SECURITY
AGREEMENT
(Securities)
1.
Grant of Security Interest . As security for any and all
Indebtedness (as defined below), the undersigned Gen-Probe
Incorporated, a Delaware corporation (“ Pledgor
”), hereby irrevocably and unconditionally grants a security
interest in and assigns and transfers to Bank of America, N.A. (and
its successors and assigns) (collectively, “ Bank
”) all property referred to in Exhibit A attached
hereto and incorporated herein, as hereafter amended or
supplemented from time to time (the “ Collateral
”). Capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Credit Agreement.
2.
Indebtedness . “ Indebtedness ” means all
“Obligations”, now or hereafter existing, as such term
is defined in that certain Credit Agreement dated February 27,
2009 between Pledgor and Bank (as amended, restated or modified
from time to time, the “ Credit Agreement ”),
together with and including all obligations and liabilities of
Pledgor to Bank hereunder.
3.
Trading or Substitution of Collateral . Subject to the terms
of any documents or agreements between Pledgor and any Securities
Intermediary, Pledgor may trade, substitute, withdraw or otherwise
dispose of Collateral so long as (i) no Default has occurred
and is continuing; and (ii) the Collateral Value, after giving
effect to such trade, substitution, withdrawal or other
disposition, equals or exceeds the Incurrence Borrowing Base.
Subject to the foregoing, unless otherwise agreed by Bank in any
credit agreement or otherwise, Bank shall be under no obligation to
permit any trading, redemption, exchange, distribution or
substitution of the Collateral or to permit the release of any
Collateral or the proceeds thereof until the Indebtedness has been
paid in full. In no event shall any trading, withdrawal or
substitution be allowed of any Collateral which is the subject of a
derivative hedging transaction with Bank without the prior consent
of Bank. The provisions in this Section 3 shall
supersede any authorization to trade as set forth in any control
agreement.
4.
Collateral Maintenance . Pledgor acknowledges that it has
been informed of the terms of the Indebtedness related to the
Collateral. Such terms may include requirements to maintain
collateral with an adequate loan value, and may grant to Bank the
right to issue a margin call with respect to the Indebtedness.
Pledgor represents that the address, telephone number and any
facsimile number listed on the signature page for Pledgor are
correct. In the event of any change in such contact information,
Pledgor shall promptly notify Bank in writing in accordance with
the provisions of the paragraph titled “Notices” below.
Pledgor acknowledges and agrees that notice of noncompliance with
the collateral maintenance requirements of the Indebtedness may be
given orally or in writing, including facsimile. Any such oral or
written notice to Pledgor shall be given in accordance with the
notice provisions of this Agreement and shall be deemed received by
Pledgor as provided herein provided that any oral notice shall be
supplemented by a written notice delivered on the same or the
immediately following business day.
5.
Pledgor’s Covenants, Warranties and Representations .
Pledgor covenants, represents and warrants that unless compliance
is waived by Bank in writing; provided any covenant shall be
binding only so long as Lender shall have any Commitment under the
Credit Agreement, any Loan or other Obligation under the Credit
Agreement shall remain unpaid or unsatisfied (other than inchoate
indemnification obligations), or any Letter of Credit shall remain
outstanding:
(a)
Except as otherwise agreed by Bank in writing, Pledgor owns all of
the Collateral free and clear of any and all liens, encumbrances,
or interests of any third parties other than the security interest
of Bank, and will keep all of the Collateral free of all liens,
claims, security interests and encumbrances of any kind or nature,
whether voluntary or involuntary, except (i) the security
interest of Bank and (ii) banker’s liens, rights of
set-off and similar liens arising in the ordinary course of
business in favor of Merrill Lynch Pierce Fenner & Smith, Inc.
(“ Depository Liens ”).
(b)
Pledgor has the corporate power and authority to pledge, assign,
transfer, deliver, deposit, set over and confirm unto Bank the
Collateral as provided herein and will warrant and defend the title
thereto and the security interest therein conveyed to Bank by this
Agreement against all claims of all persons (other than Depository
Liens) and will maintain and preserve such security
interest.
(c)
The execution, delivery and performance of this Agreement and the
pledge and/or delivery of the Collateral to Bank do not contravene
any agreement, commitment, indenture, contract or other obligation
or restriction affecting Pledgor.
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(d)
This Agreement is the valid legal and binding obligation of
Pledgor, enforceable in accordance with its terms, except as such
enforceability may be limited by Debtor Relief Laws and by general
principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(e)
This Agreement will not violate any provision of law applicable to
Pledgor.
(f)
No authorization, approval or other action by and no notice to or
filing with, any governmental authority is required for the pledge
by Pledgor of the Collateral pursuant to this Agreement, or for the
execution, delivery, or performance of this Agreement by
Pledgor.
(g)
Pledgor shall, at Pledgor’s expense, take all actions
necessary or advisable from time to time to maintain the first
priority and perfection of said security interest and shall not
take any actions that would alter, impair or eliminate said
priority or perfection.
(h)
Pledgor agrees to pay prior to delinquency all taxes, charges,
liens and assessments against the Collateral, and upon the failure
of Pledgor to do so, Bank at its option may pay any of them and
shall be the sole judge of the legality or validity thereof and the
amount necessary to discharge the same.
(i)
Pledgor’s exact legal name is correctly set forth on the
signature page hereof. Pledgor will provide Bank with at least
30 days’ prior written notice of any change in
Pledgor’s name or identity.
(j)
Pledgor’s chief executive office is, and has been for the
four-month period preceding the date hereof (or, if less, the
entire period of the existence of Pledgor), located in the State of
California. In addition, Pledgor is a corporation organized under
the laws of the State of Delaware. Pledgor shall give Bank at least
thirty (30) days notice before changing the location of its
chief executive office, type of organization, business structure or
state of incorporation or organization.
(k)
Pledgor’s organizational identification number, if any,
assigned by the state of incorporation or organization is correctly
set forth on the signature page hereof. Pledgor shall promptly
notify Bank (i) of any change of its organizational
identification number, or (ii) if Pledgor does not have an
organizational identification number and later obtains one, of such
organizational identification number.
6.
Representations, Warranties and Covenants Regarding Equity
Securities Collateral . Pledgor hereby represents, warrants and
covenants the following with respect to any equity securities
comprising any or all of the Collateral (the “ Equity
Securities ”) and covenants and agrees to promptly notify
Bank in writing in the event that any of the foregoing
representations and warranties is no longer true and
correct:
(a)
To Pledgor’s knowledge, the Equity Securities have been duly
authorized and are fully paid and non-assessable.
(b)
Except as specifically notified in writing by Pledgor to Lender,
there are no restrictions on the pledge of the Equity Securities by
Pledgor to Bank nor on the sale of the Equity Securities by Pledgor
or Bank (whether pursuant to securities laws or regulations or any
shareholder, lock-up or other similar agreement or insider trading
rules of the issuer).
(c)
Pledgor is not an “affiliate” of the issuer of any of
the Equity Securities, as such term is defined in Rule 144 of
the General Rules and Regulations under the Securities Act of 1933,
as amended, issued by the Securities and Exchange
Commission.
(d)
Except as specifically notified in writing by Pledgor to Lender,
the Equity Securities are freely and fully marketable by Pledgor or
Bank as pledgee, without regard to any holding period, manner of
sale, volume limitation, public information or notice
requirement.
7.
Powers of Bank . At any time, without notice unless
expressly required elsewhere in this Agreement, and at the expense
of Pledgor, Bank in its name or in the name of Pledgor may, but
shall not be obligated to:
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(a)
During the existence of an Event of Default, collect by legal
proceedings or otherwise, endorse, receive and receipt for all
dividends, interest, principal payments and other sums now or
hereafter payable upon or on account of the Collateral.
(b)
During the existence of an Event of Default, make any compromise or
settlement it deems desirable or proper with reference to the
Collateral.
(c)
Insure, protect and preserve the Collateral.
(d)
During the existence of an Event of Default, participate in any
recapitalization, reclassification, reorganization, consolidation,
redemption, stock split, merger or liquidation of any issuer of
securities which constitute Collateral, and in connection therewith
may deposit or surrender control of the Collateral, accept money or
other property in exchange for the Collateral, and take such action
as it deems proper in connection therewith, and any money or
property received on account of or in exchange for the Collateral
shall be applied to the Indebtedness or held by Bank thereafter as
Collateral pursuant to the provisions hereof.
(e)
During the existence of an Event of Default, cause Collateral to be
transferred to its name or to the name of its nominee or the name
of a depository or its nominee.
(f)
Obtain from any custodian or securities intermediary holding the
Collateral any and all information with respect to the Collateral,
without any further consent of or notice to Pledgor.
(g)
During the existence of an Event of Default, exercise as to the
Collateral all the rights, powers and remedies of an owner
necessary to exercise its rights under this Agreement, including
without limitation, the right to sell or otherwise dispose of all
or any part of the Collateral. Bank shall not vote any securities
constituting Collateral except as instructed by Pledgor, unless an
Event of Default exists and Bank has delivered to Pledgor a written
notice of Bank’s intent to exercise such voting
rights.
Pledgor
hereby appoints Bank its attorney-in-fact to carry out any of the
powers granted by this paragraph. Without limiting the generality
of the foregoing, Pledgor hereby appoints Bank its attorney-in-fact
to execute and deliver any necessary stock powers, endorsements,
assignments or other documents and agreements necessary to carry
out any of the foregoing powers. The foregoing appointments shall
be deemed coupled with an interest of Bank and shall not be revoked
without Bank’s written con
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