Exhibit 10.6

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH
“***”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE
SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION
REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THE EXCHANGE ACT OF 1934.

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT, dated as of June 27, 2008 (as amended,
restated, supplemented or otherwise modified from time to time, this
“Agreement”) is among GENERAL ELECTRIC CAPITAL CORPORATION (“GECC”), in its
capacity as agent for Lenders (as defined below) (together with its successors
and assigns in such capacity, “Agent”), OXFORD FINANCE CORPORATION (“Oxford”),
the other financial institutions who are or hereafter become parties to this
Agreement as lenders (together with GECC and Oxford, collectively the “Lenders”,
and each individually, a “Lender”), DEPOMED, INC., a California corporation
(“Borrower”), and the other entities or persons, if any, who are or hereafter
become parties to this Agreement as guarantors (each a “Guarantor” and
collectively, the “Guarantors”, and together with Borrower, each a “Loan Party”
and collectively, “Loan Parties”).

 

RECITALS

 

Borrower wishes to borrow funds from time to time from Lenders, and Lenders
desire to make loans, advances and other extensions of credit, severally and not
jointly, to Borrower from time to time pursuant to the terms and conditions of
this Agreement.

 

AGREEMENT

 

Loan Parties, Agent and Lenders agree as follows:

 

1.              DEFINITIONS.

 

As used in this Agreement, all capitalized terms shall have the definitions as
provided herein.  Any accounting term used but not defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States of America, as in effect from time to time (“GAAP”) and all
calculations shall be made in accordance with GAAP.  The term “financial
statements” shall include the accompanying notes and schedules.  All other terms
used but not defined herein shall have the meaning given to such terms in the
Uniform Commercial Code as adopted in the State of New York, as amended and
supplemented from time to time (the “UCC”).

 

2.              LOANS AND TERMS OF PAYMENT.

 

2.1.     PROMISE TO PAY.  BORROWER PROMISES TO PAY AGENT, FOR THE RATABLE
ACCOUNTS OF LENDERS, WHEN DUE PURSUANT TO THE TERMS HEREOF, THE AGGREGATE UNPAID
PRINCIPAL AMOUNT OF ALL LOANS, ADVANCES AND OTHER EXTENSIONS OF CREDIT MADE
SEVERALLY BY THE LENDERS TO BORROWER UNDER THIS AGREEMENT, TOGETHER WITH
INTEREST ON THE UNPAID PRINCIPAL AMOUNT OF SUCH LOANS, ADVANCES AND OTHER
EXTENSIONS OF CREDIT AT THE INTEREST RATES SET FORTH HEREIN.

 

2.2.     TERM LOANS.

 

(A)         COMMITMENT.  SUBJECT TO THE TERMS AND CONDITIONS HEREOF, EACH
LENDER, SEVERALLY, BUT NOT JOINTLY, AGREES TO MAKE THE TERM LOAN A, TERM LOAN B
AND TERM LOAN C (EACH AS

 

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Confidential Information, indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission

 

DEFINED BELOW AND EACH SOMETIMES INDIVIDUALLY REFERRED TO AS A “TERM LOAN” AND
COLLECTIVELY REFERRED TO AS THE “TERM LOANS”) TO BORROWER FROM TIME TO TIME ON
ANY BUSINESS DAY (AS DEFINED BELOW) DURING THE PERIODS SET FORTH BELOW IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED SUCH LENDER’S “TERM LOAN A COMMITMENT”,
“TERM LOAN B COMMITMENT” AND “TERM LOAN C COMMITMENT” AS IDENTIFIED ON SCHEDULE
A HERETO (SUCH COMMITMENT OF EACH LENDER AS IT MAY BE AMENDED TO REFLECT
ASSIGNMENTS MADE IN ACCORDANCE WITH THIS AGREEMENT OR TERMINATED OR REDUCED IN
ACCORDANCE WITH THIS AGREEMENT, ITS “TERM LOAN A COMMITMENT”, “TERM LOAN B
COMMITMENT” AND “TERM LOAN C COMMITMENT”, AS APPLICABLE, AND THE AGGREGATE OF
ALL SUCH COMMITMENTS, THE “AGGREGATE TERM LOAN A COMMITMENT”, “AGGREGATE TERM
LOAN B COMMITMENT” AND “AGGREGATE TERM LOAN C COMMITMENT”, AS APPLICABLE, AND
EACH TERM LOAN A COMMITMENT, TERM LOAN B COMMITMENT AND TERM LOAN C COMMITMENT
IS SOMETIMES INDIVIDUALLY REFERRED TO HEREIN AS A “COMMITMENT” AND COLLECTIVELY
AS THE “COMMITMENTS”).  NOTWITHSTANDING THE FOREGOING, THE AGGREGATE PRINCIPAL
AMOUNT OF THE TERM LOANS MADE HEREUNDER SHALL NOT EXCEED $15,000,000 (THE “TOTAL
COMMITMENT”).  EACH LENDER’S OBLIGATION TO FUND A TERM LOAN SHALL BE LIMITED TO
SUCH LENDER’S PRO RATA SHARE (AS DEFINED BELOW) OF SUCH TERM LOAN.  SUBJECT TO
THE TERMS AND CONDITIONS HEREOF, THE INITIAL TERM LOAN (THE “TERM LOAN A”) SHALL
BE MADE ON THE CLOSING DATE IN AN AGGREGATE PRINCIPAL AMOUNT EQUAL TO
$3,800,000.   AFTER THE TERM LOAN A, BORROWER MAY REQUEST (I) A SECOND TERM LOAN
(THE “TERM LOAN B”) TO BE FUNDED, SUBJECT TO THE TERMS AND CONDITIONS HEREOF, ON
OR PRIOR TO AUGUST 11, 2008 (THE “TERM LOAN B COMMITMENT TERMINATION DATE”) IN
THE AGGREGATE PRINCIPAL AMOUNT OF $5,600,000 AND (II) A THIRD TERM LOAN (THE
“TERM LOAN C”) TO BE FUNDED, SUBJECT TO THE TERMS AND CONDITIONS HEREOF, ON OR
PRIOR TO SEPTEMBER 30, 2008 (THE “TERM LOAN C COMMITMENT TERMINATION DATE”) IN
THE AGGREGATE PRINCIPAL AMOUNT OF $5,600,000.

 

(B)         METHOD OF BORROWING.  WHEN BORROWER DESIRES A TERM LOAN, BORROWER
WILL NOTIFY AGENT (WHICH NOTICE SHALL BE IRREVOCABLE) BY FACSIMILE (OR BY
TELEPHONE, PROVIDED THAT SUCH TELEPHONIC NOTICE SHALL BE PROMPTLY CONFIRMED IN
WRITING, BUT IN ANY EVENT ON OR BEFORE THE FOLLOWING BUSINESS DAY) ON A DATE
THAT IS TEN (10) OR MORE BUSINESS DAYS PRIOR TO THE DAY THE TERM LOAN IS TO BE
MADE (OR SUCH SHORTER PERIOD OF TIME AS AGENT MAY AGREE). AGENT AND LENDERS MAY
ACT WITHOUT LIABILITY UPON THE BASIS OF SUCH WRITTEN OR TELEPHONIC NOTICE
REASONABLY BELIEVED BY AGENT TO BE FROM ANY AUTHORIZED OFFICER OF BORROWER. 
AGENT AND LENDERS SHALL HAVE NO DUTY TO VERIFY THE AUTHENTICITY OF THE SIGNATURE
APPEARING ON ANY SUCH WRITTEN NOTICE.

 

(C)         FUNDING OF TERM LOANS.  PROMPTLY AFTER RECEIVING A REQUEST FOR A
TERM LOAN, AGENT SHALL NOTIFY EACH LENDER OF THE CONTENTS OF SUCH REQUEST AND
SUCH LENDER’S PRO RATA SHARE OF THE REQUESTED TERM LOAN.  UPON THE TERMS AND
SUBJECT TO THE CONDITIONS SET FORTH HEREIN, EACH LENDER, SEVERALLY AND NOT
JOINTLY, SHALL MAKE AVAILABLE TO AGENT ITS PRO RATA SHARE OF THE REQUESTED TERM
LOAN, IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA IN IMMEDIATELY AVAILABLE
FUNDS, TO THE COLLECTION ACCOUNT (AS DEFINED BELOW) PRIOR TO 11:00 A.M. (NEW
YORK TIME) ON THE SPECIFIED DATE.  AGENT SHALL, UNLESS IT SHALL HAVE DETERMINED
THAT ONE OF THE CONDITIONS SET FORTH IN SECTION 4.1, 4.2 OR 4.3, AS APPLICABLE,
HAS NOT BEEN SATISFIED, BY 4:00 P.M. (NEW YORK TIME) ON SUCH DAY, CREDIT THE
AMOUNTS RECEIVED BY IT IN LIKE FUNDS TO BORROWER BY WIRE TRANSFER TO, UNLESS
OTHERWISE SPECIFIED IN A DISBURSEMENT LETTER (AS DEFINED BELOW), THE FOLLOWING
DEPOSIT ACCOUNT OF BORROWER (OR SUCH OTHER DEPOSIT ACCOUNT AS SPECIFIED IN
WRITING BY AN AUTHORIZED OFFICER OF BORROWER AND ACCEPTABLE TO AGENT) (THE
“DESIGNATED DEPOSIT ACCOUNT”):

 

[***]

 

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(D)         NOTES.  THE TERM LOANS OF EACH LENDER SHALL BE EVIDENCED BY A
PROMISSORY NOTE SUBSTANTIALLY IN THE FORM OF EXHIBIT A HERETO (EACH A “NOTE”
AND, COLLECTIVELY, THE “NOTES”), AND BORROWER SHALL EXECUTE AND DELIVER A NOTE
TO EACH LENDER.  EACH NOTE SHALL REPRESENT THE OBLIGATION OF BORROWER TO PAY TO
SUCH LENDER THE LESSER OF (A) THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF ALL TERM
LOANS MADE BY SUCH LENDER TO BORROWER UNDER THIS AGREEMENT OR (B) THE AMOUNT OF
SUCH LENDER’S COMMITMENT, IN EACH CASE TOGETHER WITH INTEREST THEREON AS
PRESCRIBED IN SECTION 2.3(A).

 

(E)         AGENT MAY ASSUME FUNDING.  UNLESS AGENT SHALL HAVE RECEIVED NOTICE
FROM A LENDER PRIOR TO THE DATE OF ANY PARTICULAR TERM LOAN THAT SUCH LENDER
WILL NOT MAKE AVAILABLE TO AGENT SUCH LENDER’S PRO RATA SHARE OF SUCH TERM LOAN,
AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH AMOUNT AVAILABLE TO IT ON THE
DATE OF SUCH TERM LOAN IN ACCORDANCE WITH SUBSECTION (C) OF THIS SECTION 2.2,
AND MAY (BUT SHALL NOT BE OBLIGATED TO), IN RELIANCE UPON SUCH ASSUMPTION, MAKE
AVAILABLE A CORRESPONDING AMOUNT FOR THE ACCOUNT OF BORROWER ON SUCH DATE.  IF
AND TO THE EXTENT THAT SUCH LENDER SHALL NOT HAVE SO MADE SUCH AMOUNT AVAILABLE
TO AGENT, SUCH LENDER AND BORROWER SEVERALLY AGREE TO REPAY TO AGENT FORTHWITH
ON DEMAND SUCH CORRESPONDING AMOUNT TOGETHER WITH INTEREST THEREON, FOR EACH DAY
FROM THE DAY SUCH AMOUNT IS MADE AVAILABLE TO BORROWER UNTIL THE DAY SUCH AMOUNT
IS REPAID TO AGENT, AT (I) IN THE CASE OF BORROWER, A RATE PER ANNUM EQUAL TO
THE INTEREST RATE APPLICABLE THERETO PURSUANT TO SECTION 2.3(A), AND (II) IN THE
CASE OF SUCH LENDER, A FLOATING RATE PER ANNUM EQUAL TO, FOR EACH DAY FROM THE
DAY SUCH AMOUNT IS MADE AVAILABLE TO BORROWER UNTIL SUCH AMOUNT IS REIMBURSED TO
AGENT, THE WEIGHTED AVERAGE OF THE RATES ON OVERNIGHT FEDERAL FUNDS TRANSACTIONS
AMONG MEMBERS OF THE FEDERAL RESERVE SYSTEM, AS DETERMINED BY AGENT IN ITS SOLE
DISCRETION (THE “FEDERAL FUNDS RATE”) FOR THE FIRST BUSINESS DAY AND THEREAFTER,
AT THE INTEREST RATE APPLICABLE TO SUCH TERM LOAN.  IF SUCH LENDER SHALL REPAY
SUCH CORRESPONDING AMOUNT TO AGENT, THE AMOUNT SO REPAID SHALL CONSTITUTE SUCH
LENDER’S LOAN INCLUDED IN SUCH TERM LOAN FOR PURPOSES OF THIS AGREEMENT.

 

2.3.     INTEREST AND REPAYMENT.

 

(A)         INTEREST.  EACH TERM LOAN SHALL ACCRUE INTEREST FROM THE DATE MADE
UNTIL SUCH TERM LOAN IS FULLY REPAID AT A FIXED PER ANNUM RATE OF INTEREST EQUAL
TO THE SUM OF (I) THE GREATER OF (A) THE TREASURY RATE (AS DEFINED BELOW) IN
EFFECT ON THE DAY THAT IS THREE (3) BUSINESS DAYS PRIOR TO THE MAKING OF SUCH
TERM LOAN AS DETERMINED BY AGENT AND (B) 3.22% PLUS (II) 8.37%.   ALL
COMPUTATIONS OF INTEREST AND FEES CALCULATED ON A PER ANNUM BASIS SHALL BE MADE
BY AGENT ON THE BASIS OF A 360-DAY YEAR, IN EACH CASE FOR THE ACTUAL NUMBER OF
DAYS OCCURRING IN THE PERIOD FOR WHICH SUCH INTEREST AND FEES ARE PAYABLE.  EACH
DETERMINATION OF AN INTEREST RATE OR THE AMOUNT OF A FEE HEREUNDER SHALL BE MADE
BY AGENT AND SHALL BE CONCLUSIVE, BINDING AND FINAL FOR ALL PURPOSES, ABSENT
MANIFEST ERROR.  AS USED HEREIN, THE TERM “TREASURY RATE” MEANS A PER ANNUM RATE
OF INTEREST EQUAL TO THE RATE PUBLISHED BY THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM IN FEDERAL RESERVE STATISTICAL RELEASE H.15 ENTITLED “SELECTED
INTEREST RATES” UNDER THE HEADING “U.S. GOVERNMENT SECURITIES/TREASURY CONSTANT
MATURITIES” AS THE THREE YEAR TREASURIES CONSTANT MATURITIES RATE.  IN THE EVENT
RELEASE H.15 IS NO LONGER PUBLISHED, AGENT SHALL SELECT A COMPARABLE PUBLICATION
TO DETERMINE THE U.S. TREASURY NOTE YIELD TO MATURITY.

 

(B)         PAYMENTS OF PRINCIPAL AND INTEREST.  BORROWER SHALL PAY TO THE
AGENT, FOR THE RATABLE BENEFIT OF THE LENDERS, (I) WITH RESPECT TO EACH TERM
LOAN, ONE PAYMENT OF INTEREST ONLY (PAYABLE IN ARREARS) FOR THE PERIOD FROM THE
DATE OF FUNDING OF SUCH TERM LOAN TO AND INCLUDING THE LAST DAY OF THE MONTH IN
WHICH SUCH TERM LOAN WAS FUNDED AT THE RATE OF INTEREST DETERMINED IN ACCORDANCE
WITH SECTION 2.3(A), TO BE PAID ON THE FIRST DAY OF THE CALENDAR MONTH OCCURRING
AFTER

 

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THE MONTH IN WHICH SUCH TERM LOAN WAS FUNDED, (II) WITH RESPECT TO THE TERM LOAN
A, (A) SIX (6) CONSECUTIVE PAYMENTS OF INTEREST ONLY (PAYABLE IN ARREARS) AT THE
RATE OF INTEREST DETERMINED IN ACCORDANCE WITH SECTION 2.3(A) ON THE FIRST DAY
OF EACH CALENDAR MONTH (A “SCHEDULED PAYMENT DATE”) COMMENCING ON THE FIRST DAY
OF THE SECOND CALENDAR MONTH OCCURRING AFTER THE MONTH DURING WHICH THE TERM
LOAN A WAS FUNDED AND (B) THIRTY (30) EQUAL CONSECUTIVE PAYMENTS OF PRINCIPAL
AND INTEREST (PAYABLE IN ARREARS) AT THE RATE OF INTEREST DETERMINED IN
ACCORDANCE WITH SECTION 2.3(A) ON EACH SCHEDULED PAYMENT DATE COMMENCING ON THE
FIRST DAY OF THE EIGHTH CALENDAR MONTH OCCURRING AFTER THE MONTH DURING WHICH
THE TERM LOAN A WAS FUNDED, (III) WITH RESPECT TO THE TERM LOAN B, (A) MONTHLY
PAYMENTS OF INTEREST ONLY (PAYABLE IN ARREARS) AT THE RATE OF INTEREST
DETERMINED IN ACCORDANCE WITH SECTION 2.3(A) ON EACH SCHEDULED PAYMENT DATE
COMMENCING ON THE FIRST DAY OF THE SECOND CALENDAR MONTH OCCURRING AFTER THE
MONTH DURING WHICH THE TERM LOAN B WAS FUNDED AND (B) COMMENCING ON THE EARLIER
OF (X) THE FIRST DAY OF THE EIGHTH CALENDAR MONTH OCCURRING AFTER THE MONTH
DURING WHICH THE TERM LOAN B WAS FUNDED AND (B) JANUARY 1, 2009, THIRTY (30)
EQUAL CONSECUTIVE PAYMENTS OF PRINCIPAL AND INTEREST (PAYABLE IN ARREARS) AT THE
RATE OF INTEREST DETERMINED IN ACCORDANCE WITH SECTION 2.3(A) ON EACH SCHEDULED
PAYMENT DATE AND (IV) WITH RESPECT TO THE TERM LOAN C, (A) THREE (3) CONSECUTIVE
PAYMENTS OF INTEREST ONLY (PAYABLE IN ARREARS) AT THE RATE OF INTEREST
DETERMINED IN ACCORDANCE WITH SECTION 2.3(A) ON EACH SCHEDULED PAYMENT DATE
COMMENCING ON THE FIRST DAY OF THE SECOND CALENDAR MONTH OCCURRING AFTER THE
MONTH DURING WHICH THE TERM LOAN C WAS FUNDED AND (B) THIRTY-THREE (33) EQUAL
CONSECUTIVE PAYMENTS OF PRINCIPAL AND INTEREST (PAYABLE IN ARREARS) AT THE RATE
OF INTEREST DETERMINED IN ACCORDANCE WITH SECTION 2.3(A) ON EACH SCHEDULED
PAYMENT DATE COMMENCING ON THE FIRST DAY OF THE FIFTH CALENDAR MONTH OCCURRING
AFTER THE MONTH DURING WHICH THE TERM LOAN C WAS FUNDED.  THE AMOUNT OF EACH
PAYMENT OF PRINCIPAL AND INTEREST UNDER THIS SECTION 2.3(B) SHALL BE CALCULATED
BY THE AGENT AND SHALL BE SUFFICIENT TO FULLY AMORTIZE THE PRINCIPAL AND
INTEREST DUE WITH RESPECT TO THE APPLICABLE TERM LOAN OVER SUCH REPAYMENT
PERIOD.  EACH SCHEDULED PAYMENT OF INTEREST ONLY OR INTEREST AND PRINCIPAL
HEREUNDER IS REFERRED TO HEREIN AS A “SCHEDULED PAYMENT.”  NOTWITHSTANDING THE
FOREGOING, ALL UNPAID PRINCIPAL AND ACCRUED INTEREST WITH RESPECT TO A TERM LOAN
IS DUE AND PAYABLE IN FULL TO AGENT, FOR THE RATABLE BENEFIT OF LENDERS, ON THE
EARLIER OF (A) THE FIRST DAY OF THE THIRTY-SEVENTH MONTH FOLLOWING THE DATE SUCH
TERM LOAN WAS MADE OR (B) THE DATE THAT SUCH TERM LOAN OTHERWISE BECOMES DUE AND
PAYABLE HEREUNDER, WHETHER BY ACCELERATION OF THE OBLIGATIONS PURSUANT TO
SECTION 8.2 OR OTHERWISE (THE EARLIER OF (A) OR (B), THE “APPLICABLE TERM LOAN
MATURITY DATE”). EACH SCHEDULED PAYMENT, WHEN PAID, SHALL BE APPLIED FIRST TO
THE PAYMENT OF ACCRUED AND UNPAID INTEREST ON THE APPLICABLE TERM LOAN AND THEN
TO UNPAID PRINCIPAL BALANCE OF SUCH TERM LOAN.  WITHOUT LIMITING THE FOREGOING,
ALL OBLIGATIONS SHALL BE DUE AND PAYABLE ON THE APPLICABLE TERM LOAN MATURITY
DATE FOR THE LAST TERM LOAN MADE.

 

(C)         NO REBORROWING.  ONCE A TERM LOAN IS REPAID OR PREPAID, IT CANNOT BE
REBORROWED.

 

(D)         PAYMENTS.  ALL PAYMENTS (INCLUDING PREPAYMENTS) TO BE MADE BY ANY
LOAN PARTY UNDER ANY DEBT DOCUMENT SHALL BE MADE IN IMMEDIATELY AVAILABLE FUNDS
IN U.S. DOLLARS, WITHOUT SETOFF OR COUNTERCLAIM TO THE COLLECTION ACCOUNT (AS
DEFINED BELOW) BEFORE 11:00 A.M. (NEW YORK TIME) ON THE DATE WHEN DUE.  ALL
PAYMENTS RECEIVED BY AGENT AFTER 11:00 A.M. (NEW YORK TIME) ON ANY BUSINESS DAY
OR AT ANY TIME ON A DAY THAT IS NOT A BUSINESS DAY SHALL BE DEEMED TO BE
RECEIVED ON THE NEXT BUSINESS DAY.  WHENEVER ANY PAYMENT REQUIRED UNDER THIS
AGREEMENT WOULD OTHERWISE BE DUE ON A DATE THAT IS NOT A BUSINESS DAY, SUCH
PAYMENT SHALL INSTEAD BE DUE ON THE NEXT BUSINESS DAY, AND ADDITIONAL FEES OR
INTEREST, AS THE CASE MAY BE, SHALL ACCRUE AND BE PAYABLE FOR THE PERIOD OF SUCH
EXTENSION.  THE PAYMENT OF ANY SCHEDULED PAYMENT PRIOR TO ITS DUE DATE SHALL BE
DEEMED TO HAVE BEEN RECEIVED ON SUCH DUE DATE FOR PURPOSES OF CALCULATING
INTEREST HEREUNDER.  ALL SCHEDULED PAYMENTS DUE TO AGENT AND LENDERS UNDER
SECTION 2.3(B) SHALL BE EFFECTED BY AUTOMATIC DEBIT OF THE APPROPRIATE FUNDS
FROM BORROWER’S OPERATING ACCOUNT SPECIFIED

 

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Confidential Information, indicated by [***] has been omitted from this filing
and filed separately with the Securities Exchange Commission

 

ON THE EPS SETUP FORM (AS DEFINED BELOW). AS USED HEREIN, THE TERM “COLLECTION
ACCOUNT” MEANS THE FOLLOWING ACCOUNT OF AGENT (OR SUCH OTHER ACCOUNT AS AGENT
SHALL IDENTIFY TO BORROWER IN WRITING):

 

[***]

 

(E)         WITHHOLDINGS AND INCREASED COSTS.  ALL PAYMENTS SHALL BE MADE FREE
AND CLEAR OF ANY TAXES, WITHHOLDINGS, DUTIES, IMPOSITIONS OR OTHER CHARGES
(OTHER THAN TAXES ON THE OVERALL NET INCOME OF ANY LENDER AND COMPARABLE TAXES),
SUCH THAT AGENT AND LENDERS WILL RECEIVE THE ENTIRE AMOUNT OF ANY OBLIGATIONS
(AS DEFINED BELOW), REGARDLESS OF SOURCE OF PAYMENT.  IF AGENT OR ANY LENDER
SHALL HAVE REASONABLY DETERMINED THAT THE INTRODUCTION OF OR ANY CHANGE IN,
AFTER THE DATE HEREOF, ANY LAW, TREATY, GOVERNMENTAL (OR QUASI-GOVERNMENTAL)
RULE, REGULATION, GUIDELINE OR ORDER REDUCES THE RATE OF RETURN ON AGENT OR SUCH
LENDER’S CAPITAL AS A CONSEQUENCE OF ITS OBLIGATIONS HEREUNDER OR INCREASES THE
COST TO AGENT OR SUCH LENDER OF AGREEING TO MAKE OR MAKING, FUNDING OR
MAINTAINING ANY TERM LOAN, THEN BORROWER SHALL FROM TIME TO TIME UPON DEMAND BY
AGENT OR SUCH LENDER (WITH A COPY OF SUCH DEMAND TO AGENT) PROMPTLY PAY TO AGENT
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH LENDER, AS THE CASE MAY BE,
ADDITIONAL AMOUNTS SUFFICIENT TO COMPENSATE AGENT OR SUCH LENDER FOR SUCH
REDUCTION OR FOR SUCH INCREASED COST.  A CERTIFICATE AS TO THE AMOUNT OF SUCH
REDUCTION OR SUCH INCREASED COST DETERMINED AND SUBMITTED BY AGENT OR SUCH
LENDER (WITH A COPY TO AGENT) IN GOOD FAITH TO BORROWER SHALL BE CONCLUSIVE AND
BINDING ON BORROWER, ABSENT MANIFEST ERROR, PROVIDED THAT, NEITHER AGENT NOR ANY
LENDER SHALL BE ENTITLED TO PAYMENT OF ANY AMOUNTS UNDER THIS
SECTION 2.3(E) UNLESS IT HAS DELIVERED SUCH CERTIFICATE TO BORROWER WITHIN 180
DAYS AFTER THE OCCURRENCE OF THE CHANGES OR EVENTS GIVING RISE TO THE INCREASED
COSTS TO, OR REDUCTION IN THE AMOUNTS RECEIVED BY, AGENT OR SUCH LENDER.  THIS
PROVISION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

 

(F)          LOAN RECORDS.  EACH LENDER SHALL MAINTAIN IN ACCORDANCE WITH ITS
USUAL PRACTICE ACCOUNTS EVIDENCING THE OBLIGATIONS OF BORROWER TO SUCH LENDER
RESULTING FROM SUCH LENDER’S PRO RATA SHARE OF EACH TERM LOAN, INCLUDING THE
AMOUNTS OF PRINCIPAL AND INTEREST PAYABLE AND PAID TO SUCH LENDER FROM TIME TO
TIME UNDER THIS AGREEMENT.  AGENT SHALL MAINTAIN IN ACCORDANCE WITH ITS USUAL
PRACTICE A LOAN ACCOUNT (THE “LOAN ACCOUNT”) ON ITS BOOKS TO RECORD THE TERM
LOANS AND ANY OTHER EXTENSIONS OF CREDIT MADE BY LENDERS HEREUNDER, AND ALL
PAYMENTS THEREON MADE BY BORROWER.  THE ENTRIES MADE IN SUCH ACCOUNTS SHALL, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, BE PRIMA FACIE EVIDENCE OF THE EXISTENCE
AND AMOUNTS OF THE OBLIGATIONS RECORDED THEREIN; PROVIDED, HOWEVER, THAT NO
ERROR IN SUCH ACCOUNT AND NO FAILURE OF ANY LENDER OR AGENT TO MAINTAIN ANY SUCH
ACCOUNT SHALL AFFECT THE OBLIGATIONS OF BORROWER TO REPAY THE OBLIGATIONS IN
ACCORDANCE WITH THEIR TERMS.

 

(G)         PAYMENT OF EXPENSES.  AGENT IS AUTHORIZED TO, AND AT ITS SOLE
ELECTION MAY, DEBIT FUNDS FROM BORROWER’S OPERATING ACCOUNT SPECIFIED ON THE EPS
SETUP FORM (AS DEFINED BELOW) TO PAY ALL FEES, EXPENSES, COSTS AND INTEREST
OWING BY BORROWER UNDER THIS AGREEMENT OR ANY OF THE OTHER DEBT DOCUMENTS IF AND
TO THE EXTENT BORROWER FAILS TO PROMPTLY PAY ANY SUCH AMOUNTS AS

 

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CONFIDENTIAL INFORMATION, INDICATED BY [***], HAS BEEN OMITTED FROM THIS FILING
AND FILED SEPARATELY WITH THE SECURITIES EXCHANGE COMMISSION

 

AND WHEN DUE; PROVIDED, HOWEVER, THAT UNLESS A DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, AGENT MAY ONLY EXERCISE ITS RIGHTS UNDER THIS
SECTION 2.3(G) WITH RESPECT TO FEES, EXPENSES AND COSTS (1) FIVE DAYS AFTER
AGENT HAS DELIVERED NOTICE OF SUCH FEES, EXPENSES AND COSTS TO BORROWER AND
(2) [***].

 

(H)         APPLICATION OF PAYMENTS.  ALL PAYMENTS AND PREPAYMENTS APPLIED TO A
PARTICULAR TERM LOAN IN ACCORDANCE WITH THIS AGREEMENT SHALL BE APPLIED RATABLY
TO THE PORTION THEREOF HELD BY EACH LENDER AS DETERMINED BY ITS PRO RATA SHARE
OF SUCH TERM LOAN.  AS TO ALL PAYMENTS MADE WHEN AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, BORROWER HEREBY IRREVOCABLY WAIVES THE RIGHT TO
DIRECT THE APPLICATION OF ANY AND ALL PAYMENTS RECEIVED FROM OR ON BEHALF OF
BORROWER, AND BORROWER HEREBY IRREVOCABLY AGREES THAT AGENT SHALL HAVE THE
CONTINUING EXCLUSIVE RIGHT (IN ACCORDANCE WITH SECTION 8.4) TO APPLY ANY AND ALL
SUCH PAYMENTS AGAINST THE OBLIGATIONS AS AGENT MAY DEEM ADVISABLE
NOTWITHSTANDING ANY PREVIOUS ENTRY BY AGENT IN THE LOAN ACCOUNT OR ANY OTHER
BOOKS AND RECORDS.

 

2.4.     PREPAYMENTS.  BORROWER CAN VOLUNTARILY PREPAY, UPON FIVE (5) BUSINESS
DAYS’ PRIOR WRITTEN NOTICE TO AGENT, ANY TERM LOAN IN FULL, BUT NOT IN PART. 
UPON THE DATE OF (A) ANY VOLUNTARY PREPAYMENT OF A TERM LOAN IN ACCORDANCE WITH
THE IMMEDIATELY PRECEDING SENTENCE OR (B) ANY MANDATORY PREPAYMENT OF A TERM
LOAN REQUIRED UNDER THIS AGREEMENT (WHETHER BY ACCELERATION OF THE OBLIGATIONS
PURSUANT TO SECTION 8.2 OR OTHERWISE), BORROWER SHALL PAY TO AGENT, FOR THE
RATABLE BENEFIT OF THE LENDERS BASED ON THEIR RESPECTIVE PRO RATA SHARES, A SUM
EQUAL TO (I) ALL OUTSTANDING PRINCIPAL PLUS ACCRUED INTEREST WITH RESPECT TO
SUCH TERM LOAN, AND (II) A PREPAYMENT PREMIUM (AS YIELD MAINTENANCE FOR THE LOSS
OF A BARGAIN AND NOT AS A PENALTY) EQUAL TO: (A) 5% ON SUCH PREPAYMENT AMOUNT,
IF SUCH PREPAYMENT IS MADE BEFORE THE FIRST DAY OF THE 15TH CALENDAR MONTH
OCCURRING AFTER THE MONTH DURING WHICH SUCH TERM LOAN WAS FUNDED, (B) 4% ON SUCH
PREPAYMENT AMOUNT, IF SUCH PREPAYMENT IS MADE ON OR AFTER THE FIRST DAY OF THE
15TH CALENDAR MONTH OCCURRING AFTER THE MONTH DURING WHICH SUCH TERM LOAN WAS
FUNDED, BUT BEFORE THE FIRST DAY OF THE 30TH CALENDAR MONTH OCCURRING AFTER THE
MONTH DURING WHICH SUCH TERM LOAN WAS FUNDED, AND (C) 3% ON SUCH PREPAYMENT
AMOUNT, IF SUCH PREPAYMENT IS MADE ON OR AFTER THE FIRST DAY OF THE
30TH CALENDAR MONTH OCCURRING AFTER THE MONTH DURING WHICH SUCH TERM LOAN WAS
FUNDED.

 

2.5.     LATE FEES.  IF AGENT DOES NOT RECEIVE ANY SCHEDULED PAYMENT OR OTHER
PAYMENT UNDER ANY DEBT DOCUMENT FROM ANY LOAN PARTY WITHIN 3 DAYS AFTER ITS DUE
DATE, THEN, AT AGENT’S ELECTION, SUCH LOAN PARTY AGREES TO PAY TO AGENT FOR THE
RATABLE BENEFIT OF ALL LENDERS, A LATE FEE EQUAL TO (A) [***]% OF THE AMOUNT OF
SUCH UNPAID PAYMENT OR (B) SUCH LESSER AMOUNT THAT, IF PAID, WOULD NOT CAUSE THE
INTEREST AND FEES PAID BY SUCH LOAN PARTY UNDER THIS AGREEMENT TO EXCEED THE
MAXIMUM LAWFUL RATE (AS DEFINED BELOW) (THE “LATE FEE”).

 

2.6.     DEFAULT RATE.  ALL TERM LOANS AND OTHER OBLIGATIONS SHALL BEAR
INTEREST, AT THE OPTION OF AGENT OR UPON THE REQUEST OF THE REQUISITE LENDERS
(AS DEFINED BELOW), FROM AND AFTER THE OCCURRENCE AND DURING THE CONTINUATION OF
AN EVENT OF DEFAULT (AS DEFINED BELOW), AT A RATE EQUAL TO THE LESSER OF
(A) [***]% ABOVE THE RATE OF INTEREST APPLICABLE TO SUCH OBLIGATIONS AS SET
FORTH IN SECTION 2.3(A) IMMEDIATELY PRIOR TO THE OCCURRENCE OF THE EVENT OF
DEFAULT AND (B) THE MAXIMUM LAWFUL RATE (THE “DEFAULT RATE”).  THE APPLICATION
OF THE DEFAULT RATE SHALL NOT BE INTERPRETED OR DEEMED TO EXTEND ANY CURE PERIOD
OR WAIVE ANY DEFAULT OR EVENT OF DEFAULT OR OTHERWISE LIMIT THE AGENT’S OR ANY
LENDER’S RIGHT OR REMEDIES HEREUNDER.  ALL INTEREST PAYABLE AT THE DEFAULT RATE
SHALL BE PAYABLE ON DEMAND.

 

6

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Confidential Information, indicated by [***], has been omitted from this filing
and filed separately with the Securities Exchange Commission

 

2.7.     LENDER FEES.

 

(A)         CLOSING FEE.  PRIOR TO THE ADVANCE OF THE TERM LOAN A, BORROWER HAS
(I) PAID TO GECC, AND GECC HEREBY ACKNOWLEDGES RECEIPT OF, A PAYMENT IN THE
AMOUNT OF $[***], (A) $[***] OF WHICH PAYMENT SHALL BE RETAINED BY GECC IN ITS
CAPACITY AS LENDER AS A CLOSING FEE THAT SHALL BE NON-REFUNDABLE AND FULLY
EARNED BY GECC ON THE CLOSING DATE (REGARDLESS OF WHETHER THE TERM LOAN B OR
TERM LOAN C IS REQUESTED BY BORROWER OR AUTHORIZED BY BORROWER’S BOARD OF
DIRECTORS AFTER THE CLOSING DATE) AND (B) $[***] OF WHICH PAYMENT SHALL BE
APPLIED TO ANY FEES, COSTS AND EXPENSES (INCLUDING REASONABLE COUNSEL FEES)
INCURRED BY GECC IN ITS CAPACITY AS AGENT ON OR PRIOR TO THE CLOSING DATE IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREUNDER (AND TO THE EXTENT THAT
SUCH FEES, COSTS AND EXPENSES ARE LESS THAN $[***], SUCH EXCESS SHALL BE
RETURNED TO BORROWER WITHIN FIVE BUSINESS DAYS AFTER THE CLOSING DATE), AND
(II) PAID TO OXFORD, AND OXFORD HEREBY ACKNOWLEDGES RECEIPT OF, A PAYMENT IN THE
AMOUNT OF $[***] WHICH PAYMENT SHALL BE RETAINED BY OXFORD IN ITS CAPACITY AS
LENDER AS A CLOSING FEE THAT SHALL BE NON-REFUNDABLE AND FULLY EARNED BY OXFORD
ON THE CLOSING DATE (REGARDLESS OF WHETHER THE TERM LOAN B OR TERM LOAN C IS
REQUESTED BY BORROWER OR AUTHORIZED BY BORROWER’S BOARD OF DIRECTORS AFTER THE
CLOSING DATE).

 

(B)         UNUSED LINE FEE.   ON THE TERM LOAN C COMMITMENT TERMINATION DATE,
BORROWER SHALL PAY TO AGENT, FOR THE RATABLE BENEFIT OF LENDERS HOLDING A
COMMITMENT IN ACCORDANCE WITH THEIR PRO RATA SHARES OF THE TOTAL COMMITMENT, A
NON-REFUNDABLE UNUSED LINE FEE (THE “UNUSED LINE FEE”) EQUAL TO 2% OF THE
UNDRAWN AMOUNT OF THE TOTAL COMMITMENT AS OF SUCH DATE, WHICH FEE SHALL BE FULLY
EARNED ON THE TERM LOAN C COMMITMENT TERMINATION DATE (REGARDLESS OF WHETHER THE
BORROWER’S BOARD OF DIRECTORS ELECTS TO AUTHORIZE THE BORROWING OF THE TERM LOAN
B OR TERM LOAN C BY BORROWER).  NOTWITHSTANDING THE FOREGOING, A LENDER SHALL
NOT BE ENTITLED TO RECEIVE (AND BORROWER SHALL NOT BE OBLIGATED TO PAY) SUCH
LENDER’S PRO RATA SHARE OF THE UNUSED LINE FEE TO THE EXTENT (I) BORROWER
SATISFIED ALL CONDITIONS SET FORTH IN SECTION 4.2 AND SECTION 4.3, AS
APPLICABLE, WITH RESPECT TO A REQUESTED TERM LOAN AND (II) SUCH LENDER FAILED TO
ADVANCE ITS PRO RATA SHARE OF SUCH TERM LOAN.

 

2.8.     MAXIMUM LAWFUL RATE.  ANYTHING HEREIN, ANY NOTE OR ANY OTHER DEBT
DOCUMENT (AS DEFINED BELOW) TO THE CONTRARY NOTWITHSTANDING, THE OBLIGATIONS OF
LOAN PARTIES HEREUNDER AND THEREUNDER SHALL BE SUBJECT TO THE LIMITATION THAT
PAYMENTS OF INTEREST SHALL NOT BE REQUIRED, FOR ANY PERIOD FOR WHICH INTEREST IS
COMPUTED HEREUNDER, TO THE EXTENT (BUT ONLY TO THE EXTENT) THAT CONTRACTING FOR
OR RECEIVING SUCH PAYMENT BY AGENT AND LENDERS WOULD BE CONTRARY TO THE
PROVISIONS OF ANY LAW APPLICABLE TO AGENT AND LENDERS LIMITING THE HIGHEST RATE
OF INTEREST WHICH MAY BE LAWFULLY CONTRACTED FOR, CHARGED OR RECEIVED BY AGENT
AND LENDERS, AND IN SUCH EVENT LOAN PARTIES SHALL PAY AGENT AND LENDERS INTEREST
AT THE HIGHEST RATE PERMITTED BY APPLICABLE LAW (“MAXIMUM LAWFUL RATE”);
PROVIDED, HOWEVER, THAT IF AT ANY TIME THEREAFTER THE RATE OF INTEREST PAYABLE
HEREUNDER OR THEREUNDER IS LESS THAN THE MAXIMUM LAWFUL RATE, LOAN PARTIES SHALL
CONTINUE TO PAY INTEREST HEREUNDER AT THE MAXIMUM LAWFUL RATE UNTIL SUCH TIME AS
THE TOTAL INTEREST RECEIVED BY AGENT AND LENDERS IS EQUAL TO THE TOTAL INTEREST
THAT WOULD HAVE BEEN RECEIVED HAD THE INTEREST PAYABLE HEREUNDER BEEN (BUT FOR
THE OPERATION OF THIS PARAGRAPH) THE INTEREST RATE PAYABLE SINCE THE MAKING OF
THE APPLICABLE TERM LOAN AS OTHERWISE PROVIDED IN THIS AGREEMENT, ANY NOTE OR
ANY OTHER DEBT DOCUMENT.

 

3.              CREATION OF SECURITY INTEREST.

 

3.1.     GRANT OF SECURITY INTEREST.  AS SECURITY FOR THE PROMPT PAYMENT AND
PERFORMANCE, WHETHER AT THE STATED MATURITY, BY ACCELERATION OR OTHERWISE, OF
ALL TERM LOANS AND OTHER DEBT, OBLIGATIONS AND LIABILITIES OF ANY KIND
WHATSOEVER OF BORROWER TO AGENT AND LENDERS UNDER THE DEBT DOCUMENTS (WHETHER

 

7

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FOR PRINCIPAL, INTEREST, FEES, EXPENSES, PREPAYMENT PREMIUMS, INDEMNITIES,
REIMBURSEMENTS OR OTHER SUMS, AND WHETHER OR NOT SUCH AMOUNTS ACCRUE AFTER THE
FILING OF ANY PETITION IN BANKRUPTCY OR AFTER THE COMMENCEMENT OF ANY
INSOLVENCY, REORGANIZATION OR SIMILAR PROCEEDING, AND WHETHER OR NOT ALLOWED IN
SUCH CASE OR PROCEEDING), ABSOLUTE OR CONTINGENT, NOW EXISTING OR ARISING IN THE
FUTURE, INCLUDING BUT NOT LIMITED TO THE PAYMENT AND PERFORMANCE OF ANY
OUTSTANDING NOTES, AND ANY RENEWALS, EXTENSIONS AND MODIFICATIONS OF SUCH TERM
LOANS (SUCH INDEBTEDNESS UNDER THE NOTES, TERM LOANS AND OTHER DEBT, OBLIGATIONS
AND LIABILITIES IN CONNECTION WITH THE DEBT DOCUMENTS ARE COLLECTIVELY CALLED
THE “OBLIGATIONS”), AND AS SECURITY FOR THE PROMPT PAYMENT AND PERFORMANCE BY
EACH GUARANTOR OF ITS OBLIGATIONS UNDER ANY GUARANTY DELIVERED IN CONNECTION
WITH THIS AGREEMENT, EACH LOAN PARTY DOES HEREBY GRANT TO AGENT, FOR THE BENEFIT
OF AGENT AND LENDERS, A SECURITY INTEREST IN THE PROPERTY LISTED BELOW (ALL
HEREINAFTER COLLECTIVELY CALLED THE “COLLATERAL”):

 

All of such Loan Party’s personal property of every kind and nature (except for
Intellectual Property, as defined in, and to the extent excluded pursuant to,
Section 3.3) whether now owned or hereafter acquired by, or arising in favor of,
such Loan Party, and regardless of where located, including, without limitation,
all accounts, chattel paper (whether tangible or electronic), commercial tort
claims, deposit accounts, documents, equipment, financial assets, fixtures,
goods, instruments, investment property (including, without limitation, all
securities accounts), inventory, letter-of-credit or similar rights, letters of
credit, securities, supporting obligations, cash, cash equivalents, any other
contractual rights (including, without limitation, rights under any license
agreements), or rights to the payment of money, and general intangibles, and all
books and records of such Loan Party relating thereto, and in and against all
additions, attachments, accessories and accessions to such property, all
substitutions, replacements or exchanges therefor, all proceeds, insurance
claims, products, profits and other rights to payments not otherwise included in
the foregoing (with each of the foregoing terms that are defined in the UCC
having the meaning set forth in the UCC).

 

Each Loan Party hereby represents and covenants that such security interest
constitutes a valid, first priority security interest in the presently existing
Collateral, and will constitute a valid, first priority security interest in
Collateral acquired after the date hereof.  Each Loan Party hereby covenants
that it shall give written notice to Agent promptly upon the acquisition by such
Loan Party or creation in favor of such Loan Party of any commercial tort claim
after the Closing Date.

 

3.2.     FINANCING STATEMENTS.  EACH LOAN PARTY HEREBY AUTHORIZES AGENT TO FILE
UCC FINANCING STATEMENTS WITH ALL APPROPRIATE JURISDICTIONS TO PERFECT AGENT’S
SECURITY INTEREST (FOR THE BENEFIT OF ITSELF AND THE LENDERS) GRANTED HEREBY.

 

3.3.     GRANT OF SECURITY INTEREST IN PROCEEDS OF INTELLECTUAL PROPERTY. 
EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 3.3, THE COLLATERAL SHALL NOT
INCLUDE ANY INTELLECTUAL PROPERTY (AS DEFINED BELOW) OF ANY LOAN PARTY OR ANY
CLAIMS FOR DAMAGES BY WAY OF ANY PAST, PRESENT OR FUTURE INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY; PROVIDED HOWEVER, THAT THE COLLATERAL SHALL INCLUDE ALL
CASH, ROYALTY FEES, OTHER PROCEEDS, ACCOUNTS AND GENERAL INTANGIBLES (INCLUDING,
WITHOUT LIMITATION, CONTRACT RIGHTS) THAT CONSIST OF RIGHTS OF PAYMENT TO OR ON
BEHALF OF A LOAN PARTY OR PROCEEDS FROM THE SALE, LICENSING OR OTHER DISPOSITION
OF ALL OR ANY PART OF, OR RIGHTS IN, THE INTELLECTUAL PROPERTY BY OR ON BEHALF
OF A LOAN PARTY (“RIGHTS TO PAYMENT”).  NOTWITHSTANDING THE FOREGOING, TO THE
EXTENT IT IS NECESSARY UNDER APPLICABLE LAW IN ANY BANKRUPTCY OR INSOLVENCY
PROCEEDING INVOLVING A LOAN PARTY FOR AGENT (ON BEHALF OF ITSELF AND LENDERS) TO
HAVE A SECURITY INTEREST IN THE UNDERLYING INTELLECTUAL PROPERTY IN ORDER FOR
AGENT TO HAVE (I) A SECURITY INTEREST IN THE RIGHTS TO PAYMENT AND (II) A
SECURITY INTEREST IN ANY PAYMENTS WITH RESPECT TO RIGHTS TO PAYMENT THAT ARE
RECEIVED AFTER THE COMMENCEMENT OF SUCH BANKRUPTCY OR INSOLVENCY PROCEEDING,
THEN THE COLLATERAL SHALL AUTOMATICALLY, AND EFFECTIVE AS OF THE DATE HEREOF,
INCLUDE THE INTELLECTUAL PROPERTY TO THE EXTENT NECESSARY TO PERMIT ATTACHMENT
AND PERFECTION OF AGENT’S SECURITY INTEREST (ON BEHALF OF ITSELF AND

 

8

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LENDERS) IN THE RIGHTS TO PAYMENT AND ANY PAYMENTS IN RESPECT THEREOF THAT ARE
RECEIVED AFTER THE COMMENCEMENT OF ANY BANKRUPTCY OR INSOLVENCY PROCEEDING. 
AGENT HEREBY AGREES ON BEHALF OF ITSELF AND THE LENDERS THAT, IF AGENT OBTAINS A
SECURITY INTEREST IN THE INTELLECTUAL PROPERTY PURSUANT TO THE IMMEDIATELY
PRECEDING SENTENCE, AGENT WILL NOT EXERCISE ANY REMEDIES (UNDER THE UCC OR
OTHERWISE) WITH RESPECT TO THE INTELLECTUAL PROPERTY (OTHER THAN REMEDIES WITH
RESPECT TO RIGHTS TO PAYMENT OR ANY OTHER PROCEEDS OF THE INTELLECTUAL
PROPERTY).  FOR PURPOSES OF THIS AGREEMENT, “INTELLECTUAL PROPERTY” SHALL MEAN
(I) ANY AND ALL COPYRIGHTS, TRADEMARKS, SERVICEMARKS, PATENTS, DESIGN RIGHTS,
SOFTWARE, TRADE SECRETS, KNOW-HOW, OPERATING MANUALS, RIGHTS TO UNPATENTED
INVENTIONS AND INTANGIBLE RIGHTS OF A LOAN PARTY, AND THE GOODWILL OF THE
BUSINESS OF A LOAN PARTY CONNECTED WITH AND SYMBOLIZED BY ANY OF THE FOREGOING,
(II) ANY LICENSE BY A LOAN PARTY OF ANY AND ALL COPYRIGHTS, TRADEMARKS,
SERVICEMARKS, PATENTS, DESIGN RIGHTS, SOFTWARE, TRADE SECRETS AND INTANGIBLE
RIGHTS OF A THIRD PARTY, (III) ANY CLINICAL AND CLINICAL TRIAL DATA OR RECORDS,
CORRESPONDENCE OR SIMILAR DOCUMENTATION DIRECTLY RELATED THERETO, AND (IV) ANY
APPLICATIONS, REGISTRATIONS, CLAIMS, PRODUCTS, AWARDS, JUDGMENTS, AMENDMENTS,
RENEWALS, EXTENSIONS, REISSUES, CONTINUATIONS-IN-PART OF THE SAME, IMPROVEMENTS
AND INSURANCE CLAIMS RELATED THERETO NOW OWNED, LICENSED OR HEREAFTER ACQUIRED.

 

3.4.     TERMINATION OF SECURITY INTEREST.  SUBJECT TO SECTION 10.9, AGENT’S
LIEN ON AND SECURITY INTERESTS IN THE COLLATERAL (ON BEHALF OF ITSELF AND
LENDERS) SHALL CONTINUE UNTIL ALL OF THE OBLIGATIONS ARE INDEFEASIBLY REPAID IN
FULL IN CASH, ALL OF THE COMMITMENTS HEREUNDER ARE TERMINATED, AND THIS
AGREEMENT SHALL HAVE BEEN TERMINATED (THE “TERMINATION DATE”).  UPON THE
TERMINATION DATE, AGENT SHALL, AT LOAN PARTIES’ SOLE COST AND EXPENSE AND
WITHOUT ANY RECOURSE, REPRESENTATION OR WARRANTY, RELEASE ITS LIENS IN THE
COLLATERAL AND PROMPTLY FILE ALL DOCUMENTATION NECESSARY TO TERMINATE ANY
FINANCING STATEMENTS RELATED THERETO OR OTHERWISE EVIDENCE SUCH RELEASE OF LIENS
(INCLUDING, WITHOUT LIMITATION, THE TERMINATION OF ANY ACCOUNT CONTROL
AGREEMENTS, AS DEFINED BELOW), AND ALL RIGHTS REMAINING THEREIN, IF ANY, SHALL
REVERT TO LOAN PARTIES.

 

4.              CONDITIONS OF CREDIT EXTENSIONS

 

4.1.     CONDITIONS PRECEDENT TO TERM LOAN A.  NO LENDER SHALL BE OBLIGATED TO
MAKE THE TERM LOAN A, OR TO TAKE, FULFILL, OR PERFORM ANY OTHER ACTION
HEREUNDER, UNTIL THE FOLLOWING HAVE BEEN DELIVERED TO THE AGENT (THE DATE ON
WHICH THE LENDERS MAKE THE TERM LOAN A AFTER ALL SUCH CONDITIONS SHALL HAVE BEEN
SATISFIED IN A MANNER SATISFACTORY TO AGENT AND LENDERS OR WAIVED IN ACCORDANCE
WITH THIS AGREEMENT, THE “CLOSING DATE”):

 

(A)         A COUNTERPART OF THIS AGREEMENT DULY EXECUTED BY EACH LOAN PARTY;

 

(B)         A CERTIFICATE EXECUTED BY THE SECRETARY OF EACH LOAN PARTY, THE FORM
OF WHICH IS ATTACHED HERETO AS EXHIBIT B (THE “SECRETARY’S CERTIFICATE”),
PROVIDING VERIFICATION OF INCUMBENCY AND ATTACHING (I) SUCH LOAN PARTY’S BOARD
RESOLUTIONS APPROVING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE
OTHER DEBT DOCUMENTS AND (II) SUCH LOAN PARTY’S GOVERNING DOCUMENTS;

 

(C)         NOTES DULY EXECUTED BY BORROWER IN FAVOR OF EACH APPLICABLE LENDER
IN THE APPROPRIATE AMOUNTS PURSUANT TO THIS AGREEMENT;

 

(D)         FILED COPIES OF UCC FINANCING STATEMENTS, COLLATERAL ASSIGNMENTS,
AND TERMINATIONS STATEMENTS, WITH RESPECT TO THE COLLATERAL, AS AGENT SHALL
REQUEST;

 

(E)         CERTIFICATES OF INSURANCE EVIDENCING THE INSURANCE COVERAGE, AND
SATISFACTORY ADDITIONAL INSURED AND LENDER LOSS PAYABLE ENDORSEMENTS, IN EACH
CASE AS REQUIRED PURSUANT TO SECTION 6.4 HEREIN;

 

9

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(F)          CURRENT UCC LIEN, JUDGMENT, BANKRUPTCY AND TAX LIEN SEARCH RESULTS
DEMONSTRATING THAT THERE ARE NO OTHER SECURITY INTERESTS OR LIENS ON THE
COLLATERAL, OTHER THAN PERMITTED LIENS (AS DEFINED BELOW);

 

(G)         A CERTIFICATE OF GOOD STANDING OF EACH LOAN PARTY FROM THE
JURISDICTION OF SUCH LOAN PARTY’S ORGANIZATION AND A CERTIFICATE OF FOREIGN
QUALIFICATION FROM EACH JURISDICTION WHERE SUCH LOAN PARTY’S FAILURE TO BE SO
QUALIFIED COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT (AS
DEFINED BELOW), IN EACH CASE AS OF A RECENT DATE ACCEPTABLE TO AGENT;

 

(H)         A LANDLORD CONSENT AND/OR BAILEE LETTER IN FAVOR OF AGENT EXECUTED
BY THE LANDLORD OR BAILEE, AS APPLICABLE, FOR ANY THIRD PARTY LOCATION WHERE
(A) ANY LOAN PARTY’S PRINCIPAL PLACE OF BUSINESS, (B) ANY LOAN PARTY’S BOOKS OR
RECORDS OR (C) COLLATERAL WITH AN AGGREGATE VALUE IN EXCESS OF $50,000 IS
LOCATED, A FORM OF WHICH IS ATTACHED HERETO AS EXHIBIT C-1 AND EXHIBIT C-2, AS
APPLICABLE (EACH AN “ACCESS AGREEMENT”);

 

(I)          A LEGAL OPINION OF LOAN PARTIES’ COUNSEL, IN FORM AND SUBSTANCE
SATISFACTORY TO AGENT;

 

(J)          A COMPLETED EPS SET-UP FORM, A FORM OF WHICH IS ATTACHED HERETO AS
EXHIBIT E (THE “EPS SETUP FORM”);

 

(K)         A COMPLETED PERFECTION CERTIFICATE, DULY EXECUTED BY EACH LOAN PARTY
(THE “PERFECTION CERTIFICATE”), A FORM OF WHICH AGENT PREVIOUSLY DELIVERED TO
BORROWER;

 

(L)          ONE OR MORE ACCOUNT CONTROL AGREEMENTS (AS DEFINED BELOW), IN FORM
AND SUBSTANCE REASONABLY ACCEPTABLE TO AGENT, DULY EXECUTED BY THE APPLICABLE
LOAN PARTIES AND THE APPLICABLE DEPOSITORY OR FINANCIAL INSTITUTION, FOR EACH
DEPOSIT AND SECURITIES ACCOUNT LISTED ON THE PERFECTION CERTIFICATE;

 

(M)        A DISBURSEMENT INSTRUCTION LETTER, IN FORM AND SUBSTANCE SATISFACTORY
TO AGENT, EXECUTED BY EACH LOAN PARTY, AGENT AND EACH LENDER (THE “DISBURSEMENT
LETTER”);

 

(N)         ALL OTHER DOCUMENTS AND INSTRUMENTS AS AGENT AND LENDERS MAY
REASONABLY DEEM NECESSARY TO EFFECTUATE THE INTENT AND PURPOSE OF THIS AGREEMENT
(TOGETHER WITH THE AGREEMENT, NOTE, THE PERFECTION CERTIFICATE, THE SECRETARY’S
CERTIFICATE AND THE DISBURSEMENT LETTER, ANY GUARANTY AGREEMENT FROM TIME TO
TIME DELIVERED IN CONNECTION WITH THIS AGREEMENT, AND ALL OTHER AGREEMENTS,
INSTRUMENTS, DOCUMENTS AND CERTIFICATES EXECUTED AND/OR DELIVERED BY A LOAN
PARTY TO OR IN FAVOR OF AGENT FROM TIME TO TIME IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE “DEBT DOCUMENTS”); AND

 

(O)         AGENT AND LENDERS SHALL HAVE RECEIVED THE FEES REQUIRED TO BE PAID
BY BORROWER, IF ANY, IN THE RESPECTIVE AMOUNTS SPECIFIED IN SECTION 2.7, AND
BORROWER SHALL HAVE REIMBURSED AGENT AND LENDERS FOR ALL FEES, COSTS AND
EXPENSES OF CLOSING PRESENTED AS OF THE DATE OF THIS AGREEMENT.

 

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CONFIDENTIAL INFORMATION, INDICATED BY [***], HAS BEEN OMITTED FROM THIS FILING
AND FILED SEPARATELY WITH THE SECURITIES EXCHANGE COMMISSION

 

4.2.     CONDITIONS PRECEDENT TO ALL TERM LOANS.  NO LENDER SHALL BE OBLIGATED
TO MAKE ANY TERM LOAN, INCLUDING THE TERM LOAN A, UNLESS THE FOLLOWING
ADDITIONAL CONDITIONS HAVE BEEN SATISFIED:

 

(A)         (I) ALL REPRESENTATIONS AND WARRANTIES IN SECTION 5 BELOW SHALL BE
TRUE AS OF THE DATE OF SUCH TERM LOAN, EXCEPT TO THE EXTENT SUCH REPRESENTATIONS
AND WARRANTIES EXPRESSLY RELATE TO AN EARLIER DATE, IN WHICH CASE SUCH
REPRESENTATIONS AND WARRANTIES WERE TRUE AND CORRECT ON AND AS OF SUCH EARLIER
DATE; (II) NO EVENT OF DEFAULT OR ANY OTHER EVENT, WHICH WITH THE GIVING OF
NOTICE OR THE PASSAGE OF TIME, OR BOTH, WOULD CONSTITUTE AN EVENT OF DEFAULT
(SUCH EVENT, A “DEFAULT”) HAS OCCURRED AND IS CONTINUING OR WILL RESULT FROM THE
MAKING OF ANY TERM LOAN, AND (III) AGENT SHALL HAVE RECEIVED A CERTIFICATE FROM
AN AUTHORIZED OFFICER OF EACH LOAN PARTY CONFIRMING EACH OF THE FOREGOING;

 

(B)         AGENT SHALL HAVE RECEIVED THE REDELIVERY OR SUPPLEMENTAL DELIVERY OF
THE ITEMS SET FORTH IN THE FOLLOWING SECTIONS ONLY TO THE EXTENT CIRCUMSTANCES
HAVE CHANGED SINCE THE FUNDING OF THE TERM LOAN A:  SECTIONS 4.1(B), (E), (F),
(G), (H), (I), (K) AND (M); AND

 

(c)         with respect to all Term Loans, Agent shall have received copies of
such other documents, agreements, instruments or information as Agent or any
Lender shall reasonably request.

 

4.3.     ADDITIONAL CONDITIONS PRECEDENT TO TERM LOAN B AND TERM LOAN C.  NO
LENDER SHALL BE OBLIGATED TO MAKE THE TERM LOAN B OR THE TERM LOAN C,
RESPECTIVELY, UNLESS THE FOLLOWING ADDITIONAL CONDITIONS HAVE BEEN SATISFIED:

 

(A)         WITH RESPECT TO EACH OF THE TERM LOAN B AND THE TERM LOAN C,
(I) AGENT SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO AGENT AND
LENDERS, A LEGAL OPINION OF LOAN PARTIES’ COUNSEL, (II) AGENT SHALL HAVE
RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO AGENT AND LENDERS, A SECRETARY’S
CERTIFICATE EXECUTED BY THE SECRETARY OF BORROWER PROVIDING VERIFICATION OF
INCUMBENCY AND ATTACHING BORROWER’S BOARD RESOLUTIONS AUTHORIZING THE BORROWING
OF THE TERM LOAN B OR THE TERM LOAN C, AS APPLICABLE, AND (III) LENDERS SHALL
HAVE RECEIVED NOTES DULY EXECUTED BY BORROWER IN FAVOR OF EACH APPLICABLE LENDER
IN THE APPROPRIATE TERM LOAN B AMOUNTS OR TERM LOAN C AMOUNTS, AS APPLICABLE;

 

(B)         WITH RESPECT TO THE TERM LOAN B, (I) LENDERS SHALL HAVE RECEIVED
EVIDENCE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO LENDERS THAT
[***], AND (II) BORROWER SHALL HAVE, IMMEDIATELY BEFORE AND IMMEDIATELY AFTER
[***], AND LENDERS SHALL HAVE RECEIVED A CERTIFICATE SIGNED BY THE PRESIDENT,
CHIEF EXECUTIVE OFFICER OR CHIEF FINANCIAL OFFICER OF BORROWER CERTIFYING THAT
[***], AND ATTACHING A [***], TOGETHER WITH SUCH OTHER EVIDENCE AS LENDERS SHALL
REASONABLY REQUEST; AND

 

(C)         WITH RESPECT TO THE TERM LOAN C, IN ADDITION TO THE SATISFACTION OF
THE CONDITIONS SET FORTH IN [***], (I) LENDERS SHALL HAVE RECEIVED EVIDENCE IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO LENDERS THAT [***], (II) LENDERS
SHALL HAVE RECEIVED EVIDENCE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
LENDERS THAT [***], (III) BORROWER SHALL HAVE, IMMEDIATELY BEFORE AND
IMMEDIATELY AFTER [***], AND LENDERS SHALL HAVE RECEIVED A CERTIFICATE SIGNED BY
THE PRESIDENT, CHIEF EXECUTIVE OFFICER OR CHIEF FINANCIAL OFFICER OF BORROWER
CERTIFYING THAT [***], AND ATTACHING A [***], TOGETHER WITH SUCH OTHER EVIDENCE
AS LENDERS SHALL REASONABLY REQUEST, AND (IV) LENDERS

 

11

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CONFIDENTIAL INFORMATION, INDICATED BY [***], HAS BEEN OMITTED FROM THIS FILING
AND FILED SEPARATELY WITH THE SECURITIES EXCHANGE COMMISSION

 

SHALL HAVE RECEIVED EVIDENCE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
LENDERS THAT [***] UNDER MATERIALLY SIMILAR TERMS AND CONDITIONS AS IN EFFECT ON
THE CLOSING DATE.

 

As used herein, the term “[***]” means, with respect to [***] most recently
delivered to Agent and the Lenders in accordance with this Agreement:

 

(A)                      (I) [***]

 

[***]

 

(B)                     [***].

 

As used herein, the term “[***]” means, with respect to [***] delivered to and
approved by Agent and the Lenders on or prior to the Closing Date:

 

(a)                      (i) [***]

 

[***]

 

(b)                     [***].

 

5.        REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES.

 

Each Loan Party, jointly and severally, represents, warrants and covenants to
Agent and each Lender that:

 

5.1.     DUE ORGANIZATION AND AUTHORIZATION.  EACH LOAN PARTY’S EXACT LEGAL NAME
IS AS SET FORTH IN THE PERFECTION CERTIFICATE AND EACH LOAN PARTY IS, AND WILL
REMAIN, DULY ORGANIZED, EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE
STATE OF ITS ORGANIZATION AS SPECIFIED IN THE PERFECTION CERTIFICATE, HAS ITS
CHIEF EXECUTIVE OFFICE AT THE LOCATION SPECIFIED IN THE PERFECTION CERTIFICATE,
AND IS, AND WILL REMAIN, DULY QUALIFIED AND LICENSED IN EVERY JURISDICTION
WHEREVER NECESSARY TO CARRY ON ITS BUSINESS AND OPERATIONS, EXCEPT WHERE THE
FAILURE TO BE SO QUALIFIED AND LICENSED COULD NOT REASONABLY BE EXPECTED TO HAVE
A MATERIAL ADVERSE EFFECT.  THIS AGREEMENT AND THE OTHER DEBT DOCUMENTS HAVE
BEEN DULY AUTHORIZED, EXECUTED AND DELIVERED BY EACH LOAN PARTY AND CONSTITUTE
LEGAL, VALID AND BINDING AGREEMENTS ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS;
PROVIDED, HOWEVER, THAT THE RESOLUTIONS OF BORROWER’S BOARD OF DIRECTORS ADOPTED
ON OR ABOUT MAY 31, 2008 REQUIRE BORROWER TO OBTAIN FURTHER AUTHORIZATION OF THE
BOARD OF DIRECTORS TO BORROW ANY ADDITIONAL TERM LOAN AFTER THE CLOSING DATE. 
THE EXECUTION, DELIVERY AND PERFORMANCE BY EACH LOAN PARTY OF EACH DEBT DOCUMENT
EXECUTED OR TO BE EXECUTED BY IT IS IN EACH CASE WITHIN SUCH LOAN PARTY’S
POWERS.

 

5.2.     REQUIRED CONSENTS.  NO FILING, REGISTRATION, QUALIFICATION WITH, OR
APPROVAL, CONSENT OR WITHHOLDING OF OBJECTIONS FROM, ANY GOVERNMENTAL AUTHORITY
OR INSTRUMENTALITY OR ANY OTHER ENTITY OR PERSON IS REQUIRED WITH RESPECT TO THE
ENTRY INTO, OR PERFORMANCE BY ANY LOAN PARTY OF, ANY OF THE DEBT DOCUMENTS,
EXCEPT ANY ALREADY OBTAINED.

 

5.3.     NO CONFLICTS.  THE ENTRY INTO, AND PERFORMANCE BY EACH LOAN PARTY OF,
THE DEBT DOCUMENTS WILL NOT (A) VIOLATE ANY OF THE ORGANIZATIONAL DOCUMENTS OF
SUCH LOAN PARTY, (B) VIOLATE ANY LAW, RULE, REGULATION, ORDER, AWARD OR JUDGMENT
APPLICABLE TO SUCH LOAN PARTY, OR (C) RESULT IN ANY BREACH OF OR

 

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CONSTITUTE A DEFAULT UNDER, OR RESULT IN THE CREATION OF ANY LIEN, CLAIM OR
ENCUMBRANCE ON ANY OF SUCH LOAN PARTY’S PROPERTY (EXCEPT FOR LIENS IN FAVOR OF
AGENT, ON BEHALF OF ITSELF AND LENDERS) PURSUANT TO, ANY INDENTURE, MORTGAGE,
DEED OF TRUST, BANK LOAN, CREDIT AGREEMENT, OR OTHER MATERIAL AGREEMENT (AS
DEFINED BELOW) TO WHICH SUCH LOAN PARTY IS A PARTY.  AS USED HEREIN, “MATERIAL
AGREEMENT” MEANS (I) ANY AGREEMENT OR CONTRACT TO WHICH SUCH LOAN PARTY IS A
PARTY AND INVOLVING THE RECEIPT OR PAYMENT OF AMOUNTS IN THE AGGREGATE EXCEEDING
$250,000 PER YEAR, (II) ANY AGREEMENT OR CONTRACT TO WHICH SUCH LOAN PARTY IS A
PARTY THE TERMINATION OF WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT, (III) THE AZIMUTH AGREEMENT AND (IV) THAT CERTAIN SUBLICENSE
AGREEMENT DATED AS OF OCTOBER 13, 2006 (AS AMENDED, THE “PHARMANOVA AGREEMENT”)
BY AND BETWEEN PHARMANOVA INC. AND BORROWER.  A LIST OF ALL MATERIAL AGREEMENTS
AS OF THE CLOSING DATE IS SET FORTH ON SCHEDULE B HERETO.

 

5.4.     LITIGATION.  THERE ARE NO ACTIONS, SUITS, PROCEEDINGS OR INVESTIGATIONS
PENDING AGAINST OR AFFECTING ANY LOAN PARTY BEFORE ANY COURT, FEDERAL, STATE,
PROVINCIAL, MUNICIPAL OR OTHER GOVERNMENTAL DEPARTMENT, COMMISSION, BOARD,
BUREAU, AGENCY OR INSTRUMENTALITY, DOMESTIC OR FOREIGN, OR ANY BASIS THEREOF,
WHICH INVOLVES THE POSSIBILITY OF ANY JUDGMENT OR LIABILITY THAT COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, OR WHICH QUESTIONS THE
VALIDITY OF THE DEBT DOCUMENTS, OR THE OTHER DOCUMENTS REQUIRED THEREBY OR ANY
ACTION TO BE TAKEN PURSUANT TO ANY OF THE FOREGOING, NOR DOES ANY LOAN PARTY
HAVE REASON TO BELIEVE THAT ANY SUCH ACTIONS, SUITS, PROCEEDINGS OR
INVESTIGATIONS ARE THREATENED.  AS USED IN THIS AGREEMENT, THE TERM “MATERIAL
ADVERSE EFFECT” MEANS A MATERIAL ADVERSE EFFECT ON ANY OF (A) THE OPERATIONS,
BUSINESS, ASSETS, PROPERTIES, OR CONDITION (FINANCIAL OR OTHERWISE) OF BORROWER,
INDIVIDUALLY, OR THE LOAN PARTIES, COLLECTIVELY, (B) THE ABILITY OF A LOAN PARTY
TO PERFORM ANY OF ITS OBLIGATIONS UNDER ANY DEBT DOCUMENT TO WHICH IT IS A
PARTY, (C) THE LEGALITY, VALIDITY OR ENFORCEABILITY OF ANY DEBT DOCUMENT,
(D) THE RIGHTS AND REMEDIES OF AGENT OR LENDERS UNDER ANY DEBT DOCUMENT OR
(E) THE VALIDITY, PERFECTION OR PRIORITY OF ANY LIEN IN FAVOR OF AGENT, ON
BEHALF OF ITSELF AND LENDERS, ON ANY OF THE COLLATERAL.

 

5.5.     FINANCIAL STATEMENTS.  ALL FINANCIAL STATEMENTS DELIVERED TO AGENT AND
LENDERS PURSUANT TO SECTION 6.3 HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP
(SUBJECT, IN THE CASE OF UNAUDITED FINANCIAL STATEMENTS, TO THE ABSENCE OF
FOOTNOTES AND NORMAL YEAR END AUDIT ADJUSTMENTS), AND SINCE THE DATE OF THE MOST
RECENT AUDITED FINANCIAL STATEMENT, NO EVENT HAS OCCURRED WHICH HAS HAD OR COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  THERE HAS BEEN NO
MATERIAL ADVERSE DEVIATION FROM THE MOST RECENT PROPOSED ANNUAL OPERATING BUDGET
OF BORROWER DELIVERED TO AGENT AND LENDERS IN ACCORDANCE WITH SECTION 6.3.

 

5.6.     USE OF PROCEEDS.  THE PROCEEDS OF THE TERM LOANS SHALL BE USED FOR
WORKING CAPITAL AND GENERAL CORPORATE PURPOSES.

 

5.7.     COLLATERAL.  EACH LOAN PARTY IS, AND WILL REMAIN, THE SOLE AND LAWFUL
OWNER, AND IN POSSESSION OF, THE COLLATERAL, AND HAS THE SOLE RIGHT AND LAWFUL
AUTHORITY TO GRANT THE SECURITY INTEREST DESCRIBED IN THIS AGREEMENT.  THE
COLLATERAL IS, AND WILL REMAIN, FREE AND CLEAR OF ALL LIENS, CLAIMS AND
ENCUMBRANCES OF ANY KIND WHATSOEVER, EXCEPT FOR (A) LIENS IN FAVOR OF AGENT, ON
BEHALF OF ITSELF AND LENDERS, TO SECURE THE OBLIGATIONS, (B) LIENS (I) WITH
RESPECT TO THE PAYMENT OF TAXES, ASSESSMENTS OR OTHER GOVERNMENTAL CHARGES OR
(II) OF SUPPLIERS, CARRIERS, MATERIALMEN, WAREHOUSEMEN, WORKMEN OR MECHANICS AND
OTHER SIMILAR LIENS, IN EACH CASE IMPOSED BY LAW AND ARISING IN THE ORDINARY
COURSE OF BUSINESS, AND SECURING AMOUNTS THAT ARE NOT YET DUE OR THAT ARE BEING
CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED AND WITH
RESPECT TO WHICH ADEQUATE RESERVES OR OTHER APPROPRIATE PROVISIONS ARE
MAINTAINED ON THE BOOKS OF THE APPLICABLE LOAN PARTY IN ACCORDANCE WITH GAAP AND
WHICH DO NOT INVOLVE, IN THE JUDGMENT OF AGENT, ANY RISK OF THE SALE, FORFEITURE
OR LOSS OF ANY OF THE COLLATERAL (A “PERMITTED CONTEST”), (C) LIENS EXISTING ON
THE DATE HEREOF AND SET FORTH ON SCHEDULE B HERETO, (D) LIENS SECURING
INDEBTEDNESS (AS DEFINED IN SECTION 7.2 BELOW) PERMITTED UNDER
SECTION 7.2(C) BELOW, PROVIDED THAT (I) SUCH LIENS EXIST PRIOR TO THE
ACQUISITION OF, OR ATTACH SUBSTANTIALLY SIMULTANEOUS WITH, OR WITHIN 20

 

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DAYS AFTER THE, ACQUISITION, REPAIR, IMPROVEMENT OR CONSTRUCTION OF, SUCH
PROPERTY FINANCED BY SUCH INDEBTEDNESS AND (II) SUCH LIENS DO NOT EXTEND TO ANY
PROPERTY OF A LOAN PARTY OTHER THAN THE PROPERTY (AND PROCEEDS THEREOF) ACQUIRED
OR BUILT, OR THE IMPROVEMENTS OR REPAIRS, FINANCED BY SUCH INDEBTEDNESS, AND
(E) LICENSES DESCRIBED IN SECTION 7.3(C) AND (D) BELOW (ALL OF SUCH LIENS
DESCRIBED IN THE FOREGOING CLAUSES (A) THROUGH (E) ARE CALLED “PERMITTED
LIENS”).

 

5.8.     COMPLIANCE WITH LAWS.

 

(A)         EACH LOAN PARTY IS AND WILL REMAIN IN COMPLIANCE IN ALL MATERIAL
RESPECTS WITH ALL LAWS, STATUTES, ORDINANCES, RULES AND REGULATIONS APPLICABLE
TO IT.

 

(B)         WITHOUT LIMITING THE GENERALITY OF THE IMMEDIATELY PRECEDING CLAUSE
(A), EACH LOAN PARTY FURTHER AGREES THAT IT IS AND WILL REMAIN IN COMPLIANCE IN
ALL MATERIAL RESPECTS WITH ALL U.S. ECONOMIC SANCTIONS LAWS, EXECUTIVE ORDERS
AND IMPLEMENTING REGULATIONS AS PROMULGATED BY THE U.S. TREASURY DEPARTMENT’S
OFFICE OF FOREIGN ASSETS CONTROL (“OFAC”), AND ALL APPLICABLE ANTI-MONEY
LAUNDERING AND COUNTER-TERRORISM FINANCING PROVISIONS OF THE BANK SECRECY ACT
AND THE USA PATRIOT ACT AND ALL REGULATIONS ISSUED PURSUANT TO IT.  NO LOAN
PARTY NOR ANY OF ITS SUBSIDIARIES, AFFILIATES OR JOINT VENTURES (A) IS A PERSON
OR ENTITY DESIGNATED BY THE U.S. GOVERNMENT ON THE LIST OF THE SPECIALLY
DESIGNATED NATIONALS AND BLOCKED PERSONS (THE “SDN LIST”) WITH WHICH A U.S.
PERSON OR ENTITY CANNOT DEAL WITH OR OTHERWISE ENGAGE IN BUSINESS TRANSACTIONS,
(B) IS A PERSON OR ENTITY WHO IS OTHERWISE THE TARGET OF U.S. ECONOMIC SANCTIONS
LAWS SUCH THAT A U.S. PERSON OR ENTITY CANNOT DEAL OR OTHERWISE ENGAGE IN
BUSINESS TRANSACTIONS WITH SUCH PERSON OR ENTITY; OR (C) IS CONTROLLED BY
(INCLUDING WITHOUT LIMITATION BY VIRTUE OF SUCH PERSON BEING A DIRECTOR OR
OWNING VOTING SHARES OR INTERESTS), OR ACTS, DIRECTLY OR INDIRECTLY, FOR OR ON
BEHALF OF, ANY PERSON OR ENTITY ON THE SDN LIST OR A FOREIGN GOVERNMENT THAT IS
THE TARGET OF U.S. ECONOMIC SANCTIONS PROHIBITIONS SUCH THAT THE ENTRY INTO, OR
PERFORMANCE UNDER, THIS AGREEMENT OR ANY OTHER DEBT DOCUMENT WOULD BE PROHIBITED
UNDER U.S. LAW.  THE SDN LIST IS MAINTAINED BY OFAC AND IS AVAILABLE AT:
HTTP://WWW.USTREAS.GOV/OFFICES/ENFORCEMENT/OFAC/SDN/.

 

(C)         EACH LOAN PARTY HAS MET THE MINIMUM FUNDING REQUIREMENTS OF THE
UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (AS AMENDED,
“ERISA”) WITH RESPECT TO ANY EMPLOYEE BENEFIT PLANS SUBJECT TO ERISA.  NO LOAN
PARTY IS AN “INVESTMENT COMPANY” OR A COMPANY “CONTROLLED” BY AN “INVESTMENT
COMPANY” WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940.  NO LOAN
PARTY IS ENGAGED PRINCIPALLY, OR AS ONE OF THE IMPORTANT ACTIVITIES, IN THE
BUSINESS OF EXTENDING CREDIT FOR THE PURPOSE OF PURCHASING OR CARRYING MARGIN
STOCK (WITHIN THE MEANING OF REGULATIONS T, U AND X OF THE BOARD OF GOVERNORS OF
THE FEDERAL RESERVE SYSTEM (THE “FEDERAL RESERVE BOARD”).

 

5.9.     INTELLECTUAL PROPERTY.  THE INTELLECTUAL PROPERTY IS FREE AND CLEAR OF
ALL LIENS, CLAIMS AND ENCUMBRANCES OF ANY KIND WHATSOEVER, EXCEPT FOR PERMITTED
LIENS DESCRIBED IN CLAUSES (B)(I) AND (E) OF SECTION 5.7.  NO LOAN PARTY HAS
ENTERED INTO ANY OTHER AGREEMENT OR FINANCING ARRANGEMENT IN WHICH A NEGATIVE
PLEDGE IN SUCH LOAN PARTY’S INTELLECTUAL PROPERTY IS GRANTED TO ANY OTHER PARTY.
AS OF THE CLOSING DATE AND EACH DATE A TERM LOAN IS ADVANCED TO BORROWER, NO
LOAN PARTY HAS ANY INTEREST IN, OR TITLE TO ANY INTELLECTUAL PROPERTY EXCEPT AS
DISCLOSED IN THE PERFECTION CERTIFICATE.  EACH LOAN PARTY OWNS OR HAS RIGHTS TO
USE ALL INTELLECTUAL PROPERTY MATERIAL TO THE CONDUCT OF ITS BUSINESS AS NOW OR
HERETOFORE CONDUCTED BY IT OR PROPOSED TO BE CONDUCTED BY IT, WITHOUT ANY ACTUAL
OR CLAIMED INFRINGEMENT UPON THE RIGHTS OF THIRD PARTIES.

 

5.10.   SOLVENCY.  BOTH BEFORE AND AFTER GIVING EFFECT TO EACH TERM LOAN, THE
TRANSACTIONS CONTEMPLATED HEREIN, AND THE PAYMENT AND ACCRUAL OF ALL TRANSACTION
COSTS IN CONNECTION WITH THE FOREGOING, EACH LOAN PARTY IS AND WILL BE SOLVENT. 
AS USED HEREIN, “SOLVENT” MEANS, WITH RESPECT TO A

 

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LOAN PARTY ON A PARTICULAR DATE, THAT ON SUCH DATE (A) THE FAIR VALUE OF THE
PROPERTY OF SUCH LOAN PARTY IS GREATER THAN THE TOTAL AMOUNT OF LIABILITIES,
INCLUDING CONTINGENT LIABILITIES, OF SUCH LOAN PARTY; (B) THE PRESENT FAIR
SALABLE VALUE OF THE ASSETS OF SUCH LOAN PARTY IS NOT LESS THAN THE AMOUNT THAT
WILL BE REQUIRED TO PAY THE PROBABLE LIABILITY OF SUCH LOAN PARTY ON ITS DEBTS
AS THEY BECOME ABSOLUTE AND MATURED; (C) SUCH LOAN PARTY DOES NOT INTEND TO, AND
DOES NOT BELIEVE THAT IT WILL, INCUR DEBTS OR LIABILITIES BEYOND SUCH LOAN
PARTY’S ABILITY TO PAY AS SUCH DEBTS AND LIABILITIES MATURE; (D) SUCH LOAN PARTY
IS NOT ENGAGED IN A BUSINESS OR TRANSACTION, AND IS NOT ABOUT TO ENGAGE IN A
BUSINESS OR TRANSACTION, FOR WHICH SUCH LOAN PARTY’S PROPERTY WOULD CONSTITUTE
AN UNREASONABLY SMALL CAPITAL; AND (E) SUCH LOAN PARTY IS NOT “INSOLVENT” WITHIN
THE MEANING OF SECTION 101(32) OF THE UNITED STATES BANKRUPTCY CODE (11 U.S.C. §
101, ET. SEQ), AS AMENDED FROM TIME TO TIME.  THE AMOUNT OF CONTINGENT
LIABILITIES (SUCH AS LITIGATION, GUARANTIES AND PENSION PLAN LIABILITIES) AT ANY
TIME SHALL BE COMPUTED AS THE AMOUNT THAT, IN LIGHT OF ALL THE FACTS AND
CIRCUMSTANCES EXISTING AT THE TIME, REPRESENTS THE AMOUNT THAT CAN BE REASONABLY
BE EXPECTED TO BECOME AN ACTUAL OR MATURED LIABILITY.

 

5.11.   TAXES; PENSION.  ALL TAX RETURNS, REPORTS AND STATEMENTS, INCLUDING
INFORMATION RETURNS, REQUIRED BY ANY GOVERNMENTAL AUTHORITY TO BE FILED BY EACH
LOAN PARTY AND ITS SUBSIDIARIES HAVE BEEN FILED WITH THE APPROPRIATE
GOVERNMENTAL AUTHORITY AND ALL TAXES, LEVIES, ASSESSMENTS AND SIMILAR CHARGES
HAVE BEEN PAID PRIOR TO THE DATE ON WHICH ANY FINE, PENALTY, INTEREST OR LATE
CHARGE MAY BE ADDED THERETO FOR NONPAYMENT THEREOF (OR ANY SUCH FINE, PENALTY,
INTEREST, LATE CHARGE OR LOSS HAS BEEN PAID), EXCLUDING TAXES, LEVIES,
ASSESSMENTS AND SIMILAR CHARGES OR OTHER AMOUNTS WHICH ARE THE SUBJECT OF A
PERMITTED CONTEST.  PROPER AND ACCURATE AMOUNTS HAVE BEEN WITHHELD BY EACH LOAN
PARTY FROM ITS RESPECTIVE EMPLOYEES FOR ALL PERIODS IN COMPLIANCE WITH
APPLICABLE LAWS AND SUCH WITHHOLDINGS HAVE BEEN TIMELY PAID TO THE RESPECTIVE
GOVERNMENTAL AUTHORITIES.  EACH LOAN PARTY HAS PAID ALL AMOUNTS NECESSARY TO
FUND ALL PRESENT PENSION, PROFIT SHARING AND DEFERRED COMPENSATION PLANS IN
ACCORDANCE WITH THEIR TERMS, AND NO LOAN PARTY HAS WITHDRAWN FROM PARTICIPATION
IN, OR HAS PERMITTED PARTIAL OR COMPLETE TERMINATION OF, OR PERMITTED THE
OCCURRENCE OF ANY OTHER EVENT WITH RESPECT TO, ANY SUCH PLAN WHICH COULD
REASONABLY BE EXPECTED TO RESULT IN ANY LIABILITY OF A LOAN PARTY, INCLUDING ANY
LIABILITY TO THE PENSION BENEFIT GUARANTY CORPORATION OR ITS SUCCESSORS OR ANY
OTHER GOVERNMENTAL AUTHORITY.

 

5.12.   FULL DISCLOSURE.  LOAN PARTIES HEREBY CONFIRM THAT ALL OF THE
INFORMATION DISCLOSED ON THE PERFECTION CERTIFICATE IS TRUE, CORRECT AND
COMPLETE AS OF THE DATE OF THIS AGREEMENT AND AS OF THE DATE OF EACH TERM LOAN
(AS UPDATED FROM TIME TO TIME TO REFLECT CHANGES THERETO (A) AS A RESULT OF
MATTERS EXPRESSLY PERMITTED UNDER THIS AGREEMENT OR (B) CONSENTED TO BY THE
LENDERS PURSUANT TO SECTION 10.8).  NO REPRESENTATION, WARRANTY OR OTHER WRITTEN
STATEMENT MADE BY OR ON BEHALF OF A LOAN PARTY PURSUANT TO THE TERMS OF THIS
AGREEMENT CONTAINS ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITS TO STATE A
MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS CONTAINED THEREIN NOT MISLEADING,
IT BEING RECOGNIZED BY AGENT AND LENDERS THAT THE PROJECTIONS AND FORECASTS
PROVIDED BY LOAN PARTIES IN GOOD FAITH AND BASED UPON REASONABLE AND STATED
ASSUMPTIONS ARE NOT TO BE VIEWED AS FACTS AND THAT ACTUAL RESULTS DURING THE
PERIOD OR PERIODS COVERED BY ANY SUCH PROJECTIONS AND FORECASTS MAY DIFFER FROM
THE PROJECTED OR FORECASTED RESULTS.

 

6.        AFFIRMATIVE COVENANTS.

 

6.1.     GOOD STANDING.  EACH LOAN PARTY SHALL MAINTAIN ITS AND EACH OF ITS
SUBSIDIARIES’ EXISTENCE AND GOOD STANDING IN ITS JURISDICTION OF ORGANIZATION
AND MAINTAIN QUALIFICATION IN EACH JURISDICTION IN WHICH THE FAILURE TO SO
QUALIFY COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  EACH
LOAN PARTY SHALL MAINTAIN, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO MAINTAIN,
IN FULL FORCE ALL LICENSES, APPROVALS AND AGREEMENTS, THE LOSS OF WHICH COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.  “SUBSIDIARY” MEANS,
WITH RESPECT TO A LOAN PARTY, ANY ENTITY THE MANAGEMENT OF WHICH IS, DIRECTLY OR
INDIRECTLY CONTROLLED BY, OR OF WHICH AN AGGREGATE OF MORE THAN 50% OF THE
OUTSTANDING VOTING CAPITAL STOCK (OR OTHER VOTING EQUITY INTEREST) IS, AT THE
TIME, OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY, SUCH

 

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LOAN PARTY OR ONE OR MORE SUBSIDIARIES OF SUCH LOAN PARTY, AND, UNLESS THE
CONTEST OTHERWISE REQUIRES EACH REFERENCE TO A SUBSIDIARY HEREIN SHALL BE A
REFERENCE TO A SUBSIDIARY OF BORROWER.

 

6.2.     NOTICE TO AGENT.  LOAN PARTIES SHALL PROVIDE AGENT WITH (A) NOTICE OF
ANY CHANGE IN THE ACCURACY OF THE PERFECTION CERTIFICATE OR ANY OF THE
REPRESENTATIONS AND WARRANTIES PROVIDED IN SECTION 5 ABOVE, IMMEDIATELY UPON THE
OCCURRENCE OF ANY SUCH CHANGE, (B) NOTICE OF THE OCCURRENCE OF ANY DEFAULT OR
EVENT OF DEFAULT, PROMPTLY (BUT IN ANY EVENT WITHIN 5 DAYS) AFTER THE DATE ON
WHICH ANY OFFICER OF A LOAN PARTY OBTAINS KNOWLEDGE OF THE OCCURRENCE OF ANY
SUCH EVENT, (C) COPIES OF ALL STATEMENTS, REPORTS AND NOTICES MADE AVAILABLE
GENERALLY BY BORROWER TO ITS SECURITYHOLDERS AND ALL DOCUMENTS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (“SEC”) OR ANY SECURITIES EXCHANGE OR
GOVERNMENTAL AUTHORITY EXERCISING A SIMILAR FUNCTION, PROMPTLY, BUT IN ANY EVENT
WITHIN 3 DAYS OF DELIVERING OR RECEIVING SUCH INFORMATION TO OR FROM SUCH
PERSONS (PROVIDED THAT TO THE EXTENT THE SAME ARE POSTED BY BORROWER ON THE
INTERNET, BORROWER SHALL ONLY BE OBLIGATED TO GIVE NOTICE TO AGENT OF SUCH
INTERNET POSTING VIA ELECTRONIC MAIL TO AN ELECTRONIC MAIL ADDRESS PROVIDED BY
AGENT FROM TIME TO TIME), (D) A REPORT OF ANY LEGAL ACTIONS PENDING OR
THREATENED AGAINST BORROWER OR ANY SUBSIDIARY THAT COULD RESULT IN DAMAGES OR
COSTS TO BORROWER OR ANY SUBSIDIARY OF $250,000 OR MORE PROMPTLY, BUT IN ANY
EVENT WITHIN 5 DAYS, UPON RECEIPT OF NOTICE THEREOF, (E) AT THE TIME THAT
BORROWER DELIVERS EACH QUARTERLY COMPLIANCE CERTIFICATE PURSUANT TO SECTION 6.3,
A SUMMARY OF ANY NEW APPLICATIONS OR REGISTRATIONS THAT BORROWER HAS MADE OR
FILED IN RESPECT OF ANY INTELLECTUAL PROPERTY OR ANY MATERIAL ADVERSE CHANGE IN
STATUS OF ANY OUTSTANDING APPLICATION OR REGISTRATION WITHIN 5 DAYS OF SUCH
APPLICATION, FILING OR ADVERSE CHANGE IN STATUS, (F) NOTICE OF, AND UPON
REQUEST, COPIES OF ALL MATERIAL STATEMENTS, REPORTS AND NOTICES DELIVERED TO OR
BY A LOAN PARTY IN CONNECTION WITH ANY MATERIAL AGREEMENT PROMPTLY (BUT IN ANY
EVENT WITHIN 5 DAYS) UPON RECEIPT THEREOF, (G) NOTICE OF THE OCCURRENCE OF ANY
DEFAULT OR EVENT OF DEFAULT UNDER ANY LEASE AGREEMENT (AS DEFINED BELOW),
PROMPTLY (BUT IN ANY EVENT WITHIN 3 BUSINESS DAYS) AFTER THE DATE ON WHICH ANY
OFFICER OF A LOAN PARTY OBTAINS KNOWLEDGE OF THE OCCURRENCE OF ANY SUCH EVENT
AND (H) UPON AGENT’S REASONABLE REQUEST, BORROWER SHALL DELIVER TO AGENT WITHIN
5 DAYS AFTER SUCH REQUEST A CERTIFICATION FROM AN AUTHORIZED OFFICER OF THE
APPLICABLE LOAN PARTY THAT NO DEFAULT OR EVENT DEFAULT EXISTS UNDER ANY LEASE
AGREEMENT OF SUCH LOAN PARTY.

 

6.3.     FINANCIAL STATEMENTS.  IF BORROWER IS A PRIVATE COMPANY, IT SHALL
DELIVER TO AGENT AND LENDERS (A) UNAUDITED CONSOLIDATED AND, IF AVAILABLE,
CONSOLIDATING BALANCE SHEETS, STATEMENTS OF OPERATIONS AND CASH FLOW STATEMENTS
WITHIN 30 DAYS OF EACH MONTH END, IN A FORM ACCEPTABLE TO AGENT AND CERTIFIED BY
BORROWER’S PRESIDENT, CHIEF EXECUTIVE OFFICER OR CHIEF FINANCIAL OFFICER, AND
(B) ITS COMPLETE ANNUAL AUDITED CONSOLIDATED AND, IF AVAILABLE, CONSOLIDATING
FINANCIAL STATEMENTS PREPARED UNDER GAAP AND CERTIFIED WITHOUT QUALIFICATION BY
AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT SELECTED BY BORROWER AND SATISFACTORY
TO AGENT WITHIN 120 DAYS OF THE FISCAL YEAR END OR, IF SOONER, AT SUCH TIME AS
BORROWER’S BOARD OF DIRECTORS RECEIVES THE CERTIFIED AUDIT.  IF BORROWER IS A
PUBLICLY HELD COMPANY, BORROWER SHALL (I) DELIVER TO AGENT AND LENDERS VIA
ELECTRONIC MAIL TO ELECTRONIC MAIL ADDRESSES PROVIDED BY AGENT AND THE LENDERS
FROM TIME TO TIME NOTIFYING AGENT AND LENDERS OF THE POSTING BY BORROWER ON THE
INTERNET OF THE BORROWER’S QUARTERLY UNAUDITED CONSOLIDATED AND, IF AVAILABLE,
CONSOLIDATING BALANCE SHEETS, STATEMENTS OF OPERATIONS AND CASH FLOW STATEMENTS
AND (II) DELIVER TO AGENT AND LENDERS COPIES OF ANNUAL AUDITED CONSOLIDATED AND,
IF AVAILABLE, CONSOLIDATING BALANCE SHEETS, STATEMENTS OF OPERATIONS AND CASH
FLOW STATEMENTS, CERTIFIED WITHOUT QUALIFICATION BY A RECOGNIZED FIRM OF
CERTIFIED PUBLIC ACCOUNTANTS, WITHIN 5 DAYS AFTER THE STATEMENTS ARE REQUIRED TO
BE PROVIDED TO THE SEC AND BORROWER SHALL DELIVER TO AGENT AND LENDERS WITHIN 30
DAYS AFTER THE END OF EACH MONTH REPORTS OF CASH BALANCES OF THE LOAN PARTIES
AND MONTHLY PRESCRIPTION NUMBERS FOR GLUMETZA AND PROQUIN AS COMPARED TO THE
CURRENT BUDGET.  ALL SUCH STATEMENTS (OTHER THAN THE PRESCRIPTION NUMBERS
REFERENCED IN THE IMMEDIATELY PRECEDING SENTENCE) ARE TO BE PREPARED USING GAAP
(SUBJECT, IN THE CASE OF UNAUDITED FINANCIAL STATEMENTS, TO THE ABSENCE OF
FOOTNOTES AND NORMAL YEAR END AUDIT ADJUSTMENTS) AND, IF BORROWER IS A PUBLICLY
HELD COMPANY, ARE TO BE IN COMPLIANCE WITH APPLICABLE SEC REQUIREMENTS.  ALL
ANNUAL AND QUARTERLY FINANCIAL STATEMENTS DELIVERED PURSUANT TO THIS SECTION 6.3
SHALL BE ACCOMPANIED BY A COMPLIANCE CERTIFICATE, SIGNED BY THE CHIEF

 

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FINANCIAL OFFICER OR PRINCIPAL ACCOUNTING OFFICER OF BORROWER, IN THE FORM
ATTACHED HERETO AS EXHIBIT D, AND A MANAGEMENT DISCUSSION AND ANALYSIS THAT
INCLUDES A COMPARISON TO BUDGET FOR THE RESPECTIVE FISCAL PERIOD AND A
COMPARISON OF PERFORMANCE FOR SUCH FISCAL PERIOD TO THE CORRESPONDING PERIOD IN
THE PRIOR YEAR.  BORROWER SHALL DELIVER TO AGENT AND LENDERS (I) AS SOON AS
AVAILABLE AND IN ANY EVENT NOT LATER THAN 60 DAYS AFTER THE END OF EACH FISCAL
YEAR OF BORROWER, A PROPOSED ANNUAL OPERATING BUDGET FOR BORROWER, ON A
CONSOLIDATED AND, IF AVAILABLE, CONSOLIDATING BASIS, APPROVED BY THE BOARD OF
DIRECTORS OF BORROWER, FOR THE CURRENT FISCAL YEAR, IN FORM SATISFACTORY TO
AGENT AND (II) SUCH BUDGETS, SALES PROJECTIONS, OR OTHER FINANCIAL INFORMATION
AS AGENT OR ANY LENDER MAY REASONABLY REQUEST FROM TIME TO TIME GENERALLY
PREPARED BY BORROWER IN THE ORDINARY COURSE OF BUSINESS.

 

6.4.     INSURANCE.  BORROWER, AT ITS EXPENSE, SHALL MAINTAIN, AND SHALL CAUSE
EACH SUBSIDIARY TO MAINTAIN, INSURANCE (INCLUDING, WITHOUT LIMITATION,
COMPREHENSIVE GENERAL LIABILITY, HAZARD, AND BUSINESS INTERRUPTION INSURANCE)
WITH RESPECT TO ALL OF ITS PROPERTIES AND BUSINESSES (INCLUDING, THE
COLLATERAL), IN SUCH AMOUNTS AND COVERING SUCH RISKS AS IS CARRIED GENERALLY IN
ACCORDANCE WITH SOUND BUSINESS PRACTICE BY COMPANIES IN SIMILAR BUSINESSES
SIMILARLY SITUATED AND IN ANY EVENT WITH DEDUCTIBLE AMOUNTS, INSURERS AND
POLICIES THAT SHALL BE REASONABLY ACCEPTABLE TO AGENT.  BORROWER SHALL DELIVER
TO AGENT CERTIFICATES OF INSURANCE EVIDENCING SUCH COVERAGE, TOGETHER WITH
ENDORSEMENTS TO SUCH POLICIES NAMING AGENT AS A LENDER LOSS PAYEE OR ADDITIONAL
INSURED, AS APPROPRIATE, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
AGENT.  EACH POLICY SHALL PROVIDE THAT COVERAGE MAY NOT BE CANCELED OR ALTERED
BY THE INSURER EXCEPT UPON 30 DAYS PRIOR WRITTEN NOTICE TO AGENT AND SHALL NOT
BE SUBJECT TO CO-INSURANCE.  BORROWER APPOINTS AGENT AS ITS ATTORNEY-IN-FACT TO
MAKE, SETTLE AND ADJUST ALL CLAIMS UNDER AND DECISIONS WITH RESPECT TO
BORROWER’S POLICIES OF INSURANCE, AND TO RECEIVE PAYMENT OF AND EXECUTE OR
ENDORSE ALL DOCUMENTS, CHECKS OR DRAFTS IN CONNECTION WITH INSURANCE PAYMENTS.
AGENT SHALL NOT ACT AS BORROWER’S ATTORNEY-IN-FACT UNLESS AN EVENT OF DEFAULT
HAS OCCURRED AND IS CONTINUING.  THE APPOINTMENT OF AGENT AS BORROWER’S ATTORNEY
IN FACT IS A POWER COUPLED WITH AN INTEREST AND IS IRREVOCABLE UNTIL ALL OF THE
OBLIGATIONS ARE INDEFEASIBLY PAID IN FULL. PROCEEDS OF INSURANCE SHALL BE
APPLIED, AT THE OPTION OF AGENT, TO REPAIR OR REPLACE THE COLLATERAL OR TO
REDUCE ANY OF THE OBLIGATIONS.

 

6.5.     TAXES.  BORROWER SHALL, AND SHALL CAUSE EACH SUBSIDIARY TO, TIMELY FILE
ALL TAX REPORTS AND PAY AND DISCHARGE ALL TAXES, ASSESSMENTS AND GOVERNMENTAL
CHARGES OR LEVIES IMPOSED UPON IT, OR ITS INCOME OR PROFITS OR UPON ITS
PROPERTIES OR ANY PART THEREOF, BEFORE THE SAME SHALL BE IN DEFAULT AND BEFORE
THE DATE ON WHICH PENALTIES ATTACH THERETO, EXCEPT TO THE EXTENT SUCH TAXES,
ASSESSMENTS AND GOVERNMENTAL CHARGES OR LEVIES ARE THE SUBJECT OF A PERMITTED
CONTEST.

 

6.6.     AGREEMENT WITH LANDLORD/BAILEE.  UNLESS OTHERWISE AGREED TO BY THE
AGENT IN WRITING, EACH LOAN PARTY SHALL OBTAIN AND MAINTAIN SUCH ACCESS
AGREEMENT(S) WITH RESPECT TO ANY REAL PROPERTY ON WHICH (A) A LOAN PARTY’S
PRINCIPAL PLACE OF BUSINESS, (B) A LOAN PARTY’S BOOKS OR RECORDS OR
(C) COLLATERAL WITH AN AGGREGATE VALUE IN EXCESS OF $50,000 IS LOCATED (OTHER
THAN REAL PROPERTY OWNED BY SUCH LOAN PARTY) AS AGENT MAY REQUIRE.  WITHIN TEN
BUSINESS DAYS AFTER THE DUE DATE FOR ANY RENTAL PAYMENTS SET FORTH IN ANY LEASE
AGREEMENT WITH RESPECT TO ANY REAL PROPERTY DESCRIBED IN THE IMMEDIATELY
PRECEDING SENTENCE (EACH, A “LEASE AGREEMENT”), THE BORROWER SHALL DELIVER TO
AGENT EVIDENCE IN FORM REASONABLY SATISFACTORY TO AGENT THAT SUCH RENTAL PAYMENT
WAS MADE.

 

6.7.     PROTECTION OF INTELLECTUAL PROPERTY.  EACH LOAN PARTY SHALL TAKE ALL
NECESSARY ACTIONS TO: (A) PROTECT, DEFEND AND MAINTAIN THE VALIDITY AND
ENFORCEABILITY OF ITS INTELLECTUAL PROPERTY TO THE EXTENT MATERIAL TO THE
CONDUCT OF ITS BUSINESS NOW OR HERETOFORE CONDUCTED BY IT OR PROPOSED TO BE
CONDUCTED BY IT, (B) PROMPTLY ADVISE AGENT IN WRITING OF MATERIAL INFRINGEMENTS
OF ITS INTELLECTUAL PROPERTY THAT IS MATERIAL TO SUCH LOAN PARTY’S BUSINESS
(C) NOT ALLOW ANY INTELLECTUAL PROPERTY MATERIAL TO SUCH LOAN PARTY’S BUSINESS
TO BE ABANDONED, FORFEITED OR DEDICATED TO THE PUBLIC WITHOUT AGENT’S WRITTEN
CONSENT, AND (D) NOTIFY AGENT PROMPTLY, BUT IN ANY EVENT WITHIN 3 DAYS, IF IT
KNOWS OR HAS REASON TO KNOW THAT ANY APPLICATION OR REGISTRATION RELATING TO ANY
PATENT, TRADEMARK OR COPYRIGHT (NOW OR HEREAFTER EXISTING)

 

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MATERIAL TO ITS BUSINESS MAY BECOME ABANDONED OR DEDICATED, OR IF ANY ADVERSE
DETERMINATION OR DEVELOPMENT (INCLUDING THE INSTITUTION OF, OR ANY SUCH
DETERMINATION OR DEVELOPMENT IN, ANY PROCEEDING IN THE UNITED STATES PATENT AND
TRADEMARK OFFICE, THE UNITED STATES COPYRIGHT OFFICE OR ANY COURT) REGARDING
SUCH LOAN PARTY’S OWNERSHIP OF ANY INTELLECTUAL PROPERTY MATERIAL TO ITS
BUSINESS, ITS RIGHT TO REGISTER THE SAME, OR TO KEEP AND MAINTAIN THE SAME. 
EACH LOAN PARTY SHALL REMAIN LIABLE UNDER EACH OF ITS INTELLECTUAL PROPERTY
LICENSES PURSUANT TO WHICH IT IS A LICENSEE (“LICENSES”) TO OBSERVE AND PERFORM
ALL OF THE CONDITIONS AND OBLIGATIONS TO BE OBSERVED AND PERFORMED BY IT
THEREUNDER, TO THE EXTENT THAT ANY SUCH LICENSES ARE MATERIAL TO THE CONDUCT OF
ITS BUSINESS.  NONE OF AGENT OR ANY LENDER SHALL HAVE ANY OBLIGATION OR
LIABILITY UNDER ANY SUCH LICENSE BY REASON OF OR ARISING OUT OF THIS AGREEMENT,
THE GRANTING OF A LIEN, IF ANY, IN SUCH LICENSE OR THE RECEIPT BY AGENT (ON
BEHALF OF ITSELF AND LENDERS) OF ANY PAYMENT RELATING TO ANY SUCH LICENSE.  NONE
OF AGENT OR ANY LENDER SHALL BE REQUIRED OR OBLIGATED IN ANY MANNER TO PERFORM
OR FULFILL ANY OF THE OBLIGATIONS OF ANY LOAN PARTY UNDER OR PURSUANT TO ANY
LICENSE, OR TO MAKE ANY PAYMENT, OR TO MAKE ANY INQUIRY AS TO THE NATURE OR THE
SUFFICIENCY OF ANY PAYMENT RECEIVED BY IT OR THE SUFFICIENCY OF ANY PERFORMANCE
BY ANY PARTY UNDER ANY LICENSE, OR TO PRESENT OR FILE ANY CLAIMS, OR TO TAKE ANY
ACTION TO COLLECT OR ENFORCE ANY PERFORMANCE OR THE PAYMENT OF ANY AMOUNTS WHICH
MAY HAVE BEEN ASSIGNED TO IT OR WHICH IT MAY BE ENTITLED AT ANY TIME OR TIMES.

 

6.8.     SPECIAL COLLATERAL COVENANTS.

 

(A)         EACH LOAN PARTY SHALL REMAIN IN POSSESSION OF ITS RESPECTIVE
COLLATERAL SOLELY AT THE LOCATION(S) SPECIFIED ON THE PERFECTION CERTIFICATE;
EXCEPT THAT AGENT, ON BEHALF OF ITSELF AND LENDERS, SHALL HAVE THE RIGHT TO
POSSESS (I) ANY CHATTEL PAPER OR INSTRUMENT THAT CONSTITUTES A PART OF THE
COLLATERAL, (II) ANY OTHER COLLATERAL IN WHICH AGENT’S SECURITY INTEREST (ON
BEHALF OF ITSELF AND LENDERS) MAY BE PERFECTED ONLY BY POSSESSION AND (III) ANY
COLLATERAL AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT IN ACCORDANCE WITH THIS
AGREEMENT AND THE OTHER DEBT DOCUMENTS.

 

(B)         EACH LOAN PARTY SHALL (I) USE THE COLLATERAL ONLY IN ITS TRADE OR
BUSINESS, (II) MAINTAIN ALL OF THE COLLATERAL IN GOOD OPERATING ORDER AND
REPAIR, NORMAL WEAR AND TEAR EXCEPTED, AND (III) USE AND MAINTAIN THE COLLATERAL
ONLY IN MATERIAL COMPLIANCE WITH MANUFACTURERS’ RECOMMENDATIONS AND ALL
APPLICABLE LAWS.

 

(C)         AGENT AND LENDERS DO NOT AUTHORIZE AND EACH LOAN PARTY AGREES IT
SHALL NOT (I) PART WITH POSSESSION OF ANY OF THE COLLATERAL (EXCEPT TO AGENT (ON
BEHALF OF ITSELF AND LENDERS), FOR MAINTENANCE AND REPAIR OR FOR A PERMITTED
DISPOSITION), OR (II) REMOVE ANY OF THE COLLATERAL FROM THE CONTINENTAL UNITED
STATES.

 

(D)         EACH LOAN PARTY SHALL PAY PROMPTLY WHEN DUE ALL TAXES, LICENSE FEES,
ASSESSMENTS AND PUBLIC AND PRIVATE CHARGES LEVIED OR ASSESSED ON ANY OF THE
COLLATERAL, ON ITS USE, OR ON THIS AGREEMENT OR ANY OF THE OTHER DEBT
DOCUMENTS.  IN THE EVENT ANY LOAN PARTY FAILS TO PAY ANY TAXES, LICENSE FEES,
ASSESSMENTS AND PUBLIC AND PRIVATE CHARGES LEVIED OR ASSESSED ON ANY OF THE
COLLATERAL WHEN DUE, AT ITS OPTION, AGENT MAY DISCHARGE TAXES, LIENS, SECURITY
INTERESTS OR OTHER ENCUMBRANCES AT ANY TIME LEVIED OR PLACED ON THE COLLATERAL
AND MAY PAY FOR THE MAINTENANCE, INSURANCE AND PRESERVATION OF THE COLLATERAL
AND EFFECT COMPLIANCE WITH THE TERMS OF THIS AGREEMENT OR ANY OF THE OTHER DEBT
DOCUMENTS.  EACH LOAN PARTY AGREES TO REIMBURSE AGENT, ON DEMAND, ALL COSTS AND
EXPENSES INCURRED BY AGENT IN CONNECTION WITH SUCH PAYMENT OR PERFORMANCE AND
AGREES THAT SUCH REIMBURSEMENT OBLIGATION SHALL CONSTITUTE OBLIGATIONS.

 

(E)         EACH LOAN PARTY SHALL, AT ALL TIMES, KEEP SUBSTANTIALLY ACCURATE AND
COMPLETE RECORDS OF THE COLLATERAL.

 

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(F)          EACH LOAN PARTY AGREES AND ACKNOWLEDGES THAT ANY THIRD PERSON WHO
MAY AT ANY TIME POSSESS ALL OR ANY PORTION OF THE COLLATERAL SHALL BE DEEMED TO
HOLD, AND SHALL HOLD, THE COLLATERAL AS THE AGENT OF, AND AS PLEDGE HOLDER FOR,
AGENT (ON BEHALF OF ITSELF AND LENDERS).  UPON THE OCCURRENCE AND DURING THE
CONTINUATION OF ANY DEFAULT, AGENT MAY AT ANY TIME GIVE NOTICE TO ANY THIRD
PERSON DESCRIBED IN THE PRECEDING SENTENCE THAT SUCH THIRD PERSON IS HOLDING THE
COLLATERAL AS THE AGENT OF, AND AS PLEDGE HOLDER FOR, AGENT (ON BEHALF OF ITSELF
AND LENDERS).

 

(G)         EACH LOAN PARTY SHALL, DURING NORMAL BUSINESS HOURS, AND IN THE
ABSENCE OF A DEFAULT OR AN EVENT OF DEFAULT, UPON ONE BUSINESS DAY’S PRIOR
NOTICE, AS FREQUENTLY AS AGENT DETERMINES TO BE APPROPRIATE: (I) PROVIDE AGENT
(WHO MAY BE ACCOMPANIED BY REPRESENTATIVES OF ANY LENDER) AND ANY OF ITS
OFFICERS, EMPLOYEES AND AGENTS ACCESS TO THE PROPERTIES, FACILITIES, ADVISORS
AND EMPLOYEES (INCLUDING OFFICERS) OF EACH LOAN PARTY AND TO THE COLLATERAL,
(II) PERMIT AGENT (WHO MAY BE ACCOMPANIED BY REPRESENTATIVES OF ANY LENDER), AND
ANY OF ITS OFFICERS, EMPLOYEES AND AGENTS, TO INSPECT, AUDIT AND MAKE EXTRACTS
FROM ANY LOAN PARTY’S BOOKS AND RECORDS (OR AT THE REQUEST OF AGENT, DELIVER
TRUE AND CORRECT COPIES OF SUCH BOOKS AND RECORDS TO AGENT), AND (III) PERMIT
AGENT (WHO MAY BE ACCOMPANIED BY REPRESENTATIVES OF ANY LENDER), AND ITS
OFFICERS, EMPLOYEES AND AGENTS, TO INSPECT, REVIEW, EVALUATE AND MAKE TEST
VERIFICATIONS AND COUNTS OF THE COLLATERAL OF ANY LOAN PARTY.  IF AGENT ASKS,
EACH LOAN PARTY WILL PROMPTLY NOTIFY AGENT IN WRITING OF THE LOCATION OF ANY
COLLATERAL.  IF A DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR
IF ACCESS IS NECESSARY TO PRESERVE OR PROTECT THE COLLATERAL AS DETERMINED BY
AGENT OR ANY LENDER, EACH SUCH LOAN PARTY SHALL PROVIDE SUCH ACCESS TO AGENT AND
TO EACH LENDER AT ALL TIMES AND WITHOUT ADVANCE NOTICE.  EACH LOAN PARTY SHALL
MAKE AVAILABLE TO AGENT AND ANY LENDER AND THEIR RESPECTIVE AUDITORS OR COUNSEL,
AS QUICKLY AS IS POSSIBLE UNDER THE CIRCUMSTANCES, ORIGINALS OR COPIES OF ALL
BOOKS AND RECORDS THAT AGENT OR ANY LENDER MAY REASONABLY REQUEST.

 

6.9.     FURTHER ASSURANCES.  EACH LOAN PARTY SHALL, UPON REQUEST OF AGENT,
FURNISH TO AGENT SUCH FURTHER INFORMATION, EXECUTE AND DELIVER TO AGENT SUCH
DOCUMENTS AND INSTRUMENTS (INCLUDING, WITHOUT LIMITATION, UCC FINANCING
STATEMENTS) AND SHALL DO SUCH OTHER ACTS AND THINGS AS AGENT MAY AT ANY TIME
REASONABLY REQUEST RELATING TO THE PERFECTION OR PROTECTION OF THE SECURITY
INTEREST CREATED BY THIS AGREEMENT OR FOR THE PURPOSE OF CARRYING OUT THE INTENT
OF THIS AGREEMENT AND THE OTHER DEBT DOCUMENTS.

 

7.   NEGATIVE COVENANTS

 

7.1.     LIENS.  NO LOAN PARTY SHALL, AND NO LOAN PARTY SHALL PERMIT ANY OF ITS
SUBSIDIARIES TO, CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY LIEN, SECURITY
INTEREST, CLAIM OR ENCUMBRANCE OR GRANT ANY NEGATIVE PLEDGES ON ANY COLLATERAL
OR INTELLECTUAL PROPERTY, EXCEPT PERMITTED LIENS.

 

7.2.     INDEBTEDNESS.  NO LOAN PARTY SHALL, AND NO LOAN PARTY SHALL PERMIT ANY
OF ITS SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY CREATE, INCUR, ASSUME, PERMIT TO
EXIST, GUARANTEE OR OTHERWISE BECOME OR REMAIN DIRECTLY OR INDIRECTLY LIABLE
WITH RESPECT TO, ANY INDEBTEDNESS (AS HEREINAFTER DEFINED), EXCEPT FOR (A) THE
OBLIGATIONS, (B) INDEBTEDNESS EXISTING ON THE DATE HEREOF AND SET FORTH ON
SCHEDULE B TO THIS AGREEMENT, AND (C) INDEBTEDNESS ARISING AFTER THE CLOSING
DATE AND CONSISTING OF CAPITALIZED LEASE OBLIGATIONS AND PURCHASE MONEY
INDEBTEDNESS, IN EACH CASE INCURRED BY BORROWER OR ANY OF ITS SUBSIDIARIES TO
FINANCE THE ACQUISITION, REPAIR, IMPROVEMENT OR CONSTRUCTION OF FIXED OR CAPITAL
ASSETS OF SUCH PERSON, PROVIDED THAT (I) THE AGGREGATE OUTSTANDING PRINCIPAL
AMOUNT OF ALL SUCH INDEBTEDNESS DOES NOT EXCEED $250,000 AT ANY TIME AND
(II) THE PRINCIPAL AMOUNT OF SUCH INDEBTEDNESS DOES NOT EXCEED THE LOWER OF THE
COST OR FAIR MARKET VALUE OF THE PROPERTY SO ACQUIRED OR BUILT OR OF SUCH
REPAIRS OR IMPROVEMENTS FINANCED WITH SUCH INDEBTEDNESS (EACH MEASURED AT THE
TIME OF SUCH ACQUISITION, REPAIR, IMPROVEMENT OR CONSTRUCTION IS MADE).  THE
TERM “INDEBTEDNESS” MEANS, WITH RESPECT TO ANY PERSON, AT ANY DATE, WITHOUT
DUPLICATION, (I) ALL OBLIGATIONS OF SUCH PERSON FOR BORROWED MONEY, (II) ALL
OBLIGATIONS OF SUCH PERSON EVIDENCED BY BONDS,

 

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DEBENTURES, NOTES OR OTHER SIMILAR INSTRUMENTS, OR UPON WHICH INTEREST PAYMENTS
ARE CUSTOMARILY MADE, (III) ALL OBLIGATIONS OF SUCH PERSON TO PAY THE DEFERRED
PURCHASE PRICE OF PROPERTY OR SERVICES, BUT EXCLUDING OBLIGATIONS TO TRADE
CREDITORS INCURRED IN THE ORDINARY COURSE OF BUSINESS AND NOT PAST DUE BY MORE
THAN 90 DAYS,  (IV) ALL CAPITAL LEASE OBLIGATIONS OF SUCH PERSON, (V) THE
PRINCIPAL BALANCE OUTSTANDING UNDER ANY SYNTHETIC LEASE, TAX RETENTION OPERATING
LEASE, OFF-BALANCE SHEET LOAN OR SIMILAR OFF-BALANCE SHEET FINANCING PRODUCT,
(VI) ALL OBLIGATIONS OF SUCH PERSON TO PURCHASE SECURITIES (OR OTHER PROPERTY)
WHICH ARISE OUT OF OR IN CONNECTION WITH THE ISSUANCE OR SALE OF THE SAME OR
SUBSTANTIALLY SIMILAR SECURITIES (OR PROPERTY), (VII) ALL CONTINGENT OR
NON-CONTINGENT OBLIGATIONS OF SUCH PERSON TO REIMBURSE ANY BANK OR OTHER PERSON
IN RESPECT OF AMOUNTS PAID UNDER A LETTER OF CREDIT OR SIMILAR INSTRUMENT,
(VIII) ALL EQUITY SECURITIES OF SUCH PERSON SUBJECT TO REPURCHASE OR REDEMPTION
OTHERWISE THAN AT THE SOLE OPTION OF SUCH PERSON, (IX) ALL “EARNOUTS” AND
SIMILAR PAYMENT OBLIGATIONS OF SUCH PERSON, (X) ALL INDEBTEDNESS SECURED BY A
LIEN ON ANY ASSET OF SUCH PERSON, WHETHER OR NOT SUCH INDEBTEDNESS IS OTHERWISE
AN OBLIGATION OF SUCH PERSON, (XI) ALL OBLIGATIONS OF SUCH PERSON UNDER ANY
FOREIGN EXCHANGE CONTRACT, CURRENCY SWAP AGREEMENT, INTEREST RATE SWAP, CAP OR
COLLAR AGREEMENT OR OTHER SIMILAR AGREEMENT OR ARRANGEMENT DESIGNED TO ALTER THE
RISKS OF THAT PERSON ARISING FROM FLUCTUATIONS IN CURRENCY VALUES OR INTEREST
RATES, IN EACH CASE WHETHER CONTINGENT OR MATURED, AND (XII) ALL OBLIGATIONS OR
LIABILITIES OF OTHERS GUARANTEED BY SUCH PERSON.

 

7.3.     DISPOSITIONS.  NO LOAN PARTY SHALL, AND NO LOAN PARTY SHALL PERMIT ANY
OF ITS SUBSIDIARIES TO, CONVEY, SELL, RENT, LEASE, SUBLEASE, MORTGAGE, LICENSE,
TRANSFER OR OTHERWISE DISPOSE OF (COLLECTIVELY, “TRANSFER”) ANY OF THE
COLLATERAL OR ANY INTELLECTUAL PROPERTY, EXCEPT FOR THE FOLLOWING (COLLECTIVELY,
“PERMITTED DISPOSITIONS”): (A) SALES OF INVENTORY IN THE ORDINARY COURSE OF
BUSINESS, (B) DISPOSITIONS BY A LOAN PARTY OR ANY OF ITS SUBSIDIARIES OF
TANGIBLE ASSETS FOR CASH AND FAIR VALUE THAT ARE NO LONGER USED OR USEFUL IN THE
BUSINESS OF SUCH LOAN PARTY OR SUCH SUBSIDIARY SO LONG AS (I) NO DEFAULT OR
EVENT OF DEFAULT EXISTS AT THE TIME OF SUCH DISPOSITION OR WOULD BE CAUSED AFTER
GIVING EFFECT THERETO AND (II) THE FAIR MARKET VALUE OF ALL SUCH ASSETS DISPOSED
OF DOES NOT EXCEED $100,000 IN THE AGGREGATE IN ANY CALENDAR YEAR,
(C) NON-EXCLUSIVE LICENSES FOR THE USE OF BORROWER’S INTELLECTUAL PROPERTY IN
THE ORDINARY COURSE OF BUSINESS, AND (D) EXCLUSIVE LICENSES FOR THE USE OF
BORROWER’S INTELLECTUAL PROPERTY IN THE ORDINARY COURSE OF BUSINESS, SO LONG AS,
WITH RESPECT TO EACH SUCH EXCLUSIVE LICENSE, (I) NO DEFAULT OR EVENT OF DEFAULT
EXISTS AT THE TIME OF SUCH TRANSFER, (II) THE LICENSE CONSTITUTES AN ARMS-LENGTH
TRANSACTION MADE IN CONNECTION WITH A BONA FIDE CORPORATE COLLABORATION IN THE
ORDINARY COURSE OF BUSINESS AND THE TERMS OF WHICH, ON THEIR FACE, DO NOT
PROVIDE FOR A SALE OR ASSIGNMENT OF ANY INTELLECTUAL PROPERTY, (III) BORROWER
DELIVERS 10 DAYS’ PRIOR WRITTEN NOTICE AND A BRIEF SUMMARY OF THE TERMS OF THE
LICENSE TO AGENT, (IV) BORROWER DELIVERS TO AGENT COPIES OF THE FINAL EXECUTED
LICENSING DOCUMENTS IN CONNECTION WITH THE LICENSE PROMPTLY UPON CONSUMMATION OF
THE LICENSE, AND (V) ALL ROYALTIES, MILESTONE PAYMENTS OR OTHER PROCEEDS ARISING
FROM THE LICENSING AGREEMENT ARE PAID TO A DEPOSIT ACCOUNT THAT IS GOVERNED BY
AN ACCOUNT CONTROL AGREEMENT.

 

7.4.     CHANGE IN NAME, LOCATION OR EXECUTIVE OFFICE; CHANGE IN BUSINESS;
CHANGE IN FISCAL YEAR.  NO LOAN PARTY SHALL, AND NO LOAN PARTY SHALL PERMIT ANY
OF ITS SUBSIDIARIES TO, (A) CHANGE ITS NAME OR ITS STATE OF ORGANIZATION, 
(B) RELOCATE ITS CHIEF EXECUTIVE OFFICE WITHOUT 30 DAYS PRIOR WRITTEN
NOTIFICATION TO AGENT, (C) ENGAGE IN ANY BUSINESS OTHER THAN OR REASONABLY
RELATED OR INCIDENTAL TO THE BUSINESSES CURRENTLY ENGAGED IN BY SUCH LOAN PARTY
OR SUBSIDIARY, (D) CEASE TO CONDUCT BUSINESS SUBSTANTIALLY IN THE MANNER
CONDUCTED BY SUCH LOAN PARTY OR SUBSIDIARY AS OF THE DATE OF THIS AGREEMENT OR
(E) CHANGE ITS FISCAL YEAR END.

 

7.5.     MERGERS OR ACQUISITIONS.  NO LOAN PARTY SHALL MERGE OR CONSOLIDATE, AND
NO LOAN PARTY SHALL PERMIT ANY OF ITS SUBSIDIARIES TO MERGE OR CONSOLIDATE, WITH
OR INTO ANY OTHER PERSON OR ENTITY (OTHER THAN MERGERS OF A SUBSIDIARY INTO
BORROWER IN WHICH BORROWER IS THE SURVIVING ENTITY) OR ACQUIRE, OR PERMIT ANY OF
ITS SUBSIDIARIES TO ACQUIRE, ALL OR SUBSTANTIALLY ALL OF THE CAPITAL STOCK OR
PROPERTY OF ANOTHER PERSON OR ENTITY.  NOTWITHSTANDING THE IMMEDIATELY PRECEDING
SENTENCE, THE BORROWER MAY MERGE WITH OR BE ACQUIRED BY ANOTHER ENTITY WHO
ASSUMES THE OBLIGATIONS UNDER THIS AGREEMENT AND BECOMES A PARTY HERETO IF THE
AGENT AND EACH LENDER CONSENT IN WRITING TO SUCH MERGER OR ACQUISITION IN THEIR
SOLE

 

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DISCRETION AND PURSUANT TO DOCUMENTATION ACCEPTABLE TO AGENT AND LENDERS IN
THEIR SOLE DISCRETION (IT BEING UNDERSTOOD THAT AGENT AND LENDERS SHALL HAVE NO
OBLIGATION TO CONSENT TO SUCH MERGER OR ACQUISITION).

 

7.6.     RESTRICTED PAYMENTS.  NO LOAN PARTY SHALL, AND NO LOAN PARTY SHALL
PERMIT ANY OF ITS SUBSIDIARIES TO, (A) DECLARE OR PAY ANY DIVIDENDS OR MAKE ANY
OTHER DISTRIBUTION OR PAYMENT ON ACCOUNT OF OR REDEEM, RETIRE, DEFEASE OR
PURCHASE ANY CAPITAL STOCK, INCLUDING, WITHOUT LIMITATION, ANY PREFERRED STOCK
(OTHER THAN THE PAYMENT OF DIVIDENDS TO BORROWER), (B) PURCHASE, REDEEM, DEFEASE
OR PREPAY ANY PRINCIPAL OF, PREMIUM, IF ANY, INTEREST OR OTHER AMOUNT PAYABLE IN
RESPECT OF ANY INDEBTEDNESS PRIOR TO ITS SCHEDULED MATURITY, (C) MAKE ANY
PAYMENT IN RESPECT OF MANAGEMENT FEES OR CONSULTING FEES (OR SIMILAR FEES) TO
ANY EQUITYHOLDER OR OTHER AFFILIATE OF BORROWER THAT OWNS MORE THAN 1% OF THE
STOCK OF BORROWER, OR (D) BE A PARTY TO OR BOUND BY AN AGREEMENT THAT RESTRICTS
A SUBSIDIARY FROM PAYING DIVIDENDS OR OTHERWISE DISTRIBUTING PROPERTY TO
BORROWER.

 

7.7.     INVESTMENTS.  NO LOAN PARTY SHALL, AND NO LOAN PARTY SHALL PERMIT ANY
OF ITS SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY (A) ACQUIRE OR OWN, OR MAKE ANY
LOAN, ADVANCE OR CAPITAL CONTRIBUTION (AN “INVESTMENT”) IN OR TO ANY PERSON OR
ENTITY, (B) ACQUIRE OR CREATE ANY SUBSIDIARY, OR (C) ENGAGE IN ANY JOINT VENTURE
OR PARTNERSHIP WITH ANY OTHER PERSON OR ENTITY, OTHER THAN: (I) INVESTMENTS
EXISTING ON THE DATE HEREOF AND SET FORTH ON SCHEDULE B TO THIS AGREEMENT,
(II) INVESTMENTS IN CASH AND CASH EQUIVALENTS (AS DEFINED BELOW), AND
(III) LOANS OR ADVANCES TO EMPLOYEES OF BORROWER OR ANY OF ITS SUBSIDIARIES TO
FINANCE TRAVEL, ENTERTAINMENT AND RELOCATION EXPENSES AND OTHER ORDINARY
BUSINESS PURPOSES IN THE ORDINARY COURSE OF BUSINESS AS PRESENTLY CONDUCTED,
PROVIDED THAT THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF ALL LOANS AND
ADVANCES PERMITTED PURSUANT TO THIS CLAUSE (III) SHALL NOT EXCEED $100,000 AT
ANY TIME (COLLECTIVELY, THE “PERMITTED INVESTMENTS”).  THE TERM “CASH
EQUIVALENTS” MEANS (V) ANY READILY-MARKETABLE SECURITIES (I) ISSUED BY, OR
DIRECTLY, UNCONDITIONALLY AND FULLY GUARANTEED OR INSURED BY THE UNITED STATES
FEDERAL GOVERNMENT OR (II) ISSUED BY ANY AGENCY OF THE UNITED STATES FEDERAL
GOVERNMENT THE OBLIGATIONS OF WHICH ARE FULLY BACKED BY THE FULL FAITH AND
CREDIT OF THE UNITED STATES FEDERAL GOVERNMENT, (W) ANY READILY-MARKETABLE
DIRECT OBLIGATIONS ISSUED BY ANY OTHER AGENCY OF THE UNITED STATES FEDERAL
GOVERNMENT, ANY STATE OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION OF ANY
SUCH STATE OR ANY PUBLIC INSTRUMENTALITY THEREOF, IN EACH CASE HAVING A RATING
OF AT LEAST “A-1” FROM S&P OR AT LEAST “P-1” FROM MOODY’S, (X) ANY COMMERCIAL
PAPER RATED AT LEAST “A-1” BY S&P OR “P-1” BY MOODY’S AND ISSUED BY ANY ENTITY
ORGANIZED UNDER THE LAWS OF ANY STATE OF THE UNITED STATES, (Y) ANY U.S.
DOLLAR-DENOMINATED TIME DEPOSIT, INSURED CERTIFICATE OF DEPOSIT, OVERNIGHT BANK
DEPOSIT OR BANKERS’ ACCEPTANCE ISSUED OR ACCEPTED BY (I) AGENT OR (II) ANY
COMMERCIAL BANK THAT IS (A) ORGANIZED UNDER THE LAWS OF THE UNITED STATES, ANY
STATE THEREOF OR THE DISTRICT OF COLUMBIA, (B) “ADEQUATELY CAPITALIZED” (AS
DEFINED IN THE REGULATIONS OF ITS PRIMARY FEDERAL BANKING REGULATORS) AND
(C) HAS TIER 1 CAPITAL (AS DEFINED IN SUCH REGULATIONS) IN EXCESS OF
$250,000,000 OR (Z) SHARES OF ANY UNITED STATES MONEY MARKET FUND THAT (I) HAS
SUBSTANTIALLY ALL OF ITS ASSETS INVESTED CONTINUOUSLY IN THE TYPES OF
INVESTMENTS REFERRED TO IN CLAUSE (V), (W), (X) OR (Y) ABOVE WITH MATURITIES AS
SET FORTH IN THE PROVISO BELOW, (II) HAS NET ASSETS IN EXCESS OF $500,000,000
AND (III) HAS OBTAINED FROM EITHER S&P OR MOODY’S THE HIGHEST RATING OBTAINABLE
FOR MONEY MARKET FUNDS IN THE UNITED STATES; PROVIDED, HOWEVER, THAT THE
MATURITIES OF ALL OBLIGATIONS SPECIFIED IN ANY OF CLAUSES (V), (W), (X) AND
(Y) ABOVE SHALL NOT EXCEED 365 DAYS.  FOR THE AVOIDANCE OF DOUBT, “CASH
EQUIVALENTS” DOES NOT INCLUDE (AND EACH LOAN PARTY IS PROHIBITED FROM PURCHASING
OR PURCHASING PARTICIPATIONS IN) ANY AUCTION RATE SECURITIES OR OTHER CORPORATE
OR MUNICIPAL BONDS WITH A LONG-TERM NOMINAL MATURITY FOR WHICH THE INTEREST RATE
IS RESET THROUGH A DUTCH AUCTION.

 

7.8.     TRANSACTIONS WITH AFFILIATES.  NO LOAN PARTY SHALL, AND NO LOAN PARTY
SHALL PERMIT ANY OF ITS SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY ENTER INTO OR
PERMIT TO EXIST ANY TRANSACTION WITH ANY AFFILIATE (AS DEFINED BELOW) OF A LOAN
PARTY OR ANY SUBSIDIARY OF A LOAN PARTY EXCEPT FOR TRANSACTIONS THAT ARE IN THE
ORDINARY COURSE OF SUCH LOAN PARTY’S OR SUCH SUBSIDIARY’S BUSINESS, UPON FAIR
AND REASONABLE TERMS THAT ARE NO MORE FAVORABLE TO SUCH AFFILIATE THAN WOULD BE
OBTAINED IN AN ARM’S LENGTH TRANSACTION.  AS USED

 

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HEREIN, “AFFILIATE” MEANS, WITH RESPECT TO A LOAN PARTY OR ANY SUBSIDIARY OF A
LOAN PARTY, (A) EACH PERSON THAT, DIRECTLY OR INDIRECTLY, OWNS OR CONTROLS 10%
OR MORE OF THE STOCK OR MEMBERSHIP INTERESTS HAVING ORDINARY VOTING POWER IN THE
ELECTION OF DIRECTORS OR MANAGERS OF SUCH LOAN PARTY OR SUCH SUBSIDIARY, AND
(B) EACH PERSON THAT CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON CONTROL WITH
SUCH LOAN PARTY OR SUCH SUBSIDIARY.

 

7.9.     COMPLIANCE.  NO LOAN PARTY SHALL, AND NO LOAN PARTY SHALL PERMIT ANY OF
ITS SUBSIDIARIES TO, (A) FAIL TO COMPLY WITH THE LAWS AND REGULATIONS DESCRIBED
IN CLAUSES (B) OR (C) OF SECTION 5.8 HEREIN, (B) USE ANY PORTION OF THE TERM
LOANS TO PURCHASE OR CARRY MARGIN STOCK (WITHIN THE MEANING OF REGULATION U OF
THE FEDERAL RESERVE BOARD) OR (C) FAIL TO COMPLY IN ANY MATERIAL RESPECT WITH,
OR VIOLATE IN ANY MATERIAL RESPECT ANY OTHER LAW OR REGULATION APPLICABLE TO IT.

 

7.10.   DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS.  NO LOAN PARTY SHALL DIRECTLY
OR INDIRECTLY MAINTAIN OR ESTABLISH ANY DEPOSIT ACCOUNT OR SECURITIES ACCOUNT,
UNLESS AGENT, THE APPLICABLE LOAN PARTY OR LOAN PARTIES AND THE DEPOSITORY
INSTITUTION OR SECURITIES INTERMEDIARY AT WHICH THE ACCOUNT IS OR WILL BE
MAINTAINED ENTER INTO A DEPOSIT ACCOUNT CONTROL AGREEMENT OR SECURITIES ACCOUNT
CONTROL AGREEMENT, AS THE CASE MAY BE, IN FORM AND SUBSTANCE SATISFACTORY TO
AGENT (AN “ACCOUNT CONTROL AGREEMENT”) (WHICH AGREEMENT SHALL PROVIDE, AMONG
OTHER THINGS, THAT (I) SUCH DEPOSITORY INSTITUTION OR SECURITIES INTERMEDIARY
HAS NO RIGHTS OF SETOFF OR RECOUPMENT OR ANY OTHER CLAIM AGAINST SUCH DEPOSIT OR
SECURITIES ACCOUNT (EXCEPT AS AGREED TO BY AGENT), OTHER THAN FOR PAYMENT OF ITS
SERVICE FEES AND OTHER CHARGES DIRECTLY RELATED TO THE ADMINISTRATION OF SUCH
ACCOUNT AND FOR RETURNED CHECKS OR OTHER ITEMS OF PAYMENT, AND (II) SUCH
DEPOSITORY INSTITUTION OR SECURITIES INTERMEDIARY SHALL COMPLY WITH ALL
INSTRUCTIONS OF AGENT WITHOUT FURTHER CONSENT OF SUCH LOAN PARTY OR LOAN
PARTIES, AS APPLICABLE, INCLUDING, WITHOUT LIMITATION, AN INSTRUCTION BY AGENT
TO COMPLY EXCLUSIVELY WITH INSTRUCTIONS OF THE AGENT WITH RESPECT TO SUCH
ACCOUNT (SUCH NOTICE, A “NOTICE OF EXCLUSIVE CONTROL”)), PRIOR TO OR
CONCURRENTLY WITH THE ESTABLISHMENT OF SUCH DEPOSIT ACCOUNT OR SECURITIES
ACCOUNT (OR IN THE CASE OF ANY SUCH DEPOSIT ACCOUNT OR SECURITIES ACCOUNT
MAINTAINED AS OF THE DATE HEREOF, ON OR BEFORE THE CLOSING DATE.  AGENT MAY ONLY
GIVE A NOTICE OF EXCLUSIVE CONTROL WITH RESPECT TO ANY DEPOSIT ACCOUNT OR
SECURITIES ACCOUNT AT ANY TIME AT WHICH AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING.  AT THE REQUEST OF AGENT, BORROWER SHALL CREATE OR DESIGNATE A
DEDICATED DEPOSIT ACCOUNT OR ACCOUNTS TO BE USED EXCLUSIVELY FOR PAYROLL OR
WITHHOLDING TAX PURPOSES.

 

7.11.   AMENDMENTS TO OTHER AGREEMENTS.  NO LOAN PARTY SHALL AMEND, MODIFY OR
WAIVE ANY PROVISION OF (A) ANY MATERIAL AGREEMENT (UNLESS THE NET EFFECT OF SUCH
AMENDMENT, MODIFICATION OF WAIVER IS NOT ADVERSE TO ANY LOAN PARTY, AGENT OR
LENDERS), OR (B) ANY OF SUCH LOAN PARTY’S ORGANIZATIONAL DOCUMENTS, IN EACH
CASE, WITHOUT THE PRIOR WRITTEN CONSENT OF AGENT AND THE REQUISITE LENDERS.

 

8.   DEFAULT AND REMEDIES.

 

8.1.     EVENTS OF DEFAULT.  LOAN PARTIES SHALL BE IN DEFAULT UNDER THIS
AGREEMENT AND EACH OF THE OTHER DEBT DOCUMENTS IF (EACH OF THE FOLLOWING, AN
“EVENT OF DEFAULT”):

 

(A)         BORROWER SHALL FAIL TO PAY (I) ANY PRINCIPAL WHEN DUE, OR (II) ANY
INTEREST, FEES OR OTHER OBLIGATIONS (OTHER THAN AS SPECIFIED IN CLAUSE (I))
WITHIN A PERIOD OF 3 BUSINESS DAYS AFTER THE DUE DATE THEREOF (OTHER THAN ON ANY
APPLICABLE TERM LOAN MATURITY DATE);

 

(B)         ANY LOAN PARTY BREACHES ANY OF ITS OBLIGATIONS UNDER SECTION 6.1
(SOLELY AS IT RELATES TO MAINTAINING ITS EXISTENCE), SECTION 6.2, SECTION 6.3,
SECTION 6.4 OR ARTICLE 7;

 

(C)         ANY LOAN PARTY BREACHES ANY OF ITS OTHER OBLIGATIONS UNDER ANY OF
THE DEBT DOCUMENTS AND FAILS TO CURE SUCH BREACH WITHIN 30 DAYS AFTER THE
EARLIER OF (I) THE DATE ON WHICH AN OFFICER OF SUCH LOAN PARTY BECOMES AWARE, OR
THROUGH THE EXERCISE OF REASONABLE DILIGENCE

 

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SHOULD HAVE BECOME AWARE, OF SUCH FAILURE AND (II) THE DATE ON WHICH NOTICE
SHALL HAVE BEEN GIVEN TO BORROWER FROM AGENT;

 

(D)         ANY WARRANTY, REPRESENTATION OR STATEMENT MADE OR DEEMED MADE BY OR
ON BEHALF OF ANY LOAN PARTY IN ANY OF THE DEBT DOCUMENTS OR OTHERWISE IN
CONNECTION WITH ANY OF THE OBLIGATIONS SHALL BE FALSE OR MISLEADING IN ANY
MATERIAL RESPECT AT THE TIME SUCH WARRANTY, REPRESENTATIONS OR STATEMENT WAS
MADE OR DEEMED TO BE MADE;

 

(E)         ANY OF THE COLLATERAL WITH A VALUE OF MORE THAN $50,000 IN THE
AGGREGATE IS SUBJECTED TO ATTACHMENT, EXECUTION, LEVY, SEIZURE OR CONFISCATION
IN ANY LEGAL PROCEEDING OR OTHERWISE, OR IF ANY LEGAL OR ADMINISTRATIVE
PROCEEDING IS COMMENCED AGAINST ANY LOAN PARTY OR ANY OF THE COLLATERAL, WHICH
IN THE GOOD FAITH JUDGMENT OF AGENT SUBJECTS ANY OF THE COLLATERAL WITH A VALUE
OF MORE THAN $50,000 IN THE AGGREGATE TO A MATERIAL RISK OF ATTACHMENT,
EXECUTION, LEVY, SEIZURE OR CONFISCATION AND NO BOND IS POSTED OR PROTECTIVE
ORDER OBTAINED TO NEGATE SUCH RISK;

 

(F)          ONE OR MORE JUDGMENTS, ORDERS OR DECREES SHALL BE RENDERED AGAINST
ANY LOAN PARTY OR ANY SUBSIDIARY OF A LOAN PARTY THAT EXCEEDS BY MORE THAN
$100,000 ANY INSURANCE COVERAGE APPLICABLE THERETO (TO THE EXTENT THE RELEVANT
INSURER HAS BEEN NOTIFIED OF SUCH CLAIM AND HAS NOT DENIED COVERAGE THEREFOR)
AND EITHER (I) ENFORCEMENT PROCEEDINGS SHALL HAVE BEEN COMMENCED BY ANY CREDITOR
UPON ANY SUCH JUDGMENT, ORDER OR DECREE OR (II) SUCH JUDGMENT, ORDER OR DECREE
SHALL NOT HAVE BEEN VACATED OR DISCHARGED FOR A PERIOD OF 10 CONSECUTIVE DAYS
AND THERE SHALL NOT BE IN EFFECT (BY REASON OF A PENDING APPEAL OR OTHERWISE)
ANY STAY OF ENFORCEMENT THEREOF;

 

(G)         (I) ANY LOAN PARTY OR ANY SUBSIDIARY OF A LOAN PARTY SHALL GENERALLY
NOT PAY ITS DEBTS AS SUCH DEBTS BECOME DUE, SHALL ADMIT IN WRITING ITS INABILITY
TO PAY ITS DEBTS GENERALLY, SHALL MAKE A GENERAL ASSIGNMENT FOR THE BENEFIT OF
CREDITORS, OR SHALL CEASE DOING BUSINESS AS A GOING CONCERN, (II) ANY PROCEEDING
SHALL BE INSTITUTED BY OR AGAINST ANY LOAN PARTY OR ANY SUBSIDIARY OF A LOAN
PARTY SEEKING TO ADJUDICATE IT A BANKRUPT OR INSOLVENT OR SEEKING LIQUIDATION,
WINDING UP, REORGANIZATION, ARRANGEMENT, ADJUSTMENT, PROTECTION, RELIEF,
COMPOSITION OF IT OR ITS DEBTS OR ANY SIMILAR ORDER, IN EACH CASE UNDER ANY LAW
RELATING TO BANKRUPTCY, INSOLVENCY OR REORGANIZATION OR RELIEF OF DEBTORS OR
SEEKING THE ENTRY OF AN ORDER FOR RELIEF OR THE APPOINTMENT OF A CUSTODIAN,
RECEIVER, TRUSTEE, CONSERVATOR, LIQUIDATING AGENT, LIQUIDATOR, OTHER SIMILAR
OFFICIAL OR OTHER OFFICIAL WITH SIMILAR POWERS, IN EACH CASE FOR IT OR FOR ANY
SUBSTANTIAL PART OF ITS PROPERTY AND, IN THE CASE OF ANY SUCH PROCEEDINGS
INSTITUTED AGAINST (BUT NOT BY OR WITH THE CONSENT OF) SUCH LOAN PARTY OR SUCH
SUBSIDIARY, EITHER SUCH PROCEEDINGS SHALL REMAIN UNDISMISSED OR UNSTAYED FOR A
PERIOD OF 45 DAYS OR MORE OR ANY ACTION SOUGHT IN SUCH PROCEEDINGS SHALL OCCUR
OR (III) ANY LOAN PARTY OR ANY SUBSIDIARY OF A LOAN PARTY SHALL TAKE ANY
CORPORATE OR SIMILAR ACTION OR ANY OTHER ACTION TO AUTHORIZE ANY ACTION
DESCRIBED IN CLAUSE (I) OR (II) ABOVE;

 

(H)         AN EVENT OR DEVELOPMENT OCCURS WHICH HAS HAD A MATERIAL ADVERSE
EFFECT;

 

(I)          (I) ANY PROVISION OF ANY DEBT DOCUMENT SHALL FAIL TO BE VALID AND
BINDING ON, OR ENFORCEABLE AGAINST, A LOAN PARTY PARTY THERETO, OR (II) ANY DEBT
DOCUMENT PURPORTING TO GRANT A SECURITY INTEREST TO SECURE ANY OBLIGATION SHALL
FAIL TO CREATE A VALID AND ENFORCEABLE SECURITY INTEREST ON ANY COLLATERAL
PURPORTED TO BE COVERED THEREBY OR SUCH SECURITY INTEREST SHALL FAIL OR CEASE TO
BE A PERFECTED LIEN WITH THE PRIORITY REQUIRED IN THE RELEVANT DEBT DOCUMENT, OR
ANY LOAN PARTY SHALL STATE IN WRITING THAT ANY OF THE EVENTS DESCRIBED IN CLAUSE
(I) OR (II) ABOVE SHALL HAVE OCCURRED;

 

(J)          (I) ANY LOAN PARTY OR ANY SUBSIDIARY OF A LOAN PARTY DEFAULTS UNDER
ANY MATERIAL AGREEMENT (AFTER ANY APPLICABLE GRACE PERIOD CONTAINED THEREIN) AND
THE EFFECT OF SUCH DEFAULT IS

 

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Confidential Information, indicated by [***], has been omitted from this filing
and filed separately with the Securities Exchange Commission

 

TO PERMIT THE COUNTERPARTY THERETO TO TERMINATE SUCH MATERIAL AGREEMENT,
(II) (A) ANY LOAN PARTY OR ANY SUBSIDIARY OF A LOAN PARTY FAILS TO MAKE (AFTER
ANY APPLICABLE GRACE PERIOD) ANY PAYMENT WHEN DUE (WHETHER DUE BECAUSE OF
SCHEDULED MATURITY, REQUIRED PREPAYMENT PROVISIONS, ACCELERATION, DEMAND OR
OTHERWISE) ON ANY INDEBTEDNESS (OTHER THAN THE OBLIGATIONS) OF SUCH LOAN PARTY
OR SUCH SUBSIDIARY 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 $250,000
(“MATERIAL INDEBTEDNESS”), (B) ANY OTHER EVENT SHALL OCCUR OR CONDITION SHALL
EXIST UNDER ANY CONTRACTUAL OBLIGATION RELATING TO ANY SUCH MATERIAL
INDEBTEDNESS, IF THE EFFECT OF SUCH EVENT OR CONDITION IS TO ACCELERATE, OR TO
PERMIT THE ACCELERATION OF (WITHOUT REGARD TO ANY SUBORDINATION TERMS WITH
RESPECT THERETO), THE MATURITY OF SUCH MATERIAL INDEBTEDNESS OR (C) ANY SUCH
MATERIAL INDEBTEDNESS SHALL BECOME OR BE DECLARED TO BE DUE AND PAYABLE, OR BE
REQUIRED TO BE PREPAID, REDEEMED, DEFEASED OR REPURCHASED (OTHER THAN BY A
REGULARLY SCHEDULED REQUIRED PREPAYMENT), PRIOR TO THE STATED MATURITY THEREOF,
OR (III) BORROWER OR ANY SUBSIDIARY DEFAULTS (BEYOND ANY APPLICABLE GRACE
PERIOD) UNDER ANY OBLIGATION FOR PAYMENTS DUE OR OTHERWISE UNDER ANY LEASE
AGREEMENT THAT MEETS THE CRITERIA FOR THE REQUIREMENT OF AN ACCESS AGREEMENT
UNDER SECTION 6.6 AND THE EFFECT OF SUCH DEFAULT IS TO PERMIT THE LANDLORD TO
TERMINATE SUCH LEASE; OR

 

(K)          (I) THE ACQUISITION, DIRECTLY OR INDIRECTLY, BY ANY PERSON OR GROUP
(AS SUCH TERM IS USED IN SECTION 13(D)(3) OF THE SECURITIES EXCHANGE ACT OF
1934) OF [***] OF THE VOTING POWER OF THE VOTING STOCK OF BORROWER BY WAY OF
MERGER OR CONSOLIDATION OR OTHERWISE, OR (II) BORROWER CEASES TO OWN AND
CONTROL, DIRECTLY OR INDIRECTLY, ALL OF THE ECONOMIC AND VOTING RIGHTS
ASSOCIATED WITH THE OUTSTANDING VOTING CAPITAL STOCK (OR OTHER VOTING EQUITY
INTEREST) OF EACH OF ITS SUBSIDIARIES.

 

8.2.     LENDER REMEDIES.  UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT, AGENT
SHALL, AT THE WRITTEN REQUEST OF THE REQUISITE LENDERS, TERMINATE THE
COMMITMENTS WITH RESPECT TO FURTHER TERM LOANS AND DECLARE ANY OR ALL OF THE
OBLIGATIONS TO BE IMMEDIATELY DUE AND PAYABLE, WITHOUT DEMAND OR NOTICE TO ANY
LOAN PARTY AND THE ACCELERATED OBLIGATIONS SHALL BEAR INTEREST AT THE DEFAULT
RATE PURSUANT TO SECTION 2.6, PROVIDED THAT, UPON THE OCCURRENCE OF ANY EVENT OF
DEFAULT SPECIFIED IN SECTION 8.1(G) ABOVE, THE COMMITMENTS SHALL BE
AUTOMATICALLY TERMINATED AND THE OBLIGATIONS SHALL BE AUTOMATICALLY
ACCELERATED.  UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, AGENT SHALL HAVE (ON
BEHALF OF ITSELF AND LENDERS) ALL OF THE RIGHTS AND REMEDIES OF A SECURED PARTY
UNDER THE UCC, AND UNDER ANY OTHER APPLICABLE LAW; PROVIDED, HOWEVER, THAT AGENT
SHALL NOT COMMENCE THE EXERCISE OF SUCH RIGHTS AND REMEDIES WITHOUT THE PRIOR
WRITTEN REQUEST OF REQUISITE LENDERS.  WITHOUT LIMITING THE FOREGOING, AGENT
SHALL HAVE THE RIGHT TO, AND AT THE WRITTEN REQUEST OF THE REQUIRED LENDERS
SHALL,  (A) NOTIFY ANY ACCOUNT DEBTOR OF ANY LOAN PARTY OR ANY OBLIGOR ON ANY
INSTRUMENT WHICH CONSTITUTES PART OF THE COLLATERAL TO MAKE PAYMENTS TO AGENT
(FOR THE BENEFIT OF ITSELF AND LENDERS), (B) WITH OR WITHOUT LEGAL PROCESS,
ENTER ANY PREMISES WHERE THE COLLATERAL MAY BE AND TAKE POSSESSION OF AND REMOVE
THE COLLATERAL FROM THE PREMISES OR STORE IT ON THE PREMISES, (C) SELL THE
COLLATERAL AT PUBLIC OR PRIVATE SALE, IN WHOLE OR IN PART, AND HAVE THE RIGHT TO
BID AND PURCHASE AT SUCH SALE, OR (D) LEASE OR OTHERWISE DISPOSE OF ALL OR PART
OF THE COLLATERAL, APPLYING PROCEEDS FROM SUCH DISPOSITION TO THE OBLIGATIONS IN
ACCORDANCE WITH SECTION 8.4.  IF REQUESTED BY AGENT, LOAN PARTIES SHALL PROMPTLY
ASSEMBLE THE COLLATERAL AND MAKE IT AVAILABLE TO AGENT AT A PLACE TO BE
DESIGNATED BY AGENT.  AGENT MAY ALSO RENDER ANY OR ALL OF THE COLLATERAL
UNUSABLE AT A LOAN PARTY’S PREMISES AND MAY DISPOSE OF SUCH COLLATERAL ON SUCH
PREMISES WITHOUT LIABILITY FOR RENT OR COSTS.  ANY NOTICE THAT AGENT IS REQUIRED
TO GIVE TO A LOAN PARTY UNDER THE UCC OF THE TIME AND PLACE OF ANY PUBLIC SALE
OR THE TIME AFTER WHICH ANY PRIVATE SALE OR OTHER INTENDED DISPOSITION OF THE
COLLATERAL IS TO BE MADE SHALL BE DEEMED TO CONSTITUTE REASONABLE NOTICE IF SUCH
NOTICE IS GIVEN IN ACCORDANCE WITH THIS AGREEMENT AT LEAST 5 DAYS PRIOR TO SUCH
ACTION.  EFFECTIVE ONLY UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT, EACH LOAN PARTY HEREBY IRREVOCABLY APPOINTS AGENT (AND ANY OF
AGENT’S DESIGNATED OFFICERS OR EMPLOYEES) AS SUCH LOAN PARTY’S TRUE AND LAWFUL
ATTORNEY TO: (I) TAKE ANY OF THE ACTIONS SPECIFIED ABOVE IN THIS PARAGRAPH;

 

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(II) ENDORSE SUCH LOAN PARTY’S NAME ON ANY CHECKS OR OTHER FORMS OF PAYMENT OR
SECURITY THAT MAY COME INTO AGENT’S POSSESSION; (III) SETTLE AND ADJUST DISPUTES
AND CLAIMS RESPECTING THE ACCOUNTS DIRECTLY WITH ACCOUNT DEBTORS, FOR AMOUNTS
AND UPON TERMS WHICH AGENT DETERMINES TO BE REASONABLE; AND (IV) DO SUCH OTHER
AND FURTHER ACTS AND DEEDS IN THE NAME OF SUCH LOAN PARTY THAT AGENT MAY DEEM
NECESSARY OR DESIRABLE TO ENFORCE ITS RIGHTS IN OR TO ANY OF THE COLLATERAL OR
TO PERFECT OR BETTER PERFECT AGENT’S SECURITY INTEREST (ON BEHALF OF ITSELF AND
LENDERS) IN ANY OF THE COLLATERAL.  THE APPOINTMENT OF AGENT AS EACH LOAN
PARTY’S ATTORNEY IN FACT IS A POWER COUPLED WITH AN INTEREST AND IS IRREVOCABLE
UNTIL THE TERMINATION DATE. NOTWITHSTANDING ANY PROVISION OF THIS SECTION 8.2 TO
THE CONTRARY, UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT, AGENT SHALL HAVE THE
RIGHT TO EXERCISE ANY AND ALL REMEDIES REFERENCED IN THIS SECTION 8.2 WITHOUT
THE WRITTEN CONSENT OF REQUISITE LENDERS FOLLOWING THE OCCURRENCE OF AN EXIGENT
CIRCUMSTANCE.  AS USED IN THE IMMEDIATELY PRECEDING SENTENCE, “EXIGENT
CIRCUMSTANCE” MEANS ANY EVENT OR CIRCUMSTANCE THAT, IN THE REASONABLE JUDGMENT
OF AGENT, IMMINENTLY THREATENS THE ABILITY OF AGENT TO REALIZE UPON ALL OR ANY
MATERIAL PORTION OF THE COLLATERAL, SUCH AS, WITHOUT LIMITATION, FRAUDULENT
REMOVAL, CONCEALMENT, OR ABSCONDMENT THEREOF, DESTRUCTION OR MATERIAL WASTE
THEREOF, OR FAILURE OF ANY LOAN PARTY AFTER REASONABLE DEMAND TO MAINTAIN OR
REINSTATE ADEQUATE CASUALTY INSURANCE COVERAGE, OR WHICH, IN THE JUDGMENT OF
AGENT, COULD RESULT IN A MATERIAL DIMINUTION IN VALUE OF THE COLLATERAL.

 

8.3.     ADDITIONAL REMEDIES. IN ADDITION TO THE REMEDIES PROVIDED IN
SECTION 8.2 ABOVE, EACH LOAN PARTY HEREBY GRANTS TO AGENT (ON BEHALF OF ITSELF
AND LENDERS) AND ANY TRANSFEREE OF COLLATERAL, FOR THE SOLE PURPOSE OF
EXERCISING ITS REMEDIES AS PROVIDED HEREIN, AN IRREVOCABLE, NONEXCLUSIVE LICENSE
(EXERCISABLE WITHOUT PAYMENT OF ROYALTY OR OTHER COMPENSATION TO ANY LOAN PARTY)
TO USE, LICENSE OR SUBLICENSE ANY INTELLECTUAL PROPERTY NOW OWNED OR HEREAFTER
ACQUIRED BY SUCH LOAN PARTY, AND WHEREVER THE SAME MAY BE LOCATED, AND INCLUDING
IN SUCH LICENSE ACCESS TO ALL MEDIA IN WHICH ANY OF THE LICENSED ITEMS MAY BE
RECORDED OR STORED AND TO ALL COMPUTER SOFTWARE AND PROGRAMS USED FOR THE
COMPILATION OR PRINTOUT THEREOF.

 

8.4.     APPLICATION OF PROCEEDS.  PROCEEDS FROM ANY TRANSFER OF THE COLLATERAL
OR THE INTELLECTUAL PROPERTY (OTHER THAN PERMITTED DISPOSITIONS) AND ALL
PAYMENTS MADE TO OR PROCEEDS OF COLLATERAL RECEIVED BY AGENT DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT SHALL BE APPLIED AS FOLLOWS: (A) FIRST, TO
PAY ALL FEES, COSTS, INDEMNITIES, REIMBURSEMENTS AND EXPENSES THEN DUE TO AGENT
UNDER THE DEBT DOCUMENTS IN ITS CAPACITY AS AGENT UNDER THE DEBT DOCUMENTS,
(B) SECOND, TO PAY ALL FEES, COSTS, INDEMNITIES, REIMBURSEMENTS AND EXPENSES
THEN DUE TO LENDERS UNDER THE DEBT DOCUMENTS IN ACCORDANCE WITH THEIR RESPECTIVE
PRO RATA SHARES OF THE TOTAL COMMITMENT, UNTIL PAID IN FULL, (C) THIRD, TO PAY
ALL INTEREST ON THE TERM LOANS THEN DUE TO LENDERS IN ACCORDANCE WITH THEIR
RESPECTIVE PRO RATA SHARES OF THE TERM LOANS, UNTIL PAID IN FULL (OTHER THAN
INTEREST ACCRUED AFTER THE COMMENCEMENT OF ANY PROCEEDING REFERRED TO IN
SECTION 8.1(G) IF A CLAIM FOR SUCH INTEREST IS NOT ALLOWABLE IN SUCH
PROCEEDING), (D) FOURTH, TO PAY ALL PRINCIPAL ON THE TERM LOANS THEN DUE TO
LENDERS IN ACCORDANCE WITH THEIR RESPECTIVE PRO RATA SHARES OF THE TERM LOANS,
UNTIL PAID IN FULL, (E) FIFTH, TO PAY ALL OTHER OBLIGATIONS THEN DUE TO LENDERS
IN ACCORDANCE WITH THEIR RESPECTIVE PRO RATA SHARES OF THE TOTAL COMMITMENT,
UNTIL PAID IN FULL (INCLUDING, WITHOUT LIMITATION, ALL INTEREST ACCRUED AFTER
THE COMMENCEMENT OF ANY PROCEEDING REFERRED TO IN SECTION 8.1(G) WHETHER OR NOT
A CLAIM FOR SUCH INTEREST IS ALLOWABLE IN SUCH PROCEEDING), AND (F) SIXTH, TO
BORROWER OR AS OTHERWISE REQUIRED BY LAW.  BORROWER SHALL REMAIN FULLY LIABLE
FOR ANY DEFICIENCY.

 

9.   THE AGENT.

 

9.1.     APPOINTMENT OF AGENT.

 

(A)          EACH LENDER HEREBY APPOINTS GECC (TOGETHER WITH ANY SUCCESSOR AGENT
PURSUANT TO SECTION 9.9) AS AGENT UNDER THE DEBT DOCUMENTS AND AUTHORIZES THE
AGENT TO (A) EXECUTE AND DELIVER THE DEBT DOCUMENTS AND ACCEPT DELIVERY THEREOF
ON ITS BEHALF FROM LOAN PARTIES, (B) TAKE SUCH ACTION ON ITS BEHALF AND TO
EXERCISE ALL RIGHTS, POWERS AND REMEDIES AND PERFORM THE DUTIES AS ARE EXPRESSLY
DELEGATED TO THE AGENT UNDER SUCH DEBT DOCUMENTS AND (C) EXERCISE SUCH POWERS AS

 

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ARE REASONABLY INCIDENTAL THERETO.  THE PROVISIONS OF THIS ARTICLE 9 ARE SOLELY
FOR THE BENEFIT OF AGENT AND LENDERS AND NONE OF LOAN PARTIES NOR ANY OTHER
PERSON SHALL HAVE ANY RIGHTS AS A THIRD PARTY BENEFICIARY OF ANY OF THE
PROVISIONS HEREOF.  IN PERFORMING ITS FUNCTIONS AND DUTIES UNDER THIS AGREEMENT
AND THE OTHER DEBT DOCUMENTS, AGENT SHALL ACT SOLELY AS AN AGENT OF LENDERS AND
DOES NOT ASSUME AND SHALL NOT BE DEEMED TO HAVE ASSUMED ANY OBLIGATION TOWARD OR
RELATIONSHIP OF AGENCY OR TRUST WITH OR FOR ANY LOAN PARTY OR ANY OTHER PERSON. 
AGENT SHALL HAVE NO DUTIES OR RESPONSIBILITIES EXCEPT FOR THOSE EXPRESSLY SET
FORTH IN THIS AGREEMENT AND THE OTHER DEBT DOCUMENTS.  THE DUTIES OF AGENT SHALL
BE MECHANICAL AND ADMINISTRATIVE IN NATURE AND AGENT SHALL NOT HAVE, OR BE
DEEMED TO HAVE, BY REASON OF THIS AGREEMENT, ANY OTHER DEBT DOCUMENT OR
OTHERWISE A FIDUCIARY OR TRUSTEE RELATIONSHIP IN RESPECT OF ANY LENDER.  EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE OTHER DEBT DOCUMENTS, AGENT
SHALL NOT HAVE ANY DUTY TO DISCLOSE, AND SHALL NOT BE LIABLE FOR FAILURE TO
DISCLOSE, ANY INFORMATION RELATING TO BORROWER OR ANY OF ITS SUBSIDIARIES THAT
IS COMMUNICATED TO OR OBTAINED BY GECC OR ANY OF ITS AFFILIATES IN ANY CAPACITY.

 

(B)         WITHOUT LIMITING THE GENERALITY OF CLAUSE (A) ABOVE, AGENT SHALL
HAVE THE SOLE AND EXCLUSIVE RIGHT AND AUTHORITY (TO THE EXCLUSION OF THE
LENDERS), AND IS HEREBY AUTHORIZED, TO (I) ACT AS THE DISBURSING AND COLLECTING
AGENT FOR THE LENDERS WITH RESPECT TO ALL PAYMENTS AND COLLECTIONS ARISING IN
CONNECTION WITH THE DEBT DOCUMENTS (INCLUDING IN ANY OTHER BANKRUPTCY,
INSOLVENCY OR SIMILAR PROCEEDING), AND EACH PERSON MAKING ANY PAYMENT IN
CONNECTION WITH ANY DEBT DOCUMENT TO ANY LENDER IS HEREBY AUTHORIZED TO MAKE
SUCH PAYMENT TO AGENT, (II) SUBJECT TO SECTION 8.2 HEREOF, FILE AND PROVE CLAIMS
AND FILE OTHER DOCUMENTS NECESSARY OR DESIRABLE TO ALLOW THE CLAIMS OF AGENT AND
LENDERS WITH RESPECT TO ANY OBLIGATION IN ANY PROCEEDING DESCRIBED IN ANY
BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDING (BUT NOT TO VOTE, CONSENT OR
OTHERWISE ACT ON BEHALF OF SUCH LENDER), (III) ACT AS COLLATERAL AGENT FOR AGENT
AND EACH LENDER FOR PURPOSES OF THE PERFECTION OF ALL LIENS CREATED BY THE DEBT
DOCUMENTS AND ALL OTHER PURPOSES STATED THEREIN, (IV) SUBJECT TO SECTION 8.2
HEREOF, MANAGE, SUPERVISE AND OTHERWISE DEAL WITH THE COLLATERAL, OTHER THAN ANY
RELEASE OF A SECURITY INTEREST IN THE COLLATERAL REQUIRING THE CONSENT OF
REQUISITE LENDERS OR ALL LENDERS UNDER SECTIONS 10.8(B) OR 10.8(C) (PROVIDED
THAT AGENT MAY SO RELEASE SUCH SECURITY INTEREST IF SUCH CONSENT IS OBTAINED),
(V) TAKE SUCH OTHER ACTION AS IS NECESSARY OR DESIRABLE TO MAINTAIN THE
PERFECTION AND PRIORITY OF THE LIENS CREATED OR PURPORTED TO BE CREATED BY THE
DEBT DOCUMENTS, (VI) EXCEPT AS MAY BE OTHERWISE SPECIFIED IN ANY DEBT DOCUMENT
(INCLUDING WHERE THE CONSENT OR APPROVAL OF ALL LENDERS OR THE REQUISITE LENDERS
IS REQUIRED BY THE TERMS THEREOF) AND SUBJECT TO SECTIONS 8.2 AND 10.8 HEREOF,
EXERCISE ALL REMEDIES GIVEN TO AGENT AND THE OTHER LENDERS WITH RESPECT TO THE
COLLATERAL, WHETHER UNDER THE DEBT DOCUMENTS, APPLICABLE LAW OR OTHERWISE AND
(VII) EXECUTE ANY AMENDMENT, CONSENT OR WAIVER UNDER THE DEBT DOCUMENTS ON
BEHALF OF ANY LENDER THAT HAS CONSENTED IN WRITING TO SUCH AMENDMENT, CONSENT OR
WAIVER; PROVIDED, HOWEVER, THAT AGENT HEREBY APPOINTS, AUTHORIZES AND DIRECTS
EACH LENDER TO ACT AS COLLATERAL SUB-AGENT FOR AGENT AND THE LENDERS FOR
PURPOSES OF THE PERFECTION OF ALL LIENS WITH RESPECT TO THE COLLATERAL,
INCLUDING ANY DEPOSIT ACCOUNT MAINTAINED BY A LOAN PARTY WITH, AND CASH AND CASH
EQUIVALENTS HELD BY, SUCH LENDER, AND MAY FURTHER AUTHORIZE AND DIRECT THE
LENDERS TO TAKE FURTHER ACTIONS AS COLLATERAL SUB-AGENTS FOR PURPOSES OF
ENFORCING SUCH LIENS OR OTHERWISE TO TRANSFER THE COLLATERAL SUBJECT THERETO TO
AGENT, AND EACH LENDER HEREBY AGREES TO TAKE SUCH FURTHER ACTIONS TO THE EXTENT,
AND ONLY TO THE EXTENT, SO AUTHORIZED AND DIRECTED.  AGENT MAY, UPON ANY TERM OR
CONDITION IT SPECIFIES, DELEGATE OR EXERCISE ANY OF ITS RIGHTS, POWERS AND
REMEDIES UNDER, AND DELEGATE OR PERFORM ANY OF ITS DUTIES OR ANY OTHER ACTION
WITH RESPECT TO, ANY DEBT DOCUMENT BY OR THROUGH ANY TRUSTEE, CO-AGENT,
EMPLOYEE, ATTORNEY-IN-FACT AND ANY OTHER PERSON (INCLUDING ANY LENDER).  ANY
SUCH PERSON SHALL BENEFIT FROM THIS ARTICLE 9 TO THE EXTENT PROVIDED BY AGENT.

 

(C)          IF AGENT SHALL REQUEST INSTRUCTIONS FROM REQUISITE LENDERS OR ALL
AFFECTED LENDERS WITH RESPECT TO ANY ACT OR ACTION (INCLUDING FAILURE TO ACT) IN
CONNECTION WITH THIS AGREEMENT OR

 

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ANY OTHER DEBT DOCUMENT, THEN AGENT SHALL BE ENTITLED TO REFRAIN FROM SUCH ACT
OR TAKING SUCH ACTION UNLESS AND UNTIL AGENT SHALL HAVE RECEIVED INSTRUCTIONS
FROM REQUISITE LENDERS OR ALL AFFECTED LENDERS, AS THE CASE MAY BE, AND AGENT
SHALL NOT INCUR LIABILITY TO ANY PERSON BY REASON OF SO REFRAINING.  AGENT SHALL
BE FULLY JUSTIFIED IN FAILING OR REFUSING TO TAKE ANY ACTION HEREUNDER OR UNDER
ANY OTHER DEBT DOCUMENT (A) IF SUCH ACTION WOULD, IN THE OPINION OF AGENT, BE
CONTRARY TO LAW OR ANY DEBT DOCUMENT, (B) IF SUCH ACTION WOULD, IN THE OPINION
OF AGENT, EXPOSE AGENT TO ANY POTENTIAL LIABILITY UNDER ANY LAW, STATUTE OR
REGULATION OR (C) IF AGENT SHALL NOT FIRST BE INDEMNIFIED TO ITS SATISFACTION
AGAINST ANY AND ALL LIABILITY AND EXPENSE WHICH MAY BE INCURRED BY IT BY REASON
OF TAKING OR CONTINUING TO TAKE ANY SUCH ACTION.  WITHOUT LIMITING THE
FOREGOING, NO LENDER SHALL HAVE ANY RIGHT OF ACTION WHATSOEVER AGAINST AGENT AS
A RESULT OF AGENT ACTING OR REFRAINING FROM ACTING HEREUNDER OR UNDER ANY OTHER
DEBT DOCUMENT IN ACCORDANCE WITH THE INSTRUCTIONS OF REQUISITE LENDERS OR ALL
AFFECTED LENDERS, AS APPLICABLE.

 

9.2.     AGENT’S RELIANCE, ETC.  NEITHER AGENT NOR ANY OF ITS AFFILIATES NOR ANY
OF THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS, EMPLOYEES OR REPRESENTATIVES
SHALL BE LIABLE FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT OR THEM
HEREUNDER OR UNDER ANY OTHER DEBT DOCUMENTS, OR IN CONNECTION HEREWITH OR
THEREWITH, EXCEPT FOR DAMAGES CAUSED BY ITS OR THEIR OWN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION. 
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AGENT:  (A) MAY TREAT THE
PAYEE OF ANY NOTE AS THE HOLDER THEREOF UNTIL SUCH NOTE HAS BEEN ASSIGNED IN
ACCORDANCE WITH SECTION 10.1; (B) MAY CONSULT WITH LEGAL COUNSEL, INDEPENDENT
PUBLIC ACCOUNTANTS AND OTHER EXPERTS, WHETHER OR NOT SELECTED BY IT, AND SHALL
NOT BE LIABLE FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT IN GOOD FAITH IN
ACCORDANCE WITH THE ADVICE OF SUCH COUNSEL, ACCOUNTANTS OR EXPERTS; (C) SHALL
NOT BE RESPONSIBLE OR OTHERWISE INCUR LIABILITY FOR ANY ACTION OR OMISSION TAKEN
IN RELIANCE UPON THE INSTRUCTIONS OF THE REQUISITE LENDERS, (D) MAKES NO
WARRANTY OR REPRESENTATION TO ANY LENDER AND SHALL NOT BE RESPONSIBLE TO ANY
LENDER FOR ANY STATEMENTS, WARRANTIES OR REPRESENTATIONS MADE IN OR IN
CONNECTION WITH THIS AGREEMENT OR THE OTHER DEBT DOCUMENTS; (E) SHALL NOT HAVE
ANY DUTY TO INSPECT THE COLLATERAL (INCLUDING THE BOOKS AND RECORDS) OR TO
ASCERTAIN OR TO INQUIRE AS TO THE PERFORMANCE OR OBSERVANCE OF ANY PROVISION OF
ANY DEBT DOCUMENT, WHETHER ANY CONDITION SET FORTH IN ANY DEBT DOCUMENT IS
SATISFIED OR WAIVED, AS TO THE FINANCIAL CONDITION OF ANY LOAN PARTY OR AS TO
THE EXISTENCE OR CONTINUATION OR POSSIBLE OCCURRENCE OR CONTINUATION OF ANY
DEFAULT OR EVENT OF DEFAULT AND SHALL NOT BE DEEMED TO HAVE NOTICE OR KNOWLEDGE
OF SUCH OCCURRENCE OR CONTINUATION UNLESS IT HAS RECEIVED A NOTICE FROM BORROWER
OR ANY LENDER DESCRIBING SUCH DEFAULT OR EVENT OF DEFAULT CLEARLY LABELED
“NOTICE OF DEFAULT”; (F) SHALL NOT BE RESPONSIBLE TO ANY LENDER FOR THE DUE
EXECUTION, LEGALITY, VALIDITY, ENFORCEABILITY, EFFECTIVENESS, GENUINENESS,
SUFFICIENCY OR VALUE OF, OR THE ATTACHMENT, PERFECTION OR PRIORITY OF ANY LIEN
CREATED OR PURPORTED TO BE CREATED UNDER OR IN CONNECTION WITH, ANY DEBT
DOCUMENT OR ANY OTHER INSTRUMENT OR DOCUMENT FURNISHED PURSUANT HERETO OR
THERETO; AND (G) SHALL INCUR NO LIABILITY UNDER OR IN RESPECT OF THIS AGREEMENT
OR THE OTHER DEBT DOCUMENTS BY ACTING UPON ANY NOTICE, CONSENT, CERTIFICATE OR
OTHER INSTRUMENT OR WRITING (WHICH MAY BE BY TELECOPY, TELEGRAM, CABLE OR TELEX)
BELIEVED BY IT TO BE GENUINE AND SIGNED OR SENT OR OTHERWISE AUTHENTICATED BY
THE PROPER PARTY OR PARTIES.

 

9.3.     GECC AND AFFILIATES.  GECC SHALL HAVE THE SAME RIGHTS AND POWERS UNDER
THIS AGREEMENT AND THE OTHER DEBT DOCUMENTS AS ANY OTHER LENDER AND MAY EXERCISE
THE SAME AS THOUGH IT WERE NOT AGENT; AND THE TERM “LENDER” OR “LENDERS” SHALL,
UNLESS OTHERWISE EXPRESSLY INDICATED, INCLUDE GECC IN ITS INDIVIDUAL CAPACITY. 
GECC AND ITS AFFILIATES MAY LEND MONEY TO, INVEST IN, AND GENERALLY ENGAGE IN
ANY KIND OF BUSINESS WITH, BORROWER, ANY OF BORROWER’S SUBSIDIARIES, ANY OF
THEIR AFFILIATES AND ANY PERSON WHO MAY DO BUSINESS WITH OR OWN SECURITIES OF
BORROWER, ANY OF BORROWER’S SUBSIDIARIES OR ANY SUCH AFFILIATE, ALL AS IF GECC
WERE NOT AGENT AND WITHOUT ANY DUTY TO ACCOUNT THEREFOR TO LENDERS.  GECC AND
ITS AFFILIATES MAY ACCEPT FEES AND OTHER CONSIDERATION FROM BORROWER FOR
SERVICES IN CONNECTION WITH THIS AGREEMENT OR OTHERWISE WITHOUT HAVING TO
ACCOUNT FOR THE SAME TO LENDERS.  EACH LENDER ACKNOWLEDGES THE POTENTIAL
CONFLICT OF INTEREST BETWEEN GECC AS A LENDER HOLDING DISPROPORTIONATE INTERESTS
IN THE TERM

 

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LOANS AND GECC AS AGENT, AND EXPRESSLY CONSENTS TO, AND WAIVES, ANY CLAIM BASED
UPON, SUCH CONFLICT OF INTEREST.

 

9.4.     LENDER CREDIT DECISION.  EACH LENDER ACKNOWLEDGES THAT IT HAS,
INDEPENDENTLY AND WITHOUT RELIANCE UPON AGENT OR ANY OTHER LENDER AND BASED ON
THE FINANCIAL STATEMENTS REFERRED TO IN SECTION 6.3 AND SUCH OTHER DOCUMENTS AND
INFORMATION AS IT HAS DEEMED APPROPRIATE, MADE ITS OWN CREDIT AND FINANCIAL
ANALYSIS OF EACH LOAN PARTY AND ITS OWN DECISION TO ENTER INTO THIS AGREEMENT. 
EACH LENDER ALSO ACKNOWLEDGES THAT IT WILL, INDEPENDENTLY AND WITHOUT RELIANCE
UPON AGENT 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 THIS AGREEMENT.  EACH LENDER ACKNOWLEDGES THE
POTENTIAL CONFLICT OF INTEREST OF EACH OTHER LENDER AS A RESULT OF LENDERS
HOLDING DISPROPORTIONATE INTERESTS IN THE TERM LOANS, AND EXPRESSLY CONSENTS TO,
AND WAIVES, ANY CLAIM BASED UPON, SUCH CONFLICT OF INTEREST.

 

9.5.     INDEMNIFICATION.  LENDERS SHALL AND DO HEREBY INDEMNIFY AGENT (TO THE
EXTENT NOT REIMBURSED BY LOAN PARTIES AND WITHOUT LIMITING THE OBLIGATIONS OF
LOAN PARTIES HEREUNDER), RATABLY ACCORDING TO THEIR RESPECTIVE PRO RATA SHARES
OF THE TOTAL COMMITMENT FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED
BY, OR ASSERTED AGAINST AGENT IN ANY WAY RELATING TO OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER DEBT DOCUMENT OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN
BY AGENT IN CONNECTION THEREWITH; PROVIDED THAT NO LENDER SHALL BE LIABLE FOR
ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM
AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT
OF COMPETENT JURISDICTION. WITHOUT LIMITING THE FOREGOING, EACH LENDER AGREES TO
REIMBURSE AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE OF THE TOTAL
COMMITMENT OF ANY OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE COUNSEL FEES)
INCURRED BY AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY,
ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH
NEGOTIATIONS, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT AND EACH OTHER DEBT DOCUMENT,
TO THE EXTENT THAT AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY LOAN PARTIES. 
THE PROVISIONS OF THIS SECTION 9.5 SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT.

 

9.6.     SUCCESSOR AGENT.  AGENT MAY RESIGN AT ANY TIME BY GIVING NOT LESS THAN
30 DAYS’ PRIOR WRITTEN NOTICE THEREOF TO LENDERS AND BORROWER.  UPON ANY SUCH
RESIGNATION, THE REQUISITE LENDERS SHALL HAVE THE RIGHT TO APPOINT A SUCCESSOR
AGENT.  IF NO SUCCESSOR AGENT SHALL HAVE BEEN SO APPOINTED BY THE REQUISITE
LENDERS AND SHALL HAVE ACCEPTED SUCH APPOINTMENT WITHIN 30 DAYS AFTER THE
RESIGNING AGENT’S GIVING NOTICE OF RESIGNATION, THEN THE RESIGNING AGENT MAY, ON
BEHALF OF LENDERS, APPOINT A SUCCESSOR AGENT, WHICH SHALL BE A LENDER, IF A
LENDER IS WILLING TO ACCEPT SUCH APPOINTMENT, OR OTHERWISE SHALL BE A COMMERCIAL
BANK OR FINANCIAL INSTITUTION OR A SUBSIDIARY OF A COMMERCIAL BANK OR FINANCIAL
INSTITUTION IF SUCH COMMERCIAL BANK OR FINANCIAL INSTITUTION IS ORGANIZED UNDER
THE LAWS OF THE UNITED STATES OF AMERICA OR OF ANY STATE THEREOF AND HAS A
COMBINED CAPITAL AND SURPLUS OF AT LEAST $300,000,000.  IF NO SUCCESSOR AGENT
HAS BEEN APPOINTED PURSUANT TO THE FOREGOING, WITHIN 30 DAYS AFTER THE DATE SUCH
NOTICE OF RESIGNATION WAS GIVEN BY THE RESIGNING AGENT, SUCH RESIGNATION SHALL
BECOME EFFECTIVE AND THE REQUISITE LENDERS SHALL THEREAFTER PERFORM ALL THE
DUTIES OF AGENT HEREUNDER UNTIL SUCH TIME, IF ANY, AS THE REQUISITE LENDERS
APPOINT A SUCCESSOR AGENT AS PROVIDED ABOVE.  UPON THE ACCEPTANCE OF ANY
APPOINTMENT AS AGENT HEREUNDER BY A SUCCESSOR AGENT, SUCH SUCCESSOR AGENT SHALL
SUCCEED TO AND BECOME VESTED WITH ALL THE RIGHTS, POWERS, PRIVILEGES AND DUTIES
OF THE RESIGNING AGENT.  UPON THE EARLIER OF THE ACCEPTANCE OF ANY APPOINTMENT
AS AGENT HEREUNDER BY A SUCCESSOR AGENT OR THE EFFECTIVE DATE OF THE RESIGNING
AGENT’S RESIGNATION, THE RESIGNING AGENT SHALL BE DISCHARGED FROM ITS DUTIES AND
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER DEBT DOCUMENTS, EXCEPT THAT ANY
INDEMNITY RIGHTS OR OTHER RIGHTS IN FAVOR OF SUCH RESIGNING AGENT SHALL
CONTINUE.  AFTER ANY RESIGNING AGENT’S RESIGNATION HEREUNDER, THE PROVISIONS OF
THIS SECTION 9

 

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SHALL INURE TO ITS BENEFIT AS TO ANY ACTIONS TAKEN OR OMITTED TO BE TAKEN BY IT
WHILE IT WAS ACTING AS AGENT UNDER THIS AGREEMENT AND THE OTHER DEBT DOCUMENTS.

 

9.7.     SETOFF AND SHARING OF PAYMENTS.  IN ADDITION TO ANY RIGHTS NOW OR
HEREAFTER GRANTED UNDER APPLICABLE LAW AND NOT BY WAY OF LIMITATION OF ANY SUCH
RIGHTS, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT
AND SUBJECT TO SECTION 9.8(E), EACH LENDER IS HEREBY AUTHORIZED AT ANY TIME OR
FROM TIME TO TIME UPON THE DIRECTION OF AGENT, WITHOUT NOTICE TO BORROWER OR ANY
OTHER PERSON, ANY SUCH NOTICE BEING HEREBY EXPRESSLY WAIVED, TO OFFSET AND TO
APPROPRIATE AND TO APPLY ANY AND ALL BALANCES HELD BY IT AT ANY OF ITS OFFICES
FOR THE ACCOUNT OF BORROWER (REGARDLESS OF WHETHER SUCH BALANCES ARE THEN DUE TO
BORROWER) AND ANY OTHER PROPERTIES OR ASSETS AT ANY TIME HELD OR OWING BY THAT
LENDER OR THAT HOLDER TO OR FOR THE CREDIT OR FOR THE ACCOUNT OF BORROWER
AGAINST AND ON ACCOUNT OF ANY OF THE OBLIGATIONS THAT ARE NOT PAID WHEN DUE. 
ANY LENDER EXERCISING A RIGHT OF SETOFF OR OTHERWISE RECEIVING ANY PAYMENT ON
ACCOUNT OF THE OBLIGATIONS IN EXCESS OF ITS PRO RATA SHARE THEREOF SHALL
PURCHASE FOR CASH (AND THE OTHER LENDERS OR HOLDERS SHALL SELL) SUCH
PARTICIPATIONS IN EACH SUCH OTHER LENDER’S OR HOLDER’S PRO RATA SHARE OF THE
OBLIGATIONS AS WOULD BE NECESSARY TO CAUSE SUCH LENDER TO SHARE THE AMOUNT SO
OFFSET OR OTHERWISE RECEIVED WITH EACH OTHER LENDER OR HOLDER IN ACCORDANCE WITH
THEIR RESPECTIVE PRO RATA SHARES OF THE OBLIGATIONS.  BORROWER AGREES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THAT (A) ANY LENDER MAY EXERCISE ITS RIGHT TO
OFFSET WITH RESPECT TO AMOUNTS IN EXCESS OF ITS PRO RATA SHARE OF THE
OBLIGATIONS AND MAY SELL PARTICIPATIONS IN SUCH AMOUNTS SO OFFSET TO OTHER
LENDERS AND HOLDERS AND (B) ANY LENDER SO PURCHASING A PARTICIPATION IN THE TERM
LOANS MADE OR OTHER OBLIGATIONS HELD BY OTHER LENDERS OR HOLDERS MAY EXERCISE
ALL RIGHTS OF OFFSET, BANKERS’ LIEN, COUNTERCLAIM OR SIMILAR RIGHTS WITH RESPECT
TO SUCH PARTICIPATION AS FULLY AS IF SUCH LENDER OR HOLDER WERE A DIRECT HOLDER
OF THE TERM LOANS AND THE OTHER OBLIGATIONS IN THE AMOUNT OF SUCH
PARTICIPATION.  NOTWITHSTANDING THE FOREGOING, IF ALL OR ANY PORTION OF THE
OFFSET AMOUNT OR PAYMENT OTHERWISE RECEIVED IS THEREAFTER RECOVERED FROM THE
LENDER THAT HAS EXERCISED THE RIGHT OF OFFSET, THE PURCHASE OF PARTICIPATIONS BY
THAT LENDER SHALL BE RESCINDED AND THE PURCHASE PRICE RESTORED WITHOUT
INTEREST.  THE TERM “PRO RATA SHARE” MEANS, (I) WITH RESPECT TO THE TERM LOAN A
COMMITMENT, TERM LOAN B COMMITMENT OR TERM LOAN C COMMITMENT OF ANY LENDER AT
ANY TIME, THE PERCENTAGE OBTAINED BY DIVIDING (X) THE TERM LOAN A COMMITMENT,
TERM LOAN B COMMITMENT OR TERM LOAN C COMMITMENT, AS APPLICABLE, OF SUCH LENDER
THEN IN EFFECT (OR, IF TERM LOAN A COMMITMENT, TERM LOAN B COMMITMENT OR TERM
LOAN C COMMITMENT IS TERMINATED, THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF
THE APPLICABLE TERM LOAN A, TERM LOAN B OR TERM LOAN C, AS APPLICABLE, OWING TO
SUCH LENDER) BY (Y) THE AGGREGATE TERM LOAN A COMMITMENT, AGGREGATE TERM LOAN B
COMMITMENT OR AGGREGATE TERM LOAN C COMMITMENT, AS APPLICABLE, THEN IN EFFECT
(OR, IF THE AGGREGATE TERM LOAN A COMMITMENT, AGGREGATE TERM LOAN B COMMITMENT
OR AGGREGATE TERM LOAN C COMMITMENT IS TERMINATED, THE OUTSTANDING PRINCIPAL
AMOUNT OF THE TERM LOAN A, TERM LOAN B OR TERM LOAN C, AS APPLICABLE, OWING TO
ALL LENDERS) AND (II) WITH RESPECT TO ALL COMMITMENTS OF THE LENDERS, THE
PERCENTAGE OBTAINED BY DIVIDING (X) ALL COMMITMENTS OF SUCH LENDER THEN IN
EFFECT (OR, IF A COMMITMENT IS TERMINATED, THE AGGREGATE OUTSTANDING PRINCIPAL
AMOUNT OF THE TERM LOAN ADVANCED UNDER SUCH COMMITMENT OWING TO SUCH LENDER) BY
(Y) THE TOTAL COMMITMENT THEN IN EFFECT (OR, IF A COMMITMENT IS TERMINATED, THE
OUTSTANDING PRINCIPAL AMOUNT OF THE APPLICABLE TERM LOAN ADVANCED UNDER SUCH
COMMITMENT OWING TO ALL LENDERS).

 

9.8.     ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION; ACTIONS IN
CONCERT.

 

(A)          ADVANCES; PAYMENTS.  IF AGENT RECEIVES ANY PAYMENT FOR THE ACCOUNT
OF LENDERS ON OR PRIOR TO 11:00 A.M. (NEW YORK TIME) ON ANY BUSINESS DAY, AGENT
SHALL PAY TO EACH APPLICABLE LENDER SUCH LENDER’S PRO RATA SHARE OF SUCH PAYMENT
ON SUCH BUSINESS DAY. IF AGENT RECEIVES ANY PAYMENT FOR THE ACCOUNT OF LENDERS
AFTER 11:00 A.M. (NEW YORK TIME) ON ANY BUSINESS DAY, AGENT SHALL PAY TO EACH
APPLICABLE LENDER SUCH LENDER’S PRO RATA SHARE OF SUCH PAYMENT ON THE NEXT
BUSINESS DAY. TO THE EXTENT THAT ANY LENDER HAS FAILED TO FUND ANY SUCH PAYMENTS
AND TERM

 

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LOANS (A “NON-FUNDING LENDER”), AGENT SHALL BE ENTITLED TO SET OFF THE FUNDING
SHORT-FALL AGAINST THAT NON-FUNDING LENDER’S PRO RATA SHARE OF ALL PAYMENTS
RECEIVED FROM BORROWER.

 

(B)         RETURN OF PAYMENTS.

 

(I)                    IF AGENT PAYS AN AMOUNT TO A LENDER UNDER THIS AGREEMENT
IN THE BELIEF OR EXPECTATION THAT A RELATED PAYMENT HAS BEEN OR WILL BE RECEIVED
BY AGENT FROM A LOAN PARTY AND SUCH RELATED PAYMENT IS NOT RECEIVED BY AGENT,
THEN AGENT WILL BE ENTITLED TO RECOVER SUCH AMOUNT (INCLUDING INTEREST ACCRUING
ON SUCH AMOUNT AT THE FEDERAL FUNDS RATE FOR THE FIRST BUSINESS DAY AND
THEREAFTER, AT THE RATE OTHERWISE APPLICABLE TO SUCH OBLIGATION) FROM SUCH
LENDER ON DEMAND WITHOUT SETOFF, COUNTERCLAIM OR DEDUCTION OF ANY KIND.

 

(II)                   IF AGENT DETERMINES AT ANY TIME THAT ANY AMOUNT RECEIVED
BY AGENT UNDER THIS AGREEMENT MUST BE RETURNED TO A LOAN PARTY OR PAID TO ANY
OTHER PERSON PURSUANT TO ANY INSOLVENCY LAW OR OTHERWISE, THEN, NOTWITHSTANDING
ANY OTHER TERM OR CONDITION OF THIS AGREEMENT OR ANY OTHER DEBT DOCUMENT, AGENT
WILL NOT BE REQUIRED TO DISTRIBUTE ANY PORTION THEREOF TO ANY LENDER.  IN
ADDITION, EACH LENDER WILL REPAY TO AGENT ON DEMAND ANY PORTION OF SUCH AMOUNT
THAT AGENT HAS DISTRIBUTED TO SUCH LENDER, TOGETHER WITH INTEREST AT SUCH RATE,
IF ANY, AS AGENT IS REQUIRED TO PAY TO A LOAN PARTY OR SUCH OTHER PERSON,
WITHOUT SETOFF, COUNTERCLAIM OR DEDUCTION OF ANY KIND.

 

(C)          NON-FUNDING LENDERS.  THE FAILURE OF ANY NON-FUNDING LENDER TO MAKE
ANY TERM LOAN OR ANY PAYMENT REQUIRED BY IT HEREUNDER SHALL NOT RELIEVE ANY
OTHER LENDER (EACH SUCH OTHER LENDER, AN “OTHER LENDER”) OF ITS OBLIGATIONS TO
MAKE SUCH TERM LOAN, BUT NEITHER ANY OTHER LENDER NOR AGENT SHALL BE RESPONSIBLE
FOR THE FAILURE OF ANY NON-FUNDING LENDER TO MAKE A TERM LOAN OR MAKE ANY OTHER
PAYMENT REQUIRED HEREUNDER.  NOTWITHSTANDING ANYTHING SET FORTH HEREIN TO THE
CONTRARY, A NON-FUNDING LENDER SHALL NOT HAVE ANY VOTING OR CONSENT RIGHTS UNDER
OR WITH RESPECT TO ANY DEBT DOCUMENT OR CONSTITUTE A “LENDER” (OR BE INCLUDED IN
THE CALCULATION OF “REQUISITE LENDER” HEREUNDER) FOR ANY VOTING OR CONSENT
RIGHTS UNDER OR WITH RESPECT TO ANY DEBT DOCUMENT.  AT BORROWER’S REQUEST, AGENT
OR A PERSON REASONABLY ACCEPTABLE TO AGENT SHALL HAVE THE RIGHT WITH AGENT’S
CONSENT AND IN AGENT’S SOLE DISCRETION (BUT SHALL HAVE NO OBLIGATION) TO
PURCHASE FROM ANY NON-FUNDING LENDER, AND EACH NON-FUNDING LENDER AGREES THAT IT
SHALL, AT AGENT’S REQUEST, SELL AND ASSIGN TO AGENT OR SUCH PERSON, ALL OF THE
COMMITMENTS AND ALL OF THE OUTSTANDING TERM LOANS OF THAT NON-FUNDING LENDER FOR
AN AMOUNT EQUAL TO THE PRINCIPAL BALANCE OF ALL TERM LOANS HELD BY SUCH
NON-FUNDING LENDER AND ALL ACCRUED INTEREST AND FEES WITH RESPECT THERETO
THROUGH THE DATE OF SALE, SUCH PURCHASE AND SALE TO BE CONSUMMATED PURSUANT TO
AN EXECUTED ASSIGNMENT AGREEMENT (AS DEFINED BELOW).

 

(D)         DISSEMINATION OF INFORMATION.  AGENT SHALL USE REASONABLE EFFORTS TO
PROVIDE LENDERS WITH ANY NOTICE OF DEFAULT OR EVENT OF DEFAULT RECEIVED BY AGENT
FROM, OR DELIVERED BY AGENT TO BORROWER, WITH NOTICE OF ANY EVENT OF DEFAULT OF
WHICH AGENT HAS ACTUALLY BECOME AWARE AND WITH NOTICE OF ANY ACTION TAKEN BY
AGENT FOLLOWING ANY EVENT OF DEFAULT; PROVIDED THAT AGENT SHALL NOT BE LIABLE TO
ANY LENDER FOR ANY FAILURE TO DO SO, EXCEPT TO THE EXTENT THAT SUCH FAILURE IS
ATTRIBUTABLE TO AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION.  LENDERS ACKNOWLEDGE THAT
BORROWER IS REQUIRED TO PROVIDE FINANCIAL STATEMENTS TO LENDERS IN ACCORDANCE
WITH SECTION 6.3 HERETO AND AGREE THAT AGENT SHALL HAVE NO DUTY TO PROVIDE THE
SAME TO LENDERS.

 

(E)          ACTIONS IN CONCERT.  ANYTHING IN THIS AGREEMENT TO THE CONTRARY
NOTWITHSTANDING, EACH LENDER HEREBY AGREES WITH EACH OTHER LENDER THAT NO LENDER
SHALL TAKE ANY ACTION TO PROTECT

 

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OR ENFORCE ITS RIGHTS ARISING OUT OF THIS AGREEMENT, THE NOTES OR ANY OTHER DEBT
DOCUMENTS (INCLUDING EXERCISING ANY RIGHTS OF SETOFF) WITHOUT FIRST OBTAINING
THE PRIOR WRITTEN CONSENT OF AGENT AND REQUISITE LENDERS, IT BEING THE INTENT OF
LENDERS THAT ANY SUCH ACTION TO PROTECT OR ENFORCE RIGHTS UNDER THIS AGREEMENT
AND THE NOTES SHALL BE TAKEN IN CONCERT AND AT THE DIRECTION OR WITH THE CONSENT
OF AGENT AND REQUISITE LENDERS.

 

10.        MISCELLANEOUS.

 

10.1.   ASSIGNMENT.  SUBJECT TO THE TERMS OF THIS SECTION 10.1, ANY LENDER MAY
MAKE AN ASSIGNMENT TO AN ASSIGNEE OF, OR SELL PARTICIPATIONS IN, AT ANY TIME OR
TIMES, THE DEBT DOCUMENTS, ITS COMMITMENT, TERM LOANS OR ANY PORTION THEREOF OR
INTEREST THEREIN, INCLUDING ANY LENDER’S RIGHTS, TITLE, INTERESTS, REMEDIES,
POWERS OR DUTIES THEREUNDER.  ANY ASSIGNMENT BY A LENDER SHALL: (I) EXCEPT IN
THE CASE OF AN ASSIGNMENT TO A QUALIFIED ASSIGNEE (AS DEFINED BELOW), REQUIRE
THE CONSENT OF EACH LENDER (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED), (II) REQUIRE THE EXECUTION OF AN ASSIGNMENT AGREEMENT
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO, AND ACKNOWLEDGED BY, AGENT (AN
“ASSIGNMENT AGREEMENT”); (III) BE CONDITIONED ON SUCH ASSIGNEE LENDER
REPRESENTING TO THE ASSIGNING LENDER AND AGENT THAT IT IS PURCHASING THE
APPLICABLE COMMITMENT AND/OR TERM LOANS TO BE ASSIGNED TO IT FOR ITS OWN
ACCOUNT, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO THE DISTRIBUTION
THEREOF; (IV) BE IN AN AGGREGATE AMOUNT OF NOT LESS THAN $1,000,000, UNLESS SUCH
ASSIGNMENT IS MADE TO AN EXISTING LENDER OR AN AFFILIATE OF AN EXISTING LENDER
OR IS OF THE ASSIGNOR’S (TOGETHER WITH ITS AFFILIATES’) ENTIRE INTEREST OF THE
TERM LOANS OR IS MADE WITH THE PRIOR WRITTEN CONSENT OF AGENT; AND (V) INCLUDE A
PAYMENT TO AGENT OF AN ASSIGNMENT FEE OF $3,500.  IN THE CASE OF AN ASSIGNMENT
BY A LENDER UNDER THIS SECTION 10.1, THE ASSIGNEE SHALL HAVE, TO THE EXTENT OF
SUCH ASSIGNMENT, THE SAME RIGHTS, BENEFITS AND OBLIGATIONS AS ALL OTHER LENDERS
HEREUNDER.  THE ASSIGNING LENDER SHALL BE RELIEVED OF ITS OBLIGATIONS HEREUNDER
WITH RESPECT TO ITS COMMITMENT AND TERM LOANS, AS APPLICABLE, OR ASSIGNED
PORTION THEREOF FROM AND AFTER THE DATE OF SUCH ASSIGNMENT.  BORROWER HEREBY
ACKNOWLEDGES AND AGREES THAT ANY ASSIGNMENT SHALL GIVE RISE TO A DIRECT
OBLIGATION OF BORROWER TO THE ASSIGNEE AND THAT THE ASSIGNEE SHALL BE CONSIDERED
TO BE A “LENDER”.  IN THE EVENT ANY LENDER ASSIGNS OR OTHERWISE TRANSFERS ALL OR
ANY PART OF THE COMMITMENTS AND OBLIGATIONS, AGENT SHALL SO NOTIFY BORROWER AND
BORROWER SHALL, UPON THE REQUEST OF AGENT, EXECUTE NEW NOTES IN EXCHANGE FOR THE
NOTES, IF ANY, BEING ASSIGNED.  AGENT MAY AMEND SCHEDULE A TO THIS AGREEMENT TO
REFLECT ASSIGNMENTS MADE IN ACCORDANCE WITH THIS SECTION.

 

As used herein, “Qualified Assignee” means (a) any Lender and any affiliate of
any Lender and (b) any commercial bank, savings and loan association or savings
bank or any other entity which is an “accredited investor” (as defined in
Regulation D under the Securities Act) which extends credit or buys loans as one
of its businesses, including insurance companies, mutual funds, lease financing
companies and commercial finance companies, in each case, which has a rating of
BBB or higher from S&P and a rating of Baa2 or higher from Moody’s at the date
that it becomes a Lender and in each case of clauses (a) and (b), which, through
its applicable lending office, is capable of lending to Borrower without the
imposition of any withholding or similar taxes; provided that no person proposed
to become a Lender after the Closing Date and determined by Agent to be acting
in the capacity of a vulture fund or distressed debt purchaser shall be a
Qualified Assignee, and no person or Affiliate of such person proposed to become
a Lender after the Closing Date and that holds any subordinated debt or stock
issued by Borrower shall be a Qualified Assignee.

 

10.2.   NOTICES.  ALL NOTICES, REQUESTS OR OTHER COMMUNICATIONS GIVEN IN
CONNECTION WITH THIS AGREEMENT SHALL BE IN WRITING, SHALL BE ADDRESSED TO THE
PARTIES AT THEIR RESPECTIVE ADDRESSES SET FORTH ON THE SIGNATURE PAGES HERETO
BELOW SUCH PARTIES’ NAME OR IN THE MOST RECENT ASSIGNMENT AGREEMENT EXECUTED BY
ANY LENDER (UNLESS AND UNTIL A DIFFERENT ADDRESS MAY BE SPECIFIED IN A WRITTEN
NOTICE TO THE OTHER PARTY DELIVERED IN ACCORDANCE WITH THIS SECTION), AND SHALL
BE DEEMED GIVEN (A) ON THE DATE OF RECEIPT IF DELIVERED BY HAND, (B) ON THE DATE
OF SENDER’S RECEIPT OF CONFIRMATION OF PROPER TRANSMISSION IF

 

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SENT BY FACSIMILE TRANSMISSION, (C) ON THE NEXT BUSINESS DAY AFTER BEING SENT BY
A NATIONALLY-RECOGNIZED OVERNIGHT COURIER, AND (D) ON THE FOURTH BUSINESS DAY
AFTER BEING SENT BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID.  AS USED
HEREIN, THE TERM “BUSINESS DAY” MEANS AND INCLUDES ANY DAY OTHER THAN SATURDAYS,
SUNDAYS, OR OTHER DAYS ON WHICH COMMERCIAL BANKS IN NEW YORK, NEW YORK ARE
REQUIRED OR AUTHORIZED TO BE CLOSED.

 

10.3.   CORRECTION OF DEBT DOCUMENTS.  AGENT MAY CORRECT PATENT ERRORS AND FILL
IN ALL BLANKS IN THIS AGREEMENT OR THE DEBT DOCUMENTS CONSISTENT WITH THE
AGREEMENT OF THE PARTIES.

 

10.4.   PERFORMANCE.  TIME IS OF THE ESSENCE OF THIS AGREEMENT.  THIS AGREEMENT
SHALL BE BINDING, JOINTLY AND SEVERALLY, UPON ALL PARTIES DESCRIBED AS THE
“BORROWER” AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, AND SHALL INURE TO THE
BENEFIT OF AGENT, LENDERS, AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.

 

10.5.   PAYMENT OF FEES AND EXPENSES.  LOAN PARTIES AGREE, JOINTLY AND
SEVERALLY, TO PAY OR REIMBURSE UPON DEMAND FOR ALL REASONABLE FEES, COSTS AND
EXPENSES INCURRED BY AGENT AND LENDERS IN CONNECTION WITH (A) THE INVESTIGATION,
PREPARATION, NEGOTIATION, EXECUTION, ADMINISTRATION OF, OR ANY AMENDMENT,
MODIFICATION, WAIVER OR TERMINATION OF, THIS AGREEMENT OR ANY OTHER DEBT
DOCUMENT, (B) THE ADMINISTRATION OF THE LOANS AND THE FACILITIES HEREUNDER AND
ANY OTHER TRANSACTION CONTEMPLATED HEREBY OR UNDER THE DEBT DOCUMENTS AND
(C) THE ENFORCEMENT, ASSERTION, DEFENSE OR PRESERVATION OF AGENT’S AND LENDERS’
RIGHTS AND REMEDIES UNDER THIS AGREEMENT OR ANY OTHER DEBT DOCUMENT, IN EACH
CASE OF CLAUSES (A) THROUGH (C), INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEY’S FEES AND EXPENSES, THE ALLOCATED COST OF IN-HOUSE LEGAL COUNSEL,
REASONABLE FEES AND EXPENSES OF CONSULTANTS, AUDITORS AND APPRAISERS AND UCC AND
OTHER CORPORATE SEARCH AND FILING FEES AND WIRE TRANSFER FEES.  BORROWER FURTHER
AGREES THAT SUCH FEES, COSTS AND EXPENSES SHALL CONSTITUTE OBLIGATIONS.  THIS
PROVISION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.  NOTWITHSTANDING THE
FOREGOING, THE FIRST $50,000 OF THE FEES, COSTS AND EXPENSES DESCRIBED IN THIS
SECTION SHALL BE PAID FROM THE $50,000 PAYMENT DESCRIBED IN
SECTION 2.7(A)(I)(B).

 

10.6.   INDEMNITY. EACH LOAN PARTY SHALL AND DOES HEREBY JOINTLY AND SEVERALLY
INDEMNIFY AND DEFEND AGENT, LENDERS, AND THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS, AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, CONSULTANTS,
ATTORNEYS, AGENTS AND AFFILIATES (EACH AN “INDEMNITEE”) FROM AND AGAINST ALL
LIABILITIES, LOSSES, DAMAGES, EXPENSES, PENALTIES, CLAIMS, ACTIONS AND SUITS
(INCLUDING, WITHOUT LIMITATION, RELATED REASONABLE ATTORNEYS’ FEES AND THE
ALLOCATED COSTS OF IN-HOUSE LEGAL COUNSEL) OF ANY KIND WHATSOEVER ARISING,
DIRECTLY OR INDIRECTLY, WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST
SUCH INDEMNITEE AS A RESULT OF OR IN CONNECTION WITH THIS AGREEMENT, THE OTHER
DEBT DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (THE
“INDEMNIFIED LIABILITIES”); PROVIDED THAT, NO LOAN PARTY SHALL HAVE ANY
OBLIGATION TO ANY INDEMNITIEE WITH RESPECT TO ANY INDEMNIFIED LIABILITIES TO THE
EXTENT SUCH INDEMNIFIED LIABILITIES ARISE FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH INDEMNITEE AS DETERMINED BY A FINAL NON-APPEALABLE JUDGMENT
OF A COURT OF COMPETENT JURISDICTION.  THIS PROVISION SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT.

 

10.7.   RIGHTS CUMULATIVE.  AGENT’S AND LENDERS’ RIGHTS AND REMEDIES UNDER THIS
AGREEMENT OR OTHERWISE ARISING ARE CUMULATIVE AND MAY BE EXERCISED SINGULARLY OR
CONCURRENTLY.  NEITHER THE FAILURE NOR ANY DELAY ON THE PART OF AGENT OR ANY
LENDER TO EXERCISE ANY RIGHT, POWER OR PRIVILEGE UNDER THIS AGREEMENT SHALL
OPERATE AS A WAIVER, NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY RIGHT,
POWER OR PRIVILEGE PRECLUDE ANY OTHER OR FURTHER EXERCISE OF THAT OR ANY OTHER
RIGHT, POWER OR PRIVILEGE.  NONE OF AGENT OR ANY LENDER SHALL BE DEEMED TO HAVE
WAIVED ANY OF ITS RESPECTIVE RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER
AGREEMENT, INSTRUMENT OR PAPER SIGNED BY BORROWER UNLESS SUCH WAIVER IS
EXPRESSED IN WRITING AND SIGNED BY AGENT, REQUISITE LENDERS OR ALL LENDERS, AS
APPLICABLE.  A WAIVER ON ANY ONE OCCASION SHALL NOT BE CONSTRUED AS A BAR TO OR
WAIVER OF ANY RIGHT OR REMEDY ON ANY FUTURE OCCASION.

 

32

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10.8.        ENTIRE AGREEMENT; AMENDMENTS, WAIVERS.

 

(A)         THIS AGREEMENT AND THE OTHER DEBT DOCUMENTS CONSTITUTE THE ENTIRE
AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
THEREOF AND SUPERSEDE ALL PRIOR UNDERSTANDINGS (WHETHER WRITTEN, VERBAL OR
IMPLIED) WITH RESPECT TO SUCH SUBJECT MATTER.  SECTION HEADINGS CONTAINED IN
THIS AGREEMENT HAVE BEEN INCLUDED FOR CONVENIENCE ONLY, AND SHALL NOT AFFECT THE
CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT.

 

(B)         NO AMENDMENT, MODIFICATION, TERMINATION OR WAIVER OF ANY PROVISION
OF THIS AGREEMENT OR ANY OTHER DEBT DOCUMENT, OR ANY CONSENT TO ANY DEPARTURE BY
BORROWER THEREFROM, SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE IN
WRITING AND SIGNED BY AGENT, BORROWER AND LENDERS HAVING MORE THAN (X) 60% OF
THE AGGREGATE COMMITMENTS OF ALL LENDERS OR (Y) IF SUCH COMMITMENTS HAVE EXPIRED
OR BEEN TERMINATED, 60% OF THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF THE
TERM LOANS (THE “REQUISITE LENDERS”); PROVIDED, HOWEVER, THAT SO LONG AS A PARTY
THAT IS A LENDER HEREUNDER ON THE CLOSING DATE DOES NOT ASSIGN ANY PORTION OF
ITS COMMITMENT OR TERM LOAN, THE “REQUISITE LENDERS” SHALL INCLUDE SUCH LENDER. 
EXCEPT AS SET FORTH IN CLAUSE (C) BELOW, ALL SUCH AMENDMENTS, MODIFICATIONS,
TERMINATIONS OR WAIVERS REQUIRING THE CONSENT OF ANY LENDERS SHALL REQUIRE THE
WRITTEN CONSENT OF REQUISITE LENDERS.

 

(C)         NO AMENDMENT, MODIFICATION, TERMINATION OR WAIVER OF ANY PROVISION
OF THIS AGREEMENT OR ANY OTHER DEBT DOCUMENT SHALL, UNLESS IN WRITING AND SIGNED
BY AGENT AND EACH LENDER DIRECTLY AFFECTED THEREBY: (I) INCREASE OR DECREASE ANY
COMMITMENT OF ANY LENDER OR INCREASE OR DECREASE THE TOTAL COMMITMENT (WHICH
SHALL BE DEEMED TO AFFECT ALL LENDERS), (II) REDUCE THE PRINCIPAL OF OR RATE OF
INTEREST ON ANY OBLIGATION OR THE AMOUNT OF ANY FEES PAYABLE HEREUNDER (OTHER
THAN WAIVING THE IMPOSITION OF THE DEFAULT RATE), (III) POSTPONE THE DATE FIXED
FOR OR WAIVE ANY PAYMENT OF PRINCIPAL OF OR INTEREST ON ANY TERM LOAN, OR ANY
FEES HEREUNDER, (IV) RELEASE ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL, OR
CONSENT TO A TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE INTELLECTUAL PROPERTY,
IN EACH CASE, EXCEPT AS OTHERWISE EXPRESSLY PERMITTED IN THE DEBT DOCUMENTS
(WHICH SHALL BE DEEMED TO AFFECT ALL LENDERS), (V) SUBORDINATE THE LIEN GRANTED
IN FAVOR OF THE AGENT SECURING THE OBLIGATIONS (WHICH SHALL BE DEEMED TO AFFECT
ALL LENDERS), (VI) RELEASE A LOAN PARTY FROM, OR CONSENT TO A LOAN PARTY’S
ASSIGNMENT OR DELEGATION OF, SUCH LOAN PARTY’S OBLIGATIONS HEREUNDER AND UNDER
THE OTHER DEBT DOCUMENTS OR ANY GUARANTOR FROM ITS GUARANTY OF THE OBLIGATIONS
(WHICH SHALL BE DEEMED TO AFFECT ALL LENDERS) OR (VII) AMEND, MODIFY, TERMINATE
OR WAIVE SECTION 8.4, 9.7 OR 10.8(B) OR (C).

 

(D)         NOTWITHSTANDING ANY PROVISION IN THIS SECTION 10.8 TO THE CONTRARY,
NO AMENDMENT, MODIFICATION, TERMINATION OR WAIVER AFFECTING OR MODIFYING THE
RIGHTS OR OBLIGATIONS OF AGENT HEREUNDER SHALL BE EFFECTIVE UNLESS SIGNED BY
BORROWER, AGENT AND REQUISITE LENDERS.

 

10.9.   BINDING EFFECT.  THIS AGREEMENT SHALL CONTINUE IN FULL FORCE AND EFFECT
UNTIL THE TERMINATION DATE; PROVIDED, HOWEVER, THAT THE PROVISIONS OF SECTIONS
2.3(E), 9.5, 10.5 AND 10.6 AND THE OTHER INDEMNITIES CONTAINED IN THE DEBT
DOCUMENTS SHALL SURVIVE THE TERMINATION DATE.  THE SURRENDER, UPON PAYMENT OR
OTHERWISE, OF ANY NOTE OR ANY OF THE OTHER DEBT DOCUMENTS EVIDENCING ANY OF THE
OBLIGATIONS SHALL NOT AFFECT THE RIGHT OF AGENT TO RETAIN THE COLLATERAL FOR
SUCH OTHER OBLIGATIONS AS MAY THEN EXIST OR AS IT MAY BE REASONABLY CONTEMPLATED
WILL EXIST IN THE FUTURE.  THIS AGREEMENT AND THE GRANT OF THE SECURITY INTEREST
IN THE COLLATERAL PURSUANT TO SECTION 3.1 SHALL AUTOMATICALLY BE REINSTATED IF
AGENT OR ANY LENDER IS EVER REQUIRED TO RETURN OR RESTORE THE PAYMENT OF ALL OR
ANY PORTION OF THE OBLIGATIONS (ALL AS THOUGH SUCH PAYMENT HAD NEVER BEEN MADE).

 

10.10.      USE OF LOGO.  EACH LOAN PARTY AUTHORIZES AGENT TO USE ITS NAME, LOGO
AND/OR TRADEMARK WITHOUT NOTICE TO OR CONSENT BY SUCH LOAN PARTY, IN CONNECTION
WITH CERTAIN PROMOTIONAL MATERIALS THAT

 

33

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AGENT MAY DISSEMINATE TO THE PUBLIC.  THE PROMOTIONAL MATERIALS MAY INCLUDE, BUT
ARE NOT LIMITED TO, BROCHURES, VIDEO TAPE, INTERNET WEBSITE, PRESS RELEASES,
ADVERTISING IN NEWSPAPER AND/OR OTHER PERIODICALS, LUCITES, AND ANY OTHER
MATERIALS RELATING THE FACT THAT AGENT HAS A FINANCING RELATIONSHIP WITH
BORROWER AND SUCH MATERIALS MAY BE DEVELOPED, DISSEMINATED AND USED WITHOUT LOAN
PARTIES’ REVIEW.  NOTHING HEREIN OBLIGATES AGENT TO USE A LOAN PARTY’S NAME,
LOGO AND/OR TRADEMARK, IN ANY PROMOTIONAL MATERIALS OF AGENT.  LOAN PARTIES
SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS RESPECTIVE AFFILIATES TO, ISSUE ANY
PRESS RELEASE OR OTHER PUBLIC DISCLOSURE (OTHER THAN ANY DOCUMENT FILED WITH ANY
GOVERNMENTAL AUTHORITY RELATING TO A PUBLIC OFFERING OF THE SECURITIES OF
BORROWER) USING THE NAME, LOGO OR OTHERWISE REFERRING TO GENERAL ELECTRIC
CAPITAL CORPORATION, GE HEALTHCARE FINANCIAL SERVICES, INC. OR OF ANY OF THEIR
AFFILIATES, THE DEBT DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN
WITHOUT AT LEAST TWO (2) BUSINESS DAYS PRIOR WRITTEN NOTICE TO AND THE PRIOR
WRITTEN CONSENT OF AGENT UNLESS, AND ONLY TO THE EXTENT THAT, LOAN PARTIES OR
SUCH AFFILIATE IS REQUIRED TO DO SO UNDER APPLICABLE LAW AND THEN, ONLY AFTER
CONSULTING WITH AGENT PRIOR THERETO.

 

10.11.      WAIVER OF JURY TRIAL.  EACH OF LOAN PARTIES, AGENT AND LENDERS
UNCONDITIONALLY WAIVE ANY AND ALL RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER DEBT
DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS AMONG LOAN
PARTIES, AGENT AND/OR LENDERS RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION
OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
AMONG LOAN PARTIES, AGENT AND/OR LENDERS.  THE SCOPE OF THIS WAIVER IS INTENDED
TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT.
THIS WAIVER IS IRREVOCABLE.  THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING.  THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION.  THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

 

10.12.      GOVERNING LAW.  THIS AGREEMENT, THE OTHER DEBT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH
STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
REGARDLESS OF THE LOCATION OF THE COLLATERAL.  IF ANY ACTION ARISING OUT OF THIS
AGREEMENT OR ANY OTHER DEBT DOCUMENT IS COMMENCED BY AGENT IN THE STATE COURTS
OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR IN THE U.S. DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK, EACH LOAN PARTY HEREBY CONSENTS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION AND TO THE LAYING OF VENUE IN
THE STATE OF NEW YORK.  ANY PROCESS IN ANY SUCH ACTION SHALL BE DULY SERVED IF
MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO LOAN PARTIES AT THEIR ADDRESS
DESCRIBED IN SECTION 10.2, OR IF SERVED BY ANY OTHER MEANS PERMITTED BY
APPLICABLE LAW.

 

10.13.      CONFIDENTIALITY.  AGENT AND EACH LENDER AGREES, AS TO ITSELF, TO USE
COMMERCIALLY REASONABLE EFFORTS (EQUIVALENT TO THE EFFORTS AGENT OR SUCH LENDER,
AS THE CASE MAY BE, APPLIES TO MAINTAINING THE CONFIDENTIALITY OF ITS OWN
CONFIDENTIAL INFORMATION) TO MAINTAIN AS CONFIDENTIAL ALL CONFIDENTIAL
INFORMATION PROVIDED TO IT BY BORROWER AND DESIGNATED AS CONFIDENTIAL, EXCEPT
THAT AGENT AND LENDERS MAY DISCLOSE SUCH INFORMATION (A) TO PERSONS EMPLOYED OR
ENGAGED BY AGENT OR A LENDER; (B) TO

 

34

--------------------------------------------------------------------------------

 

ANY BONA FIDE ASSIGNEE OR PARTICIPANT OR POTENTIAL ASSIGNEE OR PARTICIPANT THAT
HAS AGREED TO COMPLY WITH THE COVENANT CONTAINED IN THIS SECTION 10.13 (AND ANY
SUCH BONA FIDE ASSIGNEE OR PARTICIPANT OR POTENTIAL ASSIGNEE OR PARTICIPANT MAY
DISCLOSE SUCH INFORMATION TO PERSONS EMPLOYED OR ENGAGED BY THEM AS DESCRIBED IN
CLAUSE (A) ABOVE); (C) AS REQUIRED OR REQUESTED BY ANY GOVERNMENTAL AUTHORITY OR
REASONABLY BELIEVED BY AGENT OR ANY LENDER TO BE COMPELLED BY ANY COURT DECREE,
SUBPOENA OR LEGAL OR ADMINISTRATIVE ORDER OR PROCESS; (D) AS, ON THE ADVICE OF
AGENT’S OR SUCH LENDER’S COUNSEL, REQUIRED BY LAW; (E) IN CONNECTION WITH THE
EXERCISE OF ANY RIGHT OR REMEDY UNDER THE DEBT DOCUMENTS OR IN CONNECTION WITH
ANY LITIGATION TO WHICH AGENT OR SUCH LENDER IS A PARTY OR BOUND; OR (F) THAT
CEASES TO BE CONFIDENTIAL THROUGH NO FAULT OF AGENT OR SUCH LENDER.

 

10.14.      COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS AND BY DIFFERENT PARTIES IN SEPARATE COUNTERPARTS, EACH OF WHICH
WHEN SO EXECUTED SHALL BE DEEMED TO BE AN ORIGINAL AND ALL OF WHICH WHEN TAKEN
TOGETHER SHALL CONSTITUTE ONE AND THE SAME AGREEMENT.  DELIVERY OF AN EXECUTED
SIGNATURE PAGE OF THIS AGREEMENT BY FACSIMILE TRANSMISSION OR ELECTRONIC
TRANSMISSION SHALL BE AS EFFECTIVE AS DELIVERY OF A MANUALLY EXECUTED
COUNTERPART HEREOF.

 

[Signature Page Follows]

 

35

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each Loan Party, Agent and Lenders, intending to be legally
bound hereby, have duly executed this Agreement in one or more counterparts,
each of which shall be deemed to be an original, as of the day and year first
aforesaid.

 

BORROWER:

 

DEPOMED, INC.

 

By:

  /s/ Carl A. Pelzel

 

 

  Name: Carl A. Pelzel

 

 

  Title: President and Chief Executive Officer

 

 

 

Address For Notices For All Loan Parties:

 

Depomed, Inc.

1360 O’Brien Drive

Menlo Park, CA 94025

Attention: President

Phone: (650) 462-5900

Facsimile:  (650) 462-9993

 

LOAN AND SECURITY AGREEMENT

SIGNATURE PAGE

 

1

--------------------------------------------------------------------------------

 

AGENT AND LENDER:

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

By:

  /s/ Scott Towers

 

 

Name: Scott Towers

 

 

Title: Duly Authorized Signatory

 

 

Address For Notices:

 

General Electric Capital Corporation

c/o GE Healthcare Financial Services, Inc., LSF

83 Wooster Heights Road, Fifth Floor

Danbury, Connecticut 06810

Attention: Senior Vice President of Risk
Phone: (203) 205-5200

Facsimile: (203) 205-2192

 

With a copy to:

 

General Electric Capital Corporation

c/o GE Healthcare Financial Services, Inc.

Two Bethesda Metro Center, Suite 600

Bethesda,  Maryland  20814

Attention: General Counsel
Phone: (301) 961-1640

Facsimile:  (301) 664-9866

 

2

--------------------------------------------------------------------------------

 

LENDER:

 

OXFORD FINANCE CORPORATION

 

 

By:

  /s/ T.A. Lex

 

 

Name: T.A. Lex

 

 

Title: COO

 

 

Address For Notices:

 

Oxford Finance Corporation

133 North Fairfax Street

Alexandria, VA  22314

Attention:  Timothy A. Lex

Executive Vice President & Chief Operating Officer

Phone:  (703) 519-4900

Facsimile:  (703) 519-6010

 

3

--------------------------------------------------------------------------------

 

SCHEDULE A

COMMITMENTS

 

Name of Lender

 

Commitment of such Lender

 

Pro Rata Share

 

 

 

 

 

 

 

General Electric Capital Corporation

 

Term Loan A Commitment:

$1,266,666

 

33.333333

%

 

 

Term Loan B Commitment:

$1,866,667

 

33.333333

%

 

 

Term Loan C Commitment:

$1,866,667

 

33.333333

%

 

 

 

 

 

 

 

 

 

SUBTOTAL:

$5,000,000

 

 

 

 

 

 

 

 

 

 

Oxford Finance Corporation

 

Term Loan A Commitment:

$2,533,334

 

66.666667

%

 

 

Term Loan B Commitment:

$3,733,333

 

66.666667

%

 

 

Term Loan C Commitment:

$3,733,333

 

66.666667

%

 

 

 

 

 

 

 

 

 

SUBTOTAL:

$10,000,000

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL:

$15,000,000

 

100

%

 

--------------------------------------------------------------------------------

 

SCHEDULE B

DISCLOSURES

 

[To be completed by Borrower]

 

Existing Liens

 

Debtor

 

Secured Party

 

Collateral

 

State and
Jurisdiction

 

Filing Date and
Number (include
original file date and
continuations,
amendments, etc.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Existing Indebtedness

 

Debtor

 

Creditor

 

Amount of Indebtedness
outstanding as of               ,
          

 

Maturity Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Existing Investments

 

Debtor

 

Type of Investment

 

Date

 

Amount Outstanding as
of           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Agreements

 

1.

 

2.

 

3.

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

FORM OF PROMISSORY NOTE

 

 [                   , 2008]

 

FOR VALUE RECEIVED, DEPOMED, INC., a California corporation located at the
address stated below (“Borrower”), promises to pay to the order of [Lender] or
any subsequent holder hereof (each, a “Lender”), the principal sum of
                       and       /100 Dollars ($                       ) or, if
less, the aggregate unpaid principal amount of all Term Loans made by Lender to
or on behalf of Borrower pursuant to the Agreement (as hereinafter defined). 
All capitalized terms, unless otherwise defined herein, shall have the
respective meanings assigned to such terms in the Agreement.

 

This Promissory Note is issued pursuant to that certain Loan and Security
Agreement, dated as of June 27, 2008, among Borrower, the guarantors from time
to time party thereto, General Electric Capital Corporation, as agent, [the
other lenders signatory thereto], and Lender (as amended, restated, supplemented
or otherwise modified from time to time, the “Agreement”), is one of the Notes
referred to therein, and is entitled to the benefit and security of the Debt
Documents referred to therein, to which Agreement reference is hereby made for a
statement of all of the terms and conditions under which the loans evidenced
hereby were made.

 

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Agreement.  Interest thereon shall
be paid until such principal amount is paid in full at such interest rates and
at such times as are specified in the Agreement.  The terms of the Agreement are
hereby incorporated herein by reference.

 

All payments shall be applied in accordance with the Agreement.  The acceptance
by Lender of any payment which is less than payment in full of all amounts due
and owing at such time shall not constitute a waiver of Lender’s right to
receive payment in full at such time or at any prior or subsequent time.

 

All amounts due hereunder and under the other Debt Documents are payable in the
lawful currency of the United States of America.  Borrower hereby expressly
authorizes Lender to insert the date value as is actually given in the blank
space on the face hereof and on all related documents pertaining hereto.

 

This Note is secured as provided in the Agreement and the other Debt Documents. 
Reference is hereby made to the Agreement and the other Debt Documents for a
description of the properties and assets in which a security interest has been
granted, the nature and extent of the security interest, the terms and
conditions upon which the security interest was granted and the rights of the
holder of the Note in respect thereof.

 

Time is of the essence hereof.  If Lender does not receive from Borrower payment
in full of any Scheduled Payment or any other sum due under this Note or any
other Debt Document within 3 days after its due date, Borrower agrees to pay the
Late Fee in accordance with the Agreement.  Such Late Fee will be immediately
due and payable, and is in addition to any other costs, fees and expenses that
Borrower may owe as a result of such late payment.

 

This Note may be voluntarily prepaid only as permitted under Section 2.4 of the
Agreement.  After an Event of Default, this Note shall bear interest at a rate
per annum equal to the Default Rate pursuant to Section 2.6 of the Agreement.

 

--------------------------------------------------------------------------------

 

Borrower and all parties now or hereafter liable with respect to this Note,
hereby waive presentment, demand for payment, notice of nonpayment, protest,
notice of protest, notice of dishonor, and all other notices in connection
herewith, as well as filing of suit (if permitted by law) and diligence in
collecting this Note or enforcing any of the security hereof, and agree to pay
(if permitted by law) all expenses incurred in collection, including reasonable
attorneys’ fees and expenses, including without limitation, the allocated costs
of in-house counsel.

 

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

 

No variation or modification of this Note, or any waiver of any of its
provisions or conditions, shall be valid unless such variation or modification
is made in accordance with Section 10.8 of the Agreement.   Any such waiver,
consent, modification or change shall be effective only in the specific instance
and for the specific purpose given.

 

IN WITNESS WHEREOF, Borrower has duly executed this Note as of the date first
above written.

 

 

DEPOMED, INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Federal Tax ID#:

 

 

Address: 1360 O’Brien Drive

 

Menlo Park, CA 94025

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

SECRETARY’S CERTIFICATE OF AUTHORITY

 

[DATE]

 

Reference is made to the Loan and Security Agreement, dated as of June 27, 2008
(as amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”), among Depomed, Inc., a California corporation] (the “Borrower”),
the guarantors from time to time party thereto, General Electric Capital
Corporation, a Delaware corporation (“GECC”), as a lender and as agent (in such
capacity, together with its successors and assigns in such capacity, “Agent”),
and the other lenders signatory thereto from time to time (GECC and such other
lenders, the “Lenders”).  Capitalized terms used but not defined herein are used
with the meanings assigned to such terms in the Agreement.

 

I, [                                          ], do hereby certify that:

 

(i)            I am the duly elected, qualified and acting [Assistant] Secretary
of [INSERT NAME OF LOAN PARTY] (the “Company”);

 

(ii)           attached hereto as Exhibit A is a true, complete and correct
copies of the Company’s [Certificate/Articles of Incorporation or Articles of
Organization/Certificate of Formation] and the [Bylaws/LLC Agreement/Partnership
Agreement], each of which is in full force and effect on and as of the date
hereof;

 

(iii)          each of the following named individuals is a duly elected or
appointed, qualified and acting officer of the Company who holds the offices set
opposite such individual’s name, and such individual is authorized to sign the
Debt Documents to which the Company is a party and all other notices, documents,
instruments and certificates to be delivered pursuant thereto, and the signature
written opposite the name and title of such officer is such officer’s genuine
signature:

 

Name

 

Title

 

Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(iv)          attached hereto as Exhibit B are true, complete and correct copies
of resolutions adopted by the Board of Directors/Members of the Company (the
“Board”) authorizing the execution, delivery and performance of the Debt
Documents to which the Company is a party, which resolutions were duly adopted
by the Board on [DATE] and all such resolutions are in full force and effect on
the date hereof in the form in which adopted without amendment, modification,
rescission or revocation;

 

(v)           the foregoing authority shall remain in full force and effect, and
Agent and each Lender shall be entitled to rely upon same, until written notice
of the modification, rescission or revocation of same, in whole or in part, has
been delivered to Agent and each Lender, but no such modification, rescission or
revocation shall, in any event, be effective with respect to any documents
executed or actions taken in

 

--------------------------------------------------------------------------------

 

reliance upon the foregoing authority before said written notice is delivered to
Agent and each Lender; and

 

(vi)          no Default or Event of Default exists under the Agreement, and all
representations and warranties of the Company in the Debt Documents are true and
correct in all respects on and as of the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties were true and correct in all respects
on and as of such earlier date.  [Note: this paragraph (vi) may be set forth in
a separate officer’s certificate at the option of Borrower]

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, I have hereunto set my hand as of the first date written
above

 

 

 

 

Name:

 

 

Title:

[Assistant] Secretary

 

The undersigned does hereby certify on behalf of the Company that he/she is the
duly elected or appointed, qualified and acting [TITLE] of the Company and that
[NAME FROM ABOVE] is the duly elected or appointed, qualified and acting
[Assistant] Secretary of the Company, and that the signature set forth
immediately above is his/her genuine signature.

 

 

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B TO SECRETARY’S CERTIFICATE OF AUTHORITY

 

FORM OF RESOLUTIONS

 

BOARD RESOLUTIONS

                      , 200  

 

WHEREAS, Depomed, Inc., a California corporation(“Borrower”) has requested that
General Electric Capital Corporation, a Delaware corporation (“GECC”), as agent
(in such capacity, the “Agent”) and lender, and certain other lenders (GECC and
such other lenders, collectively, the “Lenders”) provide a credit facility in an
original principal amount not to exceed $15,000,000 (the “Credit Facility”); and

 

WHEREAS, the terms of the Credit Facility are set forth in a loan and security
agreement by and among Borrower, the guarantors from time to time party thereto,
Agent, and the Lenders and certain related agreements, documents and instruments
described in detail below; and

 

[WHEREAS, as a subsidiary of Borrower,               , the “Company”) will
benefit from the making of the loan(s) to Borrower under the Credit Facility;
and]

 

WHEREAS, the Board of Directors of [Borrower] [Company] (the “Directors”) deems
it advisable and in the best interests of [Borrower] [Company] to execute,
deliver and perform its obligations under those transaction documents described
and referred to below.

 

NOW, THEREFORE, be it

 

RESOLVED, that the Credit Facility be, and it hereby is, approved; and further

 

RESOLVED, that the form of Loan and Security Agreement (the “Loan and Security
Agreement”), by and among [Borrower], [Company,] the [other] guarantors from
time to time party thereto, Agent and the Lenders, as presented to the
Directors, be and it hereby is, approved and the [President, the Chief Executive
Officer, Chief Financial Officer, the Vice President or Treasurer] of [Borrower]
[Company] (collectively, the “Proper Officers”) be, and each of them hereby is,
authorized and directed on behalf of [Borrower] [Company] to execute and deliver
to Agent the Loan and Security Agreement, in substantially the form as presented
to the Directors, with such changes as the Proper Officers may approve, such
approval to be conclusively evidenced by execution and delivery thereof; and
further

 

[RESOLVED, that the form of Promissory Note (the “Note”), as presented to the
Directors, be, and it hereby is, approved and the Proper Officers be, and each
of them hereby is, authorized and directed on behalf of Borrower to execute and
deliver to Lender one or more promissory Notes, in substantially the form as
presented to the Directors, with such changes as the Proper Officers may
approve, such approval to be conclusively evidenced by execution and delivery
thereof; and further]

 

[RESOLVED, that the form(s) of Account Control Agreement [(the “Security
Document”)] [Disbursement Letter,] [INCLUDE OTHER DOCUMENTS AS APPROPRIATE]
(together with the Security Document, the “Ancillary Documents”), each as
presented to the Directors, be, and each of them hereby is, approved and the
Proper Officers be, and each of them hereby is, authorized and directed on
behalf of Borrower to execute and deliver to Agent each of the Ancillary
Documents, in substantially the form as presented to the Directors, with such
changes as the Proper Officers may approve, such approval to be conclusively
evidenced by execution and delivery thereof; and further]

 

RESOLVED, that the Proper Officers be, and each of them hereby is, authorized
and directed to execute and deliver any and all other agreements, certificates,
security agreements, financing statements,

 

--------------------------------------------------------------------------------

 

indemnification agreements, instruments and documents (together with the Loan
and Security Agreement, [and] the Notes [, and the Ancillary Documents], the
“Debt Documents”) and take any and all other further action, in each case, as
may be required or which they may deem appropriate, on behalf of [Borrower]
[Company], in connection with the Credit Facility and carrying into effect the
foregoing resolutions, transactions and matters contemplated thereby; and
further

 

RESOLVED, that [Borrower] [Company] is hereby authorized to perform its
obligations under the Debt Documents, [including, without limitation, the
borrowing of any advances made under the Credit Facility and] the granting of
any security interest in [Borrower’s] [Company’s] assets contemplated thereby to
secure [Borrower’s] [Company’s] obligations in connection therewith; and further

 

RESOLVED, that in addition to executing any documents approved in the preceding
resolutions, the Secretary or any Assistant Secretary of [Borrower] [Company]
may attest to such Debt Documents, the signature thereon or the corporate seal
of [Borrower] [Company] thereon; and further

 

RESOLVED, that any actions taken by the Proper Officers prior to the date of
these resolutions in connection with the transactions contemplated by these
resolutions are hereby ratified and approved; and further

 

RESOLVED, that these resolutions shall be valid and binding upon [Borrower]
[Company].

 

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EXHIBIT C-1

 

FORM OF LANDLORD CONSENT

 

[Landlord]

[Address]

 

[                 ,          ]

 

Ladies and Gentlemen:

 

General Electric Capital Corporation (together with its successors and assigns,
if any, “Agent”) and certain other lenders (the “Lenders”) have entered into, or
is about to enter into, a Loan and Security Agreement, dated as of June 27, 2008
(as amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”) with Depomed, Inc., (“Borrower”) [and                     
(“Company”)], pursuant to which [Borrower] [Company] has granted, or will grant,
to Agent, on behalf of itself and the Lenders, a security interest in certain
assets of [Borrower] [Company], including, without limitation, all of
[Borrower’s] [Company’s] cash, cash equivalents, accounts, books and records,
goods, inventory, machinery, equipment, furniture and trade fixtures (such as
equipment bolted to floors), together with all addition, substitutions,
replacements and improvements to, and proceeds, including, insurance proceeds,
of the foregoing, but excluding building fixtures (such as plumbing, lighting
and HVAC systems (collectively, the “Collateral”).  Some or all of the
Collateral is, or will be, located at certain premises known as
[                                    ] in the City or Town of
[                          , County of
                                                   and State of               ]
(“Premises”), and [Borrower] [Company] occupies the Premises pursuant to a
lease, dated as of [DATE], between [Borrower] [Company], as tenant, and you,
[NAME], as [owner/landlord/mortgagee/realty manager] (as amended, restated,
supplemented or otherwise modified from time to time, the “Lease”).

 

By your signature below, you hereby agree (and we shall rely on your agreement)
that: (i) the Lease is in full force and effect and you are not aware of any
existing defaults thereunder, (ii) the Collateral is, and shall remain, personal
property regardless of the method by which it may be, or become, affixed to the
Premises; (iii) you agree to use your best efforts to provide Agent with written
notice of any default by [Borrower] [Company] under the Lease resulting in a
termination of the Lease (“Default Notice”) and Agent shall have the right, but
not the obligation to cure such default within 15 days following Agent’s receipt
of such Default Notice, (iv) your interest in the Collateral and any proceeds
thereof (including, without limitation, proceeds of any insurance therefor)
shall be, and remain, subject and subordinate to the interests of Agent and you
agree not to levy upon any Collateral or to assert any landlord lien, right of
distraint or other claim against the Collateral for any reason; (v) Agent, and
its employees and agents, shall have the right, from time to time, to enter into
the Premises for the purpose of inspecting the Collateral; and (vi) Agent, and
its employees and agents, shall have the right, upon any default by [Borrower]
[Company] under the Agreement, to enter into the Premises and to remove or
otherwise deal with the Collateral, including, without limitation, by way of
public auction or private sale (provided that, if Agent conducts a public
auction or private sale of the Collateral at the Premises, Agent shall use
reasonable efforts to notify Landlord first and to hold such auction or sale in
a manner that would not unduly disrupt Landlord’s or any other tenant’s use of
the Premises).  Agent agrees to repair or reimburse you for any physical damage
actually caused to the Premises by Agent, or its employees or agents, during any
such removal or inspection (other than ordinary wear and tear), provided that it
is understood by the parties hereto that Agent shall not be liable for any
diminution in value of the Premises caused by the removal or absence of the
Collateral therefrom.  You hereby acknowledge that Agent shall have no
obligation to remove or dispose of the Collateral from the Premises and no
action by Agent pursuant to this Consent shall be deemed to be an assumption by
Agent of any obligation under the Lease and, except as provided in the
immediately preceding sentence, Agent shall not have any obligation to you.

 

--------------------------------------------------------------------------------

 

You hereby acknowledge and agree that [Borrower’s] [Company’s] granting of a
security interest in the Collateral in favor of Agent, on behalf of itself and
the Lenders, shall not constitute a default under the Lease nor permit you to
terminate the Lease or re-enter or repossess the Premises or otherwise be the
basis for the exercise of any remedy available to you.

 

This Consent and the agreements contained herein shall be binding upon, and
shall inure to the benefit of, any successors and assigns of the parties hereto
(including any transferees of the Premises).  This Consent shall terminate upon
the indefeasible payment of Borrower’s indebtedness in full in immediately
available funds and the satisfaction in full of Borrower’s [and Company’s]
performance of its obligations under the Agreement and the related documents.

 

This Consent and any amendments, waivers, consents or supplements hereto or in
connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.  Delivery of an executed signature page of this Consent or any
delivery contemplated hereby by facsimile or electronic transmission shall be as
effective as delivery of a manually executed counterpart thereof.

 

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We appreciate your cooperation in this matter of mutual interest.

 

 

GENERAL ELECTRIC CAPITAL CORPORATION,

 

as Agent

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

General Electric Capital Corporation

 

c/o GE Healthcare Financial Services, Inc., LSF

 

83 Wooster Heights Road, Fifth Floor

 

Danbury, Connecticut 06810

 

Attention: Senior Vice President of Risk

 

Phone: (203) 205-5200

 

Facsimile: (203) 205-2192

 

 

 

With a copy to:

 

General Electric Capital Corporation

 

c/o GE Healthcare Financial Services, Inc.

 

Two Bethesda Metro Center, Suite 600

 

Bethesda, Maryland 20814

 

Attention: General Counsel

 

Phone: (301) 961-1640

 

Facsimile: (301) 664-9866

 

AGREED TO AND ACCEPTED BY:

 

 

 

[NAME], as [owner/landlord/mortgagee/realty manager]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

Address:

 

 

 

AGREED TO AND ACCEPTED BY:

 

 

 

[NAME OF LOAN PARTY]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

Interest in the Premises (check applicable box)

 

 

 

·

Owner

·

Mortgagee

·

Landlord

·

Realty Manager

 

Address:

 

--------------------------------------------------------------------------------

 

EXHIBIT C-2

 

FORM OF BAILEE CONSENT

 

[Letterhead of GE Capital]

 

                 , 200    

 

[NAME OF BAILEE]

                                

                                

Dear Sirs:

 

Re:  [Name of the Loan Party] (the “Company”)

 

Please accept this letter as notice that we have entered into or may enter into
financing arrangements with the Company under which the Company has granted to
us continuing security interests in substantially all personal property and
assets of the Company and the proceeds thereof, including, without limitation,
certain equipment owned by the Company held by you at the manufacturing facility
(the “Premises”) owned by you and located at [                            ](the
“Personal Property”).

 

Please acknowledge that as a result of such arrangements, you are holding all of
the Personal Property solely for our benefit and subject only to the terms of
this letter and our instructions; provided, however, that until further written
notice from us, you are authorized to use and/or release any and all of the
Personal Property in your possession as directed by the Company in the ordinary
course of business. The foregoing instructions shall continue in effect until we
modify them in writing, which we may unilaterally do without any consent or
approval from the Company.  Upon receipt of our instructions, you agree that
(a) you will release the Personal Property only to us or our designee; (b) you
will cooperate with us in our efforts to assemble, sell (whether by public or
private sale), take possession of, and remove all of the Personal Property
located at the Premises; (c) you will permit the Personal Property to remain on
the Premises for forty-five (45) days after your receipt of our instructions or
at our option, to have the Personal Property removed from the Premises within a
reasonable time, not to exceed forty-five (45) days after your receipt of our
instructions; (d) you will not hinder our actions in enforcing our liens on the
Personal Property; and (e) after receipt of our instructions, you will abide
solely by our instructions with respect to the Personal Property, and not those
of the Company.

 

You hereby waive and release in our favor: (a) any contractual lien, security
interest, charge or interest and any other lien which you may be entitled to
whether by contract, or arising at law or in equity against any Personal
Property; (b) any and all rights granted under any present or future laws to
levy or distrain for rent or any other charges which may be due to you against
the Personal Property; and (c) any and all other claims, liens, rights of
offset, deduction, counterclaim and demands of every kind which you have or may
hereafter have against the Personal Property.

 

 You agree that (i) you have not and will not commingle the Personal Property
with any other property of a similar kind owned or held by you in any manner
such that the Personal Property is not readily identifiable, (ii) you have not
and will not issue any negotiable or non-negotiable documents or instruments
relating to the Personal Property, and (iii) the Personal Property is not and
will not be deemed to be fixtures.

 

--------------------------------------------------------------------------------

 

Notwithstanding the foregoing, all of your charges of any nature whatsoever
shall continue to be charged to and paid by the Company and we shall not be
liable for such charges.

 

You hereby authorize us to file at any time such financing statements naming you
as the debtor/bailee, Company as the secured party/bailor, and us as the
Company’s assignee, indicating as the collateral goods of the Company now or
hereafter in your custody, control or possession and proceeds thereof, and
including any other information with respect to the Company required under the
Uniform Commercial Code for the sufficiency of such financing statement or for
it to be accepted by the filing office of any applicable jurisdiction (and any
amendments or continuations with respect thereto).

 

The arrangement as outlined herein is to continue without modification, until we
have given you written notice to the contrary.

 

EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LETTER.

 

Any notice(s) required or desired to be given hereunder shall be directed to the
party to be notified at the address stated herein.

 

The terms and conditions contained herein are to be construed and enforced in
accordance with the laws of the State of New York.

 

This terms and conditions contained herein shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns.

 

--------------------------------------------------------------------------------

 

The Company has signed below to indicate its consent to and agreement with the
foregoing arrangements, terms and conditions.  By your signature below, you
hereby agree to be bound by the terms and conditions of this letter.

 

 

Very truly yours,

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

 

 

By:

 

 

Name:

 

 

Title: Duly Authorized Signatory

 

 

 

General Electric Capital Corporation

 

c/o GE Healthcare Financial Services, Inc., LSF

 

83 Wooster Heights Road, Fifth Floor

 

Danbury, Connecticut 06810

 

Attention: Senior Vice President of Risk

 

Phone: (203) 205-5200

 

Facsimile: (203) 205-2192

 

 

 

With a copy to:

 

 

 

General Electric Capital Corporation

 

c/o GE Healthcare Financial Services, Inc.

 

Two Bethesda Metro Center, Suite 600

 

Bethesda, Maryland 20814

 

Attention: General Counsel

 

Phone: (301) 961-1640

 

Facsimile: (301) 664-9866

 

 

Agreed to:

 

 

 

[NAME OF LOAN PARTY]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Address:

 

 

 

 

 

 

 

 

 

[NAME OF BAILEE]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Address:

 

 

 

 

 

 

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EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

[DATE]

 

Reference is made to the Loan and Security Agreement, dated as of June 27, 2008
(as amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”), among, a California corporation (the “Borrower”), the guarantors
from time to time party thereto, General Electric Capital Corporation, a
Delaware corporation (“GECC”), in its capacity as agent (in such capacity,
together with its successors and assigns, in such capacity, the “Agent”) and
lender, and the other lenders signatory thereto (GECC and such other lenders,
the “Lenders”).  Capitalized terms used but not defined herein are used with the
meanings assigned to such terms in the Agreement.

 

I, [                                                  ], do hereby certify that:

 

(i)                                     I am the duly elected, qualified and
acting [TITLE] of Borrower;

 

(ii)                                  attached hereto as Exhibit A are [annual
audited financial statements]/[quarterly financial statements] as required under
Section 6.3 of the Agreement and that such financial statements are prepared in
accordance with GAAP and are consistently applied from one period to the next
except as explained in an accompanying letter or footnotes;

 

(iii)                               no Default or Event of Default has occurred
under the Agreement which has not been previously disclosed, in writing, to
Lender;

 

(iv)                              all representations and warranties of the Loan
Parties stated in the Debt Documents are true and correct in all respects on and
as of the date hereof, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties were true and correct in all respects on and as of such earlier date;
and

 

(v)                                 no default or event of default exists under
any Lease Agreement.

 

IN WITNESS WHEREOF, I have hereunto set my hand as of the first date written
above

 

 

 

 

 

Name:

 

 

Title:

 

 

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EXHIBIT E

 

o

 

EPS Setup Form

Submit Via Fax:

ATTN: EPS Facilitator

(203) 205-2193

GE Healthcare Financial Services

Phone: (800) 426-6346

Fax: Fax: (203) 205-2193

 

1.  Sender
Information:                                                                                                                                                                                                                                          
Instructions To Enroll In EPS Plan:

 

 Sender Name:

A.

Complete sections 1 - 7
(signature and all other information is required)

 Sender Phone Number:

B.

Include a copy of a voided check, on which is noted your bank, branch and
account number

 

C.

Please submit via Fax to: (203) 205-2193

 

2.  Authorization Agreement for Pre-Arranged Payment Plan:

 

(a)                      Depomed, Inc., (“Borrower”) authorizes General Electric
Capital Corporation (“Agent”) to initiate debit entries for payment becoming due
pursuant to the terms and conditions set forth in the Loan and Security
Agreement, dated as of June 27, 2008 (as amended, restated, supplemented or
otherwise modified from time to time, the “Agreement”), among Borrower, the
guarantors form time to time party thereto, Agent and the lenders signatory
thereto.

 

(b)                     Borrower understands that the basic term loan payment
and all applicable taxes are solely its responsibility.  If payment is not
satisfied due to account closure, insufficient funds, or cancellation of any
required automated payment services, Borrower agrees to remit payment plus any
applicable late charges, as set forth in the Agreement.

 

(c)                      It is incumbent upon Borrower to give written notice to
Agent of any changes to this authorization or the below referenced bank account
information 10 days prior to payment date; Borrower may revoke this
authorization by giving 10 days written notice to Agent unless otherwise
stipulated in the Agreement.

 

(d)                     If a deduction is made in error, Borrower has the right
to be paid within five business days by Agent the amount of the erroneous
deduction, provided Agent is notified in writing of such error.

 

(e)                      Cosigner must also sign if the account is a joint
account.

 

--------------------------------------------------------------------------------

 

3.  Agent Account Number(s): (Invoice Billing ID, 10-digit number formatted:
1234567-001)

 

Account:

Account:

Account:

Account:

Account:

Account:

Account:

Account:

 

 

 

 

4.  First Payment Debit Date (mm/dd/yy)

First Payment:

 

5.  Complete ALL Bank and Borrower Information:

 

BANK

Name of Bank or Financial Institution:

 

Bank Account Number:

 

ABA Routing Number
(9-digit number)

 

 

 

 

 

 

 

 

INFO

Address of Bank or Financial Institution:

 

City:

 

State:                  Zip Code:

 

 

 

Signatures

 

Company

 

Contact

 

 

Signature of Authorized Signer: Date:

 

Company Name:

 

Contact Name:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BORROWER

Name of Joint Account Holder:
(Please Print)

 

Company Address:

 

Contact Phone Number:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INFO

Signature of Joint Account Holder:
Date:

 

City:

 

Contact Fax Number:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of Authorized Signer: (Please
Print)

 

State: Zip Code:

 

Contact email address:

 

 

6.  Would you like to have property taxes paid via EPS on above accounts?

Check x:  YES: o                                    NO: o

 

7.  Would you like to receive a complimentary invoice?

Check x:  YES: o                                    NO: o

 

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