Exhibit 10.1

 

Execution Version

 

 

$45,000,000

 

CREDIT AGREEMENT

 

dated as of

 

June 30, 2014

 

among

 

RETROPHIN, INC.,

as Borrower,

 

the LENDERS from time to time parties hereto

 

and 

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Administrative Agent and Collateral Agent

 

  

 

 

 

TABLE OF CONTENTS

 

 

  Page     Article 1   Definitions       Section 1.01.  Defined Terms 1 Section
1.02.  Accounting Terms 32 Section 1.03.  Rules of Construction 32     Article 2
  Amount and Terms of Commitments       Section 2.01.  Commitments 33 Section
2.02.  Procedure for Borrowing 33 Section 2.03.  Fees 34 Section
2.04.  Repayment of Loans; Evidence of Debt 34 Section 2.05.  Prepayments 35
Section 2.06.  Interest Rates and Payment Dates 37 Section 2.07.  Payments and
Computations 38 Section 2.08.  Taxes 39 Section 2.09.  Lender’s Obligation to
Mitigate 43 Section 2.10.  Sharing of Payments, Etc 43 Section 2.11.  Warrants
43 Section 2.12.  Illegality 44 Section 2.13.  Inability to Determine Rates 45
Section 2.14.  Increased Costs to Such Day; Reserves on Loans 46 Section
2.15.  Compensation for Losses 47 Section 2.16.  Replacement of Lenders. 48
Section 2.17.  Survival 48     ARTICLE 3   Representations and Warranties      
Section 3.01.  Existence and Power 48 Section 3.02.  Authority 49 Section
3.03.  Binding Effect 49 Section 3.04.  Capital Stock; Subsidiaries 49 Section
3.05.  Business Operations and Other Information; Financial Condition; No
Material Adverse Effect 50 Section 3.06.  Litigation; No Violation of
Governmental Orders or Laws 51 Section 3.07.  No Conflicts with Agreements, Etc
51 Section 3.08.  Consents, Etc 52 Section 3.09.  Outstanding Indebtedness 52

 

 

 

 

Section 3.10.  Taxes 52 Section 3.11.  Disclosure 53 Section 3.12.  Margin
Regulations 53 Section 3.13.  Pension and Benefit Plans 54 Section 3.14.  Labor
Matters 54 Section 3.15.  Possession of Franchises, Licenses, Etc 55 Section
3.16.  Intellectual Property 55 Section 3.17.  Use of Proceeds 55 Section
3.18.  OFAC; Anti-Corruption Laws 55 Section 3.19.  Status under Certain Laws 56
Section 3.20.  Ranking of Loans 56 Section 3.21.  Solvency 56 Section
3.22.  Restrictions on or Relating to Subsidiaries 56 Section 3.23.  Collateral
Documents 56 Section 3.24.  Environmental Matters 57 Section 3.25.  Acquired
License. 58 Section 3.26.  Ownership of Property; Liens. 59 Section
3.27.  Material Contracts. 59     Article 4   Conditions Precedent       Section
4.01.  Closing Conditions 59     Article 5   Affirmative Covenants of the
Borrower       Section 5.01.  Financial Statements and Information 63 Section
5.02.  Inspection of Properties and Books 67 Section 5.03.  Payment of
Principal, Prepayment Charge and Interest 68 Section 5.04.  Payment of
Obligations and Taxes 68 Section 5.05.  Maintenance of Existence; Compliance 68
Section 5.06.  Maintenance of Property; Insurance 69 Section 5.07.  Books and
Records 69 Section 5.08.  Additional Collateral and Guarantors; Further
Assurances 70 Section 5.09.  Maintenance of Licenses; Material Contracts 71
Section 5.10.  Employee Benefits 72 Section 5.11.  Quarterly Lender Calls 72
Section 5.12.  Control Accounts 72 Section 5.13.  Information Regarding Borrower
72 Section 5.14.  Intellectual Property 72

  

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Article 6   Negative Covenants of the Borrower       Section 6.01.  Indebtedness
73 Section 6.02.  Liens 75 Section 6.03.  Sale And Leasebacks 77 Section
6.04.  Mergers, Consolidations, Etc 77 Section 6.05. [Reserved]. 78 Section
6.06.  Sales, Etc. of Assets 78 Section 6.07.  Investments and Acquisitions 79
Section 6.08.  Restricted Payments 80 Section 6.09.  Payment Restrictions
Affecting Subsidiaries; No Further Negative Pledges 80 Section 6.10.  Conduct of
Business 81 Section 6.11.  Prepayments, Etc., of Indebtedness 81 Section
6.12.  Amendments to Organizational Documents and Material Contracts 82 Section
6.13.  Accounting Changes; Fiscal Year 82 Section 6.14.  Speculative
Transactions 82 Section 6.15.  Use of Proceeds 82 Section 6.16.  Transactions
with Affiliates; Intercompany Transactions 82 Section 6.17.  Financial
Covenants. 83     Article 7   Events of Default       Section 7.01.  Events of
Default; Remedies with Respect to the Loan Obligations 85     Article 8   The
Administrative Agent and Collateral Agent           Section 8.01.  Appointment
88 Section 8.02.  Delegation of Duties 89 Section 8.03.  Exculpatory Provisions
89 Section 8.04.  Reliance by the Administrative Agent 91 Section 8.05.  Notice
of Default 91 Section 8.06.  Non Reliance on Agent and Other Lenders 91 Section
8.07.  Indemnification 92 Section 8.08.  Administrative Agent in Its Individual
Capacity 93 Section 8.09.  Successor Administrative Agent 94 Section
8.10.  Lenders as Administrative Agent 95

 

iii

 

 

Article 9   Miscellaneous       Section 9.01.  Amendments and Waivers 95 Section
9.02.  Communications 96 Section 9.03.  No Waiver; Cumulative Remedies 97
Section 9.04.  Survival of Representations and Warranties 97 Section
9.05.  Payment of Expenses, Indemnification Taxes and Costs 97 Section
9.06.  Successors and Assigns; Assignments; Participations 99 Section
9.07.  Right of Setoff 102 Section 9.08.  Counterparts 103 Section
9.09.  Severability 103 Section 9.10.  Governing Law 103 Section
9.11.  Submission to Jurisdiction; Judgment Currency; Waiver of Immunities;
Waiver of Jury Trial 103 Section 9.12.  Confidentiality 106 Section
9.13.  Replacement of Lenders 107 Section 9.14.  USA PATRIOT Act 107 Section
9.15.  Effectiveness 108

 

SCHEDULES:

 

Schedule I Commitments, Warrants and Lending Offices Schedule II Notice
Information for Lenders Schedule III Material Contracts Schedule 3.05(a) Capital
Stock; Subsidiaries Schedule 3.04(c) Outstanding Convertible or Exchangeable
Securities Schedule 3.05(c) Projections Schedule 3.05(d) Pro Forma Balance
Sheets Schedule 3.06 Litigation Schedule 3.08 Consents Schedule 6.01(a)
Outstanding Indebtedness Schedule 6.07(b) Outstanding Investments Schedule 9.02
Notice Information for the Borrower and Administrative Agent

 

EXHIBITS:

 

Exhibit A Form of Note Exhibit B Form of Notice of Borrowing Exhibit C Form of
Assignment and Acceptance Exhibit D Form of Security Agreement Exhibit E Form of
Foreign Pledge Agreement Exhibit F Form of Compliance Certificate Exhibit G Form
of Warrant Exhibit H-1 Form of U.S. Tax Compliance Certificate

 

iv

 

 

Exhibit H-2 Form of U.S. Tax Compliance Certificate Exhibit H-3 Form of U.S. Tax
Compliance Certificate Exhibit H-4 Form of U.S. Tax Compliance Certificate

 

v

 

 

CREDIT AGREEMENT, dated as of June 30, 2014 (this “Agreement”), among RETROPHIN,
INC., a Delaware corporation (the “Borrower”), the Lenders from time to time
parties hereto (the “Lenders”) and U.S. BANK NATIONAL ASSOCIATION, as
administrative agent for the Lenders from time to time parties hereto (in such
capacity and together with any successor appointed pursuant to ‎Article 8, the
“Administrative Agent”).

 

RECITALS

 

WHEREAS, as of March 27, 2014, the Borrower completed its acquisition of
Manchester Pharmaceuticals LLC, a Delaware limited liability company
(“Manchester”) and in connection therewith, issued to the seller a $33,000,000
senior note (the “Manchester Seller Financing”) and granted the sellers thereof
a security interest in the equity interests of, and substantially all of the
assets of, Manchester (the “Manchester Seller Liens”);

 

WHEREAS, the Borrower, through its Subsidiaries (including Manchester), intends
to conduct the development, acquisition and commercialization of therapies for
the treatment of serious, catastrophic or rare diseases in connection with its
biopharmaceutical business (the “Company Business”);

 

WHEREAS, the Borrower has requested that the Lenders agree to make loans in
accordance with the terms and provisions set forth herein in order that the
proceeds thereof may be used by the Borrower (x) in order to (i) repay in full
the Manchester Seller Financing and (ii) pay costs and expenses relating to the
Transactions and (y) for other corporate purposes consistent with the terms
hereof;

 

WHEREAS, each Lender has agreed to make loans on the terms and conditions set
forth in this Agreement; and

 

WHEREAS, to induce the Lenders to provide the loans, the Borrower is, among
other things, entering into this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto agree as follows:

 

Article 1

Definitions

 

Section 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:

 

“Accountant” has the meaning specified in ‎Section 5.01(b)(i).

 

 

 

 

“Accounts” means deposit accounts, brokerage accounts, securities accounts, time
deposits, certificates of deposit and other similar investments to which Cash,
securities and/or financial assets may be credited.

 

“Acquired Entity or Business” means either (x) the assets constituting an entire
business, division, product line, manufacturing facility or distribution
facility of any Person not already a Subsidiary of the Borrower or (y) 100% of
the Capital Stock of any such Person, which Person shall, as a result of the
respective acquisition, become a Wholly Owned Subsidiary of the Borrower.

 

“Acquired License” has the meaning specified in the definition of “Thiola
Licensing Agreement”.

 

“Acquisition” means (whether by purchase, exchange, issuance of Capital Stock,
merger, reorganization or any other method) (i) any acquisition by the Borrower
or any of its Subsidiaries of any other Person, which Person would then, under
GAAP, become Consolidated with the Borrower or any such Subsidiary or (ii) any
acquisition by the Borrower or any of its Subsidiaries of all or any substantial
part of the assets of any other Person or any division of any other Person.

 

“AcquisitionCo Subsidiary” shall have the meaning set forth in ‎Section
6.01(a)(iv).

 

“Act” has the meaning specified in ‎‎Section 5.01(i).

 

“Adjusted LIBOR Rate” means, with respect to any Borrowing for any Interest
Period, an interest rate per annum (rounded to the nearest 1/100 of 1%) equal to
the quotient of (a) the LIBOR Rate in effect for such Interest Period divided by
(b) a percentage (expressed as a decimal) equal to 100% minus Statutory
Reserves. For purposes hereof, the term “LIBOR Rate” means, with respect to any
Borrowing for any Interest Period, the per annum rate of interest determined by
the Administrative Agent at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period, for a term comparable to
such Interest Period, equal to (a) the rate appearing on the LIBOR01 page of the
Intercontinental Exchange Benchmark Administration Ltd (ICE) (or any successor
or substitute page of such service if such administration is no longer making
such rate available) as the rate for Dollar deposits with a maturity comparable
to such Interest Period; or (b) if the rate described in clause (a) is
unavailable for any reason, the interest rate at which Dollar deposits in the
approximate amount of the Term Loan would be offered by the Administrative
Agent’s London branch to major banks in the London interbank Eurodollar market.
Notwithstanding any of the foregoing, the LIBOR Rate shall not at any time be
less than 1.00% per annum.

 

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“Administrative Agent” has the meaning assigned to such term in the introductory
paragraph hereto and shall include any successor Administrative Agent pursuant
to ‎Section 8.09.

 

“Administrative Agent’s Account” means the account of the Administrative Agent
maintained by the Administrative Agent with such account details as may be
provided in writing to the Borrower.

 

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
“control” when used with respect to any specified person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

 

“Agents” means the collective reference to the Administrative Agent and the
Collateral Agent.

 

“Agreement” has the meaning specified in the first paragraph hereof.

 

“Agreement Currency” has the meaning assigned to such term in ‎Section
9.11(d)(ii).

 

“Agreement Value” means, for each Hedge Agreement, on any date of determination,
the maximum aggregate amount (after giving effect to any netting agreements to
the extent such netting agreements are with the same Person to whom any such
Obligations under such Hedge Agreement are owed) that the applicable Person
would be required to pay if such Hedge Agreement were terminated at such time.

 

“Applicable Margin” means (a) with respect to LIBOR Rate Loans, 10.00% per annum
and (b) with respect to Base Rate Loans, 9.00% per annum.

 

“Asset Sale” means (a) any conveyance, sale, lease, license, sublease,
assignment, transfer or other disposition (including by way of merger or
consolidation and including any sale and leaseback transaction) of any property
(including stock of any Subsidiary of the Borrower by the holder thereof) by the
Borrower or any of its Subsidiaries to any Person other than the Borrower or any
Wholly Owned Subsidiary of the Borrower and (b) any issuance or sale by any
Subsidiary of the Borrower of its Capital Stock to any Person (other than a Loan
Party).

 

3

 

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit C hereto.

 

“Athyrium” means Athyrium Capital Management, LLC, together with any funds
managed thereby.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease or
other agreement or instrument were accounted for as a Capitalized Lease and (c)
all Synthetic Debt of such Person.

 

“Audited Financial Statements” means the unqualified, audited consolidated
balance sheet of the Borrower and its Subsidiaries for the fiscal years ended
December 31, 2012 and December 31, 2013, and the related consolidated statements
of income or operations, shareholders’ equity and cash flows for such fiscal
years of the Borrower and its Subsidiaries, including the notes thereto.

 

“Authorized Officer” of any Person means the chief executive officer, president,
assistant treasurer or any Financial Officer of such Person, and solely for
purposes of the delivery of certificates on the Closing Date pursuant to
‎Section 4.01, the secretary or assistant secretary of the applicable Loan
Party.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as now and hereafter in effect, any successors to such Statute and
any other applicable insolvency or other similar law of any jurisdiction.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by the Administrative Agent
as its “prime rate,” and (c) the LIBOR Rate plus 1.00%. Notwithstanding any of
the foregoing, the Base Rate shall not at any time be less than 2.00% per annum.

 

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

 

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States.

 

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“Borrower” has the meaning assigned to such term in the first paragraph hereof.

 

“Borrower Materials” has the meaning assigned to such term in ‎Section 9.02.

 

“Borrowing” means a borrowing consisting of Loans made on the same day by the
Lenders.

 

“Business Day” means any day (other than a day which is a Saturday, Sunday or a
day on which banks in New York City are authorized or required by applicable law
to be closed).

 

“Capital Expenditures” means, with respect to any Person, for any period, the
aggregate amount of all expenditures by such Person and its Subsidiaries during
that period for the acquisition or leasing (pursuant to a capital lease) of
fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) that, in accordance
with GAAP, are or should be classified as capital expenditures in the
consolidated balance sheet of such Person and its Subsidiaries.

 

“Capital Stock” means and includes, with respect to any Person (a) any and all
shares, interests, participations or other equivalents of or interests in
(however designated) corporate stock, including shares of preferred or
preference stock of such Person, (b) all partnership interests (whether general
or limited) in such Person which is a partnership, ‎(c) all membership interests
or limited liability company interests in such Person which is a limited
liability company, ‎(d) any interest or participation that confers on a Person
the right to receive a share of the profits and/or losses of, or distributions
of assets of such Person, and ‎(e) all equity or ownership interests in such
Person of any other type, and any and all warrants, rights or options to
purchase any of the foregoing.

 

“Capitalized Lease Obligation” of any Person means the Obligations of such
Person in respect of Capitalized Leases.

 

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

 

“Cash” means money, currency or a credit balance in any demand or Deposit
Account.

 

“Cash Equivalents” means, as to any Person: (a) securities issued, or directly,
unconditionally and fully guaranteed or insured, by the United States or any
agency or instrumentality thereof (provided, that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than

 

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one year from the date of acquisition by such person; (b) time deposits and
certificates of deposit of any commercial bank having, or which is the principal
banking subsidiary of a bank holding company organized under the laws of the
United States, any state thereof or the District of Columbia having, capital and
surplus aggregating in excess of $1,000,000,000 and a rating of “A” (or such
other similar equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities
Act) with maturities of not more than one year from the date of acquisition by
such person; ‎(c) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (a) above entered
into with any bank meeting the qualifications specified in clause (b) above,
which repurchase obligations are secured by a valid perfected security interest
in the underlying securities; ‎(d) commercial paper issued by any person
incorporated in the United States rated at least A 1 or the equivalent thereof
by S&P or at least P 1 or the equivalent thereof by Moody’s and in each case
maturing not more than one year after the date of acquisition by such person;
‎(e) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (a) through ‎(d)
above; and ‎(f) demand deposit accounts maintained in the ordinary course of
business with commercial banks of the type described in clause (b) above.

 

“Casualty Event” means any settlement of, or payment in respect of, any property
or casualty insurance claim or any condemnation proceeding relating to any asset
of the Borrower or any of its Subsidiaries or any payment received by the
Borrower or any of its Subsidiaries at any time on or after the Closing Date.

 

“Certified” when used with respect to any financial information of any Person to
be certified by any of its officers (including any Financial Officer), indicates
that such information is to be accompanied by a certificate to the effect that
such financial information has been prepared in accordance with GAAP
consistently applied, subject in the case of interim financial information to
normal year end audit adjustments and absence of the footnotes required by GAAP,
and presents fairly in all material respects the information contained therein
as at the dates and for the periods covered thereby.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the

 

6

 

 

Bank for International settlements, the Basel Committee on Banking Supervision
(or any successor or similar authority) or the United States regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means and shall be deemed to have occurred if:

 

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

 

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

 

(c)          a “Change of Control”, “Change in Control” or “Fundamental Change”
(or an analogous term for any of the foregoing) shall have occurred as defined
in the indenture governing the Convertible Notes or under the terms of any
instrument evidencing or securing the

 

7

 

 

Indebtedness of the Borrower or any Subsidiary having an outstanding principal
amount in excess of $2,000,000.

 

“Closing Date” means the date of the Borrowing, which date was June 30, 2014.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated and the rulings issued thereunder.

 

“Collateral” means all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is created or purposed to be created by any
Collateral Document.

 

“Collateral Agent” means the Administrative Agent in its capacity as collateral
agent for the Lenders.

 

“Collateral Documents” means, collectively, the Security Agreement, the Foreign
Pledge Agreement, the Mortgages and all other security documents hereafter
delivered by any Loan Party granting a Lien in favor of the Collateral Agent
(for the benefit of the Lenders and the Agents) on any Property of any Person to
secure the Loan Obligations and other liabilities of any Loan Party under any
Loan Document.

 

“Commitment” has the meaning assigned to such term in ‎Section 2.01(a).

 

“Common Stock” means shares of common stock of the Borrower par value $0.0001
per share, as of the Closing Date, or shares of any class or classes resulting
from any reclassification or reclassifications thereof and that have no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Borrower
and that are not subject to redemption by the Borrower; provided that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.

 

“Company Business” has the meaning specified in the recitals to this Agreement.

 

“Compliance Certificate” means a certificate signed by a Financial Officer and
delivered to the Administrative Agent and the Lenders, substantially in the form
of Exhibit F.

 

“Confidential Information” means all non-public information furnished to the
Administrative Agent or any Lender, by or on behalf of any Loan Party;

 

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provided that, in the case of information received from a Loan Party after the
date hereof, such information is clearly identified at the time of delivery as
confidential.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

 

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

 

“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of the Group Members on a Consolidated basis for the
most recently completed Measurement Period plus (a) the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Interest
Charges, (ii) all taxes on or measured by income (excluding income tax refunds),
profits or capital (including federal, state, local, foreign, local franchise,
excise, gross receipts, single business, tariffs, customs, duties and similar
taxes), (iii) depreciation and amortization expense, (iv) non-cash deferred
compensation obligations, (v) out of pocket transaction fees and expenses
associated with non-consummated Permitted Acquisitions in an aggregate amount
not to exceed $250,000, (vi) to the extent not capitalized, out of pocket fees
and expenses in connection with documentation, execution and delivery of this
Agreement and (vii) other non-recurring expenses reducing such Consolidated Net
Income which do not represent a cash item in such period or any future period
(in each case of or by the Group Members for such Measurement Period) and minus
(b) the following to the extent included in calculating such Consolidated Net
Income: (i) Federal, state, local and foreign income tax credits and (ii) all
non-cash items increasing Consolidated Net Income (in each case of or by the
Group Members for such Measurement Period).

 

“Consolidated Indebtedness” means, as of any date of determination, for the
Group Members on a Consolidated basis, the sum of (a) the outstanding principal
amount of all Obligations, whether current or long-term, for borrowed money
(including Loan Obligations hereunder) and all Obligations evidenced by bonds,
debentures, notes, loan agreements or other similar instruments, (b) all
purchase money Indebtedness, ‎(c) all direct unpaid Obligations arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments, ‎(d) all Obligations in
respect of the deferred purchase price of property or services including
earnouts (but only at such time and to the extent such Obligation is required to
be included as a liability on the balance sheet of such Person in accordance
with GAAP) (other than trade accounts payable in the ordinary course of
business), ‎(e) all Attributable Indebtedness, ‎(f) without duplication, all
Guarantee Obligations with respect to outstanding Indebtedness of the types
specified in clauses (a) through ‎(e) above of

 

9

 

 

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

 

“Consolidated Interest Charges” means, for any Measurement Period, the sum of
(a) all interest, premium payments, debt discount, fees, charges and related
expenses in connection with Indebtedness for borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
(b) all interest paid or payable with respect to discontinued operations and
‎(c) the portion of rent expense under Capitalized Leases that is treated as
interest in accordance with GAAP, in each case, of or by the Group Members on a
Consolidated basis for the most recently completed Measurement Period.

 

“Consolidated Interest Coverage Ratio” means, as of any date of determination,
the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Charges paid
or payable in cash during such period, in each case, of or by the Group Members
on a Consolidated basis for the most recently completed Measurement Period.

 

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Indebtedness as of such date to (b) Consolidated EBITDA of
the Group Members on a Consolidated basis for the most recently completed
Measurement Period.

 

“Consolidated Net Income” means, at any date of determination, the net income
(or loss) of the Group Members on a Consolidated basis for the most recently
completed Measurement Period; provided that Consolidated Net Income shall
exclude (a) extraordinary gains and extraordinary losses for such Measurement
Period, (b) the net income of any Group Member that is a Subsidiary of the
Borrower during such Measurement Period to the extent that the declaration or
payment of dividends or similar distributions by such Group Member of such
income is not permitted by operation of the terms of its Organization Documents
or any agreement, instrument or Law applicable to such Group Member during such
Measurement Period, except that the Borrower’s equity in any net loss of any
such Group Member for such Measurement Period shall be included in determining
Consolidated Net Income, and ‎(c) any income (or loss) for such Measurement
Period of any Person if such Person is not a Subsidiary, except that the
Borrower’s equity in the net income of any such Person for such Measurement
Period shall be included in Consolidated Net Income up to the aggregate amount
of cash actually distributed by such Person during such Measurement Period to
any Group Member as a dividend or other distribution (and in the case of a
dividend or other distribution to a Subsidiary,

 

10

 

 

such Subsidiary is not precluded from further distributing such amount to the
Borrower as described in clause (b) of this proviso).

 

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

 

“Control Agreement” means any account control agreement in form and substance
satisfactory to the Collateral Agent and the Majority Lenders entered into to
establish “control” (within the meaning of the UCC) over any Account established
by any Loan Party as permitted by the Loan Documents and required to be subject
to the Liens of the Collateral Agent under the Collateral Documents.

 

“Convertible Notes” means the notes of the Borrower convertible into Common
Stock and issued pursuant to that certain Note Purchase Agreement dated as of
May 29, 2014 between the Borrower and the investors referenced therein.

 

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

 

“Default” means any event or condition which, with due notice or lapse of time
or both, would become an Event of Default.

 

“Deposit Account” means a demand, time, savings, passbook or like account with a
bank, savings and loan association, credit union or like organization, other
than an account evidenced by a negotiable certificate of deposit.

 

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of any Sanction.

 

“Disposition” or “Dispose” means any Asset Sale, transfer, lease or other
disposition (including any sale and leaseback transaction) of any Property by
any Person (or the granting of any option or other right to do any of the
foregoing), including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

 

“Disqualified Capital Stock” means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is

 

11

 

 

exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Maturity Date, (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for (i) debt
securities or (ii) any Capital Stock referred to in (a) above, in each case at
any time prior to the first anniversary of the Maturity Date, (c) contains any
repurchase obligation which may come into effect prior to payment in full of all
Loan Obligations, (d) requires, or could, by its terms, require, the payment of
any Restricted Payments (other than the payment of Restricted Payments solely in
the form of Qualified Capital Stock) prior to the first anniversary of the
Maturity Date, or (e) provides the holders thereof with any rights to receive
any Cash upon the occurrence of a Change of Control prior to the date which is
one year after the date on which the Loans have been irrevocably paid in full,
in cash.

 

“Dollars” and “$”, without further qualification, means lawful currency of the
United States of America.

 

“Domestic Foreign Holdco” means any Subsidiary, (including any Subsidiary that
is treated as an entity disregarded as separate from its owner for U.S. federal
tax purposes) that (i) is not a Foreign Subsidiary, and (ii) all or
substantially all of the assets of which (for U.S. federal income tax purposes)
are Capital Stock in one or more Excluded Foreign Subsidiaries.

 

“Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, (iii) a
Related Fund of a Lender, and (iv) any other Person (other than a natural
person) approved by the Administrative Agent and the Majority Lenders and,
unless a Default has occurred and is continuing at the time any assignment is
effected pursuant to ‎Section 9.06, the Borrower, such approval not to be
unreasonably withheld or delayed; provided that (x) such other Person shall be
deemed acceptable to the Borrower if the Borrower does not otherwise reject such
Person within five Business Days of the date on which approval is requested and
(y) notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of its Affiliates.

 

“Employee Benefit Plan” means each Plan, and each other “employee benefit plan”
(as defined in Section 3(3) of ERISA) which is sponsored, maintained or
contributed to by Borrower or any Subsidiary or ERISA Affiliate of the Borrower.

 

“Environment” means ambient air, indoor air, surface water, groundwater,
drinking water, soil, surface and subsurface strata, and natural resources such
as wetland, flora and fauna.

 

12

 

 

“Environmental Claims” means any and all actions, suits, demands, demand
letters, claims, liens, written notices of liability, noncompliance or
violation, investigations or adjudicatory or administrative proceedings relating
to any Environmental Law, including any violation of or liability under any
Environmental Law or any permit or approval issued or required under any such
Environmental Law (hereinafter, “Claim”), including (i) any and all Claims by or
before any Governmental Authority for enforcement, cleanup, removal, response,
remedial or other action or damages pursuant to any applicable Environmental Law
and (ii) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
the Release or threatened Release of Hazardous Materials or arising from alleged
injury or threat to human health or safety or the Environment.

 

“Environmental Law” means any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution, the protection of the Environment, including
natural resources, or health and safety, or to pollutants, contaminants or
chemicals or any toxic or otherwise hazardous substances, materials or wastes.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities) directly or indirectly resulting from or relating to
(a) any Environmental Law, including any violation thereof or liability
thereunder, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, ‎(d) the Release or threatened Release of any Hazardous Materials or
(e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

 

“Equity Securities” means all shares of Common Stock of the Borrower, the
Convertible Notes and all other securities, directly or indirectly, convertible
into or exchangeable for shares of Common Stock of the Borrower and all options,
warrants (including the Warrants), and other rights (other than preemptive
rights existing as a matter of law or by contract) to purchase or otherwise,
directly or indirectly, acquire from the Borrower shares of Common Stock, or
securities convertible into or exchangeable for shares of Common Stock, whether
at the time of issuance or upon the passage of time or the occurrence of some
future event.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as from time
to time amended and the regulations promulgated, and rulings issued, thereunder.

 

13

 

 

“ERISA Affiliate” means any corporation or other Person (including the Borrower
or any of its Subsidiaries) which is a member of the same controlled group
(within the meaning of Section 414(b) of the Code) of corporations or other
Persons as the Borrower or any of its Subsidiaries, or which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower or
any of its Subsidiaries, or any corporation or other Person which is a member of
an affiliated service group (within the meaning of Section 414(m) of the Code)
with the Borrower or any of its Subsidiaries, or any corporation or other Person
which is required to be aggregated with the Borrower or any of its Subsidiaries
pursuant to Section 414(o) of the Code or the regulations promulgated
thereunder.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30-day notice period is waived), (b) the filing pursuant
to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan, (c) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability under
Title IV of ERISA (other than non-delinquent premiums payable to the PBGC under
Sections 4006 and 4007 of ERISA), (d) the termination, or the filing of a notice
of intent to terminate, any Plan pursuant to Section 4041(c) of ERISA, (e) the
receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan, (f) the cessation of
operations at a facility of the Borrower or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA, (g) conditions contained in
Section 303(k)(1)(A) of ERISA for imposition of a lien shall have been met with
respect to any Plan, (h) the receipt by the Borrower or any of its ERISA
Affiliates of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any of its ERISA Affiliates of any notice, concerning Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
“insolvent” (within the meaning of Section 4245 of ERISA), or in
“reorganization” (within the meaning of Section 4241 of ERISA), or (i) any
Foreign Benefit Event.

 

“Eurocurrency Liabilities” shall have the meaning assigned thereto in Regulation
D issued by the Board, as in effect from time to time.

 

“Events of Default” has the meaning specified in ‎Section 7.01.

 

“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended, or any similar federal Statute then in effect, and a reference to a
particular section thereof shall include a reference to the comparable section,
if any, of any such similar federal Statute.

 

“Excluded Account” means (i) any Account specifically and exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to

 

14

 

 

or for the benefit of a Loan Party’s salaried employees, (ii) any Account of an
AcquisitionCo Subsidiary holding proceeds of any assets of such AcquisitionCo
Subsidiary and (iii) any Account in which the balance thereof does not exceed
$250,000 at the close of business on any day: provided that the aggregate
balance of all Excluded Accounts pursuant to clause (iii) of this definition
shall not exceed $500,000 at the close of business on any day.

 

“Excluded Domestic Subsidiary” means any Domestic Subsidiary that is (a)
Domestic Foreign Holdco, (b) prohibited by foreign law, rule or regulation or
contract from guaranteeing the Loan Obligations or which would require
governmental (including regulatory) or third-party consent, approval, license or
authorization to provide a guarantee unless such consent, approval, license or
authorization has been received (provided that such restriction shall not have
been created in contemplation of this restriction) and (c) any Subsidiary where
the Majority Lenders and the Borrower agree that the cost of obtaining a
guarantee by such Subsidiary would be excessive in light of the practical
benefit to the Lenders afforded thereby, in each case that has not guaranteed or
pledged any of its assets or suffered a pledge of its Capital Stock, to secure,
directly or indirectly, any Indebtedness of the Borrower or any Guarantor.

 

“Excluded Foreign Subsidiary” means a Foreign Subsidiary which is (a) a
controlled foreign corporation (as defined in the Code) or (b) all or
substantially all of the assets of which consist of Capital Stock of one or more
Subsidiaries described in clause (a) above, in each case that has not guaranteed
or pledged any of its assets or suffered a pledge of more than 65% of its voting
Capital Stock, to secure, directly or indirectly, any Indebtedness of the
Borrower or any Guarantor.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Lender or the Administrative Agent or required to be withheld or deducted from
a payment to a Lender or the Administrative Agent, (a) Taxes imposed on or
measured by net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, (i) imposed as a result of such Person being
organized under the laws of, or having its principal office or, in the case of
any Lender, its applicable lending office located in, the jurisdiction imposing
such Tax (or any political subdivision thereof) or (ii) that are Other
Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes
imposed on amounts payable to or for the account of such Lender with respect to
an applicable interest in a Loan or Commitment pursuant to a law in effect on
the date on which (i) such Lender acquires such interest in the Loan or
Commitment (other than pursuant to an assignment request by the Borrower under
‎Section 2.16) or (ii) such Lender changes its lending office, except in each
case to the extent that, pursuant to ‎Section 2.08, amounts with respect to such
Taxes were payable either to such Lender's assignor immediately before such
Lender became a party hereto or to such Lender immediately before it changed its
lending office, ‎(c) Taxes

 

15

 

 

attributable to such Person’s failure to comply with ‎Section 2.08(e), and ‎(d)
any U.S. federal withholding Taxes imposed under FATCA.

 

“Extraordinary Receipt” means any cash received by or paid to or for the account
of any Person from proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation for
lost earnings) and condemnation awards (and payments in lieu thereof); provided,
however, that an Extraordinary Receipt shall not include cash receipts from
proceeds of insurance or condemnation awards (or payments in lieu thereof) to
the extent that such proceeds, awards or payments in respect of loss or damage
to equipment, fixed assets or real property are applied (or in respect of which
expenditures were previously incurred) to reinvestments in accordance with the
terms of ‎Section 2.05(b)(ii).

 

“Facility” means the financing provided pursuant to this Agreement.

 

“Fair Market Value” means, with respect to any assets, the amount that a willing
buyer would pay to a willing seller in respect of such assets in an arm’s-length
transaction.

 

“FATCA” means Sections 1471 through 1474 of the Code, any current or future
regulations promulgated thereunder or official administrative interpretations
thereof, any applicable agreement entered into pursuant to Section 1471(b)(1) of
the Code, and any applicable intergovernmental agreement (or related local law)
with respect to the implementation thereof.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

 

“Federal Reserve Bank” means the Federal Reserve Bank of the United States of
America.

 

“Financial Covenants” means, collectively, each of the financial covenants set
forth in ‎Section 6.17.

 

“Financial Officer” of any Person means the chief financial officer, principal
accounting officer, treasurer or controller of such Person.

 

16

 

 

“Financial Statements” has the meaning specified in ‎Section 3.05(a).

 

“Foreign Lender” means a Lender that is not a U.S. Person.

 

“Foreign Pension Plan” means any plan, fund (including, without limitation, any
superannuation fund) or other similar program established or maintained outside
the United States of America by the Borrower or any one or more of its
Subsidiaries primarily for the benefit of employees of the Borrower or such
Subsidiaries residing outside the United States of America, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.

 

“Foreign Benefit Event” means, with respect to any Foreign Pension Plan, (a) the
existence of unfunded liabilities in excess of the amount permitted under any
applicable law, or in excess of the amount that would be permitted absent a
waiver from a Governmental Authority, (b) the failure to make the required
contributions or payments, under any applicable law, on or before the due date
for such contributions or payments, (c) the receipt of a notice by a
Governmental Authority relating to the intention to terminate any such Foreign
Pension Plan or to appoint a trustee or similar official to administer any such
Foreign Pension Plan, or alleging the insolvency of any such Foreign Pension
Plan, (d) the incurrence of any liability in excess of $1,000,000 by the
Borrower or any Subsidiary under applicable law on account of the complete or
partial termination of such Foreign Pension Plan or the complete or partial
withdrawal of any participating employer therein, or (e) the occurrence of any
transaction that is prohibited under any applicable law and that could
reasonably be expected to result in the incurrence of any liability by the
Borrower or any of the Subsidiaries, or the imposition on the Borrower or any of
the Subsidiaries of any fine, excise tax or penalty resulting from any
noncompliance with any applicable law, in each case in excess of $1,000,000.

 

“Foreign Pledge Agreements” means, collectively (i) the pledge agreement in the
form of Exhibit E pledging the shares of Foreign Subsidiaries incorporated or
organized under the laws of the Netherlands and (ii) each other pledge
agreement, in form and substance reasonably satisfactory to the Collateral Agent
and the Lenders, pursuant to which shares of Foreign Subsidiaries are pledged in
favor of the Collateral Agent (for the benefit of the Lenders and the Agents) in
order to secure the Loan Obligations and the other liabilities of any Loan Party
under any Loan Document.

 

“Foreign Subsidiary” means a Subsidiary that is incorporated or organized under
the laws of a jurisdiction other than the United States, any state thereof, or
the District of Columbia.

 

17

 

 

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

 

“Group Members” means, collectively (x) the Borrower and its Subsidiaries in
existence as of the Closing Date and (y) after the Closing Date, each
subsequently formed or acquired Subsidiary of the Borrower other than an
AcquisitionCo Subsidiary.

 

“Guarantee Obligations” means, with respect to any Person, any Obligation or
arrangement of such Person to guarantee or intended to guarantee any
Indebtedness, lease, dividend or other payment Obligation (“primary
obligations”) of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, (a) the direct or
indirect guarantee, endorsement (other than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the Obligation of a primary obligor, (b) the
Obligation to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement or (c) any
Obligation of such Person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (A) for the purchase or payment of any
such primary obligation or (B) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any Guarantee
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee Obligation
is made (or, if less, the maximum amount of such primary obligation for which
such Person may be liable pursuant to the terms of the instrument evidencing
such Guarantee Obligation) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect

 

18

 

 

thereof (assuming such Person is required to perform thereunder), as determined
by such Person in good faith.

 

“Guarantors” means each of the Borrower’s existing and subsequently acquired or
organized direct or indirect domestic Wholly Owned Subsidiaries excluding any
Excluded Domestic Subsidiary; provided that no AcquisitionCo Subsidiary shall be
a Guarantor hereunder only so long as the prohibition on such AcquisitionCo
Subsidiary providing a guarantee of the Loan Obligations remains in effect in
the definitive documentation relating to any applicable Non-Recourse
Indebtedness of such AcquisitionCo Subsidiary.

 

“Hazardous Materials” means all explosive or radioactive substances, materials
or wastes, chemicals and hazardous or toxic substances, materials or wastes or
other pollutants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to, or which can form the basis for liability under, any Environmental
Law.

 

“Hedge Agreement” means any agreement (including any Interest Rate Protection
Agreement) with respect to any swap, forward, future or derivative transaction
or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions, including the short sale of or other short exposure to any of the
foregoing.

 

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

 

(a)         all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;

 

(b)         the maximum amount of all direct or contingent obligations of such
Person arising under letters of credit (including standby and commercial),
bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)         net obligations of such Person under any Hedge Agreements at the
Agreement Value thereof;

 

19

 

 

(d)         all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and not past due for more than 60 days after the date on which such
trade account was created);

 

(e)         indebtedness (excluding prepaid interest thereon) secured by a Lien
on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;

 

(f)         all Attributable Indebtedness in respect of Capitalized Leases and
Synthetic Lease Obligations of such Person and all Synthetic Debt of such
Person;

 

(g)         all obligations of such Person to purchase, redeem, retire, defease
or otherwise make any payment in respect of any Equity Interest in such Person
or any other Person or any warrant, right or option to acquire such Equity
Interest, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and

 

(h)         all Guarantee Obligations of such Person in respect of any of the
foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.

 

“Indemnified Party” has the meaning specified in ‎Section 9.05(b).

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document and (b) to the extent not otherwise described
in (a), Other Taxes.

 

“Interest Payment Date” means (a) as to any Base Rate Loan, the last Business
Day of each March, June, September and December and the Maturity Date and (b) as
to any LIBOR Rate Loan, the last day of each Interest Period applicable to such
Loan and the Maturity Date; provided, that if any Interest Period for a Loan
exceeds three months, each of the respective dates that fall every three months
after the beginning of such Interest Period shall also be an Interest Payment
Date.

 

20

 

 

“Interest Period” shall mean, as to any LIBOR Rate Loan, the period commencing
on the Closing Date or on the last day of the immediately preceding Interest
Period applicable to such Loan, as applicable, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is one or three and, with the consent of the
Administrative Agent, and all Lenders, such longer or shorter period of months
thereafter, as the Borrower may elect; provided that, if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day. Interest shall accrue from
and including the first day of an Interest Period to but excluding the last day
of such Interest Period.

 

“Interest Rate Protection Agreement” means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar agreement
or arrangement designed to protect the Borrower or any of its Subsidiaries
against fluctuations in interest rates and not entered into for speculation.

 

“Investment” in any Person means any loan or advance or interest in other
Indebtedness of such Person, any purchase or other acquisition of any Capital
Stock or other ownership or profit interest, warrants, rights, options,
obligations or other securities of such Person, any capital contribution to such
Person, any Account maintained with such Person or other project support
arrangement or agreement with respect to such Person that constitutes an
Obligation to make an Investment in such Person, or any other investment in such
Person.

 

“IP Rights” has the meaning specified in ‎Section 3.16.

 

“IRS” means the United States Internal Revenue Service.

 

“Judgment Currency” has the meaning assigned to such term in ‎Section
9.11(d)(ii).

 

“Lenders” means each Person listed on Schedule I on the date hereof and each
Person that shall become a party hereto pursuant to an Assignment and
Acceptance.

 

“Lending Office” with respect to any Lender, means the office of such Lender
specified as its “Lending Office” opposite its name on Schedule I hereto, or
such other office of such Lender as such Lender may from time to time specify to
the Borrower and the Administrative Agent.

 

21

 

 

“LIBOR Rate Loan” means a Loan that bears interest based on the Adjusted LIBOR
Rate.

 

“Lien” means, whether arising by operation of law or otherwise, any mortgage,
pledge, charge, assignment, hypothecation, security interest, title retention,
preferential right, trust arrangement, right of setoff, counterclaim or banker’s
lien, privilege, or priority of any kind having the effect of security or any
designation of loss payees or beneficiaries or any similar arrangement under or
with respect to any insurance policy.

 

“Loan” means the advances made to the Borrower hereunder pursuant to the
Commitment.

 

“Loan Documents” means, collectively, this Agreement, the Notes, the Warrants
and the Collateral Documents, in each case together with all other agreements,
guarantees, instruments and documents now or hereafter executed and delivered
pursuant thereto or in connection therewith, as any of the foregoing may from
time to time be amended, modified or supplemented in accordance with its terms.

 

“Loan Obligations” mean, collectively, (a) the obligations of the Borrower to
pay any and all of the unpaid principal of, prepayment premium (if any) with
respect to, and interest on (including (i) accrued and unpaid interest, (ii)
capitalized interest, and (iii) interest accruing after the filing of any
petition under any Debtor Relief Law, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans, including, without limitation, by prepayment, redemption or
otherwise, (b) the obligations of the Loan Parties to pay any and all fees,
expenses, costs, indemnities and other amounts, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement,
the Notes or the other applicable Loan Documents (including without limitation
all fees payable to the Agents pursuant to the fee letter referenced in ‎Section
2.03(b)), and ‎(c) the obligations of the Loan Parties to pay, perform,
discharge, observe and comply with any and all covenants, agreements and other
obligations required to be performed, discharged, observed or complied with by
it pursuant to this Agreement, the Notes or the other applicable Loan Documents.

 

“Loan Parties” means, collectively, the Borrower and the Guarantors.

 

“Majority Lenders” means at any time Lenders holding in excess of 50% of the
aggregate outstanding Loans under this Agreement.

 

“Manchester” has the meaning specified in the recitals to this Agreement.

 

22

 

 

“Manchester Seller Financing” has the meaning specified in the recitals to this
Agreement.

 

“Manchester Seller Liens” has the meaning specified in the recitals to this
Agreement.

 

“Material Adverse Effect” means (a) a material adverse effect on the financial
condition, business, performance operations or Property of the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of (i) the ability of
the Borrower and its Subsidiaries to fully and timely perform any of their
obligations under any Loan Document or (ii) the legality, validity or
enforceability of this Agreement or any other Loan Document; or ‎(c) a material
impairment of any rights of, or remedies or benefits available to, the Lenders
under any Loan Document.

 

“Material Contracts” means those agreements set forth under on Schedule III
hereto.

 

“Maturity Date” means the fourth anniversary of the Closing Date.

 

“Measurement Period” means, at any date of determination, the most recently
completed fiscal quarter of the Borrower.

 

“Mortgage” means each mortgage, deed of trust and other security document
delivered pursuant to Section 5.08(a).

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

 

“Net Cash Proceeds” means:

 

(a)         with respect to any Disposition by any Loan Party or any of its
Subsidiaries, or any Extraordinary Receipt received or paid to the account of
such Loan Party or any of its Subsidiaries, the excess, if any, of (i) the sum
of Cash and Cash Equivalents received in connection with such transaction
(including any Cash or Cash Equivalents received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) over (ii) the sum of (A) amounts required to be applied to
repay principal interest and prepayment premiums and penalties on Indebtedness
that is secured by the applicable asset and that is required to be repaid in
connection with such transaction (other than Indebtedness under the Loan
Documents), (B) the reasonable and customary out-of-pocket fees and expenses
incurred by such Loan Party or such Subsidiary in connection with such
transaction and (C) income taxes (including any taxes on gain), and any
transfer, sale, use or

 

23

 

 

other transaction taxes paid or payable as a result thereof; provided that, if
the amount of any estimated taxes pursuant to subclause (C) exceeds the amount
of taxes actually required to be paid in cash in respect of such Disposition,
the aggregate amount of such excess shall constitute Net Cash Proceeds; and

 

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

 

“Non-Recourse Indebtedness” means Indebtedness incurred by an AcquisitionCo
Subsidiary (i) as to which no Loan Party or any of its Subsidiaries (other than
such AcquisitionCo Subsidiary) (a) is an obligor or otherwise has any Guarantee
Obligation or provides credit support or collateral of any kind (including any
undertaking, guarantee, indemnity, agreement or instrument that would constitute
Indebtedness) or (b) is directly or indirectly liable (as a guarantor, general
partner or otherwise), (ii) no default with respect to which (including any
rights that the holders thereof may have to take enforcement action against such
AcquisitionCo Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of any Loan Party or any of its Subsidiaries
(other than of such AcquisitionCo Subsidiary) to declare a default under such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity date, (iii) with respect to which the Liens (if
any) securing such Indebtedness attach only on (a) the Property of such
AcquisitionCo Subsidiary and (b) the Capital Stock of such AcquisitionCo
Subsidiary (and shall not apply to any other Property of any of the Loan Parties
or their other Subsidiaries) and (iv) with respect to which Athyrium shall have
been given a bona fide right of first refusal by the applicable Loan Party or
such AcquisitionCo Subsidiary to arrange and provide such Indebtedness.

 

“Note” has the meaning assigned to such term in ‎Section 2.04(e).

 

“Notice of Borrowing” has the meaning assigned to such term in ‎Section 2.02(a).

 

“Obligation” means, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including any liability of such
Person on any claim, whether or not the right of any creditor to payment in
respect of such claim is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable, secured or
unsecured, and whether or not such claim is discharged, stayed or otherwise

 

24

 

 

affected by any proceeding referred to in ‎Section 7.01(g), as the case may be.
Without limiting the generality of the foregoing, the Obligations of the
Borrower and the Guarantors under the Loan Documents include the Loan
Obligations.

 

“Officer’s Certificate” means, with respect to any corporation, limited
liability company or partnership, a certificate signed by an Authorized Officer
of such Person.

 

“Order” means any order, writ, injunction, decree, judgment, award,
determination or written direction or demand of any court, arbitrator or
Governmental Authority.

 

“Organizational Documents” means, as to any Person, its memorandum, certificate
or articles of incorporation or association and by-laws, its partnership
agreement, its certificate of formation and limited liability company agreement
or operating agreement and/or other organizational or governing documents of
such Person (including shareholders’, stockholders’ or other similar
agreements).

 

“Other Connection Taxes” means, with respect to any Lender or the Administrative
Agent, Taxes imposed as a result of a present or former connection between such
Person and the jurisdiction imposing such Tax (other than connections arising
from such Person having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” has the meaning assigned to such term in ‎Section 2.08(b).

 

“Participant Register” has the meaning assigned to such term in ‎Section
9.06(g).

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.

 

“Perfection Certificate” has the meaning assigned to such term in the Security
Agreement.

 

“Permitted Acquisition” means the acquisition, by merger or otherwise, by the
Borrower or any of its Subsidiaries of an Acquired Entity or Business in in
accordance with applicable law; provided that, in each case (a) such Permitted
Acquisition is financed with (x) Cash on hand of the Borrower or such
Subsidiary, (y) the proceeds of the sale or issuance of any Capital Stock by the
Borrower or (z) Non-Recourse Indebtedness incurred by the applicable
AcquisitionCo Subsidiary; (b) the Acquired Entity or Business is in a business
permitted

 

25

 

 

by ‎Section 6.10; (c) no Default or Event of Default shall have occurred and be
continuing at the time of the consummation of such Permitted Acquisition or
immediately after giving effect thereto; (d) at the time of the consummation of
such Permitted Acquisition, the Borrower shall be in pro forma compliance with
each of the Financial Covenants, determined as of the last day of the most
recently ended Measurement Period; (e) the Borrower shall have delivered to the
Administrative Agent and each Lender a certificate executed by an Authorized
Officer of the Borrower, certifying compliance with the requirements of the
preceding clauses ‎(b) through ‎(d) and containing calculations (in reasonable
detail) required to demonstrate compliance with the preceding clause ‎(d) and
(f) all applicable requirements of Section 5.08 are satisfied.

 

“Permitted Liens” means Liens permitted under ‎Section 6.02.

 

“Permitted Refinancing Indebtedness” means any Indebtedness constituting a
refinancing, replacement or extension of Indebtedness permitted under ‎Section
6.01 that (a) has an aggregate outstanding principal amount not greater than the
aggregate principal amount of the Indebtedness being refinanced, replaced or
extended, (b) has a weighted average life to maturity (measured as of the date
of such refinancing or extension) and maturity no shorter than that of the
Indebtedness being refinanced, replaced or extended, ‎(c) is not entered into as
part of a sale leaseback transaction, ‎(d) is not secured by a Lien on any
assets other than the collateral securing the Indebtedness being refinanced,
replaced or extended, ‎(e) the obligors of which are the same as the obligors of
the Indebtedness being refinanced, replaced or extended and ‎(f) is otherwise on
terms no less favorable to the Borrower and its Subsidiaries, taken as a whole,
than those of the Indebtedness being refinanced, replaced or extended.

 

“Person” means and includes an individual, a partnership, a joint venture, an
association, a limited liability company, a corporation, a trust, a syndicate,
an unincorporated organization, employee organization, mutual company, joint
stock company, estate and any Governmental Authority.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
that is covered by Section 4021 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is or, if such plan were terminated, under Section 4069
of ERISA would be, deemed to be an “employer” as defined in Section 3(5) of
ERISA.

 

“Platform” has the meaning assigned to such term in ‎Section 9.02.

 

“Preferred Stock” means, with respect to any Person, any and all preferred or
preference Capital Stock (however designated) of such Person, whether now
outstanding or issued after the Closing Date.

 

26

 

 

“Prepayment Premium” means an amount equal to (x) the principal amount of the
Facility prepaid or repaid (or repriced or effectively refinanced through any
amendment of the Facility) multiplied by (y) the percentage applicable to the
period in which the Facility was so prepaid or repaid (or so repriced or
effectively refinanced through any amendment of the Facility) set forth in the
table below:

 

Prepayment Premium Period   Percentage From the Closing Date to and including
the first anniversary of the Closing Date   10%       From (but excluding) the
first anniversary of the Closing Date, to and including the second anniversary
of the Closing Date   5%       From (but excluding) the second anniversary of
the Closing Date, to and including the third anniversary of the Closing Date  
2%       From (but excluding) the third anniversary of the Closing Date, to but
excluding the fourth anniversary of the Closing Date   1%

  

“Property” means, with respect to any Person, any right or interest in or to any
asset or property of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible, including, without limitation, Capital Stock.

 

“Public Lender” has the meaning assigned to such term in ‎Section 9.02.

 

27

 

 

“Qualified Capital Stock” of any Person means any Capital Stock of such Person
that is not Disqualified Capital Stock.

 

“Real Property” means, collectively, all right, title and interest (including
any leasehold estate) in and to any and all parcels of or interests in real
property owned, leased or operated by any Person, whether by lease, license or
other means, together with, in each case, all easements, hereditaments and
appurtenances relating thereto, all improvements and appurtenant fixtures and
equipment, all general intangibles and contract rights and other property rights
and rights incidental to the ownership, lease or operation thereof.

 

“Real Property Leases” means any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, franchise
agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.

 

“Register” has the meaning assigned to such term in ‎Section 9.06(d).

 

“Related Fund” shall mean, with respect to any Lender that is a fund or
commingled investment vehicle, any other fund that is managed or advised by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of
such Person’s Affiliates.

 

“Release” means any release, spill, emission, discharge, deposit, disposal,
leaking, pumping, pouring, dumping, emptying, migrating, injection or leaching
into the Environment, or into, on, from or through any building, structure or
facility.

 

“Requirement of Law” means, as to any Person, the Organizational Documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Capital Stock or other equity
interest of any Person or any of its Subsidiaries, or any payment (whether

 

28

 

 

in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such Capital Stock or other
equity interest, or on account of any return of capital to any Person’s
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment.

 

“Sanctions” means any sanction administered or enforced by the United States
Government (including without limitation, the Office of Foreign Assets Control
of the United States Department of the Treasury), the United Nations Security
Council, the European Union, Her Majesty’s Treasury or other relevant sanctions
authority.

 

“SEC” means the United States Securities and Exchange Commission and any
successor agency, authority, commission or Governmental Authority.

 

“Securities Act” means as of any date the United States Securities Act of 1933,
as amended, or any similar federal Statute then in effect, and a reference to a
particular section thereof shall include a reference to the comparable section,
if any, of any such similar federal Statute.

 

“Security Agreement” means the Guarantee and Collateral Agreement in the form of
Exhibit D, to be executed and delivered by (i) the applicable Loan Parties on
the Closing Date and (ii) after the Closing Date, each other Subsidiary of the
Borrower required from time to time to execute a counterpart thereof (or a
joinder agreement related thereto) pursuant to ‎‎Section 5.08

 

“Solvent” means, with respect to any Person as of any date of determination,
that, as of such date, (a) the value of the assets of such Person (both at fair
value and present fair saleable value) is greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person,
(b) the present fair saleable value of the assets of such Person is greater than
the total amount that will be required to pay the probable debt and other
liabilities (including contingent liabilities) of such Person as they become
absolute and matured, (c) such Person is able to pay all debt and other
liabilities, contingent obligations and other commitments of such Person as they
mature and (d) such Person does not have unreasonably small capital in relation
to its business as conducted on such date. In computing the amount of contingent
or unliquidated liabilities at any time, such liabilities shall be computed at
the amount that, in light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an actual
or matured liability.

 

“Statute” means any statute, ordinance, code, treaty, directive, law, rule or
regulation of any Governmental Authority.

 

29

 

 

“Statutory Reserves” shall mean on any date the percentage (expressed as a
decimal) established by the Board and any other banking authority which is the
then stated maximum rate for all reserves (including but not limited to any
emergency, supplemental or other marginal reserve requirements) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
Liabilities (or any successor category of liabilities under Regulation D issued
by the Board, as in effect from time to time). Such reserve percentages shall
include, without limitation, those imposed pursuant to said Regulation. The
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in such percentage.

 

“Subsidiary” means, with respect to any Person, any corporation or other entity
of which at least 50% of the outstanding Voting Stock is at the time directly or
indirectly owned or controlled by such Person or by one or more of any entities
directly or indirectly owned or controlled by such Person. For the purposes of
this definition, “control” of a Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person (whether by ownership of Capital Stock, by contract or
otherwise). Unless the context requires otherwise, each reference to a
Subsidiary herein shall be deemed to be a reference to a Subsidiary of the
Borrower.

 

“Synthetic Debt” means, with respect to any Person as of any date of
determination thereof, all Obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds (including any minority interest transactions that function
primarily as a borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

 

“Taxes” has the meaning assigned to such term in ‎Section 2.08(a).

 

“Tax Returns” has the meaning specified in ‎Section 3.10.

 

“Thiola Licensing Agreement” means that certain Trademark License & Supply
Agreement between the Borrower and Mission Pharmcal Company, a Texas
corporation, dated May 28, 2014 pursuant to which the Borrower acquired the
exclusive use of the U.S. trademark Thiola® (the “Acquired License”).

 

30

 

 

“Transactions” means, collectively, (i) the making of the Loans and the issuance
of the Warrants on the Closing Date, (ii) the entering into of the Loan
Documents, (iii) the prepayment in full of the Manchester Seller Financing and
the release and discharge of the Manchester Seller Liens and (iv) the payment of
all fees and expenses incurred in connection with the foregoing.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or
the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

 

“Unfunded Pension Liability” means, with respect to any Plan at any time, the
amount of any of its unfunded benefit liabilities as determined pursuant to its
most recently filed actuarial report based on such Plan’s ongoing operation
(rather than on a termination basis).

 

“United States” means the United States of America.

 

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

 

“Voting Stock” means, with respect to any Person, Capital Stock of such Person
of any class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of members of the board of
directors (or Persons performing similar functions) of such Person.

 

“Warrant” and “Warrants” have the meanings specified in ‎Section 2.11.

 

“Warrant Stock” means (i) all shares of Common Stock or other stock (voting or
non-voting) of the Borrower issued or issuable upon the exercise of any Warrant,
and (ii) any securities issued or issuable by the Borrower with respect to
shares of Common Stock referred to in the foregoing clause (i) by way of a stock
dividend or stock split or in connection with a combination or subdivision of
shares, reclassification, merger, consolidation or other reorganization of the
Borrower.

 

“Warrantholders” means the holders of the Warrants.

 

“Wholly Owned Subsidiary” means, as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by law)
is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

 

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“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

Section 1.02.   Accounting Terms.   All accounting terms used in this Agreement
shall be applied on a consolidated basis for any Person, if any, unless
otherwise specifically indicated herein. Any accounting terms not specifically
defined herein shall have the meanings customarily given them in accordance with
GAAP; provided that (a) for purposes of determining compliance with any covenant
set forth in ‎Article 6, such terms shall be construed in accordance with GAAP
as in effect on the date of this Agreement applied on a basis consistent with
the application used in the Audited Financial Statements and (b) if the Borrower
notifies the Administrative Agent (with respect to which the Administrative
Agent shall give the Lenders prompt notice thereof) that the Borrower requests
an amendment to any provision (including any definition) hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Majority Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
the Borrower and the Majority Lenders shall negotiate in good faith to amend
such provision (or the definitions used therein) (in each case subject to the
approval of the Majority Lenders) to preserve the original intent thereof in
light of such changes in GAAP; provided, further that all determinations made
pursuant to any applicable Financial Covenant (or any financial definition used
therein) shall be determined on the basis of GAAP as applied and in effect
immediately before the relevant change in GAAP or the application thereof became
effective, until such Financial Covenant (or such financial definition) is
amended.

 

Section 1.03.   Rules of Construction.   The words “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular Section or subsection. Reference herein to any Section
or subsection refers to such Section or subsection (as the case may be) hereof.
Words in the singular include the plural, and words in the plural include the
singular, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter genders. The words “including”,
“includes” and “include” shall be deemed to be followed by the words “without
limitation”, whether or not so followed. Each covenant or agreement contained
herein shall be construed (absent express provision to the contrary) as being
independent of each other covenant or agreement contained herein, so that
compliance with any one covenant or agreement shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other covenant or
agreement. Where any provision herein refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable

 

32

 

 

whether such action is taken directly or indirectly by such Person. All
references to any instruments or agreements, including references to any of the
Loan Documents, shall include any and all modifications or amendments thereto
and any and all extensions or renewals thereof, in each case, made in accordance
with the terms of the Loan Documents including this Agreement. All references to
Persons include their respective successors and assigns (to the extent permitted
under the applicable Loan Documents). Except as otherwise expressly provided
herein, all references to Statutes and related regulations shall include any
amendments of the same and any successor Statutes and regulations. Whenever any
provision in any Loan Document refers to the knowledge (or an analogous phrase)
of the Borrower or any of its Subsidiaries, such words are intended to signify
that the Borrower or such Subsidiary has actual knowledge or awareness of a
particular fact or circumstance or that the Borrower or such Subsidiary, after
due inquiry knows or is aware of such fact or circumstance or if it had
exercised reasonable diligence, would have known or been aware of such fact or
circumstance.

 

Article 2

Amount and Terms of Commitments

 

Section 2.01.   Commitments.   (a) Each Lender severally agrees, on the terms
and conditions hereinafter set forth, and upon satisfaction of the applicable
conditions set forth in ‎Article 4, to make Loans to the Borrower at the
Borrower’s request in accordance with ‎Section 2.02 on the Closing Date, in an
aggregate amount not to exceed the amount specified opposite such Lender’s name
under the column “Commitment” on Schedule I hereto (as such amount may be
terminated in accordance with ‎Section 2.01(c), such Lender’s “Commitment”);
provided that the Loans made on the Closing Date will be net funded with an
original issue discount of 1.00% of the aggregate principal amount thereof.

 

(b)          The initial aggregate amount of the Lenders’ Commitment is
$45,000,000.

 

(c)          The Commitments shall terminate on the Closing Date immediately
following the funding hereunder.

 

Section 2.02.  Procedure for Borrowing.  (a) The Borrowing shall be made after
irrevocable notice to the Administrative Agent and the Lenders. The date of the
proposed Borrowing shall be a Business Day. Such irrevocable notice of a
Borrowing (a “Notice of Borrowing”) shall be by telephone, confirmed immediately
in writing, or facsimile, in substantially the form of Exhibit B hereto,
specifying therein (i) prior to the Closing Date (x) the requested date of such
Borrowing (which date shall be the Closing Date) and (y) the account in which
the proceeds of such Borrowing are requested to be deposited with the Borrower

 

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and (ii) the Interest Period applicable thereto (with respect to the Borrowing
as of the Closing Date and the continuation of a Loan thereafter). Subject to
the fulfillment or written waiver of the applicable conditions set forth in
‎Article 4, each Lender shall make available its applicable portion of such
Borrowing (determined ratably in accordance with the respective Commitments of
the Lenders) in immediately available funds as directed by the Borrower in the
Notice of Borrowing.

 

(b)         The Notice of Borrowing shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of the non-satisfaction for any
reason whatsoever on or before the date specified in such Notice of Borrowing of
the applicable conditions for the making of any Loans set forth in ‎Article 4,
including, without limitation, any loss (excluding loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund such Loan to be made by
such Lender as part of the Borrowing requested under such Notice of Borrowing
when such Loan, as a result of such failure, is not made on such date.

 

Section 2.03.   Fees.  (a) Commitment Fee.   On the Closing Date, the Borrower
shall pay to Athyrium (or to the Administrative Agent for the account of
Athyrium), a commitment fee equal to 1.00% of the aggregate principal amount of
Athyrium’s Commitment.

 

(b)         Agency Fee.   The Borrower shall pay each Agent an agency fee in the
amount set forth in the Agency Fee Letter dated as of the Closing Date between
the Borrower and the Agents, payable in advance on the Closing Date and on each
anniversary of the Closing Date until the Loans have been repaid in full.

 

(c)         Prepayment Premium.   The Prepayment Premium shall be payable
hereunder in respect of any repayment (other than on the Maturity Date) or
prepayment of the Loans (and any repricing or amendment that effectively
refinances any Loans hereunder) including any optional or mandatory prepayment
under ‎Section 2.05 or following the acceleration of the Loans pursuant to
‎Article 7.

 

Section 2.04.  Repayment of Loans; Evidence of Debt.  (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent at the
Administrative Agent’s Account for the ratable account of the Lenders the
outstanding principal amount of the Loans on the Maturity Date.

 

(b)         Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender

 

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resulting from the Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

 

(c)         The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.

 

(d)         The entries made in the accounts maintained pursuant to paragraph
‎(b) or ‎(c) of this Section shall be binding on the Borrower, absent manifest
error; provided that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms of
this Agreement.

 

(e)         The Borrower will execute and deliver to each requesting Lender a
promissory note of the Borrower in the amount of any Loans owing to such Lender,
substantially in the form of Exhibit A with appropriate insertions as to date
and principal amount (a “Note”). The Borrower irrevocably authorizes each Lender
to make or cause to be made an appropriate notation on the Schedule attached to
such Lender’s Note of the making of Loans or the receipt of payments, but the
failure to record, or any error in so recording, any amount of such Loans or
payments on such Schedule shall not limit or otherwise affect the obligations of
the Borrower hereunder or under any Notes delivered to such Lender to make
payments of principal of or interest on the Loans or on such Notes when due.

 

Section 2.05.   Prepayments.  (a) Optional.  The Borrower shall have the right
at any time and from time to time after the Closing Date to prepay the Loans, in
whole or in part, upon at least one Business Day’s prior written notice (or
telephone notice promptly confirmed by written notice) to the Administrative
Agent before 11:00 a.m., New York City time; provided, however, that each
partial prepayment shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000. Each notice of prepayment shall specify
the prepayment date and the principal amount of the Loans to be prepaid, shall
be irrevocable and shall commit the Borrower to prepay such principal amount of
the Loans by the amount stated therein on the date stated therein.

 

(b)         Mandatory.   The Borrower shall prepay the Loans in accordance with
the following:

 

(i)         If any Loan Party or any of its Subsidiaries Disposes of any
Property (including any sale or issuance by any Loan Party or any of its
Subsidiaries of any of its Capital Stock (other than Disqualified Capital Stock
and any sales or issuances of Capital Stock to another Loan Party))

  

35

 

 

(other than any Disposition of any inventory permitted by ‎Section 6.06(a))
which results in the realization by such Person of Net Cash Proceeds in excess
of $1,000,000 in the aggregate during the term of this Agreement, the Borrower
shall prepay an aggregate principal amount of Loans equal to 100% of such Net
Cash Proceeds no later than two Business Days following receipt thereof by such
Person (such prepayments to be applied as set forth in clause (iv) below);
provided, however, that with respect to such Net Cash Proceeds, at the election
of the Borrower (as notified by the Borrower to the Administrative Agent on or
prior to the date of receipt of such Net Cash Proceeds), and so long as no
Default or Event of Default shall have occurred and be continuing, such Loan
Party or such Subsidiary may apply such Net Cash Proceeds to reinvest in the
purchase of capital assets useful in the business of such Loan Party or such
Subsidiary, in each case to be used in the business of such Loan Party or such
Subsidiary within 180 days following the date of receipt of such Net Cash
Proceeds (or, if within such 180-day period, such Loan Party or such Subsidiary
enters into a binding commitment to so reinvest such Net Cash Proceeds, within
360 days following the date of receipt of such Net Cash Proceeds); provided,
further, that if within such 180-day (or, to the extent applicable, 360-day)
period after the date of receipt by such Loan Party or such Subsidiary of such
Net Cash Proceeds, such Loan Party or such Subsidiary has not so used all or a
portion of such Net Cash Proceeds otherwise required to be applied as a
mandatory repayment pursuant to this ‎Section 2.05(b)(i), the remaining portion
of such Net Cash Proceeds shall be applied as a mandatory repayment in
accordance with the requirements of this ‎Section 2.05(b)(i) on the last day of
such 180-day (or, to the extent applicable, 360-day) period.

 

(ii)         Within two Business Days following any Extraordinary Receipt
received by or paid to or for the account of any Loan Party or any of its
Subsidiaries in excess of $1,000,000 in the aggregate during the term of this
Agreement, and not otherwise included in this ‎Section 2.05(b), the Borrower
shall prepay an aggregate principal amount of Loans equal to 100% of all Net
Cash Proceeds received therefrom by such Loan Party or such Subsidiary (such
prepayments to be applied as set forth in clause (iv) below); provided, however,
that with respect to such Extraordinary Receipts, at the election of the
Borrower (as notified by the Borrower to the Administrative Agent on or prior to
the date of receipt of such Extraordinary Receipts), and so long as no Default
or Event of Default shall have occurred and be continuing, such Loan Party or
such Subsidiary may apply such Extraordinary Receipts to reinvest in the
purchase of assets useful in the business of such Loan Party or such Subsidiary,
in each case to be used in the business of such Loan Party or such Subsidiary
within 180-days following the date of receipt of such Extraordinary

  

36

 

  

Receipts (or, if within such 180-day period, such Loan Party or such Subsidiary
enters into a binding commitment to so reinvest such Extraordinary Receipts,
within 360 days following the date of receipt of such Extraordinary Receipts);
provided, further, that if within such 180-day (or, to the extent applicable,
360-day) period after the date of receipt by such Loan Party or such Subsidiary
of such Extraordinary Receipts, such Loan Party or such Subsidiary has not so
used all or a portion of such Extraordinary Receipts otherwise required to be
applied as a mandatory repayment pursuant to this sentence, the remaining
portion of such Extraordinary Receipts shall be applied as a mandatory repayment
in accordance with the requirements of this ‎Section 2.05(b)(ii) on the last day
of such 180-day (or, to the extent applicable, 360-day) period.

 

(iii)         Upon the incurrence or issuance by any Loan Party or any of its
Subsidiaries of any Indebtedness (other than Indebtedness expressly permitted to
be incurred or issued pursuant to ‎Section 6.01), the Borrower shall prepay an
aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds
received therefrom no later than two Business Days following receipt thereof by
such Loan Party or such Subsidiary (such prepayments to be applied as set forth
in clauses (iv) and (v) below).

 

(iv)         Each prepayment of Loans pursuant to the foregoing provisions of
this ‎Section 2.05(b) shall be shared among the Lenders ratably.

 

(c)         All prepayments of Loans under this Section 2.05 (and any repricing
or amendment that effectively refinances any Loans hereunder), shall be made in
an amount equal to the sum of (x) 100% of the principal amount of such Loans
being prepaid (or repriced or effectively refinanced) plus (y) all accrued and
unpaid interest on the amount of principal of such Loans being prepaid (or
repriced or effectively refinanced) to but excluding the date of such prepayment
(or repricing or refinancing) plus (z) the applicable Prepayment Premium. No
amounts repaid hereunder may be reborrowed.

 

Section 2.06.  Interest Rates and Payment Dates.  (a) Except as provided in
‎Section 2.06(b), (x) each LIBOR Rate Loan shall bear interest on the unpaid
principal amount thereof from and including the date of such LIBOR Rate Loan to
and excluding the date such principal amount shall be paid in full, at a rate
per annum which shall, during each Interest Period applicable thereto, be equal
to the sum of the Applicable Margin plus the Adjusted LIBOR Rate for such
Interest Period and (y) each Base Rate Loan shall bear interest on the unpaid
principal amount thereof from and including the date of such Base Rate Loan to
and excluding the date such principal amount shall be paid in full, at a rate
per annum equal to the sum of the Applicable Margin plus the Base Rate. Accrued
interest on each Loan shall be payable in arrears in cash on each Interest
Payment Date.

  

37

 

 

(b)         Upon the occurrence and during the continuance of a Default under
‎Section 7.01(a) or ‎Section 7.01(g), the Borrower shall pay interest on (i) the
unpaid principal amount of each Loan owing to each Lender, payable in arrears on
the dates and in the manner referred to in clause (a) above, and on demand, at a
rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Loan pursuant to clause (a) above; and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other amount
payable under the Loan Documents that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum that would be
required to be paid at such time in respect of such amounts.

 

Section 2.07.  Payments and Computations.  (a) The Borrower shall make each
payment hereunder and under the Notes, irrespective of any right of counterclaim
or set-off, not later than 2:00 p.m. on the day when due in U.S. Dollars to the
Administrative Agent at the Administrative Agent’s Account, in same day funds,
with payments being received by the Administrative Agent after such time being
deemed to have been received on the next succeeding Business Day. The
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or fees ratably (other than
amounts payable pursuant to ‎Section 2.08) to the Lenders for the account of
their respective Lending Offices, and like funds relating to the payment of any
other amount payable to any Lender to such Lender for the account of its Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to ‎Section 9.06(d),
from and after the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under any Notes in
respect of the interest assigned thereby to the Lender assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.

 

(b)         All computations of interest and of fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

 

(c)         Whenever any payment hereunder or under any Note shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.

  

38

 

  

(d)         Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each such Lender on such due date an
amount equal to the amount then due to such Lender. If and to the extent the
Borrower shall not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at the Federal
Funds Rate.

 

(e)         The Loan Parties’ obligation to pay all amounts due hereunder and
under any other Loan Documents shall not be affected by any circumstance
whatsoever, including:

 

(i)         any setoff, counterclaim, recoupment, deduction, abatement,
suspension, diminution, reduction, defense or other right which any Loan Party
may have against any supplier, whether such supplier was paid from the proceeds
of Loans or otherwise, for any reason whatsoever arising under or pursuant to
any supply agreement or otherwise relating to the purchase of goods, other
property or services from or by any such supplier;

 

(ii)         any defect in the condition, design, operation, or fitness for use
of, or any damage to or loss or destruction of, any equipment or material
provided by any such supplier;

 

(iii)         any actual or alleged default by any such supplier or any other
Person under any supply agreement; or

 

(iv)         any other fact or circumstance relating to any supply agreement.

 

Section 2.08. Taxes. (a) Except as required by applicable law, any and all
payments by or on account of any obligation of any Loan Party under any Loan
Document shall be made free and clear of and without deduction or withholding
for any and all present or future taxes, duties, fees, levies, imposts,
deductions, assessments, withholdings or other charges (including backup
withholding) imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto (“Taxes”). If any Loan Party or
the Administrative Agent shall be required by law (as determined in good faith
by the applicable Loan Party or the Administrative Agent, as the case may be) to
deduct any Taxes from or in respect of any sum payable under any Loan Document
to any Lender

  

39

 

  

or the Administrative Agent, (i) in the case of any Indemnified Taxes, the sum
payable by the applicable Loan Party shall be increased as may be necessary so
that after the applicable Loan Party and the Administrative Agent have made all
required deductions or withholding (including deductions or withholding
applicable to additional sums payable under this ‎Section 2.08) such Lender or
the Administrative Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholding been made, (ii)
the Loan Parties shall make all such deductions or withholding and (iii) the
Loan Parties shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

(b)         In addition, the Loan Parties shall timely pay to the relevant
Governmental Authority any present or future stamp, court or documentary, or
similar Taxes that arise from any payment made under any Loan Document or from
the execution, delivery, enforcement or registration of, performance under, from
the receipt or perfection of a security interest under, or otherwise with
respect to, any Loan Document (hereinafter referred to as “Other Taxes”).

 

(c)         The Loan Parties shall indemnify each Lender and the Administrative
Agent for and hold them harmless against the full amount of Indemnified Taxes
imposed on or paid by such Lender or the Administrative Agent (as the case may
be), and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. This indemnification shall be
made within 10 days from the date such Lender or the Administrative Agent (as
the case may be) makes written demand therefor. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender, shall be conclusive absent manifest error.

 

Each Lender shall severally indemnify the Administrative Agent, within 10 days
after demand therefor, for (i) any Indemnified Taxes attributable to such Lender
(but only to the extent that any Loan Party has not already indemnified the
Administrative Agent for such Indemnified Taxes), (ii) any Taxes attributable to
such Lender’s failure to comply with the provisions of ‎Section 9.06(g) relating
to the requirement to maintain a Participant Register and (iii) any Excluded
Taxes attributable to such Lender, in each case, that are payable or paid by the
Administrative Agent in connection with any Loan Document, and any reasonable
expenses arising in connection therewith, whether or not such Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate from the Administrative Agent as to the amount of such payment or
liability delivered to a Lender shall be conclusive absent manifest error.

  

40

 

  

(d)         Within 30 days after the date of any payment of Taxes, the
applicable Loan Party shall furnish to the Administrative Agent, at its address
referred to in ‎Section 9.02, the original or a certified copy of a receipt, or
such other evidence of such payment reasonably satisfactory to the
Administrative Agent or the applicable Lender.

 

(e)         Status of Lenders.  (i) Any Lender that is entitled to an exemption
from or reduction of withholding Tax with respect to payments made under any
Loan Document shall deliver to the Borrower and the Administrative Agent, at the
time or times reasonably requested by the Borrower or the Administrative Agent,
such properly completed and executed documentation reasonably requested by the
Borrower or the Administrative Agent as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if reasonably requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in ‎Section 2.08(e)(ii)(A), (ii)(B) and (ii)(D) below)
shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender. (ii) Without limiting the generality of the foregoing, (A) any
Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax; (B) any Foreign Lender shall, to the extent it
is legally entitled to do so, deliver to the Borrower and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on or
prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the
Borrower or the Administrative Agent), whichever of the following is applicable:
(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN or
W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and (y)
with respect to any other applicable payments under any Loan Document, IRS Form
W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “business profits” or “other income” article of
such tax treaty; (ii)

  

41

 

 

 

executed originals of IRS Form W-8ECI; (iii) in the case of a Foreign Lender
claiming the benefits of the exemption for portfolio interest under Section
881(c) of the Code, (x) a certificate substantially in the form of Exhibit H-1
to the effect that such Foreign Lender is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or
W-8BEN-E; or (iv) to the extent a Foreign Lender is not the beneficial owner,
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form
of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit H-4 on behalf of each such direct and indirect partner; (C) any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to
the Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in U.S. federal withholding Tax, duly completed,
together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower or the Administrative Agent to determine
the withholding or deduction required to be made; and (D) if a payment made to a
Lender under any Loan Document would be subject to U.S. federal withholding Tax
imposed by FATCA if such Lender were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower
and the Administrative Agent at the time or times prescribed by law and at such
time or times reasonably requested by the Borrower or the Administrative Agent
such documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or the Administrative Agent as may be
necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s obligations under FATCA or to determine the amount to deduct and
withhold from such payment. Solely for purposes of this clause (D), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update

  

42

 

  

such form or certification or promptly notify the Borrower and the
Administrative Agent in writing of its legal inability to do so.

 

Section 2.09.  Lender’s Obligation to Mitigate.  If the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to ‎Section 2.08, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to ‎Section 2.08 in the future, (ii) would not subject such
Lender to any unreimbursed cost or expense and (iii) would not otherwise be
disadvantageous to such Lender. The Borrower shall pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

 

Section 2.10.  Sharing of Payments, Etc.  If any Lender shall obtain at any time
any payment (whether voluntary, involuntary, through the exercise of any right
of setoff, or otherwise) on account of the Loans owing to it (other than amounts
received pursuant to ‎Section 2.08) in excess of its ratable share of payments
on account of the Loans obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in the Loans owing to them
as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided that, if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender’s ratable share (according to the proportion
of (i) the amount of such Lender’s required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this ‎Section 2.10 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of setoff) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower or a Lender, as the case may be, in the amount of such
participation.

 

Section 2.11.   Warrants.  (a) In connection with the borrowing of the Loans by
the Borrower and as an inducement to the Lenders to make the Loans, the Borrower
has agreed to authorize the issuance to the Warrantholders its warrants,
initially exercisable to purchase up to an aggregate of 337,500 shares of its
Common Stock (subject to adjustment and limitations on exercisability as therein
provided), at an initial exercise price of $12.7552 per share to be
substantially in the form of Exhibit G attached hereto (all such warrants
initially issued pursuant to this Agreement, or delivered in substitution or
exchange for

 

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any thereof, being collectively called the “Warrants” and, individually, a
“Warrant”). Notwithstanding anything to the contrary set forth herein, the Loans
and the Warrants will be immediately separable and separately transferable
(subject in the case of Warrants to the applicable restrictions set forth
therein and the Organizational Documents of the Borrower), and, subject to the
limitations set forth therein, the Warrants shall be immediately exercisable, in
each case immediately after the consummation of the transactions contemplated by
this Agreement.

 

(b)         Subject to the terms and conditions set forth in this Agreement, on
the Closing Date the Borrower will issue the Warrants to each of the
Warrantholders, in aggregate amounts equal, with respect to each Warrantholders,
to the respective amounts set forth on Schedule I hereto opposite such
Warrantholder’s name. On the Closing Date, subject to satisfaction of the
conditions set forth herein, the Borrower will deliver to each Warrantholder a
Warrant or Warrants registered in such Warrantholder’s name or Warrants in the
name of its nominee, such Warrants to be duly executed and dated the Closing
Date, representing the aggregate number of the Warrants to be purchased by such
Warrantholder as shown on Schedule I hereto, such Warrants to be in such
denominations as such Warrantholder may specify by two (2) Business Days’ prior
written notice to the Borrower (or, in the absence of such notice, one Warrant
registered in such Warrantholder’s name representing the aggregate number of
warrants deliverable to such Warrantholder).

 

(c)         Allocation of Purchase Price. It is hereby agreed that, for purposes
of Treasury Regulations § 1.1273-2(h), (i) the aggregate “issue price” of the
Loans and Warrants on the Closing Date is equal to 99% of the principal amount
of the Loans and (ii) the portion of the issue price allocated to the Warrants
is 7% and the portion of the issue price allocated to the Loans is 93%. Each of
the Borrower and the Warrantholders agrees to use the foregoing issue price and
issue price allocation for U.S. federal income tax purposes with respect to the
transactions contemplated hereby (unless otherwise required by a final
determination by the Internal Revenue Service or a court of competent
jurisdiction) and for all other financial accounting purposes.

 

Section 2.12.  Illegality.  If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund Loans
whose interest is determined by reference to the LIBOR Rate, or to determine or
charge interest rates based upon the LIBOR Rate, or any Governmental Authority
has imposed material restrictions on the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the London interbank market, then, on
notice thereof by such Lender to the Borrower through the Administrative Agent,
any obligation of such Lender to make or continue Loans shall be suspended. Upon
receipt of such notice, (x) the Borrower shall, upon demand from such

 

44

 

 

Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all LIBOR Rate Loans of such Lender to Base Rate Loans (the interest
rate on which Base Rate Loans of such Lender shall, if necessary to avoid such
illegality, be determined by the Administrative Agent without reference to the
LIBOR Rate component of the Base Rate), either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such LIBOR
Rate Loans to such day, or immediately, if such Lender may not lawfully continue
to maintain such LIBOR Rate Loans and (y) if such notice asserts the illegality
of such Lender determining or charging interest rates based upon the LIBOR Rate,
the Administrative Agent shall during the period of such suspension compute the
Base Rate applicable to such Lender without reference to the LIBOR Rate
component thereof until the Administrative Agent is advised in writing by such
Lender that it is no longer illegal for such Lender to determine or charge
interest rates based upon the LIBOR Rate. Upon any such prepayment, the Borrower
shall also pay accrued interest on the amount so prepaid or converted together
with the Prepayment Premium.

 

Section 2.13. Inability to Determine Rates. If in connection with any request
for a LIBOR Rate Loan or a continuation thereof, (a) the Administrative Agent
determines that (i) Dollar deposits are not being offered to banks in the London
interbank market for the applicable amount and Interest Period of such Loan, or
(ii) adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed Loan (with respect
to clause ‎(a)‎(i) above, “Impacted Loans”), or (b) the Administrative Agent or
the affected Lenders determine that for any reason the LIBOR Rate for any
requested Interest Period with respect to a proposed LIBOR Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such LIBOR
Rate Loan, the Administrative Agent will promptly so notify the Borrower and
each Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR
Rate Loans shall be suspended (to the extent of the affected LIBOR Rate Loans or
Interest Periods) until the Administrative Agent upon the instruction of the
affected Lenders revokes such notice. Upon receipt of such notice, the Borrower
may revoke any pending request for a continuation of LIBOR Rate Loans (to the
extent of the affected LIBOR Rate Loans or Interest Periods).

 

Notwithstanding the foregoing, if the Administrative Agent has made the
determination described in clause ‎(a)‎(i) of this section, the rate of interest
described in clause (b) of the definition of “Base Rate” shall apply with
respect to the Impacted Loans until (1) the Administrative Agent revokes the
notice delivered with respect to the Impacted Loans under clause ‎(a) of the
first sentence of this section, (2) the Administrative Agent or the affected
Lenders notify the Administrative Agent and the Borrower that such alternative
interest rate does not adequately and fairly reflect the cost to such Lenders of
funding the Impacted Loans, or (3) any Lender determines that any Law has made
it unlawful, or that

 

45

 

 

any Governmental Authority has asserted that it is unlawful, for such Lender or
its applicable Lending Office to make, maintain or fund Loans whose interest is
determined by reference to such alternative rate of interest or to determine or
charge interest rates based upon such rate or any Governmental Authority has
imposed material restrictions on the authority of such Lender to do any of the
foregoing and provides the Administrative Agent and the Borrower written notice
thereof.

 

Section 2.14.   Increased Costs to Such Day; Reserves on Loans. (a) Increased
Costs Generally. If any Change in Law shall:

 

(i)       impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in the Rate;

 

(ii)      subject any Lender or the Administrative Agent to any Taxes (other
than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of
the definition of Excluded Taxes and (C) Connection Income Taxes); or

 

(iii)     impose on any Lender or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Rate Loans
made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making, converting to, continuing or maintaining any Loan the interest
on which is determined by reference to the Adjusted LIBOR Rate (or, in the case
of clause ‎(ii) above, any Loan), or of maintaining its obligation to make any
such Loan, or to increase the cost to such Lender, or to reduce the amount of
any sum received or receivable by such Lender hereunder (whether of principal,
interest or any other amount) then, upon request of such Lender, the Borrower
will pay to such Lender, such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.

 

(b)          Capital Requirements.   If any Lender determines that any Change in
Law affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital or liquidity requirements has or
would have the effect of reducing the rate of return on such Lender’s capital or
on the capital of such Lender’s holding company, if any, as a consequence of
this Agreement, the Commitments of such Lender or the Loans made by, such
Lender, to a level below that which such Lender or such Lender’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with respect
to capital adequacy), then from time to time the Borrower will pay to such
Lender

 

46

 

 

such additional amount or amounts as will compensate such Lender or such
Lender’s holding company for any such reduction suffered.

 

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

 

(d)          Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to the foregoing provisions of this section shall
not constitute a waiver of such Lender’s right to demand such compensation,
provided that the Borrower shall not be required to compensate a Lender pursuant
to the foregoing provisions of this section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).

 

Section 2.15.   Compensation for Losses. Upon demand of any Lender (with a copy
to the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:

 

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

 

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

 

(c)       any assignment of a Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to
‎Section 9.13;

 

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

 

47

 

 

For purposes of calculating amounts payable by the Borrower to the Lenders under
this ‎Section 2.15, each Lender shall be deemed to have funded each Loan made by
it at the LIBOR Rate for such Loan by a matching deposit or other borrowing in
the London interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Loan was in fact so funded.

 

Section 2.16.   Replacement of Lenders.   If any Lender requests compensation
under ‎Section 2.14, or if the Borrower is required to pay any Indemnified Taxes
or additional amounts to any Lender or any Governmental Authority for the
account of any Lender pursuant to ‎Section 2.08, and in each case, such Lender
has declined or is unable to designate a different lending office in accordance
with ‎Section 2.09, the Borrower may replace such Lender in accordance with
‎Section 9.13.

 

Section 2.17.   Survival.   Each party’s obligations under Sections ‎2.08,
‎2.09, ‎2.12, ‎2.13, ‎2.14, ‎2.15 and ‎2.16 shall survive termination of the
Commitments, repayment of all Loan Obligations hereunder and under the other
Loan Documents, and resignation of the Administrative Agent.

 

Article 3
Representations and Warranties

 

Representations and Warranties of the Borrower. In order to induce the Lenders
and the Administrative Agent to enter into this Agreement and to induce the
Lenders to make the Loans hereunder, the Borrower makes the following
representations and warranties as to itself and its Subsidiaries:

 

Section 3.01.   Existence and Power.   The Borrower and each of its Subsidiaries
is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is duly qualified to do business in each
additional jurisdiction necessary or advisable for the conduct of its business,
except for such failures to so qualify in such additional jurisdictions as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Borrower and each of its Subsidiaries has all requisite
organizational power to own its Properties and to carry on its business as now
being conducted and as proposed to be conducted. The Borrower and each of its
Subsidiaries has all requisite organizational power to execute, deliver and
perform its obligations under or with respect to this Agreement, the Notes, the
Warrants and the other Loan Documents to which it is a party and the Borrower
has all requisite organizational power to borrow the Loans and issue the
Warrants (including the Warrant Stock) to the Lenders and Warrantholders in
accordance with the terms hereof and thereof.

 

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Section 3.02.    Authority.   The execution, delivery and performance by the
Borrower and each of its Subsidiaries of this Agreement, the Notes, the Warrants
and the other Loan Documents to which it is a party and the Borrower’s issuance
of the Notes to the Lenders and the Warrants (including the Warrant Stock) to
the Warrantholders in accordance with the terms hereof and thereof, are within
such Person’s organizational powers and have been duly authorized by all
necessary organizational action on the part of such Person’s board of directors
(or comparable body) and, if necessary such Person’s shareholders, members or
partners, as the case may be.

 

Section 3.03.    Binding Effect.   Each of this Agreement, the Notes, the
Warrants and the other Loan Documents has been duly executed and delivered by
the Borrower and each of its Subsidiaries party thereto and each of the Notes
and Warrants issued has been validly issued in accordance with the terms hereof
and thereof. Each of this Agreement, the Notes, the Warrants and the other Loan
Documents is the legal, valid and binding obligation of the Borrower and each of
its Subsidiaries party thereto enforceable against such Person in accordance
with its respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other laws
relative to or affecting the enforcement of creditors’ rights generally in
effect from time to time and by general principles of equity whether applied in
equity or at law.

 

Section 3.04.    Capital Stock; Subsidiaries.   (a) As of the Closing Date,
after giving effect to the Transactions, the authorized and issued shares of
each class of Capital Stock of the Borrower and each of its Subsidiaries will be
as set forth on Schedule ‎3.04(a). As of the Closing Date after giving effect to
the Transactions, all of the issued and outstanding shares of Capital Stock of
the Borrower and each of its Subsidiaries will be validly issued, fully paid and
non-assessable and not subject to any pre-emptive rights and owned of record and
beneficially by the Persons listed on Schedule ‎3.04(a) free and clear of all
Liens other than Permitted Liens.

 

(b)          As of the Closing Date, after giving effect to the Transactions,
except as set forth on Schedule ‎3.04(a), neither the Borrower nor any of its
Subsidiaries owns any shares of Capital Stock of, or have any direct or indirect
equity interest in, any other Person.

 

(c)           Except as set forth on Schedule ‎3.04(c), as of the Closing Date
and after giving effect to the Transactions, there are no securities outstanding
that are convertible into or exchangeable for any shares of Capital Stock of the
Borrower or any of its Subsidiaries, nor are there outstanding any rights to
subscribe for or purchase, or any options or warrants for the purchase of, or
any agreements (contingent or otherwise) providing for the issuance of, or any
calls, commitments or claims of any character relating to, any shares of Capital
Stock of the Borrower

  

49

 

  

or any of its Subsidiaries or any securities convertible into or exchangeable
for any such shares.

 

(d)          On the Closing Date, after giving effect to the Transactions, none
of the Borrower or any of its Subsidiaries shall be subject to any obligation
(contingent or otherwise) to repurchase, acquire or retire (i) any of its
Capital Stock, (ii) any securities convertible into or exchangeable for any of
its Capital Stock, or (iii) any options, warrants or other rights to subscribe
for, purchase or acquire any of its Capital Stock.

 

Section 3.05.   Business Operations and Other Information;   Financial
Condition; No Material Adverse Effect. (a) The Borrower has heretofore delivered
or caused to be delivered to each Lender copies of the Audited Financial
Statements (the “Financial Statements”). The Financial Statements have been
prepared in accordance with GAAP (except as otherwise noted therein),
consistently applied, and subject, in the case of each of the Financial
Statements that are unaudited, to normal year-end audit adjustments and the
absence of complete footnotes, and present fairly in all material respects the
Consolidated financial position and related Consolidated income, stockholders’
equity and cash flows (as applicable) of the Borrower and its Subsidiaries as at
each of the dates and for each of the periods respectively covered thereby.

 

(b)          As of December 31, 2013, neither the Borrower nor any of its
Subsidiaries had any Indebtedness or liability, absolute or contingent,
liquidated or unliquidated, or any Guarantee Obligations, contingent
liabilities, liabilities for material taxes, long-term leases or unusual forward
or long-term commitments, except as reflected or reserved against on the balance
sheets included in the Financial Statements or described in the notes thereto.

 

(c)          Attached as Schedule ‎3.05(c) is a copy of the latest (as of the
Closing Date) projections of the consolidated statements of operations, balance
sheets and cash flow of the Borrower and its Subsidiaries (assuming consummation
of the Transactions) for each of the fiscal years of the Borrower in the period
from the Closing Date through 2015, including a detailed cash flow forecast for
the 12-month period following the Closing Date. Such projections have been
prepared by management of the Borrower on the basis of assumptions, set forth on
Schedule ‎3.05(c), which such management reasonably believes as of the Closing
Date are fair and reasonable in light of current and reasonably foreseeable
business conditions, and represent such management’s estimate of the future
financial performance (after giving effect to the Transactions) of the Borrower
and its Subsidiaries, it being acknowledged that the projections and their
underlying assumptions are subject to inherent uncertainties which may cause the
actual results of the Borrower and its Subsidiaries to vary materially from the
projected results.

 

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(d)          Attached hereto as Schedule ‎3.05(d) are true and complete copies
of pro forma balance sheets of the Borrower and its Subsidiaries on a
consolidated basis, prepared by management of the Borrower on the basis of the
historical unaudited balance sheets of the Borrower as of May 30, 2014, as
though the Transactions had been completed immediately prior to such date,
together with the related income statements for the 12-month period then ended.
Such pro forma balance sheets and income statements each fairly presents in all
material respects the financial position and results of operations of the
Borrower and its Subsidiaries on a consolidated basis as of the close of
business on such date on a pro forma basis as if the Transactions had been
completed immediately prior to such date or at the beginning of such period, as
the case may be, and contains all pro forma adjustments necessary in order to
fairly reflect such assumptions.

 

(e)          Since December 31, 2013, no development or event that individually
or in the aggregate has had, or which could reasonably be expected to have, a
Material Adverse Effect has occurred, and no development or event which
individually or in the aggregate would have constituted, or which could
reasonably be expected to constitute, a Default or Event of Default has occurred
and is continuing.

 

Section 3.06.   Litigation; No Violation of Governmental Orders or Laws.    (a)
Except as set forth on Schedule ‎3.06, there are no actions, suits or
proceedings pending, or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any of its Subsidiaries or any of their respective
Properties or rights which, if adversely determined, could, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(b)          There are no actions, suits or proceedings pending, or, to the
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries which seek to enjoin, or otherwise prevent the consummation of, the
transactions contemplated herein or to recover any damages or obtain any relief
as a result of any of the transactions contemplated herein in any court or
before any arbitrator of any kind or before or by any Governmental Authority.

 

(c)          Neither the Borrower nor any of its Subsidiaries is, nor will be
after giving effect to the consummation of the Transactions, as the case may be,
in default under or in violation of any Statute or Order, which default or
violation, individually or in the aggregate together with all other such
defaults and violations has had, or could reasonably be expected to have, a
Material Adverse Effect.

 

Section 3.07.   No Conflicts with Agreements, Etc.  Neither the execution and
delivery by the Borrower and its Subsidiaries of this Agreement, the Notes or
any of the other Loan Documents to which it is a party, nor the offering,
issuance and sale of the Loans and the Warrants by the Borrower, nor the
fulfillment of, or

 

51

 

 

compliance by, any Person with the respective terms, conditions and provisions
hereof or thereof, nor the consummation of the Transactions, will conflict with,
or result in a breach or violation of the terms, conditions or provisions of, or
constitute a default under, or result in the creation of any Lien (other than
Liens created pursuant to the Loan Documents) on any Properties or assets of the
Borrower or any of its Subsidiaries pursuant to, (i) the Organizational
Documents of the Borrower and its Subsidiaries, (ii) any Material Contract to
which the Borrower or any such Subsidiary is a party or by which the Borrower or
any such Subsidiary is bound or to which the Borrower or any such Subsidiary or
any of its respective assets are subject or (iii) any Statute or Order to which
the Borrower or any such Subsidiary or any of their respective assets are
subject.

 

Section 3.08.   Consents, Etc.   No consent, approval or authorization of or
declaration, registration or filing with any Governmental Authority or any
nongovernmental Person is required in connection with the execution or delivery
by the Borrower and its Subsidiaries of this Agreement, the Notes, the Warrants
or any of the other Loan Documents or the performance by any such Person of its
obligations hereunder or thereunder, or as a condition to the legality, validity
or enforceability of this Agreement, the Notes, the Warrants or any of the other
Loan Documents, or the consummation of any component of the Transactions, except
for such consents, approvals, authorizations, declarations, registrations or
filings as are listed on Schedule 3.08, all of which have been or will on or
prior to the Closing Date be obtained or made and are or will then be in full
force and effect, and except those which the failure to obtain or make could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

Section 3.09.    Outstanding Indebtedness.   Schedule 6.01(a) sets forth a
correct and complete list and brief description of all Indebtedness of the
Borrower and its Subsidiaries (excluding any Indebtedness evidenced by the
Loans) existing on the Closing Date after giving effect to the Transactions, in
each case showing the aggregate principal amount thereof (and the aggregate
amount of any undrawn commitments with respect thereto), the name of the
respective borrower and any other entity which directly or indirectly guarantees
such debt and all Liens securing such Indebtedness.

 

Section 3.10.   Taxes.  The Borrower, and each Subsidiary of the Borrower, has
timely filed all U.S. federal and all material state, local and foreign tax
returns, information returns and excise tax returns, forms and reports for Taxes
(“Tax Returns”) with the appropriate Governmental Authority which were or are
required to have been filed by or on behalf of any such Persons and all such Tax
Returns are true, correct and complete and accurately reflect in all material
respects all liability for Taxes of the Borrower or Subsidiary taken as a whole
for the periods covered thereby. All Taxes shown to be due and payable on such
returns and all other material Taxes and assessments payable by the Borrower or
any Subsidiary thereof have been timely paid to the appropriate Governmental

  

52

 

  

Authority, unless such Tax liability is being diligently contested in good faith
and the Borrower and/or the appropriate Subsidiaries thereof, as the case may
be, has adequately reserved against such Tax liability on its books and
financial statements in accordance with GAAP. No material Tax liens have been
filed and no material claims are being asserted with respect to any such Taxes
as of the date hereof. No material Tax assessment against the Borrower, or any
Subsidiary thereof has been proposed, formally or informally. The Tax
liabilities of the Borrower and any Subsidiary thereof are adequately provided
for on the relevant Person’s books and financial statements in accordance with
GAAP.

 

Section 3.11.   Disclosure.   None of this Agreement nor any other document or
certificate furnished to any Lender by or on behalf of the Borrower or any of
its Subsidiaries in connection herewith (including the Financial Statements),
taken in the aggregate, contained, as of its respective date and as of the
Closing Date, and no document or certificate which shall be furnished to any
Lender by or on behalf of the Borrower or any of its Subsidiaries in connection
herewith, when taken as a whole with, all documents and certificates previously
delivered, shall contain, as of its date of delivery, any untrue statement of a
material fact, or as of any such date omitted to state a material fact necessary
in order to make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based on assumptions believed to be
reasonable at the time, it being acknowledged that the projections and their
underlying assumptions are subject to inherent uncertainties which may cause the
actual results of the Borrower and its Subsidiaries to vary from the projected
results. Neither the Borrower nor any of its Subsidiaries knows of any facts
(other than matters of a general economic or political nature) that individually
or in the aggregate have had, or could reasonably be expected to have, a
Material Adverse Effect.

 

Section 3.12.    Margin Regulations.   Neither the Borrower nor any of its
Subsidiaries owns or intends to acquire any “margin stock” as defined in
Regulation U of the Board of Governors of the Federal Reserve System of the
United States (12 CFR 207). No part of the proceeds of the Loans or the Warrants
will be used, and no part of the proceeds of any loans repaid with the proceeds
from the sale of the Loans or the Warrants was used, directly or indirectly, for
the purpose of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System of the
United States (12 CFR 207), or for the purpose of buying or carrying or trading
in any securities under such circumstances as to involve the Borrower or any of
its Subsidiaries in a violation of Regulation X of said Board (12 CFR 224) or to
involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Neither the Borrower nor any of its Subsidiaries or any agent acting
on its behalf has taken or will take any action which might cause this Agreement
or the Loans to violate

 

53

 

 

Regulation U, Regulation X, Regulation T or any other regulation of the Board of
Governors of the Federal Reserve System of the United States or to violate the
Exchange Act, in each case as in effect now or as the same may hereafter be in
effect. As used in this ‎Section 3.12, the term “purpose of buying or carrying”
has the meaning assigned thereto in the aforesaid Regulation U.

 

Section 3.13.   Pension and Benefit Plans.   (a) Except as could not reasonably
be expected to have a Material Adverse Effect, with respect to each Employee
Benefit Plan, each of the Borrower and its ERISA Affiliates is in compliance
with the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events, could reasonably be expected to have a Material Adverse Effect. There
exists no Unfunded Pension Liability with respect to any Plans that could
reasonably be expected to have a Material Adverse Effect.

 

(b)          Except as would not reasonably be expected to have a Material
Adverse Effect, each Foreign Pension Plan is in compliance in all material
respects with all requirements of law applicable thereto and the respective
requirements of the governing documents for such plan. Except as would not
reasonably be expected to have a Material Adverse Effect, With respect to each
Foreign Pension Plan, none of the Borrower, any Subsidiaries or any of their
respective directors, officers, employees or agents has engaged in a transaction
which would subject the Borrower or any Subsidiary, directly or indirectly, to a
tax or civil penalty. With respect to each Foreign Pension Plan, reserves have
been established in the financial statements furnished to Lenders in respect of
any unfunded liabilities in accordance with applicable law and prudent business
practice or, where required, in accordance with ordinary accounting practices in
the jurisdiction in which such Foreign Pension Plan is maintained. The aggregate
unfunded liabilities with respect to Foreign Pension Plans could not reasonably
be expected to have a Material Adverse Effect assuming proper funding and
administration of such foreign Pension Plans on an ongoing basis.

 

Section 3.14.     Labor Matters.   As of the date hereof and the Closing Date,
there are no strikes, lockouts or slowdowns against the Borrower or any
Subsidiary pending or, to the knowledge the Borrower, threatened. The hours
worked by and payments made to employees of the Borrower and the Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters. All
payments due from the Borrower or any Subsidiary, or for which any claim may be
made against the Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary. The consummation of
the Transactions will not give rise to any right of termination or right of
renegotiation

  

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on the part of any union under any collective bargaining agreement to which the
Borrower or any Subsidiary is bound.

 

Section 3.15.   Possession of Franchises, Licenses, Etc.   Each of the Borrower
and each of its Subsidiaries possesses all material franchises, certificates,
licenses, permits, registrations, security clearances, designations, approvals
and other authorizations from Governmental Authorities that are necessary for
the ownership, maintenance and operation of its Properties, and for the conduct
of its business as now conducted, and neither the Borrower nor any of its
Subsidiaries is in violation of any thereof, except for such violations as
individually or in the aggregate do not, and could not reasonably be expected to
have, a Material Adverse Effect.

 

Section 3.16.   Intellectual Property.   The Borrower and its Subsidiaries own
or otherwise possess sufficient rights to all trademarks, service marks, trade
names, including all goodwill associated with any of the foregoing, patents,
copyrights, domain names, including all registrations and applications for
registration of any of the foregoing, inventions, technology, software, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), database rights, rights of
privacy and publicity, licenses and other intellectual property and similar
rights (collectively, “IP Rights”) used in, held for use in or reasonably
necessary for the operation of their respective businesses as currently
conducted. Any and all IP Rights owned or purported to be owned by the Borrower
or any of its Subsidiaries are owned solely and exclusively by the Borrower or
one of its Subsidiaries, are owned free and clear of all Liens and, to the
knowledge of the Borrower, are valid and enforceable. Neither the Borrower nor
any of its Subsidiaries, nor the use or sale of any of their products or the
provision of any of their services, has materially infringed, misappropriated or
otherwise violated the IP Rights of any Person. No claim, action, suit or
proceeding regarding any IP Rights is pending or, to the knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries.

 

Section 3.17.   Use of Proceeds.   The proceeds from the Loans and the Warrants
shall be used by the Borrower (i) to prepay in full the Manchester Seller
Financing, (ii) to pay fees and expenses incurred in connection with the
Transactions and (iii) for general corporate purposes consistent with the terms
hereof.

 

Section 3.18.   OFAC; Anti-Corruption Laws.   Neither the Borrower, nor any of
its Subsidiaries, nor, to the knowledge of the Borrower and its Subsidiaries,
any director, officer, employee, agent, affiliate or representative thereof, is
an individual or entity that is, or is owned or controlled by any individual or
entity that is (i) currently the subject or target of any Sanctions or (ii)
located, organized or resident in a Designated Jurisdiction. The Borrower and
its Subsidiaries have

 

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conducted their businesses in compliance with applicable anti-corruption laws
and have instituted and maintained policies and procedures designed to promote
and achieve compliance with such laws.

 

Section 3.19.   Status under Certain Laws.   Neither the Borrower nor any of its
Subsidiaries is an “investment company” or a “person directly or indirectly
controlled by or acting on behalf of an investment company” within the meaning
of the Investment Company Act of 1940, as amended.

 

Section 3.20.   Ranking of Loans.   The Indebtedness represented by the Loans
and the other Loan Obligations under the applicable Loan Documents of the
Borrower and the other Loan Parties is intended to constitute senior
Indebtedness, and accordingly is, and shall be, at all times while the Loans and
the other Loan Obligations remain outstanding senior in right of payment to, or
pari passu with, all Indebtedness of the Loan Parties.

 

Section 3.21.   Solvency.   The Borrower and its Subsidiaries, taken as a whole,
are Solvent on the Closing Date both before and after giving effect to the
Transactions to be effected on the Closing Date and the application of the net
proceeds of the Loans and the Warrants.

 

Section 3.22.     Restrictions on or Relating to Subsidiaries.   There does not
exist any encumbrance or restriction on the ability of (x) any Subsidiary of the
Borrower to pay dividends or make any other distributions on its Capital Stock
or any other interest or participation in its profits owned by the Borrower or
any Subsidiary thereof, or to pay any Indebtedness owed to the Borrower or a
Subsidiary thereof, (y) any Subsidiary of the Borrower to make loans or advances
to the Borrower or any Subsidiary thereof or (z) any Subsidiary of the Borrower
to transfer any of its properties or assets to the Borrower or any Subsidiary
thereof, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) the Loan Documents with respect to clause (z)
only, Liens permitted to exist pursuant to ‎Section 6.02 and (iii) with respect
to clause (z) only, customary restrictions on assignment, subletting or transfer
in any lease, license or contract. Except for customary provisions of corporate
law regarding payment of Restricted Payments and exchange control requirements
generally applicable to transfers of foreign currency, no Subsidiary of the
Borrower is subject to any law which limits the amount or timing of the
repatriation of profits or the payment of dividends to foreign shareholders.

 

Section 3.23.    Collateral Documents.   (a) On and after the Closing Date, the
Security Agreement creates, as security for the Loan Obligations, a valid and
enforceable perfected security interest in and Lien on all of the Collateral
subject thereto, subject to no other Liens (other than Permitted Liens), in
favor of the Collateral Agent (for the benefit of the Agents and the Lenders).
No filings or recordings are required in order to perfect the security interests
created under the

 

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Security Agreement except for filings or recordings which shall have been
delivered to the Administrative Agent in completed and duly authorized form on
or prior to the Closing Date.

 

(b)          On and after the Closing Date, the Foreign Pledge Agreement creates
(or after the execution and delivery thereof will create), as security for the
Loan Obligations, a valid and enforceable perfected security interest in and
Lien on all of the Collateral subject thereto, superior to and prior to the
rights of all third Persons, and subject to no other Liens (other than Permitted
Liens), in favor of the Lenders. No filings or recordings are required in order
to perfect the security interests created under the Foreign Pledge Agreement
except for filings or recordings which shall have been delivered to the
Administrative Agent in completed and duly authorized form on or prior to the
Closing Date or on or prior to the required date contemplated by ‎Section 5.08.

 

(c)          On and after the Closing Date, each Mortgage (if any) creates (or
after the execution and delivery thereof will create), as security for the Loan
Obligations, a valid and enforceable perfected security interest in and Lien on
all of the real property and other mortgaged property subject thereto subject to
no other Liens (other than Permitted Liens), in favor of the Lenders. No filings
or recordings are required in order to perfect the security interests created
under such Mortgage except for the recordation of such Mortgage in the
appropriate recording office in the city or county in which the real property is
located.

 

Section 3.24.    Environmental Matters.   (a) Except as would not reasonably be
expected to have a Material Adverse Effect:

 

(i)          there are no Environmental Liabilities of or relating to the
Borrower or any of its Subsidiaries of any kind whatsoever, and there are no
facts, conditions, situations or set of circumstances which could reasonably be
expected to result in or be the basis for any such Environmental Liability;

 

(ii)         Hazardous Materials have not been Released on, at, under or from
any property currently or formerly owned, leased or operated by the Borrower or
any of its Subsidiaries;

 

(iii)        neither the Borrower nor any of its Subsidiaries is undertaking,
and has not completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened Release of Hazardous Materials at,
on, under, or from any site, location or operation; and all Hazardous Materials
generated, used, treated, handled or stored at, or transported to or from, any
property currently or formerly owned,

 

57

 

 

leased or operated by the Borrower or any of its Subsidiaries have been properly
disposed of pursuant to Environmental Laws;

 

(iv)        no Environmental Claim, fine or penalty is pending or, to the
knowledge of the Borrower, threatened, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law,
in each case relating to the Borrower or any of its Subsidiaries; and

 

(v)         the Borrower and its Subsidiaries are and have been in compliance
with all Environmental Laws and have obtained and are and have been in
compliance with all permits, licenses, authorizations, certificates and
approvals of governmental authorities relating to or required by Environmental
Laws.

 

(b)          There has been no material environmental investigation, study,
audit, test, review or other analysis conducted of which the Borrower or any of
its Subsidiaries possess or have control of in relation to the current or prior
business of the Borrower or any of its Subsidiaries or any property or facility
now or previously owned, leased or operated by the Borrower or any of its
Subsidiaries, which has not been delivered to the Lenders at least five days
prior to the date hereof.

 

(c)           For purposes of this Section, the terms “Borrower” and
“Subsidiary” shall include any business or business entity which is, in whole or
in part, a predecessor of the Borrower or any Subsidiary.

 

Section 3.25.   Acquired License.   The Borrower has delivered to each Lender a
complete and correct copy of the Thiola License Agreement (including all
schedules, exhibits, amendments, supplements and modifications thereto). No Loan
Party or, to the knowledge of the Borrower or each Loan Party, any other Person
party to the Thiola License Agreement is in default in the performance or
compliance with any material provisions thereof. The Thiola License Agreement
complies in all material respects with all applicable laws. All representations
and warranties set forth in the Thiola License Agreement were true and correct
in all material respects at the time as of which such representations and
warranties were made (or deemed made). The Borrower and each of its applicable
Subsidiaries possess the right to use, all of the trademarks, service marks,
trade names, copyrights, patents, patent rights, franchises, licenses and other
intellectual property rights related to the Acquired License contemplated by the
Thiola License Agreement that are reasonably necessary for the operation of
their respective businesses, without conflict with the rights of any other
Person.

 

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Section 3.26.    Ownership of Property; Liens.   The Borrower and each of the
Guarantors has title in fee simple (or local law equivalent) to all of its owned
Real Property, a valid leasehold interest in all of its leased Real Property,
and good title to, or a valid leasehold interest in, license to, or right to
use, all its other tangible Property material to its business, in all material
respects, and no such Property is subject to any Lien except Permitted Liens. As
of the Closing Date, neither the Borrower nor any of its Subsidiaries owns in
fee any Real Property.

 

Section 3.27.  Material Contracts.  As of the Closing Date (x) true, correct and
complete copies of each Material Contract has been delivered, or made available
to, the Lenders and (y) each of the Material Contracts then in effect is in full
force and effect in all material respects. No Loan Party or, to the knowledge of
the Borrower or each Loan Party, any other Person party to any Material Contract
is in default in the performance or compliance with any material provisions
thereof. Each Material Contract complies in all material respects with all
applicable laws. All representations and warranties of the Borrower and its
Subsidiaries set forth in each Material Contract were true and correct in all
material respects at the time as of which such representations and warranties
were made (or deemed made); provided that any such representation and warranty
that is qualified by “materiality”, “material adverse effect” or similar
language shall be true and correct in all respects (after giving effect to any
such qualification therein) at the time made (or deemed made). The Borrower and
each of its Subsidiaries possess all rights and powers (including corporate or
other organizational powers and authorizations) related to each Material
Contract to which it is a party that are reasonably necessary for the operation
of its business, without conflict with the rights of any other Person.

 

Article 4

Conditions Precedent

 

Section 4.01.   Closing Conditions.  The obligations of each Lender to make
Loans on the Closing Date, and each Warrantholder’s obligation to purchase and
pay for the Warrants to be purchased by it hereunder on the Closing Date, shall
be subject to the satisfaction, on or before the Closing Date, of the following
conditions:

 

(a)          Delivery of Notes and Warrants. On the Closing Date, there shall
have been delivered to each Lender and Warrantholder the appropriate Notes or
Warrants, as the case may be, in accordance with Sections ‎2.04(e) and ‎2.11, in
each case executed by the Borrower and in form and substance provided for
herein.

 

(b)          Proceedings Satisfactory. All corporate, organizational and other
proceedings taken or to be taken in connection with the transactions
contemplated

 

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to occur on the Closing Date and all documents incident thereto shall be
reasonably satisfactory in form and substance to the Lenders, and the Lenders
shall have received all such counterpart originals or certified or other copies
of such documents as they may reasonably request, including, without limitation:

 

(i)          certificates dated as of a recent date prior to the Closing Date as
to the good standing of each Loan Party in the jurisdiction where it is
organized;

 

(ii)         certified copies of the Organizational Documents of each Loan Party
with all amendments thereto to the Closing Date;

 

(iii)        certified copies of resolutions of the board of directors (or
comparable body) of each Loan Party authorizing the execution, delivery and
performance of the Loan Documents (and in the case of the Borrower) the
borrowing of the Loans and the issuance of the Warrants; and

 

(iv)        certificates as to the incumbency and signatures of each of the
officers of each Loan Party who shall execute any Loan Document or other
document executed and delivered pursuant to or in connection herewith or
therewith.

 

(c)          Opinions of Counsel.   The Lenders shall have received from (i)
Katten Muchin Rosenman LLP, U.S. counsel to the Borrower in connection with the
Transactions, and (ii) NautaDutilh, Dutch counsel to the Borrower in connection
with the Transactions, favorable legal opinions, each dated the Closing Date and
addressed to the Lenders and the Warrantholders, covering such matters incident
to the Transactions herein contemplated as the Lenders and Warrantholders may
reasonably request.

 

(d)          Security Arrangements.   (i) Each Loan Party party thereto as of
the Closing Date shall have executed and delivered (A) the Foreign Pledge
Agreement, and shall have delivered to the Collateral Agent, as pledgee
thereunder, any and all Collateral referenced therein, (B) transfer powers and
endorsements (as applicable) for all such Collateral, executed in blank and
delivered by a duly Authorized Officer of the applicable pledgor or assignor, as
the case may be, (C) financing statements in respect of such Collateral, to the
extent requested by the Lenders, in such jurisdictions as the Lenders may
request; and the Foreign Pledge Agreement shall be in full force and effect and
(D) evidence of the completion of, or arrangement for, all other recordings,
notations and filings of, or with respect to the Foreign Pledge Agreement or the
relevant Collateral, as may be necessary or, in the reasonable opinion of the
Lenders, desirable in order to perfect the security interests intended to be
created by the Foreign Pledge Agreement.

 

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(ii)         Each Loan Party party thereto as of the Closing Date shall have
executed and delivered (A) the Security Agreement and shall have delivered to
the Collateral Agent, as pledgee thereunder, any and all Collateral referenced
therein, (B) transfer powers and endorsements (as applicable) for all such
Collateral, executed in blank and delivered by a duly Authorized Officer of the
applicable pledgor or assignor, as the case may be, (C) financing statements in
respect of the Collateral referenced therein, to the extent requested by the
Lenders, in such jurisdictions as the Lenders may request; and the Security
Agreement shall be in full force and effect and (D) evidence of the completion
of, or arrangement for, all other recordings, notations and filings of, or with
respect to the Security Agreement or the Collateral, as may be necessary or, in
the reasonable opinion of the Lenders, desirable in order to perfect the
security interests intended to be created by the Security Agreement.

 

(iii)        The Collateral Agent and the Lenders shall have received a
Perfection Certificate with respect to the Loan Parties dated the Closing Date
and duly executed by an Authorized Officer of the Borrower, and shall have
received the results of a search of the UCC filings (or equivalent filings) made
with respect to the Loan Parties in the states (or other jurisdictions) of
formation of such Persons, in which the chief executive office of each such
Person is located and in the other jurisdictions in which such Persons maintain
property, in each case as indicated on such Perfection Certificate, together
with copies of the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence satisfactory to the Lenders that the Liens
indicated in any such financing statement (or similar document) would be
permitted under ‎Section 6.02 or have been or will be contemporaneously released
or terminated.

 

(e)          Fees and Expenses. (i) The fees required to be paid on the Closing
Date pursuant to ‎Section 2.03 shall be paid concurrently with the Borrowing of
the Loans, (ii) the Warrants to be issued on the Closing Date shall have been
issued to the Lenders and (iii) the Agents and the Lenders shall have received
reimbursement or payment of all out-of-pocket expenses (including the reasonable
and documented out-of-pocket fees, disbursements and other charges of counsel to
the Lenders and counsel to the Agents) required to be reimbursed or paid by the
Borrower in connection with this Agreement, the Warrants and the other Loan
Documents.

 

(f)          Financial Statements, Projections; Pro Forma Balance Sheet;
Solvency Certificate. The Lenders shall have received and be satisfied with (i)
the pro forma balance sheet described in ‎Section 3.05(d), and (ii) the
Financial Statements and the projections delivered to the Lenders. The Lenders
shall have been satisfied based on the foregoing documentation and a certificate
from the

  

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Chief Financial Officer of the Borrower delivered to the Administrative Agent
and the Lenders, that the Borrower and each of its Subsidiaries, taken as a
whole, are Solvent on the Closing Date both before and after giving effect to
the Transactions to be effected on the Closing Date and the application of the
net proceeds of the Loans and the Warrants.

 

(g)          Insurance. The Administrative Agent and the Lenders shall have
received certificates of insurance and other evidence satisfactory to the
Lenders that the insurance required under ‎Section 5.06 is in full force and
effect (together with a customary insurance broker’s letter).

 

(h)          Repayment of Manchester Seller Financing. The Manchester Seller
Financing shall have been prepaid in full and the Manchester Seller Liens and
all other security in support thereof shall have been discharged and released in
connection therewith, and the Lenders shall have received evidence thereof that
is reasonably satisfactory to the Lenders. Immediately after giving effect to
the Transactions and the other transactions contemplated hereby, the Borrower
and its Subsidiaries shall have outstanding no Indebtedness or preferred stock
other than (x) Indebtedness outstanding under this Agreement, (y) the
Convertible Notes and (z) Indebtedness set forth on Schedule ‎6.01(a).

 

(i)           Acquired License. The Borrower shall have (x) purchased the
Acquired License pursuant to the Thiola Licensing Agreement and paid all the
related transaction costs (it being understood and agreed such condition
precedent is satisfied) and (y) delivered to each Lender a complete and correct
copy of the Thiola License Agreement (including all schedules, exhibits,
amendments, supplements and modifications thereto), all servicing, supply,
marketing, manufacturing and distribution agreements related to the Acquired
License, and all such documentation shall be in form and substance reasonably
satisfactory to the Lenders.

 

(j)          Related Party Agreements. The Borrower shall have delivered to the
Administrative Agent and each Lender any contract or agreement between the
Borrower and its Subsidiaries or any other Affiliate, and all such documentation
shall be in form and substance satisfactory to the Lenders.

 

(k)          Borrowing Notice. The Administrative Agent and Lenders shall have
received a Notice of Borrowing in accordance with ‎Section 2.02.

 

(l)           No MAE. Since December 31, 2013, there shall have not been any
change or effect that could reasonably be expected to have a Material Adverse
Effect.

 

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(m)          No Default. Immediately before and after the Borrowing on the
Closing Date, no Default or Event of Default shall have occurred and be
continuing.

 

(n)          Representations and Warranties. The representations and warranties
of the Loan Parties contained in the Loan Documents, in the Thiola Licensing
Agreement and the other documents relating to the Acquired License, shall in
each case be true and correct in all material respects on and as of the Closing
Date except to the extent that such representations and warranties specifically
refer to an earlier date, in which case such representations and warranties are
true and correct as of such earlier date; provided that any such representation
and warranty that is qualified by “materiality”, “material adverse effect” or
similar language shall be true and correct in all respects (after giving effect
to any such qualification therein) as of the Closing Date or such earlier date,
as applicable.

 

(o)          Consents. All requisite Governmental Authorities and third parties
shall have approved or consented to the Transactions, the Thiola Licensing
Agreement and the acquisition of the Acquired License, and the other
transactions contemplated hereby to the extent required, all applicable appeal
periods shall have expired and there shall not be any pending or threatened
litigation, governmental, administrative or judicial action that could
reasonably be expected to restrain, prevent or impose burdensome conditions on
the Transactions or the other transactions contemplated hereby.

 

(p)          Closing Certificate. The Lenders shall have received a duly
executed Officer’s Certificate from a Financial Officer of the Borrower (x)
certifying compliance with the conditions precedent set forth in paragraphs ‎(l)
through ‎(o) of this ‎Section 4.01 and (y) attaching thereto a duly executed
Compliance Certificate demonstrating pro forma compliance with the Financial
Covenants as of the last day of the most recently ended Measurement Period.

 

(q)          USA PATRIOT Act. The Administrative Agent and the Lenders shall
have received, to the extent requested prior to the Closing Date, all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including the Act.

 

Article 5

Affirmative Covenants of the Borrower

 

Section 5.01.    Financial Statements and Information.   The Borrower shall
furnish to the Lenders:

 

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(a)          Quarterly Financial Statements.   As soon as available and in any
event within 60 days after the end of each fiscal quarter (other than the fourth
fiscal quarter) in each fiscal year of the Borrower, copies of the unaudited
Consolidated balance sheets of the Borrower and its Consolidated Subsidiaries as
of the end of such month and the related Consolidated statements of income,
stockholder’s equity and cash flows for such fiscal quarter and for the portion
of the fiscal year ended with the last day of such fiscal quarter, and stating
in comparative form (i) the Consolidated figures as of the end of and for the
corresponding date and period in the previous fiscal year and (ii) the
corresponding figures from the Consolidated budget of the Borrower and its
Consolidated Subsidiaries for such period, all Certified by the Chief Financial
Officer of the Borrower;

 

(b)          Annual Financial Statements. As soon as available and in any event
within 120 days after the end of each fiscal year of the Borrower:

 

(i)          copies of the audited Consolidated balance sheets of the Borrower
and its Consolidated Subsidiaries, as of the end of such fiscal year, together
with, the related audited Consolidated statements of income, stockholders’
equity and cash flows for such fiscal year, and the notes thereto, all in
reasonable detail and stating in comparative form (A) the respective audited
Consolidated figures as of the end of and for the previous fiscal year and (B)
the corresponding figures from the Consolidated budget of the Borrower and its
Consolidated Subsidiaries for such fiscal year, and in the case of each of such
audited Consolidated financial statements (excluding any statements in
comparative form to be corresponding figures from the Consolidated budget),
accompanied by a report thereon of an independent public accountant of
recognized international standing selected by the Borrower and reasonably
acceptable to the Majority Lenders (the “Accountant”), which report shall be
unqualified as to going concern and scope of audit and shall state that such
Consolidated financial statements present fairly in all material respects the
Consolidated financial position of the Borrower and its Consolidated
Subsidiaries as at the end of such fiscal year and their Consolidated results of
operations, stockholders’ equity and cash flows for such fiscal year in
conformity with GAAP and that the examination by the Accountant in connection
with such Consolidated financial statements has been made in accordance with
generally accepted auditing standards; and

 

(ii)         a written statement of the Accountant stating that in making the
examination necessary for their report on such financial statements they
obtained no knowledge of any event or condition constituting a Default or Event
of Default, or if the Accountant shall have obtained such knowledge, specifying
the nature and status thereof;

  

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(c)          Compliance Certificates. Concurrently with the financial statements
furnished pursuant to clauses ‎(a) and ‎(b) of this ‎Section 5.01, a Compliance
Certificate (x) stating that, based upon such examination or investigation and
review of this Agreement as in the opinion of the signer is necessary to enable
the signer to express an informed opinion with respect thereto, no Default or
Event of Default exists or has existed during such period or, if such a Default
or Event of Default shall exist or have existed, the nature and period of
existence thereof and what action the Borrower and its Subsidiaries have taken,
are taking or propose to take with respect thereto and (y) containing all
information and calculations necessary for determining compliance by the
Borrower and its Subsidiaries with the Financial Covenants as of the last day of
the fiscal quarter or fiscal year of the Borrower, as the case may be, and, in
the event of any change in generally accepted accounting principles used in the
preparation of such financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with the Financial Covenants, a
statement of reconciliation conforming such financial statements to GAAP;

 

(d)          Events of Default. Promptly after becoming aware of the existence
of any Default or Event of Default, an Officer’s Certificate of the Borrower
specifying the nature and period of existence thereof and what action the
Borrower and/or any of its Subsidiaries have taken, are taking or propose to
take with respect thereto an Officer’s Certificate of the Borrower describing
the nature and status of such matters and what action the Borrower and/or such
Subsidiary is taking or proposes to take with respect thereto;

 

(e)          Litigation and Proceedings. Promptly (and in any event within three
(3) Business Days) after the Borrower or any of its Subsidiaries knows of (i)
the institution of, or threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any of its
Subsidiaries or any Property of any of them or which relates to any Loan
Document, including those relating to or arising out of any Environmental Law,
or (ii) any material development in any such action, suit, proceeding,
governmental investigation or arbitration, which, in either case, if adversely
determined, could reasonably be expected to have a Material Adverse Effect, an
Officer’s Certificate of the Borrower describing the nature and status of such
matter in reasonable detail;

 

(f)          Annual Budget; Insurance Coverage. As soon as available, and in any
event no later than thirty (30) days prior to the end of each fiscal year of the
Borrower (x) a detailed consolidated month-by-month budget for the following
fiscal year (including a projected consolidated balance sheet of the Borrower
and its Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow, projected changes in financial
position and projected income and a description of the underlying assumptions
applicable thereto), and, as soon as available, significant revisions, if any,
of such budget and

 

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projections with respect to such fiscal year, which shall in each case be
accompanied by an Officer’s Certificate of the Chief Financial Officer of the
Borrower stating that such projections are based on reasonable estimates,
information and assumptions; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based on assumptions believed to be reasonable at the time, it being
acknowledged that the projections and their underlying assumptions are subject
to inherent uncertainties which may cause the actual results of the Borrower and
its Subsidiaries to vary from the projected results and (y) a report summarizing
the insurance coverage (specifying type, amount and carrier) in effect for each
Loan Party and its Subsidiaries and containing such additional information as
the Administrative Agent, or any Lender through the Administrative Agent, may
reasonably specify;

 

(g)          SEC Correspondence and Other Information. Promptly after (w)
receipt thereof (and in any event within five Business Days after receipt
thereof) by any Loan Party or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Loan Party or any Subsidiary thereof, (x) any request
by the Administrative Agent or any Lender, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or
the audit committee of the board of directors) of any Loan Party by independent
accountants in connection with the accounts or books of any Loan Party or any of
its Subsidiaries, or any audit of any of them, (y) the same are available,
copies of each annual report, proxy or financial statement or other report or
communication sent to the stockholders of the Borrower, and copies of all
annual, regular, periodic and special reports and registration statements which
the Borrower may file or be required to file with the SEC under Section 13 or
15(d) of the Exchange Act, or with any national securities exchange, and in any
case not otherwise required to be delivered to the Administrative Agent pursuant
hereto and (z) the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of any Loan Party or of any of its
Subsidiaries pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
this ‎Section 5.01;

 

(h)          Material Contracts. Promptly after receipt thereof (and in no event
later than three (3) Business Days after receipt thereof) by any Loan Party or
any Subsidiary thereof, copies of all material notices, requests and other
documents, including notices of cancellation or termination so received under or
pursuant to any Material Contract or instrument, indenture, loan or credit or
similar agreement and, from time to time upon request by any Lender (or the
Administrative Agent on behalf of any Lender), such information and reports

  

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regarding the Material Contracts and such instruments, indentures and loan and
credit and similar agreements as such Lender may reasonably request;

 

(i)          PATRIOT Act. Promptly after the request by the Administrative Agent
or any Lender, all documentation and other information that such Lender
reasonably requests in order to comply with its ongoing obligations under
applicable “know your customer” and anti-money laundering rules and regulations,
including the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001)) (the “Act”).

 

(j)          Destruction or Damage to Collateral. Promptly after the occurrence
thereof, notice of damage or destruction to any material portion of the
Collateral.

 

(k)          Annual Collateral Updates. At the time of delivery of the annual
financial statements with respect to the preceding fiscal year pursuant to
‎Section 5.01‎(b), a certificate of a Financial Officer setting forth the
information required pursuant to the Perfection Certificate or confirming that
there has been no change in such information since the date of the Perfection
Certificate delivered on the Closing Date or the date of the most recent
certificate delivered pursuant to this clause (k).

 

(l)          Other Information. Any other information, including financial
statements and computations, relating to the performance of obligations arising
under this Agreement and/or the affairs of the Borrower or any of its
Subsidiaries that the Lenders may from time to time reasonably request and which
is capable of being obtained, produced or generated by the Borrower or such
Subsidiary using their commercially reasonable efforts.

 

Section 5.02.   Inspection of Properties and Books. Each Lender and its
designated representatives, shall have the right, at the Borrower’s expense (i)
to review the books and records and visit and inspect the Collateral and any of
the other Properties of the Borrower and its Subsidiaries at reasonable times,
on reasonable notice as often as reasonably requested, (ii) to make copies and
extracts therefrom at their expense, and (iii) to discuss their affairs,
finances and accounts with, and to be advised as to the same by, their officers
and senior employees and their independent public accountants (and by this
provision the Borrower authorizes the Accountant to discuss their affairs,
finances and accounts and those of its Subsidiaries, whether or not any of such
representatives is present, it being understood that nothing contained in this
‎Section 5.02 is intended to confer any right to exclude any such representative
from such discussions), during normal business hours and upon prior notice to
the Borrower; provided that prior to the occurrence of an Event of Default, the
rights set forth in this ‎Section 5.02 may not be exercised more than one time
in any calendar year. The Lenders shall be entitled to meet with the senior
management of the Borrower and its

  

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Subsidiaries at least once during each fiscal year to discuss the Borrower’s and
its Subsidiaries’ financial statements, business, assets, operations and
prospects.

 

Section 5.03.   Payment of Principal, Prepayment Charge and Interest.   The
Borrower shall duly and punctually pay the principal of, and interest on the
Loans and shall timely pay and perform all other obligations in accordance with
the terms of the applicable Loan Documents and shall cause each Subsidiary to
comply with all of the covenants, agreements and conditions contained in the
applicable Loan Documents to which such Subsidiary is a party.

 

Section 5.04.   Payment of Obligations and Taxes.   The Borrower shall, and
shall cause each of its Subsidiaries to, pay its Indebtedness and other
obligations promptly and in accordance with their terms where the failure to pay
could reasonably be expected to have a Material Adverse Effect. In addition, the
Borrower shall, and shall cause each of its Subsidiaries to (i) pay and
discharge promptly when due all Taxes, assessments and other governmental
charges or levies imposed upon it or upon its income or profits or in respect of
its Property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, could reasonably be expected to have a Material Adverse Effect; provided
that such payment and discharge shall not be required with respect to any such
Tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and the Borrower
shall have set aside on its books reserves with respect thereto in accordance
with GAAP and (ii) timely and correctly file all material Tax Returns required
to be filed by it.

 

Section 5.05.    Maintenance of Existence; Compliance.   The Borrower shall and
shall cause each of its Subsidiaries to do or cause to be done all things
necessary to (i) preserve, renew and keep in full force and effect its legal
existence, except as otherwise expressly permitted under ‎Section 6.04 or, in
the case of any of its Subsidiaries, where the failure to perform such
obligations, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect and (ii) obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits, franchises,
authorizations and IP Rights owned by Borrower or its Subsidiaries material to
the conduct of its business; maintain and operate such business in substantially
the manner in which it is presently conducted and operated; comply with all
applicable Requirements of Law (including any and all zoning, building,
ordinance, code or approval or any building permits, any restrictions of record
or agreements affecting the Real Property and Environmental Laws (including any
requirements relating to the investigation or remediation of any Release of
Hazardous Materials)) and decrees and orders of any Governmental Authority,
whether now in effect or hereafter enacted, except in each case where the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; pay and perform its obligations
under all Real Property Leases and leases of

 

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personal Property except where the failure to pay or perform, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect; provided that nothing in this ‎Section 5.05 shall prevent (x)
consolidations or mergers by or involving the Borrower or any of its
Subsidiaries in accordance with ‎Section 6.04; (y) the withdrawal by the
Borrower or any of its Subsidiaries of its qualification as a foreign
corporation in any jurisdiction where such withdrawal, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect;
or (z) the abandonment in the ordinary course of business by the Borrower or any
of its Subsidiaries of any rights, franchises, nonexclusive licenses, immaterial
IP Rights or immaterial leases that the Borrower or such Subsidiary reasonably
determines are not useful to its business.

 

Section 5.06.   Maintenance of Property; Insurance.   (a) The Borrower shall and
shall cause each of its Subsidiaries to do or cause to be done all things
necessary to at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working order
and condition (ordinary wear and tear, casualty and condemnation excepted) and
shall make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect; provided
that nothing in this ‎Section 5.06(a) shall prevent (i) sales of assets,
consolidations or mergers by or involving the Borrower or any of its
Subsidiaries in accordance with ‎Section 6.04; (ii) the withdrawal by the
Borrower or any of its Subsidiaries of its qualification as a foreign
corporation in any jurisdiction where such withdrawal, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect;
or (iii) the abandonment in the ordinary course of business by the Borrower or
any of its Subsidiaries of any rights, franchises, nonexclusive licenses,
immaterial IP Rights or immaterial leases that such Person reasonably determines
are not useful to its business.

 

(b)          The Borrower shall and shall cause each of its Subsidiaries to keep
its insurable property adequately insured at all times by financially sound and
reputable insurers; maintain such other insurance, to such extent and against
such risks, including fire and other risks insured against by extended coverage,
as is customary with companies in the same or similar businesses operating in
the same or similar locations, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in, about
or in connection with the use of any property owned, occupied or controlled by
it; and maintain such other insurance as may be required by law, such policies
to be in such form and amounts and having such coverage as may be reasonably
satisfactory to the Majority Lenders, it being acknowledged and understood that
the amounts and policies in effect on the Closing Date are acceptable.

 

Section 5.07.   Books and Records.   The Borrower shall and shall cause each of
its Subsidiaries to keep proper books of record and account in which full,

  

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true and correct entries in conformity with GAAP and all applicable Statutes are
made of all dealings and transactions in relation to its business and
activities.

 

Section 5.08.   Additional Collateral and Guarantors; Further Assurances.   (a)
Upon the formation or acquisition of any new direct or indirect domestic Wholly
Owned Subsidiary of the Borrower (other than an Excluded Domestic Subsidiary),
the Borrower shall (or shall cause such new Subsidiary to), at the Borrower’s
expense: (i) within five (5) Business Days after such formation or acquisition
(A) execute and deliver to the Collateral Agent (x) a new pledge agreement or
such amendments or supplements to each applicable Pledge Agreement and/or (y)
such amendments or supplements to the Security Agreement, in each case as the
Lenders reasonably shall deem necessary or advisable to (I) grant to the
Collateral Agent (for the benefit of the Lenders and the Agents) a Lien on (a)
all of the Capital Stock of each of its Domestic Subsidiaries (other than
Excluded Domestic Subsidiaries) and Foreign Subsidiaries (other than Excluded
Foreign Subsidiaries), (b) sixty-five percent (65%) of the outstanding voting
Capital Stock and one hundred percent (100%) of the outstanding non-voting
Capital Stock of each Excluded Foreign Subsidiary directly or indirectly owned
by any Loan Party and (c) all of the other Property of such new Subsidiary
required to be pledged as Collateral under the Collateral Documents to secure
payment of the Loan Obligations and (II) cause such Subsidiary to guarantee the
other Loan Parties’ obligations under the Loan Documents under the terms of the
Security Agreement, (B) deliver to the Collateral Agent the certificates (if
any) representing such Capital Stock and any Collateral consisting of promissory
notes, in each case, together with undated transfer powers or endorsements, as
the case may be, executed and delivered in blank by a duly Authorized Officer of
such Person and (C) furnish to the Lenders (with a copy to the Collateral Agent)
a supplement to the Perfection Certificate providing, among other things, the
description of the real and personal properties of such Subsidiary, in detail
satisfactory to the Majority Lenders and (ii) as promptly as practicable take
all other actions necessary or advisable to cause the Liens created by the
Collateral Documents to be duly perfected to the extent required by such
agreement in accordance with all applicable Requirements of Law, including,
without limitation, the filing of financing statements in such jurisdictions as
may be reasonably requested by the Lenders.

 

(b)          With respect to any fee interest in Real Property acquired by any
Loan Party having a Fair Market Value, as determined in good faith by the
Borrower, in excess of $1,000,000 owned by a Person that is or becomes a Loan
Party after the Closing Date, the Borrower shall (or shall cause such Subsidiary
to) within 90 days (or such longer period as the Majority Lenders, in their sole
discretion, shall agree) of such acquisition, execute a Mortgage in favor of the
Collateral Agent, as mortgagee for the ratable benefit of the Lenders and the
Agents, provide such other title insurance, flood insurance, environmental
audits, local counsel opinions, surveys and appraisals, in each case in form and
substance

  

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reasonably satisfactory to the Majority Lenders, as the Majority Lenders may
reasonably request, and provide evidence of the completion (or satisfactory
arrangements for the completion) of all recordings and filings of such Mortgage
as may be necessary or, in the reasonable opinion of the Majority Lenders,
desirable effectively to create a valid, perfected, first priority Lien, subject
to Permitted Liens, against the properties purported to be covered thereby.

 

(c)          The Borrower shall, and shall cause each of its direct and indirect
Wholly Owned Subsidiaries (other than an Excluded Domestic Subsidiary or any
Excluded Foreign Subsidiary) to, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time (for
the benefit of the Lenders and the Agents) such notes, vouchers, invoices,
notations, schedules, confirmatory assignments, confirmatory conveyances,
financing statements, transfer endorsements, confirmatory powers of attorney,
certificates, reports and other assurances or confirmatory instruments and take
such further steps relating to the Collateral as the Majority Lenders may
reasonably require pursuant to this ‎Section 5.08. Furthermore, the Borrower
shall cause to be delivered to the Collateral Agent and the Lenders such
opinions of counsel and other related documents as may be reasonably requested
by the Lenders to assure themselves that this ‎Section 5.08 has been complied
with. Notwithstanding anything herein to the contrary, the obligation of any new
direct or indirect Wholly Owned Subsidiary (other than an Excluded Domestic
Subsidiary or any Excluded Foreign Subsidiary) of the Borrower to provide
additional Collateral and to become a Guarantor hereunder shall not apply to any
AcquisitionCo Subsidiary so long as the prohibition on such AcquisitionCo
Subsidiary providing security and credit support under the Loan Documents
remains in effect in the definitive documentation relating to the applicable
Non-Recourse Indebtedness of such AcquisitionCo Subsidiary.

 

Section 5.09.   Maintenance of Licenses; Material Contracts.   The Borrower
shall comply in all respects with, and preserve and maintain, and cause each of
its Subsidiaries to comply in all respects with, and preserve and maintain, all
necessary authorizations, permits and licenses (including, without limitation,
the Acquired License) in connection with its right to engage in business of the
same general type as now conducted by it except where the failure would not
reasonably be expected to have a Material Adverse Effect. Each Loan Party shall
comply in all respects with, and cause each of its Subsidiaries to comply in all
respects with, all applicable biopharmaceutical Statutes and Orders and each of
the Contractual Obligations of such Loan Party or such Subsidiary except where
the failure to comply would not reasonably be expected to have a Material
Adverse Effect. The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, each Material Contract to which it is a party in full
force and effect, enforce each such Material Contract in accordance with its
terms except where the failure to do so, either individually or in the
aggregate, could not be reasonably likely to have a Material Adverse Effect.

 

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Section 5.10.   Employee Benefits.   The Borrower shall (a) comply in all
material respects with the provisions of ERISA and the Code applicable to
employee benefit plans as defined in Section 3(3) of ERISA and the laws
applicable to any Foreign Pension Plan, (b) furnish to the Lenders as soon as
possible, and in any event within ten days, after any responsible officer of
Holdings, the Borrower or any ERISA Affiliate knows or has reason to know that,
any ERISA Event has occurred or is reasonably expected to occur that, alone or
together with any other ERISA Event that has occurred or is reasonably expected
to occur that could reasonably be expected to result in liability of the
Borrower or any ERISA Affiliate in an aggregate amount exceeding $1,000,000, a
statement of a Financial Officer of the Borrower setting forth details as to
such ERISA Event and the action, if any, that the Borrower proposes to take with
respect thereto and (c) promptly and in any event within 30 days after the
filing thereof with the United States Department of Labor, furnish to the
Lenders copies of each Schedule SB (Actuarial Information) to the Annual Report
(Form 5500 Series) with respect to each Plan, if any.

 

Section 5.11.  Quarterly Lender Calls.   Upon the request of the Administrative
Agent or the Majority Lenders, the Borrower shall participate in quarterly
conference calls with the Lenders, in each case at such times as may be agreed
to by the Borrower and the Administrative Agent or the Majority Lenders.

 

Section 5.12.   Control Accounts.   Within 10 Business Days after the Closing
Date (or such longer period as the Majority Lenders, in their sole discretion,
shall agree), the Borrower shall cause, and shall cause each of its Subsidiaries
to cause, all revenues, distributions, dividends and other amounts received or
receivable by it to be deposited into an Account subject to a Control Agreement;
provided that no such Control Agreement shall be required with respect to any
Excluded Account holding proceeds of any assets of such AcquisitionCo
Subsidiary.

 

Section 5.13.    Information Regarding Loan Parties.   (a) The Borrower shall
furnish to the Administrative Agent and the Lenders prompt written notice of any
change (i) in any Loan Party’s corporate name, (ii) in the jurisdiction of
organization or formation of any Loan Party, (iii) in any Loan Party’s identity
or corporate structure or (iv) in any Loan Party’s Federal Taxpayer
Identification Number. The Borrower agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected security interest in all the Collateral.

 

Section 5.14.     Intellectual Property.   The Borrower shall, and shall cause
each of its Subsidiaries to, at its sole cost and expense (a) not take any act
or omit to take any commercially reasonable act whereby any material IP Rights
owned

  

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by the Borrower or any of its Subsidiaries may lapse or be abandoned, forfeited,
dedicated to the public, invalidated or materially impaired in any way other
than in the ordinary course of business or as consistent with the Borrower’s or
such Subsidiary’s past practice, (b) take commercially reasonable actions to
protect against and prosecute infringements, dilutions, misappropriations and
other violations of material IP Rights owned by the Borrower or any of its
Subsidiaries (including commencement of suit), and not settle or compromise any
pending or future litigation or administrative proceeding with respect to such
IP Rights, except as shall be consistent with commercially reasonable business
judgment and ‎(c) take commercially reasonable steps to protect the secrecy of
all of its material trade secrets.

 

Article 6

Negative Covenants of the Borrower

 

The Borrower covenants and agrees that, until all of the Loan Obligations have
been irrevocably and indefeasibly paid in full in Cash and no Loans are
outstanding that:

 

Section 6.01.   Indebtedness.  (a) The Borrower shall not and shall not permit
any of its Subsidiaries to incur, create, assume or permit to exist, directly or
indirectly, any Indebtedness, except that the Borrower and its Subsidiaries may
incur, create, assume or permit to exist:

 

(i)          Indebtedness incurred under the Loan Documents;

 

(ii)         (a) the Convertible Notes and (b) any Permitted Refinancing
Indebtedness in respect thereof;

 

(iii)        (a) Indebtedness of the Borrower and its Subsidiaries outstanding
on the Closing Date and listed on Schedule 6.01(a) and (b) any Permitted
Refinancing Indebtedness in respect thereof;

 

(iv)        (a) Non-Recourse Indebtedness of any Subsidiary (other than an
existing Guarantor) (an “AcquisitionCo Subsidiary”) incurred in connection with
a Permitted Acquisition by such AcquisitionCo Subsidiary of an Acquired Entity
or Business and (b) any Permitted Refinancing Indebtedness in respect thereof;

 

(v)         Indebtedness of a Subsidiary of the Borrower owed to the Borrower or
a Wholly Owned Subsidiary of the Borrower, which Indebtedness (x) in the case of
Indebtedness owed to a Loan Party, constitutes “Pledged Collateral” under the
Security Agreement, (y) be on terms (including subordination terms) acceptable
to the Administrative

 

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Agent and the Lenders and (z) be otherwise permitted under the provisions of
‎Section 6.07;

 

(vi)        Indebtedness represented by Capitalized Lease Obligations, mortgage
financings, purchase money obligations or other Indebtedness incurred or assumed
for the purpose of financing or refinancing all or any part of the purchase
price, lease expense or cost of any property or asset, tangible or intangible,
(including IP Rights) used in the Borrower’s or any of its Subsidiary’s business
or reasonably related or ancillary thereto; provided that the principal amount
of such Indebtedness so incurred when aggregated with other Indebtedness
previously incurred in reliance on this clause ‎(vi) (and permitted refinancing
with respect thereto) and still outstanding shall not in the aggregate exceed
$1,000,000;

 

(vii)       Obligations under interest rate swap agreements and other interest
rate hedging instruments, currency swap agreements, currency forward contracts
or other currency hedging instruments, in each case entered into on a
non-speculative basis and in the normal course of business; provided that the
Agreement Value of such Indebtedness together with the Agreement Value of other
Indebtedness previously incurred in reliance on this clause ‎Section
6.01(a)(vii) and still outstanding shall not in the aggregate exceed at any time
$1,000,000;

 

(viii)      Indebtedness in respect of workers’ compensation and claims arising
under similar legislation, or pursuant to self-insurance obligations and not in
connection with the borrowing of money or the obtaining of advances or credit;
and

 

(ix)         Indebtedness arising from (w) the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business; provided that such Indebtedness is extinguished
within five Business Days of incurrence, (x) bankers’ acceptances, performance,
surety, judgment, appeal or similar bonds, instruments or obligations, (y)
completion guarantees provided or letters of credit obtained by the Borrower or
any of its Subsidiaries in the ordinary course of business; and (z) the
financing of insurance premiums in the ordinary course of business; and

 

(x)          other Indebtedness not permitted to be incurred under this ‎Section
6.01(a) in an aggregate amount not to exceed $1,000,000 at any time; provided
that such Indebtedness is subordinated to the Loan Obligations on terms
reasonably satisfactory to the Lenders.

 

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(b)          For purposes of determining any particular amount of Indebtedness
under this ‎Section 6.01:

 

(i)          obligations with respect to letters of credit, guarantees or Liens,
in each case supporting Indebtedness otherwise included in the determination of
such particular amount will not be included;

 

(ii)         accrual of interest, accrual of dividends, the accretion of
accreted value and the obligation to pay commitment fees will not be treated as
Indebtedness.

 

Section 6.02. Liens. The Borrower shall not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist, any Lien on or with respect to any of
its Property or revenues, whether now owned or hereafter acquired, excluding,
however, from the operation of the foregoing restrictions the following:

 

(a)          Liens created or existing under the Loan Documents;

 

(b)          Liens created or existing under Indebtedness permitted pursuant to
Section ‎6.01(a)(iv);

 

(c)          Liens existing on the Closing Date and listed on Schedule ‎6.02(a)
and any renewals or extends thereof; provided that (i) the property covered
thereby is not changed, (ii) the amount secured or benefited thereby is not
increased except as contemplated by ‎Section 6.01(a)(vi), (iii) the direct or
any contingent obligor with respect thereto is not changed, (iv) any renewal or
extension of the obligations secured or benefited thereby is permitted by
‎Section 6.01(a)(vi) and (v) such Liens secure Indebtedness outstanding in an
aggregate principal amount not to exceed $500,000.

 

(d)          Liens securing Indebtedness permitted under ‎Section 6.01(a)(vii);
provided that (i) such Liens do not at any time encumber any Property other than
the Property financed by such Indebtedness and (ii) the Indebtedness secured
thereby does not exceed the cost or Fair Market Value, whichever is lower, of
the Property being acquired on the date of acquisition;

 

(e)          any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary of the Borrower and not created in contemplation of
such event; provided that such Lien shall not attach to any asset held by the
Borrower or any Subsidiary of the Borrower immediately prior to such Person
becoming a Subsidiary of the Borrower;

 

(f)          any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a Subsidiary of
the Borrower and not created in contemplation of such event; provided that such
Lien

 

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shall not attach to any asset held by the Borrower or any Subsidiary of the
Borrower immediately prior to such merger or consolidation;

 

(g)          Liens for ad valorem property taxes not yet due or Liens for taxes
which are being contested in good faith and by appropriate proceedings
diligently conducted (which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to any such Lien), if
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;

 

(h)          carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested in good
faith and by appropriate proceedings diligently conducted (which proceedings
have the effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien), if reserves with respect thereto are maintained on
the books of the applicable Person in accordance with GAAP;

 

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

 

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

 

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

 

(l)          licenses, sublicenses and other grants of rights under any IP
Rights and any interest or title of a lessor or sublessor or licensor or
sublicensor under any non-exclusive licenses, in each case granted in the
ordinary course of business, not interfering in a material respect with the
business of the Borrower or any of its Subsidiaries and not prohibited by this
Agreement;

 

(m)          Liens arising from precautionary UCC (or personal property security
law) financing statements filed under any lease permitted by this Agreement;

 

(n)          Liens (i) in favor of collecting banks arising under Section 4-210
of the UCC or, with respect to collecting banks located in the State of New
York, under Section 4-208 of the UCC or (ii) relating to pooled deposit or sweep

  

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accounts to permit satisfaction of overdraft or similar obligations incurred in
the ordinary course of business;

 

(o)          Liens (including the right of set-off) in favor of a bank or other
depository institution arising as a matter of law encumbering deposits;

 

(p)          Liens in favor of customs and revenue authorities arising as a
matter of law which secure payment of customs duties in connection with the
importation of goods in the ordinary course of business which are not overdue
for a period of more than 60 days or which are being contested in good faith and
by appropriate proceedings diligently conducted (which proceedings have the
effect of preventing the forfeiture or sale of the property or assets subject to
any such Lien); and

 

(q)          Liens securing judgments for the payment of money not constituting
an Event of Default under Section 7.01(h).

 

Section 6.03. Sale And Leasebacks. The Borrower shall not, and shall not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist, any
obligations as lessee for the rental or hire of real or personal Property in
connection with any sale and leaseback transaction other than in respect of
Capitalized Lease Obligations permitted by ‎Section 6.01(a).

 

Section 6.04.   Mergers, Consolidations, Etc. The Borrower shall not, and shall
not permit any of its Subsidiaries to, merge into or consolidate with any Person
or permit any Person to merge into it, or sell, transfer, lease or otherwise
Dispose of all or substantially all of the Capital Stock of any of its
Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that (x) any Subsidiary of the Borrower may be
merged, consolidated, dissolved, amalgamated or liquidated with or into the
Borrower (so long as the surviving Person of such merger, consolidation,
dissolution, amalgamation or liquidation is the Borrower) or any Guarantor (so
long as the surviving Person of such merger, consolidation, dissolution,
amalgamation or liquidation is a Guarantor) and (y) any Subsidiary of the
Borrower that is not a Loan Party may be merged, consolidated, dissolved,
amalgamated or liquidated with or into any other Subsidiary; provided that any
such merger, consolidation, dissolution, amalgamation or liquidation pursuant to
this clause (y) shall only be permitted pursuant to this ‎Section 6.04, so long
as (a) no Default or Event of Default then exists or would exist immediately
after giving effect thereto and (b) any security interests granted to the
Collateral Agent for the benefit of the Lenders and the Agents in the Property
of (and Capital Stock issued by) any such Person subject to any such transaction
shall remain in full force and effect and perfected and enforceable (to at least
the same extent as in effect immediately prior to such merger, consolidation,
amalgamation or liquidation).

 

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Section 6.05.    [Reserved].

 

Section 6.06.   Sales, Etc. of Assets.   The Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, lease, transfer or otherwise Dispose of
(in one transaction or in a series of transactions) or grant any option or other
right to purchase, lease or otherwise acquire any of its assets; provided that,
subject to the requirements of ‎Section 6.04, this ‎Section 6.06 shall not
prohibit:

 

(a)          the Borrower or any of its Subsidiaries from selling, transferring
or otherwise Disposing of obsolete, uneconomic or surplus Property, in each case
in the ordinary course of business, on an arm’s-length basis and for
consideration that is at least 75% Cash or Cash Equivalents and which is equal
to the Fair Market Value of such assets and is paid at the time of the closing
of such sale, transfer or other Disposition; provided that the Net Cash Proceeds
therefrom are applied as (and to the extent) required by ‎Section 2.05(b).

 

(b)          the Borrower or the Guarantors from entering into any sublicense
with any other Loan Party in respect of IP Rights in each case in the ordinary
course of business and so long as such sublicense could not reasonably be
expected to result in a Material Adverse Effect,

 

(c)          sales, transfers or other Dispositions of assets (x) among the
Borrower and the Guarantors and (y) among non-Loan Parties,

 

(d)          Liens permitted by the Loan Documents,

 

(e)          any Disposition in connection with directors’ qualifying shares or
investments by foreign nationals mandated by applicable law,

 

(f)          a sale-leaseback transaction permitted by this Agreement;

 

(g)          Dispositions of inventory in the ordinary course of business not
impairing in any material respect the conduct of the business of the Loan
Parties or any of their Subsidiaries;

 

(h)          cancellations, terminations or surrender of any lease permitted to
be cancelled, terminated or surrendered under this Agreement;

 

(i)          sales or discounting, on a non-recourse basis of accounts that are
more than 60 days past due in connection with the collection or compromise
thereof (provided, however, that any such sales or discounting of accounts that
are more than 60 days past due but less than 120 days past due shall not exceed
an aggregate face amount of $250,000 in any fiscal year);

 

(j)          licenses, sublicenses, leases or subleases (including any license
or sublicense of IP Rights) in the ordinary course of business not impairing in
any

  

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material respect the conduct of the business of the Loan Parties or any of their
Subsidiaries;

 

(k)          Dispositions resulting from any casualty, other insured damage, or
any taking under power of eminent domain or by condemnation or similar
proceeding; provided, that the Net Cash Proceeds therefrom are applied as (and
to the extent) required by Section 2.05(b);

 

(l)          the lapse or abandonment of any registrations or applications for
registration of any IP Rights no longer used or useful in the conduct of the
business of Borrower or any Subsidiary or to the extent no longer economically
desirable in the conduct of their business, in each case not impairing in any
material respect the conduct of the business of the Loan Parties or any of their
Subsidiaries;

 

(m)          Dispositions constituting an Investment or Restricted Payment and
permitted under Section 6.07 or Section 6.08, respectively;

 

(n)          the termination or unwinding of any interest rate swap agreements
and other interest rate hedging instruments, currency swap agreements, currency
forward contracts or other currency hedging instruments in accordance with its
terms; and

 

(o)          Dispositions of Cash Equivalents.

 

Section 6.07. Investments and Acquisitions. The Borrower shall not, and shall
not permit any of its Subsidiaries to, make or hold any Investments or
Acquisitions, including, without limitation, by way of guaranty, in or to any
Affiliate or any other Person, other than:

 

(a)          Investments by the Borrower and its Subsidiaries in Cash
Equivalents and Accounts in which solely Cash and/or Cash Equivalents are
maintained or credited;

 

(b)          (x) Investments in one or more Subsidiaries of the Borrower to the
extent outstanding on the Closing Date and identified on Schedule ‎6.07(b) and
Investments after the Closing Date in any Loan Party (and any modification,
replacement, renewal or extension thereof that does not increase the principal
amount thereof unless any additional Investments made with respect thereto are
permitted under the other provisions of this ‎Section 6.07), and (y) additional
Investments by Subsidiaries of the Borrower that are not Loan Parties in other
Subsidiaries that are not Loan Parties;

 

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(c)          advance payments by the Borrower or its Subsidiary to vendors of
such Person and other extensions of trade credit to customers of such Person in
the ordinary course of business;

 

(d)          Permitted Acquisitions;

 

(e)          loans and advances to employees in the ordinary course of the
business of the Borrower and its Subsidiaries as presently conducted in an
aggregate principal amount not to exceed $500,000 at any time outstanding;

 

(f)          Investments by the Borrower and its Subsidiaries in any non-Cash
proceeds received by the Borrower or such Subsidiary in connection with any
transaction permitted by the provisions of ‎Section 6.06;

 

(g)          non-control or minority Investments in Persons that are not
registered under the Exchange Act in which the Borrower receives equity,
convertible equity or debt securities or securities exercisable for equity or
debt of such Person; provided that the aggregate amount of Investments under
this clause (g) shall not exceed $1,000,000 at any time outstanding; and

 

(h)          other Investments not permitted by the foregoing clauses in an
aggregate amount not to exceed $2,000,000; provided no Investment may be made
pursuant to this clause (h) by any Loan Party in Subsidiaries that are not Loan
Parties unless no Default has occurred and is continuing or would result from
such Investment.

 

Section 6.08.   Restricted Payments. The Borrower shall not, and shall not
permit any of its Subsidiaries to, authorize, declare or pay, directly or
indirectly, any Restricted Payments, provided that any Subsidiary of the
Borrower may:

 

(a)          make Restricted Payments to any Loan Party and to any other Person
that directly owns the Capital Stock of a Guarantor, ratably according to their
respective holdings of the type of Capital Stock in respect of which such
Restricted Payment is being made;

 

(b)          declare and make dividend payments or other distributions payable
solely in the common stock or other common Capital Stock of such Person; and

 

(c)          except to the extent the Net Cash Proceeds thereof are required to
be applied to the prepayment of the Loans pursuant to ‎Section 2.05(b)(i), the
Borrower and each Subsidiary may purchase, redeem or otherwise acquire its
common Capital Stock with the proceeds received from the substantially
concurrent issue of new common Capital Stock.

 

Section 6.09.   Payment Restrictions Affecting Subsidiaries; No Further Negative
Pledges.  Neither the Borrower, nor any Subsidiary of the Borrower

  

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shall enter into or permit to exist any Contractual Obligation that (A) limits
the ability (i) of any Subsidiary to make Restricted Payments to the Borrower or
any Guarantor or to otherwise transfer property to or invest in the Borrower or
any Guarantor, except for any agreement in effect at the time any such
Subsidiary becomes a Subsidiary of the Borrower, so long as such agreement was
not entered into in contemplation of such Person becoming a Subsidiary of the
Borrower, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower
or (iii) of the Borrower or such Subsidiary to create, incur, assume or suffer
to exist Liens on property of such Person; provided, however, that this clause
‎(iii) shall not prohibit any negative pledge incurred or provided in favor of
any holder of Indebtedness permitted under ‎Section 6.01(a)(vi) solely to the
extent any such negative pledge relates to the property financed by or the
subject of such Indebtedness; or (B) requires the grant of a Lien to secure an
obligation of such Person if a Lien is granted to secure another obligation of
such Person; provided, further that this ‎Section 6.09 shall not apply to (i)
the Loan Documents, (ii) customary restrictions on assignment, transfer or
subletting in any lease, license or contract, (iii) restrictions on asset
transfers in the form of Permitted Liens and (iv) with respect to Non-Recourse
Indebtedness incurred by any AcquisitionCo Subsidiary, encumbrances or
restrictions contained in the terms governing any such Non-Recourse Indebtedness
applicable solely to such AcquisitionCo Subsidiary and its Subsidiaries, if (as
determined in good faith by the board of directors of the Borrower) (x) the
encumbrances or restrictions are ordinary and customary for a financing of that
type and (y) the encumbrances or restrictions would not, at the time agreed to,
be expected to materially adversely affect the ability of the Borrower to make
payments on the Loans this Agreement or any other Loan Document.

 

Section 6.10.  Conduct of Business.  The Borrower shall not, and shall not
permit any of its Subsidiaries to, conduct any business other than the Company
Business, or any other business substantially related thereto.

 

Section 6.11.  Prepayments, Etc., of Indebtedness.   The Borrower shall not, and
shall not permit any of its Subsidiaries to, optionally prepay, redeem,
purchase, defease or otherwise satisfy in any manner, or make any payment in
violation of any subordination terms of, any unsecured, subordinated or other
Indebtedness secured on a junior Lien basis relative to the Loan Obligations;
provided that the Borrower and its Subsidiaries may (i) pay trade payables in
the ordinary course of business, (ii) prepay or repay intercompany Indebtedness
(other than intercompany Indebtedness constituting Collateral), (iii) make
Investments and satisfy contingent obligations otherwise permitted hereunder;
(iv) convert the Convertible Notes into Common Stock in accordance with its
terms, (v) refinance Indebtedness to the extent permitted hereby and (vi) in the
case of any AcquisitionCo Subsidiary, prepay or repay its Non-Recourse
Indebtedness.

  

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Section 6.12.   Amendments to Organizational Documents and Material Contracts.
  The Borrower shall not, and shall not permit any of its Subsidiaries to (i)
amend its Organizational Documents or (ii) (a) cancel or terminate any Material
Contract or consent to or accept any cancellation or termination thereof, (b)
amend, modify or change in any manner any term or condition of any Material
Contract or give any consent, waiver or approval thereunder, ‎(c) waive any
default under or any breach of any term or condition of any Material Contract or
‎(d) take any other action in connection with any Material Contract that would
materially impair the value of the interest or rights of any Loan Party or its
Subsidiaries thereunder or that would materially impair the rights or interests
of the Administrative Agent or any Lender.

 

Section 6.13.   Accounting Changes; Fiscal Year.   The Borrower shall not, and
shall not permit any of its Subsidiaries to, make or permit any change in (x)
accounting policies or reporting practices, except as required to comply with
GAAP (subject to ‎Section 1.02) or (y) its or any of its Subsidiary’s fiscal
years.

 

Section 6.14.   Speculative Transactions.   The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into any Hedge Agreement except (x)
Hedge Agreements entered into to hedge or mitigate risks in respect of interest
rate currency or other risks inherent to the Company Business to which the
Borrower or any Subsidiary has actual exposure (other than those in respect of
the Capital Stock of the Borrower or any Subsidiary) and (y) other instruments
that are not speculative in nature, but instead are designed to hedge risks
incurred by the Borrower or any Subsidiary in the ordinary course of its
business.

 

Section 6.15.   Use of Proceeds.   The Borrower shall not, and shall not permit
its Subsidiaries to, directly or indirectly, use the proceeds of the Loans (x)
for any purpose other than as specified in ‎Section 3.17 nor (y) for any purpose
which would breach the United States Foreign Corrupt Practices Act of 1977, the
UK Bribery Act 2010, or other similar legislation in other jurisdictions.

 

Section 6.16.   Transactions with Affiliates; Intercompany Transactions.   (a)
The Borrower shall not, and shall not permit any of its Subsidiaries to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any Property from, or otherwise engage in any other
transactions with, any of its Affiliates or shareholders (including, without
limitation, any agreements for the provision of any service entered into between
the Borrower or any Subsidiary thereof on the one hand, and any Affiliate or
shareholder thereof, on the other hand), except (i) transactions in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower or such Subsidiary than could be obtained on an arm’s-length basis
from unrelated third parties, (ii) transactions between or among the Borrower
and its Wholly Owned Subsidiaries not involving any other Affiliate or
shareholder thereof and (iii) any transaction permitted by ‎Section 6.07;
provided that (x) in

  

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the event that such transaction (or series of related transactions) involves an
aggregate amount in excess of $1,000,000, the terms of such transaction must be
approved by a majority of the members of the board of directors of the Borrower
and by a majority of the disinterested members of such board, if any (and such
majority or majorities, as the case may be, determines that such transaction (or
series of related transactions) was on fair and reasonable terms no less
favorable to the Borrower and its Subsidiaries than it would have obtained in a
comparable arm’s length transaction with a Person that is not an Affiliate or
shareholder thereof), and (y) in the event that such transaction (or series of
related transactions) involves an aggregate amount in excess of $2,000,000 the
Borrower has received a written opinion from an independent investment banking
or accounting firm of internationally recognized standing that such transaction
is fair to the Borrower and its Subsidiaries from a financial point of view.

 

(b)          Notwithstanding the foregoing:

 

(i)          the Borrower and its Subsidiaries may make, and the Borrower and
its Subsidiaries may accept, the Investments permitted by ‎Section 6.07;

 

(ii)         The Borrower and its Subsidiaries may fulfill Contractual
Obligations under agreements in effect on the Closing Date (including the
Material Contracts) and not entered into in anticipation of the Closing Date,
which in each case have been disclosed to the Lenders prior to the Closing Date;
and

 

(iii)        the Borrower and its Subsidiaries may make payments permitted under
‎Section 6.08.

 

Section 6.17.    Financial Covenants.

 

(a)          Consolidated Leverage Ratio. The Borrower shall not permit the
Consolidated Leverage Ratio as of the end of any Measurement Period set forth
below to be greater than the ratio set forth below opposite such Measurement
Period:

 

Measurement Period Ending  Maximum
Consolidated
Leverage Ratio December 2014  30.3:1.00 March 2015  19.6:1.00 June 2015 
17.5:1.00 September 2015  16.0:1.00 December 2015  14.6:1.00 March 2016 
10.7:1.00

 

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Measurement Period Ending  Maximum
Consolidated
Leverage Ratio June 2016  10.7:1.00 September 2016  10.7:1.00 December 2016 
10.7:1.00 March 2017  9.2:1.00 June 2017  9.2:1.00 September 2017  9.2:1.00
December 2017  9.2:1.00 March 2018  8.0:1.00

 

 

(b)          Consolidated Interest Coverage Ratio. The Borrower shall not permit
the Consolidated Interest Coverage Ratio as of the end of any Measurement Period
to be less than the ratio set forth below opposite such Measurement Period:

 

Measurement Period Ending  Minimum
Consolidated
Interest Coverage
Ratio December 2014  1.7:1.00 March 2015  2.6:1.00 June 2015  3.0:1.00 September
2015  3.2:1.00 December 2015  3.5:1.00 March 2016  4.9:1.00 June 2016  4.9:1.00
September 2016  4.9:1.00 December 2016  4.9:1.00 March 2017  5.6:1.00 June 2017 
5.6:1.00 September 2017  5.6:1.00 December 2017  5.6:1.00 March 2018  6.5:1.00

  

(c)          Minimum EBITDA. The Borrower shall not permit the Consolidated
EBITDA as of the end of any Measurement Period to be less than the amount set
forth below opposite such Measurement Period:

  

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Measurement Period Ending  Minimum EBITDA
(in $ Millions)  September 2014  $(2.000) December 2014  $3.000  March 2015 
$4.644  June 2015  $5.187  September 2015  $5.694  December 2015  $6.229  March
2016  $8.533  June 2016  $8.533  September 2016  $8.533  December 2016  $8.533 
March 2017  $9.907  June 2017  $9.907  September 2017  $9.907  December 2017 
$9.907  March 2018  $11.358 

  

(d)          Minimum Liquidity. The Borrower shall not permit the aggregate
amount of its unrestricted Cash and Cash Equivalents in Accounts subject to a
Control Agreement to be less than $5,000,000 at any time.

 

Article 7

Events of Default

 

Section 7.01.   Events of Default; Remedies with Respect to the Loan
Obligations.   If any of the following events (herein called “Events of
Default”) shall have occurred (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or by operation of law or otherwise
and such Event of Default shall be deemed to be continuing until waived in
accordance with the terms hereof):

 

(a)          the Borrower shall default in the due and punctual payment of all
or any part of the principal of, any Loan when and as the same shall become due
and payable, whether at stated maturity, by acceleration, by notice of
prepayment or otherwise; or

 

(b)          the Borrower shall default in the due and punctual payment of any
interest on any Loan when and as such interest shall become due and payable or
any Loan Party shall default in the due and punctual payment of any other Loan
Obligation when and as such Loan Obligation shall become due and payable, and
any such default shall continue for a period of three Business Days; or

  

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(c)          any representation or warranty made or deemed made by or on behalf
of the Borrower or its Subsidiaries herein or in any other Loan Document or that
is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been untrue or inaccurate on or as
of the date made or deemed made; or

 

(d)          the Borrower shall default in the observance or performance of any
agreement contained in ‎Section 5.01(d), ‎5.05(i), 5.12 or ‎Article 6 of this
Agreement; or

 

(e)          the Borrower shall default in the observance or performance of any
other agreement contained in this Agreement, any other Loan Document (other than
as provided in paragraphs ‎(a) through ‎(d) of this ‎Section 7.01), and such
default shall continue unremedied for a period of 15 days after the earlier of
(x) notice to the Borrower from the Administrative Agent or any Lender and
(y) the date on which any of the Borrower or any of its Subsidiaries becomes
aware of such default; or

 

(f)          default under the terms of any instrument evidencing or securing
the Indebtedness of the Borrower or any Subsidiary having an outstanding
principal amount in excess of $1,000,000 individually or in the aggregate, if
that default (x) would cause, or permit the holder or holders of such
Indebtedness to cause, with the giving of notice, if required, such Indebtedness
to be demanded or to become due or to be repurchased, prepaid, defeased or
redeemed (automatically or otherwise) or an offer to purchase, prepay, defease
or redeem such Indebtedness to be made, prior to its stated maturity, or for any
Guarantee Obligation to become payable or cash collateral in respect thereof to
be demanded or (y) is caused by the failure to pay such Indebtedness at final
maturity thereof after giving effect to the expiration of any applicable grace
periods and other than by regularly scheduled required prepayment) and such
failure to make any payment has not been waived or the maturity of such
Indebtedness has not been extended and in either case the total amount of such
Debt unpaid or accelerated exceeds $1,000,000 or its equivalent at the time;

 

(g)          (i) the Borrower or any Subsidiary shall commence any case,
proceeding or other action (A) under any Debtor Relief Law seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it as
bankrupt or insolvent, or seeking reorganization, compositions, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to it or its debts or (B) seeking appointment of a receiver,
trustee, custodian, administrator, conservator or other similar official for it
or for all or any substantial part of its assets, or the Borrower or any
Subsidiary shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Borrower or any Subsidiary any case,
proceeding or other

  

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action of a nature referred to in clause ‎‎(i) above that (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower or any Subsidiary any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Borrower or any Subsidiary shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause ‎(i), ‎‎(ii) or ‎(iii)
above; or (v) the Borrower or any Subsidiary shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or

 

(h)          one or more judgments or decrees shall be entered against the
Borrower or any Subsidiary involving in the aggregate a liability (not paid or
fully covered by insurance as to which the relevant insurance company has
acknowledged coverage) of $1,000,000 or more, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal within
30 days from the entry thereof; or

 

(i)          any of the Loan Documents shall cease, for any reason other than as
expressly permitted hereunder or thereunder, to be in full force and effect, or
any Lien created by any of the Loan Documents shall cease to be enforceable and
of the same effect and priority purported to be created thereby, or any Loan
Party shall so assert, or contest in any manner the validity or enforceability
of any provision of any Loan Document or deny that it has any or further
liability or obligation under any provision of any Loan Document, or purports to
revoke, terminate or rescind any provision of any Loan Document.

 

(j)          an ERISA Event shall have occurred that, in the opinion of the
Majority Lenders, when taken either alone or together with all other such ERISA
Events that have previously occurred since the Closing Date and for which
liability remains outstanding could reasonably be expected to result in
liability of the Borrower and its ERISA Affiliates in an aggregate amount
exceeding $1,000,000; or

 

(k)          any Change of Control shall occur,

 

then, and in any such event, (A) if such event is an Event of Default specified
in subsection ‎(g) of ‎Section 7.01 with respect to the Borrower and its
Subsidiaries, the Loans (with accrued interest thereon together with the
applicable Prepayment Premium) and all other amounts owing under this Agreement
and the other Loan Documents shall immediately become due and payable, or (B) if
such event is any other Event of Default, either or both of the following
actions may be taken: the

  

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Administrative Agent shall, upon written request of the Majority Lenders, by
notice to the Borrower, declare the Loans (with accrued interest thereon
together with the applicable Prepayment Premium) and all other amounts owing
hereunder to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this ‎Article 7,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.

 

Article 8

The Administrative Agent and Collateral Agent

 

Section 8.01. Appointment. Each Lender hereby irrevocably designates and
appoints (x) U.S. Bank as the administrative agent of such Lender under this
Agreement and the other Loan Documents to which the Administrative Agent is a
party and (y) U.S. Bank as the collateral agent of such Lender under this
Agreement and the other Loan Documents to which the Collateral Agent is a party,
and each such Lender irrevocably authorizes each Agent to execute and deliver
each other Loan Document on behalf of such Lender and to take such action on
behalf of such Lender under the provisions of this Agreement and the other Loan
Documents to which such Agent is a party and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent and/or the
Collateral Agent, as applicable, by the terms of this Agreement and the other
Loan Documents to which the Administrative Agent and/or the Collateral Agent, as
applicable, is a party, together with such other actions and powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against each applicable Agent. It is understood and
agreed that the use of the term “agent” herein or in any other Loan Documents
(or any other similar term) with reference to any Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead such term is used as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between contracting parties. Each Lender hereby irrevocably
authorizes the Collateral Agent to execute and deliver any documents necessary
or appropriate (as determined by the Lenders) to create rights of pledge
governed by the laws of the Netherlands for the benefit of the Lenders and the
Agents including, without limitation, a pledge on 65% of the outstanding voting
Capital Stock of RTRX International C.V. pursuant to a Dutch-law governed
Foreign Pledge Agreement among certain Subsidiaries of the Borrower and the
Collateral Agent (the “Dutch CV Pledge”). Without prejudice to the provisions of
this

 

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Agreement and the other Loan Documents, the parties hereto acknowledge and agree
with the creation of a parallel debt obligation of the Pledgors as will be
described in the Parallel Debt(s) (both as defined in the Dutch CV Pledge)
including that any payment received by the Collateral Agent in respect of the
Parallel Debt(s) will be deemed a satisfaction of a pro rata portion of the
corresponding amounts of the Loan Obligations. The provisions of this Article
are solely for the benefit of the Agents and the Lenders, and neither the
Borrower nor any other Loan Party shall have rights as a third-party beneficiary
of any of such provisions.

 

Section 8.02.   Delegation of Duties.  Each Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub agents appointed by such Agent, and
shall be entitled to the advice of counsel concerning all matters pertaining to
such duties. Each Agent and any such sub agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Article shall apply to any such sub
agent and to the Related Parties of each Agent and any such sub agent. No Agent
shall be responsible for the negligence or misconduct of any sub-agents except
to the extent that a court of competent jurisdiction determines in a final and
nonappealable judgment that such Agent acted with gross negligence or willful
misconduct in the selection of such sub agents.

 

Section 8.03.    Exculpatory Provisions.

 

(a)          The Agents shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents, and its duties
hereunder shall be administrative in nature. Without limiting the generality of
the foregoing, the Agents:

 

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

 

(ii)         shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the applicable
Agent is required to exercise as directed in writing by the Majority Lenders;
provided that no Agent shall be required to take any action that, in its opinion
or the opinion of its counsel, may expose such Agent to liability or that is
contrary to any Loan Document or applicable law, including for the avoidance of
doubt any action that may be in violation of the automatic stay under any Debtor
Relief Law; and

 

(iii)        shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable

  

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for the failure to disclose, any information relating to the Borrower or any of
its Affiliates that is communicated to or obtained by the Person serving as an
Agent or any of its Affiliates in any capacity.

 

(b)          The Agents and their respective Related Parties shall not be liable
for any action taken or not taken by it (i) with the consent or at the request
of the Majority Lenders as the applicable Agent shall believe in good faith
shall be necessary, under the circumstances as provided in ‎Sections 9.01 and
7.01, or (ii) in the absence of its own gross negligence or willful misconduct
as determined by a court of competent jurisdiction by final and nonappealable
judgment.

 

(c)          No Agent shall be responsible for or have any duty to ascertain or
inquire into (i) any recital, statement, warranty or representation (whether
written or oral) made in or in connection with this Agreement or any other Loan
Document or any document furnished pursuant hereto or thereto, (ii) the contents
of any certificate, report or other document delivered hereunder or thereunder
or in connection herewith or therewith, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth herein
or therein or the occurrence of any Default, (iv) the due execution, legality,
validity, enforceability, sufficiency, transferability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document, (v) the satisfaction of any condition set forth in
Article 4 or elsewhere herein or (vi) the preparation, filing or continuation of
any UCC financing statements or other filings intended to perfect security
interest in Collateral or the correctness of any such financing statements or
filings. No Agent shall be under any obligation to any Lender to ascertain or
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Borrower or any other Loan Party. No
Agent shall be responsible for or have a duty to ascertain or inquire into any
representation or warranty regarding the existence, ownership, transferability,
value or collectability of the Collateral, the existence, priority or perfection
of the Collateral Agent’s Lien thereon, or any certificate prepared by any Loan
Party in connection therewith, nor shall any Agent be responsible or liable to
the Lenders for any failure to monitor or maintain any portion of the
Collateral. No Agent shall have any liability to the Borrower, any other Loan
Party, any Lender or any other Person for the Borrower’s, any other Loan Party’s
or any Lender’s, as the case may be, performance of, or failure to perform, any
of their respective obligations and duties under this Agreement or any other
Loan Document. It is expressly acknowledged and agreed that no Agent is
guaranteeing performance of or assuming liability for the obligations of the
other parties to the Loan Documents or to the Collateral. No Agent shall be
liable for (a) any indirect, special, punitive or consequential damages
(including without limitation lost profits) whatsoever, even if it has been
informed of the likelihood thereof and regardless of the form of

  

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action or (b) any losses or delays arising from (i) any causes or acts beyond
its control, (ii) any delay, error, omission or default of any mail, telegraph,
cable or wireless agency or operator or (iii) the acts or edicts of any
government or governmental agency or other group or entity exercising
governmental powers.

 

Section 8.04.   Reliance by the Agents.  Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation (including any
electronic message, Internet or intranet website posting or other distribution)
reasonably believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons. Each Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts. Each Agent may deem and treat the payee of any Note delivered hereunder
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with such Agent. Each
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Majority Lenders and it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. Nothing contained in this Agreement or the other Loan Documents shall
require any Agent to advance or expend its own funds. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Majority Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.

 

Section 8.05.   Notice of Default.   No Agent shall be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
it shall have received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default.” In the event that any Agent receives such a
notice, such Agent shall promptly give notice thereof to the Lenders and the
other Agent. Each applicable Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Majority
Lenders; provided that, unless and until such Agent shall have received such
directions, such Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

 

Section 8.06.     Non Reliance on Agents and Other Lenders.   Each Lender
expressly acknowledges that no Agent nor any of its Related Parties has made any

  

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representations or warranties to it and that no act by such Agent hereinafter
taken, including, without limitation, any review of the affairs of the Borrower
and the other Loan Parties, shall be deemed to constitute any representation or
warranty by such Agent to any Lender. Each Lender represents to each Agent that
it has, independently and without reliance upon such Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of an investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the other
Loan Parties and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon any 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 analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and the other Loan Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the applicable
Agent hereunder or under any other applicable Loan Document, such Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower or any
other Loan Party which may come into the possession of such Agent or any of its
Related Parties.

 

Section 8.07.   Indemnification.   The Lenders will hold harmless and indemnify
each Agent in its capacity as such and each of their respective Affiliates and
each of their and their respective Affiliates’ respective officers, directors,
employees, managers, managing members, agents, advisors, attorneys and
representatives (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to the
respective Loans made by such Lender outstanding on the date on which
indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans
and including, without limitation, attorneys fees and expenses) be imposed on,
incurred by or asserted against such Agent in any way relating to or arising out
of, the Commitments, the Loans, the Facility, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such Agent’s
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from such Agent’s gross
negligence or willful

  

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misconduct (as determined by a court of competent jurisdiction by final and
nonappealable judgment). The agreements in this Section shall survive the
payment of the Loans and all other amounts payable hereunder.

 

Section 8.08.    Agents in Their Individual Capacities.   (a) Each Agent shall
have the same rights and powers under the Loan Documents, to the extent it is a
Lender, as any other Lender and may exercise the same as though it were not the
Administrative Agent and/or the Collateral Agent, as applicable, and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include such Agent hereunder in its individual
capacity. Each Agent and its Affiliates may make loans to, accept deposits from,
act as trustee under indentures of, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the
Borrower, any of its respective Subsidiaries, other Affiliates or any person
that may do business with or own securities of the Loan Parties or any such
Subsidiary or Affiliate, as if such person were not the Administrative Agent
and/or the Collateral Agent, as applicable, hereunder or under the other Loan
Documents, and such Agent and its Affiliates may accept fees and other
consideration from the Loan Parties and its Affiliates for services in
connection with the Loan Documents or otherwise, in all cases without any duty
to account for the same to the Lenders.

 

(b)          Each Lender understands that the Administrative Agent and the
Collateral Agent, acting in their respective individual capacities, and their
respective Affiliates (collectively, an “Agent’s Group”) are engaged in a wide
range of financial services and businesses (including investment management,
financing, securities trading, corporate and investment banking and research)
(such services and businesses are collectively referred to in this ‎Section
8.08(b) as “Activities”) and may engage in the Activities with or on behalf of
one or more of the Loan Parties or their respective Affiliates. Furthermore, an
Agent’s Group may, in undertaking the Activities, engage in trading in financial
products or undertake other investment businesses for its own account or on
behalf of others (including the Borrower and its Affiliates and including
holding, for its own account or on behalf of others, equity, debt and similar
positions in the Borrower or its Affiliates), including trading in or holding
long, short or derivative positions in securities, loans or other financial
products of the Borrower or its Affiliates. Each Lender understands and agrees
that in engaging in the Activities, an Agent’s Group may receive or otherwise
obtain information concerning the Borrower or its Affiliates (including
information concerning the ability of the Borrower to perform its Obligations
hereunder and under the other Loan Documents) which information may not be
available to any of the Lenders that are not members of such Agent’s Group. No
Agent nor any member of any Agent’s Group shall have any duty to disclose to any
Lender or use on behalf of the Lenders, and shall not be liable for the failure
to so disclose or use, any information whatsoever about or derived from the
Activities or otherwise (including any information concerning

  

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the business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrower or any Affiliate of the Borrower) or to account
for any revenue or profits obtained in connection with the Activities, except
that each Agent shall deliver or otherwise make available to each Lender such
documents as are expressly required by any Loan Document to be transmitted by
such Agent to the Lender.

 

(c)          Each Lender further understands that there may be situations where
members of an Agent’s Group or their respective customers (including the
Borrower and its Affiliates) either now have or may in the future have interests
or take actions that may conflict with the interests of any one or more of the
Lenders (including the interests of the Lenders hereunder and under the other
Loan Documents). Each Lender agrees that no member of any Agent’s Group is or
shall be required to restrict its activities as a result of the Person serving
as Administrative Agent and/or the Collateral Agent, as applicable, being a
member of an Agent’s Group, and that each member of an Agent’s Group may
undertake any Activities without further consultation with or notification to
any Lender.

 

Section 8.09.    Successor Agent.   Each Agent may resign as Administrative
Agent and/or the Collateral Agent, as applicable, upon 30 days’ written notice
to the Lenders and the Borrower. If any Agent shall resign as an Agent under
this Agreement and the other Loan Documents to which it is a party, then the
Majority Lenders shall appoint a successor agent for the Lenders, which
successor agent shall succeed to the rights, powers and duties of such Agent
hereunder; provided that so long as a Default or Event of Default has not
occurred and is continuing, the prior consent of the Borrower shall be required
prior to the appointment of such successor agent; and provided further that such
consent from the Borrower shall not be unreasonably withheld or delayed.
Effective upon such appointment and approval, the term “Administrative Agent”
and/or “Collateral Agent,” as applicable, shall mean such successor agent, and,
effective upon the earlier of such appointment and the expiration of such 30
days’ notice, the former Agent’s rights, powers and duties as Administrative
Agent and/or Collateral Agent, as applicable, shall be terminated, in either
case, without any other or further act or deed on the part of such former Agent
or any of the parties to this Agreement or any holders of the Loans. After any
retiring Agent’s resignation in such capacity, the provisions of this ‎Article 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was the Administrative Agent and/or Collateral Agent, as applicable,
under this Agreement and the other Loan Documents to which it is a party.
Whether or not a successor has been appointed, such resignation shall become
effective upon the expiry of the 30 days’ notice, provided that the parties
hereto acknowledge and agree that, for purposes of any right of pledge governed
by the laws of the Netherlands, including the Dutch CV Pledge, any resignation
by the Collateral Agent shall not be effective with respect to its rights and
obligations under the Parallel Debt(s), until such rights and obligations have
been assumed by the successor Collateral Agent. Without

  

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prejudice to the provisions of this Agreement and the other Loan Documents, the
Collateral Agent will reasonably cooperate in the assumption of its rights and
obligations under or in connection with the Parallel Debt(s) by any such
successor and will reasonably cooperate in transferring to such successor
Collateral Agent all rights under the Foreign Pledge Agreement to the extent
governed by the laws of the Netherlands.

 

Section 8.10.   Lenders as Agent.   Upon written notice to the Administrative
Agent and/or the Collateral Agent, as applicable, and the Borrower by the
Majority Lenders, any provision of the Loan Documents requiring the consent or
agreement or other approval or action of the Administrative Agent and/or the
Collateral Agent, as applicable, may instead require the consent, agreement or
other approval or action of the Majority Lenders; provided, however, for the
avoidance of doubt, any such consent, agreement, approval or action which
affects the rights or duties of the Administrative Agent or the Collateral Agent
in its capacity as Administrative Agent or Collateral Agent shall require the
consent of the Administrative Agent and/or the Collateral Agent, as applicable.

 

Article 9

Miscellaneous

 

Section 9.01.   Amendments and Waivers.   Neither this Agreement nor any other
Loan Document (other than the Warrants), nor any terms hereof or thereof may be
waived, amended, supplemented or modified, and no consent may be granted by the
Administrative Agent hereunder, except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Majority Lenders; provided that no
such waiver and no such amendment, supplement, modification or consent shall,
unless in writing and signed by each Lender adversely affected thereby and the
Borrower, do any of the following: (i) increase the Commitments of the Lenders
or subject the Lenders to any additional obligations, (ii) change the principal
of, interest on, or currency of, the Loans or any fees or other amounts payable
hereunder (other than waiving the requirement to pay the rate of interest set
forth in ‎Section 2.06(b) during the continuation of an Event of Default in
connection with the waiver of such Event of Default by the Majority Lenders),
(iii) postpone any date fixed for any payment of principal of, or interest on,
the Loans, any Note delivered hereunder or any fees or other amounts payable
hereunder (other than restoring the schedule for repayment of Loans to the
Maturity Date after issuance of a Notice of Cancellation of Acceleration), (iv)
amend the definition of “Majority Lenders”, (v) amend, modify or waive Sections
‎2.07, ‎9.10 or ‎9.11, (vi) consent to the assignment or transfer by any Loan
Party of any of its rights or Loan Obligations under this Agreement or any other
Loan Document, or (vii) amend this ‎Section 9.01; and provided further that no

 

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amendment, waiver, supplement or modification shall, unless in writing and
signed by the applicable Agent, affect the rights or duties of any Agent.
Further, notwithstanding anything to the contrary contained in this ‎Section
9.02, if following the Closing Date, the Administrative Agent and any Loan Party
shall have jointly identified an obvious error or any error or omission of a
technical or immaterial nature, in each case, in any provision of the Loan
Documents, then the Administrative Agent, the Collateral Agent and the Loan
Parties shall be permitted to amend such provision and such amendment shall
become effective without any further action or consent of any other party to any
Loan Documents if the same is not objected to in writing by the Majority Lenders
within five (5) Business Days following receipt of notice thereof.

 

Section 9.02.   Communications.   All notices and other communications shall be
in writing and shall be delivered by hand or overnight courier service,
facsimile (or other electronic communication) or mailed by certified or
registered first class mail. Each such notice or communication shall be
delivered to the relevant party at the facsimile number or address (including
e-mail address), and marked for the attention of the person(s), from time to
time specified in a written notice by that party to the other parties for such
purpose. The initial information for the Lenders is as set forth in Schedule II.
The initial information for the Borrower and the Administrative Agent is as set
forth in Schedule ‎9.02. All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt.

 

All notices and communications delivered hereunder shall, unless submitted in
the English language, be accompanied by a certified English translation thereof,
which certified English translation shall (except in the case of laws,
regulations or official determinations of any Governmental Authority) be
controlling absent manifest error in the case of doubt as to the proper
interpretation or construction of the document which it purports to translate.

 

The Borrower hereby acknowledges that (a) the Administrative Agent will make
available to the Lenders materials and/or information provided by or on behalf
of the Borrower hereunder (collectively, the “Borrower Materials”) by posting
the Borrower Materials on Intralinks, Syndtrak or another similar electronic
system (the “Platform”) and (b) certain of the Lenders may be “public-side”
Lenders (i.e., Lenders that do not wish to receive material non-public
information with respect to the Borrower or its securities) (each, a “Public
Lender”). The Borrower, on behalf of itself and its Subsidiaries, hereby agrees
that (w) all Borrower Materials that are to be made available to Public Lenders
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have
authorized the Administrative Agent and the Lenders to treat such Borrower

  

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Materials as not containing any material non-public information with respect to
the Borrower or its securities for purposes of United States federal and state
securities laws (provided, however, that to the extent such Borrower Materials
constitute information received from the Borrower or its Subsidiaries and
related to the Borrower, its Subsidiaries or their respective businesses, other
than any such information that was available to the Administrative Agent, the
Collateral Agent or any Lender on a nonconfidential basis prior to its
disclosure by the Borrower or such Subsidiary, they shall be treated as set
forth in ‎Section 9.12); (y) all Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated as
“Public Investor” (or with a similar designation); and (z) the Administrative
Agent shall be entitled to treat any Borrower Materials that are not marked
“PUBLIC” as being suitable only for posting on a portion of the Platform not
marked as “Public Investor” (or with a similar designation). Notwithstanding the
foregoing, the following Borrower Materials shall be marked “PUBLIC” unless the
Borrower notifies the Administrative Agent and the Lenders promptly that any
such document contains material non-public information: (1) the Loan Documents
and (2) notification of changes in the terms of the Facility.

 

Section 9.03.   No Waiver; Cumulative Remedies.   No failure to exercise and no
delay in exercising, on the part of the Administrative Agent, the Collateral
Agent or any Lender, any right, remedy, power or privilege hereunder or under
the other Loan Documents shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.

 

Section 9.04.   Survival of Representations and Warranties.   All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or written statement delivered pursuant hereto or
in connection herewith shall survive the execution and delivery of this
Agreement and the making of the Loans hereunder.

 

Section 9.05.   Payment of Expenses, Indemnification, Taxes and Costs.   (a) The
Borrower will pay (i) all reasonable documented out-of-pocket expenses of the
Lenders and the Agents as may be incurred in connection with this Agreement and
the associated financing transaction including all due diligence and reasonable
legal expenses, expenses associated with the syndication of the Facility and the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents and any amendment or waiver with respect
thereto (including any filing fees, recording expenses or stamp or excise taxes
or other similar taxes or fees and the reasonable fees, disbursements and other
charges of one primary counsel to the Majority Lenders and one

 

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primary counsel to the Administrative Agent (and, in the case of an actual or
perceived conflict of interest where the indemnified person affected by such
conflict has retained its own counsel, of another firm of counsel for such
affected indemnified person), local Dutch counsel to the Majority Lenders and,
to the extent required, one firm of local counsel in each other relevant
jurisdiction) and the charges of electronic loan administration platforms) and
(ii) all reasonable documented out-of-pocket expenses of the Agents and the
Lenders (including the reasonable fees, disbursements and other charges of one
counsel to the Majority Lenders and one counsel to the Agents (and, in the case
of an actual or perceived conflict of interest where the indemnified person
affected by such conflict has retained its own counsel, of another firm of
counsel for such affected indemnified person), local Dutch counsel and, to the
extent required, one firm of local counsel in each other relevant jurisdiction)
in connection with the enforcement of this Agreement or any other Loan Documents
or in any bankruptcy case or insolvency proceeding under any Debtor Relief Law.

 

(b)          The Borrower agrees to indemnify and hold harmless the Agents and
each Lender and each of their Affiliates and each of their and their Affiliates’
respective officers, directors, employees, managers, managing members, agents,
advisors, attorneys and representatives (each, an “Indemnified Party”) from and
against any and all claims, damages, losses, liabilities and expenses (including
without limitation reasonable fees and disbursements of counsel), joint or
several, that may be incurred by or asserted or awarded against any Indemnified
Party (including without limitation in connection with any investigation,
litigation or proceeding or the preparation of any defense in connection
therewith), in each case arising out of or in connection with or by reason of
(x) this Agreement, the other Loan Documents, the Commitments, the Facility, the
Loans or any of the transactions contemplated hereby or (y) any actual or
alleged presence or Release or threatened Release of Hazardous Materials on or
from any property currently or formerly owned, leased or operated by any Loan
Party or any of its Subsidiaries, or any Environmental Liability related in any
way to any Loan Party or any of its Subsidiaries, except to the extent such
claim, damage, loss, liability or expense is found in a final non-appealable
judgment by a court of competent jurisdiction to have resulted primarily from
such Indemnified Party’s gross negligence, material breach in bad faith of such
Indemnified Party’s obligations hereunder or under any other Loan Document or
willful misconduct. For the avoidance of doubt, obligations under this paragraph
are without duplication to amounts paid under any fee letter executed in
connection with the Facility.

 

(c)          If any Loan to be made by a Lender is not made on the date
requested by the Borrower (other than as a result of such Lender’s failure to
comply with the provisions of this Agreement), the Borrower shall, upon demand
by such Lender, pay to such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or non-funding, including, without limitation, any
loss

  

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(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain such Loan.

 

(d)          Without prejudice to the survival of any other agreement of the
Loan Parties hereunder, the agreements and Loan Obligations of the Loan Parties
contained in ‎Section 9.05 shall survive the payment in full of principal,
interest and all other amounts payable hereunder, under the Notes delivered
hereunder and under each other Loan Document.

 

Section 9.06.   Successors and Assigns; Assignments; Participations.   (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, the Collateral Agent and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or Obligations under this Agreement without the prior written
consent of each Lender.

 

(b)          Each Lender, with notice to the Borrower and the Administrative
Agent, may assign to one or more Eligible Assignees all or a portion of its
rights and/or obligations under this Agreement, including, without limitation,
all or a portion of Loans owing to it and/or any Note(s) held by it. Except in
the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment(s) or Loan(s), the aggregate amount of the Commitment(s) and
Loan(s) of the assigning Lender subject to each such assignment (determined as
of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 (except
(x) with respect to assignments made to another Lender or an Agent or an
Affiliate of any of the foregoing and (y) during the existence or continuation
of an Event of Default, which in each case no such minimum amount shall be
applicable). The parties to each such assignment shall execute and deliver to
the Administrative Agent, for its recording in the Register, an Assignment and
Acceptance, together with any Note or Notes subject to such assignment and a
processing and a recordation fee of $3,000 (except with respect to assignments
made to an assigning Lender’s Affiliate). Upon such execution, delivery and
recording, from and after the effective date specified in such Assignment and
Acceptance, (i) the assignee thereunder shall be a party hereto and, to the
extent that rights and/or obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and/or obligations
of a Lender, as the case may be, hereunder and (ii) the Lender assignor
thereunder shall, to the extent that rights and/or obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than its rights under Sections ‎2.08, ‎Section 2.14 and ‎9.05 to
the extent any claim thereunder relates to an event arising prior to such
assignment) and/or be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all of the remaining
portion of an assigning Lender’s rights and

  

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obligations under this Agreement, such Lender shall cease to be a party hereto
and thereto).

 

(c)          By executing and delivering an Assignment and Acceptance, each
Lender assignor thereunder and each assignee thereunder confirm to and agree
with each other and the other parties thereto and hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this Agreement and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the
Administrative Agent or such assigning 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; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Administrative Agent and the Collateral Agent to take such
action, respectively, as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to such agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender, as the case may be.

 

(d)          The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at its address referred to in ‎Section
9.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the Commitment of and principal amount (and stated interest) of the Loans owing
to each Lender from time to time (the “Register”). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

 

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(e)          Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. In the case of
any assignment by a Lender, within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for any surrendered Note or Notes, if requested
by the new Lender assignee, a new Note to the order of the new Lender assignee
in an amount equal to the aggregate principal amount of the Loans assigned to it
pursuant to such Assignment and Acceptance and, if any assigning Lender has
retained any Loans hereunder, a new Note to the order of such assigning Lender
if requested by the assigning Lender, in an amount equal to the aggregate
principal amount of the Loans retained by it. Any such new Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit A hereto.

 

(f)          [Reserved].

 

(g)          Each Lender may sell participations to one or more Persons in or to
all or a portion of its rights and/or obligations under this Agreement
(including, without limitation, the Loans owing to it and/or the Note or Notes
(if any) held by it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
(v) no participant under any such participation shall have any right to approve
any amendment or waiver of any provision of any Loan Document, or any consent to
any departure by any Loan Party therefrom, or to enforce any Loan Document
except that any agreement pursuant to which any such participation is sold may
contain provisions requiring that the Lender selling such participation obtain
the consent of the participant purchasing such participation before agreeing to
any amendment, waiver or consent that would (x) reduce the principal of, or
interest on, the Loans, any Note delivered hereunder or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, (y) postpone any date fixed for any payment of principal of, or
interest on, the Loans, any Note delivered hereunder or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or (z) release all or substantially all of the Collateral.
Subject to subsection (i) of this Section, each participant shall be entitled to
the benefits of ‎Section 2.08 (subject to the requirements and limitations
therein, including the requirements under ‎

 

101

 

 

Section 2.08 (it being understood that the documentation required under ‎Section
2.08(e) shall be delivered to the participating Lenders)), ‎Section 2.12,
‎Section 2.13, ‎Section 2.14, ‎Section 2.15 and ‎Section 2.17 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
subsection ‎(b) of this Section. To the extent permitted by law, each
participant shall also be entitled to the benefits of ‎Section 9.07 as though it
were a Lender, provided that such participant agrees to be subject to ‎Section
2.09 as though it were a Lender. Each Lender that sells a participation shall,
acting solely for this purpose as an agent of the Borrower, maintain a register
on which it enters the name and address of each Participant and the principal
amounts (and stated interest) of each Participant’s interest in the Loans or
other obligations under the Loan Documents (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register (including the identity of any Participant or any
information relating to a Participant's interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

 

(h)          A participant (A) agrees to be subject to the provisions of
‎Section 2.16 as if it were an assignee under paragraph ‎(b) of this Section;
and (B) shall not be entitled to receive any greater payment under ‎Section
2.14, with respect to any participation, than its participating Lender would
have been entitled to receive, except to the extent such entitlement to receive
a greater payment results from a Change in Law that occurs after the Participant
acquired the applicable participation.

 

(i)          Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Loans owing
to it and any Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.

 

Section 9.07.   Right of Setoff.    Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified in ‎Section 7.01 to authorize the
Administrative Agent to declare the Loans and all Notes due and payable pursuant
to the provisions of ‎Section 7.01, each of the Administrative Agent and each
Lender and

 

102

 

  

each of their respective Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and otherwise
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the
Administrative Agent, such Lender or such Affiliate to or for the credit or the
account of any Loan Party against any and all of the Loan Obligations of such
Loan Party now or hereafter existing under the Loan Documents, irrespective of
whether the Administrative Agent or such Lender shall have made any demand under
this Agreement or any Note or Notes and although such Loan Obligations may be
unmatured. The Administrative Agent and each Lender agrees promptly to notify
the Borrower after any such setoff and application; provided that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of the Administrative Agent and each Lender and their respective
Affiliates under this ‎Section 9.07 are in addition to other rights and remedies
(including, without limitation, other rights of setoff) that the Administrative
Agent, such Lender and their respective Affiliates may have.

 

Section 9.08.   Counterparts.   This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

Section 9.09.   Severability.   Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

Section 9.10.   Governing Law.   This Agreement is governed by and shall be
construed in accordance with the laws of the State of New York.

 

Section 9.11.    Submission to Jurisdiction; Judgment Currency; Waiver of
Immunities; Waiver of Jury Trial.   (a) THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THE RIGHTS AND THE OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN THE RELEVANT LOAN DOCUMENT, BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, TO THE EXTENT
THAT THE SAME ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR
PERMIT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT
THAT, (X) IN THE CASE OF ANY MORTGAGE OR

  

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OTHER COLLATERAL DOCUMENT, PROCEEDINGS MAY ALSO BE BROUGHT BY THE ADMINISTRATIVE
AGENT OR COLLATERAL AGENT (ACTING AT THE DIRECTION OF THE MAJORITY LENDERS) IN
THE JURISDICTION IN WHICH THE RELEVANT MORTGAGED PROPERTY OR COLLATERAL IS
LOCATED OR ANY OTHER RELEVANT JURISDICTION AND (Y) IN THE CASE OF ANY
BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS WITH RESPECT TO ANY LOAN PARTY,
ACTIONS OR PROCEEDINGS RELATED TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN SUCH COURT HOLDING SUCH BANKRUPTCY, INSOLVENCY OR SIMILAR
PROCEEDINGS) SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE
LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, EACH OF THE PARTIES HERETO OR THERETO
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS (EXCEPT
AS SET FORTH IN THE PARENTHETICAL ABOVE). EACH PARTY HERETO HEREBY FURTHER
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION
OVER IT, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS BROUGHT IN ANY OF THE
AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER IT. EACH
PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, SUCH PARTY, AS THE
CASE MAY BE, AT ITS ADDRESS SET FORTH IN THE SCHEDULES HERETO, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH PARTY HERETO IRREVOCABLY
WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER
OR UNDER ANY OTHER LOAN DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID
OR INEFFECTIVE. NOTHING HEREIN SHALL (X) AFFECT THE RIGHT OF ANY PARTY HERETO TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR (Y) AFFECT THE RIGHT OF
THE ADMINISTRATIVE AGENT OR THE COLLATERAL AGENT (ACTING AT THE DIRECTION OF THE
MAJORITY LENDERS) TO COMMENCE LEGAL PROCEEDINGS OR

  

104

 

 

OTHERWISE PROCEED AGAINST ANY OTHER PARTY HERETO IN ANY OTHER JURISDICTION.

 

(b)          EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.

 

(c)          EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

(d)          (i) If, for the purpose of obtaining judgment in any court, it is
necessary to convert a sum due hereunder to any party hereunder in one currency
into another currency, the parties hereto agree, to the fullest extent permitted
by law, that the rate of exchange used shall be that at which in accordance with
normal banking procedures such party could purchase the first currency with such
other currency in New York City on the day which is two Business Days prior to
the day on which final judgment is rendered.

 

(ii)         To the fullest extent permitted by law, the obligation of any party
in respect of any sum payable hereunder by it to any other party hereunder
shall, notwithstanding any judgment in a currency (the “Judgment Currency”)
other than U.S. Dollars (the “Agreement Currency”), be discharged only to the
extent that on the Business Day following receipt by such other party of any sum
adjudged to be so due in the Judgment Currency such other party may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency; if the amount of the Agreement Currency which could have
been so purchased is less than the sum originally due to such other party in the
Agreement Currency, such first party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such other party against such
loss, and, if the amount of the Agreement Currency which could have been so
purchased exceeds the sum originally due to such other party, such other party
agrees to remit to such first party such excess; provided that neither any
Lender nor the Administrative Agent shall have any obligation to remit any such
excess as long as the Borrower shall have

 

105

 

  

failed to pay any Lender or the Administrative Agent, as the case may be, any
obligations due and payable under this Agreement, in which case such excess may
be applied to such obligations of the Borrower hereunder in accordance with the
terms of this Agreement.

 

(e)          To the extent that any of the parties hereto has or hereafter may
acquire any immunity (sovereign or otherwise) from any legal action, suit or
proceeding, from jurisdiction of any court or from set off or any legal process
(whether service or notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise) with respect to
itself or any of its property, each of the parties hereto hereby irrevocably
waives and agrees not to plead or claim such immunity in respect of its Loan
Obligations under this Agreement and the other Loan Documents. Each of the
parties hereto agrees that the waivers set forth above shall have the fullest
extent permitted under the Foreign Sovereign Immunities Act of the United States
of America and are intended to be irrevocable and not subject to withdrawal for
purposes of such act.

 

Section 9.12.   Confidentiality.    Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Confidential Information,
except that Confidential Information may be disclosed (i) in connection with the
transactions contemplated by the Loan Documents, to any of its Affiliates and
its and their respective Related Parties, including accountants, auditors, legal
counsel and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Confidential Information and instructed to keep such Confidential Information
confidential), (ii) to the extent (A) requested by any regulatory or
governmental authority (including any self-regulatory authority, such as the
National Association of Insurance Commissioners) or (B) required to be disclosed
by action of any court, tribunal or regulatory authority or necessary or
desirable for it to disclose in connection with any proceeding in any court,
tribunal or before any regulatory authority in order to preserve its rights or
by requirement of law, legal process, regulation, government order, decree or
rule, (iii) to the extent required by applicable laws, rules or regulations, by
any subpoena or similar legal process or by their internal procedures, (iv) to
any other party to this Agreement, (v) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (vi) subject to an agreement
containing provisions substantially the same as (and in any event no less
onerous than) those of this paragraph, to any assignee of, insurer or re-insurer
of, or participant in, or any prospective assignee of, insurer or re-insurer of,
or participant in, any of its rights or obligations under this Agreement, (vii)
with the consent of the Borrower (viii) to the extent such Confidential
Information (A) becomes publicly available other than as a result of a breach of
this paragraph or (B) becomes available to the Administrative Agent or any

  

106

 

  

Lender on a non-confidential basis from a source other than a Loan Party or (ix)
was available to it prior to its disclosure by the Borrower.

 

Section 9.13.   Replacement of Lenders.   If the Borrower is entitled to replace
a Lender pursuant to the provisions of ‎Section 2.16 or any Lender fails to
consent to a requested amendment, waiver or modification to any Loan Document in
which the Majority Lenders have already consented to such amendment, waiver or
modification but the consent of each Lender (or each Lender directly affected
thereby, as applicable) is required with respect thereto, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, ‎Section 9.06), all of its interests, rights (other than
its existing rights to payments pursuant to ‎Sections 2.08,‎ 2.09 and 2.14) and
obligations under this Agreement and the related Loan Documents to an Eligible
Assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:

 

(a)          the Borrower shall have paid to the Administrative Agent the
assignment fee (if any) specified in ‎Section 9.06;

 

(b)          such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees, the
Prepayment Premium and all other amounts payable to it hereunder and under the
other Loan Documents (including any amounts under ‎Section 2.15) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts);

 

(c)          in the case of any such assignment resulting from a claim for
compensation under ‎Section 2.14 or payments required to be made pursuant to
‎Section 2.08, such assignment will result in a reduction in such compensation
or payments thereafter; and

 

(d)          such assignment does not conflict with applicable Laws.

 

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

 

Section 9.14.   USA PATRIOT Act.   Each Lender that is subject to the Act and
the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of each Loan Party and
other

  

107

 

  

information that will allow such Lender or the Administrative Agent, as
applicable, to identify each Loan Party in accordance with the Act.

 

Section 9.15.   Effectiveness.   This Agreement shall become effective upon
execution and delivery of a counterpart hereof by each of the parties hereto.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

  

108

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

 

RETROPHIN, INC.

as Borrower

      By: /s/ Martin Shkreli Name: Martin Shkreli Title: Chief Executive Officer

  

[CREDIT AGREEMENT]

 

 

 

 

 

U.S. BANK NATIONAL
ASSOCIATION,

as Administrative Agent and Collateral
Agent

      By: /s/ James A. Hanley     Name: James A. Hanley     Title: Vice
President

  

[CREDIT AGREEMENT]

 

 

 

 

 

Athyrium Opportunities Fund (A) LP,

 as Lender

      By: Athyrium Opportunities Associates LP,
its general partner         By: Athyrium Opportunities Associates GP LLC,
its general partner         By: /s/ Jeffrey A. Ferrell     Name: Jeffrey A.
Ferrell     Title: President      

 

[CREDIT AGREEMENT]

 

 

 

 

 

 

Athyrium Opportunities Fund (B) LP,

 as Lender

      By: Athyrium Opportunities Associates LP,
its general partner         By: Athyrium Opportunities Associates GP LLC,
its general partner         By: /s/ Jeffrey A. Ferrell     Name: Jeffrey A.
Ferrell     Title: President      

 

[CREDIT AGREEMENT]

  

 

 

 

 

 

PCOF 1, as Lender

      By: /s/ Sandeep Dixit Name: Sandeep Dixit Title: Chief Credit Officer    
    By: /s/ Sam Chawla     Name: Sam Chawla     Title: Portfolio Manager      

  

[CREDIT AGREEMENT]

 

 

 

 

 

SCHEDULE I

 

COMMITMENTS, WARRANTS AND LENDING OFFICES

 

LENDER  COMMITMENT   WARRANTS   LENDING OFFICE Athyrium Opportunities Fund (A)
LP  $25,757,167.79    193,179   530 Fifth Avenue
Floor 25
New York, NY 10036 Athyrium Opportunities Fund (B) LP  $14,242,832.21  
 106,821   530 Fifth Avenue
Floor 25
New York, NY 10036 PCOF 1, LLC  $5,000,000    37,500   499 Park Avenue,
Floor 25,
New York, NY 10065

  

Schedule I – 1

 

 

SCHEDULE 9.2

 

NOTICE INFORMATION FOR THE BORROWER
AND ADMINISTRATIVE AGENT

 

Notice Information for the Borrower:

 

Retrophin, Inc. 

777 Third Avenue

Suite 22

New York, New York 10017

Attn: Chief Executive Officer

  

With copies to:

 

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, New York 10022

Attn: Evan L. Greebel, Esq. 

Angela Batterson, Esq.

  

Notice Information for the Administrative Agent:

 

U.S. BANK NATIONAL ASSOCIATION,
c/o U.S. Bank Global Corporate Trust Services
214 N. Tryon Street, 26th Floor
Charlotte, NC 28202
Tel: 302-576-3714
Facsimile: 704-335-4670
Email: agency.services@usbank.com and James.Hanley1@usbank.com

  

 

 

 

EXHIBIT A

 

FORM OF
NOTE

 

$_______________                New York, New York           _______________,
2014

 

FOR VALUE RECEIVED, the undersigned, RETROPHIN, INC., a Delaware corporation
(the “Borrower”), hereby unconditionally promises to pay to the order of
_____________ (the “Lender”) at the office of [____________________, _______
ADDRESS], in lawful money of the United States of America and in immediately
available funds, the principal amount of _______________ DOLLARS ($______), or,
if less, the unpaid principal amount of the Loans made by the Lender pursuant to
‎Section 2.01 of the Credit Agreement (as hereinafter defined) on the dates and
in the amounts specified in the Credit Agreement. The Borrower further agrees to
pay interest on the unpaid principal amount hereof from time to time outstanding
at the rates, in the manner and on the dates specified in ‎Section 2.06 of the
Credit Agreement.

 

The holder of this Note is authorized to endorse on the schedule annexed hereto
and made a part hereof or on a continuation thereof which shall be attached
hereto and made a part hereof the date and amount of each Loan and the date and
amount of each payment or prepayment of principal with respect thereto, each
continuation thereof and the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Borrower in respect of such Loans.

 

This Note (a) is one of the Notes referred to in the Credit Agreement, dated as
of June 30, 2014 (as amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among the Borrower, the Lenders from time to time
parties thereto and U.S. Bank National Association, as Administrative Agent, (b)
is subject to the provisions of the Credit Agreement and ‎(c) is subject to
prepayment in whole or in part as provided in the Credit Agreement. This Note is
secured as provided in the Loan Documents. Reference is hereby made to the Loan
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security, the terms and
conditions upon which the security interests were granted and the rights of the
holder of this Note in respect thereof.

 

Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

  

Exhibit A – 1

 

  

All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.

 

Unless otherwise defined herein, terms used herein shall have the meanings given
to them in the Credit Agreement, whether defined therein or by reference.

 

This Note shall be governed by and construed in accordance with the laws of the
State of New York.

 

  RETROPHIN, INC.       By:     Name:     Title:

  

Exhibit A – 2

 

 

Schedule A
to Note

 

ADVANCES AND REPAYMENTS OF ADVANCES

 

Date  Amount
of Loans  Interest Period and
Interest Rate with
Respect Thereto  Amount of
Principal of
Loans Repaid  Unpaid Principal
Balance of Loans  Notation
Made By                                                                       
                                                                               
                  

  

Exhibit A – 3

 

 

EXHIBIT B

 

FORM OF
NOTICE OF BORROWING

 

U.S. Bank National Association,
as Administrative Agent

 

Attention:
[___________]

 

Ladies and Gentlemen:

 

This Notice of Borrowing is delivered to you pursuant to ‎Section 2.02 of the
Credit Agreement, dated as of June 30, 2014 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among RETROPHIN,
INC., a Delaware corporation (the “Borrower”), the Lenders from time to time
parties thereto and U.S. Bank National Association, as administrative agent (the
“Administrative Agent”) for the Lenders thereunder. Unless otherwise defined
herein or the context otherwise requires, capitalized terms used herein have the
meanings provided in the Credit Agreement, whether defined therein or by
reference.

 

The undersigned Borrower hereby requests[[, irrevocably, pursuant to ‎Section
2.02 of the Credit Agreement, that Loans be made in the aggregate principal
amount of $________ and in that connection sets forth below the following
information relating to such Borrowing (the “Proposed Borrowing”) as required by
‎Section 2.02 of the Credit Agreement] [a continuation of Loans made on [___]
(the “Proposed Continuation”)]:

 

(i)          The date of the Proposed [Borrowing][Continuation] is _________ __,
____1

 

(ii)         The Interest Period and last day thereof is _________ __, ____.

 

[(iii)        The proceeds of the Proposed Borrowing are requested to be
disbursed to Borrower’s account with [BANK] (Account No. _______).]2

 

The undersigned hereby certifies that the following statements will be true on
the date of the Proposed [Borrowing][Continuation]:

 

 

1 To match the Closing Date

 

2 To be included in borrowing on the Closing Date.

 

Exhibit B – 1

 

  

(A)         the representations and warranties contained in each Loan Document
are correct in all respects on and as of the date of the Proposed Borrowing,
before and after giving effect to the Proposed Borrowing and to the application
of the proceeds therefrom, as though made on and as of such date other than any
such representations or warranties that, by their terms, refer to a specific
date other than the date of the Proposed Borrowing, in which case, as of such
specific date; and

 

(B)         no event has occurred and is continuing, or would result from such
Proposed Borrowing or from the application of the proceeds therefrom, that
constitutes a Default.

 

The Borrower has caused this Notice of Borrowing to be executed and delivered,
and the certification and warranties contained herein to be made, by the
undersigned, an Authorized Officer of the Borrower, this ___ day of __________,
2014.

 

  RETROPHIN, INC.,
as Borrower       By:       Name:     Title:

  

Exhibit B – 2

 

 

EXHIBIT C

 

FORM OF
ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Credit Agreement, dated as of June 30, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RETROPHIN, INC. (the “Borrower”), the Lenders from time to
time parties thereto and U.S. Bank National Association, as administrative agent
for the Lenders (in such capacity, the “Administrative Agent”). Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.

 

The Assignor identified on Schedule l hereto (the “Assignor”) and the assignee
identified on Schedule l hereto (the “Assignee”) agree severally with respect to
all information relating to it and its assignment hereunder and on Schedule 1
hereto as follows:

 

(1)         The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), an interest in and to the Assignor’s rights
and/or obligations under the Credit Agreement as of the date hereof equal to the
percentage interests specified on Schedule 1 hereto of the rights and/or
obligations under the Credit Agreement (such assigned interest, the “Assigned
Interest”). After giving effect to such sale and assignment, the amount of the
Loans owing to the Assignee will be as set forth on Schedule 1 hereto.

 

(2)         The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Loan Document or any other instrument or document furnished pursuant
thereto, other than that the Assignor has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and clear
of any such adverse claim; (b) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Loan Parties or
any other obligor or the performance or observance by the Loan Parties or any
other obligor of any of their respective Loan Obligations under the Credit
Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto; and ‎(c) attaches any Notes held by it and
(i) requests that the Borrower, upon request by the Assignee, exchange the
attached Notes for a new Note or Notes payable to the Assignee and (ii) if the
Assignor has retained any Loans, requests that the Borrower exchange the
attached Notes for

  

Exhibit C – 1

 

  

a new Note or Notes payable to the Assignor, in each case in amounts which
reflect the assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Effective Date).

 

(3)         The Assignee (a) represents and warrants that its name set forth on
Schedule 1 hereto is its legal name and that it is legally authorized to enter
into this Assignment and Acceptance; (b) confirms that it has received a copy of
the Credit Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; ‎(c) agrees that it will, independently and without
reliance upon the Assignor, the Administrative 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 the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; ‎(d) confirms that it is an
Eligible Assignee; ‎(e) appoints and authorizes each of the Administrative Agent
and the Collateral Agent to take such action, respectively, as agent on its
behalf and to exercise such powers and discretion under the Credit Agreement,
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto as are delegated to the Administrative Agent or the Collateral
Agent by the terms thereof, together with such powers as are incidental thereto;
and ‎(f) agrees that it will be bound by the provisions of the Credit Agreement
and will perform in accordance with their respective terms all the obligations
which by the terms of the Credit Agreement are required to be performed by it as
a Lender.

 

(4)         Following the execution of this Assignment and Acceptance, it will
be delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
“Effective Date”) shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto.

 

(5)         Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement (other than its rights
and obligations under the Loan Documents that are specified under the terms of
such Loan Documents to survive the payment in full of the Loan Obligations of
the Borrower under the Loan Documents to the extent any claim thereunder relates
to an event arising prior to the Effective Date of this Assignment and
Acceptance) and, at such time as this Assignment and Acceptance covers all of
the remaining

 

Exhibit C – 2

 

  

portion of the rights and obligations of the Assignor under the Credit
Agreement, the Assignor then shall cease to be a party to each such agreement.

 

(6)         Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement and any and all Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to the Assignee. The Assignor
and the Assignee shall make all appropriate adjustments in payments under the
Credit Agreement and any and all Notes for periods prior to the Effective Date
directly between themselves.

 

(7)         This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.

 

This Assignment and Acceptance may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 hereto by facsimile shall be effective as delivery of an original
executed counterpart of this Assignment and Acceptance.

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.

  

Exhibit C – 3

 

 

Schedule 1
to Assignment and Acceptance

 

Name of Assignor:

 

Name of Assignee:

 

Effective Date of Assignment:

 

Percentage of Outstanding Loans Assigned:             __________%     Principal
Amount of Loans Assigned: $_______________     Principal Amount of Loans Payable
to Assignee: $_______________     Principal Amount of Loans Payable to Assignor:
$_______________

 

[NAME OF ASSIGNEE]   [NAME OF ASSIGNOR]       By:     By:     Name:     Name:  
Title:     Title:

  

Accepted:

 

U.S. BANK NATIONAL ASSOCIATION, as
Administrative Agent

    By:     Name:   Title:

  

[Acknowledged and agreed:

 

RETROPHIN, INC., as Borrower     By:     Name:   Title:       ]1

 

 

1 To include to the extent required by Section 9.06 of the Credit Agreement and
the definition of “Eligible Assignee”.

  

Exhibit C – 4

 

 

EXHIBIT D

 

FORM OF
SECURITY AGREEMENT

 

(Attached under Separate Cover)

 

Exhibit D – 1

 

 

EXHIBIT E

 

FORM OF
FOREIGN PLEDGE AGREEMENT

 

(Attached under Separate Cover)

 

Exhibit E – 1

 

 

EXHIBIT F

 

FORM OF
COMPLIANCE CERTIFICATE

 

Financial Statement Date: ________, ____

 

To:         U.S. Bank National Association, as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of June 30, 2014
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Credit Agreement;” the terms defined therein being used
herein as therein defined), among RETROPHIN, INC, a Delaware corporation (the
“Borrower”), the Lenders from time to time party thereto, and U.S. Bank National
Association, as Administrative Agent and Collateral Agent.

 

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

 

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

 

1.          [The Borrower has delievered pursuant to Section 5.01(b) of the
Credit Agreement, copies of the audited Consolidated balance sheets of the
Borrower and its Consolidated Subsidiaries, as of the end of the fiscal year
ended December [ ], 20[ ], together with, the related audited Consolidated
statements of income, stockholders’ equity and cash flows for such fiscal year,
and the notes thereto, all in reasonable detail and stating in comparative form
(A) the respective audited Consolidated figures as of the end of and for the
previous fiscal year and (B) the corresponding figures from the Consolidated
budget of the Borrower and its Consolidated Subsidiaries for such fiscal year,
and in the case of each of such audited Consolidated financial statements
(excluding any statements in comparative form to be corresponding figures from
the Consolidated budget), accompanied by a report thereon of the Accountants
required by such Section 5.01(b).]

 

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

 

1.          [The Borrower has delievered pursuant to Section 5.01(a) of the
Credit Agreement, copies of the unaudited Consolidated balance sheets of the
Borrower and its Consolidated Subsidiaries as of the end of the month and the
related Consolidated statements of income, stockholder’s equity and cash flows
for the fiscal quarter, and for the portion of the fiscal year ended with the
last day of the fiscal quarter ended [       ], 20[  ], and stating in
comparative form (A) the Consolidated figures as of the end of and for the
corresponding date and period in the previous fiscal year and (B) the

 

Exhibit F – 1

 

 

corresponding figures from the Consolidated budget of the Borrower and its
Consolidated Subsidiaries for such period, all Certified by the Chief Financial
Officer of the Borrower as required by such Section 5.01(a).]

 

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

 

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

 

[select one:]

 

[to the best knowledge of the undersigned, during such fiscal period the
Borrower and its Subsidiaries performed and observed each covenant and condition
of the Loan Documents applicable to them, and no Default or Event of Default has
occurred and is continuing.]

 

—or—

 

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

 

4.          The representations and warranties of the Borrower and its
Subsidiaries contained in Article 3 of the Credit Agreement and all
representations and warranties of any Loan Party that are contained in any
document furnished at any time under or in connection with the Loan Documents,
are true and correct on and as of the date hereof, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, and except that
for purposes of this Compliance Certificate, the representations and warranties
contained in Section 3.05(a) of the Credit Agreement shall be deemed to refer to
the most recent statements furnished pursuant to clauses (a) and (b), of Section
5.01 of the Credit Agreement, including the statements in connection with which
this Compliance Certificate is delivered.

 

5.          Pursuant to Section 6.17(d) of the Credit Agreement, the Borrower
has at all times maintained no less than $5,000,000 in aggregate amount of its
unresctricted Cash and Cash Equivalents in Accounts subject to a Control
Agreement.

 

6.          The Financial Covenants analyses and information set forth on
Schedule 1 attached hereto are true and accurate on and as of the date of this
Compliance Certificate.

 

Exhibit F– 2

 

 

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

 

  RETROPHIN, INC., as Borrower         By:    

  Name:    

  Title:    

 

Exhibit F– 3

 

 

For the Quarter/Year ended ___________________, ____ (“Statement Date”)

 

SCHEDULE 1
to the Compliance Certificate
($ in 000’s)

 

I. Section 6.17 (a) – Consolidated Leverage Ratio.             A. Consolidated
Indebtedness at Statement Date $______           B. Consolidated EBITDA of the
Group Members for Measurement Period ending on above date (the “Subject
Period”): $______               1. Consolidated Net Income of the Group Members
for Subject Period: $______                 Plus (to the extent deducted in
calculating such Consolidated Net Income)                 2. Consolidated
Interest Charges of the Group Members for the Subject Period: $______          
    3. All taxes on or measured by income (excluding income tax refunds),
profits or capital (including federal, state, local, foreign, local franchise,
excise, gross receipts, single business, tariffs, customs, duties and similar
taxes) of the Group Members for the Subject Period: $______               4.
Depreciation and amortization expense of the Group Members for the Subject
Period: $______               5. Non-cash deferred compensation obligations of
the Group Members for the Subject Period: $______               6. Out of pocket
transaction fees and expenses of the Group Members associated with
non-consummated Permitted Acquisitions in an aggregate amount not to exceed
$250,000 for the Subject Period: $______               7. To the extent not
capitalized, out of pocket fees and expenses of the Group Members in connection
with documentation, execution and delivery of the Credit Agreement for the
Subject Period: $______

 

Exhibit F– 4

 

  

    8. Other non-recurring expenses of the Group Members reducing the
Consolidated Net Income of the Group Members for the Subject Period, which do
not represent a cash item in the Subject Period or any future period: $______  
              Minus (to the extent included in calculating such Consolidated Net
Income)                 9. Federal, state, local and foreign income tax credits
of the Group Members for the Subject Period: $______               10. All
non-cash items increasing Consolidated Net Income of the Group Members for the
Subject Period: $______               11. Consolidated EBITDA for the Subject
Period (Lines I.B.1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 – 9 – 10): $______            
C. Consolidated Leverage Ratio (Line I.A ¸ Line I.B): ____ to 1            
Maximum Consolidated Leverage Ratio permitted for the Subject Period pursuant to
Section 6.17(a): ____ to 1           II. Section 6.17 (b) – Consolidated
Interest Coverage Ratio             A. Consolidated EBITDA for Subject Period
(Line I.B.11 above): $______             B. Consolidated Interest Charges for
the Subject Period (Line I.B.2 above): $______             C. Consolidated
Interest Coverage Ratio for the Subject Period (Line II.A ¸ Line II.B): ____ to
1             Minimum Consolidated Interest Coverage Ratio required for the
Subject Period pursuant to Section 6.17(b): ____ to 1         III. Section
6.17(c) – Minimum EBITDA             A. Consolidated EBITDA for the Subject
Period (Line.I.B.11 above): $______             Minimum Consolidated EBITDA
required for the Subject Period pursuant to Section 6.17(c): $______

 

Exhibit F– 5

 

  

EXHIBIT G

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO TRANSFER RESTRICTIONS SET
FORTH HEREIN.

 

COMMON STOCK PURCHASE WARRANT CERTIFICATE

 

RETROPHIN, inc.

 

Warrants: _______ Warrant Shares: _______ Initial Exercise Date: June 30, 2014

 

 

THIS COMMON STOCK PURCHASE WARRANT CERTIFICATE certifies that, for value
received, _____________ or its assigns (the “Holder”) holds the number of
warrants set forth above (the “Warrants” and each a “Warrant”), each of which
entitles, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the
“Initial Exercise Date”) and on or prior to the close of business on the five
(5) year anniversary of the Initial Exercise Date (the “Termination Date”) but
not thereafter, to subscribe for and purchase from Retrophin, Inc., a Delaware
corporation (the “Company”), one share (as subject to adjustment hereunder, the
“Warrant Shares”) of the common stock, par value $0.0001 per share (the “Common
Stock”), of the Company. The purchase price of one share of Common Stock shall
be equal to the Exercise Price, as defined in Section 1(b).

 

Section 1.          Exercise.

 

a)        Exercise of Warrants. Exercise of the purchase rights represented by
the Warrants may be made, in whole or in part in integral multiples of one whole
Warrant, at any time or times on or after the Initial Exercise Date and on or
before the Termination Date by (1) surrender of this Warrant certificate to the
Company (or such other office or agency of the Company in the City of New York
as it may designate by notice in writing to the registered Holder at the address
of the Holder appearing on the books of the Company) and (2) delivery to the
Company (or such other office or agency of the Company in the City of New York
as it may designate by notice in writing to the registered Holder at the address
of the Holder appearing on the books of the Company) of a duly executed
facsimile copy of the Notice of Exercise form annexed hereto, and within three
(3) Trading Days (defined below) of the date said Notice of Exercise is
delivered to the Company, the Company shall have received payment of the
aggregate Exercise Price (defined below) of the shares thereby purchased by wire
transfer of immediately available funds or cashier’s check drawn on a United
States bank or, if available, pursuant to Cashless Exercise as specified in
Section 1(c) below. On the Share Delivery Date set

 

1

 

 

forth below, the Company shall issue a number of shares of Common Stock, for
each Warrant exercised, equal to the Warrant Shares or as set forth in Section
1(c) below, as applicable. No ink-original Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise form be required. The Company shall maintain records
showing the number of shares of Common Stock purchased upon exercise of Warrants
and the date of such purchases. The Company shall deliver any objection to any
Notice of Exercise within one (1) business day of receipt of such notice.

 

“Trading Day” means a day on which the principal Trading Market is open for
trading.

 

“Trading Market” means the Nasdaq Global Market or, if the Common Stock (or any
other security for which a VWAP or Closing Sale Price must be determined) is not
listed on the Nasdaq Global Market, such other US exchange or market on which
the Common Stock (or such other security) is quoted or available for trading.

 

b)        Exercise Price. The exercise price per share of Common Stock shall be
$12.7552, subject to adjustment hereunder (the “Exercise Price”).

 

c)         Cashless Exercise. If the Holder elects in its Notice of Exercise,
Warrants may be exercised, in whole or in part in integral multiples of one
whole Warrant, in lieu of paying the Exercise Price, as set forth in this clause
(a “Cashless Exercise”), in which the Holder shall be entitled to receive, in
respect of each Warrant, a number of shares of Common Stock equal to the sum of
the quotients obtained by dividing the greater of zero and [(A-B)(X)] by A for
each of the three (3) Trading Days immediately preceding the date on which the
Holder duly completes and delivers a Notice of Exercise, where:

 

A = the VWAP (defined below) on the relevant Trading Day;

 

B = the Exercise Price, as adjusted hereunder; and

 

X = the quotient of (i) the Warrant Shares, divided by (ii) 3.

 

Notwithstanding anything herein to the contrary, on the Termination Date, the
Warrants shall be automatically exercised via Cashless Exercise pursuant to this
Section 1(c).

 

“VWAP” means, for any Trading Day, the price determined by the daily volume
weighted average price of the Common Stock for such date on the Trading Market
during its regular trading session (without regard to after-hours trading) as
reported by Bloomberg L.P.

 

d)        Mechanics of Exercise.

 

i.            Delivery of Warrant Shares Upon Exercise. Shares of Common Stock
issued upon exercise hereunder shall be transmitted by

 

2

 

 

the transfer agent of the Company (the “Transfer Agent”) to the Holder (A) by
crediting the account of the Holder’s prime broker with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the
Company is then a participant in such system if (1) there is an effective
registration statement permitting the issuance of such shares to or resale
thereof by the Holder, (2) the shares are eligible for resale by the Holder
pursuant to Rule 144 (“Rule 144”) under the Securities Act of 1933, as amended
(the “Securities Act”), and as of the date of such exercise the Holder is not,
and during the three month period prior to such exercise shall not have been, an
affiliate (within the meaning of Rule 144) of the Company, or (3) such shares of
Common Stock are issued upon a Cashless Exercise of Warrants issued after the 12
month anniversary from the date of issuance of such Warrants, and (B) otherwise,
by physical delivery to the address specified by the Holder in the Notice of
Exercise by the date that is one (1) Trading Day after the latest of (x) the
delivery to the Company of the Notice of Exercise and (y) surrender of this
Warrant certificate (if required) (such date, the “Share Delivery Date”). The
shares of Common Stock issued upon exercise of any Warrant shall be deemed to
have been issued, and the Holder or any other individual, partnership, firm,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature (“Person”) so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date such
Warrant has been exercised, with payment to the Company of the Exercise Price
(or by Cashless Exercise, if permitted) and all taxes required to be paid by the
Holder, if any, pursuant to Section 1(d)(vi) prior to the issuance of such
shares, having been paid.

 

ii.             Delivery of New Warrants Upon Exercise. If this Warrant
certificate shall have been exercised in part, the Company shall, at the request
of the Holder and upon surrender of this Warrant certificate, on the Share
Delivery Date, deliver to the Holder a new Warrant certificate evidencing the
rights of the Holder to purchase the unexercised Warrants, which new Warrant
certificate shall in all other respects be identical with this Warrant
certificate.

 

iii.         Rescission Rights. If the Company fails to cause the Transfer Agent
to transmit to the Holder the shares of Common Stock issued upon exercise of
Warrants on the Share Delivery Date, then the Holder will have the right to
rescind such exercise.

 

iv.         No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of the
Warrants. As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such exercise, the Company

 

3

 

 

shall, at its election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the VWAP for the date
the Warrants are exercised or round up to the next whole share.

 

v.           Charges, Taxes and Expenses. Issuance of shares of Common Stock
upon exercise of Warrants shall be made without charge to the Holder for any
issue or transfer tax or other incidental expense in respect of the issuance of
such shares, all of which taxes and expenses shall be paid by the Company, and
such shares shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event that such
shares are to be issued in a name other than the name of the Holder, the Notice
of Exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Exercise.

 

vi.         Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of the Warrants,
pursuant to the terms hereof.

 

e)        Under no circumstances will the Company be required to net cash settle
the Warrants, the exercise of the Warrants or the Common Stock issuable upon the
exercise of the Warrants.

 

Section 2A.       Adjustments to Exercise Price. The Exercise Price shall be
subject to adjustment (without duplication) upon the occurrence of any of the
following events:

 

a)         The issuance of Common Stock as a dividend or distribution to all
holders of Common Stock, or a subdivision or combination of Common Stock, in
which event the Exercise Price shall be adjusted based on the following
formula: 

[pg140.jpg]

 

where:

 

EP0 = the Exercise Price in effect immediately prior to the open of business on
the Ex-Date (as defined below) for such dividend or distribution, or immediately
prior to the open of business on the effective date for such subdivision or
combination, as the case may be;       EP1 = the Exercise Price in effect
immediately after the open of business on the Ex-Date for such dividend or
distribution, or immediately after the open of business on the effective date
for such subdivision or combination, as the case may be;

 

4

 

  

OS0 = the number of shares of Common Stock outstanding immediately prior to the
open of business on the Ex-Date for such dividend or distribution, or
immediately prior to the open of business on the effective date for such
subdivision or combination, as the case may be; and       OS1 = the number of
shares of Common Stock that would be outstanding immediately after, and solely
as a result of, such dividend, distribution, subdivision or combination.

 

Such adjustment shall become effective immediately after the open of business on
the Ex-Date for such dividend or distribution, or immediately after the open of
business on the effective date for such subdivision or combination, as the case
may be. If any dividend or distribution or subdivision or combination of the
type described in this Section 2A(a) is declared or announced but not so paid or
made, the Exercise Price shall again be adjusted to the Exercise Price that
would then be in effect if such dividend or distribution or subdivision or
combination had not been declared or announced, as the case may be.

 

“Ex-Date” means, in connection with any dividend, issuance or distribution, the
first date on which the shares of Common Stock trade on the applicable exchange
or in the applicable market, regular way, without the right to receive such
dividend, issuance or distribution.

 

b)         The issuance to all holders of Common Stock of rights or warrants
entitling them for a period expiring 60 days or less from the date of issuance
of such rights or warrants to purchase shares of Common Stock at less than the
Current Market Price (as defined below) of Common Stock, in which event the
Exercise Price will be adjusted based on the following formula:

 

[pg141.jpg]

 

where:

 

EP0 = the Exercise Price in effect immediately prior to the open of business on
the Ex-Date for such issuance;       EP1 = the Exercise Price in effect
immediately after the open of business on the Ex-Date for such issuance;      
OS0 = the number of shares of Common Stock outstanding immediately prior to the
open of business on the Ex-Date for such issuance;       X = the total number of
shares of Common Stock issuable pursuant to such rights or warrants; and

 

5

 

  

Y = the aggregate price payable to exercise such rights or warrants divided by
the Current Market Price.

 

Such adjustment shall become effective immediately after the open of business on
the Ex-Date for such issuance. In the event that the issuance of such rights or
warrants is announced but such rights or warrants are not so issued, the
Exercise Price shall again be adjusted to be the Exercise Price that would then
be in effect if the Ex-Date for such issuance had not occurred. To the extent
that such rights or warrants are not exercised prior to their expiration or
shares of Common Stock are otherwise not delivered pursuant to such rights or
warrants, upon the expiration, termination or maturity of such rights or
warrants, the Exercise Price shall be readjusted to the Exercise Price that
would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of the delivery of only the number of
shares of Common Stock actually delivered. In determining the aggregate price
payable for such shares of Common Stock, there shall be taken into account any
consideration received for such rights or warrants, and the value of such
consideration, if other than cash, shall be determined in good faith by the
Company’s board of directors (the “Board of Directors”).

 

“Current Market Price” means, in connection with a dividend, issuance or
distribution, the average of the Closing Sale Prices of the Common Stock for
each of the 10 consecutive Trading Days ending on, but excluding, the earlier of
the date in question and the Trading Day immediately preceding the Ex-Date for
such dividend, issuance or distribution.

 

“Closing Sale Price” means, as of any date, the last reported sale price of a
share of Common Stock or any other security on such date (or, if no last
reported sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and the average ask
prices on such date) as reported on the Trading Market; provided that in the
absence of such quotations, the Board of Directors will make a good faith
determination of the Closing Sale Price. If, during a period applicable for
calculating the Closing Sale Price, an issuance, distribution, subdivision,
combination or other transaction or event occurs that requires an adjustment to
the Exercise Price or number of Warrant Shares hereunder, the Closing Sale Price
shall be calculated for such period in a manner determined by the Company in
good faith to appropriately reflect the impact of such issuance, distribution,
subdivision or combination on the price of the Common Stock during such period.

 

c)         The dividend or other distribution to all holders of Common Stock of
shares of the Company’s Capital Stock (as defined below) (other than Common
Stock) or evidences of the Company’s indebtedness, rights or warrants to
purchase the Company’s securities, or the Company’s assets or other property
(excluding any dividend, distribution or issuance as to which an adjustment is
effected under clauses (a) or (b) above or (d) or (e) below), in which event the
Exercise Price will be adjusted based on the following formula:

 

 [pg142.jpg]

 

6

 

  

where:

 

EP0 = the Exercise Price in effect immediately prior to the open of business on
the Ex-Date for such dividend or distribution;       EP1 = the Exercise Price in
effect immediately after the open of business on the Ex-Date for such dividend
or distribution;       SP0 = the Current Market Price; and       FMV = the fair
market value (as determined in good faith by the Board of Directors), on the
Ex-Date for such dividend or distribution, of the shares of Capital Stock,
evidences of indebtedness, rights, warrants or assets or other property so
distributed, expressed as an amount per share of Common Stock.

 

“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of the Company and all
warrants or options to acquire such capital stock.

 

Such adjustment shall become effective immediately after the open of business on
the Ex-Date for such dividend or distribution. In the event that such dividend
or distribution is declared or announced but not so paid or made, the Exercise
Price shall again be adjusted to be the Exercise Price which would then be in
effect if such distribution had not been declared or announced.

 

However, if the transaction that gives rise to an adjustment pursuant to this
clause (c) is one pursuant to which the payment of a dividend or other
distribution on Common Stock consists of shares of capital stock of, or similar
equity interests in, a subsidiary of the Company or other business unit of the
Company (i.e., a “spin-off”) that are, or, when issued, will be, traded or
quoted on the Nasdaq Global Market or any other national or regional securities
exchange or market, then the Exercise Price will instead be adjusted based on
the following formula:

 

[pg144.jpg] 

where:

 

EP0 = the Exercise Price in effect immediately prior to the open of business on
the Ex-Date for such dividend or distribution;       EP1 = the Exercise Price in
effect immediately after the open of business on the Ex-Date for such dividend
or distribution;       FMV = the average of the Closing Sale Prices of the
capital stock or similar equity interests distributed to holders of Common Stock
applicable to one share of Common Stock over the 10 consecutive Trading Days
commencing on,

 

 

7

 

  

    and including, the third Trading Day after the Ex-Date for such dividend or
distribution (the “Valuation Period”); and       MP0 = the average of the
Closing Sale Prices of the Common Stock over the Valuation Period for such
dividend or distribution.

 

Such adjustment shall be made immediately after the close of business on the
last Trading Day of the Valuation Period for such dividend or distribution. In
the event that such dividend or distribution is declared or announced but not so
paid or made, the Exercise Price shall again be adjusted to be the Exercise
Price which would then be in effect if such distribution had not been declared
or announced. If any exercise of Warrants occurs during the Valuation Period,
references in the preceding paragraph with respect to 10 Trading Days shall be
deemed to be replaced with such lesser number of Trading Days as have elapsed
between the Ex-Date for such dividend or distribution and the date a Notice of
Exercise is duly submitted in determining the Exercise Price.

 

d)        Dividends or other distributions consisting exclusively of cash to all
holders of Common Stock, in which event the Exercise Price will be adjusted
based on the following formula:

 

[pg145.jpg] 

where:

 

EP0 = the Exercise Price in effect immediately prior to the open of business on
the Ex-Date for such dividend or distribution;       EP1 = the Exercise Price in
effect immediately after the open of business on the Ex-Date for such dividend
or distribution;       SP0 = the Current Market Price; and       C = the amount
in cash per share that the Company distributes to holders of Common Stock for
such dividend or distribution.

 

Such adjustment shall become effective immediately after the open of business on
the Ex-Date for such dividend or distribution. In the event that such dividend
or distribution is declared or announced but is not so paid or made, the
Exercise Price shall again be adjusted to be the Exercise Price which would then
be in effect if such dividend or distribution had not been declared or
announced.

 

e)         The Company or one or more subsidiaries of the Company make purchases
of Common Stock pursuant to a tender offer or exchange offer (other than offers
not subject to Rule 13e-4 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) by the Company or a subsidiary of the Company for the
Common Stock, if the cash and value of any other consideration included in the
payment per share

 

8

 

  

of Common Stock validly tendered or exchanged exceeds the Closing Sale Price of
Common Stock on the Trading Day next succeeding the last date on which tenders
or exchanges may be made pursuant to such tender or exchange offer (the “Offer
Expiration Date”), in which event the Exercise Price will be adjusted based on
the following formula:

 

[pg146.jpg] 

where:

 

EP0 = the Exercise Price in effect immediately prior to the close of business on
the Trading Day next succeeding the Offer Expiration Date;       EP1 = the
Exercise Price in effect immediately after the close of business on the Trading
Day next succeeding the Offer Expiration Date;       FMV = the fair market value
(as determined by the Board of Directors), on the Offer Expiration Date, of the
aggregate value of all cash and any other consideration paid or payable for
shares of Common Stock validly tendered or exchanged and not withdrawn as of the
Offer Expiration Date (the “Purchased Shares”);       OS1 = the number of shares
of Common Stock outstanding as of the last time tenders or exchanges may be made
pursuant to such tender or exchange offer (the “Offer Expiration Time”) less any
Purchased Shares;       OS0 = the number of shares of Common Stock outstanding
as of the Offer Expiration Time, including any Purchased Shares; and       SP1 =
the Closing Sale Price of Common Stock on the Trading Day next succeeding the
Offer Expiration Date.

 

An adjustment, if any, to the Exercise Price pursuant to this clause (e) shall
become effective immediately prior to the open of business on the second Trading
Day immediately following the Offer Expiration Date. In the event that the
Company or a subsidiary of the Company is obligated to purchase shares of Common
Stock pursuant to any such tender offer or exchange offer, but the Company or
such subsidiary is permanently prevented by applicable law from effecting any
such purchases, or all such purchases are rescinded, then the Exercise Price
shall again be adjusted to be the Exercise Price which would then be in effect
if such tender offer or exchange offer had not been made. Except as set forth in
the preceding sentence, if the application of this clause (e) to any tender
offer or exchange offer would result in an increase in the Exercise Price, no
adjustment shall be made for such tender offer or exchange offer under this
clause (e).

 

f)         For the purposes of Section 2A(a), (b) or (c), any dividend or
distribution to which Section 2A(c) is applicable that also includes shares of
Common Stock, or rights

 

9

 

  

or warrants to subscribe for or purchase shares of Common Stock (or both), shall
be deemed instead to be (i) a dividend or distribution of the indebtedness,
assets, property, shares of Capital Stock other than such shares of Common Stock
or rights or warrants (and any Exercise Price adjustment required by Section
2A(c) with respect to such dividend or distribution shall be made in respect of
such dividend or distribution (without regard to the parenthetical in Section
2A(c) that begins with the word “excluding”)) (ii) immediately followed by a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Exercise Price adjustment required by Section 2A with
respect to such dividend or distribution shall then be made), except any shares
of Common Stock included in such dividend or distribution shall not be deemed
“outstanding at the open of business on the Ex-Date.”

 

g)        If the Company or any subsidiary of the Company thereof, as
applicable, at any time while any Warrant is outstanding, shall sell or grant
any option to purchase, or sell or grant any right to reprice, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option to
purchase or other disposition) any Common Stock or Common Stock Equivalents
(defined below), at an effective price per share less than the Exercise Price
then in effect (such lower price, the “Base Share Price” and such issuances
collectively, a “Dilutive Issuance”) (it being understood and agreed that if the
holder of the Common Stock or Common Stock Equivalents so issued shall at any
time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights per share which are issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective price
per share that is less than the Exercise Price, such issuance shall be deemed to
have occurred for less than the Exercise Price on such date of the Dilutive
Issuance at such effective price), then simultaneously with the consummation of
each Dilutive Issuance the Exercise Price shall be reduced and only reduced to a
price determined by dividing (i) an amount equal to the sum of (1) the
applicable Exercise Price immediately prior to such Dilutive Issuance multiplied
by the number of shares of Common Stock deemed outstanding at the close of
business on the day immediately preceding the date of such Dilutive Issuance,
plus (2) the aggregate consideration, if any, received or to be received by the
Company upon such Dilutive Issuance, by (ii) an amount equal to the sum of (1)
the number of shares of Common Stock deemed outstanding immediately prior to
such Dilutive Issuance, plus (2) the total number of shares of Common Stock
issued or to be issued in such Dilutive Issuance. For the purposes of the
preceding sentence, the number of shares of Common Stock deemed to be
outstanding as of a given date shall be the sum of (i) the number of shares of
Common Stock actually outstanding and (ii) the number of (A) shares of Common
Stock issuable upon the exercise of the then outstanding Warrants, (B) shares of
Common Stock into which warrants of the Company issued prior to the date hereof
are exercisable, (C) outstanding options for shares of Common Stock, (D) options
for shares of Common Stock awardable under the Company’s 2014 Incentive
Compensation Plan (the “2014 Plan”), (E) options for shares of Common Stock,
restricted stock units or stock appreciation rights issuable under the 2014 Plan
or otherwise approved by the Board of Directors of the Company and issued by the
Company, (F) restricted shares of Common Stock subject to vesting and (E) shares
of Common Stock issuable upon the conversion of the Company’s 4.50% Senior
Convertible Notes due 2019, if each are fully exercised on

 

10

 

  

the day immediately preceding the given date. The Company shall notify the
Holder, in writing, no later than the Trading Day following the issuance or
deemed issuance of any Common Stock or Common Stock Equivalents subject to this
Section 2A(g), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such
notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether
or not the Company provides a Dilutive Issuance Notice pursuant to this Section
2A(g), upon the occurrence of any Dilutive Issuance, the Holder is entitled to
receive a number of Warrant Shares based upon the Base Share Price regardless of
whether the Holder accurately refers to the Base Share Price in the Notice of
Exercise. Notwithstanding any contrary provision of this Warrant certificate,
the term “Dilutive Issuance” shall not include the issuance of Common Stock,
Common Stock Equivalents or any other securities issued pursuant to the 2014
Plan or the issuance of restricted shares of Common Stock to consultants,
employees or advisors of the Company as approved by the Board of Directors or
their designees.

 

For the purposes of this Section 2A(g), “Common Stock Equivalents” means any
securities of the Company which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

 

Section 2B.       Adjustments to Number of Warrant Shares. Concurrently with any
adjustment to the Exercise Price under Section 2A, the number of Warrant Shares
will be adjusted such that the number of Warrant Shares in effect immediately
following the effectiveness of such adjustment will be equal to the number of
Warrant Shares in effect immediately prior to such adjustment, multiplied by a
fraction, (a) the numerator of which is the Exercise Price in effect immediately
prior to such adjustment and (b) the denominator of which is the Exercise Price
in effect immediately following such adjustment.

 

Section 2C.       Certain Distributions of Rights and Warrants.

 

a)        Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company’s Capital Stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events (a
“Trigger Event”):

 

i.          are deemed to be transferred with such shares of Common Stock;

 

ii.         are not exercisable; and

 

iii.        are also issued in respect of future issuances of Common Stock,

 

shall be deemed not to have been distributed for purposes of adjustments to the
Exercise Price and the number of shares of Common Stock issued upon exercise of
Warrants hereunder (and no adjustment to the Exercise Price or the number of
Warrant Shares hereunder will be made) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate

 

11

 

  

adjustment (if any is required) to the Exercise Price and the number of Warrant
Shares shall be made hereunder (subject in all respects to Section 2D).

 

b)        If any such right or warrant is subject to events, upon the occurrence
of which such right or warrant becomes exercisable to purchase different
securities, evidences of indebtedness or other assets, then the date of the
occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (subject in all respects to Section 2D).

 

c)        In addition, except as set forth in Section 2D, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in Section 2C(b)) with respect
thereto that was counted for purposes of calculating a distribution amount for
which an adjustment to the Exercise Price and the number of Warrant Shares
hereunder was made (including any adjustment contemplated in Section 2D):

 

i.          in the case of any such rights or warrants that shall all have been
redeemed or repurchased without exercise by the holders thereof, the Exercise
Price and the number of Warrant Shares shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a cash distribution, equal to the per
share redemption or repurchase price received by a holder or holders of Common
Stock with respect to such rights or warrants (assuming such holder had retained
such rights or warrants), made to all holders of Common Stock as of the date of
such redemption or repurchase; and

 

ii.         in the case of such rights or warrants that shall have expired or
been terminated without exercise by the holders thereof, the Exercise Price and
the number of Warrant Shares shall be readjusted as if such rights and warrants
had not been issued.

 

Section 2D.       Shareholder Rights Plans. If a Company shareholder rights plan
under which any rights are issued provides that each share of Common Stock
issued upon exercise of the Warrants at any time prior to the distribution of
separate certificates representing such rights shall be entitled to receive such
rights, prior to the separation of such rights from the Common Stock, the
Exercise Price and the number of Warrant Shares shall not be adjusted pursuant
to Section 2A. If, however, prior to any exercise of a Warrant, such rights have
separated from the Common Stock, the Exercise Price and the number of Warrant
Shares shall be adjusted at the time of separation as if the Company dividend or
distributed to all holders of Common Stock, the Company’s Capital Stock,
evidences of the Company’s indebtedness, certain rights or warrants to purchase
the Company’s securities or other of the Company’s assets as described in
Section 2A(c), subject to readjustment in the event of the expiration,
termination or redemption of such rights.

 

12

 

  

Section 2E.      Other Adjustments if Cashless Exercise Applies. The Board of
Directors shall make appropriate adjustments to the number of shares of Common
Stock due upon exercise of a Warrant in the event of a Cashless Exercise, as may
be necessary or appropriate to effectuate the intent hereunder and to avoid
unjust or inequitable results as determined in its good faith judgment, to
account for any adjustment to the Exercise Price and the number of Warrant
Shares that becomes effective, or any event requiring an adjustment to the
Exercise Price and the number of Warrant Shares where the record date or
effective date (in the case of a subdivision or combination of the Common Stock)
of the event occurs, during the three (3) Trading Days immediately preceding the
date on which the Holder elects to exercise such Warrant by means of a Cashless
Exercise, as set forth in the applicable Notice of Exercise.

 

Section 2F.      Restrictions on Adjustments. In no event will the Company
adjust the Exercise Price or make a corresponding adjustment to the number of
Warrant Shares to the extent that the adjustment would reduce the Exercise Price
below the par value per share of Common Stock.

 

Section 2G.       Recapitalizations, Reclassifications and Other Changes.

 

a)If any of the following events occur:

 

i.          any recapitalization;

 

ii.         any reclassification or change of the outstanding shares of Common
Stock (other than changes resulting from a subdivision or combination to which
Section 2A(a) applies);

 

iii.        any consolidation, merger or combination involving the Company;

 

iv.        any sale or conveyance to a third party of all or substantially all
of the Company’s assets; or

 

v.         any statutory share exchange,

 

(each such event, a “Reorganization Event”), in each case as a result of which
the Common Stock would be converted into, or exchanged for, stock, other
securities, other property or assets (including cash or any combination thereof)
(the “Reference Property”), then, following the effective time of such
Reorganization Event, the right to receive shares of Common Stock upon exercise
of a Warrant shall be changed to a right to receive, upon exercise of such
Warrant with respect to each share of Common Stock for which such Warrant is
exercisable, the kind and amount of Reference Property that a holder of one
share of Common Stock would have owned or been entitled to receive in connection
with such Reorganization Event (such kind and amount of Reference Property per
share of Common Stock, a “Unit of Reference Property”). In the event holders of
Common Stock have the opportunity to elect the form of consideration to be
received in a Reorganization Event, the type and amount of consideration into
which the Warrants shall be exercisable from and after the effective time of
such Reorganization Event shall be deemed to be the weighted average of the
types and amounts of consideration received

 

13

 

  

by the holders of Common Stock in such Reorganization Event. The Company hereby
agrees not to become a party to any Reorganization Event unless its terms are
consistent with this Section 2G.

 

b)        At any time from, and including, the effective time of a
Reorganization Event:

 

i.           in the event of a Cashless Exercise, the Holder shall be entitled
to receive a number of Units of Reference Property calculated as set forth in
Section 1(c), except that the VWAP for any Trading Day used to determine such
number of Units of Reference Property shall be the Unit Value (as defined below)
for such Trading Day;

 

ii.         the Company shall pay cash in lieu of delivering any fraction of a
Unit of Reference Property in accordance with Section 1(d)(iv) based on the Unit
Value for the date the Warrants are exercised; and

 

iii.        the Closing Sale Price and the Current Market Price shall be
calculated with respect to a Unit of Reference Property.

 

c)        The value of a Unit of Reference Property (the “Unit Value”) shall be
determined as follows:

 

i.          any shares of common stock of the successor or purchasing
corporation or any other corporation that are traded on a national or regional
stock exchange included in such Unit of Reference Property shall be valued as if
such shares were “Common Stock” using procedures set forth in the definition of
“Closing Sale Price” in Section 2A(b);

 

ii.         any other property (other than cash) included in such Unit of
Reference Property shall be valued in good faith by the Board of Directors or by
a Nasdaq Global Market member firm selected by the Board of Directors; and

 

iii.        any cash included in such Unit of Reference Property shall be valued
at the amount thereof.

 

d)        On or prior to the effective time of any Reorganization Event, the
Company or the successor or purchasing Person, as the case may be, shall execute
an amendment to this Warrant certificate providing that the Warrants shall be
exercisable for Units of Reference Property in accordance with the terms of this
Section 2G. If the Reference Property in connection with any Reorganization
Event includes shares of stock or other securities and assets of a Person other
than the successor or purchasing Person, as the case may be, in such
Reorganization Event, then the Company shall use commercially reasonable efforts
to cause such amendment to this Warrant certificate to be executed by such other
Person and such amendment shall contain such additional provisions to protect
the interests of the Holder as the Board of Directors shall reasonably consider
necessary by reason of the foregoing. Any such amendment to this Warrant

 

14

 

  

certificate shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for herein. The Company shall
cause notice of the execution of any such amendment to be mailed to the Holder,
at its address appearing on the Warrant Register (as defined below), within 20
business days after execution thereof. Failure to deliver such notice shall not
affect the legality or validity of such amendment.

 

e)        The above provisions of this Section 2G shall similarly apply to
successive Reorganization Events.

 

f)         If this Section 2G applies to any event or occurrence, no other
provision above with respect to anti-dilution adjustments shall apply to such
event or occurrence.

 

g)        This Section 2G does not limit the rights of the Holder or the Company
in the event of a Make-Whole Fundamental Change, including the Holder’s right to
receive an Exercise Price Reduction and corresponding increase in the number of
Warrant Shares in connection with a Make-Whole Fundamental Change under Section
2J.

 

Section 2H.       Consolidation, Merger and Sale of Assets.

 

a)        The Company may, without the consent of the Holder, consolidate with,
merge into or sell, lease or otherwise transfer in one transaction or a series
of related transactions the consolidated assets of the Company and its
subsidiaries substantially as an entirety to any corporation, limited liability
company, partnership or trust organized under the laws of the United States or
any of its political subdivisions; provided that (i) any stock into which the
Warrants shall be exercisable shall be the stock of an entity that is a
corporation for U.S. federal income tax purposes and (ii) the successor shall
assume all of the Company’s obligations under this Warrant certificate.

 

b)        In case of any such consolidation, merger, sale, lease or other
transfer and upon any such assumption by the successor corporation, limited
liability company, partnership or trust, such successor entity shall succeed to
and be substituted for the Company with the same effect as if it had been named
herein as the Company.

 

Section 2I.        Statements on Warrants. Except as provided in Section 2G,
this Warrant certificate need not be changed because of any adjustment made
hereunder, and Warrant certificates issued after such adjustment may state the
same information (other than the adjusted Exercise Price and the relevant
adjusted number of Warrant Shares) as is stated in this Warrant certificate.

 

Section 2J.        Make-Whole Fundamental Change.

 

a)        If, at any time while any Warrant is outstanding, a Make-Whole
Fundamental Change (as defined below) has occurred, and the Holder elects to
exercise such Warrant in connection with such Make-Whole Fundamental Change, the
Company shall reduce the Exercise Price by an amount (the “Exercise Price
Reduction”), and increase the number of Warrant Shares, as described in this
Section 2J (the “Make-Whole Adjustment”). An exercise of a Warrant shall be
deemed for the purposes of this Section

 

15

 

  

2J(a) to be “in connection with” a Make-Whole Fundamental Change if the date a
duly completed Notice of Exercise is delivered falls during the period
commencing on the effective date of such Make-Whole Fundamental Change (the
“Effective Date”) and ending on the 30th calendar day following the Effective
Date of such Make-Whole Fundamental Change.

 

A “Make-Whole Fundamental Change” will be deemed to have occurred when any of
the following has occurred:

 

i.          the consummation of any transaction (including, without limitation,
any merger or consolidation) the result of which is that any “person” or “group”
becomes the “beneficial owner” (as these terms are defined in Rule 13d-3 and
Rule 13d-5 under the Exchange Act) of more than 50% of the Capital Stock of the
Company that is at that time entitled to vote by the holder thereof in the
election of the Board of Directors (or comparable body);

 

ii.         the adoption of a plan relating to the liquidation or dissolution of
the Company;

 

iii.        (1) the consolidation, merger or share exchange of the Company with
or into any other Person, or (2) the sale, lease, transfer, conveyance or other
disposition, in one or a series of related transactions, of all or substantially
all of the assets of the Company and those of its subsidiaries taken as a whole
to any other Person (other than a wholly owned subsidiary of the Company), other
than, in the case of clause (1):

 

(A)         a transaction that does not result in any reclassification,
conversion or exchange of the Common Stock into cash, securities or other
property or assets that are not listed on the Nasdaq Global Market or the New
York Stock Exchange; or

 

(B)         any merger solely for the purpose, and with the sole effect, of
changing the jurisdiction of incorporation of the Company and resulting in a
reclassification, conversion or exchange of outstanding shares of Common Stock
solely into shares of common stock of the surviving entity, as long as such
shares of common stock of the surviving entity are listed on the Nasdaq Global
Market or the New York Stock Exchange and become the Reference Property
hereunder; or

 

iv.        the termination of trading of Common Stock, which will be deemed to
have occurred if the Common Stock is not listed on the Nasdaq Global Market or
the New York Stock Exchange.

 

16

 

  

b)        Within 15 calendar days after the Effective Date of any Make-Whole
Fundamental Change, the Company shall mail a written notice of such Make-Whole
Fundamental Change by first-class mail to the Holder at its address appearing on
the Warrant Register. Such notice must state the events causing, and the
Effective Date of, such Make-Whole Fundamental Change. If the Company fails to
provide such notice within 15 calendar days of the Effective Date, the period
during which the Holder may exercise a Warrant and receive the Make-Whole
Adjustment will be extended by the number of calendar days that such
notification is delayed or not otherwise provided to the Holder beyond the
specified notice deadline.

 

c)        The Company shall mail a notice to the Holder, at its address
appearing on the Warrant Register, and issue a press release through Dow Jones &
Company, Inc. or Bloomberg Business News or other similarly broad public medium
that is customary for such press releases no later than 10 calendar days prior
to the anticipated Effective Date for any Make-Whole Fundamental Change. The
failure to deliver such notice or issue such press release shall not affect the
validity of such transaction.

 

d)        The amount of any Exercise Price Reduction shall be determined by
reference to the table set forth on Exhibit A hereto and shall be based on the
Effective Date of, and the Applicable Price for, the relevant Make-Whole
Fundamental Change.

 

“Applicable Price” means, for any Make-Whole Fundamental Change, (i) if the
consideration paid to holders of Common Stock in connection with such Make-Whole
Fundamental Change consists exclusively of cash, the amount of such cash per
share of Common Stock, and (ii) in all other cases, the average of the Closing
Sale Prices of Common Stock for the five (5) consecutive Trading Days
immediately preceding the Effective Date of such Make-Whole Fundamental Change.

 

e)        The Applicable Prices set forth in the first row of the table set
forth on Exhibit A hereto (i.e., the column headers), and the Exercise Price
Reduction amounts set forth in such table, shall each be adjusted at the same
time and in the manner as the Exercise Price as set forth herein.

 

f)         If the exact Applicable Price and/or Effective Date are not set forth
in the table set forth on Exhibit A hereto, then:

 

i.           if the actual Applicable Price is between two Applicable Prices in
the table or the Effective Date is between two Effective Dates in the table, the
Exercise Price Reduction shall be determined by a straight-line interpolation
between the Exercise Price Reduction set forth for the higher and lower
Applicable Prices and/or the earlier and later Effective Dates in the table,
based on a 365-day year, as applicable;

 

ii.         if the actual Applicable Price is equal to or in excess of $40.00
per share, subject to adjustment as set forth in Section 2J(e), the Exercise
Price shall not be reduced pursuant to this Section 2J (and there shall be no

 

17

 

  

corresponding increase to the number of Warrant Shares pursuant to this Section
2J); and

 

iii.         if the actual Applicable Price is equal to or less than $2.50 per
share, subject to adjustment as set forth in Section 2J(e), the Exercise Price
shall not be reduced pursuant to this Section 2J (and there shall be no
corresponding increase to the number of Warrant Shares pursuant to this Section
2J).

 

g)        If the Exercise Price is reduced pursuant to this Section 2J, the
number of Warrant Shares shall concurrently be increased by multiplying the
number of Warrant Shares prior to such increase by a fraction, (i) the numerator
of which is the Exercise Price prior to giving effect to such Exercise Price
Reduction and (ii) the denominator of which is the Exercise Price after giving
effect to such Exercise Price Reduction.

 

Section 2K.       Notice to Holder.

 

a)        Whenever the Exercise Price is adjusted pursuant to any provision
hereunder, the Company shall promptly mail to the Holder, at its address
appearing on the Warrant Register, a notice setting forth the Exercise Price
after such adjustment and any resulting adjustment to the number of Warrant
Shares and setting forth a brief statement of the facts requiring such
adjustment.

 

b)        If (A) the Company shall declare a dividend (or any other distribution
in whatever form) on the Common Stock, (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights, (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or (E) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 10 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate

 

18

 

  

action required to be specified in such notice. The Holder shall remain entitled
to exercise the Warrants during the period commencing on the date of such notice
to the effective date of the event triggering such notice except as may
otherwise be expressly set forth herein.

 

Section 2L.       Calculations. All calculations under this Section 2 shall be
made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For the purposes of any adjustments hereunder, the number of shares of Common
Stock at any time outstanding shall not include shares held, directly or
indirectly, by the Company, but shall include shares issuable in respect of
scrip representing fractional shares of Common Stock.

 

Section 3.          Transfer of Warrant.

 

a)        Transferability. Subject to compliance with any applicable securities
laws and the conditions set forth in Section 3(d) hereof, the Warrants and all
rights hereunder (including, without limitation, any registration rights) are
transferable, in whole or in part in integral multiples of one whole Warrant,
upon surrender of this Warrant certificate at the principal office of the
Company or its designated agent, together with a written assignment of the
Warrants to be transferred substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant certificate in the name of the assignee or assignees, as applicable, and
in the denomination or denominations specified in such instrument of assignment,
and shall issue to the assignor a new Warrant certificate evidencing the
Warrants not so assigned, and this Warrant certificate shall promptly be
cancelled.

 

b)        New Warrants. This Warrant certificate may be divided or combined with
other Warrant certificates upon presentation hereof at the aforesaid office of
the Company, together with a written notice specifying the names and
denominations in which new Warrant certificates are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section 3(a), as to
any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant certificate in exchange for the Warrant
certificate to be divided or combined in accordance with such notice. All
Warrant certificates issued on transfers or exchanges shall be dated the Initial
Exercise Date and shall be identical with this Warrant certificate except as to
the number of Warrants represented thereby.

 

c)        Warrant Register. The Company shall register this Warrant certificate,
upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of a Warrant as the absolute
owner thereof for the purpose of any exercise thereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.

 

d)        Representation by the Holder. The Holder, by the acceptance hereof,
represents and warrants that it is acquiring the Warrants and, upon any exercise
thereof,

 

19

 

  

will acquire the shares issuable upon such exercise, for its own account and not
with a view to or for distributing or reselling such Warrants or shares or any
part thereof in violation of the Securities Act or any applicable state
securities law, except pursuant to sales registered or exempted under the
Securities Act.

 

e)        Transfer Restrictions.

 

i.          The Warrants may only be sold (A) pursuant to an effective
registration statement under the Securities Act or (B) pursuant to a private
placement exemption from registration under the Securities Act and upon delivery
to the Company of a customary opinion of legal counsel (which may rely on
certificates and representations), certifications or other evidence as may
reasonably be required by the Company in order to determine that such
registration is not required under the Securities Act. Any Warrants sold
pursuant to an effective registration statement under the Securities Act shall
not bear a restrictive legend as set forth in this Warrant certificate or
pursuant to this clause.

 

ii.         Any shares of Common Stock issued upon exercise of the Warrants may
only be sold (A) pursuant to an effective registration statement under the
Securities Act or (B) pursuant to an exemption from registration under the
Securities Act and upon delivery to the Company of a customary opinion of legal
counsel (which may rely on certificates and representations), certifications or
other evidence as may reasonably be required by the Company in order to
determine that such registration is not required under the Securities Act. Any
shares of Common Stock issued upon exercise may bear a legend to the foregoing
effect. Notwithstanding the foregoing, any shares of Common Stock issued upon a
Cashless Exercise of a Warrant after the 12 month anniversary from the date of
issuance of such Warrant may be sold under the exemption from registration
provided by Rule 144 and shall not bear any such restrictive legend, provided
the Holder is not an affiliate (within the meaning of Rule 144) of the Company
and shall not have been an affiliate of the Company for a period of three months
prior to such sale.

 

Section 4.          Registration Rights. The Company shall, as soon as practical
but no later than 90 days after the Initial Exercise Date, prepare and file with
the Securities and Exchange Commission (the “SEC”) a registration statement
(“Registration Statement”) and a prospectus thereunder (“Prospectus”) covering
the Warrants and the shares of Common Stock issued upon exercise of Warrants for
a selling stockholder resale offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form S-3 (except if the
Company is not then eligible to register for resale the Warrants or the shares
of Common Stock issued upon exercise of Warrants on Form S-3, in which case such
registration shall be on another appropriate form in accordance herewith). The
Company shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof and to cause the Registration Statement to
remain effective continuously and a Prospectus to remain available continuously
for so long as (a) shares

 

20

 

  

of Common Stock issued upon exercise of Warrants unsold thereunder are not
eligible for resale under Rule 144 without registration thereunder or (b) such
shares bear a restrictive legend. The Company shall promptly notify the Holder
via facsimile or electronic mail of a “.pdf” format data file of the
effectiveness of the Registration Statement within one business day thereof. The
Company shall, by 9:30 a.m. New York City time on the first business day after
the effective date, file a final Prospectus with the SEC, as required by Rule
424(b) of the Securities Act. Notwithstanding the registration obligations set
forth in this Section 4, in the event the SEC informs the Company that the
Warrants and all of the shares of Common Stock issued upon exercise of Warrants
cannot, as a result of the application of Rule 415, be registered for resale on
a single registration statement, the Company agrees to promptly (i) inform the
Holder thereof, (ii) use its best efforts to file amendments to the Registration
Statement as required by the SEC and/or (iii) withdraw the Registration
Statement and file a new registration statement (a “New Registration
Statement”), in either case covering the maximum number of Warrants and shares
of Common Stock issued upon exercise of Warrants permitted to be registered by
the SEC, on Form S-3 or such other form available to register for resale the
Warrants and the shares of Common Stock issued upon exercise of Warrants as a
secondary offering; provided, however, that prior to filing such amendment or
New Registration Statement, the Company shall be obligated to use its
commercially reasonable efforts to advocate with the SEC for the registration of
the Warrants and all of the shares of Common Stock issued upon exercise of
Warrants in accordance with the SEC Guidance, including without limitation, the
Manual of Publicly Available Telephone Interpretations D.29. In the event the
Company amends the initial Registration Statement or files a New Registration
Statement, as the case may be, under clauses (ii) or (iii) above, the Company
will use its commercially reasonable efforts to file with the SEC, as promptly
as allowed by SEC or SEC Guidance provided to the Company or to registrants of
securities in general, one or more registration statements on Form S-3 or such
other form available to register for resale those Warrants and shares of Common
Stock issued upon exercise of Warrants that were not registered for resale on
the Registration Statement, as amended, or the New Registration Statement.

 

Section 5.          Miscellaneous.

 

a)        No Rights as Stockholder Until Exercise. The Warrants do not entitle
the Holder to any voting rights, dividends or other rights as a stockholder of
the Company prior to the exercise thereof as set forth in Section 1(d)(i),
except as expressly set forth in Section 2.

 

b)        Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant certificate
or any stock certificate relating to the shares of Common Stock issued upon
exercise of Warrants, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant
certificate, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant certificate or stock certificate, if mutilated, the
Company will make and deliver a new Warrant certificate or stock certificate of
like tenor and dated as of such cancellation, in lieu of such Warrant
certificate or stock certificate.

  

21

 

  

c)        Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall not be a Trading Day, then, such action may be taken or such right
may be exercised on the next succeeding Trading Day.

 

d)        Authorized Shares.

 

The Company covenants that, during the period any Warrant is outstanding, it
will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of the shares of Common Stock issuable
upon exercise of the Warrants. The Company further covenants that its issuance
of the Warrants shall constitute full authority to its officers who are charged
with the duty of issuing the necessary shares of Common Stock upon the exercise
of the purchase rights under the Warrants. The Company will take all such
reasonable action as may be necessary to assure that such shares of Common Stock
may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common
Stock may be listed. The Company covenants that all shares of Common Stock which
may be issued upon the exercise of the purchase rights represented by the
Warrants will, upon exercise of the purchase rights represented by the Warrants
and payment for such shares in accordance herewith (including Cashless
Exercise), be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant certificate, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of the Holder
as set forth in this Warrant certificate against impairment. Without limiting
the generality of the foregoing, the Company will (i) not increase the par value
of any shares of Common Stock above the amount payable therefor upon such
exercise immediately prior to such increase in par value (including Cashless
Exercise), (ii) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon exercise of Warrants and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof, as may be,
necessary to enable the Company to perform its obligations under this Warrant
certificate.

 

Before taking any action which would result in an adjustment in the number of
Warrant Shares or in the Exercise Price, the Company shall obtain all

 

22

 

 

such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e)        Governing Law; Jurisdiction. Applicable Law. This Warrant certificate
will be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed within the State of
New York.  The Company and the Holder hereby irrevocably submit themselves to
the exclusive jurisdiction of any state or federal court sitting in New York,
New York for any action arising out of, or as a result of, this Warrant
certificate.  The parties hereto hereby individually agree that they shall not
assert any claim that they are not subject to the jurisdiction of such courts,
that the venue is improper, that the forum is inconvenient or any similar
objection, claim or argument.  Service of process on any of the parties hereto
with regard to any such action may be made by mailing the process to such party
to the address on file with the Company.

 

f)         Nonwaiver and Expenses. No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate as a waiver
of such right or otherwise prejudice the Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant certificate, which results in any material damages to the
Holder, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.

 

g)        Limitation of Liability. No provision hereof, in the absence of any
affirmative action by the Holder to exercise Warrants to purchase shares of
Common Stock, and no enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

 

h)        Remedies. The Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant certificate. The Company
agrees that monetary damages may not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant
certificate and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.

 

i)          Successors and Assigns. Subject to applicable securities laws, this
Warrant certificate and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors and permitted assigns of
the Company and the successors and permitted assigns of Holder. The provisions
of this Warrant certificate are intended to be for the benefit of any Holder
from time to time of the Warrants represented hereby and shall be enforceable by
the Holder or holder of shares of Common Stock issued upon exercise of a
Warrant.

 

23

 

  

j)         Amendment. This Warrant certificate may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder,
except as provided in Section 2G(d) and Section 2I. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of this Warrant certificate unless the same consideration also is
offered to the Holder.

 

k)        Severability. Wherever possible, each provision of this Warrant
certificate shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant certificate shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant certificate.

 

l)         Headings. The headings used in this Warrant certificate are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant certificate.

 

********************

 

(Signature Page Follows)

 

24

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant certificate to be
executed by its officer thereunto duly authorized as of the date first above
indicated.

 

  RETROPHIN, inc.         By:       Name:     Title:

  

 

 

 

EXHIBIT A

MAKE-WHOLE FUNDAMENTAL CHANGE TABLE

 

   Applicable Price  Effective Date  $2.50   $5.00   $7.50   $10.00   $12.76  
$15.00   $17.50   $20.00   $22.50   $25.00   $30.00   $35.00   $40.00  June 30,
2014    0.0051    0.0178    0.0318    0.0445    0.0559    0.0420    0.0318  
 0.0242    0.0191    0.0153    0.0115    0.0089    0.0064  December 30, 2014  
 0.0038    0.0153    0.0293    0.0420    0.0533    0.0394    0.0293    0.0229  
 0.0178    0.0140    0.0102    0.0076    0.0064  June 30, 2015    0.0026  
 0.0127    0.0255    0.0382    0.0508    0.0369    0.0267    0.0204    0.0166  
 0.0127    0.0089    0.0064    0.0051  December 30, 2015    0.0013    0.0102  
 0.0229    0.0356    0.0483    0.0343    0.0255    0.0191    0.0153    0.0115  
 0.0076    0.0064    0.0051  June 30, 2016    0.0013    0.0076    0.0191  
 0.0318    0.0445    0.0318    0.0229    0.0166    0.0127    0.0102    0.0076  
 0.0051    0.0038  December 30, 2016    0.0000    0.0051    0.0153    0.0280  
 0.0407    0.0280    0.0191    0.0140    0.0115    0.0089    0.0064    0.0038  
 0.0038  June 30, 2017    0.0000    0.0038    0.0115    0.0229    0.0369  
 0.0242    0.0166    0.0115    0.0089    0.0064    0.0051    0.0038    0.0026 
December 30, 2017    0.0000    0.0013    0.0076    0.0178    0.0318    0.0204  
 0.0127    0.0089    0.0064    0.0051    0.0038    0.0026    0.0026  June 30,
2018    0.0000    0.0000    0.0038    0.0127    0.0255    0.0153    0.0089  
 0.0051    0.0038    0.0026    0.0026    0.0013    0.0013  December 30, 2018  
 0.0000    0.0000    0.0013    0.0051    0.0178    0.0076    0.0038    0.0026  
 0.0013    0.0013    0.0013    0.0013    0.0013  June 30, 2019    0.0000  
 0.0000    0.0000    0.0000    0.0000    0.0000    0.0000    0.0000    0.0000  
 0.0000    0.0000    0.0000    0.0000 

 

 

 

 

NOTICE OF EXERCISE FORM

 

To:         RETROPHIN, inc.

 

(1)  The undersigned hereby elects to exercise _______ Warrant(s) of the Company
pursuant to the terms of the attached Warrant certificate, and tenders herewith
payment of the exercise price in full, together with all applicable transfer
taxes, if any.

 

(2)  Payment shall take the form of (check applicable box):

 

[ ] in lawful money of the United States; or

 

[ ] by Cashless Exercise, in which case no payment is required.

 

(3)  Please issue the shares of Common Stock in the name of the undersigned or
in such other name as is specified below:

 

_______________________________

 

 

The shares of Common Stock shall be delivered to the following DWAC Account
Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

(4)   Accredited Investor. If the shares of Common Stock issued upon exercise
will bear a restrictive legend as set forth in the Warrant certificate, the
undersigned represents it is an “accredited investor” as defined in Regulation D
promulgated under the Securities Act of 1933, as amended.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:
________________________________________________________________________

Signature of Authorized Signatory of Investing Entity:
_________________________________________________

Name of Authorized Signatory:
___________________________________________________________________

Title of Authorized Signatory:
____________________________________________________________________

Date:
________________________________________________________________________________________

 

 

 

  

ASSIGNMENT FORM

 

(To assign the foregoing Warrant(s), execute
this form and supply required information.
Do not use this form to exercise the Warrant(s).)

 

FOR VALUE RECEIVED, _______ Warrant(s) and all rights evidenced thereby are
hereby assigned to

 

_______________________________________________ whose address is

 

_______________________________________________________________.

 

_______________________________________________________________

  

    Dated:                                 ,                         Holder’s
Signature:               Holder’s Address:                    

  

 

 

 

EXHIBIT H-1

 

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement dated as of June 30, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RETROPHIN, INC., a Delaware Corporation and the Lenders from
time to time party thereto and U.S. Bank National Association, as Administrative
Agent and Collateral Agent.

 

Pursuant to the provisions of Section 2.08 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv)
it is not a controlled foreign corporation related to the Borrower as described
in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]   By:   Name:     Title:  

 

Date: ________ __, 20[ ]

 

Exhibit H-1 – 1

 

 

EXHIBIT H-2

 

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement dated as of June 30, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RETROPHIN, INC., a Delaware Corporation and the Lenders from
time to time party thereto and U.S. Bank National Association, as Administrative
Agent and Collateral Agent.

 

Pursuant to the provisions of Section 2.08 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate, (ii)
it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii)
it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

 

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF PARTICIPANT]   By:   Name:     Title:  

 

Date: ________ __, 20[ ]

 

Exhibit H-2 – 1

 

 

EXHIBIT H-3

 

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement dated as of June 30, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RETROPHIN, INC., a Delaware Corporation and the Lenders from
time to time party thereto and U.S. Bank National Association, as Administrative
Agent and Collateral Agent.

 

Pursuant to the provisions of Section 2.08 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

 

Exhibit H-3 – 1

 

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 [NAME OF PARTICIPANT]

  By:   Name:     Title:  

 

Date: ________ __, 20[ ]

 

Exhibit H-3 – 2

 

 

EXHIBIT H-4

 

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

 

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement dated as of June 30, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among RETROPHIN, INC., a Delaware Corporation and the Lenders from
time to time party thereto and U.S. Bank National Association, as Administrative
Agent and Collateral Agent.

 

Pursuant to the provisions of Section 2.08 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

Exhibit H-4 – 1

 

  

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]   By:   Name:     Title:      

 

Date: ________ __, 20[ ]

 

Exhibit H-4 – 2