Credit And Security Agreement

Exhibit 10.1

CREDIT AND SECURITY AGREEMENT

THIS CREDIT AND SECURITY AGREEMENT (as the same may be amended, supplemented, restated or otherwise modified from time to time, this " Agreement" ) is dated as of June 4, 2007 by and among SERACARE LIFE SCIENCES, INC. , a Delaware corporation (" Company" ), f/k/a SeraCare Reorganization Company, Inc., as a Borrower, and any additional Borrower that may hereafter be added to this Agreement (together with Company, collectively, " Borrowers" and each individually, a " Borrower" ), MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc. , individually as a Lender, and as Administrative Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender.

RECITALS

Borrowers have requested that Lenders make available to Borrowers the financing facilities as described herein. Lenders are willing to extend such credit to Borrowers under the terms and conditions herein set forth. AGREEMENT

NOW, THEREFORE , in consideration of the premises and the agreements, provisions and covenants herein contained, Borrowers, Lenders and Administrative Agent agree as follows:

ARTICLE 1 - DEFINITIONS

Section 1.1 Certain Defined Terms. The following terms have the following meanings:

" Account Debtor" means " account debtor" , as defined in Article 9 of the UCC, and any other obligor in respect of an Account.

" Accounts" means collectively (a) any right to payment of a monetary obligation, whether or not earned by performance, (b) without duplication, any " account" (as defined in the UCC), any accounts receivable (whether in the form of payments for services rendered or goods sold, rents, license fees or otherwise), any " health-care-insurance receivables" (as defined in the UCC), any " payment intangibles" (as defined in the UCC) and all other rights to payment and/or reimbursement of every kind and description, whether or not earned by performance, (c) all accounts, " general intangibles" (as defined in the UCC), Intellectual Property, rights, remedies, Guarantees, " supporting obligations" (as defined in the UCC), " letter-of-credit rights" (as defined in the UCC) and security interests in respect of the foregoing, all rights of enforcement and collection relating to the foregoing, all books and records evidencing or related to the foregoing, and all rights under the Operative Documents in respect of the foregoing, (d) all information and data compiled or derived by any Borrower or to which any Borrower is entitled in respect of or related to the foregoing, and (e) all proceeds of any of the foregoing.

" Administrative Agent" means Merrill Lynch, in its capacity as administrative agent for the Lenders hereunder, as such capacity is established in, and subject to the provisions of, Article 10, and the successors of Merrill Lynch in such capacity.

" Affiliate" means, with respect to any Person, (a) any Person that directly or indirectly controls such Person, (b) any Person which is controlled by or is under common control with such Person, and (c) each of such Person' s (other than, with respect to any Lender, any Lender' s) officers or directors (or Persons functioning in substantially similar roles). As used in this definition, the term " control" of a Person means the possession, directly or indirectly, of the power to vote 10% or more of any class of voting securities of such Person or to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

" Anti-Terrorism Laws" means any Laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by OFAC. " Approved Fund" means any (i) investment company, fund, trust, securitization vehicle or conduit that is (or will be) engaged primarily in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business or (ii) any Person (other than a natural person) which temporarily warehouses loans for any Lender or any entity described in the preceding clause (i) and that, with respect to each of the preceding clauses (i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender.

" Asset Disposition" means any sale, lease, license, transfer, assignment or other consensual disposition by any Credit Party of any asset.

" Assignment Agreement" means an agreement between a Lender and an Eligible Assignee in form and substance reasonably satisfactory to Administrative Agent. " Bankruptcy Code" means Title 11 of the United States Code entitled " Bankruptcy" , as the same may be amended, modified or supplemented from time to time, and any successor statute thereto.

" Bankruptcy Court" means the United States Bankruptcy Court for the Southern District of California, or such other court having jurisdiction over the Chapter 11 Case.

" Base Rate" means the LIBOR Rate.

" Base Rate Margin" means 2.75% per annum with respect to the Revolving Loans and other Obligations.

" Blocked Person" means any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) that commits, threatens or conspires to commit or supports " terrorism" as defined in Executive Order No. 13224, or (e) that is named a " specially designated national" or " blocked person" on the most current list published by OFAC or other similar list or is named as a " listed person" or " listed entity" on other lists made under any Anti-Terrorism Law.

" Borrower" and " Borrowers" mean the entity(ies) described in the first paragraph of this Agreement and each of their successors and permitted assigns.

" Borrower Representative" means Company, in its capacity as Borrower Representative pursuant to the provisions of Section 2.9, or any successor Borrower Representative selected by Borrowers and approved by Administrative Agent. " Borrowing Base" means, at the time of determination:

(a) the product of (i) 85% multiplied by (ii) the aggregate net amount at such time of the Eligible Accounts; plus

(b) the least of (i) an amount equal to 150% multiplied by the amount derived under clause (a) above, (ii) 70% multiplied by the Orderly Liquidation Value of the Eligible Inventory or (iii) 30% multiplied by the value of the Eligible Inventory, valued at the lower of first-in-first-out cost or market, and after factoring in all rebates, discounts and other incentives or rewards associated with the purchase of the applicable Inventory; minus

(c) the amount of any reserves and/or adjustments provided for in this Agreement.

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" Borrowing Base Certificate" means a certificate, duly executed by a Responsible Officer of Borrower Representative, appropriately completed and substantially in the form of Exhibit C hereto.

" Business Day" means any day except a Saturday, Sunday or other day on which either the New York Stock Exchange is closed, or on which commercial banks in Chicago and New York City are authorized by law to close. " Capital Lease" means, with respect to any Person, any lease of any real or personal property by such Person that, in accordance with GAAP, is required to be accounted for as a capital lease on the balance sheet of such Person.

" Cash" means money, currency, or a credit balance in a Deposit Account.

" Cash Equivalents" means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government, or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within eighteen (18) months after such date; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within eighteen (18) months after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from Standard & Poor' s (" S&P" ) or at least P-1 from Moody' s Investors Service, Inc. (" Moody' s" ); (iii) commercial paper maturing no more than eighteen (18) months from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody' s; (iv) certificates of deposit or bankers' acceptances maturing within eighteen (18) months after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (a) is at least " adequately capitalized" (as defined in the regulations of its primary Federal banking regulator), and (b) has Tier 1 capital (as defined in such regulations) of not less than $500,000,000; and (v) shares of any money market mutual fund that (a) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $500,000,000, and (c) has a rating of at least A-1 from S&P or at least P-1 from Moody' s.

" Chapter 11 Case" means the Chapter 11 case, case no. 06-00510-LA, of the Filing Company pursuant to the Filing Company' s voluntary petition for reorganization under the Bankruptcy Code with the Bankruptcy Court.

" CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.A. a7 9601 et seq. , as the same may be amended from time to time. " Change in Control" means the occurrence of any of the following events: (a) any Person or two or more Persons acting in concert shall have acquired beneficial ownership, directly or indirectly, of, or shall have acquired by contract or otherwise (other than acquisitions made on a public securities exchange), or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of or control over, voting stock of Principal Borrower (or other securities convertible into such voting stock) representing 50% or more of the combined voting power of all voting stock of Principal Borrower; (b) a majority of Principal Borrower' s board of directors shall cease to consist of the directors of Principal Borrower on the Closing Date and other directors whose nomination for election to Principal Borrower' s board of directors is recommended by at least a majority of the foregoing described directors; (c) Principal Borrower ceases to own, directly or indirectly, all of the outstanding capital stock of any other Borrower (other than by reason of a merger between such Borrower and Principal Borrower to the extent permitted under Section 5.6); or (d) any " Change of Control" , " Change in Control" , or terms of similar import under any Subordinated Debt Document. As used herein, " beneficial ownership" shall have the meaning provided in Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934. " Closing Date" means the date of this Agreement.

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


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" Collateral" means all property, now existing or hereafter acquired, that is mortgaged or pledged to, or purported to be subjected to a Lien in favor of, Administrative Agent, for the benefit of Administrative Agent and Lenders, pursuant to this Agreement and the Security Documents, including all of the property described in Schedule 8.1 hereto.

" Commitment Annex" means Annex A to this Agreement. " Commitment Expiry Date" means June 4, 2010.

" Company" has the meaning set forth in the introduction to this Agreement.

" Compliance Certificate" means a certificate, duly executed by a Responsible Officer of Borrower Representative, appropriately completed and substantially in the form of Exhibit B hereto. " Confirmation Order" has the meaning set forth in Section 7.1(e). " Contingent Obligation" means, with respect to any Person, any direct or indirect liability of such Person: (a) with respect to any Debt of another Person (a " Third Party Obligation" ) if the purpose or intent of such Person incurring such liability, or the effect thereof, is to provide assurance to the obligee of such Third Party Obligation that such Third Party Obligation will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Third Party Obligation will be protected, in whole or in part, against loss with respect thereto; (b) with respect to any undrawn portion of any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for the reimbursement of any drawing; (c) under any Swap Contract, to the extent not yet due and payable; (d) to make take-or-pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement; or (e) for any obligations of another Person pursuant to any Guarantee or pursuant to any agreement to purchase, repurchase or otherwise acquire any obligation or any property constituting security therefor, to provide funds for the payment or discharge of such obligation or to preserve the solvency, financial condition or level of income of another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so Guaranteed or otherwise supported or, if not a fixed and determinable amount, a reasonable estimate of the amount so Guaranteed or otherwise supported.

" Controlled Group" means all members of any group of corporations and all members of a group of trades or businesses (whether or not incorporated) under common control which, together with any Borrower, are treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA. " Credit Exposure" means any period of time during which the Revolving Loan Commitment is outstanding or any Loan, Reimbursement Obligation or other Obligation remains unpaid or any Letter of Credit or Support Agreement remains outstanding; provided, however, that no Credit Exposure shall be deemed to exist solely due to the existence of contingent indemnification liability, absent the assertion of a claim, or the known existence of a claim reasonably likely to be asserted, with respect thereto.

" Credit Party" means any Guarantor under a Guarantee of the Obligations or any part thereof, any Borrower, any Subsidiary of a Borrower, and any other Person (other than Administrative Agent, a Lender or a participant of a Lender), whether now existing or hereafter acquired or formed, that becomes, or is required to become in accordance with the terms hereof, obligated as a borrower, guarantor, surety, indemnitor, pledgor, assignor or other obligor under any Financing Document; and " Credit Parties" means all such Persons, collectively.

" Debt" of a Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising and paid on a timely basis and in the Ordinary Course of Business, (d) all Capital Leases of such Person, (e) all non-contingent obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit, banker' s acceptance or similar instrument, (f) all equity securities of such Person subject to repurchase or redemption otherwise than at the sole option of such Person, (g) all obligations secured by a Lien on any asset of such Person, whether or not such obligation is otherwise an obligation of such Person, (h) " earnouts" , purchase price adjustments, profit sharing arrangements, deferred purchase money amounts and similar payment


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obligations or continuing obligations of any nature of such Person arising out of purchase and sale contracts, except trade accounts payable arising and paid on a timely basis and in the Ordinary Course of Business; (i) all Debt of others Guaranteed by such Person; (j) off-balance sheet liabilities and/or pension plan liabilities of such Person; and (k) obligations arising under non-compete agreements. Without duplication of any of the foregoing, Debt of Borrowers shall include any and all Loans and Letter of Credit Liabilities.

" Default" means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default. " Defaulted Lender" means, so long as such failure shall remain in existence and uncured, any Lender which shall have failed to make any Loan or other credit accommodation, disbursement, settlement or reimbursement required pursuant to the terms of any Financing Document.

" Deposit Account" means a " deposit account" (as defined in Article 9 of the UCC) or other account (other than a Securities Account) in which funds are held or invested for credit to or for the benefit of any Borrower.

" Deposit Account Control Agreement" means an agreement, in form and substance reasonably satisfactory to Administrative Agent, among Administrative Agent, any Borrower and each bank or financial institution in which such Borrower maintains a Deposit Account, which agreement provides that (a) such bank or financial institution acknowledges the security interest of Administrative Agent in such Deposit Account, (b) such bank or financial institution shall comply with instructions originated by Administrative Agent directing disposition of the funds in such Deposit Account without further consent by such Borrower, and (c) such bank or financial institution shall agree that it shall have no Lien on, or right of setoff or recoupment against, such Deposit Account or the contents thereof, other than in respect of usual and customary service fees and of returned items for which Administrative Agent has been given value, in each such case expressly consented to by Administrative Agent, and containing such other terms and conditions as Administrative Agent may reasonably require, including as to any such agreement pertaining to any Lockbox Account, providing that such bank shall wire, or otherwise transfer, in immediately available funds, on a daily basis to the Payment Account all funds received or deposited into such Lockbox or Lockbox Account.

" Dollars" or " $" means the lawful currency of the United States of America.

" Effective Date" has the meaning set forth in the Reorganization Plan. " Eligible Account(s)" means, subject to the criteria below, an account receivable of a Borrower, which was generated in the Ordinary Course of Business, which was generated originally in the name of such Borrower and not acquired via assignment or otherwise, and which Administrative Agent, in its good faith credit judgment and discretion, deems to be an Eligible Account. The net amount of Eligible Accounts at any time shall be (a) the face amount of such Eligible Accounts as originally billed minus all cash collections and other proceeds of such Account received from or on behalf of the Account Debtor thereunder as of such date and any and all returns, rebates, discounts (which may, at Administrative Agent' s option, be calculated on shortest terms), credits, allowances or excise taxes of any nature at any time issued, owing, claimed by Account Debtors, granted, outstanding or payable in connection with such Accounts at such time, and (b) adjusted by applying percentages (known as " liquidity factors" ) by payor and/or payor class based upon the applicable Borrower' s actual recent collection history for each such payor and/or payor class in a manner consistent with Administrative Agent' s underwriting practices and procedures. Such liquidity factors may be adjusted by Administrative Agent from time to time as warranted by Administrative Agent' s underwriting practices and procedures and using Administrative Agent' s good faith credit judgment. Without limiting the generality of the foregoing, no Account shall be an Eligible Account if: (a) the Account remains unpaid more than 120 days past the claim or invoice date (but in no event more than 135 days after the applicable goods or services have been rendered or delivered);

(b) the Account is subject to any defense, set-off, recoupment, counterclaim, deduction, discount, credit, chargeback, freight claim, allowance, or adjustment of any kind (but only to the extent of such defense, set-off, recoupment, counterclaim, deduction,


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discount, credit, chargeback, freight claim, allowance, or adjustment), or the applicable Borrower is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process;

(c) if the Account arises from the sale of goods, any part of any goods the sale of which has given rise to the Account has been returned, rejected, lost, or damaged (but only to the extent that such goods have been so returned, rejected, lost or damaged); (d) if the Account arises from the sale of goods, the sale was not an absolute, bona fide sale, or the sale was made on consignment or on approval or on a sale-or-return or bill-and-hold or progress billing basis, or the sale was made subject to any other repurchase or return agreement, or the goods have not been shipped to the Account Debtor or its designee or the sale was not made in compliance with applicable Laws;

(e) if the Account arises from the performance of services, the services have not actually been performed or the services were undertaken in violation of any law or the Account represents a progress billing for which services have not been fully and completely rendered;

(f) the Account is subject to a Lien other than a Permitted Lien, or Administrative Agent does not have a Lien on such Account;

(g) the Account is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment, unless such Chattel Paper or Instrument has been delivered to Administrative Agent; (h) the Account Debtor is an Affiliate or Subsidiary of a Credit Party, or if the Account Debtor holds any Debt of a Credit Party; (i) 50% or more of the aggregate balance of all Accounts owing from the Account Debtor obligated on the Account are ineligible under subclause (a) above (in which case, all Accounts from such Account Debtor shall be ineligible);

(j) without limiting the provisions of subclause (i) above, 50% or more of the aggregate unpaid Accounts from the Account Debtor obligated on the Account are not deemed Eligible Accounts under this Agreement for any reason (in which case, all Accounts from such Account Debtor shall be ineligible);

(k) the total unpaid Accounts of the Account Debtor obligated on the Account exceed 25% (or, in the case of NIH, 40%) of the net amount of all Eligible Accounts owing from all Account Debtors (but only the amount of the Accounts of such Account Debtor exceeding such 25% limitation (or 40% limitation, as applicable) shall be considered ineligible); (l) any covenant, representation or warranty contained in the Financing Documents with respect to such Account has been breached in any respect;

(m) the Account is unbilled or has not been invoiced to the Account Debtor in accordance with the procedures and requirements of the applicable Account Debtor;

(n) the Account is an obligation of an Account Debtor that is the federal (or local) government (including NIH) or a political subdivision thereof, unless the applicable Borrower assigns its right to payment of such Account to Administrative Agent pursuant to the federal Assignment of Claims Act of 1940, as the same may be amended, modified or supplemented from time to time, and any successor statute thereto, or has otherwise complied with other applicable Law, and Administrative Agent has received from the Account Debtor an acknowledgement of Administrative Agent' s notice of assignment of such Account; provided, however , that for a period of forty-five (45) days following the Closing Date, an Account shall not be ineligible solely as a result of the Administrative Agent having not yet received such acknowledgment from the Account Debtor;


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(o) the Account is an obligation of an Account Debtor that has suspended business, made a general assignment for the benefit of creditors, is unable to pay its debts as they become due or as to which a petition has been filed (voluntary or involuntary) under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or the Account is an Account as to which any facts, events or occurrences exist which could reasonably be expected to impair the validity, enforceability or collectibility of such Account or reduce the amount payable or delay payment thereunder;

(p) the Account Debtor has its principal place of business or executive office outside the United States unless the sale giving rise to such Account is on letter of credit or other credit support terms satisfactory to Administrative Agent in its sole discretion;

(q) the Account is payable in a currency other than United States dollars;

(r) the Account Debtor is an individual; (s) the Borrower owning such Account has not signed and delivered to Administrative Agent notices, in the form requested by Administrative Agent, directing the Account Debtors to make payment to the applicable Lockbox Account;

(t) the Account includes late charges or finance charges (but only the amount of such late charges or finance charges shall be ineligible);

(u) the Account is an Account of the GCI Division; or

(v) the Account arises out of the sale of any Inventory upon which any other Person holds, claims or asserts a Lien. " Eligible Assignee" means (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund, and (iv) any other Person (other than a natural person) approved by Administrative Agent and, so long as no Default or Event of Default exists, Principal Borrower (which approval of Principal Borrower shall not be unreasonably withheld or delayed); provided that notwithstanding the foregoing, (x) " Eligible Assignee" shall not include any Borrower or any Affiliate or Subsidiary of any Borrower and (y) no proposed assignee intending to assume all or any portion of the Revolving Loan Commitment shall be an Eligible Assignee unless such proposed assignee either already holds a portion of such Revolving Loan Commitment, or has been approved as an Eligible Assignee by Administrative Agent. " Eligible Inventory" means Inventory owned by a Borrower and acquired and dispensed by such Borrower in the Ordinary Course of Business that Administrative Agent, in its good faith credit judgment and discretion, deems to be Eligible Inventory. Without limiting the generality of the foregoing, no Inventory shall be Eligible Inventory if: (a) such Inventory is not owned by a Borrower free and clear of all Liens (other than inchoate Liens of the type described in clauses (c) or (d) of the definition of " Permitted Liens" ) and rights of any other Person (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure such Borrower' s performance with respect to that Inventory);

(b) such Inventory is placed on consignment or is in transit; (c) such Inventory is covered by a negotiable document of title, unless such document has been delivered to Administrative Agent with all necessary endorsements, free and clear of all Liens except those in favor of Administrative Agent and inchoate Liens of the type described in clauses (c) or (d) of the definition of " Permitted Liens" ; (d) such Inventory is excess, obsolete, unsalable, shopworn, seconds, damaged, unfit for sale, unfit for further processing, is of substandard quality or is not of good and merchantable quality, free from any defects;


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(e) such Inventory consists of display items or packing or shipping materials, manufacturing supplies or Work-In-Process;

(f) such Inventory is not subject to a first priority Lien in favor of Administrative Agent; (g) such Inventory consists of goods that can be transported or sold only with licenses that are not readily available excluding those licenses set forth on Schedule 1 to the extent that Borrowers have obtain ...