pro rata basis; 

        (iii)    Required Consents.    No consent shall be required for any assignment except to the extent required by
subsection (b)(i)(B) of this Section and, in addition: 

        (A)  the
consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; 

        (B)  the
consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (1) any
Revolving Commitment if such assignment is to a Person that is not a Lender with a Revolving Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (2) any
Term Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; 

87

 

        (C)  the
consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the
assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and 

        (D)  the
consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment of a Revolving Commitment if such
assignment is to a Person that is not a Lender with a Revolving Commitment. 

        (iv)    Assignment and Assumption.    The parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided,  however, that the Administrative
Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment.
The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. 

        (v)    No Assignment to Borrower.    No such assignment shall be made to the Borrower or any of the Borrower's
Affiliates or Subsidiaries. 

        (vi)    No Assignment to Natural Persons.    No such assignment shall be made to a natural person. 

        Subject
to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment
and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and,
in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be
entitled to the benefits of Section 3.01, 3.04,  3.05, and 11.04 with respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection
(d) of this Section. 

        (c)    Register.    The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall
maintain at the Administrative Agent's Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments
of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice. In addition, at any time that a request for a consent for a material or substantive
change to the Loan Documents is pending, any Lender may request and receive from the Administrative Agent a copy of the Register. 

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        (d)    Participations.    Any Lender may at any time, without the consent of, or notice to, the Borrower or the
Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower's Affiliates or Subsidiaries) (each, a
"Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or
the Loans (including such Lender's participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and
(iii) the Borrower, the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations
under this Agreement. 

        Any
agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that
affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of  Sections 3.01, 3.04 and 3.05 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by Law, each Participant also shall be entitled to the
benefits of Section 11.08 as though it were a Lender; provided such Participant agrees to be
subject to Section 2.13 as though it were a Lender. 

        (e)    Limitations upon Participant Rights.    A Participant shall not be entitled to receive any greater payment
under Section 3.01, 3.04 or 3.05 than the
applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01
unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with  Section 3.01(e) as though it were a
Lender. 

        (f)    Certain Pledges.    Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank;  provided that
no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto. 

        (g)    Electronic Execution of Assignments.    The words "execution," "signed," "signature," and words of like import
in any Assignment and Assumption shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and
Records Act, or any other similar state Laws based on the Uniform Electronic Transactions Act. 

        (h)    Resignation as L/C Issuer or Swing Line Lender after Assignment.    Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon 30 days' notice to the
Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days' notice to the Borrower, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing
Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,  however,
that no failure by the Borrower to appoint any such successor shall affect 

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the
resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of
the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right
to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of
America resigns as Swing Line Lender, it shall retain all the rights and duties of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to  Section 2.04(c). Upon
the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank
of America with respect to such Letters of Credit. 

11.07    Confidentiality.    

        Each
of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its and its Affiliates' respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by
applicable Laws or by any subpoena or similar legal process, (d) to any other party hereto, (e) to the extent reasonably necessary, in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section (with the Borrower as an express third-party beneficiary), to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or any Person invited to become a Lender under  Section 2.02(f)
or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the
Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this
Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower. 

        For
purposes of this Section, "Information" means all information received from the Borrower or any Subsidiary relating to the Borrower or
any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to
disclosure by the Borrower or any Subsidiary. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. 

        Each
of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning the
Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including Federal and state securities Laws. 

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11.08    Set-off.    

        In
addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default, each Lender and any Affiliate of any Lender
is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such notice being waived by the Borrower (on its own behalf and on behalf of each
Loan Party) to the fullest extent permitted by Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at
any time owing by, such Lender to or for the credit or the account of the respective Loan Parties against any and all Obligations owing to such Lender hereunder or under any other Loan Document, now
or hereafter existing, irrespective of whether or not the Administrative Agent or such Lender shall have made demand under this Agreement or any other Loan Document and although such Obligations may
be contingent or unmatured or denominated in a currency different from that of the applicable deposit or indebtedness. Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and application. 

11.09    Interest Rate Limitation.    

        Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or any Lender shall receive interest in
an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize
any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder. 

11.10    Counterparts.    

        This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of
an executed counterpart by electronic transmission shall be effective as delivery of a manually executed counterpart. 

11.11    Integration.    

        This
Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior
agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall
control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of
any party, but rather in accordance with the fair meaning thereof. 

11.12    Survival of Representations and Warranties.    

        All
representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall
survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be 

91

 

relied
upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation
hereunder (other than (x) contingent reimbursement or indemnification obligations or (y) Swap Contracts that, at any time, are allowed by the terms thereof to remain outstanding) shall
remain unpaid or unsatisfied or any Letter of Credit (other than Letters of Credit that have been Cash Collateralized) shall remain outstanding. 

11.13    Severability.    

        If
any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining
provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid
or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in
a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

11.14    Replacement of Lenders.    

        If
(a) any Lender requests compensation under Section 3.04, (b) the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender pursuant to Sections 3.01 or  3.04, (c) any Lender is subject to
illegality under Section 3.02, (d) a Lender (a
"Non-Consenting Lender") does not consent to a proposed change, waiver, discharge or termination with respect to any Loan Document that has
been approved by the Required Lenders as provided in Section 11.01 but requires unanimous consent of all Lenders or all Lenders directly affected
thereby (as applicable) or (e) any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by,  Section 11.06), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that: 

          (i)  Administrative
Agent shall have received the assignment fee specified in Section 11.06(b); 

         (ii)  such
Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts); 

        (iii)  in
the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments
required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; 

        (iv)  such
assignment does not conflict with applicable Laws; and 

         (v)  in
the case of any such assignment resulting from a Non-Consenting Lender's failure to consent to a proposed change, waiver, discharge or termination with
respect to any Loan Document, the applicable replacement bank, financial institution or Fund consents to the proposed change, waiver, discharge or termination;  provided that the failure by such
Non-Consenting Lender to execute and deliver an Assignment and Assumption shall not impair the validity of
the removal of such Non-Consenting Lender and the mandatory assignment of such Non-Consenting Lender's Commitments and outstanding Loans and participations in L/C Obligations
and Swing Line Loans 

92

 

pursuant
to this Section 11.14 shall nevertheless be effective without the execution by such Non-Consenting Lender of an Assignment
and Assumption. 

        A
Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower
to require such assignment and delegation cease to apply. 

11.15    Governing Law; Jurisdiction, Etc.    

        (a)   THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICTS OF
LAWS TO THE EXTENT THAT THE SAME ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAWS OF ANOTHER STATE WOULD BE REQUIRED THEREBY;  PROVIDED THAT THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW. 

        (b)   ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK, NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF  FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. 

        (c)   EACH
PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02.
NOTHING IN THS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. 

11.16    California Judicial Reference.    

        If
any action or proceeding is filed (other than by an Indemnitee) in a court of the State of California by or against any party hereto in connection with any of the transactions
contemplated by this Agreement or any other Loan Document, (a) the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure
Section 638 to a referee (who shall be a single active or retired judge) to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a
statement of decision, provided that at the option of any party to such proceeding, any such issues pertaining to a "provisional remedy" as defined in
California Code of Civil Procedure Section 1281.8 shall be heard and determined by the court, and (b) without limiting the generality of  Section 11.04, the Borrower shall be solely
responsible to pay all fees and expenses of any referee appointed in such action or proceeding;  provided, that the Borrower shall not be responsible for or required to pay any such fees or expenses to
the extent that any such action or proceeding
arises or results from, or in connection with, the gross negligence or willful misconduct of any Indemnitee or any claim brought by the Borrower or any Loan Party against an Indemnitee for breach in
bad faith by such Indemnitee of such Indemnitee's obligations hereunder or under any other Loan Document. 

93

 

11.17    Waiver of Right to Trial by Jury.    

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

11.18    USA PATRIOT Act Notice.    

        Each
Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into Law October 26, 2001)) (the "Act"),
it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act. 

11.19    No Advisory or Fiduciary Relationship.    

        In
connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document, the
Borrower acknowledges and agrees, and acknowledges its Affiliates' understanding, that: (a)(i) the arranging and other services regarding this Agreement provided by the Administrative Agent and
BAS, are arm's-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent and BAS, on the other hand, (ii) the Borrower has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Borrower is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan Documents; (b)(i) the Administrative Agent and BAS each is and has been acting solely as a principal and, except as
expressly agreed in writing by the relevant parties, has not been, is not and will not be acting as an advisor, agent or fiduciary, for the Borrower or any of Affiliates or any other Person and
(ii) neither the Administrative Agent nor BAS has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly
set forth herein and in the other Loan Documents; and (c) the Administrative Agent and BAS and their respective Affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor BAS has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the
fullest extent permitted by law, the Borrower hereby waives and releases, any claims that it may have against the Administrative Agent or BAS with respect to any breach or alleged breach of agency or
fiduciary duty in connection with any aspect of any transaction contemplated hereby. 

[SIGNATURE
PAGES FOLLOW] 

94

 

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

	BORROWER:	 	PROMETHEUS LABORATORIES INC.,

a California corporation
	

 	
 	

By:	
 	

/s/  JOSEPH M. LIMBER      

	 	 	Name:	 	Joseph M. Limber
	 	 	Title:	 	President & Chief Executive Officer
	

GUARANTOR:	
 	
PATIENTCOMMUNITY.COM, INC.

a California corporation
	

 	
 	

By:	
 	

/s/  JOSEPH M. LIMBER      

	 	 	Name:	 	Joseph M. Limber
	 	 	Title:	 	President & Chief Executive Officer
	

ADMINISTRATIVE

AGENT:	
 	
BANK OF AMERICA, N.A.,

as Administrative Agent
	

 	
 	

By:	
 	

/s/  BRENDA H. LITTLE      

	 	 	Name:	 	Brenda H. Little
	 	 	Title:	 	Assistant Vice President
	

LENDERS:	
 	
BANK OF AMERICA, N.A.,

as a Lender, L/C Issuer and Swing Line Lender
	

 	
 	

By:	
 	

/s/  KARIN S. BARNES      

	 	 	Name:	 	Karin S. Barnes
	 	 	Title:	 	Senior Vice President
	

 	
 	
BANK OF THE WEST, N.A.
	

 	
 	

By:	
 	

/s/  KRISTIAN T. ILKOV      

	 	 	Name:	 	Kristian T. Ilkov
	 	 	Title:	 	Vice President
	

 	
 	
MANUFACTURERS BANK
	

 	
 	

By:	
 	

/s/  SANDY LEE      

	 	 	Name:	 	Sandy Lee
	 	 	Title:	 	Vice President
	

 	
 	
US BANK NA
	

 	
 	

By:	
 	

/s/  CYRUS M. VAFI      

	 	 	Name:	 	Cyrus M. Vafi
	 	 	Title:	 	Vice President
	 	 	 	 	 

95

 

	

 	
 	
COMERICA BANK
	

 	
 	

By:	
 	

/s/  DENNIS KIM      

	 	 	Name:	 	Dennis Kim
	 	 	Title:	 	Corporate Banking Officer
	

 	
 	
UNION BANK OF CALIFORNIA NA
	

 	
 	

By:	
 	

/s/  PAUL K. MOYER      

	 	 	Name:	 	Paul K. Moyer
	 	 	Title:	 	Vice President

96

EXHIBIT A  

FORM OF LOAN NOTICE  

        Date:                        ,
            

	To:
	Bank
of America, N.A., as Administrative Agent 

Ladies
and Gentlemen: 

        Reference
is made to that certain Credit Agreement (as amended, modified, supplemented or extended from time to time, the "Credit
Agreement") dated as of September 21, 2007 among Prometheus Laboratories Inc., a California corporation (the
"Borrower"), the Guarantors from time to time party thereto, the Lenders from time to time party thereto and Bank of America, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. 

        The
undersigned hereby requests (select one): 

	 	o  A Borrowing of Revolving Loans	 	o  A conversion or continuation of Revolving Loans
	

 	

o  A Borrowing of the Term Loan	
 	

o  A conversion or continuation of Term Loans

	1.
	On            ,
20            (which is a Business Day).

	2.
	In
the amount of $                  .

	3.
	Comprised
of            (Type of Loan requested).

	4.
	For
Eurodollar Rate Loans: with an Interest Period of            months. 

        (a)   With
respect to any Borrowing or any conversion or continuation requested herein, the Borrower hereby represents and warrants that after giving effect to any Borrowing
of Revolving Loans, the Total Revolving Outstandings shall not exceed the Aggregate Revolving Commitments and (b) with respect to any Borrowing, each of the conditions set forth in  Section 5.02 of the Credit Agreement has been satisfied on and as of the date of such Borrowing. 

        The
undersigned is executing this Loan Notice not in the undersigned's individual capacity, but in the undersigned's capacity as a Responsible Officer of the Borrower. 

	 	 	PROMETHEUS LABORATORIES INC.,

a California corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:

Title:

EXHIBIT B  

FORM OF SWING LINE LOAN NOTICE  

        Date:                        ,
            

	To:
	Bank
of America, N.A., as Swing Line Lender

Bank of America, N.A., as Administrative Agent 

Ladies
and Gentlemen: 

        Reference
is made to that certain Credit Agreement (as amended, modified, supplemented or extended from time to time, the "Credit
Agreement") dated as of September 21, 2007 among Prometheus Laboratories Inc., a California corporation (the
"Borrower"), the Guarantors from time to time party thereto, the Lenders from time to time party thereto and Bank of America, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer. 

        The
undersigned hereby requests a Swing Line Loan: 

	1.
	On                        (a
Business Day).

	2.
	In
the amount of $                        . 

        The
Borrower hereby represents and warrants that each of the conditions set forth in Section 5.02 of the Credit Agreement have been
satisfied on and as of the date of the requested Borrowing of a Swing Line Loan. 

        The
undersigned is executing this Swing Line Loan Notice not in the undersigned's individual capacity, but in the undersigned's capacity as a Responsible Officer of the Borrower. 

	 	 	PROMETHEUS LABORATORIES INC.,

a California corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:

Title:

EXHIBIT C-1  

FORM OF REVOLVING NOTE  

                    ,            

        FOR
VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay
to                        or its registered assigns (the
"Lender"), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Revolving Loan from time to
time made by the Lender to the Borrower under that certain Credit Agreement dated as of September 21, 2007 (as amended, modified, supplemented or extended from time to time, the
"Credit Agreement") among the Borrower, the Guarantors from time to time party thereto, the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. 

        The
Borrower promises to pay interest on the unpaid principal amount of each Revolving Loan from the date of such Revolving Loan until such principal amount is paid in full, at such
interest rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in
immediately available funds at the Administrative Agent's Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due
date thereof until the date of actual payment computed at the per annum rate set forth in the Credit Agreement. 

        This
Revolving Note is one of the Revolving Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and
conditions provided therein. Upon the occurrence and during the continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this
Revolving Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Revolving Loans made by the Lender shall be evidenced by one or more loan
accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Revolving Note and endorse thereon the date, amount and maturity of its
Revolving Loans and payments with respect thereto. 

        The
Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and nonpayment of this Revolving
Note. 

        THIS
REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 

	 	 	PROMETHEUS LABORATORIES INC.,

a California corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:

Title:

EXHIBIT C-2  

FORM OF SWING LINE NOTE  

                    ,            

        FOR
VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay to BANK OF AMERICA, N.A. or its registered assigns (the
"Swing Line Lender"), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Swing Line Loan
from time to time made by the Swing Line Lender to the Borrower under that certain Credit Agreement dated as of September 21, 2007 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Credit Agreement") among the Borrower, the Guarantors from time to time party thereto, the Lenders from time
to time party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. Capitalized terms used but not otherwise defined herein have the meanings provided in the
Credit Agreement. 

        The
Borrower promises to pay interest on the unpaid principal amount of each Swing Line Loan from the date of such Swing Line Loan until such principal amount is paid in full, at such
interest rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be
made to the Administrative Agent for the account of the Swing Line Lender in Dollars in immediately available funds at the Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment computed at the per annum rate set forth in the Credit Agreement. 

        This
Swing Line Note is the Swing Line Note referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and
conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Swing Line Note
shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Swing Line Loans made by the Swing Line Lender shall be evidenced by one or more loan
accounts or records maintained by the Swing Line Lender in the ordinary course of business. The Swing Line Lender may also attach schedules to this Swing Line Note and endorse thereon the date,
amount, currency and maturity of its Swing Line Loans and payments with respect thereto. 

        The
Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this
Swing Line Note. 

        THIS
SWING LINE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 

	 	 	PROMETHEUS LABORATORIES INC.,

a California corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:

Title:

EXHIBIT C-3  

FORM OF TERM NOTE  

                    ,            

        FOR
VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to pay
to                        or its registered assigns (the
"Lender"), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Term Loan from time to time
made by the Lender to the Borrower under that certain Credit Agreement dated as of September 21, 2007 (as amended, modified, supplemented or extended from time to time, the
"Credit Agreement") among the Borrower, the Guarantors from time to time party thereto, the Lenders from time to time party thereto and Bank of America,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement. 

        The
Borrower promises to pay interest on the unpaid principal amount of each Term Loan from the date of such Term Loan until such principal amount is paid in full, at such interest rates
and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof
until the date of actual payment computed at the per annum rate set forth in the Credit Agreement. 

        This
Term Note is one of the Term Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and
conditions provided therein. Upon the occurrence and during the continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Term
Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Term Loans made by the Lender shall be evidenced by one or more loan accounts or
records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Term Note and endorse thereon the date, amount and maturity of its Term Loans and
payments with respect thereto. 

        The
Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and nonpayment of this Term Note. 

        THIS
TERM NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 

	 	 	PROMETHEUS LABORATORIES INC.,

a California corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:

Title:

EXHIBIT D  

FORM OF COMPLIANCE CERTIFICATE  

Financial
Statement Date:            ,    

To:  Bank
of America, N.A., as Administrative Agent 

Ladies
and Gentlemen: 

        Reference
is made to that certain Credit Agreement, dated as of September 21, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time to
time, the "Credit Agreement;" the terms defined therein being used herein as therein defined), among Prometheus Laboratories Inc., a California
corporation (the "Borrower"), the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer. 

        The
undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                        of the Borrower,
and that, in his/her capacity as such, he/she is authorized
to execute and deliver this Compliance Certificate to the Administrative Agent on the behalf of the Borrower, and that: 

[Use following paragraph 1 for fiscal year-end financial statements]

        1.     Attached
hereto as Schedule 1 are the year-end audited financial statements required by  Section 7.01(a) of the Credit Agreement for the fiscal year of the
Borrower ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section. Such financial statements fairly present in all material respects the financial condition, results of operations and cash flows of
the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period. 

[Use following paragraph 1 for fiscal quarter-end financial statements]

        1.     Attached
hereto as Schedule 1 are the unaudited financial statements required by  Section 7.01(b) of the Credit Agreement for the fiscal quarter of the
Borrower ended as of the above date. Such financial statements fairly
present in all material respects the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject
to year-end audit adjustments and the absence of footnotes. 

        2.     The
undersigned has reviewed and is familiar with the terms of the Credit Agreement and has made, or has caused to be made under his/her supervision, a reasonably
detailed review of the transactions and condition (financial or otherwise) of the Loan Parties during the accounting period covered by the attached financial statements. 

        3.     A
review of the activities of the Loan Parties during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during
such fiscal period each Loan Party performed and observed all its Obligations under the Loan Documents, and 

[select one:]

        [to
the knowledge of the undersigned, each Loan Party performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default or Event of
Default has occurred and is continuing.] 

—or—

        [the
following covenants or conditions have not been performed or observed and the following is a list of each such Default or Event of Default and its nature and
status:] 

        4.     The
financial covenant analyses and information set forth on Schedule 2 attached hereto are true and accurate in
all material respects on and as of the date of this Compliance Certificate. 

        The
undersigned is executing this Compliance Certificate not in the undersigned's individual capacity, but in the undersigned's capacity as a Responsible Officer of the Borrower. 

        IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of                        ,        . 

	 	 	PROMETHEUS LABORATORIES INC.,

a California corporation
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

For the Quarter/Year ended                        

SCHEDULE 2
  to the Compliance Certificate

($ in 000's) 

	I.	Section 8.11(a)—CONSOLIDATED LEVERAGE RATIO.
	

 	

(a)	

Consolidated Funded Indebtedness	
 	
$	

 
	

 	

(b)	

Consolidated EBITDA	
 	
 	

 
	

 	

 	

(i)	

Consolidated Net Income	
 	
$	

 
	

 	

 	

(ii)	

Consolidated Interest Expense(1)	
 	
$	

 
	

 	

 	

(iii)	

provision for federal, state, local and foreign income taxes(1)	
 	
$	

 
	

 	

 	

(iv)	

depreciation and amortization expense(1)	
 	
$	

 
	

 	

 	

(v)	

non-cash, non-recurring charges (including non-cash stock-based compensation charges and option-based severance expenses)(1)(2)	
 	
$	

 
	

 	

 	

(vi)	

federal, state, local and foreign income tax credits(3)	
 	
$	

 
	

 	

 	

(vii)	

interest income of the Borrower and its Subsidiaries on a consolidated basis(3)	
 	
$	

 
	

 	

 	

(viii)	

Consolidated EBITDA

[(i) + (ii) + (iii) + (iv) + (v) – (vi) – (vii)]	
 	
$	

 
	

 	

(c)	

Consolidated Leverage Ratio

[(a) / (b)(viii)]            	
 	
 	

:1.0
	
 	

 	

 	

 	
 	
 	

 
	II.	Section 8.11(b)—CONSOLIDATED FIXED CHARGE COVERAGE RATIO.
	

 	

(a)	

Consolidated EBITDA [I(b)(viii) above]	
 	
$	

 
	

 	

(b)	

Consolidated Cash Taxes	
 	
$	

 
	

 	

(c)	

Consolidated Fixed Charges	
 	
 	

 
	

 	

 	

(i)	

cash Consolidated Interest Expense	
 	
$	

 
	

 	

 	

(ii)	

Consolidated Scheduled Funded Debt Payments	
 	
$	

 
	

 	

 	

(iii)	

Consolidated Fixed Charges

[(i) + (ii)]	
 	
$	

 
	

 	

(d)	

Consolidated Fixed Charge Coverage Ratio

[((a) – (b)) / (c)(iii)]	
 	
$	

 

	(1)
	To
the extent deducted in calculating Consolidated Net Income.

	(2)
	Subject
to the proviso set forth in the definition of "Consolidated EBITDA" in the Credit Agreement.

	(3)
	To
the extent included in calculating Consolidated Net Income. 

EXHIBIT E  

FORM OF ASSIGNMENT AND ASSUMPTION  

        This Assignment and Assumption (this "Assignment and Assumption") is dated as of the Effective Date set forth
below and is entered into by and between [the][each] Assignor identified in item 1 below ([the][each,
an] "Assignor") and [the][each] Assignee identified in item 2 below
([the][each, an] "Assignee"). [It is understood and agreed that the rights and obligations
of [the Assignors][the Assignees] hereunder are several and not joint.] Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the "Credit Agreement"), receipt of a copy of which is hereby acknowledged by
[the][each] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby
agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full. 

        For
an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the
Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from
[the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor's][the respective Assignors'] rights and
obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the
Assignor][the respective Assignors] under the respective facilities identified below (including, without limitation, the Letters of Credit and the Swing Line Loans
included in such facilities) and (ii) to the extent permitted to be assigned under applicable Law, all claims, suits, causes of action and any other right of [the Assignor (in its
capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned
pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to
[the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as
[the][an] "Assigned Interest"). Each such sale and assignment is without recourse to
[the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by
[the][any] Assignor. 

	 	1.	Assignor[s]:	 	 	 	 
	 	 	 	 	
	 	 
	

 	

 	

 	
 	

	
 	

 
	

 	

2.	

Assignee[s]:	
 	

 	
 	

 
	 	 	 	 	
	 	 
	

 	

 	

 	
 	

	
 	

 
	

 	

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]
	

 	

3.	
Borrower: Prometheus Laboratories Inc., a California corporation
	

 	

4.	
Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement
	

 	

5.	
Credit Agreement: Credit Agreement, dated as of September 21, 2007 among Prometheus Laboratories Inc., a California corporation (the "Borrower"), the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer
	 	 	 	 	 	 	 

	

 	

6.	

Assigned Interest:

	Assignor[s](1)
	Assignee[s](2)
	Facility

Assigned(3)
	 	Aggregate

Amount of

Commitment/Loans

for all Lenders(4)
	 	Amount of

Commitment/Loans

Assigned
	 	Percentage

Assigned of

Commitment/

Loans(5)
	 	CUSIP

Number

	    	 	 	 	$	 	 	$	 	 	 	%	 
	    	 	 	 	$	 	 	$	 	 	 	%	 
	    	 	 	 	$	 	 	$	 	 	 	%	 
	    	 	 	 	 	 	 	 	 	 	 	 	 

	 	[7.	Trade Date:                        ](6)
	

 	

 	

Effective Date:                        , 20    [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE
EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
	

 	

 	

The terms set forth in this Assignment and Assumption are hereby agreed to:
	    	 	 	 	 	 	 

	 	 	 	ASSIGNOR

[NAME OF ASSIGNOR]
	

 	

 	
 	

By:	

 
	 	 	 	 	
        Title:
	

 	

 	
 	
ASSIGNEE

[NAME OF ASSIGNEE]
	

 	

 	
 	

By:	

 
	 	 	 	 	
        Title:
	

[Consented to and](7) Accepted:	
 	

 	

 
	

BANK OF AMERICA, N.A.,

as Administrative Agent	
 	

 	

 
	

By:	

 	
 	

 	

 
	 	
 Title:	 	 	 
	

[Consented to:](8)	
 	

 	

 
	

By:	

 	
 	

 	

 
	 	
 Title:	 	 	 

	(1)
	List
each Assignor, as appropriate.

	(2)
	List
each Assignee, as appropriate.

	(3)
	Fill
in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. "Revolving Commitment", "Term Loan
Commitment", etc.).

	(4)
	Amounts
in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and
the Effective Date.

	(5)
	Set
forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

	(6)
	To
be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. 
	(7)
	To
be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.

	(8)
	To
be added only if the consent of the Borrower and/or other parties (e.g. Swing Line Lender, L/C Issuer) is required by the terms of
the Credit Agreement. 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION  

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION  

        1.     Representations and Warranties. 

        1.1.  Assignor.    [The][Each] Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility
with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any
other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document. 

        1.2.  Assignee.    [The][Each] Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under  Section 11.06(b)(iii), (v)
and (vi) of the Credit
Agreement (subject to such consents, if any, as may be required under Section 11.06(b)(iii) of the Credit Agreement), (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant]
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by
[the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire
[the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has
received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 7.01 thereof, as applicable, and such other documents and
information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant
to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently
and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of
the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 

        2.     Payments.    From and after the Effective Date, the Administrative Agent shall make all payments in respect of
[the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the
relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which
have accrued from and after the Effective Date. 

        3.     General Provisions.    This Assignment and Assumption shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This
Assignment and Assumption shall be governed by, and construed in accordance with, the Law of the State of New York. 

EXHIBIT F  

FORM OF JOINDER AGREEMENT  

        THIS JOINDER AGREEMENT (the "Agreement") dated as
of                        , 20    is by and among
                        ,
a                        (the "New Subsidiary"), and Bank of America, N.A., in its
capacity as Administrative Agent under that certain Credit
Agreement dated as of September 21, 2007 (as amended, modified, supplemented or extended from time to time, the "Credit Agreement") among
Prometheus Laboratories Inc., a California corporation (the "Borrower"), the Guarantors from time to time party thereto, the Lenders from time to
time party thereto and Bank of America, N.A., as the Administrative Agent, Swing Line Lender and L/C Issuer. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. 

        The
Loan Parties are required by Section 7.12 of the Credit Agreement to cause the New Subsidiary to become a "Guarantor"
thereunder. Accordingly, the New Subsidiary hereby agrees as follows with the Administrative Agent, for the benefit of the Lenders: 

        1.     The
New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Credit
Agreement and a "Guarantor" for all purposes of the Credit Agreement, and shall have all of the obligations of a Guarantor thereunder as if it had executed the Credit Agreement. The New Subsidiary
hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Guarantors contained in the Credit Agreement. Without limiting the
generality of the foregoing terms of this paragraph 1, the New Subsidiary hereby jointly and severally together with the other Guarantors, guarantees to each Lender and the Administrative
Agent, as provided in Article IV of the Credit Agreement, the prompt payment and performance of the Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof. 

        2.     The
New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Security
Agreement and a "Grantor" for all purposes of the Security Agreement, and shall have all the obligations of a Grantor thereunder as if it had executed the Security Agreement. The New Subsidiary hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Security Agreement. Without limiting the generality of the foregoing terms of
this paragraph 2, the New Subsidiary hereby grants to the Administrative Agent, for the benefit of the holders of the Secured Obligations (as defined in the Security Agreement), a continuing
security interest in any and all right, title and interest of the New Subsidiary in and to the Collateral (as defined in the Security Agreement) of the New Subsidiary to secure the prompt payment and
performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations (as defined in the Security Agreement). 

        3.     The
New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Pledge
Agreement and a "Pledgor" for all purposes of the Pledge Agreement, and shall have all the obligations of a Pledgor thereunder as if it had executed the Pledge Agreement. The New Subsidiary hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Pledge Agreement. Without limiting the generality of the foregoing terms of
this paragraph 3, the New Subsidiary hereby grants, pledges and assigns to the Administrative Agent, for the benefit of the holders of the Secured Obligations (as defined in the Pledge
Agreement), a continuing security interest in any and all right, title and interest of the New Subsidiary in and to the Equity Interests identified on  Schedule 7 hereto and all other Pledged
Collateral (as defined in the Pledge Agreement) of the New Subsidiary to secure the prompt payment and
performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations (as defined in the Pledge Agreement). 

        4.     The
New Subsidiary hereby represents and warrants to the Administrative Agent and the Lenders that as of the date hereof: 

        (a)   The
New Subsidiary's exact legal name and state of formation are as set forth on the signature pages hereto. 

        (b)   The
New Subsidiary's chief executive office is located at the location set forth on Schedule 1 hereto. The New
Subsidiary's federal taxpayer identification number and organization number are set forth on Schedule 1 hereto. 

        (c)   Other
than as set forth on Schedule 2 hereto, the New Subsidiary has not changed its legal name, changed its state
of formation, been party to a merger, consolidation or other change in structure or used any tradename in the five years preceding the date hereof. 

        (d)   Schedule 3 hereto includes all of the trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, "IP Rights") registered or pending registration with the United States
Copyright Office or the United States Patent and Trademark Office and owned by the New Subsidiary as of the date hereof. None of the IP Rights of the New Subsidiary set forth in  Schedule 3 hereto
is subject to any licensing agreement or similar arrangement, except as set forth on  Schedule 3 hereto. 

        (e)   Schedule 4 hereto includes all Commercial Tort Claims (as defined in the Security Agreement) before any
Governmental Authority by or in favor of the New Subsidiary. 

        (f)    Schedule 5 hereto lists all real property located in the United States that is owned or leased by the New
Subsidiary. 

        (g)   Schedule 6 hereto lists all locations in the United States of tangible personal property (other than any tangible
personal property that is in the possession of a sales representative of any Loan Party) that is owned or leased by the New Subsidiary. 

        (h)   Schedule 7 hereto includes each Subsidiary of the New Subsidiary, including (i) jurisdiction of formation,
(ii) number of shares of each class of Equity Interests outstanding, (iii) the certificate number(s) of the certificates evidencing such Equity Interests and number and percentage of
outstanding shares of each class owned by the New Subsidiary (directly or indirectly) of such Equity Interests and (iv) number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect thereto. 

        5.     The
address of the New Subsidiary for purposes of all notices and other communications is the address designated for all Loan Parties on  Schedule 11.02 to the Credit Agreement or such other address as
the New Subsidiary may from time to time notify the Administrative Agent in
writing. 

        6.     The
New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New Subsidiary under  Article IV of the Credit Agreement upon the execution of this
Agreement by the New Subsidiary. 

        7.     This
Agreement may be executed in multiple counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract. 

        8.     THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 

        IN
WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Lenders, has caused
the same to be accepted by its authorized officer, as of the day and year first above written. 

	 	 	 	 	[NEW SUBSIDIARY]
	

 	
 	

 	
 	

 	
 	

By:	
 	

 

	 	 	 	 	Name:	 	 	 	 
	 	 	 	 	Title:	 	 	 	 
	

Acknowledged and accepted:	
 	

 	
 	

 	
 	

 
	

BANK OF AMERICA, N.A.,

as Administrative Agent	
 	

 	
 	

 	
 	

 
	

By:	
 	

 
	
 	

 	
 	

 	
 	

 
	Name:	 	 	 	 	 	 	 	 
	Title:	 	 	 	 	 	 	 	 

Schedule 1

Location
of Chief Executive Office;

Federal Taxpayer Identification Number; Organizational Number 

Schedule 2

Changes
in Legal Name or State of Formation;

Mergers, Consolidations and other Changes in Structure; Tradenames 

Schedule 3

IP
Rights 

Schedule 4

Commercial
Tort Claims 

Schedule 5

Real
Property Locations 

Schedule 6

Tangible
Personal Property Locations 

Schedule 7

Equity
Interests 

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Exhibit 10.23  

 
 

LEASE
  (Single Tenant; Net)    
    
    BETWEEN    
    
    THE IRVINE COMPANY    
    
    AND    
    
    PROMETHEUS LABORATORIES INC.    
    

 
INDEX TO LEASE  

	

ARTICLE I. BASIC LEASE PROVISIONS	
 	

1
	

ARTICLE II. PREMISES	
 	

2
	 	 	SECTION 2.1.	 	LEASED PREMISES	 	2
	 	 	SECTION 2.2.	 	ACCEPTANCE OF PREMISES	 	2
	 	 	SECTION 2.3.	 	BUILDING NAME AND ADDRESS	 	3
	 	 	SECTION 2.4.	 	LANDLORD'S RESPONSIBILITIES	 	3
	

ARTICLE III. TERM	
 	

4
	 	 	SECTION 3.1.	 	GENERAL	 	4
	 	 	SECTION 3.4.	 	EARLY OCCUPANCY	 	4
	 	 	SECTION 3.3.	 	RIGHT TO EXTEND THIS LEASE	 	4
	

ARTICLE IV. RENT AND OPERATING EXPENSES	
 	

6
	 	 	SECTION 4.1.	 	BASIC RENT	 	6
	 	 	SECTION 4.2.	 	OPERATING EXPENSES	 	6
	 	 	SECTION 4.3.	 	SECURITY DEPOSIT	 	10
	

ARTICLE V. USES	
 	

11
	 	 	SECTION 5.1.	 	USE	 	11
	 	 	SECTION 5.2.	 	SIGNS	 	11
	 	 	SECTION 5.3.	 	HAZARDOUS MATERIALS	 	12
	

ARTICLE VI. COMMON AREAS; SERVICES	
 	

16
	 	 	SECTION 6.1.	 	UTILITIES AND SERVICES	 	16
	 	 	SECTION 6.2.	 	OPERATION AND MAINTENANCE OF COMMON AREAS	 	16
	 	 	SECTION 6.3.	 	USE OF COMMON AREAS	 	16
	 	 	SECTION 6.4.	 	PARKING	 	17
	 	 	SECTION 6.5.	 	CHANGES AND ADDITIONS BY LANDLORD	 	18
	

ARTICLE VII. MAINTAINING THE PREMISES	
 	

18
	 	 	SECTION 7.1.	 	TENANT'S MAINTENANCE AND REPAIR	 	18
	 	 	SECTION 7.2.	 	LANDLORD'S MAINTENANCE AND REPAIR	 	18
	 	 	SECTION 7.3.	 	ALTERATIONS	 	19
	 	 	SECTION 7.4.	 	MECHANIC'S LIENS	 	21
	 	 	SECTION 7.5.	 	ENTRY AND INSPECTION	 	21
	 	 	SECTION 7.6.	 	COMMUNICATIONS EQUIPMENT	 	21
	 	 	SECTION 7.7.	 	EMERGENCY GENERATORS	 	22
	

ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY	
 	

23
	

ARTICLE IX. ASSIGNMENT AND SUBLETTING	
 	

23
	 	 	SECTION 9.1.	 	RIGHTS OF PARTIES	 	23
	 	 	SECTION 9.2.	 	EFFECT OF TRANSFER	 	25
	 	 	SECTION 9.3.	 	SUBLEASE REQUIREMENTS	 	25
	 	 	SECTION 9.4.	 	CERTAIN TRANSFERS	 	26
	 	 	 	 	 	 	 

ii

 

	

ARTICLE X. INSURANCE AND INDEMNITY	
 	

27
	 	 	SECTION 10.1.	 	TENANT'S INSURANCE	 	27
	 	 	SECTION 10.2.	 	LANDLORD'S INSURANCE	 	27
	 	 	SECTION 10.3.	 	JOINT INDEMNITY	 	27
	 	 	SECTION 10.4.	 	LANDLORD'S NONLIABILITY	 	28
	 	 	SECTION 10.5.	 	WAIVER OF SUBROGATION	 	28
	

ARTICLE XI. DAMAGE OR DESTRUCTION	
 	

29
	 	 	SECTION 11.1.	 	RESTORATION	 	29
	 	 	SECTION 11.2.	 	LEASE GOVERNS	 	30
	

ARTICLE XII. EMINENT DOMAIN	
 	

30
	 	 	SECTION 12.1.	 	TOTAL OR PARTIAL TAKING	 	30
	 	 	SECTION 12.2.	 	TEMPORARY TAKING	 	31
	 	 	SECTION 12.3.	 	TAKING OF PARKING AREA	 	31
	

ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS	
 	

31
	 	 	SECTION 13.1.	 	SUBORDINATION	 	31
	 	 	SECTION 13.2.	 	ESTOPPEL CERTIFICATE	 	32
	 	 	SECTION 13.3.	 	FINANCIALS	 	32
	

ARTICLE XIV. EVENTS OF DEFAULT AND REMEDIES	
 	

33
	 	 	SECTION 14.1.	 	TENANT'S DEFAULTS	 	33
	 	 	SECTION 14.2.	 	LANDLORD'S REMEDIES	 	33
	 	 	SECTION 14.3.	 	LATE PAYMENTS	 	35
	 	 	SECTION 14.4.	 	RIGHT OF LANDLORD TO PERFORM	 	36
	 	 	SECTION 14.5.	 	DEFAULT BY LANDLORD	 	36
	 	 	SECTION 14.6.	 	EXPENSES AND LEGAL FEES	 	36
	 	 	SECTION 14.7.	 	WAIVER OF JURY TRIAL	 	37
	 	 	SECTION 14.8.	 	SATISFACTION OF JUDGMENT	 	37
	

ARTICLE XV. END OF TERM	
 	

37
	 	 	SECTION 15.1.	 	HOLDING OVER	 	37
	 	 	SECTION 15.2.	 	MERGER ON TERMINATION	 	38
	 	 	SECTION 15.3.	 	SURRENDER OF PREMISES; REMOVAL OF PROPERTY	 	38
	

ARTICLE XVI. PAYMENTS AND NOTICES	
 	

38
	

ARTICLE XVII. RULES AND REGULATIONS	
 	

38
	

ARTICLE XVIII. BROKER'S COMMISSION	
 	

39
	

ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST	
 	

39
	 	 	 	 	 	 	 

iii

 

	

ARTICLE XX. INTERPRETATION	
 	

39
	 	 	SECTION 20.1.	 	GENDER AND NUMBER	 	39
	 	 	SECTION 20.2.	 	HEADINGS	 	39
	 	 	SECTION 20.3.	 	JOINT AND SEVERAL LIABILITY	 	39
	 	 	SECTION 20.4.	 	SUCCESSORS	 	40
	 	 	SECTION 20.5.	 	TIME OF ESSENCE	 	40
	 	 	SECTION 20.6.	 	CONTROLLING LAW/VENUE	 	40
	 	 	SECTION 20.7.	 	SEVERABILITY	 	40
	 	 	SECTION 20.8.	 	WAIVER AND CUMULATIVE REMEDIES	 	40
	 	 	SECTION 20.9.	 	INABILITY TO PERFORM	 	40
	 	 	SECTION 20.10.	 	ENTIRE AGREEMENT	 	40
	 	 	SECTION 20.11.	 	QUIET ENJOYMENT	 	40
	 	 	SECTION 20.12.	 	SURVIVAL	 	41
	 	 	SECTION 20.13.	 	INTERPRETATION	 	41
	

ARTICLE XXI. EXECUTION AND RECORDING	
 	

41
	 	 	SECTION 21.1.	 	COUNTERPARTS	 	41
	 	 	SECTION 21.2.	 	CORPORATE, LIMITED LIABILITY COMPANY AND PARTNERSHIP AUTHORITY	 	41
	 	 	SECTION 21.3.	 	EXECUTION OF LEASE; NO OPTION OR OFFER	 	41
	 	 	SECTION 21.4.	 	RECORDING	 	41
	 	 	SECTION 21.5.	 	AMENDMENTS	 	41
	 	 	SECTION 21.6.	 	EXECUTED COPY	 	41
	 	 	SECTION 21.7.	 	ATTACHMENTS	 	41
	

ARTICLE XXII. MISCELLANEOUS	
 	

41
	 	 	SECTION 22.1.	 	NONDISCLOSURE OF LEASE TERMS	 	41
	 	 	SECTION 22.3.	 	CHANGES REQUESTED BY LENDER	 	42
	 	 	SECTION 22.4.	 	MORTGAGEE PROTECTION	 	42
	 	 	SECTION 22.5.	 	[INTENTIONALLY DELETED]	 	42
	 	 	SECTION 22.6.	 	SECURITY MEASURES	 	42

EXHIBITS  

	Exhibit A	 	Description of Premises
	Schedule A	 	Landlord's Work
	Exhibit B	 	Environmental Questionnaire
	Exhibit C	 	[Intentionally Deleted]
	Exhibit D	 	Insurance Requirements
	Exhibit E	 	Rules and Regulations
	Exhibit F	 	Location of Generators/Trash Enclosures
	Exhibit G	 	Signage Criteria
	Exhibit H	 	Requirements for Contractors
	Exhibit I	 	Standard Improvements
	Exhibit J	 	Howard's Rug Proposal Dated June 1, 2005
	Exhibit X	 	Work Letter
	Exhibit X-1	 	Preliminary Plan
	Exhibit X-2	 	Approved Subcontractors
	Exhibit Y	 	Project Site Plan

iv

   LEASE
  (Single Tenant; Net)  

        THIS LEASE is made as of the 22nd day of June, 2005, by and between THE IRVINE COMPANY, a Delaware corporation hereafter called
"Landlord," and PROMETHEUS LABORATORIES INC., a California corporation, hereinafter called
"Tenant." 

ARTICLE I. BASIC LEASE PROVISIONS  

        Each reference in this Lease to the "Basic Lease Provisions" shall mean and refer to the following collective
terms, the application of which shall be governed by the provisions in the remaining Articles of this Lease. 

	1.
	Premises:
The Premises are more particularly described in Section 2.1. 

Address
of Building: 9410 Carroll Park Drive, San Diego, CA 

	2.
	Project
Description: Canyon Ridge Technology Park (as more particularly described on Exhibit Y attached hereto)

	3.
	Use
of Premises: General office, research and development and all permitted uses under the project zoning: IL-2-1.

	4.
	Commencement
Date: January 1, 2006 (subject to "Landlord Delays" as defined in Section 3.1 of this Lease)

	5.
	Expiration
Date: December 31, 2012

	6.
	Basic
Rent: Commencing on the Commencement Date, the Basic Rent shall be Ninety Four Thousand Eighty-Nine Dollars ($94,089.00) per month, based on $0.95 per rentable square
foot. 

Basic
Rent is subject to adjustment as follows: 

Commencing
January 1, 2007, the Basic Rent shall be Ninety Seven Thousand Sixty Dollars ($97,060.00) per month, based on $0.98 per rentable square foot. 

Commencing
January 1, 2008, the Basic Rent shall be One Hundred Thousand Thirty One Dollars ($100,031.00) per month, based on $1.01 per rentable square foot. 

Commencing
January 1, 2009, the Basic Rent shall be One Hundred Three Thousand Three Dollars ($103,003.00) per month, based on $1.04 per rentable square foot. 

Commencing
January 1, 2010, the Basic Rent shall be One Hundred Five Thousand Nine Hundred Seventy-Four Dollars ($105,974.00) per month, based on $1.07 per rentable square foot. 

Commencing
January 1, 2011, the Basic Rent shall be One Hundred Eight Thousand Nine Hundred Forty-Five Dollars ($108,945.00) per month, based on $1.10 per rentable square foot. 

Commencing
January 1, 2012, the Basic Rent shall be One Hundred Eleven Thousand Nine Hundred Sixteen Dollars ($111,916.00) per month, based on $1.13 per rentable square foot. 

	7.
	Guarantor(s):
None

	8.
	Floor
Area: Approximately 99,041 rentable square feet

	9.
	Security
Deposit: $280,867.00 (subject to reduction as set forth in Section 4.3)

	10.
	Broker(s):
Cushman & Wakefield/CREA/Grubb & Ellis/BRE

	11.
	Additional
Insureds: None 

1

 
	12.
	Address
for Payments and Notices: 

	LANDLORD	 	TENANT
	

THE IRVINE COMPANY

dba Office Properties

8105 Irvine Center Drive, Suite 300

Irvine, CA 92618

Attn: Vice President, Operations, Technology Portfolio	
 	
Prior to the Commencement Date:

 

PROMETHEUS LABORATORIES INC.

5739 Pacific Center Blvd.

San Diego, CA 92121

Attn: Legal Department
	

with a copy of notices to:	
 	

 
	

THE IRVINE COMPANY

dba Office Properties

8105 Irvine Center Drive, Suite 300

Irvine, CA 92618

Attn: Senior Vice President, Operations Office Properties	
 	
Following the Commencement Date:

  

PROMETHEUS LABORATORIES INC.

9410 Carroll Park Drive

San Diego, CA 92121

Attn: Legal Department

	13.
	Tenant's
Liability Insurance Requirement (as defined in Exhibit D): $2,000,000.00

	14.
	Vehicle
Parking Spaces: Two Hundred Seventy-Eight (278) 

ARTICLE II. PREMISES  

        SECTION 2.1.    LEASED PREMISES.    Landlord leases to Tenant and Tenant leases from Landlord the premises shown in
 Exhibit A (the "Premises"), containing approximately the rentable square footage set forth as the
"Floor Area" in Item 8 of the Basic Lease Provisions. The Premises consist of all of the Floor Area within the building identified in Item 1 of the
Basic Lease Provisions. The Premises together with such building, the underlying real property and all improvements outside of such building located on such real property (including, without
limitation, the structure housing the boiler room, chiller room and cooling tower (the "Utility Building")), are collectively called the
"Building." The Building is a portion of the project identified in Item 2 of the Basic Lease Provisions and shown in  Exhibit Y (the "Project"). Landlord makes no representation that the Project will not be changed
from the Project as shown on Exhibit Y; provided, however, that in the event of such change Tenant's obligation with respect to Operating Expenses shall be reasonably adjusted to take into
account such change. All references to "Floor Area" in this Lease shall mean the rentable square footage set forth in Item 8 of the Basic Lease Provisions. The rentable square footage set forth in
Item 8 may include or have been adjusted by various factors, including, without limitation, a load factor for any vertical penetrations, stairwells or similar features or areas of the Building. Tenant
agrees that the Floor Area set forth in Item 8 shall be binding on Landlord and Tenant for purposes of this Lease regardless of whether any future or differing measurements of the Premises or the
Building are consistent or inconsistent with the Floor Area set forth in Item 8. 

        SECTION 2.2.    ACCEPTANCE OF PREMISES.    Except as expressly provided in this Lease, Tenant acknowledges that
neither Landlord nor any representative of Landlord has made any representation or warranty with respect to the Premises, the Building or the Project. No representation or warranty is made concerning
the suitability or fitness of the Premises, the Building or the Project for any purpose, including without limitation any representations or warranties regarding the compliance of Tenant's use of the
Premises with the applicable zoning or regarding any other land use matters, and Tenant shall be solely responsible as to such matters. Further, neither Landlord nor any representative of Landlord has
made any representations or warranties regarding (i) what other tenants or uses may be permitted or intended in the Building or the Project, (ii) any exclusivity of use by Tenant with 

2

 

respect
to its permitted use of the Premises as set forth in Item 3 of the Basic Lease Provisions, or (iii) any construction of portions of the Project not yet completed. Except as expressly
provided in this Lease, Tenant's lease of the Premises shall be on an "as is" basis. Landlord shall, at its sole cost and expense, construct, repair and/or replace the items set forth on  Schedule A
attached to this Lease (collectively, the "Landlord's Work"). The Landlord's Work
shall be constructed in a good and workmanlike manner in compliance with all applicable building codes and permits, and in accordance with the scheduled completion dates for each component of the
Landlord's Work set forth on attached Schedule A. Landlord shall obtain any customary manufacturers/installers warranties for the Landlord's
Work. Except as expressly provided in this Lease, Tenant shall be conclusively deemed to have accepted the Premises and those portions of the Building and Project in which Tenant has any rights under
this Lease as of the "Early Occupancy Date" (as defined in Section 3.2), which acceptance shall mean that it is conclusively established that the Premises and those portions of the Building and
Project in which Tenant has any rights under this Lease were in satisfactory condition and in conformity with the provisions of this Lease, subject only to (1) those defective or incomplete
portions of the Landlord's Work which Tenant shall have itemized on a written punch list and delivered to Landlord within forty-five (45) days following Landlord's written notice(s)
that the Landlord's Work has been substantially completed (or within forty five (45) days following the date of this Lease for items of Landlord's Work designated as "complete" on the attached  Schedule A), and (2) Landlord's obligations expressly set forth in Section 2.4 below. Landlord shall correct any deficiencies with
the Landlord's Work promptly following delivery of the itemized punch list therefor as provided in the foregoing. Landlord shall also provide two (2) allowances to Tenant as follows:
(a) Sixteen Thousand Seven Hundred Dollars ($16,700.00) (the "Access Control Allowance") towards the cost to repair and/or replace the access
control system in the Premises (the "Access Control Work"); and (b) Three Hundred thousand Dollars ($300,000.00) (the
"Floor Surface Allowance") towards the cost of bead blasting, repairing and otherwise preparing the surface of the Building's slab as more particularly
provided in that certain proposal from Howard's Rug dated June 1, 2005, a copy of which proposal is attached hereto as Exhibit J (the
"Floor Surfacing Work"). Tenant shall obtain those warranties from the manufacturers/installers for the Access Control Work and for the Floor Surfacing
Work satisfactory to Tenant in its sole discretion, and Landlord shall have no liability whatsoever for the Access Control Work and/or for the Floor Surfacing Work beyond payment of the applicable
allowance therefor. Sums from each of the allowances shall be paid within thirty (30) days of Landlord's receipt of an invoice(s) with respect to the covered work. Promptly from and after the
full execution and delivery of this Lease, Landlord shall deliver possession of the Premises to Tenant (such date of delivery of possession (the "Delivery
Date") for Tenant's construction of those tenant improvements (the "Tenant Improvements") in the Premises as provided in, and
subject to the terms and conditions of, the Work Letter attached as Exhibit X hereto (the "Work
Letter"). 

        SECTION 2.3.    BUILDING NAME AND ADDRESS.    Except for any names already in use by Tenant prior to such selection
and notification by Landlord, Tenant shall not utilize any name selected by Landlord from time to time for the Building and/or the Project as any part of Tenant's corporate or trade name. Upon not
less than sixty (60) days written notice to Tenant, Landlord shall have the right to change the name, address, number or designation of the Building or Project without liability to Tenant.
Notwithstanding the foregoing, Landlord shall reimburse Tenant for all reasonable out-of-pocket expenses incurred by Tenant, including without limitation, Tenant's costs of
obtaining new business cards, stationery and informing Tenant's customers and vendors of Tenant's new address, not to exceed Ten Thousand Dollars ($10,000.00) in the aggregate, resulting from any
changed name, number or designation of the Building or Project initiated by Landlord. 

        SECTION 2.4.    LANDLORD'S RESPONSIBILITIES.    Landlord warrants to Tenant that (a) the roof, foundation,
footings, slab, structural walls, exterior windows and skylights (including seals), plumbing, fire sprinkler\life safety system, lighting, heating, ventilation and air conditioning systems, electrical
systems, and the passenger and freight elevators serving the Premises shall be in good 

3

 

operating
condition and repair (except to the extent modified or otherwise impaired by Tenant's construction of the Tenant Improvements) on the Early Occupancy Date, (b) the Premises, the
Building, and Common Areas shall be free of all mold as of the Delivery Date, and (c) the Premises, Building and the Common Areas (except for the Tenant Improvements) shall comply with all
laws, codes and regulations (collectively, "Laws") pertaining thereto, and shall be free of latent defects in the construction thereof, as of the Early
Occupancy Date. Provided that Tenant shall notify Landlord of a non-compliance with the foregoing warranty set forth in Subsection 2.4(a) above not later than one hundred twenty
(120) days from and after the Early Occupancy Date, or of a non-compliance with the foregoing warranty set forth in Subsection 2.4(b) above not later than sixty (60) days
from and after the Delivery Date, then Landlord shall, except as otherwise provided in this Lease, promptly after receipt of written notice from Tenant setting forth the nature and extent of each
non-compliance, rectify same at Landlord's sole cost and expense and not as a Project Cost. Except as otherwise provided in this Lease, promptly after receipt of written notice from Tenant
setting forth the nature and extent of each non-compliance, Landlord shall rectify any non-compliance with the foregoing warranty contained in Subsection 2.4(c) above
throughout the Term of this Lease at Landlord's sole cost and expense and not as a Project Cost. 

ARTICLE III. TERM  

        SECTION 3.1.    GENERAL.    The term of this Lease ("Term") shall
commence on the date set forth in Item 4 of the Basic Lease Provisions (the "Commencement Date"), and shall expire on the date set forth in Item 5 of
the Basic Lease Provisions (the "Expiration Date"). Notwithstanding the foregoing, the Commencement Date and the Expiration Date shall be extended, on a
day-for-day basis, in the event that Tenant's construction of the Tenant Improvements is actually delayed due to: (i) Landlord's failure to respond within the time
period(s) required for approvals as set forth in the attached Work Letter, or (ii) Landlord's failure to complete any component of the Landlord's Work as set forth on  Schedule A attached to
this Lease (collectively, a "Landlord's Delay"); provided, however, that
no Landlord's Delay shall be effective unless and until Tenant shall notify Landlord that any such failure is causing, or is likely to cause, an actual delay in Tenant's construction of the Tenant
Improvements, and Landlord shall thereafter fail to cure such failure within two (2) business days thereafter. Any dispute involving a Landlord's Delay shall be resolved by JAMs as
provided in Article III of the attached Work Letter. 

        SECTION 3.2.    EARLY OCCUPANCY.    Landlord agrees that Tenant shall be permitted to occupy the Premises for the
conduct of its business on that date (the "Early Occupancy Date") of Tenant's choosing following the Delivery Date and prior to the Commencement Date of
this Lease. Tenant's occupancy of the Premises prior to the Commencement Date shall be subject to all of the covenants and conditions on Tenant's part contained in this Lease (including, without
limitation, the covenants contained in Sections 5.3, 6.1, 7.1, 7.3, 7.4, 10.1 and 10.3 of the Lease), except for the obligation to pay Basic Rent. 

        SECTION 3.3.    RIGHT TO EXTEND THIS LEASE.    Provided that no Event of Default has occurred and is continuing under
any provision of this Lease, either at the time of exercise of the extension right granted herein or at the time of the commencement of such extension, and provided further that Tenant is occupying at
least fifty percent (50%) of the Premises, then Tenant may extend the Term of this Lease for one (1) period of sixty (60) months at the "Fair Market Rent" (as defined below). Tenant
shall exercise its right to extend the Term by and only by delivering to Landlord, not less than ten (10) months or more than thirteen (13) months prior to the Expiration Date, Tenant's
written notice that it desires to so extend the Term of this Lease (the "Extension Notice"). The "Fair Market
Rent" shall mean the economic terms (e.g., Basic Rent, tenant improvement allowance, brokerage commission and any other concessions typically granted by landlords of similar
buildings/comparable space in the Sorrento Mesa and Sorrento Valley areas to the extent applicable to the 

4

 

proposed
extension) secured at that time by landlords of similar buildings/comparable space in the Sorrento Mesa and Sorrento Valley areas for lease extensions. The Fair Market Rent for any extension
of the Term shall be determined as provided in the following provisions. 

        Landlord
shall, within thirty (30) days following the Extension Notice, notify Tenant in writing of its determination of the Fair Market Rent including the basis for such
determination ("Landlord's Determination"). Within twenty (20) business days following delivery of the Landlord's Determination, Tenant shall
notify Landlord in writing ("Tenant's Notice") that it shall (a) lease the Premises on the terms set forth in Landlord's Determination,
(b) arbitrate Landlord's Determination as set forth in this Section 3.3 in which case Tenant shall include Tenant's determination of the Fair Market Rent
("Tenant's Determination"), or (c) irrevocably withdraw the Extension Notice. If Tenant fails to provide Tenant's notice as provided herein,
Tenant shall be deemed to have irrevocably withdrawn the Extension Notice and waived its extension rights under this Section 3.3. Tenant's Notice shall serve as its irrevocable notice of its
commitment to extend the Term on the terms and conditions herein provided.
If applicable, within ten (10) days following delivery of the Tenant's Determination, the parties shall attempt to agree on an appraiser to determine the Fair Market Rent. If the parties are
unable to agree in that time, then each party shall designate an appraiser within ten (10) days thereafter. Should either party fail to so designate an appraiser within that time, then the
appraiser designated by the other party shall determine the Fair Market Rent. Should each of the parties timely designate an appraiser, then the two appraisers so designated shall appoint a third
appraiser who shall, acting alone, determine the Fair Market Rent for the Premises. Any appraiser designated hereunder shall have an MAI certification with not less than five (5) years
experience in the valuation of commercial industrial buildings in the vicinity of the Project. 

        Within
thirty (30) days following the selection of the appraiser and such appraiser's receipt of the Landlord's Determination and the Tenant's Determination, the appraiser shall
determine whether the Landlord's Determination or the Tenant's Determination more accurately reflects the Fair Market Rent. Accordingly, either the Landlord's Determination or the Tenant's
Determination shall be selected by the appraiser as the Fair Market Rent for the extension period. In making such determination, the appraiser shall not attribute any factor for brokerage commissions
in making its determination of the Fair Market Rent. At any time before the decision of the appraiser is rendered, either party may, by written notice to the other party, accept the rental terms
submitted by the other party, in which event such terms shall be deemed adopted as the agreed Fair Market Rent. The fees of the appraiser(s) shall be borne entirely by the party whose determination of
the Fair Market Rent was not accepted by the appraiser. 

        Within
twenty (20) days after the determination of the Fair Market Rent, Landlord shall prepare an appropriate and commercially reasonable and mutually agreeable amendment to this
Lease for the extension period, and Tenant shall execute and return same to Landlord within ten (10) days after Tenant's receipt of same. Should the Fair Market Rent not be established by the
commencement of the extension period, then Tenant shall continue paying rent at the rate in effect during the last month of the initial Term, and a lump sum adjustment shall be made promptly upon the
determination of such new rental rate. 

        If
Tenant fails to timely exercise the extension right granted herein within the time period expressly set forth for exercise by Tenant in the initial paragraph of this Section, Tenant's
right to extend the Term shall be extinguished and the Lease shall automatically terminate as of the expiration date of the Term, without any extension and without any liability to Landlord. Except
for a "Permitted Transfer" (as defined in Section 9.4 of this Lease), any attempt to assign or transfer any right or interest created by this paragraph shall be void from its inception. Tenant
shall have no other right to extend the Term beyond the single sixty (60) month extension period created by this paragraph. Unless agreed to in a writing signed by Landlord and Tenant, any
extension of the Term, whether created by an amendment 

5

 

to
this Lease or by a holdover of the Premises by Tenant, or otherwise, shall be deemed a part of, and not in addition to, any duly exercised extension period permitted by this paragraph. 

ARTICLE IV. RENT AND OPERATING EXPENSES  

        SECTION 4.1.    BASIC RENT.    From and after the Commencement Date, Tenant shall pay to Landlord without deduction or
offset, the rental amount for the Premises shown in Item 6 of the Basic Lease Provisions (the "Basic Rent"), including subsequent adjustments, if any.
Any rental adjustment to Basic Rent shown in Item 6 shall be deemed to occur on the specified monthly anniversary of the Commencement Date, whether or not the Commencement Date occurs at the end of a
calendar month. The rent shall be due and payable in advance commencing on the Commencement Date (as prorated for any partial month) and continuing thereafter on the first day of each successive
calendar month of the Term. No demand, notice or invoice shall be required for the payment of Basic Rent. An installment of rent in the amount of one (1) full month's Basic Rent at the initial
rate specified in Item 6 of the Basic Lease Provisions and one (1) month's estimated Tenant's Share of Operating Expenses (as defined in Section 4.2) shall be delivered to Landlord
concurrently with Tenant's execution of this Lease and shall be applied against the Basic Rent and Operating Expenses first due hereunder. 

        SECTION 4.2.    OPERATING EXPENSES.    

        (a)   From
and after the Early Occupancy Date, Tenant shall pay to Landlord, as additional rent, Tenant's Share of all Operating Expenses, as defined in Section 4.2(f),
incurred by Landlord in the operation of the Building and the Project. The term "Tenant's Share" means (i) one hundred percent (100%) of
Operating Expenses reasonably determined by Landlord to relate specifically to the Building rather than the entire Project or any other building in the Project, plus (ii) that portion of any
Operating Expenses determined by multiplying the cost of such item by a fraction, the numerator of which is the Floor Area and the denominator of which is the total rentable square footage intended
for lease or occupancy of (A) all of the buildings in the Project for expenses reasonably determined by Landlord to benefit or relate substantially to the entire Project rather than any
specific building, or (B) all or some of the buildings within the Project as well as all or a portion of other property owned by Landlord and/or its affiliates for expenses reasonably
determined by Landlord to benefit or relate to such buildings within the Project and such other real property. In the event that Landlord reasonably determines that any premises within any building
within the Project or any portion of a building or project within a larger area incurs a non-proportional benefit from any expense, or is the non-proportional cause of any such
expense, Landlord may, allocate a greater percentage of such Operating Expense to such premises, building or project, as applicable. Notwithstanding the foregoing provision for calculation of the
"Tenant's Share" (but subject to the provisions of Section 4.2(h) "capping" said management fee), the full amount of any management fee for the management of the Premises that is calculated as
a percentage of the rent payable by Tenant shall be paid in full by Tenant as additional rent. 

        (b)   Prior
to the start of each full Expense Recovery Period (as defined in this Section 4.2), Landlord shall give Tenant a good faith line item written estimate of
the amount of Tenant's Share of Operating Expenses for the applicable Expense Recovery Period. Failure to provide such estimate shall not relieve Tenant from its obligation to pay Tenant's Share of
Operating Expenses or estimated amounts thereof, if and when Landlord provides such estimate or final payment amount. Tenant shall pay the estimated amounts to Landlord in equal monthly installments,
in advance concurrently with payments of Basic Rent. If Landlord has not furnished its written estimate for any Expense Recovery Period by the time set forth above, Tenant shall continue to pay
monthly the estimated Tenant's Share of Operating Expenses in effect during the prior Expense Recovery Period; provided that when the new estimate is delivered to Tenant, Tenant shall, at the next
monthly payment date(s), pay any accrued estimated Tenant's Share of Operating Expenses based upon the new estimate or receive a credit against amounts next due for overpaid amounts. For purposes
hereof, "Expense Recovery Period" shall 

6

 

mean
every twelve month period during the Term (or portion thereof for the first and last lease years) commencing July 1 and ending June 30, provided that Landlord shall have the right
to change the date on which an Expense Recovery Period commences in which event appropriate reasonable adjustments shall be made to Tenant's Share of Operating Expenses so that the amount payable by
Tenant shall not materially vary as a result of such change. 

        (c)   Within
one hundred twenty (120) days after the end of each Expense Recovery Period, Landlord shall furnish to Tenant a statement showing in reasonable detail the
actual or prorated Tenant's Share of Operating Expenses incurred by Landlord during the period, and the parties shall within thirty (30) days thereafter make any payment or allowance necessary
to adjust Tenant's estimated payments of Tenant's Share of Operating Expenses, if any, to the actual Tenant's Share of Operating Expenses as shown by the annual statement. Any delay or failure by
Landlord in delivering any statement hereunder shall not constitute a waiver of Landlord's right to require Tenant to pay Tenant's Share of Operating Expenses pursuant hereto. Any amount due Tenant
shall be credited against installments next coming due under this Section 4.2, and any deficiency shall be paid by Tenant together with the next installment. Should Tenant fail to object in
writing to Landlord's determination of Tenant's Share of Operating Expenses within one hundred eighty (180) days following Tenant's receipt of Landlord's expense statement (the
"Review Period"), Landlord's determination of Tenant's Share of Operating Expenses for the applicable Expense Recovery Period shall be conclusive and
binding on the parties for all purposes and any future claims to the contrary shall be barred. 

        Provided
no Event of Default (based on Tenant's failure to pay any sum due under this Lease) has occurred, which has not either been cured by Tenant or waived by Landlord, Tenant shall
have the right to cause its own qualified employee(s) or a certified public accountant, in either case engaged on a non-contingency fee basis, to audit Operating Expenses by inspecting
Landlord's general ledger of expenses not more than once for any Expense Recovery Period. However, to the extent that insurance premiums are determined by Landlord on the basis of an internal
allocation of costs utilizing information Landlord in good faith deems proprietary, such expense component shall not be subject to audit. Tenant shall give notice to Landlord of Tenant's intent to
audit, if at all, within the Review Period for the applicable Expense Recovery Period. Such audit shall be conducted at a mutually agreeable time during normal business hours at the office of Landlord
or its management agent where such accounts are maintained. If Tenant's audit determines that actual Operating Expenses have been overstated by more than five percent (5%), then subject to Landlord's
right to review and/or contest
the audit results, Landlord shall reimburse Tenant for the reasonable out-of-pocket costs of such audit. Tenant's rent shall be appropriately adjusted to reflect any
overstatement in Operating Expenses. In the event of a dispute between Landlord and Tenant regarding such audit, such dispute shall be submitted and resolved by binding arbitration pursuant to the
provisions of Article III of the attached Work Letter. All of the information obtained by Tenant and/or its auditor in connection with such audit, as well as any compromise, settlement, or
adjustment reached between Landlord and Tenant as a result thereof, shall be held in strict confidence and, except as may be required pursuant to litigation, shall not be disclosed to any third party,
directly or indirectly, by Tenant or its auditor or any of their officers, agents or employees. Landlord may require Tenant's auditor to execute a separate confidentiality agreement affirming the
foregoing as a condition precedent to any audit. In the event of a violation of this confidentiality covenant in connection with any audit, then in addition to any other legal or equitable remedy
available to Landlord, Tenant shall forfeit its right to any reconciliation or cost reimbursement payment from Landlord due to said audit (and any such payment theretofore made by Landlord shall be
promptly returned by Tenant), and Tenant shall have no further audit rights under this Lease. 

        (d)   Even
though this Lease has terminated and the Tenant has vacated the Premises, when the final determination is made of Tenant's Share of Operating Expenses for the
Expense Recovery Period in which this Lease terminates, Tenant shall, subject to the audit rights set forth in Section 4.2(c) 

7

 

above,
within thirty (30) days of written notice pay the entire increase over the estimated Tenant's Share of Operating Expenses already paid. Conversely, any overpayment by Tenant shall be
rebated by Landlord to Tenant not later than thirty (30) days after such final determination. 

        (e)   If,
at any time during any Expense Recovery Period, any one or more of the Operating Expenses are increased to a rate(s) or amount(s) in excess of the rate(s) or
amount(s) used in calculating the estimated Tenant's Share of Operating Expenses for the year, then the estimate of Tenant's Share of Operating Expenses may be increased by written notice from
Landlord for the month in which such rate(s) or amount(s) becomes effective and for all succeeding months by an amount equal to Tenant's Share of the increase. If Landlord gives Tenant written notice
of the amount or estimated amount of the increase, the month in which the increase will or has become effective, then Tenant shall pay the increase to Landlord as a part of Tenant's monthly payments
of the estimated Tenant's Share of Operating Expenses as provided in Section 4.2(b), commencing with the month following Tenant's receipt of Landlord's notice. In addition, Tenant shall pay
upon written request any such increases which were incurred prior to the Tenant commencing to pay such monthly increase. Following any such increase, if requested by Tenant, Landlord shall review any
possible decreases in other of the Operating Expenses for such year with Tenant, and will implement any such decreases, if warranted. 

        (f)    The
term "Operating Expenses" shall mean and include all Project Costs, as defined in subsection (g), and Property Taxes,
as defined in subsection (h). 

        (g)   The
term "Project Costs" shall include all commercially reasonable expenses of operation, repair and maintenance of the
Building and the Project, including without limitation all appurtenant Common Areas (as defined in Section 6.2), and shall include the following charges by way of illustration but not
limitation: water and sewer charges; insurance premiums and deductibles and/or reasonable premium and deductible equivalents should Landlord elect to self-insure all or any portion of any
risk that Landlord is authorized to insure hereunder; license, permit, and inspection fees; light; power; window washing; trash pickup; heating, ventilating and air conditioning (to the extent not
performed and paid for by Tenant as provided under Section 7.1 below); supplies; materials; equipment; tools; the cost of any commercially reasonable environmental, insurance, tax or other
consultant utilized by Landlord in connection with the Building and/or Project; establishment of reasonable reserves for replacements and/or repairs; costs incurred in connection with compliance with
any laws or changes in laws applicable to the Building or the Project that become effective after the Early Occupancy Date; the cost of any capital investments or replacements (other than tenant
improvements for specific tenants) to the extent of the amortized amount thereof over the useful life of such capital investments or replacements with interest calculated at seven percent (7%) per
annum, all as determined by Landlord in accordance with generally accepted accounting principles, consistently applied, for each such year of useful life during the Term; costs associated with the
maintenance of an air conditioning, heating and ventilation service agreement (to the extent not performed and paid for by Tenant as provided under Section 7.1 below); third-party labor costs
and expenses; reasonably allocated wages and salaries, fringe benefits, and payroll taxes for administrative and other personnel directly applicable to the Building and/or Project, including both
Landlord's personnel and outside personnel; any expense incurred pursuant to Sections 6.1, 6.2, 6.4, 7.2, and 10.2; and a reasonable overhead/management fee for the professional operation of the
Project. It is understood and agreed that Project Costs may include competitive charges for direct services (including, without limitation, management and/or operations services) provided by any
subsidiary, division or affiliate of Landlord. Tenant shall bear the burden of proof in any challenge to Landlord's designation of an item as a Project Cost based on the fact Tenant does not consider
it to be commercially reasonable. 

        (h)   Notwithstanding
the provisions of Section 4.2(g) above, Project Costs shall not include: (i) the cost of capital improvements (except as permitted in
Section 4.2(g) above, but subject to Landlord's obligations contained in Section 2.4 above); (ii) all fees, costs, principal and interest related to any 

8

 

mortgage(s)
or deed(s) of trust, all payments made under any ground or underlying lease and all other non-operating debts of Landlord; (iii) the cost of repairs or other work to the
extent Landlord is actually reimbursed by insurance or condemnation proceeds, or otherwise actually reimbursed by a third party; (iv) costs in connection with leasing space in the Building
(including, without limitation, brokerage commissions, marketing costs, attorneys' fees, lease concessions, rental abatements and construction allowances granted to specific tenants); (v) costs
incurred in connection with the sale, financing or refinancing of the Building or Project; (vi) fines, interest and penalties incurred due to the late payment of Property Taxes or Project Costs
not caused to by Tenant's failure to timely pay Basic Rent, Operating Expenses or Property Taxes; (vii) any penalties or damages that Landlord pays to Tenant under this Lease or to other
tenants in the Building or Project under their respective leases; (viii) any costs, fines, or penalties incurred due to violations by Landlord of any governmental rule or authority;
(ix) the cost of any service provided to Tenant or other occupants of the Building or Project for which Landlord is actually reimbursed by another tenant in the Building; (x) costs
associated with damage or repairs to the Project or Common Areas necessitated by the willful misconduct of Landlord or Landlord's employees or authorized agents; (xi) salaries and benefits or
employees over the level of property manager or building engineer; (xii) legal fees, accountant fees and other expenses incurred in disputes with other tenants or occupants of the Building or
Project or associated with the enforcement of any other leases or defense of Landlord's title to or interest in the Building, Project or any part thereof; (xiii) services or installations
furnished to any tenant in the Building or Project that are not also furnished to Tenant; (xiv) the cost of any service provided to Tenant or other occupants of the Building or Project for
which Landlord is actually reimbursed; (xv) costs or fees payable to public authorities in connection with any future construction, renovation and/or improvements to the Project (other than the
Tenant Improvements or any improvements made to the Premises by or for Tenant) including fees for transit, housing, schools, open space, child care, arts programs, traffic mitigation measures,
environmental impact reports, traffic studies, and transportation system management plans (provided, however, any of the foregoing that would be considered part of Property Taxes and/or billed as such
may be included in Property Taxes); (xvi) expenditures covered by the "Property Policy" or by the "Liability Policy" (as defined in Section 10.2) should Landlord elect to
self-insure such coverage under Section 10.2; (xvii) organizational expenses associated with the creation, maintenance and operation of the entity which constitutes Landlord;
(xviii) except as allowed as a capital replacement or investment cost pursuant to Section 4.2(g) above, rentals and other related expenses, if any, incurred in leasing air conditioning
systems, elevators or other equipment ordinarily considered capital in nature; (xix) amounts paid to persons or entities affiliated with, controlled by, controlling of, or under common control
with, Landlord to the extent such amounts are greater than would have been charged by an unaffiliated third party in an arms-length transaction; (xx) any management fee or
administrative cost in excess of the lower of (A) the fee charged by similar landlords in the area of the Project or (B) four percent (4%) of the Basic Rent and Operating Expenses for
the period in question for the first five (5) years of the Term; and five percent (5%) for the final two years of the Term; (xxi) any reserves for capital replacements of any item other
than a reasonable reserve for the replacement of the roof of the Building and the Utility Building; (xxii) should Landlord elect to self-insure the "Property Policy" and/or the
"Liability Policy" (as defined in Section 10.2), the costs of premium and/or deductible equivalents to the extent such costs are in excess of the cost of such coverage if purchased in the
insurance marketplace (based on the size of Landlord's portfolio and its loss history); (xxiii) as determined following each Expense Recovery Period, any item of Project Cost which is
duplicative of any other item of Project Costs; and (xxiv) taxes on Landlord's income from all sources. 

        (i)    The
term "Property Taxes" as used herein shall include any form of federal, state, county or local government or
municipal taxes, fees, charges or other impositions of every kind (whether general, special, ordinary or extraordinary) related to the ownership, leasing or operation of the Premises, Building or
Project, including without limitation, the following: (i) all real estate taxes or personal property taxes, as such property taxes may be reassessed from time to time; and (ii) other
taxes, 

9

 

charges
and assessments which are levied with respect to this Lease or to the Building and/or the Project, and any improvements, fixtures and equipment and other property of Landlord located in the
Building and/or the Project, (iii) all assessments and fees for public improvements, services, and facilities and impacts thereon, including without limitation arising out of any Community
Facilities Districts, "Mello Roos" districts, similar assessment districts, and any traffic impact mitigation assessments or fees; (iv) any tax, surcharge or assessment which shall be levied in
addition to or in lieu of real estate or personal property taxes, other than taxes covered by Article VIII; and (v) taxes based on the receipt of rent (including gross receipts or sales
taxes applicable to the receipt of rent), and (vi) reasonable costs and expenses incurred in good faith in contesting the amount or validity of any Property Tax by appropriate proceedings.
Notwithstanding the foregoing, Property Taxes shall not include: (A) income, capital, stock, succession, transfer, franchise, gift, estate or inheritance tax; (B) any item to the extent
otherwise included in Project Costs; (C) any environmental assessments, charges or liens arising in connection with the remediation of Hazardous Materials from the Project, the causation of
which arose prior to the Commencement Date or to the extent caused by Landlord, its agents, employees or contractors or any tenant of the Project (other than Tenant or its sublessees or assignees);
(D) reserves for future Property Taxes; or (E) penalties or interest on the late payment of any Property Taxes. In no event shall Tenant be obligated to pay that portion of Property
Taxes allocated to the Building or Premises by Landlord that is more than five percent (5%) greater than the taxes actually levied against the assessor's parcel on which the Premises is located. If
any Property Taxes are payable in installments over a period of time, Tenant shall be liable only for the payment of those installments falling due and payable during the Term, with appropriate
proration for fractional years. 

        SECTION 4.3.    SECURITY DEPOSIT.    Concurrently with Tenant's delivery of this Lease, Tenant shall deposit with
Landlord the sum, if any, stated in Item 9 of the Basic Lease Provisions, to be held by Landlord as security for the full and faithful performance of all of Tenant's obligations under this Lease (the
"Security Deposit"). Landlord shall not be required to keep this Security Deposit separate from its general funds, and Tenant shall not be entitled to
interest on the Security Deposit. Subject to the last sentence of this Section, the Security Deposit shall be understood and agreed to be the property of Landlord upon Landlord's receipt thereof, and
may be utilized by Landlord in its sole and absolute discretion towards the payment of all expenses by Landlord for which Tenant would be required to reimburse Landlord under this Lease. Upon any
Event of Default by Tenant (as defined in Section 14.1), Landlord may, in its sole and absolute discretion, use or apply the whole or any part of the Security Deposit to pay any sum which
Tenant is obligated to pay under this Lease including, but not limited to, sums that Landlord may reasonably expend or be required to expend by reason of the Event of Default by Tenant or any loss or
damage that Landlord may suffer by reason of the Event of Default or costs incurred by Landlord in connection with the repair or restoration of the Premises pursuant to Section 15.3 of this
Lease upon expiration or earlier termination of this Lease. In no event shall Landlord be obligated to apply the Security Deposit upon an Event of Default and Landlord's rights and remedies resulting
from an Event of Default, including without limitation, Tenant's failure to pay Basic Rent, Tenant's Share of Operating Expenses or any other amount due to Landlord pursuant to this Lease, shall not
be diminished or altered in any respect due to the fact that Landlord is holding the Security Deposit. If any portion of the Security Deposit is applied by Landlord as permitted by this Section,
Tenant shall within five (5) business days after written demand by Landlord deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount. If Tenant
fully performs its obligations under this Lease, the Security Deposit shall be returned to Tenant within thirty (30) days after the expiration of the Term, provided that Tenant agrees that
Landlord may retain the Security Deposit to the extent and until such time as all amounts due from Tenant in accordance with this Lease have been determined (which determination shall not be
unreasonably withheld, conditioned or delayed) and paid in full and Tenant agrees that Tenant shall have no claim against Landlord for Landlord's retaining such Security Deposit to the extent provided
in this Section. 

10

 

        Provided
that no Event of Default has theretofore occurred under any provision of this Lease, Tenant shall have the right to have the Security Deposit reduced to the amount of One
Hundred Twenty-Three Thousand One Hundred Eight Dollars ($123,108.00) by sending written request thereof to Landlord, which request shall be accompanied by Tenant's audited Statements demonstrating
two (2) immediately prior consecutive years of positive net income for Tenant. Following such written request to Landlord, Tenant shall be credited in the amount of the difference between the
amount of the Security Deposit stated in Item 9 of the Basic Lease Provisions and the reduced amount of Security Deposit set forth above, against Basic Rent and Operating Expenses next coming due
under this Lease. 

ARTICLE V. USES  

        SECTION 5.1.    USE.    Tenant shall use the Premises only for the purposes stated in Item 3 of the Basic Lease
Provisions, all in accordance with applicable laws and restrictions and pursuant to approvals to be obtained by Tenant from all relevant and required governmental agencies and authorities. The parties
agree that any contrary use shall be deemed to cause material and irreparable harm to Landlord and shall entitle Landlord to injunctive relief in addition to any other available remedy. Tenant, at its
expense, shall procure, maintain and make available for Landlord's inspection throughout the Term, all governmental approvals, licenses and permits required for the proper and lawful conduct of
Tenant's permitted use of the Premises. Tenant shall not do or permit anything to be done in or about the Premises which will in any way unreasonably interfere with the rights of other occupants of
the Project, or use or allow the Premises to be used for any unlawful purpose, nor shall Tenant permit any nuisance or commit any waste in the Premises or the Project. Tenant shall not, without
Landlord's prior written consent, conduct its business operations in areas outside the Premises or the Utility Building, including but not limited to storing any property, equipment or trash in such
areas except as shown on Exhibit F attached hereto. Tenant shall be responsible for any increased cost of any insurance policy(ies) covering the
Project and/or their contents occasioned by its use. Tenant shall comply at its expense with all present and future laws, ordinances, restrictions, regulations, orders, rules and requirements of all
governmental authorities that pertain to Tenant or its use of the Premises, including without limitation all federal and state occupational health and safety requirements, whether or not Tenant's
compliance will necessitate expenditures or interfere with its use and enjoyment of the Premises. Tenant shall comply at its expense with all present and future covenants, conditions, easements or
restrictions now or hereafter affecting or encumbering the Building and/or Project, and any amendments or modifications thereto, including without limitation the payment by Tenant of any periodic or
special dues or assessments charged against the Premises or Tenant which may be allocated to the Premises or Tenant in accordance with the provisions thereof, provided, however, that such future or
amended covenants, conditions, easements or restrictions are provided to Tenant (and, to the extent action is required of Tenant to comply, Tenant has reasonable prior notice) and do not materially
impair the rights of Tenant or materially increase the obligations of Tenant under this Lease. Tenant shall promptly upon demand reimburse Landlord for any additional commercially reasonable insurance
premium charged by reason of Tenant's failure to comply with the provisions of this Section, and shall indemnify Landlord from any liability and/or reasonable expense resulting from Tenant's
noncompliance. 

        SECTION 5.2.    SIGNS.    Tenant shall have the right to install one (1) exterior building-top sign
on the Building, one (1) sign on either side of the existing monument sign in front of the Building and commercially reasonable signage for Tenant's name (and for any subtenant's name) on the
Premises' entry and exit doors, subject to Landlord's right of prior approval that such exterior signage is in compliance with the Signage Criteria (defined below). Except as provided in the
foregoing, Tenant shall have no right to maintain signs in any location on or about the Building or the Project and shall not place or erect any signs that are visible from the exterior of the
Building, except to the extent required by law, regulation or government authority. The size, design, graphics, material, style, color and other physical aspects of any permitted sign shall be subject
to Landlord's written determination, as 

11

 

determined
solely by Landlord, prior to installation, that signage is in compliance with any covenants, conditions or restrictions encumbering the Premises and Landlord's signage program for the
Project, in effect and approved by the City of San Diego (the "Signage Criteria") as of the date of installation of such signage. A copy of the Signage
Criteria in effect as of the date of this Lease is attached as Exhibit G to this Lease. Prior to placing or erecting any such signs, Tenant shall
obtain and deliver to Landlord a copy of any applicable municipal or other governmental permits and approvals and comply with any applicable insurance requirements for such signage. Tenant shall be
responsible for the cost of any permitted sign, including the fabrication, installation, maintenance and removal thereof and the cost of any permits therefor. If Tenant fails to maintain its sign in
good condition, or if Tenant fails to remove same upon termination of this Lease and repair and restore any damage caused by the sign or its removal, Landlord may do so at Tenant's expense. Landlord
shall have the right to temporarily remove any signs in connection with any repairs or maintenance in or upon the Building. The term "sign" as used in this Section shall include all signs, designs,
monuments, displays, advertising materials, logos, banners, projected images, pennants, decals, pictures, notices, lettering, numerals or graphics. 

        SECTION 5.3.    HAZARDOUS MATERIALS.    

        (a)   For
purposes of this Lease, the term "Hazardous Materials" includes (i) any "hazardous material" as defined in
Section 25501(o) of the California Health and Safety Code, (ii) hydrocarbons, polychlorinated biphenyls or asbestos, (iii) any toxic or hazardous materials, substances, wastes or
materials as defined pursuant to any other applicable state, federal or local law or regulation, and (iv) any other substance or matter which may result in liability to any person or entity as
a result of such person's possession, use, release or distribution of such substance or matter and that is considered a hazardous material under any applicable law or regulation. 

        (b)   Tenant
shall not cause or permit any Hazardous Materials to be brought upon, stored, used, generated, released or disposed of on, under, from or about the Premises
(including without limitation the soil and groundwater thereunder) without the prior written consent of Landlord, which shall not be unreasonably withheld as hereinafter provided. Notwithstanding the
foregoing, Tenant shall have the right, without obtaining prior written consent of Landlord, to utilize within the Premises: (A) a reasonable quantity of standard office or consumer products
that may contain Hazardous Materials (such as photocopy toner, "White Out", and the like), provided however, that (i) Tenant shall maintain such
products in their original retail packaging, shall follow all instructions on such packaging with respect to the storage, use and disposal of such products, and shall otherwise comply with all
applicable laws with respect to such products, and (ii) all of the other terms and provisions of this Section 5.3 shall apply with respect to Tenant's storage, use and disposal of all
such products; and (B) those Hazardous Materials (i) in kind and content listed on the Environmental Questionnaire (defined below) delivered to Landlord prior to the execution of this
Lease or otherwise reasonably related to Tenant's diagnostic business (the "Current HazMats") to the extent that the use of such Current HazMats shall
comply with all applicable laws and all of the other terms and provisions of this Section 5.3 shall apply with respect to Tenant's storage, use and disposal of such Current HazMats, and
(ii) reasonably related to any future, non-diagnostic business which Tenant (each a "Future HazMat") to the extent (1) the use
of such Future HazMats shall comply with all applicable laws and all of the other terms and provisions of this Section 5.3 shall apply with respect to Tenant's storage, use and disposal of such
Future HazMats, (2) Tenant gives Landlord prior written notice with regard to its proposed use of any Future HazMat, (3) if Landlord reasonably determines that a Future HazMat is
materially different in type and risk than the Current HazMats, Landlord may require Tenant obtain the insurance described in Exhibit D,
Section 2 in amount commensurate with such different type and risk, and (4) Landlord may place such reasonable conditions with respect to Tenant's use of any Future HazMat and may
further require that Tenant demonstrate that any such Future HazMats are necessary or useful to Tenant's business and will be generated, stored, used and disposed of in a manner that complies with all
applicable laws and regulations pertaining thereto and with good business practices. 

12

 

Tenant
understands that Landlord may utilize an environmental consultant to assist in determining conditions of approval in connection with the storage, generation, release, disposal or use of Future
HazMats proposed by Tenant as provided in the foregoing sentence on or about the Premises, and Tenant agrees that any reasonable costs incurred by Landlord in connection therewith shall be reimbursed
by Tenant to Landlord either as a condition to such consent by Landlord or as additional rent hereunder upon demand. 

        (c)   Prior
to the execution of this Lease, Tenant shall complete, execute and deliver to Landlord an Environmental Questionnaire and Disclosure Statement (the
"Environmental Questionnaire") in the form of Exhibit B attached hereto. The completed
Environmental Questionnaire shall be deemed incorporated into this Lease for all purposes, and Landlord shall be entitled to rely fully on the information contained therein. Tenant shall disclose to
Landlord in writing at the time it makes its annual regulatory disclosures regarding its use of Hazardous Materials or, if no such disclosure is made or required, on or about each anniversary of the
Commencement Date, the names and amounts of all Hazardous Materials which were stored, generated, used, released and/or disposed of on, under or about the Premises for the twelve-month period prior
thereto, and which Tenant expects to store, generate, use, release and/or dispose of on, under or about the Premises for the succeeding twelve-month period. In addition, to the extent Tenant is
permitted to utilize Hazardous Materials upon the Premises, Tenant shall, upon reasonable notice, make available for inspection and copying complete and legible copies of all the following
environmental documents relating to Hazardous Materials utilized by Tenant on or about the Premises: reports filed pursuant to any self-reporting requirements; permit applications,
permits, monitoring reports, emergency response or action plans, workplace exposure and community exposure warnings or notices and all other reports, disclosures, plans or documents (even those which
may be characterized as confidential) relating to water discharges, air pollution, waste generation or disposal, and underground storage tanks for Hazardous Materials; orders, reports, notices,
listings and correspondence (even those which may be considered confidential) of or concerning the release, investigation of, compliance, cleanup, remedial and corrective actions, and abatement of
Hazardous Materials; and all complaints, pleadings and other legal documents filed by or against Tenant related to Tenant's use, handling, storage, release and/or disposal of Hazardous Materials.
Notwithstanding anything to the contrary contained in this Section 5.3, under no circumstances shall (i) any provision in this Section 5.3 require Tenant to disclose to Landlord
any document Tenant reasonably believes is attorney-client privileged or attorney work product or (ii) Tenant be required to disclose any confidential materials without such disclosure being
subject to the parties' execution of a commercially reasonable non-disclosure agreement. 

        (d)   Landlord
and its agents shall have the right, but not the obligation, after giving Tenant at least 24 hours prior notice (except in an emergency for which no
notice shall be required) to inspect, sample and/or monitor the Premises and/or the soil or groundwater thereunder at any time to determine whether Tenant is complying with the terms of this
Section 5.3, and in connection therewith Tenant shall provide, with prior reasonable notice, Landlord with full access to all facilities, records and personnel related thereto. If Tenant is not
in compliance with any of the provisions of this Section 5.3, or in the event of a release of any Hazardous Material on, under or about the Premises caused or permitted by Tenant, its agents,
employees, contractors, licensees or invitees, Landlord and its agents shall have the right, but not the obligation, without limitation upon any of Landlord's other rights and remedies under this
Lease, to immediately enter upon the Premises without notice and to discharge Tenant's obligations under this Section 5.3 at Tenant's expense (which expense shall be reasonable under the
circumstances), including without limitation the taking of emergency or long-term remedial action. Landlord and its agents shall endeavor to minimize interference with Tenant's business in
connection therewith, but shall not be liable for any such interference. In addition, Landlord, at Tenant's expense (which expense shall be reasonable under the circumstances), shall have the right,
but not the obligation, to join and participate in any legal proceedings or actions initiated in connection with any claims arising out of the storage, generation, use, release and/or disposal by
Tenant or its 

13

 

agents,
employees, contractors, licensees or invitees of Hazardous Materials on, under, from or about the Premises (provided that Landlord reasonably determines that an actual or potential conflict of
interest between Landlord and Tenant exists or may exist that reasonably requires Landlord to retain a separate attorney from Tenant). 

        (e)   If
the presence of any Hazardous Materials on, under, from or about the Premises or the Project caused or permitted by Tenant or its agents, employees, contractors,
licensees or invitees results in (i) injury to any person, (ii) injury to or any contamination of the Premises or the Project, or (iii) injury to or contamination of any real or
personal property wherever situated, Tenant, at its expense, shall promptly take all actions necessary to return the Premises and the Project and any other directly affected real or personal property
owned by Landlord to the "Required Condition" (as hereinafter defined). Notwithstanding the foregoing, Tenant shall not, without Landlord's prior written consent, which consent may be given or
withheld in Landlord's sole and absolute discretion, take any remedial action in response to the presence of any Hazardous Materials on, from, under or about the Premises or the Project or any other
directly affected real or personal property owned by Landlord or enter into any similar agreement to take remedial action, consent, decree or other compromise with any governmental agency with respect
to any Hazardous Materials claims; provided however, Landlord's prior written consent shall not be necessary in the event that the presence of Hazardous Materials on, under or about the Premises or
the Project or any other directly affected real or personal property owned by Landlord (i) imposes an immediate threat to the health, safety or welfare of any individual and (ii) is of
such a nature that an immediate remedial response is necessary and it is not possible to obtain Landlord's consent before taking such action. Landlord shall be responsible for any increased costs or
liability to the extent they are directly attributable to Landlord's withholding or delay in providing its consent. As used herein, "Required Condition"
shall mean returning the Premises and the Project and any other directly affected real or personal property owned by Landlord to a condition that is both (A) required by applicable federal,
state or local law, regulation or order, including without limitation, performing any required cleanup, remediation, removal, disposal, neutralization or other treatment of Hazardous Materials,  and
(B) wherein Landlord's marketability, use and leasing thereof as commercial properties is not materially impaired. To the fullest extent
permitted by law, Tenant shall indemnify, hold harmless, protect and defend (with attorneys reasonably acceptable to Landlord) Landlord and any successors to all or any portion of Landlord's interest
in the Premises and the Project and any other directly affected real or personal property owned by Landlord from and against any and all liabilities, losses, damages, diminution in value, judgments,
fines, demands, claims, recoveries, deficiencies, costs and expenses (including without limitation reasonable attorneys' fees, court costs and other professional expenses), whether foreseeable or
unforeseeable, arising directly or indirectly out of the use, generation, storage, treatment, release, on- or off-site disposal or transportation of Hazardous Materials on,
into, from, under or about the Premises, the Building or the Project and any other directly affected real or personal property owned by Landlord caused or knowingly permitted by Tenant, its agents,
employees, contractors, licensees or invitees (each a "Tenant Party"). Such indemnity obligation shall specifically include, without limitation, the
cost of any repair, restoration, cleanup or detoxification of the Premises, the Building and the Project and any other directly affected real or personal property owned by Landlord required or
necessary to return same to the Required Condition, the preparation of any closure or other required plans, whether or not such action is required or necessary during the Term or after the expiration
of this Lease and any loss of rental due to the inability to lease the Premises or any portion of the Building or Project as a result of such Hazardous Material or remediation thereof. If it is at any
time discovered that Hazardous Materials have been released on, into, from, under or about the Premises during the Term by Tenant or any Tenant Party, or that Tenant or any Tenant Party may have
caused or knowingly permitted the release of a Hazardous Material on, under, from or about the Premises, the Building or the Project or any other directly affected real or personal property owned by
Landlord, Tenant shall, at Landlord's request, immediately prepare and submit to Landlord a comprehensive plan, subject to Landlord's 

14

 

reasonable
approval, specifying the actions to be taken by Tenant to return the Premises, the Building or the Project or any other directly affected real or personal property owned by Landlord to the
Required Condition. Upon Landlord's approval of such cleanup plan, Tenant shall, at its expense, and without limitation of any rights and remedies of Landlord under this Lease or at law or in equity,
immediately implement such plan and proceed to cleanup such Hazardous Materials in accordance with all applicable laws and as required by such plan and this Lease. The provisions of this
Section 5.3(e) shall expressly survive the expiration or sooner termination of this Lease. 

        (f)    Notwithstanding
anything to the contrary contained in this Lease, Tenant shall have no liability or responsibility with respect to any Hazardous Materials in, on, under
or around the Building or Project which were not caused or knowingly permitted by Tenant or by any Tenant Party. Notwithstanding the preceding sentence, Tenant agrees to notify its agents, employees,
contractors, licensees, and invitees of any exposure or potential exposure to Hazardous Materials at the Premises that Landlord brings to Tenant's attention. Provided such information is accurate,
Tenant hereby acknowledges that this disclosure satisfies any obligation of Landlord to Tenant pursuant to California Health & Safety Code Section 25359.7, or any amendment or substitute
thereto or any other disclosure obligations of Landlord. Landlord shall take responsibility, at its sole cost and expense, for any governmentally-required clean-up, remediation, removal,
disposal, neutralization or other treatment of Hazardous Materials conditions described in this Section 5.3(f). The foregoing obligation on the part of Landlord shall include the reasonable
costs (including, without limitation, reasonable attorney's fees) of defending Tenant from and against any legal action or proceeding instituted by any governmental agency in connection with such
clean-up, remediation, removal, disposal, neutralization or other treatment of such conditions, provided that Tenant promptly tenders such defense to Landlord. 

        (g)   Landlord
represents that, to "Landlord's knowledge" (as hereinafter defined), there are no Hazardous Materials in or about the Premises or the Building, nor have there
been Hazardous Materials in or about the Premises or the Building, which are in violation of any applicable federal, state or local law, regulation or order. As used herein,
"Landlord's knowledge" shall mean the actual knowledge, without duty of inquiry or investigation, of the current employees or authorized agents of
Landlord responsible for Hazardous Materials compliance matters. 

15

   ARTICLE VI. COMMON AREAS; SERVICES  

        SECTION 6.1.    UTILITIES AND SERVICES.    Tenant shall be responsible, at its sole cost and expense, for all charges
for water, gas, electricity, sewer, heat, light, power, telephone, telecommunications service, refuse pickup, janitorial service, interior landscape maintenance and all other utilities, materials and
services furnished directly to Tenant or the Premises or used by Tenant in, on or about the Premises during the Term, together with any taxes thereon. If any utilities or services are not separately
metered or assessed to Tenant, Landlord shall make a reasonable determination of Tenant's proportionate share of the cost of such utilities and services, and Tenant shall pay such amount to Landlord,
as an item of additional rent, within thirty (30) days after receipt of Landlord's statement or invoice therefor. Alternatively, Landlord may elect to include such cost in the definition of
Project Costs in which event Tenant shall pay Tenant's proportionate share of such costs in the manner set forth in Section 4.2. Landlord shall not be liable for damages or otherwise for any
failure or interruption of any utility or other service furnished to the Premises, and no such failure or interruption shall be deemed an eviction or entitle Tenant to terminate this Lease or withhold
or abate any rent due hereunder. Notwithstanding the foregoing, if as a result of the direct actions of Landlord, its employees, contractors or authorized agents, for more than three
(3) consecutive business days following written notice to Landlord there is no HVAC or electricity services to all or a portion of the Premises, or such an interruption of other essential
utilities and building services, such as fire protection or water, so that all or a portion of the Premises cannot be used by Tenant, then Tenant's Basic Rent (or an equitable portion of such Basic
Rent to the extent that less than all of the Premises are affected) shall thereafter be abated until the Premises are again usable by Tenant; provided, however, that if Landlord is diligently pursuing
the repair of such utilities or services and Landlord provides substitute services reasonably suitable for Tenant's purposes, as for example, bringing in portable air-conditioning
equipment, then there shall not be an abatement of Basic Rent. Provided Landlord shall diligently pursue the repair of such utilities and services, the foregoing provisions shall be Tenant's sole
recourse and remedy in the event of such an interruption of services. The foregoing provisions shall not apply in case of the actions of parties other than Landlord, its employees, contractors or
authorized agents, or in the case of damage to, or destruction of, the Premises (which shall be governed by the provisions of Article XI of the Lease). Any disputes concerning the foregoing
provisions shall be submitted to and resolved by JAMS arbitration pursuant to Article III of the Work Letter attached to this Lease. 

        Landlord
shall at all reasonable times have free access to the Building and Premises to install, maintain, repair, replace or remove all electrical and mechanical installations of
Landlord. Tenant acknowledges that the costs incurred by Landlord related to providing above-standard utilities to Tenant (which shall only be provided upon Tenant's request), including, without
limitation, telephone lines, shall be charged to Tenant. 

        SECTION 6.2.    OPERATION AND MAINTENANCE OF COMMON AREAS.    During the Term, Landlord shall operate all Common Areas
within the Project. The term "Common Areas" shall mean all areas which are not held for exclusive use by persons entitled to occupy space, and all other
appurtenant areas and improvements within the Project provided by Landlord for the common use of Landlord and tenants and their respective employees and invitees, including without limitation parking
areas and structures, driveways, sidewalks, landscaped and planted areas, but shall not include any interior spaces within any buildings in the Project. 

        SECTION 6.3.    USE OF COMMON AREAS.    The occupancy by Tenant of the Premises shall include the use of the Common
Areas in common with Landlord and with all others for whose convenience and use the Common Areas may be provided by Landlord, subject, however, to compliance with the Rules and Regulations (as defined
in Article XVII of this Lease). Landlord shall operate and maintain the Common Areas in the manner as determined by Landlord in its reasonable discretion. All costs incurred by Landlord for the
maintenance and operation of the Common Areas 

16

 

shall
be included in Project Costs except to the extent any particular cost incurred is related to or associated with a specific tenant and can be charged to such tenant of the Project. Landlord shall
at all times during the Term have exclusive control of the Common Areas, and may restrain or permit any use or occupancy, except as authorized by Landlord's rules and regulations. Tenant shall keep
the Common Areas clear of any obstruction or unauthorized use related to Tenant's operations or use of Premises, including without limitation, planters and furniture. Except as expressly provided
elsewhere in this Lease, nothing in this Lease shall be deemed to impose liability upon Landlord for any damage to or loss of the property of, or for any injury to, Tenant, its invitees or employees.
Landlord may temporarily close any portion of the Common Areas for repairs, remodeling and/or alterations, to prevent a public dedication or the accrual of prescriptive rights, or for any other reason
deemed sufficient by Landlord, without liability to Landlord, provided, however, that any such closure shall not unreasonably interfere with Tenant's access to the Premises or Tenant's parking rights
granted in this Lease. 

        SECTION 6.4.    PARKING.    Tenant shall be entitled to the number of vehicle parking spaces set forth in Item 14 of
the Basic Lease Provisions, which spaces shall be unreserved and unassigned, on those portions of the Common Areas designated by Landlord for parking. Tenant shall not use more parking spaces than
such number. All parking spaces shall be used only for parking of vehicles no larger than full size passenger automobiles, sports utility vehicles or pickup trucks. Tenant shall not permit or allow
any vehicles that belong to or are controlled by Tenant or Tenant's employees, suppliers, shippers, customers or invitees to be loaded, unloaded or parked in areas other than those designated by
Landlord for such activities. If Tenant permits or allows any of the prohibited activities described above, then Landlord shall have the right, without notice, in addition to such other rights and
remedies that Landlord may have, to remove or tow away the vehicle involved and charge the costs to Tenant. Parking within the Common Areas shall be limited to striped parking stalls, and no parking
shall be permitted in any driveways, access ways or in any area which would prohibit or impede the free flow of traffic within the Common Areas. There shall be no parking of any vehicles for longer
than seven (7) consecutive days unless otherwise authorized by Landlord, and vehicles which have been abandoned or parked in violation of the terms hereof may be towed away at the owner's
expense. Nothing contained in this Lease shall be deemed to create liability upon Landlord for any damage to motor vehicles of visitors or employees, for any loss of property from within those motor
vehicles, or for any injury to Tenant, its visitors or employees, unless ultimately determined to be caused by the active negligence or willful misconduct of Landlord, or Landlord's employees,
authorized agents or contractors. Landlord shall have the right to establish, and from time to time amend, and to enforce against all users all reasonable rules and regulations (including the
designation of areas for employee parking) that Landlord may deem necessary and advisable for the proper and efficient operation and maintenance of parking within the Common Areas. Landlord shall have
the right to construct, maintain and operate lighting facilities within the parking areas; to change the area, level, location and arrangement of the parking areas and improvements therein; to
restrict parking by tenants, their officers, agents and employees to employee parking areas; after the expiration of the initial 84-month Term of this Lease, to enforce parking charges (by
operation of meters or otherwise); and to do and perform such other acts in and to the parking areas and improvements therein as, in the use of good business judgment, Landlord shall determine to be
advisable. Any person using the parking area shall observe all directional signs and arrows and any posted speed limits. In no event shall Tenant interfere with the use and enjoyment of the parking
area by other tenants of the Project or their employees or invitees. Parking areas shall be used only for parking vehicles. Washing, waxing, cleaning or servicing of vehicles, or the storage of
vehicles for longer than 48-hours, is prohibited unless otherwise authorized by Landlord. Tenant shall be liable for any damage to the parking areas caused by Tenant or Tenant's employees,
suppliers, shippers, customers or invitees, including without limitation damage from excess oil leakage. Tenant shall have no right to install any fixtures, equipment or personal property in the
parking areas. 

17

 

        SECTION 6.5.    CHANGES AND ADDITIONS BY LANDLORD.    Landlord reserves the right to make alterations or additions to
the Building or the Project, or to the attendant fixtures, equipment and Common Areas. Landlord may at any time relocate or remove any of the various buildings, parking areas, and other Common Areas,
and may add buildings and areas to the Project from time to time. No change shall entitle Tenant to any abatement of rent or other claim against Landlord, provided that the change does not deprive
Tenant of reasonable access to or use of the Premises. Notwithstanding the foregoing, no change by Landlord to the Common Areas shall: (i) materially impair access to and from the Premises from
the parking areas, (ii) reduce the number of Tenant's parking spaces granted under this Lease, or (iii) otherwise unreasonably interfere with Tenant's access to and use of the Premises,
the
parking areas and the Common Areas adjacent to the Building in any material manner without Tenant's prior written consent, which shall not be unreasonably withheld. 

ARTICLE VII. MAINTAINING THE PREMISES  

        SECTION 7.1.    TENANT'S MAINTENANCE AND REPAIR.    Tenant at its sole expense shall repair and maintain and make all
appropriate replacements necessary to keep the Premises in the condition as existed on the Commencement Date (or on any later date that the improvements may have been installed), excepting ordinary
wear and tear and casualty, including without limitation all interior glass, doors, door closures, hardware, fixtures, HVAC systems and equipment serving the Premises, electrical, plumbing, fire
extinguisher equipment and other equipment installed in the Premises, all Alterations constructed by Tenant pursuant to Section 7.3 below, and all of the "Tenant Improvements" installed by
Tenant pursuant to the Work Letter. In no event, however, shall Tenant be responsible for capitalized replacements exceeding the amount of Ten Thousand Dollars ($10,000.00) in cost per replacement, or
for any repairs required of Landlord pursuant to Sections 2.2 or 2.4. Any damage or deterioration of the Premises shall not be deemed ordinary wear and tear if the same could have been prevented by
good maintenance practices by Tenant. As part of its maintenance obligations hereunder, Tenant shall provide all janitorial services to the Premises and, at Landlord's request, shall provide Landlord
with copies of all maintenance schedules, reports and notices prepared by, for or on behalf of Tenant. All repairs and replacements shall, unless otherwise permitted in this Lease, be at least equal
in quality to the original work, taking into account ordinary wear and tear, and shall be made only by a licensed contractor, which contractor, for repairs or replacements exceeding $50,000.00, shall
be approved in writing in advance by Landlord, not to be unreasonably withheld or delayed. Any contractor utilized by Tenant shall be subject to Landlord's standard requirements for contractors
attached hereto as Exhibit H, as reasonably modified from time to time. Landlord may impose reasonable restrictions and requirements with respect
to repairs, as provided in Section 7.3, and the provisions of Section 7.4 shall apply to all repairs. If Tenant fails to properly maintain and/or repair the Premises as herein provided
following Landlord's notice and the expiration of the applicable cure period (or earlier if Landlord determines that such work must be performed prior to such time in order to avoid damage to the
Premises or Building or other detriment), then Landlord may elect, but shall have no obligation, to perform any repair or maintenance required hereunder on behalf of Tenant and at Tenant's expense,
and Tenant shall reimburse Landlord upon demand for all reasonable costs incurred upon submission of an invoice. Notwithstanding anything to the contrary in this Section 7.1, Tenant may, by
giving Landlord not less than sixty (60) days prior written notice, elect to have Landlord assume Tenant's obligations under this Section 7.1 for repair and maintenance of the HVAC
systems and equipment serving the Premises. 

        SECTION 7.2.    LANDLORD'S MAINTENANCE AND REPAIR.    Subject to Section 7.1 and Article XI, Landlord
shall maintain in good operating condition and repair all parts of the Premises that are not Tenant's obligation under Section 7.1 and all areas outside of the Premises including, without
limitation, all portions and elements of the roof (including sky lights and related seals), foundations, footings, the exterior surfaces of the exterior walls of the Building (including exterior glass
and doors), structural walls, passenger and freight elevators and the structural, life/safety, electrical and 

18

 

mechanical
systems (except for HVAC systems and equipment) in or serving the Building, except that Tenant at its expense shall make all repairs which Landlord deems reasonably necessary as a result of
the act or negligence of Tenant, its agents, employees, invitees, subtenants or contractors. Landlord shall have the right to employ or designate any reputable person or firm, including any employee
or agent of Landlord or any of Landlord's affiliates or divisions, to perform any service, repair or maintenance function. Landlord need not make any other improvements or repairs except as
specifically required under this Lease, and nothing contained in this Section shall limit Landlord's right to reimbursement from Tenant for reasonable maintenance, repair costs and replacement costs
as provided elsewhere in this Lease (but subject to any limitations therein provided). Tenant understands that it shall not make repairs at Landlord's expense or by rental offset. Tenant further
understands that Landlord shall not be required to make any repairs to the roof, foundations, footings, the exterior surfaces of the exterior walls of the Building (excluding exterior glass), or
structural, electrical or mechanical systems unless and until Tenant has notified Landlord in writing of the need for such repair and Landlord shall have a reasonable period of time thereafter to
commence and complete said repair, if warranted. Except as set forth in Sections 2.4 and 4.2 of this Lease, all costs of any maintenance, repairs and replacement on the part of Landlord provided
hereunder shall be considered part of Project Costs. 

        SECTION 7.3.    ALTERATIONS.    Except as otherwise provided in this Section, Tenant shall make no alterations,
additions, fixtures or improvements ("Alterations") to the Premises or the Building without the prior written consent of Landlord, which consent shall
not be unreasonably withheld. Notwithstanding the foregoing, Tenant may make Alterations to the Premises costing less than Fifty Thousand Dollars ($50,000.00) during each calendar year of the Term
without Landlord's consent, provided, however, that any Alterations which require a governmental permit as a prerequisite to the construction thereof, shall require Landlord's prior written consent,
which shall not be unreasonably withheld, and Tenant shall supply an itemized summary to Landlord's property manager, including as-built plans (if applicable), at least annually, of all of
the foregoing Alterations made without Landlord's consent. Notwithstanding anything to the contrary contained in either of the foregoing sentences, without the prior written consent of Landlord which
may be withheld in Landlord's sole and absolute discretion, no Alterations shall: (i) affect the exterior of the Building or outside areas (or be visible from adjoining sites),
(ii) adversely affect or penetrate through any of the structural portions of the Building, including but not limited to the roof, (iii) require any change to the basic floor plan of the
Premises (including, without limitation, the adding of any additional "office" square footage) or any material change to any structural, electrical or mechanical systems of the Premises,
(iv) fail to comply with any applicable governmental requirements or with any governmental permit prerequisite to the construction thereof, (v) result in the Premises requiring building
services beyond the level normally provided to other tenants, (vi) interfere in any manner with the proper functioning of, or Landlord's access to, any mechanical, electrical, plumbing or HVAC
systems, facilities or equipment located in or serving the Building, or (vii) alter or replace Standard Improvements with a Non-Standard Improvement. In the event that any requested
Alteration involves the use of lesser quality materials or less stringent specifications than the building standard materials and specifications attached hereto as  Exhibit I ("Standard Improvements"), Landlord may withhold consent to such Alteration in its sole
and absolute discretion. In the event Landlord so consents to the use of lesser quality materials or less stringent specifications than the Standard Improvements (such use being referred to as a
"Non-Standard Improvement"), Tenant shall be responsible for the cost of replacing such Non-Standard Improvement with the
applicable Standard Improvement ("Replacements"), which Replacements shall be completed prior to the Expiration Date or earlier termination of this
Lease. Landlord may impose any reasonable condition to its consent, including but not limited to reasonable requirements as to the manner and time of performance of such work, but not including a lien
and completion bond unless: (A) Tenant's current Statements show a net worth less than the Statements of Tenant at lease execution, and
(B) such Alterations cost in excess of Two Hundred Fifty Thousand 

19

 

Dollars
($250,000.00). Landlord shall in all events, whether or not Landlord's consent is required, have the right to reasonably approve the contractor performing the installation and removal of
Alterations and Replacements and Tenant shall not permit any contractor not approved by Landlord to perform any work on the Premises or on the Building. The restriction set forth in the preceding
sentence shall not apply if the cost of such Alteration or Replacement is less than Fifty Thousand Dollars ($50,000.00). Tenant shall obtain all required permits for the installation and removal of
Alterations and Replacements and shall perform the installation and removal of Alterations and Replacements in compliance with all applicable laws, regulations and ordinances, including without
limitation the Americans with Disabilities Act, all covenants, conditions and restrictions affecting the Project, and the Rules and Regulations as described in Article XVII. Tenant understands
and agrees that Landlord shall be entitled to a supervision fee for any Alterations either requiring a permit from the City of San Diego or affecting any mechanical, electrical, plumbing or HVAC
systems, facilities or equipment located in or serving the Building, in the following amounts: (i) five percent (5%) of the cost of such Alterations costing less than Fifty Thousand Dollars
($50,000.00), or (ii) for Alterations costing more than Fifty Thousand Dollars ($50,000.00), the sum of Two Thousand Five Hundred Dollars ($2,500.00)
plus one percent (1%) of the cost of such Alterations (not to exceed the aggregate amount of Fifteen Thousand Dollars ($15,000.00)), plus Landlord's actual and reasonable costs of its mechanical
and/or electrical engineers to review such Alterations. Under no circumstances shall Tenant make any Alterations or Replacements which incorporate any Hazardous Materials, including without limitation
asbestos-containing construction materials into the Premises, the Building or the Common Area. If any governmental entity requires, as a condition to any proposed Alterations by Tenant, that
improvements be made to the Common Areas, and if Landlord consents to such improvements to the Common Areas (which consent may be withheld in the sole and absolute discretion of Landlord), then Tenant
shall, at Tenant's sole expense, make such required improvements to the Common Areas in such manner, utilizing such materials, and with such contractors, architects and engineers as Landlord may
require in its reasonable discretion. Any request for Landlord's consent to any proposed Alterations shall be made in writing and shall contain architectural plans describing the work in detail
reasonably satisfactory to Landlord. Landlord may elect to cause its architect to review Tenant's architectural plans, and the reasonable cost of that review shall be reimbursed by Tenant. Should the
work proposed by Tenant and consented to by Landlord modify the basic floor plan of the Premises, then Tenant shall, at its expense, furnish Landlord with as-built drawings and CAD disks
compatible with Landlord's systems and standards. Unless Landlord otherwise agrees in writing, all Alterations made or affixed to the Premises, the Building or to the Common Area (but excluding trade
fixtures, personal property, equipment and furniture, including, but not limited to, laboratory equipment and benching and emergency generators which shall remain the property of Tenant), shall become
the property of Landlord and shall be surrendered with the Premises at the end of the Term; except that Landlord may, as provided in the next succeeding paragraph of this Section 7.3, require
Tenant to remove by the Expiration Date or sooner termination date of this Lease, all or any of the Alterations installed either by Tenant or by Landlord at Tenant's request, and to repair any damage
to the Premises, the Building or the Common Area arising from that removal and restore the Premises to their condition prior to making such Alterations, reasonable wear and tear and casualty excepted. 

        As
of the Expiration Date or earlier termination date of this Lease, Landlord shall have the right to require Tenant to remove any Alterations made by Tenant to the Premises and to
replace same with the applicable Replacements, whether or not Landlord's consent was required. Notwithstanding anything to the contrary in this Section 7.3, if at the time of requesting
Landlord's consent to any such Alterations or if prior to commencing any Alterations for which Landlord's consent is not required, Tenant shall request in writing whether or not Landlord shall require
such Alterations to be so removed and replaced as of the Expiration Date or earlier termination date of this Lease, then Landlord's right to require Tenant to so remove and replace such Alterations
shall be exercised, if at all, at the time of Landlord's consent thereto. 

20

 

        As
used in this Section 7.3, "Alterations" do not include the Tenant Improvements to be constructed by Tenant pursuant to the attached Work Letter. 

        SECTION 7.4.    MECHANIC'S LIENS.    Tenant shall keep the Premises free from any liens arising out of any work
performed, materials furnished, or obligations incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly (but in no event later than ten (10) business days following such
request) cause any such lien to be released by posting a bond in accordance with California Civil Code Section 3143 or any successor statute. In the event that Tenant shall not, within thirty
(30) days following the imposition of any lien, cause the lien to be released of record by payment or posting of a proper bond, Landlord shall have, in addition to all other available remedies,
the right to cause the lien to be released by any means it deems proper, including payment of or defense against the claim giving rise to the lien. All reasonable expenses so incurred by Landlord,
including Landlord's attorneys' fees, and any direct damages incurred by Landlord proximately caused by such lien, shall be reimbursed by Tenant upon demand, together with interest from the date of
payment by Landlord at the per annum rate of ten percent (10%) not to exceed the maximum rate permitted by law until paid. Tenant shall give Landlord no less than ten (10) business days prior
notice in writing before commencing construction of any kind on the Premises or Common Area and shall again notify Landlord that construction has commenced, such notice to be given on or about the
actual date on which construction commences, so that Landlord may post and maintain notices of nonresponsibility on the Premises or Common Area, as applicable, which notices Landlord shall have the
right to post and which Tenant agrees it shall not disturb. Tenant shall also provide Landlord notice in writing within ten (10) days following the date on which such work is substantially
completed. The provisions of this Section shall expressly survive the expiration or sooner termination of this Lease. 

        SECTION 7.5.    ENTRY AND INSPECTION.    Landlord shall at all reasonable times, upon at least 24 hours prior
written or oral notice (except in emergencies, when no notice shall be required) have the right to enter the Premises to inspect them, to supply services in accordance with this Lease, to have access
to install, repair, maintain, replace or remove all electrical and mechanical installations of Landlord and to protect the interests of Landlord in the Premises, and to submit the Premises to
prospective or actual purchasers or encumbrance holders (or, during the last one hundred and eighty (180) days of the Term or when an uncured Tenant Event of Default exists, to prospective
tenants), all without being deemed to have caused an eviction of Tenant and without abatement of rent except as provided elsewhere in this Lease. Landlord shall have the right, if desired, to retain a
key which unlocks all of the doors in the Premises, excluding Tenant's vaults and safes, and Landlord shall have the right to use any and all means which Landlord may deem proper to open the doors in
an emergency in order to obtain entry to the Premises, and any entry to the Premises obtained by Landlord shall not under any circumstances be deemed to be a forcible or unlawful entry into, or a
detainer of, the Premises, or any eviction of Tenant from the Premises. 

        SECTION 7.6.    COMMUNICATIONS EQUIPMENT.    Landlord hereby grants to Tenant a non-exclusive license (the
"License") to install, maintain and operate on the roof of the Building one or more antenna or satellite dishes not exceeding forty-eight inches (48")
in height (the "Antenna") in accordance with and subject to the terms and conditions set forth below. The Antenna shall be installed at a location
designated by Landlord and reasonably acceptable to Tenant ("Licensed Area"). The Licensed Area shall be considered to be a part of the Premises for all
purposes under the Lease, and except as otherwise expressly provided in this Section 7.6 all provisions applicable to the use of the Premises under the Lease shall apply to the Licensed Area
and its use by Tenant. 

        (1)   The
Term of the License shall be coterminous with this Lease; 

        (2)   Tenant
shall not be obligated to pay any license fee for the use of the Licensed Area pursuant to this Section 7.7 during the Term of this Lease. 

21

 

        (3)   Tenant
shall use the Licensed Area only for the installation, operation, repair, replacement and maintenance of the Antenna and the necessary mechanical and electrical
equipment to service said Antenna and for no other use or purpose. The installation of the Antenna and all equipment and facilities related thereto, including any required conduit from the Premises to
the Antenna, shall be deemed to constitute an alteration subject to the provisions of Section 7.3 of the Lease, provided that Landlord shall not unreasonably withhold its approval of the same.
Landlord may require appropriate screening for the Antenna as a condition of Landlord's approval of the installation of the Antenna. Tenant may have access to the Licensed Area for such uses during
normal business hours and at times upon reasonable prior notice to Landlord and shall reimburse Landlord for any reasonable out-of-pocket expenses incurred by Landlord in
connection therewith; 

        (4)   The
Antenna shall be used only for transmitting and/or receiving data, audio and/or video signals to and from Tenant's facilities within the Premises for Tenant's use,
and shall not be used or permitted to be used by Tenant for purposes of broadcasting signals to the public or to provide telecommunications or other communications transmitting or receiving services
to any third parties as a commercial business; 

        (5)   Landlord
reserves the right upon reasonable prior written notice to Tenant to require the removal of any and all of such equipment should Landlord reasonably determine
that its presence results in material damage to the Building unless Tenant makes satisfactory arrangements to protect Landlord therefrom; 

        (6)   Tenant
shall require its employees, when using the Licensed Area, to stay within the immediate vicinity thereof. In addition, in the event any communications system or
broadcast or receiving facilities are operating in the area, Tenant shall at all times during the term of the License conduct its operations so as to ensure that such system or facilities shall not be
subjected to harmful interference as a result of such operations by Tenant. Upon notification from Landlord of any such interference, Tenant agrees to immediately take the necessary steps to correct
such situation, and Tenant's failure to do so shall be deemed a default under the terms of this License, as a result of which Landlord may terminate the License on five (5) days notice, and
Tenant shall remove the Antenna. 

        (7)   During
the term of the License, Tenant shall comply with any standards promulgated by applicable governmental authorities or otherwise reasonably established by Landlord
regarding the generation of electromagnetic fields. Should Landlord determine in good faith at any time that the Antenna poses a health or safety hazard to occupants of the Building, Landlord may
require Tenant to make arrangements satisfactory to Landlord to mitigate such hazard or, if Tenant either fails or is unable to make such satisfactory arrangements, to remove the Antenna. Any claim or
liability resulting from the use of the Antenna or the Licensed Area shall be subject to the indemnification provisions of this Lease applicable to Tenant's use of the Premises; 

        (8)   During
the term of the License, Tenant shall pay all taxes attributable to the Antenna and other equipment owned and installed by Tenant, and Tenant shall assure and
provide Landlord with evidence that the Licensed Area and Tenant's use thereof are subject to the insurance coverages otherwise required to be maintained by Tenant as to the Premises pursuant to  Exhibit D; and 

        (9)   Upon
the expiration or sooner termination of the Lease, Tenant shall remove the Antenna and all related equipment and facilities, including any conduit from the Premises
to the Antenna, from the Licensed Area and any other portions of the Building within or upon which the same may be installed, and shall restore the Licensed Area and all other areas affected by such
removal to their original condition, reasonable wear and tear excepted, all at its sole cost and expense. 

        SECTION 7.7.    EMERGENCY GENERATORS.    Landlord acknowledges that Tenant desires to install as part of the Tenant
Improvements up to two (2) emergency generators in or about the Building (the "Generators") in the locations shown on  Exhibit F attached hereto.
Provided such 

22

 

installation
complies with all laws, Landlord approves Tenant's installation of the Generators as part of the Tenant Improvements. 

ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY  

        Tenant shall be liable for and shall pay, prior to delinquency, all taxes and assessments levied against all personal property of Tenant located in the Premises,
and, if required by Landlord, against all Non-Standard Improvements to the Premises (as defined in Section 7.3) made by Landlord or Tenant, and against any Alterations (as defined
in Section 7.3) made to the Premises or the Building by or on behalf of Tenant. If requested by Landlord, Tenant shall cause its personal property, Non-Standard Improvements and
Alterations to be assessed and billed separately from the real property of which the Premises form a part. If any taxes required to be paid by Tenant on Tenant's personal property,
Non-Standard Improvements and/or Alterations are levied against Landlord or Landlord's property and if Landlord pays the same, or if the assessed value of Landlord's property is increased
by the inclusion of a value placed upon the personal property, Non-Standard Improvements and/or Alterations and if Landlord pays the taxes based
upon the increased assessment, Landlord shall have the right to require that Tenant pay to Landlord the taxes so levied against Landlord or the proportion of the taxes resulting from the increase in
the assessment. In calculating what portion of any tax bill which is assessed against Landlord separately, or Landlord and Tenant jointly, is attributable to Tenant's Non-Standard
Improvements, Alterations and personal property, Landlord's reasonable determination shall be conclusive. At Tenant's request, Landlord shall provide Tenant with the basis and rationale for such
allocation. 

ARTICLE IX. ASSIGNMENT AND SUBLETTING  

        SECTION 9.1.    RIGHTS OF PARTIES.    

        (a)   Notwithstanding
any provision of this Lease to the contrary, and except as to transfers expressly permitted without Landlord's consent pursuant to Section 9.4,
Tenant will not, either voluntarily or by operation of law, assign, sublet, encumber, or otherwise transfer all or any part of Tenant's interest in this Lease or the Premises, or permit the Premises
to be occupied by anyone other than Tenant, without Landlord's prior written consent, which consent shall not unreasonably be withheld or conditioned in accordance with the provisions of
Section 9.1(b). No assignment (whether voluntary, involuntary or by operation of law) and no subletting shall be valid or effective without Landlord's prior written consent and, at Landlord's
election, any such assignment or subletting shall be void and of no force and effect and any such attempted assignment or subletting shall constitute an Event of Default of this Lease if not cured
within thirty (30) days of written notice from Landlord. Landlord shall not be deemed to have given its consent to any assignment or subletting by any course of action other than written
consent. To the extent not prohibited by provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq., (the
"Bankruptcy Code"), including Section 365(f)(1), Tenant on behalf of itself and its creditors, administrators and assigns waives the
applicability of Section 365(e) of the Bankruptcy Code unless the proposed assignee of the Trustee for the estate of the bankrupt meets Landlord's standard for consent as set forth in
Section 9.1(b) of this Lease. If this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy Code, any and all monies or other considerations to be delivered in
connection with the assignment shall be delivered to Landlord, shall be and remain the exclusive property of Landlord and shall not constitute property of Tenant or of the estate of Tenant within the
meaning of the Bankruptcy Code. Any person or entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to have assumed all of the obligations arising
under this Lease on and after the date of the assignment, and shall upon demand execute and deliver to Landlord an instrument confirming that assumption. 

        (b)   If
Tenant desires to transfer an interest in this Lease or the Premises, it shall first notify Landlord of its desire and shall submit in writing to Landlord:
(i) the name and address of the 

23

 

proposed
transferee; (ii) the nature of any proposed transferee's business to be carried on in the Premises; (iii) the terms and provisions of any proposed sublease, assignment or other
transfer, including a copy of the proposed assignment, sublease or transfer form; (iv) evidence that the proposed assignee, subtenant or transferee will comply with the requirements of  Exhibit D hereto; (v) a completed Environmental Questionnaire from the proposed assignee, subtenant or transferee; (vi) any other
information requested by Landlord and reasonably related to the transfer and (vii) the fee described in Section 9.1(e). Except as provided in Section 9.1 (c), Landlord shall not
unreasonably withhold or condition its consent, provided that the parties agree that it shall be reasonable for Landlord to withhold and/or condition its consent if: (1) the use of the Premises
will not be consistent with the provisions of this Lease; (2) a proposed subtenant or assignee has not demonstrated to the reasonable satisfaction of Landlord that it is financially responsible
or has failed to submit to Landlord all reasonable information as requested by Landlord (following execution of a commercially reasonable non-disclosure agreement, if required by the
proposed subtenant or assignee) concerning the proposed subtenant or assignee, including, but not limited to, a certified balance sheet of the proposed subtenant or assignee as of a date within one
hundred eighty (180) days of the request for Landlord's consent, statements of income or profit and loss of the proposed subtenant or assignee for the two-year period preceding the
request for Landlord's consent, and/or a certification signed by the proposed subtenant or assignee that it has not been evicted or been in arrears in rent at any other leased premises for the
3-year period preceding the request for Landlord's consent; (3) the proposed assignee or subtenant is an existing tenant of the Building or Project or a prospect with whom Landlord
is actively negotiating to become a tenant at the Building or Project; or (4) the proposed transfer will impose adverse tax effects on Landlord for which Landlord will not be fully compensated.
Tenant's exterior signage rights are personal to Tenant and may not be assigned or transferred to any assignee of this Lease or subtenant of the Premises. 

        Notwithstanding
the foregoing, Tenant may assign its exterior signage rights in connection with an assignment of this Lease or a subletting of more than fifty percent (50%) of the Floor
Area of the Premises that is consented to by Landlord or in connection with a Permitted Transfer (as defined below); provided, however, that Landlord shall have the right of prior approval that such
signage continues to comply with the Sign Criteria and the other requirements of Section 5.2 of this Lease, and provided further that any name and/or graphics on such signage do not materially
devalue the Project as determined by Landlord in its sole and absolute discretion. 

        If
Landlord consents to the proposed transfer, Tenant may within ninety (90) days after the date of the consent effect the transfer upon the terms described in the information
furnished to Landlord; provided that any material change in the terms shall be subject to Landlord's consent as set forth in this Section 9.1. Landlord shall approve or disapprove any requested
transfer within fifteen (15) business days following receipt of Tenant's written request, the information set forth above, and the fee set forth below. 

        (c)   Notwithstanding
the provisions of Section 9.1(b) above, in lieu of consenting to a proposed assignment of this Lease or to a proposed subletting of more than
fifty percent (50%) of the Floor Area of the Premises for all or substantially all of the then-remaining Term of this Lease, Landlord may elect, within the fifteen (15) business day
period permitted for Landlord to approve or disapprove a requested transfer, to (i) sublease the Premises (or the portion proposed to be so subleased), or take an assignment of Tenant's
interest in this Lease, upon substantially the same terms as offered to the proposed subtenant or assignee (excluding terms relating to the purchase of trade fixtures, furniture and equipment,
personal property, the use of Tenant's name or the continuation of Tenant's business), or (ii) terminate this Lease as to the portion of the Premises proposed to be so subleased or assigned
with a proportionate abatement in the rent payable under this Lease in which case Tenant shall have no further liability for Basic Rent or Operating Expenses accruing from and after the effective date
of such termination with respect to such portion of the Premises, effective thirty (30) days following 

24

 

written
notice by Landlord of its election to so sublease or terminate. Landlord may thereafter, at its option, assign, sublet or re-let any space so sublet, obtained by assignment or
obtained by termination to any third party, including without limitation the proposed transferee of Tenant. 

        (d)   In
the event that Landlord approves the requested assignment or subletting, Tenant agrees that fifty percent (50%) of any amounts actually paid by the assignee or
subtenant, however described, in excess of (i) the Basic Rent payable by Tenant hereunder, or in the case of a sublease of a portion of the Premises, in excess of the Basic Rent and Operating
Expenses reasonably allocable to such portion as determined by Landlord, plus (ii) Tenant's direct out-of-pocket costs which Tenant certifies to Landlord have been
incurred to provide occupancy related services or other costs to such assignee or subtenant of a nature commonly provided by landlords of similar space (e.g. brokerage commissions, improvement
allowances, etc., actually incurred by Tenant), shall be the property of Landlord and such amounts shall be payable directly to Landlord by the assignee or subtenant or, at Landlord's option, by
Tenant within ten (10) days of Tenant's receipt thereof. Landlord shall have the right to review or audit the books and records of Tenant, or have such books and records reviewed or audited by
an outside accountant, to confirm any such direct out-of-pocket costs. In the event that such direct out-of-pocket costs claimed by Tenant are
overstated by more than five percent (5%), Tenant shall reimburse Landlord for any of Landlord's costs related to such review or audit. At Landlord's request, a commercially reasonable written
agreement shall be entered into by and among Tenant, Landlord and the proposed assignee or subtenant confirming the requirements of this Section 9.1(d). 

        (e)   Tenant
shall pay to Landlord a fee equal to the greater of (i) Landlord's actual and reasonable costs related to such assignment, subletting or other transfer or
(ii) Five Hundred Dollars ($500.00), to process any request by Tenant for an assignment, subletting or other transfer under this Lease. Tenant shall pay Landlord the sum of Five Hundred Dollars
($500.00) concurrently with Tenant's request for consent to any assignment, subletting or other transfer, and Landlord shall have no obligation to consider such request unless accompanied by such
payment. Tenant shall pay Landlord upon demand any costs in excess of such payment to the extent Landlord's actual costs related to such request exceeds $500.00. Such fee is hereby acknowledged as a
reasonable amount to reimburse Landlord for its costs of review and evaluation of a proposed transfer. 

        SECTION 9.2.    EFFECT OF TRANSFER.    Except for a termination elected by Landlord pursuant to Subsection
9.1(c)(ii) above, no subletting or assignment, even with the consent of Landlord, shall relieve Tenant of its obligation to pay rent and to perform all its other obligations under this Lease.
Moreover, Tenant shall indemnify and hold Landlord harmless, as provided in Section 10.3, for any act or omission by an assignee or subtenant. Each assignee, other than Landlord, shall assume
all obligations of Tenant under this Lease and shall be liable jointly and severally with Tenant for the payment of all rent, and for the due performance of all of Tenant's obligations, under this
Lease. No assignment or subletting shall be effective or binding on Landlord unless documentation in form and substance satisfactory to Landlord in its reasonable discretion evidencing the transfer,
and in the case of an assignment, the assignee's assumption of the obligations of Tenant under this Lease, is delivered to Landlord and both the assignee/subtenant and Tenant deliver to Landlord a
commercially reasonable executed consent to transfer instrument prepared by Landlord and consistent with the requirements of this Article. The acceptance by Landlord of any payment due under this
Lease from any other person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any transfer. Consent by Landlord to one or more transfers shall not
operate as a waiver or estoppel to the future enforcement by Landlord of its rights under this Lease or as a consent to any subsequent transfer. 

        SECTION 9.3.    SUBLEASE REQUIREMENTS.    The following terms and conditions shall apply to any subletting by Tenant
of all or any part of the Premises and shall be deemed included in each sublease: 

25

 

        (a)   Except
as expressly otherwise agreed by Landlord in its written consent to such sublease, the sublease and/or any subletting by Tenant shall be subject and subordinate
to this Lease. 

        (b)   Tenant
hereby irrevocably assigns to Landlord all of Tenant's interest in all rentals and income arising from any sublease of the Premises, and Landlord may collect such
rent and income and apply same toward Tenant's obligations under this Lease during the pendency of any Event of Default; provided, however, that unless there is an uncured Event of Default by Tenant,
Tenant shall have the right to receive and collect the sublease rentals. At Tenant's request, not more frequently than quarterly, Landlord shall supply Tenant with the gross amounts of any such
sublease rentals so collected by Landlord to date and the application of such subrentals so collected to amounts then due under the Lease. Landlord shall not, by reason of this assignment or the
collection of sublease rentals, be deemed liable to the subtenant for the performance of any of Tenant's obligations under the sublease. Tenant hereby irrevocably authorizes and directs any subtenant,
upon receipt of a written notice from Landlord stating that an uncured Event of Default exists in the performance of Tenant's obligations under this Lease, to pay to Landlord all sums then and
thereafter due under the sublease. Tenant agrees that the subtenant may rely on that notice without any duty of further inquiry and notwithstanding any notice or claim by Tenant to the contrary. 

        (c)   In
the event of the termination of this Lease for any reason, including without limitation as the result of an Event of Default by Tenant or by the mutual agreement of
Landlord and Tenant, Landlord may, at its sole option, take over Tenant's entire interest in any sublease and, upon notice from Landlord, the subtenant shall attorn to Landlord. In no event, however,
shall Landlord be liable for any previous act or omission by Tenant under the sublease or for the return of any advance rental payments or deposits under the sublease that have not been actually
delivered to Landlord, nor shall Landlord be bound by any sublease modification executed without Landlord's consent or for any advance rental payment by the subtenant in excess of one month's rent.
The general provisions of this Lease, including without limitation those pertaining to insurance and indemnification, shall be deemed incorporated by reference into the sublease despite the
termination of this Lease. In the event Landlord does not elect to take over Tenant's interest in a sublease in the event of any such termination of this Lease, such sublease shall terminate
concurrently with the termination of this Lease and such subtenant shall have no further rights under such sublease and Landlord shall have no obligations to such subtenant. 

        SECTION 9.4.    CERTAIN TRANSFERS.    The following shall be deemed to constitute an assignment of this Lease:
(a) the sale of all or substantially all of Tenant's assets (other than bulk sales in the ordinary course of business), or (b) the transfer, assignment or hypothecation of any stock or
interest in Tenant to a single entity which constitutes more than fifty percent (50%) of Tenant's voting stock. Notwithstanding the foregoing, Landlord's consent shall not be required for the
assignment of this Lease to: (A) any person(s) or entity who controls, is controlled by or is under common control with Tenant, (B) to any entity resulting from the merger, consolidation
or other reorganization with Tenant, whether or not Tenant is the surviving entity, or (C) to any person or legal entity which acquires all or substantially all of the assets or stock of Tenant
(each of the foregoing is hereinafter referred to as "Permitted Transfer"), so long as (i) the net worth of the successor or reorganized entity
after such Permitted Transfer is at least equal to the net worth of Tenant as of the execution of this Lease by Landlord, evidence of which, reasonably satisfactory to Landlord, shall be presented to
Landlord prior to such Permitted Transfer, (ii) Tenant shall provide to Landlord, prior to such Permitted Transfer, written notice of such Permitted Transfer and such assignment documentation
and other information as Landlord may reasonably require in connection therewith, and (iii) all of the other terms and requirements Section 9.2 and 9.3 (but  not of Section 9.1) shall
apply with respect to such assignment. For purposes of this Section 9.4, a public or private offering of Tenant
debt or equity shall not be deemed an assignment of this Lease. 

26

 

ARTICLE X. INSURANCE AND INDEMNITY  

        SECTION 10.1.    TENANT'S INSURANCE.    Tenant, at its sole cost and expense, shall provide and maintain in effect the
insurance described in Exhibit D. Evidence of that insurance must be delivered to Landlord prior to the Commencement Date. 

        SECTION 10.2.    LANDLORD'S INSURANCE.    Landlord shall provide property insurance coverage insuring the full
replacement cost of the Building, including all Tenant Improvements constructed pursuant to the attached Work Letter, with or without deductible and in amounts and coverages appropriate and consistent
with industry standards as reasonably determined by Landlord and subject to standard exclusions (such as, but not limited to, earthquake and flood exclusions) (the "Property
Policy"), and commercial general liability insurance with or without deductible and in amounts and coverages appropriate and consistent with industry standards as reasonably
determined by Landlord (the "Liability Policy"). In addition, Landlord may, at its election, obtain insurance for such other risks as Landlord or its
mortgages may from time to time deem appropriate in its sole discretion, including without limitation, coverage for earthquake and flood. Landlord shall not be required to carry insurance of any kind
on Tenant's Alterations or on Tenant's other property, including, without limitation, Tenant's trade fixtures, furnishings, equipment, signs and all other items of personal property, and Landlord
shall not be obligated to repair or replace that property should damage occur. All proceeds of insurance maintained by Landlord upon the Building and/or Project shall be the property of Landlord,
whether or not Landlord is obligated to or elects to make any repairs. At Landlord's option, Landlord may self-insure all or any portion of the risks for which Landlord is required or
elects to provide insurance hereunder; provided, however, that in the event The Irvine Company, or any affiliate thereof, is no longer the "Landlord" under this Lease, such successor Landlord must
demonstrate to Tenant a net worth of at least One Hundred Million Dollars ($100,000,000.00) to continue to self-insure such risks. 

        SECTION 10.3.    JOINT INDEMNITY.    

        (a)   To
the fullest extent permitted by law, Tenant shall defend, indemnify, protect, save and hold harmless Landlord, its agents, and any and all affiliates of Landlord,
including, without limitation, any corporations or other entities controlling, controlled by or under common control with Landlord, from and against any and all claims, liabilities, costs or expenses
arising either before or after the Commencement Date from Tenant's use or occupancy of the Premises, the Building or the Common Areas, or from the conduct of its business, or from any activity, work,
or thing done, permitted or suffered by Tenant or its agents, employees, invitees or licensees in or about the Premises, the Building or the Common Areas, or from any Event of Default in the
performance of any obligation on Tenant's part to be performed under this Lease, or from any act or negligence of Tenant or its agents, employees, visitors, patrons, guests, invitees or licensees.
Tenant shall assume Landlord's defense in any action covered by this Section through counsel reasonably satisfactory to Landlord. The provisions of this Section 10.3(a) shall expressly survive
the expiration or sooner termination of this Lease. Tenant's obligations under this Section shall not apply in the event that the claim, liability, cost or expense (i) is caused by the active
negligence or willful misconduct of Landlord, Landlord's employees, contractors or authorized agents; or (ii) (1) relates to an obligation of Landlord hereunder and (2) is of the
nature that Landlord had actual knowledge of the condition; or (iii) that is Landlord's responsibility to indemnify Tenant pursuant to Section 10.3(b) below. 

        (b)   To
the fullest extent permitted by law, but subject to the express limitations on liability contained in this Lease (including, without limitation, the provisions of
Sections 10.4, 10.5 and 14.8 of this Lease), Landlord shall defend, indemnify, protect, save and hold harmless Tenant, its agents and any and all affiliates of Tenant, including without limitation,
any corporations, or other entities controlling, controlled by or under common control with Tenant, from and against any and all claims, liabilities, costs or expenses arising either before or after
the Commencement Date that occurs in 

27

 

connection
with the operation, maintenance and repair of the Common Areas of the Project and (i) is caused by the active negligence or willful misconduct of Landlord, Landlord's employees,
contractors or authorized agents; or (ii) (1) relates to an obligation of Landlord hereunder and (2) is of the nature that Landlord had actual knowledge of the condition. The
provisions of this Section 10.3(b) shall expressly survive the expiration or sooner termination of this Lease. 

        SECTION 10.4.    LANDLORD'S NONLIABILITY.    Subject to the express indemnity obligations contained in
Section 10.3(b) of this Lease and such other applicable provisions of this Lease (including, without limitation, Landlord's right to self-insure pursuant to Section 10.2
above), Landlord shall not be liable to Tenant, its employees, agents and invitees, and Tenant hereby waives all claims against Landlord for personal injury or any other loss, cost, damage, injury or
liability whatsoever resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak or flow from or into any part of the Premises or from the breakage, leakage,
obstruction or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning, electrical works or other fixtures in the Building. Notwithstanding any provision of this Lease to
the contrary, including, without limitation, the provisions of Section 10.3(b) of this Lease, Landlord shall in no event be liable to Tenant, its employees, agents, and invitees, and Tenant
hereby waives all claims against Landlord, for (i) loss or interruption of Tenant's business or income (including, without limitation, any consequential damages and lost profit or opportunity
costs), or (ii) any other loss, cost, damage, injury or liability resulting from Acts of God (except with respect to restoration obligations pursuant to Article XI below), acts of civil
disobedience or insurrection, acts or omissions (criminal or otherwise) of any third parties (other than Landlord's employees or authorized agents), including without limitation, any other tenants
within the Project or their agents, employees, contractors, guests or invitees. It is understood that any such condition may require the temporary evacuation or closure of all or a portion of the
Building. Landlord shall have no liability (including without limitation consequential damages and lost profit or opportunity costs) and, except as provided in Sections 6.1, 11.1 and 12.1 below, there
shall be no abatement of rent, by reason of any injury to or interference with Tenant's business arising from the making of any repairs, alterations or improvements to any portion of the Building,
including repairs to the Premises, nor shall any related activity by Landlord constitute an actual or constructive eviction; provided, however, that in making repairs, alterations or improvements,
Landlord shall interfere as little as reasonably practicable with the conduct of Tenant's business in the Premises. Should Tenant elect to receive any service or products from a concessionaire,
licensee or third party tenant of Landlord, Landlord shall have no liability for any services or products so provided or for any breach of contract by such third party provider. Neither Landlord nor
its agents shall be liable for interference with light or other similar intangible interests. Tenant shall immediately notify Landlord in case of fire or accident in the Premises or the Building and
of matters related to the condition of the Premises or Building that pose a material threat to the safety or health of persons in or around the Premises or Building. 

        SECTION 10.5.    WAIVER OF SUBROGATION.    Notwithstanding anything to the contrary contained in this Lease, Landlord
and Tenant each hereby waives all rights of recovery against the other and the other's agents on account of loss and damage occasioned to the property of such waiving party to the extent that the
waiving party is entitled to proceeds for such loss or damage under any property insurance policies carried or required to be carried by the provisions of this Lease (including, without limitation,
the Property Policy carried by Landlord, regardless of whether Landlord self-insures such coverage); provided however, that the foregoing waiver shall not apply to the extent of Tenant's
obligations to pay deductibles under any such policies and this Lease. By this waiver it is the intent of the parties that neither Landlord nor Tenant shall be liable to any insurance company (by way
of subrogation or otherwise) insuring the other party for any loss or damage insured against under any property insurance policies contemplated by this Lease, even though such loss or damage might be
occasioned by the negligence of such party, its agents, employees, contractors, guests or invitees. 

28

 

ARTICLE XI. DAMAGE OR DESTRUCTION  

        SECTION 11.1.    RESTORATION.    

        (a)   If
the Premises or the Building or a part thereof are materially damaged by any fire, flood, earthquake or other casualty (including but not limited to, the
contamination of the Premises and/or the Building by Hazardous Materials not caused or knowingly permitted by Tenant or by any Tenant Party which contamination renders the Premises unsafe for
occupancy by Tenant), then Landlord shall have the right to terminate this Lease upon written notice to Tenant if: (i) Landlord reasonably determines that proceeds necessary to pay the full
cost of repair is not available from Landlord's Property Policy (regardless of whether Landlord self-insures such coverage), or from any earthquake insurance carried by Landlord, plus such
additional amounts Tenant elects, at its option, to contribute, excluding however the deductible (for which Tenant shall be responsible for Tenant's Share); (ii) Landlord reasonably determines
that the Premises cannot, with reasonable diligence, be fully repaired by Landlord (or cannot be safely repaired because of the presence of hazardous factors, including without limitation Hazardous
Materials, earthquake faults, and other similar dangers) within two hundred seventy (270) days after the date of the damage; (iii) an uncured monetary Event of Default by Tenant has
occurred; or (iv) the material damage occurs during the final twelve (12) months of the Term. Landlord shall notify Tenant in writing ("Landlord's
Notice") within sixty (60) days after the damage occurs as to (A) whether Landlord is terminating this Lease as a result of such material damage and (B) if
Landlord is not terminating this Lease, the number of days within which Landlord has estimated that the Premises, with reasonable diligence, are likely to be fully repaired. In the event Landlord
elects to terminate this Lease, this Lease shall terminate as of the date specified for termination by Landlord's Notice (which termination date shall in no event be later than sixty (60) days
following the date of the damage, or, if no such date is specified, such termination shall be the date of Landlord's Notice). 

        (b)   If
Landlord has the right to terminate this Lease pursuant to Section 11.1(a) and does not elect to so terminate this Lease, and provided that at the time of
Landlord's Notice no uncured monetary Event of Default exists, then within twenty (20) days following delivery of Landlord's Notice pursuant to Section 11.1(a), Tenant may elect to
terminate this Lease by written notice to Landlord, but only if (i) Landlord's Notice specifies that Landlord has determined that the Premises cannot be repaired, with reasonable diligence,
within two hundred seventy (270) days after the date of damage or (ii) the casualty has occurred within the final twelve (12) months of the Term and such material damage has a
materially adverse impact on Tenant's continued use of the Premises. If Tenant fails to provide such termination notice within such twenty (20) day period, Tenant shall be deemed to have waived
any termination right under this Section 1l.1(b) or any other applicable law. 

        (c)   In
the event that neither Landlord nor Tenant terminates this Lease pursuant to this Section 11.1 as a result of material damage to the Building or Premises
resulting from a casualty, Landlord shall repair all material damage to the Premises or the Building as soon as reasonably possible and this Lease shall continue in effect for the remainder of the
Term. Subject to any provision to the contrary in the Work Letter, such repair by Landlord shall include repair of material damage to the Tenant Improvements constructed pursuant to the Work Letter,
so long as insurance proceeds from insurance required to be carried by Tenant are made available to Landlord. Landlord shall have the right, but not the obligation, to repair or replace any other
leasehold improvements made by Tenant or any Alterations (as defined in Section 7.3) constructed by Tenant. If Landlord elects to repair or replace such leasehold improvements and/or
Alterations, all insurance proceeds available for such repair or replacement shall be made available to Landlord (to the extent expended for such repair and/or replacement by Landlord). Landlord shall
have no liability to Tenant in the event that the Premises or the Building has not been fully repaired within the time period specified by Landlord in Landlord's Notice to Tenant as described in
Section 11.1(a). Notwithstanding the foregoing, the repair 

29

 

of
damage to the Premises to the extent such damage is not material shall be governed by Sections 7.1 and 7.2. 

        (d)   In
the event the Lease is not terminated by Landlord or Tenant as provided in this Article XI, commencing on the date of such material damage to the Building, and
ending on the sooner of the date the damage is repaired or the date this Lease is terminated, the Basic Rent and Operating Expenses to be paid under this Lease shall be abated in the same proportion
that the Floor Area of the Premises that is rendered unusable by the damage from time to time bears to the total Floor Area of the Premises, as reasonably determined by Landlord, provided that Tenant
is then carrying the rental loss insurance required of Tenant pursuant to Exhibit D. 

        (e)   Except
as provided in Section 11.1(c), Landlord shall not be required to repair or replace any of Tenant's furniture, trade fixtures or equipment or any Tenant
Improvement or Alteration. 

        (f)    Tenant
shall fully cooperate with Landlord in removing Tenant's personal property and any debris from the Premises to facilitate all inspections of the Premises and the
making of any repairs. Notwithstanding anything to the contrary contained in this Lease, if Landlord in good faith believes there is a risk of injury to persons or damage to property from entry into
the Building or Premises following any damage or destruction thereto, Landlord may restrict entry into the Building or the Premises by Tenant, its employees, agents and contractors in a
non-discriminatory manner, without being deemed to have violated Tenant's rights of quiet enjoyment to, or made an unlawful detainer of, or evicted Tenant from, the Premises. Upon request,
Landlord shall consult with Tenant to determine if there are safe methods of entry into the Building or the Premises solely in order to allow Tenant to retrieve files, data in computers, and necessary
inventory, subject however to all indemnities and waivers of liability from Tenant to Landlord contained in this Lease and any additional indemnities and waivers of liability which Landlord may
require. 

        SECTION 11.2.    LEASE GOVERNS.    Tenant agrees that the provisions of this Lease, including without limitation
Section 11.1, shall govern any damage or destruction and shall accordingly supersede any contrary statute or rule of law. 

ARTICLE XII. EMINENT DOMAIN  

        SECTION 12.1.    TOTAL OR PARTIAL TAKING.    If all or a material portion of the Building is taken by any lawful
authority by exercise of the right of eminent domain, or sold to prevent a taking, either Tenant or Landlord may terminate this Lease effective as of the date possession is required to be surrendered
to the authority. For purposes of this Article XII, a material portion of the Building shall be enough that, in Tenant's good faith judgment, the part of the Building that remains cannot,
within a reasonable period of time, be made reasonably suitable for the continued operation of Tenant's business. In the event title to a portion of the Building or Project, whether or not including a
portion of the Premises, is taken or sold in lieu of taking, and if Landlord elects to restore the Building in such a way as to alter the Premises materially, either party may terminate this Lease, by
written notice to the other party, effective on the date of vesting of title. In the event neither party has elected to terminate this Lease as provided above, then Landlord shall promptly, after
receipt of a sufficient condemnation award, proceed to restore the Premises to substantially their condition prior to the taking, and a proportionate allowance shall be made to Tenant for the Basic
Rent and Operating Expenses corresponding to the time during which, and to the part of the Premises of which, Tenant is deprived on account of the taking and restoration. In the event of a taking,
Landlord shall be entitled to the entire amount of the condemnation award without deduction for any estate or interest of Tenant; provided that nothing in this Section shall be deemed to give Landlord
any interest in, or prevent Tenant from seeking any award against the taking authority for, the taking of personal property and fixtures belonging to Tenant or for relocation or business interruption
expenses recoverable from the taking authority. 

30

 

        SECTION 12.2.    TEMPORARY TAKING.    No temporary taking of the Premises shall terminate this Lease or give Tenant
any right to abatement of rent, and any award specifically attributable to a temporary taking of the Premises shall belong entirely to Tenant. A temporary taking shall be deemed to be a taking of the
use or occupancy all or any part of the Building for a period of not to exceed thirty (30) days. 

        SECTION 12.3.    TAKING OF PARKING AREA.    In the event there shall be a taking of the parking area such that
Landlord can no longer provide sufficient parking to comply with this Lease, Landlord may substitute reasonably equivalent parking in a location reasonably close to the Building at no cost to Tenant;
provided that if Landlord fails to make that substitution within fifteen (15) days following the taking and if the taking materially impairs Tenant's use and enjoyment of the Premises, Tenant
may, at its option, terminate this Lease by written notice to Landlord. If this Lease is not so terminated by Tenant, there shall be no abatement of rent and this Lease shall continue in effect. 

ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS  

        SECTION 13.1.    SUBORDINATION.    At the option of Landlord or any lender of Landlord's that obtains a security
interest in the Building, this Lease shall be either superior or subordinate to all ground or underlying leases, mortgages and deeds of trust, if any, which may hereafter affect the Building, and to
all renewals, modifications, consolidations, replacements and extensions thereof; provided, that so long as no Event of Default exists under this Lease, Tenant's possession and quiet enjoyment of the
Premises shall not be disturbed and this Lease shall not terminate in the event of termination of any such ground or underlying lease, or the foreclosure of any such mortgage or deed of trust, to
which this Lease has been subordinated pursuant to this Section. Tenant shall execute and deliver any commercially reasonable documents or agreements requested by Landlord or such lessor or lender
which provide Tenant with the non-disturbance protections set forth in this Section. In the event of a termination or foreclosure, Tenant shall become a tenant of and attorn to the
successor-in-interest to Landlord upon the same terms and conditions as are contained in this Lease, and shall execute any instrument reasonably required by Landlord's
successor for that purpose. Tenant shall also, upon written request of Landlord, execute and deliver all commercially reasonable instruments as may be required from time to time to subordinate the
rights of Tenant under this Lease to any ground or underlying lease or to the lien of any mortgage or deed of trust (provided that such instruments include the nondisturbance and attornment provisions
set forth above), or, if requested by Landlord, to subordinate, in whole or in part, any ground or underlying lease or the lien of any mortgage or deed of trust to this Lease. Tenant agrees that any
purchaser at a foreclosure sale or lender taking title under a deed-in-lieu of foreclosure shall not be responsible for any act or omission of a prior landlord, shall not be
subject to any offsets or defenses Tenant may have against a prior landlord, and shall not be liable for the return of the security deposit to the extent it is not actually received by such purchaser
or bound by any rent paid for more than the current month in which the foreclosure occurred. Landlord shall use its reasonable diligence to obtain the instrument described in the foregoing from the
holder of any ground or underlying lease and/or of any mortgage or deed of trust of record as of the execution of this Lease. 

        Within
sixty (60) days of the execution hereof, as a condition precedent to Tenant's obligations under this Lease, Landlord shall deliver to Tenant executed and notarized
nondisturbance agreements in writing from any lenders whose debt is secured by all or a portion of the Project, in form and content provided for in the applicable underlying financing documents,
stating that so long as Tenant is not in default under any of the terms, covenants, conditions, or agreements of this Lease, this Lease and all of the terms, provisions, and conditions of this Lease,
shall remain in full force and effect, and neither this Lease, nor Tenant's rights nor Tenant's possession of the Premises will be disturbed during the Term of this Lease or any extension thereof.
Tenant shall reimburse Landlord for, or shall pay 

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directly,
all costs assessed by said lender (in excess of One Thousand Dollars ($1,000.00)) in connection with obtaining such nondisturbance agreement(s). 

        SECTION 13.2.    ESTOPPEL CERTIFICATE.    

        (a)   Tenant
shall, at any time upon not less than ten (10) business days prior written notice from Landlord, execute, acknowledge and deliver to Landlord, in any form
that Landlord may reasonably require, a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of the modification
and certifying that this Lease, as modified, is in full force and effect) and the dates to which the rental, additional rent and other charges have been paid in advance, if any, and
(ii) acknowledging that, to Tenant's knowledge, there are no uncured defaults on the part of Landlord, or specifying each default if any are claimed, and (iii) setting forth all further
information regarding this Lease and/or Tenant's occupancy of the Premises that Landlord or any purchaser or encumbrancer may reasonably require. Tenant's statement may be relied upon by any
prospective purchaser or encumbrancer of all or any portion of the Building or Project. 

        (b)   Notwithstanding
any other rights and remedies of Landlord, Tenant's failure to deliver any estoppel statement required by the provisions of Section 13.2(a) above
within the provided time shall be conclusive upon Tenant that (i) this Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) there are no
uncured Events of Default in Landlord's performance, and (iii) not more than one month's rental (excluding the Security Deposit) has been paid in advance. 

        SECTION 13.3.    FINANCIALS.    

        (a)   Tenant
has delivered to Landlord prior to the execution of this Lease, and shall deliver to Landlord at any time upon not less than ten (10) business days prior
written notice from Landlord, Tenant's audited financial statements, including a balance sheet and profit and loss statement for the most recent prior year for which such statements are available
(collectively, the "Statements"), which Statements shall accurately and completely reflect the financial condition of Tenant. Landlord agrees that it
will keep the Statements confidential, except that Landlord shall have the right to deliver the same to any proposed purchaser of the Building or Project (provided that Landlord shall require that any
such proposed purchaser execute a confidentiality agreement, in commercially reasonable form, requiring that the Statement be kept confidential), and to any encumbrancer of all or any portion of the
Building or Project (provided that Landlord shall request such encumbrancer to keep such Statements confidential). Notwithstanding the foregoing, in the event Tenant shall become a publicly-traded
corporation whose stock is traded on a nationally recognized exchange or on NASDAQ, the "Statements" shall consist of Tenant's most recently publicly disclosed financial statements. 

        (b)   Tenant
acknowledges that Landlord is relying on the Statements in its determination to enter into this Lease, and Tenant represents to Landlord, which representation
shall be deemed made on the date of this Lease, that no material adverse change in the financial condition of Tenant, as reflected in the Statements, has occurred since the date Tenant delivered the
Statements to Landlord. The Statements are represented and warranted by Tenant to be correct and to accurately and fully reflect Tenant's true financial condition as of, and for the periods presented
in, such Statements provided to Landlord. 

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   ARTICLE XIV. EVENTS OF DEFAULT AND REMEDIES  

        SECTION 14.1.    TENANT'S DEFAULTS.    In addition to any other breaches of this Lease which are defined as Events of
Default in this Lease, the occurrence of any one or more of the following events shall constitute an Event of Default by Tenant: 

        (a)   The
failure by Tenant to make any payment of Basic Rent or additional rent required to be made by Tenant, as and when due, where the failure continues for a period of
five (5) days after written notice from Landlord to Tenant; provided, however, that any such notice shall be in lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 and 1161(a) as amended. For purposes of these Events of Default and remedies provisions, the term "additional rent"
shall be deemed to include all amounts of any type whatsoever other than Basic Rent to be paid by Tenant pursuant to the terms of this Lease. 

        (b)   The
assignment, sublease, encumbrance or other transfer of this Lease by Tenant, either voluntarily or by operation of law, whether by judgment, execution, transfer by
intestacy or testacy, or other means, without the prior written consent of Landlord when consent is required by this Lease. 

        (c)   The
discovery by Landlord that any of the Statements provided by Tenant was materially and adversely false. 

        (d)   The
failure of Tenant to timely and fully provide any subordination agreement, estoppel certificate or financial statements in accordance with the requirements of
Article XIII. 

        (e)   The
failure or inability by Tenant to observe or perform any of the express or implied covenants or provisions of this Lease to be observed or performed by Tenant, other
than as specified in this Section 14.1, where the failure continues for a period of thirty (30) days after written notice from Landlord to Tenant or such shorter period as is specified
in any other provision of this Lease; provided, however, that any such notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure
Section 1161 and 1161(a) as amended. However, if the nature of the failure is such that more than thirty (30) days are reasonably required for its cure, then Tenant shall not be deemed
to have committed an Event of Default if Tenant commences the cure within thirty (30) days, and thereafter diligently pursues the cure to completion. 

        (f)    (i) The
making by Tenant of any general assignment for the benefit of creditors; (ii) the filing by or against Tenant of a petition to have Tenant adjudged
a Chapter 7 debtor under the Bankruptcy Code or to have debts discharged or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed
against Tenant, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, if possession is not restored to Tenant within sixty (60) days; (iv) the attachment, execution or other judicial seizure of substantially
all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where the seizure is not discharged within sixty (60) days; or (v) Tenant's convening of a meeting
of its creditors for the purpose of effecting a moratorium upon or composition of its debts. Landlord shall not be deemed to have knowledge of any event described in this Section 14.1(f) unless
notification in writing is received by Landlord, nor shall there be any presumption attributable to Landlord of Tenant's insolvency. In the event that any provision of this Section 14.1(f) is
contrary to applicable law, the provision shall be of no force or effect. 

        SECTION 14.2.    LANDLORD'S REMEDIES.    

        (a)   If
an Event of Default by Tenant occurs, then in addition to any other remedies available to Landlord, Landlord may exercise the following remedies: 

          (i)  Landlord
may terminate Tenant's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender
possession of the 

33

 

Premises
to Landlord. Such termination shall not affect any accrued obligations of Tenant under this Lease. Upon termination, Landlord shall have the right to reenter the Premises and remove all
persons and property. Landlord shall also be entitled to recover from Tenant: 

        (1)   The
worth at the time of award of the unpaid Basic Rent and additional rent which had been earned at the time of termination; 

        (2)   The
worth at the time of award of the amount by which the unpaid Basic Rent and additional rent which would have been earned after termination until the time of award
exceeds the amount of such loss that Tenant proves could have been reasonably avoided; 

        (3)   The
worth at the time of award of the amount by which the unpaid Basic Rent and additional rent for the balance of the Term after the time of award exceeds the amount of
such loss that Tenant proves could be reasonably avoided; 

        (4)   Any
other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in
the ordinary course of things would be likely to result from Tenant's Event of Default, including, but not limited to, the cost of recovering possession of the Premises, refurbishment of the Premises,
marketing costs, commissions and other expenses of reletting, including necessary repair, the unamortized portion of any tenant improvements and brokerage commissions funded by Landlord in connection
with this Lease, reasonable attorneys' fees, and any other reasonable costs; and 

        (5)   The
term "rent" as used in the Lease shall be deemed to mean the Basic Rent, Tenant's Share of Operating Expenses and any other sums required to be paid by Tenant to
Landlord pursuant to the terms of this Lease, including, without limitation, any sums that may be owing from Tenant pursuant to Section 4.3 of this Lease. Any sum, other than Basic Rent, shall
be computed on the basis of the average monthly amount accruing during the twenty-four (24) month period immediately prior to the Event of Default, except that if it becomes
necessary to compute such rental before the twenty-four (24) month period has occurred, then the computation shall be on the basis of the average monthly amount during the shorter
period. As used in Sections 14.2(a)(i) (1) and (2) above, the "worth at the time of award" shall be computed by allowing interest at the rate of ten percent (10%) per annum. As
used in Section 14.2(a)(i)(3) above, the "worth at the time of award" shall be computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time
of award plus one percent (1%). 

         (ii)  Landlord
may elect not to terminate Tenant's right to possession of the Premises, in which event Landlord may continue to enforce all of its rights and remedies under
this Lease, including the right to collect all rent as it becomes due. Efforts by the Landlord to maintain, preserve or relet the Premises, or the appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a termination of the Tenant's right to possession of the Premises. In the event that Landlord elects to avail itself of the remedy provided by this
Section 14.2(a)(ii), Landlord shall not unreasonably withhold its consent to an assignment or subletting of the Premises subject to the reasonable standards for Landlord's consent as are
contained in this Lease. 

        (b)   Landlord
shall be under no obligation to observe or perform any covenant of this Lease on its part to be observed or performed which accrues after the date of any Event
of Default by Tenant unless and until the Event of Default is cured by Tenant, it being understood and agreed that the performance by Landlord of its obligations under this Lease are expressly
conditioned upon Tenant's full and timely performance of its obligations under this Lease. The various rights and remedies 

34

 

reserved
to Landlord in this Lease or otherwise shall be cumulative and, except as otherwise provided by California law, Landlord may pursue any or all of its rights and remedies at the same time. 

        (c)   No
delay or omission of Landlord to exercise any right or remedy shall be construed as a waiver of the right or remedy of any Event of Default by Tenant. The acceptance
by Landlord of rent shall not be a (i) waiver of any preceding Event of Default by Tenant of any provision of this Lease, other than the failure of Tenant to pay the particular rent accepted,
regardless of Landlord's knowledge of the preceding Event of Default at the time of acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy available to Landlord by
virtue of the Event of Default. The acceptance of any payment from a debtor in possession, a trustee, a receiver or any other person acting on behalf of Tenant or Tenant's estate shall not waive or
cure an Event of Default under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser amount than the rent required by this Lease shall be deemed to be other than a partial
payment on account of the earliest due stipulated rent, nor shall any endorsement or statement on any check or letter be deemed an accord and satisfaction and Landlord shall accept the check or
payment without prejudice to Landlord's right to recover the balance of the rent or pursue any other remedy available to it. No act or thing done by Landlord or Landlord's agents during the Term shall
be deemed an acceptance of a surrender of the Premises, and no agreement to accept a surrender shall be valid unless in writing and signed by Landlord. No employee of Landlord or of Landlord's agents
shall have any power to accept the keys to the Premises prior to the termination of this Lease, and the delivery of the keys to any employee shall not operate as a termination of this Lease or a
surrender of the Premises. 

        SECTION 14.3.    LATE PAYMENTS.    

        (a)   Any
payment due to Landlord under this Lease, including without limitation Basic Rent, Tenant's Share of Operating Expenses or any other payment due to Landlord under
this Lease, that is not received by Landlord within five (5) days following the date due shall bear interest at the maximum per annum rate of ten percent (10%) not to exceed the rate permitted
by law from the date due until fully paid. The payment of interest shall not cure any Event of Default by Tenant under this Lease. In addition, Tenant acknowledges that the late payment by Tenant to
Landlord of Basic Rent and Tenant's Share of Operating Expenses will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult and
impracticable to ascertain. Those costs may include, but are not limited to, administrative, processing and accounting charges, and late charges which may be imposed on Landlord by the terms of any
ground lease, mortgage or trust deed covering the Premises. Accordingly, if any Basic Rent or Tenant's Share of Operating Expenses due from Tenant shall not be received by Landlord or Landlord's
designee within five (5) days following the date due, then Tenant shall pay to Landlord, in addition to the interest provided above, a late charge, which the Tenant agrees is reasonable, in a
sum equal to the greater of five percent (5%) of the amount overdue or Two Hundred Fifty Dollars ($250.00) for each delinquent payment; provided, however, that Landlord shall waive such late fee in
connection with the initial late payment by Tenant. Acceptance of a late charge alone by Landlord shall not constitute a waiver of Tenant's Event of Default with respect to the overdue amount, nor
shall it prevent Landlord from exercising any of its other rights and remedies. 

        (b)   Following
each second installment of Basic Rent and/or the payment of Tenant's Share of Operating Expenses within any twelve (12) month period that is not paid
within five (5) days following the date due, Landlord shall have the option to require that beginning with the first payment of Basic Rent next due, Basic Rent and the Tenant's Share of
Operating Expenses shall no longer be paid in monthly installments but shall be payable quarterly three (3) months in advance. Should Tenant deliver to Landlord, at any time during the Term,
two (2) or more insufficient checks, the Landlord may require that all monies then and thereafter due from Tenant be paid to Landlord by cashier's check or wire transfer. If any check for any
payment to Landlord hereunder is returned by the bank for any reason, such payment shall not be deemed to have been received by Landlord and Tenant shall be 

35

 

responsible
for any applicable late charge, interest payment and the charge to Landlord by its bank for such returned check. Nothing in this Section shall be construed to compel Landlord to accept
Basic Rent, Tenant's Share of Operating Expenses or any other payment from Tenant if there exists an Event of Default unless such payment fully cures any and all such Event of Default. Any acceptance
of any such payment shall not be deemed to waive any other right of Landlord under this Lease. Any payment by Tenant to Landlord may be applied by Landlord, in its sole and absolute discretion, in any
order determined by Landlord to any amounts then due to Landlord. 

        SECTION 14.4.    RIGHT OF LANDLORD TO PERFORM.    All covenants and agreements to be performed by Tenant under this
Lease shall be performed at Tenant's sole cost and expense and without any abatement of rent or right of set-off. If Tenant fails to pay any sum of money due under this Lease, other than
rent payable to Landlord, or fails to perform any other act on its part to be performed under this Lease, and the failure continues beyond any applicable grace period set forth in Section 14.1,
then in addition to any other available remedies, Landlord may, at its election make the payment or perform the other act on Tenant's part and Tenant hereby grants Landlord the right to enter onto the
Premises in order to carry out such performance. Landlord's election to make
the payment or perform the act on Tenant's part shall not give rise to any responsibility of Landlord to continue making the same or similar payments or performing the same or similar acts nor shall
Landlord be responsible to Tenant for any damage caused to Tenant as the result of such performance by Landlord. Tenant shall, promptly upon demand by Landlord, reimburse Landlord for all reasonable
sums paid by Landlord and all necessary incidental costs, together with interest at the per annum rate of ten percent (10%) not to exceed the maximum rate permitted by law from the date of the payment
by Landlord. Landlord shall provide Tenant with written notice and the appropriate cure period provided in this Lease before performing any act on behalf of Tenant. 

        SECTION 14.5.    DEFAULT BY LANDLORD.    Landlord shall not be deemed to be in default in the performance of any
obligation under this Lease, and Tenant shall have no rights to take any action against Landlord, unless and until Landlord has failed to perform the obligation within thirty (30) days after
written notice by Tenant to Landlord specifying in reasonable detail the nature and extent of the failure; provided, however, that if the nature of Landlord's obligation is such that more than thirty
(30) days are required for its performance, then Landlord shall not be deemed to be in default if it commences performance within the thirty (30) day period and thereafter diligently
pursues the cure to completion. In the event of Landlord's default under this Lease, Tenant's sole remedies shall be to seek damages or specific performance from Landlord, provided that any damages
shall be limited to Tenant's actual out-of-pocket expenses and shall in no event include any consequential damages, lost profits or opportunity costs; provided, however, if
Landlord fails to commence and diligently pursue a cure to its default with respect to an item or condition that threatens the health or safety of persons in or around the Building, Tenant may take
all reasonable actions to resolve the issue and seek its actual out-of-pocket damages so incurred against Landlord. Tenant may resort to its sole remedies cumulatively or in
the alternative. 

        SECTION 14.6.    EXPENSES AND LEGAL FEES.    All sums reasonably incurred by Landlord in connection with any Event of
Default by Tenant under this Lease or holding over of possession by Tenant after the expiration or earlier termination of this Lease, or any action related to a filing for bankruptcy or reorganization
by Tenant, including without limitation all costs, expenses and actual accountants, appraisers, attorneys and other professional fees, and any reasonable collection agency or other collection charges,
shall be due and payable to Landlord on demand, and shall bear interest at the rate of ten percent (10%) per annum not to exceed the maximum rate permitted by law. Should either Landlord or Tenant
bring any action in connection with this Lease, the prevailing party shall be entitled to recover as a part of the action its reasonable attorneys' fees, and all other reasonable costs. The prevailing
party for the purpose of this Section shall be determined by the trier of the facts. 

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        SECTION 14.7.    WAIVER OF JURY TRIAL.    LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS
AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY
MATTERS WHATSOEVER ARISING OUT
OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE. FURTHERMORE, THIS WAIVER AND RELEASE OF ALL RIGHTS TO A JURY TRIAL IS
DEEMED TO BE INDEPENDENT OF EACH AND EVERY OTHER PROVISION, COVENANT, AND/OR CONDITION SET FORTH IN THIS LEASE.

        SECTION 14.8.    SATISFACTION OF JUDGMENT.    The respective obligations of Landlord and Tenant do not constitute the
personal obligations of the individual partners, trustees, directors, officers or shareholders of Landlord or Tenant, respectively or their constituent partners. Should Tenant recover a money judgment
against Landlord, such judgment shall be satisfied only from the interest of Landlord in the Project and out of the rent or other income from such property receivable by Landlord or out of
consideration received by Landlord from the sale or other disposition of all or any part of Landlord's right, title or interest in the Project and no action for any deficiency may be sought or
obtained by Tenant. The provisions of the foregoing sentence shall not apply, however, to: (i) proceeds from insurance coverage required of Landlord pursuant to Section 10.2 of this
Lease, (ii) Landlord's obligation to carry insurance coverage pursuant to Section 10.2 to the extent that Landlord elects to "self-insure" such coverage, and
(iii) Landlord's obligation to fund the Access Control Allowance, the Floor Surface Allowance and/or the Landlord's Contribution (as defined in the Work Letter) pursuant to the applicable
provisions of this Lease. 

ARTICLE XV. END OF TERM  

        SECTION 15.1.    HOLDING OVER.    This Lease shall terminate without further notice upon the expiration of the Term,
and any holding over by Tenant after the expiration shall not constitute a renewal or extension of this Lease, or give Tenant any rights under this Lease, except when in writing signed by both
parties. Any period of time following the Expiration Date or earlier termination of this Lease required for Tenant to remove its property or to place the Premises in the condition required pursuant to
Section 15.3 (or for Landlord to do so if Tenant fails to do so) shall be deemed a holding over by Tenant. If Tenant holds over for any period after the Expiration Date (or earlier termination)
of the Term without the prior written consent of Landlord, such possession shall constitute a tenancy at sufferance only and an Event of Default under this Lease; such holding over with the prior
written consent of Landlord shall constitute a month-to-month tenancy commencing on the first (1st) day following the termination of this Lease and terminating thirty
(30) days following delivery of written notice of termination by either Landlord or Tenant to the other. In either of such events, possession shall be subject to all of the terms of this Lease,
except that for the initial two (2) months of holdover the monthly Basic Rent shall be one hundred fifty percent (150%) of the Basic Rent for the month immediately preceding the date of
termination, and thereafter the monthly Basic Rent shall be the greater of (a) one hundred fifty percent (150%) of the Basic Rent for the month immediately preceding the date of termination or
(b) the then currently scheduled Basic Rent for comparable space in the Project. The acceptance by Landlord of monthly holdover rental in a lesser amount shall not constitute a waiver of
Landlord's right to recover the full amount due for any holdover by Tenant, unless otherwise agreed in writing by Landlord. If Tenant fails to surrender the Premises upon the expiration of this Lease
despite demand to do so by Landlord, Tenant shall indemnify and hold Landlord harmless from all loss or liability, including without limitation, any claims made by any succeeding tenant relating to
such failure to surrender. The foregoing provisions of this Section are in 

37

 

addition
to and do not affect Landlord's right of re-entry or any other rights of Landlord under this Lease or at law. 

        SECTION 15.2.    MERGER ON TERMINATION.    The voluntary or other surrender of this Lease by Tenant, or a mutual
termination of this Lease, shall terminate any or all existing subleases unless Landlord, at its option, elects in writing to treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises. 

        SECTION 15.3.    SURRENDER OF PREMISES; REMOVAL OF PROPERTY.    Subject to the provisions of 7.3 of this Lease, upon
the Expiration Date or upon any earlier termination of this Lease, Tenant shall quit and surrender possession of the Premises to Landlord in as good order, condition and repair as of the date of
substantial completion of the Tenant Improvements by Tenant or as hereafter may be improved by Landlord or Tenant, reasonable wear and tear, casualty and repairs which are Landlord's obligation
excepted, and shall, without expense to Landlord, remove or cause to be removed from the Premises all personal property, trade fixtures (including, without limitation, laboratory benches and equipment
and the Generators) and debris, except for any items that Landlord may by written authorization allow to remain. Tenant shall repair all damage to the Premises resulting from the removal, which repair
shall include the restoration of all electrical and plumbing facilities caused by such removal, the patching and filling of holes and repair of structural damage, provided that Landlord may instead
elect to repair any structural damage and the reasonable costs thereof shall be reimbursed by Tenant. If Tenant shall fail to comply with the provisions of this Section, Landlord may effect the
removal and/or make any repairs, and the cost to Landlord shall be additional rent payable by Tenant upon demand. If Tenant fails to remove Tenant's personal property from the Premises upon the
expiration of the Term, Landlord may remove, store, dispose of and/or retain such personal property, at Landlord's option, in accordance with then applicable laws, all at the expense of Tenant. If
requested by Landlord following the Expiration Date or earlier termination of this Lease, Tenant shall execute, acknowledge and deliver to Landlord an instrument in writing releasing and quitclaiming
to Landlord all right, title and interest of Tenant in the Premises. 

ARTICLE XVI. PAYMENTS AND NOTICES  

        All sums payable by Tenant to Landlord shall be deemed to be rent under this Lease and shall be paid, without deduction or offset, except as expressly provided in
this Lease, in lawful money of the United States to Landlord at its address set forth in Item 12 of the Basic Lease Provisions, or at any other place as Landlord may designate in writing. Unless this
Lease expressly provides otherwise, as for example in the payment of Basic Rent and the Tenant's Share of Operating Expenses pursuant to Sections 4.1 and 4.2, all payments shall be due and payable
within five (5) business days after demand. All payments requiring proration shall be prorated on the basis of a thirty (30) day month and a three hundred sixty (360) day year.
Any notice, election, demand, consent, approval or other communication to be given or other document to be delivered by either party to the other may be delivered in person or by courier or overnight
delivery service to the other party, addressed to the other party at the address set forth in Item 12 of the Basic Lease Provisions. Either party may, by written notice to the other, served in the
manner provided in this Article, designate a different address. If more than one person or entity is named as Tenant under this Lease, service of any notice upon any one of them shall be deemed as
service upon all of them. 

ARTICLE XVII. RULES AND REGULATIONS  

        Tenant agrees to observe faithfully and comply strictly with the Rules and Regulations, attached as  Exhibit E (the "Rules and Regulations"), and any reasonable and nondiscriminatory amendments,
modifications and/or additions as may be adopted and published by written notice to tenants by Landlord for the safety, care, security, good order, or cleanliness of the Premises, Building, Project
and Common Areas, provided that such additional rules and regulations do not materially decrease Tenant's 

38

 

rights
under this Lease or materially increase Tenant's obligations under this Lease. Landlord shall use its commercially reasonable efforts to apply the Rules and Regulations uniformly and on a
non-discriminatory basis, but Landlord shall not be liable to Tenant for any violation of the Rules and Regulations or the breach of any covenant or condition in any lease by any other
tenant or such tenant's agents, employees, contractors, guests or invitees. One or more waivers by Landlord of any breach of the Rules and Regulations by Tenant or by any other tenant(s) shall not be
a waiver of any subsequent breach of that rule or any other. Tenant's failure to keep and observe the Rules and Regulations, following written notice from Landlord and Tenant's failure to cure
pursuant to the applicable provisions of Section 14.1 above, shall constitute an Event of Default. In the case of any conflict between the Rules and Regulations and this Lease, this Lease shall
be controlling. 

ARTICLE XVIII. BROKER'S COMMISSION  

        The parties recognize as the broker(s) who negotiated this Lease the firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease Provisions, and
agree that Landlord shall be responsible for the payment of brokerage commissions to those broker(s) unless otherwise provided in this Lease. Tenant warrants that it has had no dealings with any other
real estate broker or agent in connection with the negotiation of this Lease, and Tenant agrees to indemnify and hold Landlord harmless from any cost, expense or liability (including reasonable
attorneys' fees) for any compensation, commissions or charges claimed by any other real estate broker or agent employed or claiming to represent or to have been employed by Tenant in connection with
the negotiation of this Lease. The foregoing agreement shall survive the termination of this Lease. 

ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST  

        In the event of any transfer of Landlord's interest in the Premises, and the transferee's assumption of the obligations of the Landlord arising from and after the
effective date of such transfer, the transferor shall be automatically relieved of all further obligations on the part of Landlord, (but shall not be relieved of any obligations or liabilities arising
during its ownership of such interest in the Building or Project) and the transferor shall be relieved of any obligation to pay any funds in which Tenant has an interest to the extent that such funds
have been turned over, subject to that interest, to the transferee
and Tenant is notified of the transfer as required by law. No beneficiary of a deed of trust to which this Lease is or may be subordinate, and no landlord under a so-called
sale-leaseback, shall be responsible in connection with the Security Deposit, unless the mortgagee or beneficiary under the deed of trust or the landlord actually receives the Security
Deposit. It is intended that the covenants and obligations contained in this Lease on the part of Landlord shall, subject to the foregoing, be binding on Landlord, its successors and assigns, only
during and in respect to their respective successive periods of ownership. 

ARTICLE XX. INTERPRETATION  

        SECTION 20.1.    GENDER AND NUMBER.    Whenever the context of this Lease requires, the words
"Landlord" and "Tenant" shall include the plural as well as the singular, and words used in neuter,
masculine or feminine genders shall include the others. 

        SECTION 20.2.    HEADINGS.    The captions and headings of the articles and sections of this Lease are for convenience
only, are not a part of this Lease and shall have no effect upon its construction or interpretation. 

        SECTION 20.3.    JOINT AND SEVERAL LIABILITY.    If more than one person or entity is named as Tenant, the obligations
imposed upon each shall be joint and several and the act of or notice from, or notice or refund to, or the signature of, any one or more of them shall be binding on all of 

39

 

them
with respect to the tenancy of this Lease, including, but not limited to, any renewal, extension, termination or modification of this Lease. 

        SECTION 20.4.    SUCCESSORS.    Subject to Articles IX and XIX, all rights and liabilities given to or imposed upon
Landlord and Tenant shall extend to and bind their respective heirs, executors, administrators, successors and assigns. Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns any rights or remedies under this Lease. 

        SECTION 20.5.    TIME OF ESSENCE.    Time is of the essence with respect to the performance of every provision of this
Lease. 

        SECTION 20.6.    CONTROLLING LAW/VENUE.    This Lease shall be governed by and interpreted in accordance with the laws
of the State of California. Any litigation commenced concerning any matters whatsoever arising out of or in any way connected to this Lease shall be initiated in the Superior Court of the county in
which the Project is located. 

        SECTION 20.7.    SEVERABILITY.    If any term or provision of this Lease, the deletion of which would not adversely
affect the receipt of any material benefit by either party or the deletion of which is consented to by the party adversely affected, shall be held invalid or unenforceable to any extent, the remainder
of this Lease shall not be affected and each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. 

        SECTION 20.8.    WAIVER AND CUMULATIVE REMEDIES.    One or more waivers by Landlord or Tenant of any breach of any
term, covenant or condition contained in this Lease shall not be a waiver of any subsequent breach of the same or any other term, covenant or condition. Consent to any act by one of the parties shall
not be deemed to render unnecessary the obtaining of that party's consent to any subsequent act. No breach by either party of this Lease shall be deemed to have been waived by the other party unless
the waiver is in a writing signed by such party. Subject to the express limitations and restrictions contained in this Lease, the rights and remedies of Landlord and Tenant under this Lease shall be
cumulative and in addition to any and all other rights and remedies which such party may have. 

        SECTION 20.9.    INABILITY TO PERFORM.    In the event that either party shall be delayed or hindered in or prevented
from the performance of any work or in performing any act required under this Lease by reason of any cause beyond the reasonable control of that party, other than financial inability, then the
performance of the work or the doing of the act shall be excused for the period of the delay and the time for performance shall be extended for a period equivalent to the period of the delay. The
provisions of this Section shall not operate to excuse Tenant from the prompt payment of rent, or either party from the timely performance of any of their respective obligations under this Lease
within such party's reasonable control. 

        SECTION 20.10.    ENTIRE AGREEMENT.    This Lease and its exhibits and other attachments cover in full each and every
agreement of every kind between the parties concerning the Premises, the Building, and the Project, and all preliminary negotiations, oral agreements, understandings and/or practices, except those
contained in this Lease, are superseded and of no further effect. Tenant waives its rights to rely on any representations or promises made by Landlord or others which are not contained in this Lease.
No verbal agreement or implied covenant shall be held to modify the provisions of this Lease, any statute, law, or custom to the contrary notwithstanding. 

        SECTION 20.11.    QUIET ENJOYMENT.    Upon the observance and performance of all the covenants, terms and conditions
on Tenant's part to be observed and performed, and subject to the other provisions of this Lease, Tenant shall have the right of quiet enjoyment and use of the Premises 

40

 

for
the Term without hindrance or interruption by Landlord or any other person claiming by or through Landlord. 

        SECTION 20.12.    SURVIVAL.    All covenants of Landlord or Tenant which reasonably would be intended to survive the
expiration or sooner termination of this Lease, including without limitation any warranty or indemnity hereunder, shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns. 

        SECTION 20.13.    INTERPRETATION.    This Lease shall not be construed in favor of or against either party, but shall
be construed as if both parties prepared this Lease. 

ARTICLE XXI. EXECUTION AND RECORDING  

        SECTION 21.1.    COUNTERPARTS.    This Lease may be executed in one or more counterparts, each of which shall
constitute an original and all of which shall be one and the same agreement. 

        SECTION 21.2.    CORPORATE, LIMITED LIABILITY COMPANY AND PARTNERSHIP AUTHORITY.    The parties hereto represent and
warrant that they are duly authorized to execute and deliver this Lease, and that this Lease is binding in accordance with its terms. If this Lease is not signed by two officers as provided in
California Corporations Code Section 313, Tenant shall, at Landlord's request, deliver a certified copy of its board of directors' resolution, operating agreement or partnership agreement or
certificate authorizing or evidencing the execution of this Lease. 

        SECTION 21.3.    EXECUTION OF LEASE; NO OPTION OR OFFER.    The submission of this Lease to Tenant shall be for
examination purposes only, and shall not constitute an offer to or option for Tenant to lease the Premises. Execution of this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed and delivered this Lease to Tenant, it being intended that this Lease shall only become effective upon execution by
Landlord and delivery of a fully executed counterpart to Tenant. 

        SECTION 21.4.    RECORDING.    Tenant shall not record this Lease without the prior written consent of Landlord.
Tenant, upon the request of Landlord, shall execute and acknowledge a "short form" memorandum of this Lease for recording purposes. 

        SECTION 21.5.    AMENDMENTS.    No amendment or termination of this Lease shall be effective unless in writing signed
by authorized signatories of Tenant and Landlord, or by their respective successors in interest. No actions, policies, oral or informal arrangements, business dealings or other course of conduct by or
between the parties shall be deemed to modify this Lease in any respect. 

        SECTION 21.6.    EXECUTED COPY.    Any fully executed photocopy or similar reproduction of this Lease shall be deemed
an original for all purposes. 

        SECTION 21.7.    ATTACHMENTS.    All exhibits, amendments, riders and addenda attached to this Lease are hereby
incorporated into and made a part of this Lease. 

ARTICLE XXII. MISCELLANEOUS  

        SECTION 22.1.    NONDISCLOSURE OF LEASE TERMS.    Tenant acknowledges and agrees that the terms of this Lease are
confidential and constitute proprietary information of Landlord. Disclosure of the terms could adversely affect the ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners, officers, directors, employees and attorneys, shall not intentionally and voluntarily disclose, by public filings or
otherwise, the terms and conditions of this Lease ("Confidential Information") to any third party, either directly or indirectly, without the prior written consent of Landlord, which consent may be
given or withheld in Landlord's sole and absolute discretion. The foregoing restriction shall not apply if 

41

 

either:
(i) Tenant is required to disclose the Confidential Information in response to a subpoena or other regulatory, administrative or court order, (ii) independent legal counsel to
Tenant advises that Tenant is required to disclose the Confidential Information to, or file a copy of this Lease with, any governmental agency or any stock exchange; provided however, that in
such event, Tenant shall, before making any such disclosure (A) provide Landlord with prompt written notice of such required disclosure, (B) at Tenant's sole cost, take all commercially
reasonable steps to resist or narrow such requirement, including without limitation preparing and filing a request for confidential treatment of the Confidential Information and (C) if
disclosure of the Confidential Information is required by subpoena or other regulatory, administrative or court order, Tenant shall provide Landlord with as much advance notice of the possibility of
such disclosure as practical so that Landlord may attempt to stop such disclosure or obtain an order concerning such disclosure. In addition, Tenant may disclose the terms of this Lease to prospective
assignees of this Lease and prospective subtenants under this Lease with whom Tenant is actively negotiating such an assignment or sublease. Notwithstanding anything to the contrary, the restrictions
contained in this Section 22.1 shall not apply to the filing of this Lease with the Securities and Exchange Commission in connection with any public offering of securities. 

        SECTION 22.2.    [INTENTIONALLY DELETED]        

        SECTION 22.3.    CHANGES REQUESTED BY LENDER.    If, in connection with obtaining financing for the Project, the
lender shall request reasonable modifications in this Lease as a condition to the financing, Tenant will not unreasonably withhold or delay its consent, provided that the modifications do not
materially increase the obligations nor materially decrease the rights of Tenant, or materially and adversely affect the leasehold interest created by this Lease. 

        SECTION 22.4.    MORTGAGEE PROTECTION.    No act or failure to act on the part of Landlord which would otherwise
entitle Tenant to be relieved of its obligations hereunder shall result in such a release or termination unless (a) Tenant has given notice by registered or certified mail to any beneficiary of
a deed of trust or mortgage covering the Building whose address has been furnished to Tenant and (b) such beneficiary is afforded a reasonable opportunity to cure the default by Landlord (which
in no event shall be less than sixty (60) days), including, if necessary to effect the cure, time to obtain possession of the Building by power of sale or judicial foreclosure provided that
such foreclosure remedy is diligently pursued. Tenant agrees that each beneficiary of a deed of trust or mortgage covering the Building is an express third party beneficiary hereof, Tenant shall have
no right or claim for the collection of any deposit from such beneficiary or from any purchaser at a foreclosure sale unless such beneficiary or purchaser shall have actually received and not refunded
the deposit, and
Tenant shall comply with any written directions by any beneficiary to pay rent due hereunder directly to such beneficiary without determining whether a default exists under such beneficiary's deed of
trust. 

        SECTION 22.5.    [Intentionally Deleted.]        

        SECTION 22.6.    SECURITY MEASURES.    Tenant hereby acknowledges that Landlord shall have no obligation whatsoever to
provide guard service or other security measures for the benefit of the Premises or the Project. Tenant assumes all responsibility for the protection of Tenant, its employees, agents, invitees and
property from acts of third parties. Nothing herein contained shall prevent 

42

 

Landlord,
at its sole option, from providing security protection for the Project or any part thereof, in which event the reasonable cost thereof shall be included within the definition of Project
Costs. 

	LANDLORD:	 	TENANT:
	
THE IRVINE COMPANY	
 	
PROMETHEUS LABORATORIES INC.,

a California corporation
	

By:	

/s/ William R. Halford
 William R. Halford

President, Office Properties	
 	

By:	

/s/ Joseph M. Limber
 Joseph M. Limber

President and Chief Executive Officer
	

By:	

/s/ Steven M. Case
 Steven M. Case, Senior Vice President

Leasing, Office Properties	
 	

By:	

/s/ Michael V. Swanson
 Michael V. Swanson

Vice President, Finance

and Chief Financial Officer

43

THE IRVINE COMPANY  

 9410 Carroll Park Dr.  

        [map of building] 

EXHIBIT A
  to the Lease

Page 1 of 2 

THE IRVINE COMPANY  

 9410 Carroll Park Dr.  

        [map of building] 

EXHIBIT A
  to the Lease

Page 2 of 2 

SCHEDULE A 

Landlord's Work  

        Landlord shall repair and/or replace the following items located in or around the Building and Premises, insuring that such items are in good operating condition: 

	1.
	Central
plant

	a.
	Cooling
tower system, loop chemistry and flow performance—Complete, subject to Note 1 below

	b.
	Boiler
controls, burners and ignition integrity—Complete, subject to Note 1 below

	i.
	Chiller
System #1—Complete, subject to Note 1 below

	ii.
	Chiller
System #2—Landlord shall replace with a 180-ton Turbocor McQuay chiller system. Chiller System #2 shall be installed as the "Lead Chiller
System"—To be completed within sixteen (16) weeks of Lease execution

	c.
	All
circulating pumps—Complete, subject to Note 1 below

	d.
	Controls—Landlord
has installed a new Siemens Control Panel. All points have been tested & verified. Complete, subject to Note 1 below.

	2.
	Building

	a.
	Air
handlers drives/fans and controllers—Complete, subject to Note 1 below

	b.
	VAV
distribution boxes performance and integrity in Existing Office Areas—Complete, subject to Note 1 below

	c.
	Reheat
coils in Existing Office Areas—Complete, subject to Note 1 below

	d.
	Siemens
Building Automation control system including a new computer & printer, software, supporting documentation including, but not limited to, programming printout with point
locations and setpoints, loop control performance integrity in existing office areas—To be completed within four (4) weeks of Lease execution, subject to Note 1 below

	e.
	ADA
Compliance Work as follows, to be completed within eight (8) weeks of Lease Execution:

	i.
	Lower
grab bars in all handicapped stalls. Includes lowering flushometers and wall tile repair

	ii.
	Lower
coat hooks. Plugs will be inserted into removed screw holes

	iii.
	Add
U-shaped pulls

	iv.
	Lower
feminine napkin dispensers. Screw holes to be patched

	v.
	Add
deck-mounted soap dispensers

	vi.
	Adjust
drinking fountains if required.

	3.
	Premises

	a.
	Provide
functional trash/recycle container storage enclosures as set forth in Exhibit F—To be completed by July 30, 2005

	b.
	Provide
functional Hazardous Materials storage enclosures as set forth in Exhibit F—To be completed by July 30, 2005 

        Note 1—Landlord
shall provide written notice of completion of these items after execution and delivery of the Lease. Should Chiller #1 fail to remain in good operating
condition during the forty-five (45) day period after each written notice, Landlord shall repair Chiller #1, provide written notice that Chiller #1 is in good operating condition,
and the forty-five (45) day period shall start over for these items. 

Schedule A

to the Lease 

   EXHIBIT B

THE
IRVINE COMPANY—INVESTMENT PROPERTIES GROUP 

HAZARDOUS
MATERIAL SURVEY FORM 

        The
purpose of this form is to obtain information regarding the use of hazardous substances on Investment Properties Group ("IPG") property. Prospective tenants and contractors should
answer the questions in light of their proposed activities on the premises. Existing tenants and contractors should answer the questions as they relate to ongoing activities on the premises and should
update any information previously submitted. 

        If
additional space is needed to answer the questions, you may attach separate sheets of paper to this form. When completed, the form should be sent to the following address: 

THE
IRVINE COMPANY MANAGEMENT OFFICE

111 Innovation Drive

Irvine, CA 92617 

        Your
cooperation in this matter is appreciated. If you have any questions, please call your property manager at (949) 720-4400 for assistance. 

	1.	 	GENERAL INFORMATION.
	

 	
 	

Name of Responding Company:	
 	

    

	 	 	Check all that apply:	 	Tenant	 	(        )	 	Contractor	 	(        )
	 	 	 	 	Prospective	 	(        )	 	Existing	 	(        )
	 	 	Mailing Address:	 	    

	 	 	Contact person & Title:	 	    

	 	 	 	 	Telephone Number: (      )	 	    
	 	 
	

 	
 	
Current TIC Tenant(s):	
 	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

Address of Lease Premises:	
 	

    

	

 	
 	

Length of Lease or Contract Term:	
 	

    

	

 	
 	
Prospective TIC Tenant(s):	
 	

 	
 	

 	
 	

 	
 	

 
	

 	
 	

Address of Leased Premises:	
 	

    

	

 	
 	

Address of Current Operations:	
 	

    

	 	 	Describe the proposed operations to take place on the property, including principal products manufactured or services to be conducted. Existing tenants and contractors should describe any proposed changes to ongoing
operations.
	 	 	 

	

 	
 	

 

	

 	
 	

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

1

 

	

2.	
 	
HAZARDOUS MATERIALS.    For the purposes of this Survey Form, the term "hazardous material" means any raw material, product or agent considered hazardous under any state
or federal law. The term does not include wastes which are intended to be discarded.	
 	

 
	

 	
 	

2.1	
 	

Will any hazardous materials be used or stored on site?	
 	

 
	

 	
 	

 	
 	

Chemical Products	
 	

Yes	
 	

(    )	
 	

No	
 	

(    )	
 	

 
	 	 	 	 	Biological Hazards/Infectious Wastes	 	Yes	 	(    )	 	No	 	(    )	 	 
	 	 	 	 	Radioactive Materials	 	Yes	 	(    )	 	No	 	(    )	 	 
	 	 	 	 	Petroleum Products	 	Yes	 	(    )	 	No	 	(    )	 	 
	

 	
 	

2.2	
 	

List any hazardous materials to be used or stored, the quantities that will be on-site at any given time, and the location and method of storage (e.g., bottles in storage closet on the premises).	
 	

 

	 
	 	 
	 	Hazardous Materials
	 	Location and Method

of Storage
	 	Quantity

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

2.3	
 	

Is any underground storage of hazardous materials proposed or currently conducted on the premises?    Yes    (    )    No    (    )

	

 	
 	

 	
 	

If yes, describe the materials to be stored, and the size and construction of the tank. Attach copies of any permits obtained for the underground storage of such substances.
	 	 	 	 	 

	

 	
 	

 	
 	

 

	

 	
 	

 	
 	

 

	

3.	
 	
HAZARDOUS WASTE.    For the purposes of this Survey Form, the term "hazardous waste" means any waste (including biological, infectious or radioactive waste) considered
hazardous under any state or federal law, and which is intended to be discarded.
	

 	
 	

3.1	
 	

List any hazardous waste generated or to be generated on the premises, and indicate the quantity generated on a monthly basis.

	 
	 	 
	 	Hazardous Materials
	 	Location and Method

of Storage
	 	Quantity

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

2

 

	

 	
 	

3.2	
 	

Describe the method(s) of disposal (including recycling) for each waste. Indicate where and how often disposal will take place.

	 
	 	 
	 	Hazardous Materials
	 	Location and Method

of Storage
	 	Quantity

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

 	
 	

    
	
 	

    
	
 	

    

	

 	
 	

3.3	
 	

Is any treatment or processing of hazardous, infectious or radioactive wastes currently conducted or proposed to be conducted on the premise?

Yes    (    )    No    (    )
	

 	
 	

 	
 	

If yes, please describe any existing or proposed treatment methods.
	

 	
 	

 	
 	

    

	 	 	 	 	    

	 	 	 	 	    

	

 	
 	

3.4	
 	

Attach copies of any hazardous waste permits or licenses issued to your company with respect to its operations on the premises.
	

4.	
 	
SPILLS
	

 	
 	

4.1	
 	

During the past year, have any spills or releases of hazardous materials occurred on the premises?    Yes    (    )    No    (    )

	

 	
 	

 	
 	

If so, please describe the spill and attach the results of any testing conducted to determine the extent of such spills.
	 	 	 	 	 

	

 	
 	

 	
 	

 

	

 	
 	

 	
 	

 

	

 	
 	

4.2	
 	

Were any agencies notified in connection with such spills?    Yes    (    )    No    (    )
	

 	
 	

 	
 	

If so, attach copies of any spill reports or other correspondence with regulatory agencies.
	

 	
 	

4.3	
 	

Were any clean-up actions undertaken in connection with the spills?
	 	 	 	 	Yes    (    )    No    (    )	 	 	 	 
	

 	
 	

 	
 	

If so, briefly describe the actions taken. Attach copies of any clearance letters obtained from any regulatory agencies involved and the results of any final soil or groundwater sampling done upon completion of the clean-up work.
	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

3

 

	

5.	
 	
WASTEWATER TREATMENT/DISCHARGE
	

 	
 	

5.1	
 	

Do you discharge industrial wastewater to:
	

 	
 	

 	
 	

    
	
 	

storm drain?	
 	

    
	
 	

sewer?
	

 	
 	

 	
 	

    
	
 	

surface water?	
 	

    
	
 	

no industrial discharge
	

 	
 	

5.2	
 	

Is your industrial wastewater treated before discharge?    Yes    (    )    No    (    )
	

 	
 	

 	
 	

If yes, describe the type of treatment conducted.
	

 	
 	

    

	

 	
 	

    

	

 	
 	

    

	

 	
 	

5.3 Attach copies of any wastewater discharge permits issued to your company with respect to its operations on the premises.
	

6.	
 	
AIR DISCHARGES.
	

 	
 	

6.1	
 	

Do you have any air filtration systems or stacks that discharge into the air?

Yes    (    )    No    (    )
	

 	
 	

6.2	
 	

Do you operate any equipment that require air emissions permits?

Yes    (    )    No    (    )
	

 	
 	

6.3	
 	

Attach copies of any air discharge permits pertaining to these operations.
	

7.	
 	
HAZARDOUS MATERIALS DISCLOSURES.
	

 	
 	

7.1	
 	

Does your company handle an aggregate of at least 500 pounds, 55 gallons or 200 cubic feet of hazardous material at any given time?    Yes    (    )
    No    (    )
	

 	
 	

7.2	
 	

Has your company prepared a Hazardous Materials Disclosure—Chemical Inventory and Business Emergency Plan or similar disclosure document pursuant to state or county requirements?    Yes    
(    )    No    (    )
	

 	
 	

 	
 	

If so, attach a copy.
	

 	
 	

7.3	
 	

Are any of the chemicals used in your operations regulated under Proposition 65?
	

 	
 	

 	
 	

If so, describe the procedures followed to comply with these requirements.
	

 	
 	

    

	

 	
 	

    

	

 	
 	

    

4

 

	

 	
 	

7.4	
 	

Is your company subject to OSHA Hazard Communication Standard Requirements?    Yes    (    )    No    (    )
	

 	
 	

 	
 	

If so, describe the procedures followed to comply with these requirements.
	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

8.	
 	
ANIMAL TESTING.
	

 	
 	

8.1	
 	

Does your company bring or intend to bring live animals onto the premises for research or development purposes?    Yes    (    )    No    
(    )
	

 	
 	

 	
 	

If so, describe the activity.
	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

8.2	
 	

Does your company bring or intend to bring animal body parts or bodily fluids onto the premises for research or development purposes? Yes (    ) No (    )
	

 	
 	

 	
 	

If so, describe the activity.
	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

9.	
 	
ENFORCEMENT ACTIONS, COMPLAINTS.
	

 	
 	

9.1	
 	

Has your company ever been subject to any agency enforcement actions, administrative orders, lawsuits, or consent orders/decrees regarding environmental compliance or health and safety?    Yes    
(    )    No    (    )
	

 	
 	

 	
 	

If so, describe the actions and any continuing obligations imposed as a result of these actions.
	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

9.2	
 	

Has your company ever received any request for information, notice of violation or demand letter, complaint, or inquiry regarding environmental compliance or health and safety?    Yes    
(    )    No    (    )
	 	 	 	 	 	 	 	 	 	 	 

5

 

	

 	
 	

9.3	
 	

Has an environmental audit ever been conducted which concerned operations or activities on premises occupied by you?    Yes    (    )    No    
(    )
	

 	
 	

9.4	
 	

If you answered "yes" to any questions in this section, describe the environmental action or complaint and any continuing compliance obligation imposed as a result of the same.
	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

 	
 	

    

	

 	
 	

    

	

 	
 	

    

	

 	
 	

By:	
 	

    

	 	 	 	 	Name:	 	    

	 	 	 	 	Title:	 	    

	 	 	 	 	Date:	 	    

6

EXHIBIT C  

        [INTENTIONALLY DELETED.]

   EXHIBIT D

 TENANT'S INSURANCE  

        The following requirements for Tenant's insurance shall be in effect at the Building, and Tenant shall also cause any subtenant to comply with these requirements.
Landlord reserves the right to adopt commercially reasonable nondiscriminatory modifications and additions to these insurance requirements applying to Landlord's insured portfolios as a whole. Tenant
agrees to obtain and present evidence to Landlord that it has fully complied with the insurance requirements. 

        1.     Tenant
shall, at its sole cost and expense, commencing on the date Tenant is given access to the Premises for any purpose and during the entire Term, procure, pay for and
keep in full force and effect: (i) commercial general liability insurance with respect to the Premises and the operations of or on behalf of Tenant in, on or about the Premises, including but
not limited to coverage for (A) personal injury, independent contractors, broad form property damage, fire and water legal liability, and liquor law liability (if alcoholic beverages are sold,
served or consumed within the Premises) which policy(ies) shall be written on an "occurrence" basis (B) products liability (only if a product is sold by Tenant from the Premises) which policy
may be written on a "claims made" basis, and for not less than the amount set forth in Item 13 of the Basic Lease Provisions, with a combined single limit (with a $50,000 minimum limit on fire legal
liability) per occurrence for bodily injury, death, and property damage liability; (ii) workers' compensation insurance coverage as required by law, together with employers' liability insurance
of at least One Million Dollars ($1,000,000.00); (iii) with respect to Alterations and the like required or permitted to be made by Tenant under this Lease, builder's risk insurance, in an
amount equal to the replacement cost of the work; (iv) insurance against fire, vandalism, malicious mischief and such other additional perils as may be included in a standard "special form"
policy, insuring Tenant's Alterations, trade fixtures, furnishings, equipment and items of personal property of Tenant located in the Premises, in an amount equal to not less than ninety percent (90%)
of their actual replacement cost (with replacement cost endorsement); and (v) loss of rent insurance in amounts sufficient to cover up to one (1) year of Basic Rent and Operating
Expenses payable under this Lease. In no event shall the limits of any policy be considered as limiting the liability of Tenant under this Lease. 

        2.     In
the event Landlord consents to Tenant's use, generation or storage of "Future HazMats" (as defined in Section 5.3 of the Lease) on, under or about the Premises,
Landlord shall have the continuing right, as provided in Section 5.3(b)(B)(ii)(3) of the Lease, to require Tenant, at Tenant's sole cost and expense, to purchase insurance reasonably approved
by Landlord with coverage in amounts commensurate with the type and risk of such Future HazMats but not less than Two Million Dollars ($2,000,000.00), insuring (i) any Future HazMats shall be
removed from the Premises, (ii) the Premises shall be restored with regard to the Future HazMats, and (iii) any liability of Tenant, Landlord and Landlord's officers, directors,
shareholders, agents, employees and representatives, arising from such Future HazMats. 

        3.     All
policies of insurance required to be carried by Tenant pursuant to this Exhibit D containing a deductible
exceeding One Hundred Thousand Dollars ($100,000.00) per occurrence must be approved in writing by Landlord prior to the issuance of such policy. Tenant shall be solely responsible for the payment of
all deductibles. 

        4.     All
policies of insurance required to be carried by Tenant pursuant to this Exhibit D shall be written by
responsible insurance companies authorized to do business in the State of California (the foregoing shall not, and is not intended to, exclude insurance companies that are not admitted in the State of
California), and with a general policyholder rating of not less than "A-" and financial rating of not less than "VI" in the most current Best's Insurance Report. Any insurance required of
Tenant may be furnished by Tenant under any blanket policy carried by it or under a separate policy. A true and exact copy of each policy evidencing the insurance (appropriately authenticated by the
insurer) or a 

1

 

certificate
of insurance, certifying that the policy has been issued, provides the coverage required by this Exhibit D and contains the required
provisions, together with endorsements acceptable to Landlord evidencing the waiver of subrogation and additional insured provisions required below, shall be delivered to Landlord prior to the date
Tenant is given the right of possession of the Premises. A certificate of insurance evidencing the renewal of any insurance coverage shall also be delivered to Landlord prior to or on the date of the
expiration of the coverage. Landlord may at any time, and from time to time, inspect and/or copy any and all insurance policies required by this Lease. 

        5.     Each
policy evidencing insurance required to be carried by Tenant pursuant to this Exhibit D shall contain the
following provisions and/or clauses satisfactory to Landlord: (i) with respect to Tenant's commercial general liability insurance, a provision that the policy and the coverage provided shall be
primary and that any coverage carried by Landlord shall be noncontributory with respect to any policies carried by Tenant, together with a provision including Landlord, the Additional Insureds
identified in Item 11 of the Basic Lease Provisions, as additional insureds; (ii) except with respect to Tenant's commercial general liability insurance, a waiver by the insurer of any right to
subrogation against Landlord, its agents, employees, contractors and representatives which arises or might arise by reason of any payment under the policy or by reason of any act or omission of
Landlord, its agents, employees, contractors or representatives; and (iii) a provision that the insurer will not cancel the coverage provided by the policy (a) for nonpayment of any
premium without endeavoring to give Landlord at least ten (10) days prior written notice, and (b) for any other reason without endeavoring to give Landlord at least thirty
(30) days prior written notice. 

        6.     In
the event that Tenant fails to procure, maintain and/or pay for, at the times and for the durations specified in this  Exhibit D, any insurance required by this Exhibit D, or fails to carry insurance required
by any governmental authority, Landlord may at its election procure that insurance and pay the premiums, in which event Tenant shall repay Landlord all reasonable sums paid by Landlord, together with
interest at the per annum rate of ten percent (10%) and any related costs or expenses incurred by Landlord, within ten (10) days following Landlord's written demand to Tenant. 

        NOTICE TO TENANT: IN ACCORDANCE WITH THE TERMS OF THIS LEASE, TENANT MUST PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD'S MANAGEMENT AGENT PRIOR TO BEING
AFFORDED ACCESS TO THE PREMISES.

2

EXHIBIT E

 RULES AND REGULATIONS  

        This Exhibit sets forth the rules and regulations governing Tenant's use of the Premises leased to Tenant pursuant to the terms, covenants and conditions of the
Lease to which this Exhibit is attached and therein made part thereof. In the event of any conflict or inconsistency between this Exhibit and the Lease, the Lease shall control. 

        1.     Tenant
shall not place anything or allow anything to be placed near the glass of any window, door, partition or wall, which may appear unsightly from outside the
Premises. 

        2.     The
walls, walkways, sidewalks, entrance passages, elevators, stairwells, courts and vestibules shall not be obstructed or used for any purpose other than ingress and
egress of pedestrian travel to and from the Premises, and shall not be used for smoking, loitering or gathering, or to display, store or place any merchandise, equipment or devices, or for any other
purpose. The walkways, sidewalks, entrance passageways, courts, vestibules and roof are not for the use of the general public and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the reasonable judgment of the Landlord shall be prejudicial to the safety, character, reputation and interests of the Building and its tenants,
provided that nothing herein contained shall be construed to prevent such access to persons with whom Tenant normally deals in the ordinary course of Tenant's business, including the design and
construction of the Tenant Improvements or any Alterations, unless such persons are engaged in illegal activities. Smoking is permitted outside the Building and within the Project only in areas
designated by Landlord. No tenant or employee or invitee or agent of any tenant shall be permitted upon the roof of the Building without prior written approval from Landlord, except for Tenant's
facility personnel and contractors. 

        3.     No
awnings or other projection shall be attached to the outside walls of the Building. No security bars or gates, curtains, blinds, shades or screens shall be attached to
or hung in, or used in connection with, any exterior window or door of the Premises without the prior written consent of Landlord. No exterior windows shall be coated or otherwise sunscreened without
the express written consent of Landlord. 

        4.     Tenant
shall not mark, nail, paint, drill into, or in any way deface any part of the Premises or the Building except to affix shelving, decorations, pictures or other
wall hangings on the interior walls of the Premises so long as they are not visible from the exterior of the Building. The expense of repairing any damage resulting from a violation of this rule shall
be borne by Tenant. 

        5.     The
toilet rooms, urinals, wash bowls and other plumbing apparatus shall not be used for any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein. Any pipes or tubing used by Tenant to transmit water to an appliance or device in the Premises must be made of a material commonly used for
the transmission of water given the circumstances. The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the tenant who, or whose employees or
invitees, caused it. 

        6.     [INTENTIONALLY
DELETED] 

        7.     No
exterior storage shall be allowed at any time without the prior written approval of Landlord. The Premises shall not be used for cooking (except for the type of
cooking normally conducted in similar office environments) or washing clothes without the prior written consent of Landlord, or for lodging or sleeping or for any immoral or illegal purposes. 

        8.     Tenant
shall not make, or permit to be made, any unseemly or disturbing noises or disturb or interfere with occupants of this or neighboring buildings or premises or
those having business with them, whether by the use of any musical instrument, radio, phonograph, noise, or otherwise. Tenant shall not permit or suffer the Premises to be used or occupied in any
manner offensive or reasonably objectionable to Landlord or other occupants of this or neighboring buildings or premises by reason of any odors, fumes or gases. Tenant shall properly store and contain
any foul smelling gas or substance in the Premises. 

 

        9.     No
animals, except for seeing eye dogs, shall be permitted at any time within the Premises. 

        10.   Tenant
shall not use the name of the Building or the Project in connection with or in promoting or advertising the business of Tenant, except as Tenant's address,
without the written consent of Landlord. Landlord shall have the right to prohibit any advertising by any Tenant which, in Landlord's reasonable opinion, tends to impair the reputation of the Project
or its desirability for its intended uses, and upon written notice from Landlord any Tenant shall refrain from or discontinue such advertising. 

        11.   Canvassing,
soliciting, peddling, parading, picketing, demonstrating or otherwise engaging in any conduct that unreasonably impairs the value or use of the Premises or
the Project are prohibited and each Tenant shall cooperate to prevent the same. Landlord shall have full and absolute authority to regulate or prohibit the entrance to the Premises of any vendor,
supplier, purveyor, petitioner, proselytizer or other similar person if, in the good faith judgment of Landlord, such person will be involved in general solicitation activities, or the proselytizing,
petitioning, or disturbance of other tenants or their customers or invitees, or engaged or likely to engage in conduct which may in Landlord's opinion distract from the use of the Premises for its
intended purpose. Notwithstanding the foregoing, Landlord reserves the absolute right and discretion to limit or prevent access to the Buildings by any food or beverage vendor (except for vending
machines and catering services engaged by Tenant), whether or not invited by Tenant. 

        12.   No
equipment of any type shall be placed on the Premises which in Landlord's opinion exceeds the load limits of the floor or otherwise threatens the soundness of the
structure or improvements of the Building. 

        13.   [INTENTIONALLY
DELETED] 

        14.   The
entire Premises shall at all times be maintained in a safe, neat and clean condition by Tenant. All trash, refuse and waste materials shall be regularly removed from
the Premises by Tenant and placed in the containers at the locations designated by Landlord for refuse collection. All cardboard boxes must be "broken down" prior to being placed in the trash
container. All styrofoam chips must be bagged or otherwise contained prior to placement in the trash container, so as not to constitute a nuisance. Pallets must be immediately disposed of by tenant
and may not be disposed of in the Landlord provided trash container or enclosures. Pallets may be neatly stacked in an exterior location on a temporary basis (no longer than 5 days) so long as
Landlord has provided prior written approval. The burning of trash, refuse or waste materials is prohibited. 

        15.   Tenant
shall use at Tenant's cost such pest extermination contractor as Landlord may reasonably direct and at such intervals as Landlord may reasonably require. 

        16.   All
keys for the Premises shall be provided to Tenant by Landlord and Tenant shall return to Landlord any of such keys so provided upon the termination of the Lease. 

        17.   No
person shall enter or remain within the Project while intoxicated or under the influence of liquor or drugs. Landlord shall have the right to exclude or expel from
the Project any person who, in the absolute discretion of Landlord, is under the influence of liquor or drugs. 

        18.   [INTENTIONALLY
DELETED] 

        19.   [INTENTIONALLY
DELETED] 

        20.   Landlord
may from time to time grant other tenants of the project individual and temporary variances from these Rules, provided that any variance does not have a
material adverse effect on the use and enjoyment of the Premises by Tenant. 

        21.   Landlord
reserves the right to amend or supplement the foregoing Rules and Regulations and to adopt and promulgate additional rules and regulations applicable to the
Premises, as permitted in Article XVII of the Lease. Notice of such rules and regulations and amendments and supplements thereto, if any, shall be given to the Tenant. 

2

   THE IRVINE COMPANY  

 9410 Carroll Park Dr.  

Map
of Generator, Trash and Hazmat Storage Zones. 

EXHIBIT F
  to the Lease 

1

   The  

 Irvine  

 Company  

 [GRAPHIC]  

 Industrial  

 Sign Program  

FOR

INDUSTRIAL SITES

SUBJECT TO

IRVINE COMPANY DESIGN REVIEW 

March 13,
2000 

EXHIBIT G
  to the Lease 

1

 
Irvine Company  

 Industrial Sign Program  

 For Industrial Sites Subject To Irvine Company Design Review  

 [GRAPHIC]  

 3/13/00  

Table Of Contents  

	 
	 	 
	 	Page

	1.0	 	Design Objectives	 	3
	
2.0	
 	
Covered Property	
 	
3
	
3.0	
 	
General Sign Design Criteria	
 	
3
	
4.0	
 	
Permanent Ground Level Signs	
 	
4
	

 	
 	

Center or project identification monument signs	
 	

4
	 	 	Business identification monument signs	 	4
	 	 	Business directory signs	 	5
	 	 	On-site advisory signs	 	5
	 	 	On-site regulatory signs	 	5
	
5.0	
 	
Permanent Wall-Mounted Signs	
 	
6
	

 	
 	

Primary business identification signs, single-tenant buildings	
 	

6
	 	 	Secondary business identification signs, single-tenant buildings	 	7
	 	 	Business identification signs, multi-tenant buildings	 	8
	 	 	Building address signs	 	8
	 	 	Operating hours/Information signs	 	9
	 	 	Delivery entrance identification/Service area signs	 	9
	
6.0	
 	
Flags	
 	
9
	
7.0	
 	
Temporary Signs	
 	
10
	
8.0	
 	
General Sign Design and Construction Specifications	
 	
11

2

 
	1.0
	Design Objectives

	1.1
	Signs
are an important element contributing to the identity and quality of an employment center. This sign program has been established to promote the coordination of
exterior signs at industrial sites subject to Irvine Company design review.

	1.2
	This
sign program is intended to be used by The Irvine Company or its agents, not by public agencies. If any public agency has adopted a sign program for a site that is
more stringent than the criteria in this sign program, then the public agency's sign program shall be used.

	1.3
	All
signs for industrial sites are to be designed as one of the following sign types.

	•
	Permanent ground level signs, including monument signs, business directory signs, on-site advisory and regulatory
signs;

	•
	Permanent wall-mounted signs, including single and multiple business identity signs, entry door signs, address
signs, operating hours/information signs, and delivery entrance identification/service door signs;

	•
	Temporary signs, including ground level leasing signs.

 

	2.0
	Covered Property

	2.1
	The
following sign criteria apply to industrial sites subject to Irvine Company design review, including sites in Irvine, San Diego, and Sunnyvale, California.

	3.0
	General Sign Design Criteria

	3.1
	Signs
for each site are limited to those identifying businesses, giving directions for on-site circulation and providing sales, leasing, and construction
information.

	3.2
	No
advertising is permitted on any sign.

	3.3
	All
signs are to be compatible in design, size, proportion, color and material with the project they serve.

	3.4
	Signs
visible from the exterior of any building may be lighted, but no signs or any other contrivance may be devised to rotate, gyrate, blink, flash, or move in any
fashion.

	3.5
	Sign
copy must be coordinated in size, color and typestyle.

	3.6
	Copy
should be applied in a manner that avoids shadow distortions.

	3.7
	Copy
must be located no closer than one-half letter height to any sign edge or other line of copy. Exceptions may be granted for a registered trademark.

	3.8
	Logosymbols
may not exceed the maximum sign height or 50 percent greater than the actual letter height; and may not be located closer than one half letter height
to any building edge, window, door, column, corner, mullion, sign band, canopy or other significant architectural feature.

	3.9
	The
sign panel background should be free of distracting details and decoration.

	3.10
	Copy
color should contrast with background color.

	3.11
	Permanent
ground signs may be externally illuminated with concealed, external, low-profile, floodlighting, or internally illuminated in a manner that lights
only the copy and not the sign background. No other lighting is acceptable.

	3.12
	Primary
and secondary business identification wall-mounted signs may be illuminated. All other wall-mounted signs must be
non-illuminated. At University Research Park in Irvine, only warm white halo-illumination is permitted. 

3

 
	3.13
	Paint
on nonferrous materials to be Mathews Acrylic Polyurethane (or equal) over self etching primer.

	4.0
	Permanent Ground Level Signs

	4.1
	Permanent
ground level signs are limited to center or project identification monument signs, business identification monument signs, business directory signs,
on-site advisory signs, and on-site regulatory signs. No other permanent ground level signs are permitted.

	4.2
	Center or Project Identification Monument Signs

	4.2.1
	Purpose:
To identify the name and/or address of a site with more than one business.

	4.2.2
	Maximum
Number: One (1) monument sign is permitted per major entrance and one (1) monument sign is permitted at street frontages without entrances.

	4.2.3
	Location:
In front of the street hedge, if occurs. Not at corners with special landscape treatment common on all four corners of an intersection. Not within vehicular
sight distance zones.

	4.2.4
	Orientation:
Perpendicular to the street.

	4.2.5
	Sign
Copy: Limited to name of site and/or address.

	4.2.6
	Maximum
Size 

[Illustration] 

Copy
may be located no closer than one-half letter height to any sign edge or other line of copy. 

	4.2.7
	Sign
Material: Smooth, durable, non-weathering, rectangular sign panel face mounted on a sandblasted natural finish concrete base; with lettering incised
in the panel or fabricated from nonferrous metals. (Cabinet signs with translucent or transparent backgrounds are not permitted.) All framing and hardware shall be of nonferrous materials. A
6-inch minimum wide concrete mow strip is required at signs located in turf.

	4.3
	Business Identification Monument Signs

	4.3.1
	Purpose:
To identify the name of a business when a project or center identification sign is not used; and when a wall-mounted sign is not used.

	4.3.2
	Maximum
Number: One (1) monument sign is permitted per major entrance and one (1) monument sign is permitted at street frontages without entrances.

	4.3.3
	Location:
In front of the street hedge, if occurs. Not at corners with special landscape treatment common on all four corners of an intersection. Not within vehicular
sight distance zones.

	4.3.4
	Orientation:
Perpendicular to the street.

	4.3.5
	Sign
Copy: Limited to name of business and street address. (Exceptions for also listing names of parent company or subsidiary may be granted.)

	4.3.6
	Maximum
Size 

[Illustration] 

Copy
may be located no closer than one-half letter height to any sign edge or other line of copy. 

	4.3.7
	Sign
Material: Smooth, durable, non-weathering, rectangular sign panel face mounted on a sandblasted natural finish concrete base; with lettering incised
in the panel or fabricated from nonferrous metals. (Cabinet signs with translucent or transparent backgrounds are not permitted.) All framing and hardware shall be of nonferrous materials. A
6-inch minimum wide concrete mow strip is required at signs located in turf. 

4

 
	4.4
	Business Directory Signs

	4.4.1
	Purpose:
To identify the names of businesses at a site.

	4.4.2
	Maximum
Number: One (1) directory sign is permitted per major entrance.

	4.4.3
	Location:
At major entrances, behind the street hedge, if occurs.

	4.4.4
	Sign
Copy: Limited to business names and address. This sign may be designed with replaceable name panels.

	4.4.5
	Maximum
Size 

[Illustration]

Copy
may be located no closer than one-half letter height to any sign edge or other line of copy. 

	4.4.6
	Sign
Material 

The
size, letterstyle, material, and color of all directory signs on the same site must match. 

Smooth,
durable, non-weathering, rectangular sign panel face, compatible with any monument sign; mounted on a painted, tinted or sandblasted natural finish concrete base; with lettering
incised in the panel or fabricated from nonferrous metals. (Cabinet signs with translucent or transparent backgrounds are not permitted.) All framing and hardware shall be of nonferrous materials. A
6-inch minimum wide concrete mow strip is required at signs located in turf. 

	4.5
	On-Site Advisory Signs

	4.5.1
	Purpose:
To provide directional information to site users.

	4.5.2
	Location:
Along drive aisles, behind the street hedge, if occurs. At building entrances (for addresses at multi-building sites).

	4.5.3
	Sign
Copy: Limited to essential information and may not be used for surrogate tenant identification.

	4.5.4
	Maximum
Size 

[Illustration]

Copy
may be located no closer than one-half letter height to any sign edge or other line of copy. 

	4.5.5
	Sign
Material 

Smooth,
durable, non-weathering, rectangular sign panel with silk screen or die cut lettering and graphics, mounted on a post or a concrete base. 

The
size, letterstyle, material, and color of all directional signs on the same site must match. 

Posts
must be painted tubular aluminum. Wood, steel and pre-punched galvanized U-posts are not acceptable. 

	4.6
	On-Site Regulatory Signs

	4.6.1
	Purpose:
To provide legal information to site users, including parking restrictions, vehicular circulation, handicap access, and fire code information.

	4.6.2
	Location:
Along drive aisles, behind the street hedge.

	4.6.3
	Sign
Copy: 

Limited
to essential information and may not be used for surrogate tenant identification. 

5

 

Standard
site entry signs for handicap access, fire code and parking requirements are to be consolidated onto a single coordinated sign panel. 

	4.6.4
	Maximum
Size: 

Designed
as consistent as possible with the directional sign system. 

Stop
signs and handicap parking signs shall conform in height and size to applicable codes. 

Copy
may be located no closer than one-half letter height to any sign edge or other line of copy. 

	4.6.5
	Sign
Material 

Smooth,
durable non-weathering, rectangular sign panel with silk screen or die cut lettering and graphics, mounted on a post or a concrete base. 

The
size, letterstyle, material, and color of all regulatory signs on the same site must match. 

Stop
signs and handicap parking signs shall conform in size, shape, color and text to applicable codes. 

Posts
must be painted tubular aluminum. Wood, steel and pre-punched galvanized U-posts are not acceptable. 

	5.0
	Permanent Wall-Mounted Signs

	5.1
	Permanent
wall-mounted signs are signs mounted on buildings identifying businesses or providing information. They are limited to primary business
identification signs, single-tenant buildings; secondary business identification signs, single-tenant buildings; business identification signs, multi-tenant buildings; building address signs;
operating hours / information signs; and delivery entrance identification / service area signs. No other permanent wall-mounted signs are permitted. 

All
primary, secondary and address signs on the same building must use the same materials. 

Primary,
secondary and address sign materials are limited to nonferrous metals, acrylics or sign foam only. 

The
background wall area should be free of obstructions, large seams, mullions or contrasting colors or materials. 

No
signs or supergraphics may be painted directly on building walls. 

	5.2
	Primary Business Identification Signs, Single-tenant Buildings

	5.2.1
	Purpose:
To identify the major occupant(s) of a single-tenant building, when a monument sign is not visible. (A "single-tenant building" is defined as a building that
is designed to be occupied by a single business but that may be occupied by several businesses for some period during its lifetime, typically with a common lobby and typically with no more than four
businesses.) 

For
sites less than five acres, a business may not have a monument sign and wall-mounted sign on the same street frontage. For single business sites five acres or greater, a business may
have a monument sign and wall-mounted sign on the same street frontage if both signs are not visible from the same vantage point. 

	5.2.2
	Maximum
Number: Two (2) primary business identification signs are permitted per major occupant; and one (1) primary business identification sign is
permitted per building elevation.

	5.2.3
	Location:
At the parapet level or at the first floor (eyebrow) level, not on any intermediate floors. Only one (1) primary business identification sign is
allowed at any building corner. 

6

 
	5.2.4
	Sign
Copy: Limited to name of business and/or logo only. Subtitles and other copy are not allowed.

	5.2.5
	Maximum
Size: Signs (including logos) may be located no closer than one half letter height to any building edge, window, door, column, corner, mullion, sign band,
canopy or other significant architectural feature (e.g. maximum sign height is one-half the sign band height for a single-line sign, subject to the additional following
criteria). 

Sign
Area: 1 square foot per one linear foot of building frontage, up to 200 square feet 

[Illustration] 

20%
of the sign area may exceed the maximum sign height if the sign is located no closer than one half average letter height to any building edge. Exceptions to the maximum sign height and length may
be granted for registered trademarks, if the average sign height is no larger than the maximum permitted sign height and if the sign is located no closer than one half average letter height to any
building edge. Logosymbols may not exceed the maximum sign height or 50 percent greater than the actual letter height; and may not be located closer than one half letter height to any building
edge. 

	5.2.6
	Sign
Material: Individual letters and logotypes only. No continuous, cabinet or 'can' sign forms are permitted.

	5.3
	Secondary Business Identification Signs, Single-tenant Buildings

	5.3.1
	Purpose:
To identify minor occupants of a single-tenant building (A "single-tenant building" is defined as a building that is designed to be occupied by a single
business but that may be occupied by several businesses for some period during its lifetime, typically with a common lobby and typically with no more than four businesses.)

	5.3.2
	Maximum
Number: One (1) secondary business identification sign is permitted per building occupant; and two (2) business identifications signs (including
up to one primary business sign) are permitted per building elevation.

	5.3.3
	Location:
At the first floor (eyebrow) level.

	5.3.4
	Sign
Copy: Information on this sign type is limited to name of business and/or logo only. Subtitles and other copy are not allowed.

	5.3.5
	Maximum
Size: Signs (including logos) may be located no closer than one half letter height to any building edge, window, door, column, corner, mullion, sign band,
canopy or other significant architectural feature (e.g. maximum sign height is one-half the sign band height for a single-line sign, subject to the additional following
criteria). 

[Illustration]

Exceptions
to the maximum sign height and length may be granted for registered trademarks, if the average sign height is no larger than the maximum permitted sign height and if the sign is located no
closer than one half average letter height to any building edge. 

Logosymbols
may not exceed the maximum sign height or 50 percent greater than the actual letter height; and may not be located closer than one half letter height to any building edge. 

	5.3.6
	Sign
Material: Individual letters and logotypes only. No continuous, cabinet or 'can' sign forms are permitted. (Exceptions for continuous signs may be granted for
registered trademarks.) 

7

 
	5.4
	Business Identifications Signs, Multi-tenant Buildings

	5.4.1
	Purpose:
To identify businesses in multi-tenant buildings. (A multi-tenant building' is defined as a building designed for five or more businesses each with an equal,
exclusive entrance, usually from an exterior walkway or a common hallway. Typically the average square footage does not exceed 3000 square feet.)

	5.4.2
	Maximum
Number: One (1) sign is permitted per tenant.

	5.4.3
	Location:
Within the tenant lease line frontage in one of the following locations: Option #1) Directly on the primary entry door; Option #2) On glazing or wall panels
immediately above the entry door, or Option #3) On glazing or wall panels immediately adjacent to the entry door. All signs on the same building should be located in the same Option.

	5.4.4
	Sign
Copy: Single-line; limited to name of business and/or logo only.

	5.4.5
	Maximum
Size: Signs (including logos) may be located no closer than one half letter height to any building edge, window, door, column, corner, mullion, sign band,
canopy or other significant architectural feature (e.g. maximum sign height is one-half the sign band height, subject to the additional following criteria). 

[Illustration]

	5.4.6
	Sign
Material: Limited to individual letters and logotypes only: Die-cut vinyl and silkscreen graphics if on glazing; sign foam if on wall panels. The
color of all signs on the same building must match, unless the sign is a registered trademark. The lettering of all signs on the same building should be similar, unless the sign is a registered
trademark.

	5.5
	Building Address Signs

	5.5.1
	Purpose:
To identify the stree: address of a building.

	5.5.2
	Maximum
Number: One (1) wall-mounted address sign per street frontage; and as needed for on-site circulation.

	5.5.3
	Location:
On each building at or close to the main entrance lobby and/or visible from the main site entry. Only one (1) wall-mounted address sign is
allowed at any building corner. Address sign must be located to remain visible after trees grow to maturity.

	5.5.4
	Sign
Copy: Limited to the address number, the name of the street, and the building number on a multi-building site.

	5.5.5
	Maximum
Size 

Address
signs may be located no closer than one half number/letter height to any building edge, window, door, column, corner, mullion, sign band, canopy or other significant architectural feature
(e.g. maximum sign height is one-half the sign band height, subject to the additional following criteria). 

Maximum
sign height is 18 inches.

Maximum sign length is 10 times sign height. 

	5.5.6
	Sign
Material: Individual numbers only. No continuous, cabinet or 'can' sign forms are permitted. The size, letterstyle and color of all address signs at the same site
must match. 

The
address may not appear to be the dominant graphic device on the facade of any building. 

8

 
	5.6
	Operating Hours/Information Signs

	5.6.1
	Purpose:
To provide operating hours, emergency information and other required notices. They are not to be used for advertising, but may include the name of the
business and a statement of services.

	5.6.2
	Maximum
Number: One (1) sign per tenant.

	5.6.3
	Location:
Applied only to the door or to glazing or a wall plaque immediately adjacent to the tenant entrance door.

	5.6.4
	Maximum
size: Signs may be located no closer than one half letter height to any building edge, window, door, column, corner, mullion, sign band, canopy or other
significant architectural feature. 

Maximum
sign area is 2.25 square feet.

Maximum sign height is 24 inches.

Maximum sign width is 24 inches.

Maximum letter height is 2 inches. 

	5.6.5
	Sign
Material: Limited to die-cut vinyl and silkscreen graphics only. Neon signs, advertising signs, help-wanted notices,
hand-painted signs, painted windows, and temporary signs are not allowed in windows.

	5.7
	Delivery Entrance Identification/Service Area Signs

	5.7.1
	Purpose:
To identify doors in service areas.

	5.7.2
	Maximum
Number: One (1) service area sign is permitted per door.

	5.7.3
	Location

Service
and employee entry door identification must be located directly on or adjacent to the door. 

Wall-mounted
warehouse truck area shipping and receiving directional signs must be applied to panels compatible with adjacent wall surfaces and located immediately above or beside
warehouse doors. 

	5.7.4
	Sign
Copy: Limited to the suite address and related information.

	5.7.5
	Maximum
Size: Signs may be located no closer than one half letter height to any building edge, window, door, column, corner, mullion, sign band, canopy or other
significant architectural feature. 

Service and employee entry doors:

Maximum sign area is 1 square foot.

Maximum letter height is 4 inches. 

Wall-mounted warehouse loading/receiving area directional signs:

Maximum sign area is 4 square feet.

Maximum sign height is 12 inches.

Maximum sign width is 8 feet. 

	5.7.6
	Sign
Material: Limited to die-cut vinyl and silkscreen graphics only. The letterstyle and color of all service area signs on the same building must match.

	6.0
	Flags

	6.1
	Flags
are limited to American, state, county, city or corporate flags displayed on freestanding flagpoles. Foreign country flags for visiting dignitaries may be used on
a temporary basis as 

9

 

needed.
Other flags and decorative, advertising or special event banners or devices are not allowed. 

	6.2
	Flagpoles
are limited to a maximum of (3) three per location.

	6.3
	Flagpoles
must be freestanding. No flagpoles are allowed on building facades or roofs.

	6.4
	Flagpole
height may not exceed adjacent building height, except for buildings under twenty (20) feet.

	6.5
	Flagpoles
must be freestanding. Flag size shall be compatible with pole height: 

	Pole Height
 
	 	Appropriate Flag Size

	20 feet	 	3 feet by 5 feet
	25 feet	 	4 feet by 6 feet
	30 feet	 	5 feet by 8 feet
	35 feet	 	5 feet by 8 feet
	40 feet	 	5 feet by 8 feet

	7.0
	Temporary Signs

	7.1
	Temporary
signs are non-illuminated, ground level signs that identify or provide basic information about future facilities, for sale /for lease opportunities
and construction activities. They may not be used for any other purpose. 

No
temporary signs, including panels, placards or banners, are permitted on buildings, walls or fences. Small temporary directional signs may be permitted. Small temporary "space available' stickers
may be permitted on building entry doors at 5'-0" to center. 

Banners
may be installed for special events, limited to one workday or one weekend per year, with approval by building management. 

	7.2
	Maximum
Number: One (1) temporary sign is permitted per 500 feet of street frontage.

	7.3
	Location

On-site,
at least 10'-0" behind the street curb. 

Not
at corners with special landscape treatment common on all four corners of an intersection. 

Not
within vehicular sight distance zones. 

Coordinated
with landscaping and separated from permanent ground level signs to avoid visual conflicts. 

	7.4
	Sign
Copy 

Limited
to: 

	•
	Name
and/or logo of building, development, tenant, or use

	•
	Type
and size of building(s)

	•
	Names
of leasing agent, real estate broker, primary tenant, developer, financial institution, architect, engineer, general contractor, and/or property management

	•
	Phone
number for further information

	•
	Anticipated
availability date

	•
	Regulatory
or directional information for a construction site, including safety and warning signs and site address 

10

 

	•
	Rendering
or site plan diagram of building or project 

Copy
may be located no closer than one third letter height to the edge of any sign panel. 

	7.5
	Maximum
Size 

Maximum
allowable dimensions for future facility, for sale, for lease or construction activity ground signs are: 

12'-0"
maximum height

8'-0" maximum width 

Maximum
allowable dimensions for leasing/sales signs after initial 85% occupancy are: 

9'-0"
maximum height

6'-0" maximum width 

[Illustration]

	7.6
	Sign
Material 

All
temporary signs must be constructed of exterior grade wood; and designed to match the current Irvine Company program for temporary signs. 

Temporary
signs must be refurbished as needed and must be removed at the completion of building construction, occupancy or reoccupancy. 

	8.0
	General Sign Design and Construction Specifications

This
section sets forth guidelines to control exterior signs at industrial sites subject to Irvine Company design review. Included are compliance requirements, signs not permitted and general design
and construction specifications. 

	8.1
	Compliance

	8.1.1
	No
person, firm or corporation shall erect, construct, enlarge, alter, rebuild, move, improve, convert, demolish, or remove any sign, sign structure, or standard, or
paint a wall sign; nor shall they cause or permit the same to be done, except upon approval by The Irvine Company, or its designee.

	8.1.2
	Any
nonconforming or unapproved signs must be removed or brought into compliance at the sole expense of the persons responsible for their installation, within thirty
(30) days of issuance of notice of nonconformity.

	8.2
	Signs Not Permitted

	8.2.1
	Signs
which incorporate any manner of mechanical movement, audible elements, flashing or intermittent lighting, moving or otherwise animated forms.

	8.2.2
	Signs
which interfere with or conflict with any traffic control device, create a safety hazard by obstructing the clear view of pedestrian or vehicular traffic,
project into the public right-of-way or interfere with efficient operations of emergency vehicles.

	8.2.3
	Signs
preventing free access to or from any fire escape, door, window or exit or access to any standpipe.

	8.2.4
	Signs
which project above a parapet or roof line or are located on the roof of a building.

	8.2.5
	Off-premise
signs, including signs or graphics applied to parked vehicles for nearby vendor identification.

	8.2.6
	Signs
or graphics painted directly on exterior of buildings. 

11

 
	8.2.7
	Landscaping
that becomes a sign or message.

	8.2.8
	Graphics
painted on or adhered to trash bins or their enclosures.

	8.2.9
	Flags/banners/pennants/balloons
used for advertising purposes.

	8.3
	General Sign Specifications

	8.3.1
	All
permanent signs shall be designed, specified and fabricated to have a life expectancy of at least ten years. All temporary signs shall have a life expectancy of
two years.

	8.3.2
	All
sign designs shall be approved by The Irvine Company, or its designee, for design, color, sign layout, location and size.

	8.3.3
	All
wall-mounted signs should be reviewed by the building architect. All ground-mounted signs should be reviewed by the land-scape architect.

	8.3.4
	All
building-mounted signs shall be compatible in size, material and color with the architecture of the building to which they are attached. The minimum thickness of a
wall sign is 4 inches, except in San Diego and Newport Center, where the minimum thickness is 2 inches.

	8.3.5
	No
lettering or graphics shall be located closer than one half letter height to the top, bottom and sides of the sign or building area to which the sign is mounted.

	8.3.6
	All
materials shall be a top quality that will not fade, delaminate, distort and/or deteriorate within ten years.

	8.3.7
	All
welded seams on sign faces should be finished smooth and invisible. Surfaces which are intended to be flat shall be without bulges, oil-canning or
other physical deformities.

	8.3.8
	All
signs must meet or exceed all applicable codes (i.e., electrical, mechanical, structural, etc.). All signs containing electrical components must be U.L. approved.

	8.3.9
	The
area of a sign is measured by a rectangle around the outside of all copy and graphics.

	8.3.10
	No
junction boxes, exposed conduit or raceways are permitted on the exterior face of a sign or building.

	8.3.11
	All
raceways, transformers, electrode boxes and other wiring shall be concealed; located in ceiling spaces or behind walls.

	8.3.12
	No
crossovers between letters or words are permitted.

	8.3.13
	All
signs, bolts, fastenings, and clips of all types shall be hot-dipped galvanized iron, stainless steel, or brass. No black iron materials of any type
will be permitted.

	8.3.14
	The
disconnect switch must be concealed within the sign or in an appropriate place that is out of view.

	8.3.15
	Access
hatches should be concealed from view and designed as an aesthetic part of the sign. Access hatches should be waterproof and lightproof.

	8.3.16
	All
identification labels shall be concealed, except those that are required by code. Required labels should be low contrast and so placed that they are not a
dominant feature of the sign. Fabricator identification or advertising labels and plates are not allowed.

	8.3.17
	Signing
shall meet all requirements of the relevant public agencies. 

*** 

EXHIBIT G

to the Lease 

12

EXHIBIT H

CONTRACTOR
REQUIREMENTS 

EXHIBIT H  

 CONTRACTOR REQUIREMENTS

        A.    General.    All insurance described in this Exhibit to be carried by contractors ("Contractors") hired by Tenant
to construct the Tenant Improvements or Alterations ("Insurance Requirements") will be maintained by Contractor at its expense with insurance carriers licensed and approved to do business in
California, having a general policyholders rating of not less than an "A-" and financial rating of not less than "VI" in the most current Best's Key Rating Guide. In no event will such
insurance be terminated or otherwise allowed to lapse prior to termination of any contract between Tenant and contractor ("Contract") or such longer period as may be specified herein. Contractor may
provide the insurance described in this Exhibit in whole or in part through a policy or policies covering other liabilities and projects of Contractor; provided, however, that any such policy or
policies shall satisfy all of the requirements of this Exhibit, including the endorsements described below. The required coverage limit amounts stated in these Insurance Requirements are  minimum
coverage limit amounts. Where a coverage limit amount specified in these Insurance Requirements is less than the current coverage limit
generally carried by Contractor for such insurance, Contractor shall provide coverage at the higher coverage limit. Tenant, in its sole discretion, may approve commercially reasonable deductibles (in
no event more than $25,000 for any coverage type without Landlord's approval) for the coverage limit amounts specified in these Insurance Requirements. If Contractor, with Tenant's approval, elects to
maintain a deductible with respect to insurance required hereunder, Tenant shall not be obligated to reimburse such deductible or pay Contractor as a reimbursable cost any actual or imputed cost of
maintaining such deductible. Contractor shall not include any costs for risk management salaries or staff functions, including, but not limited to, administering loss control, safety programs,
certificate tracking, claims management, or purchasing insurance. 

        B.    Evidence of Insurance.    As evidence of specified insurance coverage, and except as otherwise provided below,
Tenant will accept certificates issued by Contractor's insurance carrier acceptable to Tenant showing such policies in force for the specified period, but Tenant has the right to obtain certified
policies as reasonably necessary. Such evidence shall be delivered to Tenant promptly upon execution of this Contract or prior to commencement of Work, whichever earliest occurs. Each policy and
certificate shall be subject to reasonable approval by Tenant. Each certificate shall provide that such policy shall not be subject to cancellation or non-renewal without thirty
(30) days prior written notice to be delivered to Tenant. In the event (a) any policy expires or is canceled before the expiration of any Contract and Contractor fails to procure
immediately other insurance as specified in this Exhibit, or (b) any policy of insurance is altered so that the coverage required by this Exhibit is reduced or otherwise changed to the
detriment of Tenant or any named insured and Contractor fails to procure immediately other insurance to maintain the coverages required in this Exhibit, then Tenant reserves the right, but shall have
no obligation, to procure such insurance and to deduct the cost thereof from any sum due Contractor under any Contract. Contractor shall also allow Tenant to inspect and/or obtain such evidence of
insurance that Contractor obtains from any of its Subcontractors. 

        C.    Damages.    Nothing contained in these insurance requirements is to be construed as limiting the type, quality
or quantity of insurance Contractor should maintain or the extent of Contractor's responsibility for payment of damages resulting from its operations under any Contract. 

        D.    Workers' Compensation Insurance.    Contractor shall maintain Workers' Compensation Insurance, including
Employer's Liability (at a minimum limit of One Million Dollars ($1,000,000)) for all persons whom it employs in carrying out the Work under any Contract, including waiver of subrogation by the
insurance carrier with respect to Tenant and Landlord. Prior to the commencement of the Work, a waiver of subrogation endorsement in form and substance as attached as Attachment I to this Exhibit
shall be delivered to Tenant. The foregoing insurance shall be in strict accordance with the requirements of the most current and applicable Workers' Compensation Insurance Laws in effect from time to
time in California. 

        E.    General Liability Insurance.    Contractor shall maintain Comprehensive or Commercial General Liability
Insurance on an "occurrence" basis, with deductibles reasonably acceptable to Tenant, with a combined single limit for bodily injury and property damage of Five Million Dollars ($5,000,000), or
current limit carried, whichever is greater, covering Operations, Independent Contractors, Products and Completed Operations (renewed annually for 10 years after Final Acceptance), Blanket
Contractual Liability, Broad Form Property Damage, Severability of Interest and Cross Liability clauses, Personal Injury and Explosion, Collapse and Underground Hazards (X,C,U). The limits of
liability specified in this paragraph may be provided by any combination of primary and excess liability insurance policies. The foregoing liability insurance shall name Tenant and Landlord as
additional insureds and shall be primary with respect to insurance or self-insurance maintained by Tenant and/or Landlord. Any insurance or self-insurance maintained by Tenant
and/or Landlord shall be excess and non-contributing with respect to Contractor's policy. An endorsement reflecting the above, in form and substance as attached to this Exhibit as
Attachment II, shall be delivered to Tenant prior to commencement of any work. 

        F.    Automobile Liability Insurance.    Contractor shall maintain owned, hired and non-owned automobile
liability insurance covering all use of all automobiles, trucks and other motor vehicles and trailers utilized by Contractor in connection with any Contract with a combined single limit for bodily
injury and property damage of One Million Dollars ($1,000,000), or current limit carried, whichever is greater. 

        G.    Waiver of Subrogation.    Contractor hereby waives all rights against Tenant and Landlord and their officers,
directors, agents, servants, employees, divisions, subdivisions, shareholders, partners and affiliated companies, for damages caused by fire and other perils, liabilities and risks to the extent
coverable by Contractor's policies of insurance. 

        H.    Professional Errors and Omissions Liability Insurance.    In the event Contractor provides architectural,
design, engineering or similar professional services under any Contract, Contractor shall maintain Professional Errors and Omissions Liability Insurance with a coverage limit of not less than One
Million Dollars ($1,000,000) per occurrence, or current limit carried if greater, and with a deductible not to exceed $25,000. Such insurance shall include coverage for prior acts and shall be
maintained during the term of any Contract and renewed for at least five (5) years thereafter, so long as such renewable coverage is available at commercially reasonable rates. 

        I.    Transit Insurance.    Contractor shall maintain "all risk" insurance, on a replacement cost basis covering loss
or damage to property (for which it has title and/or risk of loss) which will become a final part of the Project, during its off-Project site transit and while stored or worked upon away
from the Project site. Tenant and Landlord shall be included as a loss payee under such policy as their interests may appear. 

        J.    Tenant's Election to Insure.    Tenant reserves the right, but shall have no obligation, to procure the
insurance, or any portion thereof, for which Contractor is herein responsible and which is described in this Exhibit. Tenant shall notify Contractor if Tenant exercises its right, whereupon
Contractor's responsibility to carry such duplicative insurance shall cease and the sums paid by Tenant to Contractor hereunder shall be equitably adjusted by the parties to reflect any resulting cost
saving to Contractor. Tenant further reserves the right at any time, with thirty (30) days' notice to Contractor, to require that Contractor resume the maintenance of any insurance for which
Tenant has elected to become responsible pursuant to this paragraph; in such event, the sums paid to Contractor by Tenant shall increase to the extent of any previously agreed and implemented
reduction as aforesaid attributable to Tenant's prior assumption of the particular insurance coverage. 

        K.    Landlord
shall have the right to obtain copies of any certificates or other evidence of insurance supplied by Contractor to Tenant. Capitalized terms not defined herein
shall have the meaning set forth in the Lease between The Irvine Company and Prometheus Laboratories Inc dated June 22, 2005. 

FORM WC 00 03 13  

 NATIONAL COUNCIL ON COMPENSATION INSURANCE, 1984  

 WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS

ENDORSEMENT—WORKER'S COMPENSATION  

SCHEDULE            

Name of Person or Organization:  

        Prometheus Laboratories Inc., The Irvine Company, and all of their respective officers, directors, agents, servants, employees, division, subsidiaries,
shareholders, partners and affiliated companies, and all of their respective successors and assigns. 

        We
have the right to recover our payments from anyone liable for any injury covered by this policy. We will not enforce our right against the person or organization named in this
Schedule. This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us. 

Attachment
I to EXHIBIT H

ISO FORM CG 20 10 11 85

POLICY
NUMBER: 

NAME
INSURED: 

THIS
ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY 

ADDITIONAL
INSURED ENDORSEMENT—OWNERS, LESSEES

OR CONTRACTORS (FORM B) 

This
endorsement modifies insurance provided under the following: 

COMMERCIAL
GENERAL LIABILITY COVERAGE PART 

SCHEDULE                        

Name of Person or Organization:  

        Prometheus Laboratories, Inc., The Irvine Company, and all of their respective officers, directors, agents, servants, employees, divisions, subsidiaries,
shareholders, partners and affiliated companies and all of their respective successors and assigns. 

        This
insurance is primary and any other insurance or self-insurance maintained by such additional insureds is excess and noncontributing with this insurance as respects
claims or liability arising out of or resulting from the acts or omissions of the named insured or of others performed on behalf of the named insured. 

        (If
no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement). 

        WHO
IS AN INSURED (section II) is amended to include as an additional insured the person or organization shown in this Schedule, but only with respect to liability arising out of
your work for that insured by or for you. 

Attachment
II to EXHIBIT H

   Exhibit I—Standard Improvements 

CANYON RIDGE BUSINESS PARK 

        SAN
DIEGO, CALIFORNIA. 

Tenant Improvement/Interior Construction Outline Specifications
  (By Tenant/Tenant Allowance) 

	TENANT STANDARD GENERAL OFFICE:	 	CARPET
	 	 	Direct glue, from one of the following options:
	 	 	Designweave—Z6354 Tempest Esq.:	 	Designweave—Z6356 Techno:
	 	 	a)	 	553 Steel Wool	 	a)	 	336 Lido
	 	 	b)	 	773 Melba Toast	 	b)	 	252 Topaz
	 	 	c)	 	575 Silver Smoke	 	c)	 	518 Night Sky
	 	 	d)	 	535 Dolphin	 	d)	 	997 Silver Plum
	 	 	e)	 	454 Denim	 	e)	 	496 Galactic
	

 	
 	

VINYL COMPOSITION TILE (VCT)

12x12 VCT Armstrong Standard Excelon, from the following options:
	 	 	a)	 	51803 Pearl White	 	a)	 	51908 Pewter
	 	 	b)	 	51899 Cool White	 	d)	 	51899 Cool White
	

 	
 	

PAINT/WALLS

5/8" gypsum drywall on 2-1/2" × 25 ga. metal studs, floor to ceiling construction, no walls shall penetrate the grid unless required by code. All walls shall be straight, and parallel to
building perimeter walls. All offices and rooms shall be constructed of a standard size and tangent to a building shell or core wall. Paint finish, one standard color to be Benjamin Moore AC-40, Glacier White.
	

 	
 	

BASE

2-1/2"Burke rubber base color; Pearl 137P, straight at cut pile carpet, coved at resilient flooring and loop carpet.
	

 	
 	

PLASTIC LAMINATE

Plastic laminate color at millwork to be Nevamar "Smoky White", Textured #S-7-27T.
	

 	
 	

CEILING

2x4 Armstrong Second Look II #2776 White scored tile on Suprafine 9/16" T-bar grid. Continuous grid throughout.
	

 	
 	

PERIMETER WALLS

Furring, 25 ga. metal studs with 5/8" gypsum drywall, with batt insulation.
	

 	
 	

LIGHTING

2x4 fluorescent, 3-lamp energy saving ballasts, prismatic lens fixtures.

	Revised 8/12/02	 	THE IRVINE COMPANY

THE
SPECIFICATIONS SET FORTH IN THIS OUTLINE ARE SUBJECT TO MODIFICATION FROM TIME TO TIME AS DETERMINED TO BE NECESSARY OR APPROPRIATE BY THE DEVELOPER. 

1

 

	

 	
 	

DOORS

1-3/4" solid core, 3"-0" × 8"-10", plain sliced white oak, Western Integrated clear anodized aluminum frames, Schlage "D" series "Sparta" latchset hardware, dull chrome finish.
	

 	
 	

OFFICE SIDELITES

All interior offices to have sidelite glazing adjacent to office entry door, 2" wide × door height, Western Integrated clear anodized aluminum frame integral to door frame with clear tempered glass.
	

 	
 	

COFFEE BAR

Eight (8) lineal feel of upper and lower plastic laminate faced cabinets, flush overlay custom grade design with stainless steel sink and garbage disposal at one location per tenant; adjacent to restrooms and/or building waste line.
	

 	
 	

WINDOW COVERINGS

Vertical blinds: Mariak Industries PVC blinds at building perimeter windows, Model M-3000, Color: Light Grey.
	

TENANT STANDARD MECHANICAL:	
 	

HVAC

Thermostats shall be provided with set points as required by Title 24. Ceiling diffusers and return perforated face in 2x4 ceiling grid. Distribution, drops and VAV boxes from shell supply main loop.
	

 	
 	

FIRE PROTECTION

Pendant satin chrome platec, recessed heads, adjustable canopies, minimum K factor to be 562, located at center of scored ceiling file.

Ceiling drops from shell supply loop.
	

TENANT STANDARD ELECTRICAL:	
 	

ELECTRICAL SYSTEM

277/480 volt, three phase, four wire metered distribution section added to main service at Main Electrical Room.
	

 	
 	

Electrical tenant distribution capacity suitable for 22 watts per s.f. to accommodate HVAC, lighting data processing, computer loads and convenience outlets.
	

 	
 	

Tenant electrical room to include 270/480 volt and 120/208 volt panels as required.
	

 	
 	

Building HVAC system is connected to the tenant distribution system as part of tenant improvements.
	

 	
 	

LIGHTING

Double switch per Title 24, paired in double gang box, white plastic cover, 42" AFF to switch centerline. 2x4 fluorescent light futures, 3-lamp energy saving ballasts, prismatic lens. Exit signs: Internally illuminated, brushed stainless steel
face.
	 	 	 	 	 	 	 	 	 

2

 

	

 	
 	

OUTLETS

Power: 15-amp 125-volt specification grade duplex receptacle mounted vertically, 18" AFF to centerline, white plastic coverplate.

Telephone/Data: Single gang box with mud ring and pull string, mounted vertically, 18" AFF to centerline, Cover plate by telephone company. Teflon cable by tenant.
	

TENANT STANDARD WAREHOUSE/SHIPPING AND RECEIVING:	
 	

FLOORS

Sealed concrete.
	

 	
 	

WALLS

5/8" gypsum wallboard standard partition. Paint to match Frazee #-484 City Lights; rated partition at occupancy separation as required by code.
	

 	
 	

CEILING

Exposed structure
	

 	
 	

WINDOWS

None
	

 	
 	

ACCESS

7'-6" H × 7'-6" W glazed service doors. Glazing is bronze reflective glass.
	

 	
 	

HVAC

None
	

 	
 	

PLUMBING

Single accommodation restroom, if required.
	

 	
 	

Sheet vinyl flooring to be Armstrong Classic Corton "Seagate" #86526 Oyster, with FRP panel wainscot to 48" high, painted walls above to be Frazee #484.
	

 	
 	

LIGHTING

Chain hung florescent strip.
	

 	
 	

OTHER ELECTRICAL

Convenience outlets; surface mounted at exposed concrete walls.
	

 	
 	

SECURITY

Lockable doors.

3

   HOWARD'S RUG CO.  

[ILLEGIBLE] 

EXHIBIT
J

To the Lease 

1

 
THE IRVINE COMPANY  

 9410 Carroll Park Drive  

[MAP OF BUILDING] 

EXHIBIT
J

To the Lease 

2

EXHIBIT X  

 WORK LETTER
  (Tenant Buildout with Landlord's Contribution) 

I.    TENANT IMPROVEMENTS    

The
tenant improvement work ("Tenant Improvements") shall consist of the work required to complete certain improvements to the Premises pursuant to approved "Working Drawings and Specifications" (as
defined below). Tenant shall employ San Diego Office Interiors, or another licensed architect reasonably approved by Landlord (the "Architect") for preparation of the Preliminary Plan and Working
Drawings and Specifications (as hereinafter defined), and shall cause the Architect to inspect the Premises to become acquainted with all existing conditions. Tenant shall contract with Roel, Burger,
Johnson and Jennings, Prevost, San Diego Office Interiors or another licensed general contractor reasonably acceptable to Landlord (the "TI Contractor") to construct the Tenant Improvements. The
Tenant Improvements work shall be undertaken and prosecuted in accordance with the following requirements: 

	A.
	Landlord
and Tenant have approved that certain space plan depicting the Tenant Improvements prepared by the Architect (the "Preliminary Plan"), a copy of which Preliminary Plan is
attached as Exhibit X-1 hereto. From and after the execution of this Lease, Tenant shall submit the following to Landlord:
(i) working drawings and specifications prepared by the Architect based on the approved Preliminary Plan (the "Working Drawings and Specifications"), and (ii) any change proposed by
Tenant to the approved Working Drawings and Specifications ("Change"). Within ten (10) business days following Tenant's initial submission of the Working Drawings and Specifications, and within
five (5) business days for any other submission to Landlord, Landlord shall approve (by signing a copy thereof) or shall disapprove the Working Drawings and Specifications and/or the Change,
which approval shall not be unreasonably withheld or conditioned. Landlord acknowledges that Tenant intends to phase the construction of the Tenant Improvements over time, and accordingly, Tenant may
submit Working Drawings and Specifications for portions of the Tenant Improvements in phases over time. If Landlord disapproves the Working Drawings and Specifications or Change, Landlord shall
specify in detail the reasons for disapproval and Tenant shall cause the Architect to modify the Working Drawings and Specifications or Change to incorporate Landlord's suggested revisions in a
mutually satisfactory manner. Tenant agrees and acknowledges that Landlord will not check the Preliminary Plan, the Working Drawings and Specifications and/or any Change for building code compliance
(or other federal, state or local law, ordinance or regulations compliance), and that Tenant and its Architect shall be solely responsible for such matters.

	B.
	It
is understood that except as provided below, the Tenant Improvements shall only include actual improvements to the Premises approved by Landlord as provided above, and shall exclude
(but not by way of limitation) Tenant's furniture, trade fixtures, partitions, equipment and signage improvements, if any. Further, Tenant shall not use lesser quality materials or less stringent
specifications for the Tenant Improvements than the "Standard Improvements" (as defined in the Lease). Landlord may, in its sole discretion, authorize in writing one or more "Non-Standard
Improvements" (as defined in the Lease), informing Tenant at the time of any such authorization if such Non-Standard Improvement must be removed at the expiration or earlier termination of
the Lease, in which event Tenant shall be solely responsible for the cost of removing and replacing same with the applicable Standard Improvement(s) upon the expiration or termination of the Lease.
All Non-Standard Improvements shall be subject to the prior approval of Landlord, which shall not be unreasonably withheld, conditioned or delayed, but Landlord shall in no event be
required to approve any Non-Standard Improvement if Landlord determines that such Improvement (i) is of a lesser quality than the corresponding Standard Improvement,
(ii) fails to conform to applicable governmental requirements, (iii) requires building services beyond the level Landlord has agreed to provide 

Tenant
under this Lease, or (iv) would have an adverse aesthetic impact from the exterior of the Premises. 

	C.
	Tenant
shall cause the TI Contractor to use the roofing subcontractor, and, unless Landlord otherwise approves in writing (which approval shall not be unreasonably withheld conditional
or delayed), the electrical, mechanical and plumbing engineers and subcontractors, designated on Exhibit X-2 attached hereto. Tenant
shall cause the Tenant Improvements to be constructed in a good and workmanlike manner, in compliance with all applicable building codes and permits and in accordance with the approved Working
Drawings and Specifications.

	D.
	[Intentionally
Deleted.]

	E.
	Prior
to the commencement of the Tenant Improvements work, Tenant shall deliver to Landlord a copy of the final application for permit and issued permit for the work.

	F.
	The
TI Contractor and each of its subcontractors shall comply with Landlord's requirements as set forth on Exhibit H attached to
the Lease, including without limitation all applicable insurance coverage requirements and the obligation to furnish appropriate certificates of insurance to Landlord, prior to commencement of
construction of the Tenant Improvements.

	G.
	A
construction schedule shall be provided to Landlord prior to commencement of the construction of the Tenant Improvements, and weekly updates (or such longer interval as is reasonably
appropriate) shall be supplied during the progress of the work; provided however, that the completion of the Tenant Improvements shall not be a
condition of, or affect, the Commencement Date of this Lease.

	H.
	Tenant
shall give Landlord ten (10) days prior written notice of the commencement of construction of the Tenant Improvements so that Landlord may cause an appropriate notice of
non-responsibility to be posted.

	I.
	The
Tenant Improvements shall be subject to inspection at all times by Landlord and its construction manager, and Landlord and/or its construction manager shall be permitted to attend
weekly (or such longer interval as is reasonably appropriate) job meetings with the TI Contractor.

	J.
	Tenant
shall apply and pay for all utility services required for the construction of the Tenant Improvements. Landlord expressly agrees that construction trailers may be parked in the
parking areas associated with the Building during construction of the Tenant Improvements.

	K.
	Upon
completion of the Tenant Improvements, Tenant shall cause to be provided to Landlord (i) as-built drawings of the Tenant Improvements work signed by the
Architect, (ii) CAD disks of the improved space compatible with Landlord's CAD system, (iii) a final punch list signed by Tenant, (iv) final and unconditional lien waivers from
the TI Contractor and all subcontractors, (v) a duly recorded notice of completion of the improvement work, and (vi) a certificate of occupancy for the Premises (collectively, the
"Close-Out Package").

	L.
	The
Tenant Improvements work shall be performed at all times in accordance with all state, federal and local laws, regulations and ordinances, including without limitation all OSHA and
other safety laws, the Americans with Disabilities Act ("ADA") and all applicable governmental permit and code requirements.

	M.
	All
of the provisions of this Lease (including, without limitation, the provisions of Sections 7.4, 10.1 and 10.3) shall apply to, and shall be binding on Tenant with respect to, the
construction of the Tenant Improvements.

	N.
	Landlord
shall permit Tenant and its contractors to enter the Premises immediately following the execution of the Lease in order that Tenant may prepare the Working Drawings and
Specifications and construct the Tenant Improvements. The entry shall be deemed to be under all of the provisions of the Lease except as to the covenants to pay rent. Landlord shall not be liable in
any way for any injury, loss or damage which may occur to any such work being 

performed
by Tenant, the same being solely at Tenant's risk, unless such injury, loss or damage is due to the active negligence or willful misconduct of Landlord, or Landlord's employees, authorized
agents or contractors. 

	O.
	Tenant
hereby designates Don Bradley, Telephone No. (858) 587-4183, as its representative, agent and attorney-in-fact for the purpose of
receiving notices, approving submittals and issuing requests for Changes, and Landlord shall be entitled to rely upon authorizations and directives of such persons) as if given directly by Tenant.
Tenant may amend the designation of its construction representative(s) at any time upon delivery of written notice to Landlord. 

II.    COST OF THE TENANT IMPROVEMENTS WORK    

	A.
	Landlord
shall provide to Tenant two (2) allowances as follows: (i) in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00) ("Landlord's Contribution") towards
the cost of repairing, replacing and/or expanding the HVAC system in the Premises and Utility Building (the "HVAC System") as part of the Tenant Improvements, and (ii) in the amount of Nine
Thousand Nine Hundred Four Dollars ($9,904.00) ("Space Planning Allowance") towards Tenant's space planning costs and fees for the Tenant Improvements. Except as provided in the foregoing, and any
additional cost of the Tenant Improvements shall be borne solely by Tenant. It is further understood and agreed that Landlord's construction manager shall be entitled to a supervision/administrative
fee equal to Fifteen Thousand Dollars ($15,000.00), which fee shall be paid from the Landlord's Contribution. If the actual cost of completion of the HVAC System is less than the maximum amount of the
Landlord's Contribution, such savings shall inure to the benefit of Landlord and Tenant shall not be entitled to any credit or payment. Tenant shall utilize the Landlord's Contribution and Space
Planning Allowance prior to June 30, 2006, and unless the Landlord's Contribution and/or the Space Planning Allowance is paid to Tenant prior to such date, Landlord shall have no further
obligation to fund the Landlord's Contribution and/or the Space Planning Allowance.

	B.
	The
Landlord's Contribution shall be paid to Tenant within thirty (30) days following substantial completion of the portion of the Tenant Improvements related to the HVAC System
in accordance with this Work Letter and submission of conditional lien waivers with respect to such work to Landlord. The Space Planning Allowance shall be paid within thirty (30) days
following Tenant's invoicing thereof.

	C.
	It
is understood that the construction of the Tenant Improvements may be done during Tenant's occupancy of the Premises and, in this regard, no rental abatement shall result due to
such construction and Tenant agrees to assume any resulting risk of injury, loss or damage. Not by way of limitation of the foregoing, the Commencement Date of the Lease shall not be extended or
otherwise affected by Tenant's construction of the Tenant Improvements (except as provided for a "Landlord's Delay" as defined in Section 3.1 of
the Lease). 

III.    DISPUTE RESOLUTION    

	A.
	All
claims or disputes between Landlord and Tenant arising out of, or relating to, this Work Letter shall be decided by the JAMS/ENDISPUTE ("JAMS"), or its successor, with such
arbitration to be held in San Diego, California, unless the parties mutually agree otherwise. Within ten (10) business days following submission to JAMS, JAMS shall designate three arbitrators
and each party may, within five (5) business days thereafter, veto one of the three persons so designated. If two different designated arbitrators have been vetoed, the third arbitrator shall
hear and decide the matter. If less than two (2) arbitrators are timely vetoed, JAMS shall select a single arbitrator from the non-vetoed arbitrators originally designated by JAMS,
who shall hear and decide the matter. Any arbitration pursuant to this section shall be decided within thirty (30) days of submission to JAMS. The decision of the arbitrator shall be final and
binding on the parties. In no event shall the arbitrator be empowered or authorized to award consequential or punitive damages (including any award for lost profit or opportunity 

costs
or loss or interruption of business or income). All costs associated with the arbitration shall be awarded to the prevailing party as determined by the arbitrator. 

	B.
	Notice
of the demand for arbitration by either party to the Work Letter shall be filed in writing with the other party to the Work Letter and with JAMS and shall be made within a
reasonable time after the dispute has arisen. The award rendered by the arbitrator shall be final, and judgment may be entered upon it in accordance with applicable law in any court having
jurisdiction thereof. Except by written consent of the person or entity sought to be joined, no arbitration arising out of or relating to this Work Letter shall include, by consolidation, joinder or
in any other manner, any person or entity not a party to the Work Letter unless (1) such person or entity is substantially involved in a common question of fact or law, (2) the presence
of such person or entity is required if complete relief is to be accorded in the arbitration, or (3) the interest or responsibility of such person or entity in the matter is not insubstantial.

	C.
	The
agreement herein among the parties to arbitrate shall be specifically enforceable under prevailing law. The agreement to arbitrate hereunder shall apply only to disputes arising
out of, or relating to, this Work Letter, and shall not apply to other matters of dispute under the Lease except as may be expressly provided in the Lease. 

   THE IRVINE COMPANY  

 9410 Carroll Park Dr.

First Floor  

[Map
of building] 

EXHIBIT X-1  

1

 
THE IRVINE COMPANY  

 9410 Carroll Park Dr.

Second Floor  

[Map
of building] 

EXHIBIT X-1  

2

	TIC APPROVED SUBCONTRACTORS:

06/16/05	 	FOR 9410 Carroll Park Drive
	
GENERAL CONTRACTORS	
 	

 
	Roel Construction	 	 
	Burger Construction	 	 
	Johnson & Jennings	 	 
	Prevost Construction	 	 
	San Diego Office Interiors	 	 
	
MECHANCIAL	
 	

 
	Pacific Rim	 	 
	Control Air / Mike Jones	 	 
	Comfort Systems	 	 
	
ELECTRICAL	
 	

 
	Bergelectric / Ken Bertalan	 	 
	Sasco / Bob Smith	 	 
	Neal Electric	 	 
	
PLUMBING	
 	

 
	KMP Plumbing / Steve Greishaber	 	 
	Cass Plumbing / Scott	 	 
	Pacific Rim	 	 
	
ROOFING	
 	

 
	Evans Roofing / Tony Baratto / 714-285-1180	 	 
	No other roofing allowed due to warranty	 	 

EXHIBIT X-2  

THE IRVINE COMPANY  

Canyon Ridge Site Plan

FULL BUILDING, MULTI-TENANT & HIGH-IMAGE USERS 

[Map
of site] 

	 	 	CANYON RIDGE TECHNOLOGY PARK LEGENDS
	 	 	—Total Buildings: 10
	 	 	—Total Square Feet: 515,122
	 	 	—Project Phase: 3
	 	 	Phase I: 9339, 9369 & 9449
	 	 	Phase II: 9380, 9410, 9440, 9450 & 9480
	 	 	Phase III: 6910 & 6920

Exhibit Y  

EXHIBIT Y
  to the Lease 

QuickLinks

LEASE (Single Tenant; Net) BETWEEN THE IRVINE COMPANY AND PROMETHEUS LABORATORIES INC.

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