Exhibit 10.2

CREDIT AGREEMENT
Dated as of July 9, 2014
among
VERTEX PHARMACEUTICALS INCORPORATED,
as the Borrower,
MACQUARIE US TRADING LLC,
as Administrative Agent,
and
The Other Lenders Party Hereto

EAST\78425679.8

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

TABLE OF CONTENTS
Section    Page

ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS……………………    1

1.01
Defined Terms………………………………………………………….    1

1.02
Other Interpretive Provisions…………………………………………..    28

1.03
Accounting Terms………………………………………………………    29

1.04
Rounding……………………………………………………………….    29

1.05
Times of Day; Rates…………………………………………………… 29

ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS…………..    30

2.01
The Loans………………………………………………………………    30

2.02
Borrowings, Conversions and Continuations of Loans…………………30

2.03
Prepayments…………………………………………………………….    31

2.04
Repayment of Loans……………………………………………………    33

2.05
Interest………………………………………………………………….    33

2.06
Fees……………………………………………………………………..    34

2.07
Computation of Interest and Fees………………………………………    34

2.08
Evidence of Debt……………………………………………………….    34

2.09
Payments Generally; Administrative Agent’s Clawback………………    34

2.10
Sharing of Payments by Lenders………………………………………    36

2.11
Incremental Facility……………………………………………………    37

ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY……………    39

3.01
Taxes……………………………………………………………………    39

3.02
Illegality…………………………………………………………………44

3.03
Inability to Determine Rates…………………………………………....    45

3.04
Increased Costs; Reserves on Eurodollar Rate Loans…………………. 45

3.05
Compensation for Losses……………………………………………….    47

3.06
Mitigation Obligations; Replacement of Lenders………………………    47

3.07
Survival…………………………………………………………………    48

ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS………    48

4.01
Conditions………………………………………………………………    48

ARTICLE V.
REPRESENTATIONS AND WARRANTIES………………………    52

5.01
Existence, Qualification and Power……………………………………    52

5.02
Authorization; No Contravention………………………………………    52

5.03
Governmental Authorization; Other Consents…………………………    52

5.04
Binding Effect………………………………………………………….    52

5.05
Financial Statements; No Material Adverse Effect…………………….    53

5.06
Litigation………………………………………………………………    53

5.07
No Default………………………………………………………………    54

5.08
Ownership of Property; Liens…………………………………………..    54

i    

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

TABLE OF CONTENTS
Section    Page

5.09
Environmental Compliance………………………………………….....    55

5.10
Insurance……………………………………………………………….    56

5.11
Taxes……………………………………………………………………    56

5.12
ERISA Compliance……………………………………………………..    56

5.13
Subsidiaries; Equity Interests…………………………………………...    57

5.14
Margin Regulations; Investment Company Act………………………...    58

5.15
Disclosure……………………………………………………..………..    58

5.16
Compliance with Laws…………………………………………………    58

5.17
Taxpayer Identification Number………………………………………..    58

5.18
Intellectual Property; Licenses, Etc…………………………………….    58

5.19
OFAC……………………………………………………………………59

5.20
Compliance of Products………………………………………………... 59

5.21
Anti-Corruption Laws…………………………………………………..    62

5.22
Solvency………………………………………………………………...    62

5.23
Casualty, Etc……………………………………………………………    62

5.24
Labor Matters…………………………………………………………..    62

5.25
Senior Debt……………………………………………………………..    62

ARTICLE VI.
AFFIRMATIVE COVENANTS……………………………………    62

6.01
Financial Statements……………………………………………………    62

6.02
Certificates; Other Information…………………………………………    63

6.03
Notices………………………………………………………………….    66

6.04
Payment of Obligations…………………………………………………    66

6.05
Preservation of Existence, Etc………………………………………….    67

6.06
Maintenance of Properties………………………………………………67

6.07
Maintenance of Insurance………………………………………………    67

6.08
Compliance with Laws…………………………………………………    67

6.09
Books and Records……………………………………………………..    67

6.10
Inspection Rights; Annual Lender Meetings……………………………    69

6.11
Use of Proceeds…………………………………………………………    69

6.12
Covenant to Guarantee Obligations and Give Security.………………...69

6.13
Compliance with Environmental Laws…………………………………    72

6.14
Further Assurances……………………………………………………..    73

6.15
Products and Required Permits…………………………………………    73

6.16
[Intentionally Omitted]…………………………………………………    73

6.17
Information Regarding Collateral………………………………………    73

6.18
Material Contracts……………………………………………………...    74

6.19
Designation of Senior Debt…………………………………………….    74

6.20
Anti-Corruption Laws………………………………………………….    74

6.21
Post-Closing Covenants…………………………………………………74

ARTICLE VII.
NEGATIVE COVENANTS………………………………………...    75

7.01
Liens……………………………………………………………………    75

ii    

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

TABLE OF CONTENTS
Section    Page

7.02
Investments…………………………………………………………….    78

7.03
Indebtedness……………………………………………………………    80

7.04
Fundamental Changes………………………………………………….    83

7.05
Dispositions…………………………………………………………….    83

7.06
Restricted Payments……………………………………………………    85

7.07
Change in Nature of Business…………………………………………    86

7.08
Transactions with Affiliates……………………………………………    86

7.09
Burdensome Agreements………………………………………………    86

7.10
Customer Agreements………………………………………………….    87

7.11
Use of Proceeds…………………………………………………………    87

7.12
Kalydeco Product Revenue…………………………………………….    87

7.13
Capital Expenditures……………………………………………………    87

7.14
Amendment of Organization Documents………………………………    87

7.15
Accounting Changes……………………………………………………    88

7.16
Prepayments, Etc. of Indebtedness……………………………………..    88

7.17
Designation of Senior Debt…………………………………………….    88

7.18
Amendment, Etc. of Material Contracts and Indebtedness…………….    88

7.19
Sanctions………………………………………………………………..    88

7.20
Anti-Corruption Laws…………………………………………………..    88

7.21
Pension Plan……………………………………………………………    88

7.22
Massachusetts Security Corporation……………………………………    88

ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES…………………………………………………………    89

8.01
Events of Default………………………………………………………    89

8.02
Remedies Upon Event of Default………………………………………    92

8.03
Application of Funds……………………………………………………    92

ARTICLE IX.
ADMINISTRATIVE AGENT………………………………………    92

9.01
Appointment and Authority……………………………………………    93

9.02
Rights as a Lender………………………………………………………    93

9.03
Exculpatory Provisions…………………………………………………    93

9.04
Reliance by Administrative Agent……………………………………...    94

9.05
Delegation of Duties……………………………………………………    95

9.06
Resignation of Administrative Agent…………………………………..    95

9.07
Non-Reliance on Administrative Agent and Other Lenders……………    96

9.08
No Other Duties, Etc……………………………………………………    96

9.09
Administrative Agent May File Proofs of Claim………………………    96

9.10
Collateral and Guaranty Matters……………………………………….    98

ARTICLE X.
CONTINUING GUARANTY……………………………………...99

10.01
Guaranty………………………………………………………………..    99

iii    

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

TABLE OF CONTENTS
Section    Page

10.02
Rights of Lenders………………………………………………………    99

10.03
Certain Waivers…………………………………………………………    99

10.04
Obligations Independent……………………………………………….    100

10.05
Subrogation…………………………………………………………….    100

10.06
Termination; Reinstatement……………………………………………    100

10.07
Subordination…………………………………………………………..    100

10.08
Stay of Acceleration……………………………………………………    101

10.09
Condition of Borrower…………………………………………………    101

ARTICLE XI.
MISCELLANEOUS……………………………………………….    101

11.01
Amendments, Etc………………………………………………………    101

11.02
Notices; Effectiveness; Electronic Communication……………………    102

11.03
No Waiver; Cumulative Remedies; Enforcement………………………    104

11.04
Expenses; Indemnity; Damage Waiver…………………………………    105

11.05
Payments Set Aside……………………………………………………    107

11.06
Successors and Assigns…………………………………………………    107

11.07
Treatment of Certain Information; Confidentiality……………………..    111

11.08
Right of Setoff………………………………………………………….    112

11.09
Interest Rate Limitation………………………………………………..    112

11.10
Counterparts; Integration; Effectiveness………………………………    112

11.11
Survival of Representations and Warranties……………………………    113

11.12
Severability……………………………………………………………..    113

11.13
Replacement of Lenders………………………………………………..    113

11.14
Governing Law; Jurisdiction; Etc.……………………………………..    114

11.15
Waiver of Jury Trial…………………………………………………….    115

11.16
No Advisory or Fiduciary Responsibility………………………………    115

11.17
Electronic Execution of Assignments and Certain Other Documents…    116

11.18
USA PATRIOT Act…………………………………………………….    116

11.19
Licenses…………………………………………………………………    116

SIGNATURES………………………………………………………………………......S-1

iv    

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

 

SCHEDULES
1.01    Products    
2.01    Commitments and Applicable Percentages
5.05    Supplement to Interim Financial Statements
5.08(b)    Existing Liens
5.08(c)    Owned Real Property
5.08(d)(i)    Leased Real Property (Lessee)
5.08(d)(ii)    Leased Real Property (Lessor)
5.08(e)    Existing Investments
5.13    Subsidiaries and Other Equity Investments; Loan Parties
5.18    Intellectual Property Matters
6.12    Guarantors
7.03    Existing Indebtedness
11.02    Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS
Form of
A    Loan Notice
B    Note
C-1    Assignment and Assumption
C-2    Administrative Questionnaire
D    United States Tax Compliance Certificates
E    Security Agreement
F    Solvency Certificate
G    Perfection Certificate

v

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

 

CREDIT AGREEMENT
This CREDIT AGREEMENT (“Agreement”) is entered into as of July 9, 2014, among
VERTEX PHARMACEUTICALS INCORPORATED, a Massachusetts corporation (the
“Borrower”), each lender from time to time party hereto (collectively, the
“Lenders” and individually, a “Lender”), and MACQUARIE US TRADING LLC, as
Administrative Agent.
The Borrower has requested that the Lenders provide a term loan credit facility,
and the Lenders are willing to do so on the terms and conditions set forth
herein.
In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:
ARTICLE I.DEFINITIONS AND ACCOUNTING TERMS
1.01    Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:
“Abbreviated New Drug Application” means an abbreviated new drug application
(including all applicable supplements and amendments that may be filed with
respect thereto) filed with the FDA or any similar or successor applications or
procedures seeking authorization and approval to Manufacture, package, ship, and
sell a Product in the United States pursuant to the FDCA including an
application under 21 U.S.C. § 355(j).
“Act” has the meaning specified in Section 11.18.
“Administrative Agent” means Macquarie US Trading LLC in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 11.02, or such other address or
account as the Administrative Agent may from time to time notify to the Borrower
and the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire in
substantially the form of Exhibit C-2 or any other form approved by the
Administrative Agent.
“Affected Subsidiary” means (i) any direct or indirect Foreign Subsidiary that
is a “controlled foreign corporation” within the meaning of Section 957 of the
Code, (ii) any direct or indirect Domestic Subsidiary substantially all of the
assets of which consist of Equity Interests in or Indebtedness of one or more
direct or indirect Foreign Subsidiaries that are “controlled foreign
corporations” within the meaning of Section 957 of the Code and (iii) any direct
or indirect Domestic Subsidiary of a direct or indirect Foreign Subsidiary.
“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

1

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

 

“Agent Indemnitee” has the meaning specified in Section 9.10(c).
“Aggregate Commitments” means the Commitments of all the Lenders.
“Agreement” has the meaning specified in the introductory paragraph hereto.
“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of (i) on or prior to the
Closing Date, the Aggregate Commitments represented by such Lender’s Commitment
at such time and (ii) thereafter, Total Outstandings represented by such
Lender’s Loans at such time. The initial Applicable Percentage of each Lender is
set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment
and Assumption pursuant to which such Lender becomes a party hereto, as
applicable.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit C-1 or any other form (including electronic
documentation generated by MarkitClear or other electronic platform) approved by
the Administrative Agent.
“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 audited consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal year ended December 31, 2013,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.
“Base Rate” means, for any day, a floating rate equal to the greater of (x) the
higher of (i) the per annum rate publicly quoted from time to time by The Wall
Street Journal as the “Prime Rate” in the United States (or, if The Wall Street
Journal ceases quoting a base rate of the type described, either (a) the per
annum rate quoted as the base rate on such corporate loans in a different
national publication as selected by Administrative Agent or (b) the highest per
annum rate of interest published by the Federal Reserve Board in Federal Reserve
statistical release H.15 (519) entitled “Selected Interest Rates” as the Bank
prime loan rate or its equivalent), and (ii) the Federal Funds Rate plus fifty
(50) basis points per annum, (y) the sum of (a) the Eurodollar Rate calculated
for each such day based on a Interest Period of one (1) month determined two (2)
Business Days prior to the first day of the then current month plus (b) 100
basis points, for such day. Each change in

2

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

 

any interest rate provided for in this Agreement based upon the Base Rate shall
take effect at the time of such change in the Base Rate.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Borrower” has the meaning specified in the introductory paragraph hereto.
“Borrower Indemnitee” has the meaning specified in Section 11.04(b).
“Borrower Materials” has the meaning specified in Section 6.02.
“Borrowing” means a borrowing of Loans of the same Type and having the same
Interest Period.
“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day that is also a
London Banking Day.
“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.
“Cash Equivalents” means any of the following types of Investments, to the
extent owned by the Borrower or any of its Subsidiaries free and clear of all
Liens (other than Liens created under the Collateral Documents and other Liens
permitted hereunder):
(a)readily marketable obligations issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
having maturities of not more than 360 days from the date of acquisition
thereof; provided that the full faith and credit of the United States of America
is pledged in support thereof;
(b)    time deposits with, or insured certificates of deposit or bankers’
acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized
under the laws of the United States of America, any state thereof or the
District of Columbia or is the principal banking subsidiary of a bank holding
company organized under the laws of the United States of America, any state
thereof or the District of Columbia, and is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper rated as
described in clause (c) of this definition and (iii) has combined capital and
surplus of at least $1,000,000,000, in each case with maturities of not more
than 180 days from the date of acquisition thereof;
(c)    commercial paper issued by any Person organized under the laws of any
state of the United States of America and rated at least “Prime-1” (or the then
equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by
S&P, in each case with maturities of not more than 180 days from the date of
acquisition thereof;

3

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

 

(d)    Investments, classified in accordance with GAAP as current assets of the
Borrower or any of its Subsidiaries, in money market investment programs
registered under the Investment Company Act of 1940, which are administered by
financial institutions that have the highest rating obtainable from either
Moody’s or S&P, and the portfolios of which are limited solely to Investments of
the character, quality and maturity described in clauses (a), (b) and (c) of
this definition;
(e)    repurchase obligations for underlying securities of the types described
in clauses (a) and (b) entered into with any financial institution or recognized
securities dealer meeting the qualifications specified in clause (b) above; and
(f)    other readily marketable investments permitted by the Borrower’s
Investment Policy adopted by the Audit and Finance Committee of its board of
directors and set forth in Schedule 1.01 hereto, with any changes consented to
by the Required Lenders, whose consent shall not be unreasonably withheld or
delayed; provided that any change to the Investment Policy that further
restricts permitted investments shall not require such consent.
“Casualty Event” shall mean any loss of title (other than through a consensual
disposition of such property in accordance with this Agreement) or any loss of
or damage to or any destruction of, or any condemnation or other taking
(including by any Governmental Authority) of, any property of the Borrower or
any of its Subsidiaries. “Casualty Event” shall include any taking of all or any
part of any real property of any person or any part thereof, in or by
condemnation or other eminent domain proceedings pursuant to any Law, or by
reason of the temporary requisition of the use or occupancy of all or any part
of any real property of any person or any part thereof by any Governmental
Authority, or any settlement in lieu thereof.
“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.
“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 Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign 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.

4

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

 

“Change of Control” means an event or series of events by which:
(a)    any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, 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 Securities Exchange Act of 1934, except that a person or group shall
be deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire, 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 12 consecutive months, a majority of the members of
the board of directors or other equivalent governing body of the Borrower cease
to be composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or
(c)    the passage of thirty days from the date upon which any Person or two or
more Persons acting in concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon consummation
thereof, will result in its or their acquisition of the power to exercise,
directly or indirectly, a controlling influence over the management or policies
of the Borrower, or control over 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 Persons have the right to acquire pursuant to any
option right) representing 35% or more of the combined voting power of such
securities; or
(d)    a “change of control” or any comparable term under, and as defined in,
any Subordinated Indebtedness or other significant debt shall have occurred.
“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 11.01.

5

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

 

“Code” means the Internal Revenue Code of 1986.
“Collateral” means all of the “Collateral” and “Mortgaged Property” or “Trust
Property” or other similar term referred to in the Collateral Documents and all
of the other property that is or is intended under the terms of the Collateral
Documents to be subject to Liens in favor of the Administrative Agent for the
benefit of the Secured Parties.
“Collateral Documents” means, collectively, the Security Agreement, the
Intellectual Property Security Agreements, the Mortgages, each of the mortgages,
collateral assignments, security agreements, pledge agreements or other similar
agreements delivered to the Administrative Agent pursuant to Section 6.12, and
each of the other agreements, instruments or documents that creates or purports
to create a Lien in favor of the Administrative Agent for the benefit of the
Secured Parties.
“Commitment” means, as to each Lender, its obligation to make Loans to the
Borrower pursuant to Section 2.01 in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender’s name
on Schedule 2.01, as such amount may be adjusted from time to time in accordance
with this Agreement.
“Conditional Marketing Authorization Application” refers to a time-limited
approval granted by a foreign Governmental Authority for sale of a drug in the
European Union under certain conditions for its use to treat seriously
debilitating or life-threatening diseases, address emergency threats and to
treat orphan medical conditions.
“Confidential Information” means all non-public information, whether written,
oral or in any electronic, visual or other medium, that is the subject of
reasonable efforts to keep it confidential and that is owned by the Borrower or
any Subsidiary or that the Borrower or any Subsidiary is licensed, authorized or
otherwise granted rights under or to.
“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
“Copyright License” means any agreement, whether written or oral, providing for
the grant of any right to use any Work under any Copyright.
“Copyrights” means (a) all proprietary rights afforded Works pursuant to Title
17 of the United States Code, including, without limitation, all rights in mask
works, copyrights and original designs, and all proprietary rights afforded such
Works by other countries for the full term thereof (and including all rights
accruing by virtue of bilateral or international treaties and conventions
thereto), whether registered or unregistered, including, but not limited to, all
applications for registration, renewals, extensions, reversions or restorations
thereof now or hereafter provided for

6

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

 

by law and all rights to make applications for registrations and recordations,
regardless of the medium of fixation or means of expression, which are owned by
the Borrower or any Subsidiary or which the Borrower or any Subsidiary is
licensed, authorized or otherwise granted rights under or to; and (b) all
copyright rights under the copyright laws of the United States and all other
countries for the full term thereof (and including all rights accruing by virtue
of bilateral or international copyright treaties and conventions), whether
registered or unregistered, including, but not limited to, all applications for
registration, renewals, extensions, reversions or restorations of copyrights now
or hereafter provided for by law and all rights to make applications for
copyright registrations and recordations, regardless of the medium of fixation
or means of expression, which are owned by the Borrower or any Subsidiary or
which the Borrower or any Subsidiary is licensed, authorized or otherwise
granted rights under or to.
“Credit Extension” means a Borrowing.
“Customer Agreement” means a license or other agreement between any Loan Party
or any Affiliate of any Loan Party, on the one part, and any customer, licensee,
distributor or other Person (each, a “Customer”), on the other part, for the
research, development or commercialization of any product.
“Cystic Fibrosis Drug Franchise Assets” means (1) ivacaftor (tradename
KALYDECO), for use in treating patients with cystic fibrosis six years of age
and older who carry the G551D mutation in the CFTR gene; (2) lumacaftor in
combination with ivacaftor which is being developed for potential use in
treating patients twelve years and older who are homozygous for the F508del
mutation in their CFTR gene; (3) VX-661 in combination with ivacaftor which is
being developed for use in treating patients twelve years and older who carry
certain mutations in the CFTR gene and (4) all proceeds, IP Rights, Permits and
other assets related thereto and all Products, IP Rights or other assets
developed or acquired in connection with cystic fibrosis.
“DEA” means the Drug Enforcement Administration of the United States of America
and any successor agency thereof.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect.
“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.
“Default Rate” means an interest rate equal to the then Interest Rate plus 2%
per annum.
“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 the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person (or the granting of

7

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

 

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.
“Dollar” and “$” mean lawful money of the United States.
“Domain Names” means all domain names and URLs that are registered and/or owned
by the Borrower or any Subsidiary or which the Borrower or any Subsidiary is
licensed, authorized or otherwise granted rights under or to.
“Domestic Subsidiary” means any Subsidiary organized under the laws of the
United States of America, any state thereof or the District of Columbia.
“Drug Application” means a New Drug Application (including a supplemental New
Drug Application), a Biologics License Application, an Abbreviated New Drug
Application, or a product license application, as those terms are defined in the
Food, Drugs and Cosmetics Act (21 U.S.C. ch. 9 § 301 et seq.), for any Product,
as appropriate, in each case of the Borrower or any Subsidiary, and equivalents
thereof, including Conditional Marketing Authorizations, for submission to
Governmental Authorities outside of the United States.
“Drug Approval” means an approval, authorization or license (including, without
limitation, an Investigational New Drug Application (“IND”) authorizing human
testing of a drug, New Drug Application, conditional Marketing Authorization
Application and Marketing Authorization Application) granted by a Governmental
Authorities (including, without limitation, the FDA and the European Commission)
to permit the use in human use, sale and marketing of a Product.
“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 11.06(b)(iii), and (iv) (subject to such consents, if
any, as may be required under Section 11.06(b)(iii)).
“Environment” means ambient air, indoor air, surface water (including navigable
waters, ocean waters, streams, ponds, drainage basins, and wetlands),
groundwater, drinking water, soil, surface and subsurface strata, flora and
fauna, and any other environmental medium or natural resource.
“Environmental Laws” means any and all Laws, including regulations, ordinances,
rules, judgments, orders, decrees, permits, agreements or governmental
restrictions, relating to pollution or the protection of the Environment, to
human health and safety in respect of Hazardous Materials, including those
relating to the manufacture, generation, handling, transport, storage,
treatment, Release or threat of a Release of or exposure to Hazardous Materials.
“Environmental Liability” means any liabilities, monetary obligations, losses,
damages, costs and expenses (including all fees, disbursements and expenses of
counsel, experts, or consultants, and costs of corrective measures,
investigation, feasibility studies, and remediation), fines, penalties,
sanctions, indemnities, and interest contingent or otherwise of the Borrower,
any other Loan Party or any of their respective Subsidiaries arising under or in
connection with

8

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

 

Environmental Laws, including those directly or indirectly resulting from or
based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment, disposal or other management of
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) 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.
“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.
“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
For purposes of Section 6.12 and the Security Agreement, Equity Interests shall
include Indebtedness that the Borrower and the Administrative Agent agree in
good faith is properly treated as equity for U.S. federal income tax purposes
or, if the Borrower and the Administrative Agent cannot agree on the proper
treatment of the Indebtedness, as determined in the opinion of a tax advisor
reasonably acceptable to each the Borrower and the Administrative Agent.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b)
the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA,; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan; (f) any event or condition which constitutes grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (g) the determination that any Pension Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA; (h) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the
Borrower or any ERISA Affiliate; or (i) a failure by the Borrower or any ERISA
Affiliate to meet all applicable requirements under

9

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

 

the Pension Funding Rules in respect of a Pension Plan, whether or not waived,
or the failure by the Borrower or any ERISA Affiliate to make any required
contribution to a Multiemployer Plan.
“Eurodollar Rate” means:
(a)    for any Interest Period with respect to a Eurodollar Rate Loan, the rate
per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable
or successor rate, which rate is approved by the Administrative Agent, as
published on the applicable Bloomberg screen page (or such other commercially
available source providing such quotations as may be designated by the
Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
Dollar deposits (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period; and
(b)    for any interest calculation with respect to a Base Rate Loan on any
date, the rate per annum equal to LIBOR, at or about 11:00 a.m., London time
determined two Business Days prior to such date for U.S. Dollar deposits with a
term of one month commencing that day;
provided that to the extent a comparable or successor rate is approved by the
Administrative Agent in connection herewith, the approved rate shall be applied
in a manner consistent with market practice; provided, further that to the
extent such market practice is not administratively feasible for the
Administrative Agent, such approved rate shall be applied in a manner as
otherwise reasonably determined by the Administrative Agent.
“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on
clause (a) of the definition of “Eurodollar Rate”.
“European Commission” refers to the European Commission or any successor entity
thereto.
“Event of Default” has the meaning specified in Section 8.01.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to
any Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, imposed as a result of
such Recipient being organized under the laws of, or having its principal office
or its Lending Office (or relevant office for receiving payments from or on
account of the Borrower or making funds available to or for the benefit of the
Borrower) located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) (b) Other Connection Taxes, (c) U.S. federal withholding
Taxes that are (or would be) required to be withheld pursuant to a Law in effect
on the date on which (i) such Recipient acquires such interest in the Loan or
Commitment or becomes the Administrative Agent (other than pursuant to an
assignment request by the Borrower under Section 11.13) or (ii) such Recipient
changes its Lending Office (or relevant office for receiving payments from or on
account of the Borrower or making funds available to or for the benefit of the
Borrower), except in each case to the extent that, pursuant to Section
3.01(a)(ii), (a)(iii) or (c), amounts with respect to such Taxes were payable
either to such Recipient’s predecessor

10

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

 

immediately before such Recipient became a party hereto or to such Recipient
immediately before it changed its Lending Office (or relevant office for
receiving payments from or on account of the Borrower or making funds available
to or for the benefit of the Borrower), (d) Taxes attributable to such
Recipient’s failure to comply with Section 3.01(e) (e) any U.S. federal
withholding Taxes imposed pursuant to FATCA and (f) U.S. backup withholding
Taxes.
“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantially comparable
and not materially more onerous to comply with) and, in each case, any current
or future regulations or official interpretations thereof, any agreements
entered into pursuant to Section 1471 (b) (1) of the Code, and any
intergovernmental agreements entered into in connection therewith (and any
legislation or guidance issued with respect to such intergovernmental
agreements).
“FDA” means the Food and Drug Administration of the United States of America or
any successor entity thereto.
“FDCA” means the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C.
Section 301 et seq. and all regulations promulgated thereunder.
“Federal” means the federal government of the United States.
“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the
Administrative Agent on such day on such transactions as determined by the
Administrative Agent.
“Fixed Rate Loan” means a Loan that bears interest in accordance with
clauses (a) and (b) of the definition of “Interest Rate”.
“Foreign Recipient” means (a) if the Borrower is a U.S. Person, a Recipient that
is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Recipient
that is resident or organized under the laws of a jurisdiction other than that
in which the Borrower is resident for tax purposes. For purposes of this
definition, the United States, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction. 
“Foreign Subsidiary” means any Subsidiary of the Borrower that is not a Domestic
Subsidiary.

11

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

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.
“Fund” means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.
“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 the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).
“Governmental Licenses” means all applications to and requests for approval from
a Governmental Authority for the right to manufacture, import, store, market,
promote, advertise, offer for sale, sell, use and/or otherwise distribute a
Product, including, without limitation, any such filings filed with the FDA, and
all authorizations issuing from a Governmental Authority based upon or as a
result of such applications and requests, which are owned by the Borrower or any
Subsidiary, acquired by the Borrower or any Subsidiary via assignment, purchase
or otherwise or that the Borrower or any Subsidiary is licensed, authorized or
otherwise granted rights under or to.
“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably

12

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

 

anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith. The term “Guarantee” as a verb has a corresponding
meaning.
“Guarantors” means, collectively, each Person that executes this Agreement as a
Guarantor or any other Guaranty.
“Guaranty” means each Guaranty made by the Guarantors under Article X in favor
of the Secured Parties, or any other guaranty substantially similar to Article X
and otherwise in form and substance reasonably satisfactory to the
Administrative Agent, together with each other guaranty and guaranty supplement
delivered pursuant to Section 6.12.
“Hazardous Materials” means any material, chemical, compound, substance,
mixture, waste or by-product (regardless of physical form or concentration) that
(a) is hazardous, toxic, infectious, explosive, radioactive, carcinogenic,
mutagenic, ignitable, corrosive, reactive, or otherwise deleterious to living
things or the environment, or (b) is or becomes identified, defined, designated,
listed, restricted or otherwise regulated under Environmental Laws. Without
limiting the foregoing, Hazardous Materials include petroleum or petroleum
distillates, natural gas, natural gas liquids, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, toxic mold, and infectious or
medical wastes.
“HHS” means the United States Department of Health and Human Services and any
successor agency thereof.
“Immaterial Subsidiary” means any Foreign Subsidiary with annual revenues not
exceeding $1,000,000 and with total assets not exceeding $1,000,000.
“Impacted Loans” has the meaning assigned to such term in Section 3.03.
“Increase Effective Date” has the meaning assigned to such term in Section
2.11(a).
“Increase Joinder” has the meaning assigned to such term in Section 2.11(c).
“Incremental Commitments” has the meaning assigned to such term in Section
2.11(b).
“Incremental Loan Maturity Date” has the meaning assigned to such term in
Section 2.11(c).
“Incremental Loans” means any loans made pursuant to any Incremental
Commitments.
“IND” has the meaning specified in the definition of “Drug Approval”.
“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;

13

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

 

(b)    the maximum amount of all direct or contingent obligations of such Person
arising under standby letters of credit, bankers’ acceptances, bank guaranties,
surety bonds and similar instruments;
(c)    net obligations of such Person under any Swap Contract;
(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 contingent obligations);
(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 Guarantees 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. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.
“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 any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.
“Information” has the meaning specified in Section 11.07.
“Intangible Assets” means assets that are considered to be intangible assets
under GAAP, including customer lists, goodwill, computer software, copyrights,
trade names, trademarks, patents, franchises, licenses, unamortized deferred
charges, unamortized debt discount and capitalized research and development
costs.
“Intellectual Property Security Agreement” has the meaning specified in
Section 4.01(a)(iv).

14

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

 

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day
of each Interest Period applicable to such Loan and the Maturity Date; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan or Fixed Rate Loan, the first Business Day of each January,
April, July and October and the Maturity Date.
“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is converted to or continued as a
Eurodollar Rate Loan and ending on the date one, two, three or six months
thereafter (in each case, subject to availability), as selected by the Borrower
in its Loan Notice; provided that:
(i)any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless, in the case of
a Eurodollar Rate Loan, such Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding Business Day;
(ii)    any Interest Period pertaining to a Eurodollar Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and
(iii)    no Interest Period shall extend beyond the Maturity Date.
“Interest Rate” means, from time to time, the following percentages per annum as
set forth below:
(a)    at any time on and after the Closing Date, but subject to clauses (b)
– (d) below, 7.20 % per annum;
(b)    at any time on and after the first full quarterly Interest Payment Date
that occurs after the later of (i) the Administrative Agent has received a
certificate from the Borrower certifying the FDA approval in the United States
of a Product with a label claim for treating patients with cystic fibrosis 12
years of age and older who are homozygous with the F508del population and (ii)
the one year anniversary of the Closing Date, in each case, until the second
anniversary of the Closing Date, 6.20% per annum;
(c)    at any time on and after the second anniversary of the Closing Date in
the event the event in clause (b)(i) above has not been satisfied, the
Eurodollar Rate plus 7.50% (or, at any time the Interest Rate is based on the
Base Rate in accordance with this Agreement, the Base Rate plus 6.50%);
(d)    at any time on and after the second anniversary of the Closing Date in
the event the event in clause (b)(i) above has been satisfied, the Eurodollar
Rate plus 5.00% (or, at any time the Interest Rate is based on the Base Rate in
accordance with this Agreement, the Base Rate plus 4.00%).

15

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

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit or all or a
substantial part of the business of, such Person (other than ordinary course
trade payables). For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
“IP Event of Default” means the occurrence of any of the following events:
(a)    the institution of any proceeding by the FDA or similar Governmental
Authority to temporarily order the withdrawal of any Product or Product category
from the market or to permanently enjoin the Borrower or any Subsidiary or any
representative of the Borrower or any Subsidiary from manufacturing, marketing,
selling or distributing any Product or Product category wherein such
institution, withdrawal or injunction could reasonably be expected to result in
a Material Adverse Effect or, solely with respect to the Cystic Fibrosis Drug
Franchise Assets, could reasonably be expected to result in liabilities or loss
of revenue in excess of $50,000,000 or a Material Adverse Effect;
(b)    the institution of any action or proceeding by the DEA, FDA, or any other
Governmental Authority to revoke, suspend, reject, withdraw, limit, or restrict
any Required Permit held by the Borrower or any Subsidiary or any representative
of the Borrower or any Subsidiary and any such institution, revoke, suspension,
rejection, withdrawal, limitation, or restriction could reasonably be expected
to result in a Material Adverse Effect or, solely with respect to the Cystic
Fibrosis Drug Franchise Assets, could reasonably be expected to result in
liabilities or loss of revenue in excess of $50,000,000 or a Material Adverse
Effect;
(c)    the commencement of any enforcement action against the Borrower or any
Subsidiary by the DEA, FDA, or any other Governmental Authority wherein such
enforcement action could reasonably be expected to result in a Material Adverse
Effect or, solely with respect to the Cystic Fibrosis Drug Franchise Assets,
could reasonably be expected to result in liabilities or loss of revenue in
excess of $50,000,000 or a Material Adverse Effect;
(d)    the Recall of any Product from the market, the voluntary withdrawal of
any Products from the market, or the discontinuation of the sale of any Products
primarily due to the threat of Recall, in each case which could reasonably be
expected to result in a Material Adverse Effect or, solely with respect to the
Cystic Fibrosis Drug Franchise Assets, could reasonably be expected to result in
liabilities or loss of revenue in excess of $50,000,000 or a Material Adverse
Effect;
(e)    a change in Law, including a change in FDA or DEA policies or procedures,
occurs which would reasonably be expected to have a Material Adverse Effect; or

16

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

 

(f)    the termination of any agreement with a manufacturer that supplies any
Product or any component of any Product or any material change to any agreement
with a manufacturer that supplies any Product or any components of any Product,
in each case, that is not replaced by a reasonably equivalent agreement (or any
such material change is not fully ameliorated by a curative agreement,
supplement or amendment) within a reasonable period of time and, as a
consequence of such failure to replace (or amend or supplement), the loss of
such agreement or material change to such agreement would reasonably be expected
to have a Material Adverse Effect.
“IP Rights” means, collectively, all Confidential Information, all Copyrights,
all Copyright Licenses, all Domain Names, all Drug Applications, all
Governmental Licenses, all Other Intellectual Property, all Other IP Agreements,
all Patents, all Patent Licenses, all Proprietary Databases, all Proprietary
Software, all Trademarks, all Trademark Licenses, all Trade Secrets, all
Websites and all Website Agreements.
“IRS” means the United States Internal Revenue Service.
“Kalydeco Product” means ivacaftor for use in treating patients six years and
older who carry certain mutations in the CFTR gene.
“Kalydeco Product US Revenue” means, with respect to any date of determination,
total revenue from sales of the Kalydeco Product derived from customers located
in the United States over the trailing twelve month period ending on such date
of determination, as determined on a consolidated basis in accordance with GAAP
and otherwise calculated in a manner substantially consistent with the
calculations for “revenue” in the Borrower’s financial statements delivered
under Sections 6.01(a) and (b).
“Kalydeco Product US and Foreign Revenue” means, with respect to any date of
determination, total revenue from sales of the Kalydeco Product derived from
customers located in the United States and in other jurisdictions over the
trailing twelve month period ending on such date of determination, which
revenue, if consisting of currency other than US Dollars, will be calculated
using the foreign exchange rates prevailing as of the Closing Date, as
determined on a consolidated basis in accordance with GAAP and calculated in a
manner substantially consistent with the calculations for “revenue” in the
Borrower’s financial statements delivered under Sections 6.01 (a) and (b).
“Knowledge” means, (a) with respect to any natural Person’s knowledge of a
matter in question, knowledge after due inquiry of such Person and (ii) with
respect to any Loan Party or any Subsidiary’s knowledge of a matter in question,
knowledge after due inquiry of such Person’s Responsible Officers.
“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, common law, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable

17

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

 

administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.
“Lender” has the meaning specified in the introductory paragraph hereto.
“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent, which office may include any Affiliate of such Lender or
any domestic or foreign branch of such Lender or such Affiliate. Unless the
context otherwise requires each reference to a Lender shall include its
applicable Lending Office.
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, easement, right-of-way or other encumbrance on title
to real property, lien (statutory or other), charge, or preference, priority or
other security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, and any financing lease having substantially
the same economic effect as any of the foregoing).
“Loan” means an extension of credit by a Lender to the Borrower under Article
II.
“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c)
each Guaranty, (d) the Collateral Documents and (e) each fee letter entered into
with the Borrower and Administrative Agent or any Lender.
“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from
one Type to the other, or (c) a continuation of Eurodollar Rate Loans, which
shall be substantially in the form of Exhibit A or such other form as may be
approved by the Administrative Agent (including any form on an electronic
platform or electronic transmission system as shall be approved by the
Administrative Agent), appropriately completed and signed by a Responsible
Officer of the Borrower.
“Loan Parties” means, collectively, the Borrower and each Guarantor.
“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.
“Make Whole Premium” means, on any date of prepayment of any Loan prior to the
second anniversary of the Closing Date, the present value of all required
interest payments due on the amount of such Loan prepaid from the date of
prepayment through and including the second anniversary of the Closing Date
(excluding accrued interest) (assuming that all amortization payments would have
been made on a timely basis discounted to the date of prepayment on a quarterly
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 50 basis points.

18

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

 

“Market Withdrawal” means a Person’s removal or correction of a distributed
product which involves a minor violation that would not be subject to legal
action by the FDA or which involves no violation, e.g., normal stock rotation
practices, routine equipment adjustments and repairs, etc., as that term is
defined in 21 C.F.R. 7.3(j).
“Massachusetts Security Corporation” means a Person that qualifies as a
Massachusetts security corporation under Mass. Gen. L. c. 63, §38B, but only to
the extent, and during the time period, it so qualifies.
“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent) or financial condition of the Borrower and its Subsidiaries taken
as a whole; (b) a material impairment of the rights and remedies of the
Administrative Agent or any Lender under the Loan Documents, or of the ability
of the Loan Parties to perform their obligations under the Loan Documents; or
(c) a material adverse effect upon the legality, validity, binding effect or
enforceability against the Loan Parties of the Loan Documents to which it is a
party.
“Material Contract” means, with respect to any Person, each contract to which
such Person is a party involving aggregate consideration payable to or by such
Person of $15,000,000 or more or otherwise material to the business, condition
(financial or otherwise), operations or properties of the Borrower and its
Subsidiaries, taken as a whole.
“Material IP Rights” means, as of any date of determination, IP Rights that as
of such date are considered to have a material financial value to the operation
or business of the Borrower or its Subsidiaries, taken as a whole; provided,
however, that any IP Rights that would otherwise be considered Material IP
Rights, which are developed or acquired by the Company or its Subsidiaries after
the Closing Date, shall be considered to be Material IP Rights as of the date of
determination described above.
“Maturity Date” means July 9, 2017; provided, however, that if such date is not
a Business Day, the Maturity Date shall be the next Business Day.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Mortgage” means deeds of trust, trust deeds, deeds to secure debt, mortgages,
leasehold mortgages and leasehold deeds of trust, together with the fixture
filings and assignments of leases and rents referred to therein, duly executed
by the appropriate Loan Party.
“Mortgage Policy” fully paid American Land Title Association Lender’s Extended
Coverage title insurance policies, with endorsements and in amounts reasonably
acceptable to the Administrative Agent, issued, coinsured and reinsured by title
insurers reasonably acceptable to the Administrative Agent, insuring the
Mortgages to be valid first and subsisting Liens on the property described
therein, free and clear of all defects (including, but not limited to,
mechanics’ and materialmen’s Liens) and encumbrances, excepting only Permitted
Encumbrances, and providing for such other affirmative insurance and such
coinsurance and direct access reinsurance as the Administrative Agent may
reasonably deem necessary or desirable.

19

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

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.
“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including the Borrower or any ERISA Affiliate) at least two of whom
are not under common control, as such a plan is described in Section 4064 of
ERISA.
“Net Cash Proceeds” means (a) with respect to any Disposition by the Borrower 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) the principal amount of any 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 expenses incurred by
the Borrower or such Subsidiary in connection with such transaction and (C)
taxes reasonably estimated to be actually payable in connection therewith
(including Taxes imposed on the distribution or repatriation of any such Net
Cash Proceeds); 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 any Casualty Event, the
cash insurance proceeds, condemnation awards and other compensation received by
the Borrower or any of its Subsidiaries in respect thereof, net of all
reasonable costs and expenses incurred in connection with the collection of such
proceeds, awards or other compensation in respect of such Casualty Event.
“New Drug Application” means a new drug application as defined in the Act, and
the regulations promulgated thereunder, or any corresponding application for
Regulatory Approval in a country or jurisdiction other than the United States.
“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit B.
“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, in each case whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.
“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.
“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with

20

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

 

respect to any non-U.S. jurisdiction); (b) with respect to any limited liability
company, the certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles of
formation or organization of such entity.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising solely from such
Recipient 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 Documents.
“Other Intellectual Property” means all worldwide intellectual property rights,
industrial property rights, proprietary rights and common-law rights, whether
registered or unregistered, which are not otherwise included in Confidential
Information, Copyrights, Copyright Licenses, Domain Names, Governmental
Licenses, Other IP Agreements, Patents, Patent Licenses, Trademarks and
Trademark Licenses, Proprietary Databases, Proprietary Software, Websites,
Website Agreements and Trade Secrets, including, without limitation, all rights
to and under all new and useful algorithms, concepts, data (including all
clinical data relating to a Product), databases, designs, discoveries,
inventions, know-how, methods, processes, protocols, show-how, software (other
than commercially available, off-the-shelf software that is not assignable in
connection with a Change of Control), specifications for Products, techniques,
technology, trade dress and all improvements thereof and thereto, which is owned
by the Borrower or any Subsidiary or which the Borrower or any Subsidiary is
licensed, authorized or otherwise granted rights under or to, and which is used
by the Borrower or any other Person to advertise, manufacture, import, market,
promote, offer for sale, sell, use and/or otherwise distribute a Product.
“Other IP Agreements” means any agreement, whether written or oral, providing
for the grant of any right under any Confidential Information, Governmental
Licenses, Proprietary Database, Proprietary Software, Trade Secret and/or any
other IP Rights, to the extent that the grant of any such right is not otherwise
the subject of a Copyright License, Trademark License, Patent License or Website
Agreement.
“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are imposed with
respect to an assignment, grant of participation, designation of new office for
receiving payments by or on account of the Borrower or other transfer (other
than an assignment or designation of a new office made pursuant to Section
3.06).

21

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

 

“Outstanding Amount” means, on any date, the aggregate outstanding principal
amount of Loans after giving effect to any borrowings and prepayments or
repayments thereof occurring on such date.
“Participant” has the meaning specified in Section 11.06(d).
“Participant Register” has the meaning specified in Section 11.06(d).
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Act” means the Pension Protection Act of 2006.
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each
as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431,
432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“Pension Plan” means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that is maintained or is contributed to
by the Borrower and any ERISA Affiliate and is either covered by Title IV of
ERISA or is subject to the minimum funding standards under Section 412 of the
Code.
“Perfection Certificate” shall mean a certificate in the form of Exhibit G or
any other form approved by the Administrative Agent, as the same shall be
supplemented from time to time by an additional Perfection Certificate,
supplement or otherwise.
“Permits” means licenses, certificates, accreditations, product clearances or
approvals, provider numbers or provider authorizations, marketing
authorizations, other authorizations, registrations, permits, consents and
approvals required in connection with the conduct of Borrower’s or any
Subsidiary’s business or to comply with any applicable Laws, including drug
listings and drug establishment registrations under 21 U.S.C. Section 510,
registrations issued by DEA under 21 U.S.C. Section 823 (if applicable to any
Product), Permits issued by Governmental Authorities outside of the United
States or those issued by Federal, state or local government for the conduct of
Borrower’s or any Subsidiary’s business.
“Permitted Acquisition” means the purchase or other acquisition, by merger or
otherwise, by the Borrower or any of its Subsidiaries of all or at least a
majority of the Equity Interests in, or all or substantially all the assets of
(or all or substantially all the assets constituting a business unit, division,
product line or line of business of) any Person; provided that (a) in the case
of any purchase or other acquisition of Equity Interests in a Person, such
Person, upon the consummation of such acquisition, will become a Guarantor to
the extent required by Section 6.12 (including as a result of a merger,
amalgamation or consolidation between any Subsidiary and such Person), (b) all
transactions related thereto are consummated in accordance in all material
respects with requirements of all Laws and, in the case of any acquisition of a
Person, the board of directors or equivalent governing body of such acquired
Person or its selling equityholders shall have approved

22

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

 

such purchase or other acquisition, (c) the business of such Person, or such
assets, as the case may be, constitute a business permitted by Section 7.07, (d)
with respect to each such purchase or other acquisition, all actions required to
be taken with respect to such newly created or acquired Subsidiary (including
each subsidiary thereof) or assets in order to satisfy the requirements set
forth in Section 6.12 to the extent applicable shall have been taken (or
arrangements for the taking of such actions within the applicable times set
forth in Section 6.12 (or by such later date reasonably satisfactory to the
Administrative Agent) shall have been made), (e) both immediately before and
after giving effect to any such purchase or other acquisition, no Event of
Default shall have occurred and be continuing, (f) the total cash consideration
(including all deferred contingent and non-contingent payment obligations to the
sellers thereof and all assumptions of debt and similar liabilities in
connection therewith) paid by or on behalf of the Borrower and its Subsidiaries
for any such purchase or other acquisition, when aggregated with the total cash
consideration paid by or on behalf of the Borrower and its Subsidiaries for all
other purchases and other Investments made by the Borrower and its Subsidiaries
pursuant to Sections 7.02(h) and 7.02(i) shall not exceed $100,000,000 per year,
subject to the further provisions of Section 7.02, and (g) the Borrower shall
have delivered to the Administrative Agent a certificate of a Responsible
Officer certifying that all the requirements set forth in this definition have
been satisfied with respect to such purchase or other acquisition.
“Permitted Encumbrances” shall mean Liens of the type described in clauses (a),
(c), (d) and (g) of Section 7.01 and such Liens as identified on the Mortgage
Policy applicable to such property and acceptable to the Administrative Agent.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan), maintained for employees of the Borrower or
any ERISA Affiliate or any such Plan to which the Borrower or any ERISA
Affiliate is required to contribute on behalf of any of its employees.
“Platform” has the meaning specified in Section 6.02.
“Product” means any product advertised, developed, imported, manufactured,
marketed, offered for sale, promoted, sold, tested, used or otherwise
distributed by the Borrower or any Subsidiary in connection with or that embody,
in whole or in part, the IP Rights, including without limitation those products
set forth on Schedule 1.01 (as updated from time to time in accordance with the
terms of this Agreement), provided that, (i) if Borrower shall fail to comply
with its obligations under this Agreement to give notice to Administrative Agent
and update Schedule 1.01 prior to selling or marketing any new Product, any such
improperly undisclosed Product shall be deemed to be included in this definition
and (ii) “Product” shall not include Incivek or Lexiva.
“Proprietary Databases” means any material non-public proprietary database that
is owned by the Borrower or any Subsidiary or that the Borrower or any
Subsidiary is licensed, authorized or otherwise granted rights under or to.

23

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

 

“Proprietary Software” means any proprietary software owned, licensed or
otherwise used, other than any software that is generally commercially
available, off-the-shelf and/or open source including, without limitation, the
object code and source code forms of such software and all associated
documentation, which is owned by the Borrower or any Subsidiary or which the
Borrower or any Subsidiary is licensed, authorized or otherwise granted rights
under or to.
“Public Lender” has the meaning specified in Section 6.02.
“Recall” means a Person’s removal or correction of a marketed product that the
FDA considers to be in violation of the laws it administers and against which
the FDA would initiate legal action, e.g., seizure, as that term is defined in
21 C.F.R. 7.3(g).
“Recipient” means the Administrative Agent, any Lender or any other recipient of
any payment to be made by or on account of any obligation of any Loan Party
hereunder.
“Register” has the meaning specified in Section 11.06(c).
“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees and advisors
of such Person and of such Person’s Affiliates. “Release” means any release,
spill, emission, discharge, deposit, disposal, leaking, pumping, pouring,
dumping, emptying, injection or leaching into the Environment, or into, within,
from or through any building, structure or facility.
“Relevant Foreign Jurisdictions” means Australia, Canada, Ireland, United
Kingdom, France and Germany.
“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
“Required Cash” has the meaning specified in the proviso following Section 7.02.
“Required Lenders” means, at any time, Lenders having Total Outstandings
representing more than 50% of the Total Outstandings of all Lenders.
“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer or controller of a Loan Party,
and solely for purposes of the delivery of incumbency certificates pursuant to
Section 4.01, the secretary or any assistant secretary of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
“Required Permit” means a Permit issued or required under Laws applicable to the
business of the Borrower or any Subsidiary or necessary in the manufacturing,
importing, exporting, possession, ownership, warehousing, marketing, promoting,
sale, labeling, furnishing, distribution or delivery of goods or services under
Laws applicable to the business of the Borrower or any Subsidiary or any Drug
Application (including without limitation, at any point in time, all licenses,

24

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

 

approvals and permits issued by the FDA or any other applicable Governmental
Authority within or outside of the United States necessary for the testing,
manufacture, marketing or sale of any Product by the Borrower or any Subsidiary
as such activities are being conducted by the Borrower or such Subsidiary with
respect to such Product at such time).
“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 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.
“Safety Notice” means any “dear doctor” letter, safety alert, “serious adverse
event” report or other notice of action relating to an alleged lack of safety or
regulatory compliance of any Product issued by the Borrower or any Subsidiary,
and/or other any Governmental Authority, to the extent that the events or
circumstances underlying such letter, alert, report or notice could reasonably
expected to result in a liability in excess of the Threshold Amount.
“Sanction(s)” means any international economic sanction administered or enforced
by the United States Government (including without limitation, OFAC), the United
Nations Security Council, the European Union, Her Majesty’s Treasury or other
relevant sanctions authority.
“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw-Hill Companies, Inc., and any successor thereto.
“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
each co-agent or sub-agent appointed by the Administrative Agent from time to
time pursuant to Section 9.05, and the other Persons the Obligations owing to
which are or are purported to be secured by the Collateral under the terms of
the Collateral Documents.
“Security Agreement” has the meaning specified in Section 4.01(a)(iii).
“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature, (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital, and (e)
such Person is able to pay its debts and liabilities, contingent obligations and
other commitments as they mature in the ordinary course of business.

25

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

 

The amount of contingent liabilities at any time shall be computed as the amount
that, in the 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.
“Specified Loan Party” means any Loan Party that is not an “eligible contract
participant” under the Commodity Exchange Act (determined prior to giving effect
to Section 10.10).
“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Borrower.
“Subordinated Indebtedness” shall mean Indebtedness of any Company that is by
its terms subordinated in right of payment to all or any portion of the
Obligations.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
“Swap Obligations” means with respect to any Guarantor any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.
“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

26

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

 

“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” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
“Threshold Amount” means $15,000,000.
“Total Outstandings” means the aggregate Outstanding Amount of all Loans.
“Trademark License” has the meaning specified in the Security Agreement.
“Trademarks” has the meaning specified in the Security Agreement.
“Trade Secrets” has the meaning specified in the Security Agreement.
“Treasury Rate” means, on any date of prepayment of any Loan, the yield to
maturity at the time of computation of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) which has become publicly available at least two
Business Days prior to the prepayment date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the redemption date to second anniversary of the
Closing Date; provided, however, that if such period is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Administrative Agent shall obtain the Treasury Rate
by linear interpolation (calculated to the nearest one-twelfth of a year) from
the weekly average yields of United States Treasury securities for which such
yields are given.
“Type” means, with respect to a Loan, its character as a Fixed Rate Loan, Base
Rate Loan or a Eurodollar Rate Loan.
“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

27

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

 

to time in such other jurisdiction for purposes of the provisions hereof
relating to such perfection, effect of perfection or non-perfection or priority.
“United States” and “U.S.” mean 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.
“U.S. Tax Compliance Certificate” has the meaning specified in
Section 3.01(e)(ii)(B)(III).
“Websites” means all websites that the Borrower or any Subsidiary shall operate,
manage or control through a Domain Name, whether on an exclusive basis or a
nonexclusive basis, including, without limitations, all content, elements, data,
information, materials, hypertext markup language (HTML), software and code,
works of authorship, textual works, visual works, aural works, audiovisual works
and functionality embodied in, published or available through each such website
and all IP Rights in each of the foregoing.
“Website Agreements” means all agreements between the Borrower and/or any
Subsidiary and any other Person pursuant to which such Person provides any
services relating to the hosting, design, operation, management or maintenance
of any Website, including without limitation, all agreements with any Person
providing website hosting, database management or maintenance or disaster
recovery services to the Borrower and/or any Subsidiary and all agreements with
any domain name registrar, as all such agreements may be amended, supplemented
or otherwise modified from time to time.
“Work” means any work or subject matter that is subject to protection pursuant
to Title 17 of the United States Code.
1.02    Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:
(a)    The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “hereto”, “herein”,
“hereof” and “hereunder”, and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its entirety and
not to any particular provision thereof, (iv) all references in a Loan Document
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles

28

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

 

and Sections of, and Exhibits and Schedules to, the Loan Document in which such
references appear, (v) any reference to any law shall include all statutory and
regulatory provisions consolidating, amending, replacing or interpreting such
law and any reference to any law or regulation shall, unless otherwise
specified, refer to such law or regulation as amended, modified or supplemented
from time to time, and (vi) the words “asset” and “property” shall be construed
to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
(b)    In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”; and the word “through” means “to and
including”.
(c)    Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.
1.03    Accounting Terms.
(a)    Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein. Notwithstanding the foregoing, for
purposes of determining compliance with any covenant (including the computation
of any financial covenant) contained herein, Indebtedness of the Borrower and
its Subsidiaries shall be deemed to be carried at 100% of the outstanding
principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on
financial liabilities shall be disregarded.
(b)    Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (A) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (B) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.
1.04    Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed

29

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

 

herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).
1.05    Times of Day; Rates. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or standard, as
applicable).
The Administrative Agent does not warrant, nor accept responsibility, nor shall
the Administrative Agent have any liability with respect to the administration,
submission or any other matter related to the rates in the definition of
“Eurodollar Rate” or with respect to any comparable or successor rate thereto.
ARTICLE II.    THE COMMITMENTS AND CREDIT EXTENSIONS
2.01    The Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make Loans on the Closing Date not to exceed such
Lender’s Commitment. The Borrowing shall consist of Loans made simultaneously by
the Lenders in accordance with their respective Commitments. Amounts borrowed
under this Section 2.01 and repaid or prepaid may not be reborrowed. Loans may
be Fixed Rate Loans, Base Rate Loans or Eurodollar Rate Loans as further
provided herein, but the initial Loans borrowed hereunder will be borrowed as
Fixed Rate Loans.
2.02    Borrowings, Conversions and Continuations of Loans.
(c)    Each Borrowing, each conversion of Loans from one Type to the other
(other than a Fixed Rate Loan), and each continuation of Eurodollar Rate Loans
shall be made upon the Borrower’s irrevocable written notice to the
Administrative Agent, in the form of a Loan Notice in the form attached hereto
as Exhibit A. Each such Loan Notice must be received by the Administrative Agent
not later than 11:00 a.m. one Business Day before the Closing Date or three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans. Each Loan Notice for a Borrowing (whether telephonic
or written) shall specify (i) the requested date of the Borrowing (which shall
be a Business Day),(ii) the principal amount of Loans to be borrowed, (iii) wire
instructions for the Borrower, and (iv) for a Borrowing of Eurodollar Rate
Loans, the duration of the Interest Period with respect thereto. Each conversion
to or continuation of Loans shall be in a principal amount of $5,000,000 or a
whole multiple of $1,000,000 in excess thereof. Each Loan Notice for such
conversion or continuation of Loans shall specify (i) whether the Borrower is
requesting a conversion of Loans from one Type to the other (other than Fixed
Rate Loans), or a continuation of Eurodollar Rate Loans, (ii) the requested date
of the conversion or continuation, as the case may be (which shall be a Business
Day), (iii) the principal amount of Loans to be converted or continued, (iv) to
which existing Loans are to be converted, and (v) if applicable, the duration of
the Interest Period with respect thereto. If the Borrower fails to give a timely
notice requesting a conversion or continuation, then the applicable Loans shall
be continued as the same Type of Loan (other than as set forth in the definition
of Interest Rate). If the Borrower requests a conversion to, or continuation of
Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest
Period,

30

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

 

it will be deemed to have specified an Interest Period of one month. Fixed Rates
Loans shall automatically be converted to Eurodollar Rate Loans as described in
the definition of Interest Rate.
(d)    Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the
applicable Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic continuation of Loans described in Section 2.02(a).
In the case of a Borrowing, each Lender shall make the amount of its Loan
available to the Administrative Agent in immediately available funds at the
Administrative Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Loan Notice. Upon satisfaction of the applicable
conditions set forth in Section 4.01, the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of the Administrative Agent with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to
(and reasonably acceptable to) the Administrative Agent by the Borrower.
(e)    Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Administrative Agent.
(f)    The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. At any time that Base Rate
Loans are outstanding, the Administrative Agent shall notify the Borrower and
the Lenders of any change in the Base Rate promptly following the public
announcement of such change.
(g)    After giving effect to all Borrowings, all conversions of Loans from one
Type to the other (other than Fixed Rate Loans), and all continuations of Loans
as the same Type, there shall not be more than six (6) Interest Periods in
effect.
2.03    Prepayments.
(a)    Optional. Subject to the payment of any required prepayment premium, the
Borrower may, upon prior written notice to the Administrative Agent, at any time
or from time to time voluntarily prepay Loans in whole or in part; provided that
(i) such notice must be received by the Administrative Agent not later than
11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar
Rate Loans and (B) one Business Day prior to the date of prepayment of any other
Loans; and (ii) any prepayment of Loans shall be in a principal amount of
$1,000,000 or a whole multiple of $1,000,000 in excess thereof or, if less, the
entire principal amount thereof then outstanding. Each such notice shall specify
the date and amount of such prepayment and the Type(s) of Loans to be prepaid
and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such
Loans. The Administrative Agent will promptly notify each Lender of its receipt
of each such notice,

31

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

 

and of the amount of such Lender’s Applicable Percentage of such prepayment. If
such notice is given by the Borrower, the Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein. Any prepayment of a Loan shall be accompanied by all
accrued interest on the amount prepaid, together with any premiums required
under clause (c) below and additional amounts required pursuant to Section 3.05.
Each prepayment of the outstanding Loans pursuant to this Section 2.03(a) shall
be applied to the principal repayment installments thereof on a pro-rata basis,
and each prepayment shall be applied to the Loans of the Lenders in accordance
with their respective Applicable Percentages.
(b)    Mandatory.
(i)    If the Borrower or any of its Subsidiaries Disposes of any property
permitted by Section 7.05(g) and 7.05(k) which results in the realization by
such Person of Net Cash Proceeds in excess of $1,000,000 in any fiscal year or
realizes any Net Cash Proceeds in excess of $1,000,000 in any fiscal year in
connection with a Casualty Event, the Borrower shall prepay an aggregate
principal amount of Loans equal to 100% of such Net Cash Proceeds within one
Business Day after receipt thereof by such Person (such prepayments to be
applied as set forth in clause (iii) below), unless no Event of Default has
occurred and is continuing and such Person receives such Net Cash Proceeds
during a fiscal quarter in which (i) sales from the Kalydeco Product for the
most recently ended fiscal quarter equal or exceed $100,000,000 and (ii) the
Borrower is in compliance with Section 7.12; provided, however, that, with
respect to any Net Cash Proceeds realized under a Disposition or Casualty Event
described in this Section 2.03(b)(i), at the election of the Borrower (as
notified by the Borrower to the Administrative Agent on or prior to the date of
such Disposition or on or prior to the date Net Cash Proceeds are realized in
connection with a Casualty Event, as the case may be), and so long as no Event
of Default shall have occurred and be continuing, the Borrower or such
Subsidiary may reinvest all or any portion of such Net Cash Proceeds in
operating assets so long as within 365 days after the receipt of such Net Cash
Proceeds, such purchase shall have been consummated (as certified by the
Borrower in writing to the Administrative Agent); and provided further, however,
that an amount equal to any Net Cash Proceeds not subject to such definitive
agreement or so reinvested shall be immediately applied to the prepayment of the
Loans as set forth in this Section 2.03(b)(i).
(ii)    Upon the incurrence or issuance by the Borrower or any of its
Subsidiaries of any Indebtedness (other than Indebtedness expressly permitted to
be incurred or issued pursuant to Section 7.03), the Borrower shall prepay an
aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds
received therefrom within one Business Day after receipt thereof by the Borrower
or such Subsidiary (such prepayments to be applied as set forth in clause (iii)
below).
(iii)    Each prepayment of Loans pursuant to this Section 2.03(b) shall be (A)
accompanied by prior written notice to the Administrative Agent of the same,
provided by 11 a.m. one Business Day prior to the date of prepayment, and (B)
applied to the principal

32

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

 

repayment installments thereof on a pro-rata basis, and each such prepayment
shall be applied to the Loans of the Lenders in accordance with their respective
Applicable Percentages.
(c)    Prepayment Premium. If all or any portion of the Loans are prepaid, or
required to be prepaid due to acceleration or otherwise, pursuant to this
Section 2.03, Article VIII or otherwise (other than in accordance with
Section 2.04) prior to the second anniversary of the Closing Date, then, in all
cases, the Borrower shall pay to the Lenders, for their respective ratable
accounts, on the date on which such prepayment is paid or required to be paid,
in addition to the other Obligations so prepaid or required to be prepaid, the
Make Whole Premium.
2.04    Repayment of Loans.
The Borrower shall repay to the Lenders the aggregate principal amount of all
Loans outstanding on the following dates in the respective amounts set forth
opposite such dates (which amounts shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth in
Section 2.03):
Date
Amount
Closing Date to September 30, 2015
$0.00
October 1, 2015
$15,000,000
January 1, 2016
$15,000,000
April 1, 2016
$15,000,000
July 1, 2016
$15,000,000
October 1, 2016
$60,000,000
January 1, 2017
$60,000,000
April 1, 2017
$60,000,000
Maturity Date
$60,000,000

provided, however, that the final principal repayment installment of the Loans
shall be repaid on the Maturity Date and in any event shall be in an amount
equal to the aggregate principal amount of all Loans outstanding on such date.
Additionally, to the extent any of the foregoing payments falls on a
non-Business Day, it shall be paid on the next Business Day. Any Incremental
Loans made in accordance with Section 2.10 will amortize in the manner set forth
in the relevant Increase Joinder.
2.05    Interest.
(a)    Subject to the provisions of subsection (b) below, the Loans shall bear
interest at the rate per annum equal to the Interest Rate.
(b)    If any amount of principal of any Loan is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

33

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

 

(c)    Upon the request of the Required Lenders, while any Event of Default
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.
(d)    Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.
(e)    Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.06    Fees. The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Unless expressly provided for in such writing, such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.
2.07    Computation of Interest and Fees. All computations of interest for Fixed
Rate Loans Base Rate Loans (including Base Rate Loans determined by reference to
the Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.09(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.
2.08    Evidence of Debt.
(a)    The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. Subject to Section 11.06(c), the
accounts or records maintained by the Administrative Agent and each Lender shall
be conclusive absent manifest error of the amount of the Credit Extensions made
by the Lenders to the Borrower and the interest and payments thereon. Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations. In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records of
the Administrative Agent shall control in the absence of manifest error. Subject
to Section 11.06(c), upon the request of any Lender made through the
Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which

34

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

 

shall evidence such Lender’s Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.
2.09    Payments Generally; Administrative Agent’s Clawback.
(a)    General. All payments to be made by the Borrower shall be made free and
clear of and without condition or deduction for any counterclaim, defense,
recoupment or setoff. Except as otherwise expressly provided herein, all
payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
Administrative Agent’s Office in Dollars and in immediately available funds not
later than 2:00 p.m. on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office. All payments received by the
Administrative Agent after 2:00 p.m. may be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue. If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day,
and such extension of time shall be reflected in computing interest or fees, as
the case may be.
(b)    Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
time at which any payment is due to the Administrative Agent for the account of
the Lenders hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if the Borrower has not
in fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender, in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.
A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.
(c)    Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrower by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

35

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

 

(d)    Obligations of Lenders Several. The obligations of the Lenders hereunder
to make Loans and to make payments pursuant to Section 11.04(c) are several and
not joint. The failure of any Lender to make any Loan, to fund any such
participation or to make any payment under Section 11.04(c) on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan, to purchase its participation or to make its
payment under Section 11.04(c).
(e)    Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.10    Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of (a)
Obligations due and payable to such Lender hereunder and under the other Loan
Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender
at such time to (ii) the aggregate amount of the Obligations due and payable to
all Lenders hereunder and under the other Loan Documents at such time) of
payments on account of the Obligations due and payable to all Lenders hereunder
and under the other Loan Documents at such time obtained by all the Lenders at
such time or (b) Obligations owing (but not due and payable) to such Lender
hereunder and under the other Loan Documents at such time in excess of its
ratable share (according to the proportion of (i) the amount of such Obligations
owing (but not due and payable) to such Lender at such time to (ii) the
aggregate amount of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the other Loan Parties at such time) of payment on
account of the Obligations owing (but not due and payable) to all Lenders
hereunder and under the other Loan Documents at such time obtained by all of the
Lenders at such time then the Lender receiving such greater proportion shall (a)
notify the Administrative Agent of such fact, and (b) purchase (for cash at face
value) participations in the Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of Obligations then due and payable to the Lenders or owing (but not due and
payable) to the Lenders, as the case may be, provided that:
(i)    if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest; and
(ii)    the provisions of this Section shall not be construed to apply to
(x) any payment made by or on behalf of the Borrower pursuant to and in
accordance with the express terms of this Agreement, (y) any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans to any assignee or participant, other than an assignment to the
Borrower or any Affiliate thereof (as to which the provisions of this Section
shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing

36

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

 

arrangements may exercise against such Loan Party rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Loan Party in the amount of such participation. Each
Lender shall keep records in a Participant Register, as defined in Section
11.06(d) (which shall be conclusive and binding in absence of manifest error),
of participations purchased pursuant to this Section 2.10.
2.11    Incremental Facility.
(a)    On and after the period ending six months following the Closing Date, the
Borrower may by written notice to the Administrative Agent elect to request that
Macquarie CAF LLC establish not more than one new term loan commitments (each,
an “Incremental Commitment”), by an aggregate amount not in excess of
$200,000,000. Such notice shall specify the date (the “Increase Effective Date”)
on which the Borrower proposes that the Incremental Commitments shall be
effective, which shall be a date not less than 10 Business Days after the date
on which such notice is delivered to the Administrative Agent. Notwithstanding
anything contained herein to the contrary, the establishment of the Incremental
Commitment shall be made in the sole discretion of the Administrative Agent.
(b)    Conditions. The Incremental Commitments shall become effective as of the
Increase Effective Date; provided that:
(i)    no Default shall have occurred and be continuing or would result from the
borrowings to be made on the Increase Effective Date;
(ii)    the representations and warranties contained in Article V and the other
Loan Documents are true and correct in all material respects on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall have
been true and correct in all material respects as of such earlier date, and
except that for purposes of this Section 2.11(b), the representations and
warranties contained in Section 5.05(a) and Section 5.05(b) shall be deemed to
refer to the most recent financial statements furnished pursuant to
subsections (a) and (b), respectively, of Section 6.01.
(iii)    either (A) both of the ongoing Phase III studies (called TRAFFIC and
TRANSPORT) of Kalydeco in combination with lumacaftor (VX-809) meet or exceed
the respective study’s primary endpoint or (B) FDA approval of a Product with a
label claim for treating patients twelve years and older who are homozygous for
the F508del mutation in their CFTR gene in the United States;
(iv)    Macquarie CAF LLC has decided in its sole discretion to establish the
Incremental Commitment and make the Incremental Loans; and
(v)    the Borrower shall deliver or cause to be delivered officer’s
certificates and legal opinions of the type delivered on the Closing Date to the
extent reasonably requested by, and in form and substance reasonably
satisfactory to, the Administrative Agent.

37

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

 

(c)    Terms of New Loans. The terms and provisions of Loans made pursuant to
Incremental Commitments shall be as follows:
(i)    terms and provisions of Incremental Loans shall be, except as otherwise
set forth herein or in the Increase Joinder, identical to the Loans (it being
understood that Incremental Loans may be a part of the Loans) and to the extent
that the terms and provisions of Incremental Loans are not identical to the
Loans (except to the extent permitted by clause (iii) or (iv) below) they shall
be reasonably satisfactory to the Administrative Agent; provided that in any
event the Incremental Loans must comply with clauses (iii) and (iv) below;
(ii)    the weighted average life to maturity of any Incremental Loans shall be
no shorter than the remaining weighted average life to maturity of the then
existing Loans;
(iii)    the maturity date of Incremental Loans (the “Incremental Loan Maturity
Date”) shall not be earlier than the Maturity Date; and
(iv)    the Interest Rate for Incremental Loans shall be determined by the
Borrower and the Lenders of the Incremental Loans; provided that in the event
that the Interest Rate for any Incremental Loan is greater than the Interest
Rate for the Loans by more than 50 basis points, then the Interest Rate for the
Loans shall be increased to the extent necessary so that the Interest Rate for
the Incremental Loans is 50 basis points higher than the Interest Rate for the
Loans; provided, further, that in determining the Interest Rate applicable to
the Loans and the Incremental Loans, (x) original issue discount (“OID”) or
upfront fees (which shall be deemed to constitute like amounts of OID) payable
by the Borrower to the Lenders of the Loans or the Incremental Loans in the
primary syndication thereof shall be included (with OID being equated to
interest based on an assumed four-year life to maturity), (y) customary
arrangement or commitment fees payable to the Administrative Agent (or its
respective affiliates) in connection with the Loans or to one or more arrangers
(or their affiliates) of the Incremental Loans shall be excluded; and (z) if the
LIBOR or Base Rate “floor” for the Incremental Loans is greater than the LIBOR
or Base Rate “floor”, respectively, for the existing Loans, the difference
between such floor for the Incremental Loans and the Loans shall be equated to
an increase in the Interest Rate for purposes of this clause (iv).
The Incremental Commitments shall be effected by a joinder agreement (the
“Increase Joinder”), executed by the Borrower, the Administrative Agent and each
Lender making such Incremental Commitment, in form and substance reasonably
satisfactory to each of them. Notwithstanding the provisions of Section 10.01,
the Increase Joinder may, without the consent of any other Lenders, effect such
amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent, to effect
the provisions of this Section 2.11. In addition, unless otherwise specifically
provided herein, all references in Loan Documents to Loans shall be deemed,
unless the context otherwise requires, to include references to Incremental
Loans made pursuant to this Agreement. This Section 2.11 shall supersede any
provisions in Section 10.01 to the contrary.

38

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

 

(d)    Making of New Term Loans. On any Increase Effective Date on which new
Incremental Commitments are effective, subject to the satisfaction of the
foregoing terms and conditions, each Lender of such new Incremental Commitment
shall make an Incremental Loan to the Borrower in an amount equal to its new
Incremental Commitment.
(e)    Equal and Ratable Benefit. The Loans and Commitments established pursuant
to this Section shall constitute Loans and Commitments under, and shall be
entitled to all the benefits afforded by, this Agreement and the other Loan
Documents, and shall, without limiting the foregoing, benefit equally and
ratably from the Guarantees and security interests created by the Collateral
Documents, except that the new Loans may be subordinated in right of payment or
the Liens securing the new Loans may be subordinated, in each case, to the
extent set forth in the Increase Joinder. The Loan Parties shall take any
actions reasonably required by the Administrative Agent to ensure and/or
demonstrate that the Lien and security interests granted by the Collateral
Documents continue to be perfected under the UCC or otherwise after giving
effect to the establishment of any such class of Term Loans or any such new
Commitments.
ARTICLE III.    TAXES, YIELD PROTECTION AND ILLEGALITY
3.01    Taxes.
(h)    Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes.
(i)    Any and all payments by or on account of any obligation of any Loan Party
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by applicable Laws. If any applicable Laws (as
determined in the good faith discretion of the applicable withholding agent)
require the deduction or withholding of any Tax from any such payment by the
Administrative Agent or a Loan Party, then the Administrative Agent or such Loan
Party shall be entitled to make such deduction or withholding, upon the basis of
the information and documentation to be delivered pursuant to subsection (e)
below.
(ii)    If any Loan Party or the Administrative Agent shall be required by the
Code to withhold or deduct any Taxes, including both United States Federal
backup withholding and withholding taxes, from any payment, then (A) the
Administrative Agent shall withhold or make such deductions as are determined by
the Administrative Agent to be required based upon the information and
documentation it has received pursuant to subsection (e) below, (B) the
Administrative Agent shall timely pay the full amount withheld or deducted to
the relevant Governmental Authority in accordance with the Code, and (C) to the
extent that the withholding or deduction is made on account of Indemnified
Taxes, the sum payable by the applicable Loan Party shall be increased as
necessary so that after any required withholding or the making of all required
deductions (including deductions applicable to additional sums payable under
this Section 3.01) the applicable Recipient receives an amount equal to the sum
it would have received had no such withholding or deduction been made.

39

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

 

(iii)    If any Loan Party or the Administrative Agent shall be required by any
applicable Laws other than the Code to withhold or deduct any Taxes from any
payment, then (A) such Loan Party or the Administrative Agent, as required by
such Laws, shall withhold or make such deductions as are determined by it to be
required based upon the information and documentation it has received pursuant
to subsection (e) below, (B) such Loan Party or the Administrative Agent, to the
extent required by such Laws, shall timely pay the full amount withheld or
deducted to the relevant Governmental Authority in accordance with such Laws,
and (C) to the extent that the withholding or deduction is made on account of
Indemnified Taxes, the sum payable by the applicable Loan Party shall be
increased as necessary so that after any required withholding or the making of
all required deductions (including deductions applicable to additional sums
payable under this Section 3.01) the applicable Recipient receives an amount
equal to the sum it would have received had no such withholding or deduction
been made.
(i)    Payment of Other Taxes by the Borrower. Without limiting the provisions
of subsection (a) above and without duplication of other amounts payable by the
Borrower under this Section, the Loan Parties shall timely pay to the relevant
Governmental Authority in accordance with applicable law, or at the option of
the Administrative Agent timely reimburse it for the payment of, any Other
Taxes.
(j)    Tax Indemnifications. (1) Each of the Loan Parties shall, and does
hereby, jointly and severally indemnify each Recipient, and shall make payment
in respect thereof within 10 days after demand therefor, for the full amount of
any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 3.01) payable or paid by such
Recipient, and any penalties, interest and 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. A
certificate setting forth in reasonable detail the basis and 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. .
(i)    Each Lender shall, and does hereby, severally indemnify, and shall make
payment in respect thereof within 10 days after demand therefor, (x) the
Administrative Agent against 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 and without limiting the
obligation the Loan Parties to do so), (y) the Administrative Agent and the Loan
Parties, as applicable, against any Taxes attributable to such Lender’s failure
to comply with the provisions of Section 10.06(d) relating to the maintenance of
a Participant Register and (z) the Administrative Agent and the Loan Parties, as
applicable, against any Excluded Taxes attributable to such Lender that are
payable or paid by the Administrative Agent or a Loan Party in connection with
any Loan Document, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by the

40

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

 

Administrative Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender under this Agreement or any other Loan
Document against any amount due to the Administrative Agent under this
clause (ii).
(k)    Evidence of Payments. Upon request by the Borrower or the Administrative
Agent, as the case may be, after any payment of Taxes by the Borrower or by the
Administrative Agent to a Governmental Authority as provided in this
Section 3.01, the Borrower shall deliver to the Administrative Agent or the
Administrative Agent shall deliver to the Borrower, as the case may be, the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, or other evidence of such payment reasonably
satisfactory to the Borrower or the Administrative Agent, as the case may be.
(l)    Status of Recipients; Tax Documentation.
(v)    Any Recipient 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 Recipient, 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 Recipient 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 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Recipient’s reasonable judgment such completion, execution or
submission would subject such Recipient to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Recipient.
(vi)    Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person,
(A)    any Recipient that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Recipient becomes a
Recipient under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), two (2)
accurate, complete, executed originals of IRS Form W-9 certifying that such
Recipient is exempt from U.S. federal backup withholding tax;
(B)    any Foreign Recipient 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, but not less than two (2)) on or
prior to the date on

41

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

 

which such Foreign Recipient becomes a Recipient 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 Recipient 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, accurate, complete, executed originals of IRS
Form W-8BEN or IRS Form W-8BEN-E (or successor forms) 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 IRS Form W-8BEN-E (or successor
forms) 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)    accurate, complete, executed originals of IRS Form W-8ECI (or successor
forms);
(III)    in the case of a Foreign Recipient 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 D-1 to the effect that such
Foreign Recipient 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) accurate, complete, executed originals of IRS Form W‑8BEN
or IRS Form W-8BEN-E (or successor forms); or
(IV)    to the extent a Foreign Recipient is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W‑8ECI, IRS Form W-8BEN or
IRS Form W-8BEN-E), a U.S. Tax Compliance Certificate substantially in the form
of Exhibit D-2 or Exhibit D-3, IRS Form W‑9, and/or other successor forms or
certification documents from each beneficial owner, as applicable; provided that
if the Foreign Recipient is a partnership and one or more direct or indirect
partners of such Foreign Recipient are claiming the portfolio interest
exemption, such Foreign Recipient may provide a U.S. Tax Compliance Certificate
substantially in the form of Exhibit D-4 on behalf of each such direct and
indirect partner;
(C)    any Foreign Recipient 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 Recipient becomes a Recipient 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

42

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

 

(D)    if a payment made to a Recipient under any Loan Document would be subject
to U.S. federal withholding Tax imposed by FATCA if such Recipient 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
Recipient 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
Recipient has complied with such Recipient’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.
(vii)    Each Recipient agrees that if any form or certification it previously
delivered pursuant to this Section 3.01 expires or becomes obsolete or
inaccurate in any respect, it shall update such form or certification or
promptly notify the Borrower and the Administrative Agent in writing of its
legal inability to do so.
(m)    Treatment of Certain Refunds. Unless required by applicable Laws, at no
time shall the Administrative Agent have any obligation to file for or otherwise
pursue on behalf of a Lender, or have any obligation to pay to any Lender, any
refund of Taxes withheld or deducted from funds paid for the account of such
Lender. If any Recipient determines, in its sole discretion exercised in good
faith, that it has received a refund of any Taxes as to which it has been
indemnified by any Loan Party or with respect to which any Loan Party has paid
additional amounts pursuant to this Section 3.01, it shall pay to the Loan Party
an amount equal to such refund (but only to the extent of indemnity payments
made, or additional amounts paid, by a Loan Party under this Section 3.01 with
respect to the Taxes giving rise to such refund), net of all reasonable
out-of-pocket expenses (including Taxes) incurred by such Recipient, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that the Loan Party, upon the request of
the Recipient, agrees to repay the amount paid over to the Loan Party (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Recipient in the event the Recipient is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this subsection, in no event will the applicable Recipient be required to pay
any amount to the Loan Party pursuant to this subsection the payment of which
would place the Recipient in a less favorable net after-Tax position than such
Recipient would have been in if the Tax subject to indemnification and giving
rise to such refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts with respect to such Tax had
never been paid. This subsection shall not be construed to require any Recipient
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to any Loan Party or any other Person.

43

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

 

(n)    Survival. Each party’s obligations under this Section 3.01 shall survive
the resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all other Obligations.
3.02    Illegality. If any Lender determines that any Law has made it unlawful,
or that any Governmental Authority has asserted that it is unlawful, for any
Lender or its Lending Office to make, maintain or fund Loans whose interest is
determined by reference to the Eurodollar Rate, or to determine or charge
interest rates based upon the Eurodollar 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,
(i) any obligation of such Lender to make or continue Eurodollar Rate Loans or
to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and (ii)
if such notice asserts the illegality of such Lender making or maintaining Base
Rate Loans the interest rate on which is determined by reference to the
Eurodollar Rate component of the Base Rate, 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 Eurodollar Rate component
of the Base Rate, in each case until such Lender notifies the Administrative
Agent and the Borrower that the circumstances giving rise to such determination
no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon
demand from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans
(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 Eurodollar 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 Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such
notice asserts the illegality of such Lender determining or charging interest
rates based upon the Eurodollar Rate, the Administrative Agent shall during the
period of such suspension compute the Base Rate applicable to such Lender
without reference to the Eurodollar 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
Eurodollar Rate. Upon any such prepayment or conversion, the Borrower shall also
pay accrued interest on the amount so prepaid or converted.
3.03    Inability to Determine Rates. If in connection with any request for a
Eurodollar Rate Loan or a conversion to or continuation thereof, (a)  the
Administrative Agent determines that (i) Dollar deposits are not being offered
to banks in the London interbank Eurodollar market for the applicable amount and
Interest Period of such Eurodollar Rate Loan, or (ii) adequate and reasonable
means do not exist for determining the Eurodollar Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan or in connection
with an existing or proposed Base Rate Loan (in each case with respect to
clause (a)(i) above, “Impacted Loans”), or (b) the Administrative Agent or the
Required Lenders determine that for any reason the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan does
not adequately and fairly reflect the cost to such Lenders of funding such
Eurodollar Rate Loan, the Administrative Agent will promptly so notify the
Borrower and each Lender. Thereafter, (x) the

44

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

 

obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended, (to the extent of the affected Eurodollar Rate Loans or Interest
Periods), and (y) in the event of a determination described in the preceding
sentence with respect to the Eurodollar Rate component of the Base Rate, the
utilization of the Eurodollar Rate component in determining the Base Rate shall
be suspended, in each case until the Administrative Agent upon the instruction
of the Required Lenders revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans (to the extent of the affected Eurodollar
Rate Loans or Interest Periods) or, failing that, will be deemed to have
converted such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein.
Notwithstanding the foregoing, if the Administrative Agent has made the
determination described in clause (a)(i) of this section, the Administrative
Agent, in consultation with the Borrower and the affected Lenders, may establish
an alternative interest rate for the Impacted Loans, in which case, such
alternative rate of interest 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 Required 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 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.
3.04    Increased Costs; Reserves on Eurodollar Rate Loans.
(f)    Increased Costs Generally. If any Change in Law shall:
(iii)    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 contemplated by Section 3.04(e);
(iv)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (c) through (f) of the definition of Excluded
Taxes, and (C) Other Connection Taxes that are imposed on or measured by net
income (however denominated) or that are franchise Taxes or branch profits
Taxes) on its loans, loan principal, letters of credit, commitments or other
obligations, or its deposits, reserves, other liabilities or capital
attributable thereto; or
(v)    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;

45

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

 

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 Eurodollar Rate, 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.
(g)    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 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 such additional amount or amounts
as will compensate such Lender or such Lender’s holding company for any such
reduction suffered.
(h)    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.
(i)    Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to the foregoing provisions of this Section 3.04 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).
(j)    Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender,
as long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs
of such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least 10 days’ prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender. If a
Lender

46

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

 

fails to give notice 10 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 10 days from receipt of such
notice.
3.05    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 other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b)    any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower; or
(c)    any assignment of a Eurodollar Rate Loan on a day other than the last day
of the Interest Period therefor as a result of a request by the Borrower
pursuant to Section 11.13;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
3.06    Mitigation Obligations; Replacement of Lenders.
(a)    Designation of a Different Lending Office. Each Lender may make any
Credit Extension to the Borrower through any Lending Office, provided that the
exercise of this option shall not affect the obligation of the Borrower to repay
the Credit Extension in accordance with the terms of this Agreement. If any
Recipient requests compensation under Section 3.04, or requires the Borrower or
any Loan Party to pay any Indemnified Taxes or additional amounts to any
Recipient or any Governmental Authority for the account of any Recipient
pursuant to Section 3.01, or if any Recipient gives a notice pursuant to
Section 3.02, then at the request of the Borrower such Lender shall, as
applicable, 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 Recipient, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the
future, or eliminate the need for the notice pursuant to Section 3.02, as
applicable, and (ii) in each case, would not subject such Recipient to any
unreimbursed cost or expense

47

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

 

and would not otherwise be disadvantageous to such Recipient. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Recipient
in connection with any such designation or assignment.
(b)    Replacement of Lenders. If any Recipient requests compensation under
Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or
additional amounts to any Recipient or any Governmental Authority for the
account of any Recipient pursuant to Section 3.01 and, in each case, such
Recipient has declined or is unable to designate a different lending office in
accordance with Section 3.06(a), the Borrower may replace such Recipient in
accordance with Section 11.13.
3.07    Survival. All of the Borrower’s obligations under this Article III shall
survive termination of the Aggregate Commitments, repayment of all other
Obligations hereunder, and resignation of the Administrative Agent.
ARTICLE IV.    CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01    Conditions. The obligation of each Lender to make its Credit Extension
hereunder is subject to satisfaction of the following conditions precedent:
(d)    The Administrative Agent’s receipt of the following, each of which shall
be originals or telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance reasonably satisfactory to the Administrative Agent and each of
the Lenders:
(i)    executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;
(ii)    a Note executed by the Borrower in favor of each Lender requesting a
Note;
(iii)    a security agreement, in substantially the form of Exhibit E (together
with each other security agreement and security agreement supplement delivered
pursuant to Section 6.12, in each case as amended, the “Security Agreement”),
duly executed by each Loan Party, together with:
(A)    certificates and instruments representing the Pledged Collateral referred
to therein accompanied by undated stock powers or instruments of transfer
executed in blank,
(B)    properly completed financing statements in form appropriate for filing
under the Uniform Commercial Code of all jurisdictions that the Administrative
Agent may reasonably deem necessary or desirable in order to perfect the Liens
created under the Security Agreement, covering the Collateral described in the
Security Agreement,

48

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

 

(C)    a list of UCC, United States Patent granted patents and pending patent
application, Trademark Office registrations and pending registration
applications and United States Copyright Office registrations and pending
registration applications together with their equivalents in foreign
jurisdictions, tax and judgment lien searches, or equivalent reports or
searches, each of a recent date listing all effective financing statements, lien
notices or comparable documents (together with copies of such financing
statements and documents) that name any Loan Party as debtor and that are filed
in those state and county jurisdictions in which any Loan Party is organized or
maintains its principal place of business and such other searches that are
required by the Perfection Certificate or that the Administrative Agent
reasonably deems necessary or appropriate, none of which encumber the Collateral
covered or intended to be covered by the Collateral Documents (other than
Permitted Liens),
(D)    a Perfection Certificate, in substantially the form of Exhibit H, duly
executed by each of the Loan Parties, and
(E)    evidence that all other actions, recordings and filings that the
Administrative Agent may deem reasonably necessary in order to perfect the Liens
created under the Security Agreement has been taken (including receipt of duly
executed payoff letters and UCC-3 termination statements, to the extent
applicable);
(iv)    a copyright security agreement, patent security agreement and trademark
security agreement (together with each other intellectual property security
agreement delivered pursuant to Section 6.12, in each case as amended, the
“Intellectual Property Security Agreement”), duly executed by each applicable
Loan Party, together with evidence that all action that the Administrative Agent
may reasonably deem necessary or desirable in order to perfect the Liens created
under the Intellectual Property Security Agreement has been taken;
(v)    a certificate of the secretary or assistant secretary of each Loan Party
dated the Closing Date, certifying (A) that attached thereto is a true and
complete copy of each Organizational Document of such Loan Party certified (to
the extent applicable) as of a recent date by the Secretary of State of the
state of its organization, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Loan Party
authorizing the execution, delivery and performance of the Loan Documents to
which such person is a party and, in the case of Borrower, the Credit Extensions
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect and (C) as to the incumbency and
specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party (together
with a certificate of another officer as to the incumbency and specimen
signature of the secretary or assistant secretary executing the certificate
required by this clause (v));
(vi)    such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and that each of the Borrower and the Guarantors is validly existing, in good
standing (in so‑called

49

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

 

“long-form” if available) and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect;
(vii)    a favorable opinion of Ropes & Gray LLP, counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, as to the matters
concerning the Loan Parties and the Loan Documents as the Required Lenders may
reasonably request;  
(viii)    a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of any and all material consents, licenses and approvals
required in connection with the execution, delivery and performance by such Loan
Party and the validity against such Loan Party of the Loan Documents to which it
is a party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;
(ix)    a certificate attesting to the Solvency of each Loan Party before and
after giving effect to the Borrowing, from the chief financial officer of the
Borrower, substantially in the form of Exhibit F;
(x)    evidence that all insurance required to be maintained pursuant to the
Loan Documents has been obtained and is in effect, together with endorsements
naming the Administrative Agent, on behalf of the Secured Parties, as an
additional insured or loss payee, as the case may be;
(xi)    a certificate signed by a Responsible Officer of the Borrower certifying
(A) that, assuming those conditions specified in this Section 4.01 required to
be satisfied, delivered or provided for in a manner reasonably satisfactory to
the Administrative Agent have been satisfied, delivered or provided for in a
manner reasonably satisfactory to the Administrative Agent, the conditions
specified in this Section 4.01 have been satisfied, (B)  since December 31,
2013, there has not been any change, development or event that, individually or
in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect and (C) with respect to certain matters referred to in Section
5.18(b);
(xii)    an amendment or termination to the letter of credit facility with Bank
of America, N.A., in form and substance reasonably satisfactory to the
Administrative Agent, allowing for the creation of a security interest in the
Collateral (as defined in the Security Agreement) by the Administrative Agent
for the benefit of the Secured Parties, or any consent by Bank of America, N.A.
to the creation of such security interest;
(xiii)    any and all amendments relating to any and all license agreements or
similar arrangements between or among the Loan Parties and any of their
respective Subsidiaries relating to the Cystic Fibrosis Drug Franchise Assets,
in form and substance reasonably satisfactory to the Administrative Agent,
allowing for the creation and performance of a security interest in such license
agreements by the Administrative Agent

50

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

 

for the benefit of the Secured Parties under the Loan Documents and the
termination at will by the licensor or similar Person; and
(xiv)    such other assurances, certificates, documents, consents or opinions as
the Administrative Agent or the Required Lenders reasonably may require.
(e)    The Administrative Agent shall be reasonably satisfied that all requisite
Governmental Authorities, equityholders and third parties shall have approved,
authorized or consented to the Transactions, and there shall be no governmental
or judicial action, actual or threatened, that has or would have, individually
or in the aggregate, a reasonable likelihood of restraining, preventing or
imposing burdensome conditions on the transactions contemplated hereby.
(f)    There shall not exist any claim, action, suit, investigation, litigation
or proceeding pending or threatened by or before any court, or any governmental,
administrative or regulatory agency or authority, domestic or foreign, that, in
the reasonable opinion of the Administrative Agent (a) has had, or could
reasonably be expected to result in liabilities in excess of the Threshold
Amount, or (b) the ability of any Company to perform its obligations under the
Loan Documents, or the ability of the parties to consummate the financings
contemplated hereby.
(g)    The Administrative Agent shall have received, at least five business days
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, without limitation, the USA PATRIOT
Act; including, in particular, a duly executed valid form W-9 from the Borrower,
or other applicable tax form.
(h)    Unless waived by the Administrative Agent, the Borrower shall have paid
all reasonable fees, charges and disbursements of counsel to the Administrative
Agent (directly to such counsel if requested by the Administrative Agent) to the
extent invoiced prior to or on the Closing Date, plus such additional amounts of
such fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrower and the
Administrative Agent).
(i)    The representations and warranties of the Borrower and each other Loan
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct 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 they shall be true and correct as of such earlier
date.
(j)    No Default shall exist, or would result from such proposed Credit
Extension or from the application of the proceeds thereof.

51

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

 

(k)    The Administrative Agent shall have received a Loan Notice in accordance
with the requirements hereof.
Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
ARTICLE V.    REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the Lenders
that:
5.01    Existence, Qualification and Power. Each Loan Party and each of its
Subsidiaries (a) is duly organized or formed, validly existing and, as
applicable, in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to
(i) own or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party, and
(c) is duly qualified and is licensed and, as applicable, in good standing under
the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification or
license; except in each case referred to in clause (b)(i) or (c), to the extent
that failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.02    Authorization; No Contravention. The execution, delivery and performance
by each Loan Party of each Loan Document to which such Person is party, have
been duly authorized by all necessary corporate or other organizational action,
and do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Material Contract to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any applicable Law.
5.03    Governmental Authorization; Other Consents. Other than filings to
perfect the security interests granted under the Collateral Documents and any
filings with the SEC, no approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority or any other
Person (provided if such action is required with respect to a Contractual
Obligation this Section 5.03 shall only apply to Material Contracts) is
necessary or required in connection with (a) the execution, delivery or
performance by, or enforcement against, any Loan Party of this Agreement or any
other Loan Document, (b) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents, (c) the perfection or maintenance of the
Liens created under the Collateral Documents (including the first priority
nature thereof) or (d) the exercise by the Administrative Agent or any Lender of
its rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents.

52

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

 

5.04    Binding Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, subject to bankruptcy, insolvency,
moratorium and other laws affecting creditors and secured parties generally and
general principles of equity.
5.05    Financial Statements; No Material Adverse Effect.
(b)    The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present in all material respects
the financial condition of the Borrower and its Subsidiaries as of the date
thereof and their results of operations, cash flows and changes in shareholders’
equity for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for Taxes, material commitments and Indebtedness.
(c)    The unaudited consolidated balance sheets of the Borrower and its
Subsidiaries dated March 31, 2014, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations, cash flows and changes in shareholders’ equity for the
period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments. Schedule 5.05
sets forth all material indebtedness and other liabilities, direct or
contingent, of the Borrower and its consolidated Subsidiaries as of the date of
such financial statements, including liabilities for Taxes, material commitments
and Indebtedness.
(d)    Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.
(e)    The consolidated forecasted balance sheet and statements of income and
cash flows of the Borrower and its Subsidiaries delivered pursuant to
Section 6.01(c) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in light of the conditions existing
at the time of delivery of such forecasts, and represented, at the time of
delivery, the Borrower’s best estimate of its future financial condition and
performance.
5.06    Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the Knowledge of the Borrower after due and diligent
investigation, threatened in writing, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or any

53

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

 

of its Subsidiaries or against any of their properties or revenues that
(a) purport to affect or pertain to this Agreement or any other Loan Document,
or any of the transactions contemplated hereby or (b) could reasonably be
expected, either individually or in the aggregate, to result in a Material
Adverse Effect.
5.07    No Default. Neither any Loan Party nor any Subsidiary thereof is in
default under or with respect, or party to, to any Contractual Obligation that
could, either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. No Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Agreement
or any other Loan Document.
5.08    Ownership of Property; Liens. (1) Each Loan Party and each of its
Subsidiaries has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(f)    Schedule 5.08(b) sets forth a complete and accurate list of all Liens on
the property or assets of each Loan Party and each of its Subsidiaries as of the
Closing Date, showing as of the date hereof the lienholder thereof, the
principal amount of the obligations secured thereby and the property or assets
of such Loan Party or such Subsidiary subject thereto. The property of each Loan
Party and each of its Subsidiaries is subject to no Liens, other than Liens set
forth on Schedule 5.08(b), and as otherwise permitted by Section 7.01.
(g)    Schedule 5.08(c) sets forth a complete and accurate list of all real
property owned by each Loan Party and each of its Subsidiaries, showing as of
the date hereof the street address, county or other relevant jurisdiction,
state, record owner and book and fair value thereof. Each Loan Party and each of
its Subsidiaries has good, marketable and insurable fee simple title to the real
property owned by such Loan Party or such Subsidiary, free and clear of all
Liens, other than Liens created or permitted by the Loan Documents.
(h)    (1)    Schedule 5.08(d)(i) sets forth a complete and accurate list of all
leases of real property under which any Loan Party or any Subsidiary of a Loan
Party is the lessee, showing as of the date hereof the street address, county or
other relevant jurisdiction, state, lessor, lessee, expiration date and annual
rental cost thereof. Each such lease is the legal, valid and binding obligation
of the lessor thereof, enforceable in accordance with its terms.
(i)    Schedule 5.08(d)(ii) sets forth a complete and accurate list of all
leases of real property under which any Loan Party or any Subsidiary of a Loan
Party is the lessor, showing as of the date hereof the street address, county or
other relevant jurisdiction, state, lessor, lessee, expiration date and annual
rental cost thereof. Each such lease is the legal, valid and binding obligation
of the lessee thereof, enforceable in accordance with its terms.
(i)    Schedule 5.08(e) sets forth a complete and accurate list of all
Investments held by any Loan Party or any Subsidiary of a Loan Party on the date
hereof, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.

54

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

 

(j)    Any Mortgages executed and delivered after the Closing Date will be
effective to create in favor of the Administrative Agent (for the benefit of the
Secured Parties) a legal, valid and enforceable first priority Lien on all of
the applicable Loan Parties’ right, title and interest in and to the Mortgaged
Property (as such term is defined in the applicable Mortgage) thereunder and the
proceeds thereof, and when such Mortgages are filed or recorded in the proper
real estate filing or recording offices, and all relevant mortgage taxes and
recording charges are duly paid, the Administrative Agent (for the benefit of
the Secured Parties) shall have a perfected first priority Lien on, and security
interest in, all right, title, and interest of the applicable Loan Parties in
such Mortgaged Property and, to the extent applicable, subject to Section 9-315
of the Uniform Commercial Code, the proceeds thereof, in each case prior and
superior in right to the Lien of any other person, except for Permitted
Encumbrances.
5.09    Environmental Compliance.
(a)    The Loan Parties and their respective Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility pursuant to any
Environmental Law on their respective businesses, operations and properties or
any other Environmental Liability, and as a result thereof the Borrower has
reasonably concluded that such Environmental Laws and claims could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b)    None of the properties currently or formerly owned, operated, leased, or
otherwise occupied by any Loan Party or any of its Subsidiaries, and no property
to which any of the Loan Parties or their respective Subsidiaries have
transported or arranged for the transportation, treatment or disposal of any
Hazardous Materials, is listed or formally proposed for listing on the National
Priorities List promulgated pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act (“CERCLA”) or on the CERCLIS (as
defined by CERCLA) or any analogous foreign, state or local list or is adjacent
to any such property; there are no and to the best knowledge of the Loan Parties
and their Subsidiaries never have been any underground or above-ground storage
tanks or any surface impoundments, septic tanks, pits, sumps, lagoons or other
features in which Hazardous Materials are being or have been treated, stored or
disposed on any property currently owned, operated, leased, or otherwise
occupied by any Loan Party or any of its Subsidiaries or, to the best of the
knowledge of the Loan Parties, on any property formerly owned, operated, leased,
or otherwise occupied by any Loan Party or any of its Subsidiaries; there is no
asbestos or asbestos-containing material on, at or in any property currently
owned, operated, leased, or otherwise occupied by any Loan Party or any of its
Subsidiaries; and Hazardous Materials have not been Released on, at, under or
from any property currently or formerly owned, operated, leased, or otherwise
occupied by any Loan Party or any of its Subsidiaries in a manner, form or
amount which could reasonably be expected to result in material liability of any
Loan Party or any Subsidiary.

55

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

 

(c)    Neither any Loan Party 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, either voluntarily or
pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used, treated, handled
or stored at, or transported to or from, any property currently or formerly
owned, operated, leased, or otherwise occupied by any Loan Party or any of its
Subsidiaries have been managed and disposed of in a manner which could not
reasonably be expected to result in material liability to any Loan Party or any
of its Subsidiaries.
(d)    The Loan Parties and their respective Subsidiaries: (i) are in compliance
with all applicable Environmental Laws; (ii) hold all Permits (each of which is
in full force and effect) required under Environmental Laws for any of their
current or intended operations or for any property owned, leased, operated or
otherwise occupied by any of the Loan Parties or their respective Subsidiaries
(“Environmental Permits”); (iii) are and have been in compliance with all of
their Environmental Permits; and (iv) to the extent within the control of the
Loan Parties and their respective Subsidiaries, each of their Environmental
Permits will be timely renewed and complied with, and any additional
Environmental Permits that may be required of any of them or that is or is
expected to become applicable to any of them will be timely obtained and
complied with, without material expense, and in compliance with any
Environmental Law, in the case of clauses (i), (ii), (iii) and (iv) above,
except where non-compliance or the failure to hold or renew such Environmental
Permits could not reasonably be expected to result in a liability above the
Threshold Amount.
5.10    Insurance. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.
5.11    Taxes. The Borrower and each of its Subsidiaries have timely filed all
federal and state income and other material tax returns and reports required to
be filed, and have timely paid all federal and state income and other material
Taxes (whether or not shown on a tax return), including in its capacity as a
withholding agent, levied or imposed upon it or its properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings diligently conducted and for which adequate reserves
have been provided in accordance with GAAP. There is no proposed material tax
assessment or other material claim against, and no material tax audit with
respect to, the Borrower or any Subsidiary.
5.12    ERISA Compliance.
(a)    Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state laws. Each Pension Plan
that is intended to be a qualified plan under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service to
the effect that the form of such

56

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

 

Plan is qualified under Section 401(a) of the Code and the trust related thereto
has been determined by the Internal Revenue Service to be exempt from federal
income tax under Section 501(a) of the Code, or an application for such a letter
is currently being processed by the Internal Revenue Service. To the best
knowledge of the Borrower, nothing has occurred that would prevent or cause the
loss of such tax-qualified status.
(b)    There are no pending or, to the best Knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c)    (i) No ERISA Event has occurred, and neither the Borrower nor any ERISA
Affiliate is aware of any fact, event or circumstance that could reasonably be
expected to constitute or result in an ERISA Event with respect to any Pension
Plan or Multiemployer Plan; (ii) as of the most recent valuation date for any
Pension Plan, the funding target attainment percentage (as defined in Section
430(d)(2) of the Code) is 60% or higher and neither the Borrower nor any ERISA
Affiliate knows of any facts or circumstances that could reasonably be expected
to cause the funding target attainment percentage for any such plan to drop
below 60% as of the most recent valuation date; (iii) neither the Borrower nor
any ERISA Affiliate has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have become due
that are unpaid; (iv) neither the Borrower nor any ERISA Affiliate has engaged
in a transaction that could be subject to Section 4069 or Section 4212(c) of
ERISA; and (v) no Pension Plan has been terminated by the plan administrator
thereof nor by the PBGC, and no event or circumstance has occurred or exists
that could reasonably be expected to cause the PBGC to institute proceedings
under Title IV of ERISA to terminate any Pension Plan. Neither the Borrower nor
any ERISA Affiliate maintains or contributes to, or has any unsatisfied
obligation to contribute to, or liability under, any active or terminated
Pension Plan or retiree group medical plan.
5.13    Subsidiaries; Equity Interests. The Borrower has no Subsidiaries other
than those specifically disclosed in Part (a) of Schedule 5.13, and all of the
outstanding Equity Interests in such Subsidiaries have been validly issued, are
fully paid and non-assessable and are owned directly or indirectly by a Loan
Party in the amounts specified on Part (a) of Schedule 5.13 free and clear of
all Liens except those created under the Collateral Documents. The Borrower has
no equity investments in any other corporation or entity other than those
specifically disclosed in Part (b) of Schedule 5.13. All of the outstanding
Equity Interests in the Borrower have been validly issued, are fully paid and
non-assessable. Set forth on Part (c) of Schedule 5.13 is a complete and
accurate list of all Loan Parties, showing as of the Closing Date (as to each
Loan Party) the jurisdiction of its incorporation, the address of its principal
place of business and its U.S. taxpayer identification number, if any, or, in
the case of any non-U.S. Loan Party that does not have a U.S. taxpayer
identification number, its unique identification number issued to it by the
jurisdiction of its incorporation, if any. The copy of the charter of each Loan
Party and each amendment thereto

57

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

 

provided pursuant to Section 4.01(a)(v) is a true and correct copy of each such
document, each of which is valid and in full force and effect.
5.14    Margin Regulations; Investment Company Act. The Borrower is not engaged
and will not engage, principally or as one of its important activities, in the
business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock. None of the Borrower, any Person
Controlling the Borrower, or any Subsidiary is or is required to be registered
as an “investment company” under the Investment Company Act of 1940.
5.15    Disclosure. The Borrower has disclosed to the Administrative Agent and
the Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to
it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. No report, financial statement, certificate
or other written information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or under any other Loan Document (in each case, as modified or supplemented by
other information so furnished), when taken as a whole, contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
5.16    Compliance with Laws. Each Loan Party and each Subsidiary thereof is and
has been in compliance in all material respects with the requirements of all
Laws and all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.17    Taxpayer Identification Number. The Borrower’s true and correct U.S.
taxpayer identification number is set forth on Schedule 11.02.
5.18    Intellectual Property; Licenses, Etc. (a) Schedule 5.18 sets forth a
complete and accurate list of the following: (i) all Copyrights and all
Trademarks of any Loan Party, that are registered, or in respect of which an
application for registration has been filed or recorded, with the United States
Patent and Trademark Office or the United States Copyright Office or with any
other Governmental Authority (or comparable organization or office established
pursuant to an international treaty or similar international agreement for the
filing, recordation or registration of interests in intellectual property),
together with relevant identifying information with respect to such Copyrights
and Trademarks, (ii) all Patents of any Loan Party that are granted, or in
respect of which an application for patent has been submitted to and is pending
with the United States Patent and Trademark Office or with any other
Governmental Authority (or comparable organization or office established
pursuant to an international treaty or similar international agreement for the
filing, recordation or registration of interests in intellectual property),
together with relevant identifying information with respect to such Patents,
(iii) all Domain Names of the Borrower or any Guarantor,

58

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

 

their respective properties or the conduct or operation of their respective
businesses (including the generation of future revenues), together with relevant
identifying information with respect to such Domain Names and (iv) each
Copyright License, Patent License and Trademark License included in the Material
IP Rights.
(a)    The Material IP Rights are, in all material respects, subsisting, valid,
unexpired and enforceable. Other than as disclosed to the Agent prior to the
Closing Date, no written claim known to the Borrower or any Subsidiary has been
made that the use or other exploitation by the Borrower, any Subsidiary or any
of their licensees of any of the Material IP Rights or material intellectual
property rights of another Person, including, without limitation, to advertise,
display, import, manufacture, have manufactured, market, offer for sale,
perform, prepare derivative works based upon, promote, reproduce, sell, use
and/or otherwise distribute a Product, does or may infringe, violate or
misappropriate the rights of any Person in any material respect. No holding,
decision or judgment has been rendered by any Governmental Authority that would
limit, invalidate, render unenforceable, cancel or create a material cloud over
the validity of any Material IP Right. No action or proceeding is pending
seeking to limit the scope of protection provided by, invalidate, render
unenforceable, cancel or create a material cloud over the validity of any IP
Right. The Borrower and its Subsidiaries have, since taking title to the
Material IP Rights, performed all acts and have paid all annuities, fees, costs,
expenses and taxes required to maintain the Material IP Rights in full force and
effect throughout the world, as applicable. The Borrower and its Subsidiaries
have filed all applications for registration and patents pertaining to the
Material IP Rights of the Borrower and the Guarantors that in the good faith
opinion of the Borrower are commercially reasonable and consistent with sound
business practice. The Borrower and its Subsidiaries own, or are entitled to use
by license or otherwise, all the Material IP Rights. To the extent any of the
Material IP Rights were authored, developed, conceived or created, in whole or
in part, for or on behalf of the Borrower or any Subsidiary by any other Person,
then the Borrower or such Subsidiary has entered into a written agreement with
such Person in which, such Person has assigned or licensed all right, title and
interest in and to such Material IP Rights to the Borrower or such Subsidiary.
To the Borrower’s Knowledge, no slogan or other advertising material, device,
product, process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Borrower or any Subsidiary or any licensee
of the Borrower or any Subsidiary in the manufacture, use and sale of products
under the Material IP Rights violates, infringes or misappropriates any rights
held by any other Person and (ii) no claim or litigation regarding any of the
Material IP Rights is pending or has been threatened in writing and remains
unresolved as of the Closing Date. None of the Material IP Rights is subject to
any license grant by the Borrower or any Subsidiary or similar arrangement
authorizing a third party to practice any of the Material IP Rights, except for
(x) license grants among the Loan Parties and (y) those license grants disclosed
on Schedule 5.18.
5.19    OFAC. 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 currently
the subject of any Sanctions, nor is the Borrower or any Subsidiary located,
organized or resident in a Designated Jurisdiction.

59

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

 

5.20    Compliance of Products.
(a)    The Borrower and its Subsidiaries:
(i)    have obtained all Required Permits, or have contracted with third parties
holding Required Permits, necessary for compliance in all material respects with
all Laws with respect to sourcing, manufacturing, development, testing,
production, sale and distribution of Products, and all such Required Permits are
in full force and effect;
(ii)    have not received any adverse written communication from any
Governmental Authority regarding, and there are no facts or circumstances that
are likely to give rise to (A) any material adverse change in, any Required
Permit, or any failure to materially comply with any Laws or any term or
requirement of any Required Permit or (B) any revocation, withdrawal,
suspension, cancellation, material limitation, termination or material
modification of any Required Permit;
(iii)    have not used the services of any Person debarred or disqualified under
the provisions of the Generic Drug Enforcement Act of 1992, 21 U.S.C. Section
335a;
(iv)    warrant and represent that none of their officers, directors, nor, to
the Borrower's Knowledge, any of their employees, agents, Affiliates or any
consultant involved in any Drug Application, has been convicted of any felony
for which debarment or disqualification is authorized by 21 U.S.C. Section 335a
or engaged in any other action for which debarment or disqualification is
authorized by 21 U.S.C. Section 335a;
(v)    warrant and represent that, none of their officers, directors, nor, to
the Borrower’s Knowledge, any of their employees, agents, Affiliates or any
consultant has made on behalf of the Borrower an untrue statement of material
fact or fraudulent statement to the FDA or failed to disclose a material fact
required to be disclosed to the FDA;
(vi)    warrant and represent that all applications, notifications, submissions,
information, claims, reports and statistics and other data and conclusions
derived therefrom, utilized as the basis for or submitted in connection with any
and all requests for a Required Permit from the FDA or other Governmental
Authority relating to the Borrower or any Subsidiary, their business operations
and Products, when submitted to the FDA or other Governmental Authority were
true, complete and correct in all material respects as of the date of submission
or any necessary or required updates, changes, corrections or modifications to
such applications, submissions, information and data have been submitted to the
FDA or other Governmental Authority;
(vii)    warrant and represent that all preclinical and clinical trials in
respect of the activities of the Borrower and its Subsidiaries being conducted
by or on behalf of the Borrower and its Subsidiaries producing data submitted to
any Governmental Authority, including the FDA and its counterparts worldwide, in
connection with any Required Permit, are being or have been conducted in
compliance in all material respects with the required experimental protocols,
procedures and controls pursuant to applicable Laws;

60

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

 

(viii)    have not received any written notice that any Governmental Authority,
including without limitation the FDA, the DEA, the Office of the Inspector
General of HHS or the United States Department of Justice, has commenced or
threatened to initiate any enforcement action against the Borrower or a
Subsidiary, any action to enjoin the Borrower or a Subsidiary, its officers,
directors, employees, shareholders or its agents and Affiliates, from conducting
its business at any facility owned or used by it or for any material civil
penalty, injunction, seizure or criminal action that could reasonably be
expected to have a Material Adverse Effect;
(ix)    neither the Borrower nor any Subsidiary has received from the FDA or the
DEA, a Warning Letter, Form FDA-483, “Untitled Letter”, other correspondence or
notice setting forth allegedly objectionable observations for correction (except
with respect to observations and violations which could not reasonably be
expected to have a Material Adverse Effect) or alleged violations of laws and
regulations enforced by the FDA or the DEA, or any comparable correspondence
from any state or local authority responsible for regulating drug products and
establishments, or any comparable correspondence from any foreign counterpart of
the FDA with regard to any Product or the manufacture, processing, packing, or
holding thereof; and
(x)    neither the Borrower nor any Subsidiary has (A) instituted any Recalls or
Market Withdrawals, (B) issued or received any Safety Notices, (C) Knowledge of
any material product complaints with respect to the Products, to the extent that
any such matter could reasonably be expected to have a Material Adverse Effect.
(b)    With respect to Products:
(i)    All Products are listed on Schedule 1.01; provided, that, if after the
Closing Date, the Borrower or any Subsidiary wishes to sell or market any new
Product, the Borrower shall update Schedule 1.01 to include such Product;
(ii)    Each Product is not adulterated or misbranded within the meaning of the
FDCA;
(iii)    Each Product is not an article prohibited from introduction into
interstate commerce under the provisions of Sections 404, 505 or 512 of the
FDCA;
(iv)    Each Product has been manufactured, imported, possessed, owned,
warehoused, marketed, promoted, sold, labeled, furnished, distributed and
marketed in accordance with all applicable Permits and Laws, except where a
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and
(v)    Each Product has been and shall be manufactured in accordance with good
manufacturing practices, except where a failure to do so could not reasonably be
expected to have a Material Adverse Effect.

61

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

 

5.21    Anti-Corruption Laws. The Borrower and its Subsidiaries have conducted
their businesses in material compliance with applicable anti-corruption laws and
have instituted and maintained policies and procedures designed to promote and
achieve compliance with such laws.
5.22    Solvency. Each Loan Party is, on a consolidated basis, Solvent.
5.23    Casualty, Etc. Neither the businesses nor the properties of any Loan
Party or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance), condemnation or eminent domain proceeding that, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
5.24    Labor Matters. The Borrower and its Subsidiaries are in compliance in
all material respects with all Laws relating to the employment of labor
(including those relating to wages and hours, vacation and leaves of absence,
worker classification, occupational health and safety, insurance, equal
employment opportunity, and collective bargaining.) There are no collective
bargaining agreements or Multiemployer Plans covering the employees of the
Borrower or any of its Subsidiaries as of the Closing Date and neither the
Borrower nor any Subsidiary has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years. There are no
pending unfair labor practice charges filed, or threatened to be filed, with the
National Labor Relations Board or similar Governmental Authority.
5.25    Senior Debt. The Obligations are designated in a writing addressed to
the holders of the Obligations executed by, or on behalf of, the holders of the
Subordinated Indebtedness as “Senior Debt”, “Designated Senior Debt” or the
equivalent thereof for all purposes of all Subordinated Indebtedness.
ARTICLE VI.    AFFIRMATIVE COVENANTS
So long as any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, the Borrower shall, and shall (except in the case of the covenants
set forth in Sections 6.01, 6.02, and 6.03) cause each Subsidiary to:
6.01    Financial Statements. Deliver to the Administrative Agent and each
Lender, in form and detail reasonably satisfactory to the Administrative Agent
and the Required Lenders:
(a)    as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower (or, if earlier, 15 days after the date
required to be filed with the SEC (without giving effect to any extension
permitted by the SEC)), a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, and consolidated statements of changes in
shareholders’ equity, and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and prepared in accordance with GAAP, audited and accompanied
by a report and opinion of an independent certified public accountant of
nationally recognized standing reasonably acceptable to the Required Lenders,
which report and opinion shall be prepared in accordance

62

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

 

with generally accepted auditing standards and shall not be subject to “going
concern” or like qualification or exception or any qualification or exception as
to the scope of such audit;
(b)    as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower (or,
if earlier, 5 days after the date required to be filed with the SEC (without
giving effect to any extension permitted by the SEC)) a consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter,
the related consolidated statements of income or operations for such fiscal
quarter and for the portion of the Borrower’s fiscal year then ended, and the
related consolidated statements of changes in shareholders’ equity and cash
flows for such fiscal quarter and for the portion of the Borrower’s fiscal year
then ended, in each case setting forth in comparative form, as applicable, the
figures for the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail,
such consolidated statements to be certified by the chief executive officer,
chief financial officer, treasurer or controller of the Borrower as fairly
presenting in all material respects the financial condition, results of
operations, shareholders’ equity and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; and
(c)    as soon as available, but in any event within 45 days after the end of
each fiscal year of the Borrower, an annual business plan and budget of the
Borrower and its Subsidiaries on a consolidated basis, including forecasts
prepared by management of the Borrower, in form reasonably satisfactory to the
Administrative Agent and the Required Lenders, of consolidated balance sheets
and statements of income or operations and cash flows of the Borrower and its
Subsidiaries on a quarterly basis for the immediately following fiscal year
(including the fiscal year in which the Maturity Date occurs).
As to any information contained in materials furnished pursuant to
Section 6.02(d), the Borrower shall not be separately required to furnish such
information under subsection (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in subsections (a) and (b) above at the times specified
therein.
6.02    Certificates; Other Information. Deliver to the Administrative Agent and
each Lender, in form and detail reasonably satisfactory to the Administrative
Agent and the Required Lenders:
(a)    concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b) a report of Kalydeco Product US and Foreign Revenue
detailing (i) revenue from sales of the Kalydeco Product derived from customers
located in the United States over the trailing twelve month period ending on
such date of determination and (ii) revenue from sales of the Kalydeco Product
derived from customers located outside of the United States over the trailing
twelve month period ending on such date of determination, which revenue, if
consisting of currency other than US Dollars, will be calculated using the
foreign exchange rates prevailing as of the Closing Date and as at the date of
determination, (iii) the relevant foreign exchange rates used in the calculation
described in clause (ii) above

63

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

 

and the sources of such rates, which rates and sources shall be reasonable
satisfactory to the Administrative Agent and (iv) such other detail reasonably
requested by the Administrative Agent, duly completed and signed by the chief
executive officer, chief financial officer, treasurer or controller of the
Borrower (which delivery may, unless the Administrative Agent, or a Lender
requests executed originals, be by electronic communication including fax or
email and shall be deemed to be an original authentic counterpart thereof for
all purposes);
(b)    promptly after any request by the Administrative Agent or any Lender,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors (or the audit committee of the board of
directors) of the Borrower by independent accountants in connection with the
accounts or books of the Borrower or any Subsidiary, or any audit of any of
them;
(c)    promptly after 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 Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;
(d)    promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of any Loan Party or any Subsidiary
thereof in an aggregate principal amount in excess of the Threshold Amount
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 Section 6.01
or any other clause of this Section 6.02;
(e)    promptly, 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 regarding
financial or other operational results of any Loan Party or any Subsidiary
thereof and copies of any written communication from the FDA or any other
regulatory body, in each case, that is reasonably expected to result in (i) a
material negative effect on the Borrower’s ability to obtain approval for
ivacaftor in combination with lumacaftor, (ii) a material adverse change to the
label (package insert) for, or recall of, KALYDECO or, (iii) post-approval, if
any, a material adverse change to the label (package insert), or recall of,
ivacaftor in combination with lumacaftor or another CFTR corrector active
ingredient;
(f)    as soon as available, but in any event within 60 days after the end of
each fiscal year of the Borrower, 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)    promptly, such additional information regarding the business, financial
or corporate affairs of the Borrower or any Subsidiary, or compliance with the
terms of the

64

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

 

Loan Documents, as the Administrative Agent or any Lender may from time to time
reasonably request;
(h)    promptly after the assertion or occurrence thereof, notice of any action
or proceeding against or of any noncompliance by any Loan Party or any of its
Subsidiaries with any Environmental Law or Environmental Permit that could
(i) reasonably be expected to have a Material Adverse Effect or (ii) cause any
property described in the Mortgages to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental Law; and
(i)    as soon as available, but in any event within 60 days after the end of
each fiscal year of the Borrower, a report supplementing the Schedules to this
Agreement to the extent there have been any changes thereto, each such report to
be signed by a Responsible Officer of the Borrower and to be in a form
reasonably satisfactory to the Administrative Agent.
Information required to be delivered pursuant to Section 6.01 or Section 6.02(c)
shall be deemed to have been delivered if such information, or one or more
annual or quarterly reports containing such information, shall have been posted
by the Administrative Agent on the Platform or shall be available on the website
of the SEC at http://www.sec.gov or on the website of the Borrower (provided, in
each case, that the Borrower has notified the Administrative Agent (including by
email) that such information is available on such website and, if requested by
the Administrative Agent, shall have provided hard copies to the Administrative
Agent). Information required to be delivered pursuant to Section 6.01 and this
Section 6.02 may also be delivered by electronic communications pursuant to
procedures approved by the Administrative Agent. Each Lender shall be solely
responsible for timely accessing posted documents and maintaining its copies of
such documents.
The Borrower hereby acknowledges that (a) the Administrative Agent may, but
shall not be obligated to, make available to the Lenders materials and/or
information provided by or on behalf of the Borrower hereunder (collectively,
“Borrower Materials”) by posting the Borrower Materials on Debt Domain,
IntraLinks, Syndtrak or another similar electronic system (the “Platform”) and
(b) certain of the Lenders (each, a “Public Lender”) may have personnel who do
not wish to receive material non-public information with respect to the Borrower
or its Affiliates, or the respective securities of any of the foregoing, and who
may be engaged in investment and other market-related activities with respect to
such Persons’ securities. The Borrower hereby agrees that so long as the
Borrower is the issuer of any outstanding debt or equity securities that are
registered or issued pursuant to a private offering or is actively contemplating
issuing any such securities (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 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, they shall be
treated as set forth in

65

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

 

Section 11.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Side
Information;” 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 designated “Public Side Information”.
6.03    Notices. Promptly notify the Administrative Agent and each Lender:
(a)    of the occurrence of any Default;
(b)    of any matter that has resulted or could reasonably be expected to result
in a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii)
any dispute, litigation, investigation, proceeding or suspension between the
Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;
(c)    of the occurrence of any ERISA Event;
(d)    of any Recall and of any Market Withdrawal affecting the Kalydeco Product
or any other Product the Borrower begins marketing after the Closing Date, in
each case providing reasonable detail; and
(e)    of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary; and
(f)    of the (i) occurrence of any Disposition or Casualty Event with respect
to property or assets for which the Borrower is required to make a mandatory
prepayment pursuant to Section 2.05(b)(i), and (ii) incurrence or issuance of
any Indebtedness for which the Borrower is required to make a mandatory
prepayment pursuant to Section 2.05(b)(ii).
Each notice pursuant to this Section 6.03 shall be accompanied by a statement of
a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
6.04    Payment of Obligations. Except where failure to pay and discharge its
obligations and liabilities could not reasonably be expected to result in
liability equal to or greater than the Threshold Amount, pay and discharge as
the same shall become due and payable, all its obligations and liabilities,
including (i) all Tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings diligently conducted (which proceedings
have the effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien) and adequate reserves in accordance with GAAP are
being maintained by the Borrower or such Subsidiary; (ii) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (iii) all
Indebtedness, as and when due

66

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

 

and payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness; and (b) timely file all
material tax returns required to be filed.
6.05    Preservation of Existence, Etc. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by Section
7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of
its business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect; and (d) preserve or renew all of its registered Material IP
Rights or Material IP Rights in respect of which an application for registration
has been filed or recorded with the United States Copyright office or the United
States Patent and Trademark Office, except with the consent of the Required
Lenders, which consent may not be unreasonably withheld or delayed.
6.06    Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; and (b) make
all necessary repairs thereto and renewals and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.
6.07    Maintenance of Insurance. (a) Maintain with financially sound and
reputable insurance companies that are not Affiliates of the Borrower, insurance
with respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons and all such insurance shall (i) provide for
not less than 30 days’ prior notice to the Administrative Agent of termination,
lapse or cancellation of such insurance, (ii) name the Administrative Agent as
mortgagee (in the case of property insurance) or additional insured on behalf of
the Secured Parties (in the case of liability insurance) or loss payee (in the
case of property insurance), as applicable, (iii) if reasonably requested by the
Administrative Agent, include a breach of warranty clause and (iv) be reasonably
satisfactory in all other respects to the Administrative Agent.
6.08    Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or
(b) the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09    Books and Records. Maintain proper books of record and account, in which
full, true and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and
business of the Borrower or such Subsidiary, as the case may be.
6.10    Inspection Rights; Annual Lender Meetings.

67

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

 

(a)    Permit representatives and independent contractors of the Administrative
Agent and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at the expense of the Borrower
(limited to reasonable out-of-pocket costs of the Administrative Agent) and at
such reasonable times during normal business hours and up to once per year, upon
reasonable advance notice to the Borrower; provided, however, that when an Event
of Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing all at the expense of the Borrower at any time during normal business
hours and without advance notice.
(b)    The Borrower shall meet on an annual basis with the Lenders (including
telephonic meetings at the discretion of the Required Lenders) in which the
operations, business, properties, liabilities, condition and prospects may be
discussed (at the discretion of the Lenders in attendance). The Borrower shall
reimburse the Lenders for all reasonable out-of-pocket costs and expenses
incurred it in connection with traveling to and from and attending such meeting.
6.11    Use of Proceeds. Use the proceeds of the Credit Extensions for Permitted
Acquisitions, Investments permitted hereunder and general corporate purposes not
in contravention of any Law or of any Loan Document.
6.12    Covenant to Guarantee Obligations and Give Security.
(a)    Upon the formation or acquisition of any new direct Subsidiary (other
than an Immaterial Subsidiary) by any Loan Party, then the Borrower shall, at
the Borrower’s expense:
(i)    within 15 days after such formation or acquisition, cause such Domestic
Subsidiary, and cause each direct and indirect parent of such Subsidiary (if it
has not already done so) that is a Domestic Subsidiary, to duly execute and
deliver to the Administrative Agent a guaranty or guaranty supplement, in form
and substance reasonably satisfactory to the Administrative Agent, guaranteeing
the other Loan Parties’ obligations under the Loan Documents (other than
Affected Subsidiaries, Immaterial Subsidiaries or Subsidiaries that are
prohibited from doing so because of law or regulation, but only to the extent
such law or regulation is effective with respect to such prohibition),
(ii)    within 15 days after such formation or acquisition, furnish to the
Administrative Agent a description of the real and personal properties of such
Domestic Subsidiary, in detail reasonably satisfactory to the Administrative
Agent,
(iii)    within 30 days after such formation or acquisition, cause such
Subsidiary and each direct and indirect parent of such Subsidiary (if it has not
already done so) to duly execute and deliver to the Administrative Agent deeds
of trust, trust deeds, deeds to secure debt, mortgages, security agreement
supplements, Perfection Certificate, IP

68

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

 

Security Agreements and other security and pledge agreements, as specified by
and in form and substance reasonably satisfactory to the Administrative Agent
(including delivery of all certificates, if any, representing the Equity
Interests in and of such Subsidiary, and other instruments of the type specified
in Section 4.01(a)(iii)), securing payment of all the Obligations of such
Subsidiary or such parent, as the case may be, under the Loan Documents and
constituting Liens on all such real and personal properties (other than Affected
Foreign Subsidiaries, Immaterial Subsidiaries or Subsidiaries that are
prohibited from doing so because of law or regulation, but only to the extent
such law or regulation is effective with respect to such prohibition),
(iv)    within 30 days after such formation or acquisition, cause such
Subsidiary and each direct and indirect parent of such Subsidiary (if it has not
already done so) to take whatever action (including the recording of mortgages,
the filing of Uniform Commercial Code financing statements, the giving of
notices and the endorsement of notices on title documents) may be necessary or
advisable in the reasonable opinion of the Administrative Agent to vest in the
Administrative Agent (or in any representative of the Administrative Agent
designated by it) valid and subsisting Liens on the properties purported to be
subject to the deeds of trust, trust deeds, deeds to secure debt, mortgages,
security agreement supplements, IP Security Agreements and security and pledge
agreements delivered pursuant to this Section 6.12, enforceable against all
third parties in accordance with their terms (other than Affected Subsidiaries,
Immaterial Subsidiaries or Subsidiaries that are prohibited from doing so
because of law or regulation, but only to the extent such law or regulation is
effective with respect to such prohibition),
(v)    within 60 days after such formation or acquisition, deliver to the
Administrative Agent, upon the request of the Administrative Agent in its
reasonable discretion, a signed copy of a favorable opinion, addressed to the
Administrative Agent and the other Secured Parties, of counsel for the Loan
Parties reasonably acceptable to the Administrative Agent as to the matters
contained in clauses (i), (iii) and (iv) above, and as to such other matters as
the Administrative Agent may reasonably request, and
(vi)    as promptly as practicable after such formation or acquisition, deliver,
upon the request of the Administrative Agent in its reasonable discretion, to
the Administrative Agent with respect to each parcel of real property owned by
the Domestic Subsidiary that is the subject of such formation or acquisition
title policies, surveys and engineering, soils and other reports, and
environmental assessment reports, each in scope, form and substance reasonably
satisfactory to the Administrative Agent, provided, however, that to the extent
that any Loan Party or any of its Subsidiaries shall have otherwise received any
of the foregoing items with respect to such real property, such items shall,
promptly after the receipt thereof, be delivered to the Administrative Agent.
Notwithstanding anything to the contrary in this Section 6.12(a), no Subsidiary
or direct or indirect parent of such Subsidiary shall pledge more than 65% of
the Equity Interests of any Affected Subsidiary; provided that if an entity that
is an Affected Subsidiary ceases

69

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

 

to be an Affected Subsidiary, the provisions of this Section 6.12(a) shall apply
as if such Subsidiary is acquired or formed as of the time it ceases to be an
Affected Subsidiary.
 
(b)    Upon the acquisition of any property by any Loan Party, if such property,
in the reasonable judgment of the Administrative Agent, shall not already be
subject to a perfected first priority security interest in favor of the
Administrative Agent for the benefit of the Secured Parties, then the Borrower
shall, at the Borrower’s expense:
(i)    within 15 days after such acquisition, furnish to the Administrative
Agent a description of the property so acquired in detail reasonably
satisfactory to the Administrative Agent,
(ii)    within 30 days after such acquisition, cause the applicable Loan Party
to duly execute and deliver to the Administrative Agent Mortgages, as specified
by and in form and substance reasonably satisfactory to the Administrative
Agent, securing payment of all the Obligations of the applicable Loan Party
under the Loan Documents and constituting Liens on all such properties,
(iii)    within 30 days after such acquisition, cause the applicable Loan Party
to take whatever action (including the recording of mortgages, the filing of
Uniform Commercial Code financing statements, the giving of notices and the
endorsement of notices on title documents) may be necessary or advisable in the
reasonable opinion of the Administrative Agent to vest in the Administrative
Agent (or in any representative of the Administrative Agent designated by it)
valid and subsisting Liens on such property, enforceable against all third
parties,
(iv)    within 60 days after such acquisition, deliver to the Administrative
Agent, upon the request of the Administrative Agent in its reasonable
discretion, a signed copy of a favorable opinion, addressed to the
Administrative Agent and the other Secured Parties, of counsel for the Loan
Parties reasonably acceptable to the Administrative Agent as to the matters
contained in clauses (ii) and (iii) above and as to such other matters as the
Administrative Agent may reasonably request,
(v)    as promptly as practicable after any acquisition of a real property,
deliver, upon the request of the Administrative Agent in its reasonable
discretion, to the Administrative Agent with respect to such real property title
reports, surveys and engineering, soils and other reports, and environmental
assessment reports, each in scope, form and substance reasonably satisfactory to
the Administrative Agent, provided, however, that to the extent that any Loan
Party or any of its Subsidiaries shall have otherwise received any of the
foregoing items with respect to such real property, such items shall, promptly
after the receipt thereof, be delivered to the Administrative Agent, and

70

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

 

(vi)    promptly provide evidence that all other action that the Administrative
Agent may deem reasonably necessary or desirable in order to create valid first
and subsisting Liens on the property described in the Mortgages has been taken.
Notwithstanding anything to the contrary in this Section 6.12(b), no Subsidiary
or direct or indirect parent of such Subsidiary shall pledge more than 65% of
the Equity Interests of any Affected Subsidiary; provided that if an entity that
is an Affected Subsidiary ceases to be an Affected Subsidiary, the provisions of
this Section 6.12(b) shall apply as if the Equity Interests of such Subsidiary
are acquired as of the time it ceases to be an Affected Subsidiary.
(c)    Upon the request of the Administrative Agent following the occurrence and
during the continuance of an Event of Default, the Borrower shall, at the
Borrower’s expense:
(ii)    within 10 days after such request, furnish to the Administrative Agent a
description of the real and personal properties of the Loan Parties and their
respective Subsidiaries in detail reasonably satisfactory to the Administrative
Agent,
(iii)    within 15 days after such request, duly execute and deliver, and cause
each Loan Party (other than an Affected Subsidiary) (if it has not already done
so) to duly execute and deliver to the Administrative Agent Mortgages, security
agreement supplements, IP Security Agreements and other security and pledge
agreements, as specified by and in form and substance reasonably satisfactory to
the Administrative Agent (including delivery of all certificates, if any,
representing the Equity Interests in and of such Subsidiary, and other
instruments of the type specified in Section 4.01(a)(iii)), securing payment of
all the Obligations of the applicable Loan Party under the Loan Documents and
constituting Liens on all such properties,
(iv)    within 30 days after such request, take, and cause each Loan Party
(other than an Affected Subsidiary) to take, whatever action (including the
recording of mortgages, the filing of Uniform Commercial Code financing
statements, the giving of notices and the endorsement of notices on title
documents) may be necessary or advisable in the reasonable opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the deeds of
trust, trust deeds, deeds to secure debt, mortgages, security agreement
supplements, IP Security Agreements and security and pledge agreements delivered
pursuant to this Section 6.12, enforceable against all third parties in
accordance with their terms,
(v)    within 60 days after such request, deliver to the Administrative Agent,
upon the request of the Administrative Agent in its reasonable discretion, a
signed copy of a favorable opinion, addressed to the Administrative Agent and
the other Secured Parties, of counsel for the Loan Parties reasonably acceptable
to the Administrative Agent as to the matters contained in clauses (ii) and
(iii) above, and as to such other matters as the Administrative Agent may
reasonably request, and

71

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

 

(vi)    as promptly as practicable after such request, deliver, upon the request
of the Administrative Agent in its sole discretion, to the Administrative Agent
with respect to each parcel of real property owned by the Borrower and its
Subsidiaries, title policies, surveys and engineering, soils and other reports,
and environmental assessment reports, each in scope, form and substance
reasonably satisfactory to the Administrative Agent, provided, however, that to
the extent that any Loan Party or any of its Subsidiaries shall have otherwise
received any of the foregoing items with respect to such real property, such
items shall, promptly after the receipt thereof, be delivered to the
Administrative Agent.
Notwithstanding anything to the contrary in this Section 6.12(c), no Loan Party
shall pledge more than of 65% of the Equity Interests of any Affected
Subsidiary; provided that if an entity that is an Affected Subsidiary ceases to
be an Affected Subsidiary, the provisions of this Section 6.12(c) shall apply to
such Subsidiary as of the time it ceases to be an Affected Subsidiary.
(d)    At any time upon reasonable request of the Administrative Agent, promptly
execute and deliver any and all further instruments and documents and take all
such other action as the Administrative Agent may deem reasonably necessary or
desirable in obtaining the full benefits of, or (as applicable) in perfecting
and preserving the Liens of, such guaranties, deeds of trust, trust deeds, deeds
to secure debt, mortgages, security agreement supplements, IP Security
Agreements and other security and pledge agreements.
(e)    Notwithstanding anything to the contrary herein or in any other Loan
Document,
(i)    provided that the Massachusetts Security Corporation complies with the
requirements necessary to qualify as a Massachusetts “Security Corporation”
pursuant to regulation 830 CMR63.38B.1 issued pursuant to Massachusetts General
Law c. 63, §38B, the Massachusetts Security Corporation shall not be required to
(i) become a Loan Party, (ii) guarantee the Obligations of Borrower, or (iii)
grant any pledge and security interest in and to the assets of the Massachusetts
Security Corporation; and
(ii)    the provisions of this Section 6.12 shall be applicable to the Patents
and Trademarks of any and all Loan Parties that are registered under the laws of
any Relevant Foreign Jurisdictions.
6.13    Compliance with Environmental Laws. Comply, and cause all lessees and
other Persons operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental Permits;
obtain and renew all Environmental Permits necessary for its operations and
properties; and conduct any investigation, study, sampling and testing, and
undertake any cleanup, response or other corrective action necessary to address
all Hazardous Materials at, on, under or emanating from any of properties owned,
leased or operated by it in accordance with the requirements of all
Environmental Laws; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal, remedial
or other action to the extent that its obligation to do so is being contested in
good faith

72

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

 

and by proper proceedings and appropriate reserves are being maintained with
respect to such circumstances in accordance with GAAP.
6.14    Further Assurances. Promptly upon request by the Administrative Agent,
or any Lender through the Administrative Agent, (a) correct any material defect
or error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (i) carry out more effectively
the purposes of the Loan Documents, (ii) to the fullest extent permitted by
applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties,
assets, rights or interests to the Liens now or hereafter intended to be covered
by any of the Collateral Documents, (iii) perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder and (iv) assure, convey, grant, assign,
transfer, preserve, protect and confirm more effectively unto the Secured
Parties the rights granted or now or hereafter intended to be granted to the
Secured Parties under any Loan Document or under any other instrument executed
in connection with any Loan Document to which any Loan Party or any of its
Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do
so.
6.15    Products and Required Permits.
(a)    Without limiting the generality of Section 6.08, in connection with the
development, testing, manufacture, marketing or sale of each and any Product by
the Borrower or any Subsidiary (other than Products abandoned in the ordinary
course of the Borrower’s business), the Borrower or such Subsidiary shall comply
in all material respects with all Required Permits at all times issued by any
Government Authority, specifically including the FDA, with respect to such
development, testing, manufacture, marketing or sales of such Product by the
Borrower or such Subsidiary.
(b)    Without limiting the generality of clause (a) above, Borrower shall
immediately and in any case within five (5) Business Days give written notice to
Administrative Agent upon a Responsible Officer of the Borrower becoming aware
that any of the representations and warranties set forth in Section 5.20 with
respect to any Product have become incorrect in any material respect (provided
that, for the avoidance of doubt, the giving of such notice shall not cure or
result in the automatic waiver of any Default or Event of Default that may have
resulted from such breach of such representation or warranty).
6.16    [Intentionally Omitted]
6.17    Information Regarding Collateral
(b)    Not effect any change (i) in any Loan Party’s legal name, (ii) in the
location of any Loan Party’s chief executive office, (iii) in any Loan Party’s
identity or organizational structure, (iv) in any Loan Party’s Federal Taxpayer
Identification Number or organizational identification number, if any, or (v) in
any Loan Party’s jurisdiction of organization (in each

73

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

 

case, including by merging with or into any other entity, reorganizing,
dissolving, liquidating, reorganizing or organizing in any other jurisdiction),
until (A) it shall have given the Administrative Agent not less than 15 days’
prior written notice (in the form of certificate signed by a Responsible
Officer), or such lesser notice period agreed to by the Administrative Agent, of
its intention so to do, clearly describing such change and providing such other
information in connection therewith as the Administrative Agent may reasonably
request and (B) it shall have taken all action reasonably satisfactory to the
Administrative Agent to maintain the perfection and priority of the security
interest of the Administrative Agent for the benefit of the Secured Parties in
the Collateral, if applicable. Each Loan Party agrees to promptly provide the
Administrative Agent with certified Organization Documents reflecting any of the
changes described in the preceding sentence.
(c)    Concurrently with the delivery of financial statements pursuant to
Section 6.01(a), deliver to the Administrative Agent a Perfection Certificate
and a certificate of a Responsible Officer of the Borrower.
6.18    Material Contracts. Perform and observe all the terms and provisions of
each Material Contract to be performed or observed by it, maintain each such
Material Contract in full force and effect, enforce each such Material Contract
in accordance with its terms, take all such action to such end as may be from
time to time reasonably requested by the Administrative Agent and, upon request
of the Administrative Agent, make to each other party to each such Material
Contract such demands and requests for information and reports or for action as
any Loan Party or any of its Subsidiaries is entitled to make under such
Material Contract, and cause each of its Subsidiaries to do so, except, in any
case, where the failure to do so, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
6.19    Designation as Senior Debt. Designate all Obligations as “Designated
Senior Debt” under, and defined in, Subordinated Indebtedness.
6.20    Anti-Corruption Laws. Conduct its businesses in compliance in all
material respects with applicable anti-corruption laws and maintain policies and
procedures designed to promote and achieve compliance with such laws.
6.21    Post-Closing Covenants. On or before the applicable date set forth below
for each action described below, or such later date agreed to in writing by
Administrative Agent in its sole discretion, Borrower shall take, or cause to be
taken, the action specified and deliver the required agreements, as applicable.
The failure to have taken such actions or deliver such agreements shall not
constitute a Default or an Event of Default or a breach of any representation
and warranty until the date specified below (as such date may be extended as
provided above in this Section 6.21); provided that failure to have taken such
action or make such required delivery by the date required by this Section 6.21
shall be an immediate Event of Default.
(a)    Loan Parties shall obtain and deliver to Agent within 60 days after the
Closing Date fully executed Control Agreements (as defined in the Security
Agreement) for all deposit accounts, securities accounts and commodities
accounts of the Loan Parties (other than Excluded Accounts (as defined in the
Security Agreement)).

74

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

 

(b)    Loan Parties shall within 60 days of the Closing Date deliver a pledge,
pursuant to documentation reasonably acceptable to Administrative Agent and
effective under the laws of the Relevant Foreign Jurisdictions, of all Patents
and Trademarks registered under such laws, together with opinions of counsel in
form and substance reasonably satisfactory to the Administrative Agent, and
thereafter, within 60 days of notice from the Administrative Agent, deliver a
pledge, pursuant to documentation reasonably acceptable to the Administrative
Agent and effective under the laws of such additional jurisdiction as the
Administrative Agent shall reasonably request, all Patents and Trademarks
registered under such laws, together with opinions of counsel in form and
substance reasonably satisfactory to the Administrative Agent.
(c)    Loan Parties shall within 30 days of the Closing Date deliver to the
Administrative Agent all certificates and instruments evidencing the Equity
Interests of the direct Foreign Subsidiaries of the Loan Parties that constitute
Pledged Collateral (as defined in the Security Agreement), accompanied by
undated stock powers or instruments of transfer executed in blank.
(d)    Loan Parties shall within 14 days of the Closing Date deliver to the
Administrative Agent all Pledged Debt Securities (as defined in the Security
Agreement), to the extent not already delivered on the Closing Date.
ARTICLE VII.    NEGATIVE COVENANTS
So long as any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, the Borrower shall not, nor shall it permit any Subsidiary to,
directly or indirectly:
7.01    Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, or sign
or file or suffer to exist under the Uniform Commercial Code of any jurisdiction
a financing statement that names the Borrower or any of its Subsidiaries as
debtor, or assign any accounts or other right to receive income, other than the
following:
(j)    Liens pursuant to any Loan Document;
(k)    Liens existing on the date hereof and listed on Schedule 5.08(b) and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased
except as contemplated by Section 7.03(b), (iii) the direct or any contingent
obligor with respect thereto is not changed, and (iv) any renewal or extension
of the obligations secured or benefited thereby is permitted by Section 7.03(b);
(l)    Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

75

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

 

(m)    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 30 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 adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;
(n)    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;
(o)    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;
(p)    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;
(q)    Liens securing judgments for the payment of money not constituting an
Event of Default under Section 8.01(h);
(r)    Liens securing Indebtedness permitted under Section 7.03(e) and 7.03(v);
provided that (A) such Liens attach concurrently with or within 270 days after
the acquisition, repair, replacement, construction or improvement (as
applicable) of the property subject to such Liens, (B) such Liens do not at any
time encumber any property other than the property financed by such Indebtedness
except for accessions to such property and the proceeds and the products thereof
and (C) with respect to Capitalized Lease Obligations, such Liens do not at any
time extend to or cover any assets (except for accessions to or proceeds of such
assets) other than the assets subject to such Capitalized Lease Obligations;
provided further that individual financings of equipment provided by one lender
may be cross collateralized to other financings of equipment provided by
such lender;
(s)    Liens on the assets of Foreign Subsidiaries securing Indebtedness
permitted under Section 7.03(j);
(t)    Liens (other than on Cystic Fibrosis Drug Franchise Assets) securing
Indebtedness permitted by 7.03(g) in an aggregate amount not to exceed the
Threshold Amount at any time outstanding;
(u)    leases, licenses, subleases or sublicenses to the extent permitted under
7.05(f) and 7.05(j);
(v)    Liens (A) in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the importation of
goods in the

76

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

 

ordinary course of business or (B) on specific items of inventory or other goods
and proceeds of any Person securing such Person’s obligations in respect of
bankers’ acceptances or letters of credit permitted under Section 7.03 and
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods in the ordinary course of
business;
(w)    Liens of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection;
(x)    Liens (A) on cash advances or escrow deposits in favor of the seller of
any property to be acquired in an Investment permitted pursuant to Section 7.02
to be applied against the purchase price for such Investment or otherwise in
connection with any escrow arrangements with respect to any such Investment or
any Disposition permitted under Section 7.05 (including any letter of intent or
purchase agreement with respect to such Investment or Disposition), or (B)
consisting of an agreement to dispose of any property in a Disposition permitted
under Section 7.05, in each case, solely to the extent such Investment or
Disposition, as the case may be, would have been permitted on the date of the
creation of such Lien;
(y)    Liens granted by a Subsidiary that is not a Loan Party in favor of any
Loan Party;
(z)    Liens existing on property at the time of its acquisition or existing on
the property of any Person at the time such Person becomes a Subsidiary, in each
case after the date hereof (other than Liens on the Equity Interests of any
Person that becomes a Subsidiary); provided that (A) such Lien was not created
in contemplation of such acquisition or such Person becoming a Subsidiary, (B)
such Lien does not extend to or cover any other assets or property (other than
the proceeds or products thereof and other than after-acquired property subject
to a Lien securing Indebtedness and other obligations incurred prior to such
time and which Indebtedness and other obligations are permitted hereunder that
require or include, pursuant to their terms at such time, a pledge of
after-acquired property, it being understood that such requirement shall not be
permitted to apply to any property to which such requirement would not have
applied but for such acquisition), and (C) the Indebtedness secured thereby is
permitted under Section 7.03(n);
(aa)    Liens deemed to exist in connection with Investments in repurchase
agreements related to Cash Equivalents;
(bb)    Liens that are contractual rights of setoff (A) relating to the
establishment of depository relations with banks not given in connection with
the incurrence of Indebtedness for borrowed money or (B) relating to purchase
orders and other agreements entered into with customers of the Borrower or any
of its Subsidiaries in the ordinary course of business;
(cc)    Liens on cash pledged to secure Indebtedness permitted by Section
7.03(h);

77

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

 

(dd)    Liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto and deposits made in the ordinary
course of business to secure liability to insurance carriers; and
(ee)    (A) zoning, building, entitlement and other land use regulations by
Governmental Authorities with which the normal operation of the business
complies, and (B) any zoning or similar law or right reserved to or vested in
any Governmental Authority to control or regulate the use of any real property
that does not materially interfere with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries.
7.02    Investments. Make any Investments, except:
(g)    Investments held by the Borrower or such Subsidiary in the form of Cash
Equivalents;
(h)    Loans or advances to officers, directors and employees of the Borrower
and Subsidiaries (i) in an aggregate amount not to exceed $5,000,000 at any time
outstanding, for relocation (ii) to purchase stock in the Borrower, provided
that such Investments shall be non-cash, and (iii) for entertainment, travel and
similar ordinary business purposes;
(i)    (i) Investments by the Borrower and its Subsidiaries in their respective
Subsidiaries outstanding on the date hereof, (ii) additional Investments by the
Borrower and its Subsidiaries in Loan Parties (other than Holdings), (iii)
additional Investments by Subsidiaries of the Borrower that are not Loan Parties
in other Subsidiaries that are not Loan Parties and (iv) so long as no Event of
Default has occurred and is continuing or would result from such Investment,
additional Investments by the Loan Parties in Subsidiaries that are not Loan
Parties in an aggregate amount invested from the date hereof not to exceed, in
the aggregate with any Guarantees provided under Section 7.03(k), $20,000,000 in
cash Investments over the term of this Agreement (provided that Cystic Fibrosis
Drug Franchise Assets may not be invested in non-Loan Party Subsidiaries under
this Section 7.02(c));
(j)    Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;
(k)    Guarantees permitted by Section 7.03;
(l)    Investments existing on the date hereof (other than those referred to in
Section 7.02(c)(i)) and set forth on Schedule 5.08(e);
(m)    other Investments not exceeding $15,000,000 in the aggregate in any
fiscal year of the Borrower;

78

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

 

(n)    acquisitions of, investments in, and loans and advances to, joint
ventures and other Persons by the Borrower and its Subsidiaries, so long as the
aggregate amount invested, loaned or advanced (determined without regard to any
write-downs or write-offs of such investments, loans or advances) does not
exceed, when aggregated with all other Investments made by the Borrower and its
Subsidiaries pursuant to this Section 7.02(h) and Section 7.02(i), $100,000,000
per year, subject to the further provisions of this Section 7.02;
(o)    Permitted Acquisitions;
(p)    [intentionally omitted];
(q)    promissory notes and other non-cash consideration received in connection
with Dispositions permitted by Section 7.05;
(r)    Investments in the ordinary course of business consisting of Uniform
Commercial Code Article 3 endorsements for collection or deposit and Uniform
Commercial Code Article 4 customary trade arrangements with customers consistent
with past practices;
(s)    advances of payroll payments to employees in the ordinary course of
business;
(t)    Investments of a Subsidiary acquired after the Closing Date or of a
Person merged, amalgamated or consolidated with any Subsidiary in accordance
with this Section and Section 7.04 after the Closing Date (other than existing
Investments in Subsidiaries of such Subsidiary or Person) to the extent that
such Investments were not made in contemplation of or in connection with such
acquisition, merger, amalgamation or consolidation and were in existence on the
date of such acquisition, merger, amalgamation or consolidation;
(u)    the licensing, sublicensing, or contribution of rights in any IP Rights
pursuant to licensing, joint marketing, distribution, or development
arrangements in the ordinary course of business and permitted under Section
7.05(f);
(v)    Investments to the extent that payment for such Investments is made
solely by the issuance of Equity Interests of the Borrower (or any direct or
indirect parent of the Borrower) to the seller of such Investments;
(w)    Subsidiaries of Borrower may be established or created if the Borrower
and such Subsidiary comply with the requirements of Section 6.12, if applicable;
provided that, in each case, to the extent such new Subsidiary is created solely
for the purpose of consummating an acquisition permitted by this Section 7.02,
and such new Subsidiary at no time holds any assets or liabilities other than
any merger consideration contributed to it contemporaneously with the closing of
such transactions, such new Subsidiary shall not be required to take the actions
set forth in Section 6.12, as applicable, until the respective acquisition is
consummated (at which time the surviving entity of the respective transaction
shall be required to so comply in accordance with the provisions thereof);

79

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

 

(x)    Investments in Swap Contracts permitted hereunder; and
(y)    Investments by the Borrower in the Massachusetts Security Corporation;
provided that the baskets in sections 7.02(h) and 7.02(i) above shall be
unlimited:
(x) if during the Borrower’s most recently ended fiscal quarter the Borrower’s
net product revenue (as calculated in accordance with GAAP consistent with past
practice) exceeded $400,000,000; or
(y) if the requirements of clause (x) above have not been satisfied for such
fiscal quarter, to the extent that the Borrower and its Subsidiaries maintain in
the aggregate at least $450,000,000 in cash and/or Cash Equivalents (the
“Required Cash”) (which value will be determined on a daily basis) immediately
after giving effect to the applicable Investment; provided that Required Cash as
used in this Section shall be increased by the amount of any advance of
Incremental Loans and shall be reduced by any payments made under Section
2.03(a) or Section 2.04.
Notwithstanding anything in this Agreement to the contrary, without consent of
the Administrative Agent, cash payments for contingent or other obligations
shall not be permitted with respect to any Investment otherwise permitted under
Section 7.02(h) or 7.02(i) unless and only to the extent the Borrower and its
Subsidiaries are permitted to make an Investment in such amount under Section
7.02(h) or 7.02(i) (as modified by these further provisions to Section 7.02) on
the date of such cash payment.
7.03    Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:
(a)    Indebtedness under the Loan Documents;
(b)    Indebtedness outstanding on the date hereof and listed on Schedule 7.03
and any refinancings, refundings, renewals or extensions thereof; provided that
(i) the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and the direct or any
contingent obligor with respect thereto is not changed, as a result of or in
connection with such refinancing, refunding, renewal or extension and (ii) the
terms relating to principal amount, amortization, maturity, collateral (if any)
and subordination (if any), and other material terms taken as a whole, of any
such refinancing, refunding, renewing or extending Indebtedness, and of any
agreement entered into and of any instrument issued in connection therewith, are
no less favorable in any material respect to the Loan Parties or the Lenders
than the terms of any agreement or instrument governing the Indebtedness being
refinanced, refunded, renewed or extended and the interest rate applicable to
any such refinancing, refunding, renewing or extending Indebtedness does not
exceed the then applicable market interest rate;

80

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

 

(c)    Guarantees of the Borrower or any Guarantor in respect of Indebtedness
otherwise permitted hereunder of the Borrower or any Guarantor;
(d)    obligations (contingent or otherwise) of the Borrower or any Subsidiary
existing or arising under any Swap Contract, provided that such obligations are
(or were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a “market view”;
(e)    Indebtedness in respect of capital leases (other than capitalized real
estate leases), Synthetic Lease Obligations and purchase money obligations for
fixed or capital assets within the limitations set forth in Section 7.01(i);
provided, however, that the aggregate amount of all such Indebtedness at any one
time outstanding shall not exceed (i) $35,000,000 per year for fiscal year 2014
and (ii) $30,000,000 per year for each fiscal year thereafter;
(f)    Indebtedness under the Master Lease Agreement No. 1, dated as of June 26,
2013, among the Borrower and Macquarie Corporate and Asset Funding Inc., and
related documents and all refinancings thereof;
(g)    Indebtedness in an aggregate principal amount not to exceed $15,000,000
at any time outstanding;
(h)    Indebtedness in respect of a letter of credit facility with Bank of
America, N.A. (or one of its affiliates or any other letter of credit issuer) in
an aggregate amount not to exceed $35,000,000;
(i)    Subordinated Indebtedness consisting of convertible subordinated debt
instruments so long as (i) such convertible subordinated debt matures at least
12 months after the Maturity Date, (ii) such convertible subordinated debt does
not amortize or make any other cash principal payments other than as agreed to
by the Required Lenders, (iii) interest and fees with respect to such
convertible subordinated debt are on prevailing market terms and (iv) such
convertible subordinated debt is subordinated to the Obligations on customary
terms reasonably acceptable to the Required Lenders;
(j)    Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed
$20,000,000 at any time outstanding;
(k)    Unsecured Guarantees by the Borrower or any of its Subsidiaries of
Indebtedness of Foreign Subsidiaries pursuant to Section 7.03(j);
(l)    Indebtedness permitted pursuant to Section 7.02(c);
(m)    Indebtedness of any Subsidiary that is not a Loan Party owing to any
other Subsidiary that is not a Loan Party;

81

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

 

(n)    Indebtedness of any Person that becomes a Subsidiary of the Borrower (or
of any Person not previously a Guarantor that is merged, amalgamated or
consolidated with or into the Borrower or a Guarantor) after the Closing Date as
a result of a Permitted Acquisition, or Indebtedness of any Person that is
assumed by the Borrower or any of its Subsidiaries in connection with an
acquisition of assets by the Borrower or such Subsidiary in a Permitted
Acquisition, and all refinancings thereof; provided that (A) such Indebtedness
is not incurred in contemplation of such Permitted Acquisition, (B) provided
further that the aggregate principal amount of Indebtedness that is outstanding
in reliance on this clause (vii) shall not, at any time outstanding, exceed
$25,000,000;
(o)    Indebtedness representing deferred compensation or stock-based
compensation to employees of the Borrower and its Subsidiaries incurred in the
ordinary course of business;
(p)    Indebtedness constituting indemnification obligations or obligations in
respect of purchase price or other similar adjustments incurred in a Permitted
Acquisition, any other Investment or any Disposition, in each case permitted
under this Agreement;
(q)    Indebtedness consisting of obligations under deferred consideration
(earn-outs, indemnifications, incentive non-competes, milestone payments and
other contingent obligations) or other similar arrangements incurred in
connection with any Permitted Acquisition or other Investment permitted
hereunder;
(r)    obligations of the Borrower or any of its Subsidiaries in respect of any
overdraft and related liabilities arising from treasury, depository, credit
card, purchasing card and cash management services or any automated clearing
house transfers of funds and other Indebtedness in respect of netting services,
overdraft protections, cash pooling, employee credit cards and similar
arrangements, in each case, in connection with deposit accounts in the ordinary
course of business;
(s)    Indebtedness incurred by the Borrower or any of its Subsidiaries in
respect of bankers’ acceptances or similar instruments (other than letters of
credit) issued or created in the ordinary course of business in an aggregate
amount not to exceed $5,000,000, including in respect of workers compensation
claims, health, disability or other employee benefits or property, casualty or
liability insurance or self-insurance or other reimbursement-type obligations
(other than obligations in respect of letters of credit) regarding workers
compensation claims; provided that the reimbursement obligations in respect
thereof are reimbursed within 60 days following the date thereof;
(t)    obligations in respect of performance, bid, appeal and surety bonds and
performance and completion guarantees and similar obligations provided by the
Borrower or any of its Subsidiaries, in each case in the ordinary course of
business or consistent with past practice and in an aggregate amount not to
exceed $5,000,000;
(u)    Indebtedness consisting of insurance premium financing and take or pay
obligations contained in supply agreements in the ordinary course of business;
and

82

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

 

(v)    Indebtedness in respect of capitalized real estate leases.
7.04    Fundamental Changes. Merge, dissolve, liquidate, consolidate with or
into another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Event of Default exists or would result therefrom:
(a)    any Subsidiary may merge with or liquidate into (i) the Borrower,
provided that the Borrower shall be the continuing or surviving Person, or (ii)
any one or more other Subsidiaries, provided that when any Guarantor is merging
with or liquidating into another Subsidiary, the Guarantor shall be the
continuing or surviving Person;
(b)    any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to the Borrower or to another
Subsidiary; provided that if the transferor in such a transaction is a
Guarantor, then the transferee must either be the Borrower or Guarantor;
(c)    the Borrower may merge, amalgamate or consolidate with any other Person;
provided that (A) the Borrower shall be the continuing or surviving Person, (B)
any Investment in connection therewith is permitted under Section 7.02, (C) no
Event of Default shall have occurred and be continuing and (D) that such merger,
consolidation or amalgamation shall not include or result in any contingent
liabilities that could reasonably be expected to be materially adverse to the
business, financial condition, or operations of the Borrower and its
Subsidiaries, taken as a whole (as determined in good faith by the board of
directors (or persons performing similar functions) of the Borrower or such
Subsidiary if the board of directors is otherwise approving such transaction
and, in each other case, by a Responsible Officer);
(d)    any Subsidiary of the Borrower may merge, consolidate or amalgamate with
any other Person in order to effect an Investment permitted pursuant to
Permitted Acquisitions under Section 7.02; provided that the continuing or
surviving Person shall be a Subsidiary of the Borrower (or if any of the
Subsidiaries is a Loan Party then the surviving Person shall be a Loan Party),
which together with each of its Subsidiaries, shall have complied with the
requirements of Section 6.12 (or arrangements for the compliance with such
requirements within the applicable times set forth in Section 6.12 shall have
been made) and if the other party to such transaction is not a Loan Party, no
Event of Default exists after giving effect to such transaction; and
(e)    any Subsidiary of the Borrower may effect a merger, dissolution,
liquidation consolidation or amalgamation to effect a Disposition permitted
pursuant to Section 7.05; provided that if the other party to such transaction
is not a Loan Party, no Event of Default exists after giving effect to such
transaction.
7.05    Dispositions. Make any Disposition or enter into any agreement to make
any Disposition, except:

83

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

 

(a)    Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b)    Dispositions of inventory in the ordinary course of business;
(c)    Dispositions of equipment to the extent that (i) such property is
exchanged for credit against the purchase price of similar replacement property
or (ii) the proceeds of such Disposition are reasonably promptly applied to the
purchase price of such replacement property;
(d)    Dispositions of property by the Borrower or any Subsidiary to the
Borrower or to a wholly-owned Subsidiary; provided that, if the transferor of
such property is the Borrower or a Guarantor, the transferee thereof must either
be the Borrower or a Guarantor;
(e)    transactions permitted by Section 7.04, Investments permitted by Section
7.02, Restricted Payments permitted by Section 7.06 and Liens permitted by
Section 7.01, to the extent they can also be deemed to be Dispositions;
(f)    the licensing, sublicensing or contribution of rights in any IP Rights
pursuant to licensing, joint marketing, distribution, or development
arrangements in the ordinary course of business in the life science industry and
substantially consistent with past practice (provided if any one or more of the
foregoing could reasonably be expected to result in a Material Adverse Effect,
the prior written consent of the Required Lenders shall be required, which
consent may not be unreasonably withheld or delayed);
(g)    Dispositions by the Borrower and its Subsidiaries of Products and
business lines not otherwise permitted under this Section 7.05; provided that at
the time of such Disposition, no Event of Default shall exist or would result
from such Disposition;
(h)    Dispositions of Cash Equivalents in the ordinary course of business and
consistent with past practices;
(i)    Dispositions of accounts receivable in connection with the collection or
compromise thereof (other than in connection with financing transactions);
(j)    leases, subleases of real property or equipment, licenses or sublicenses,
in each case in the ordinary course of business in the life science industry and
that do not materially interfere with the business of the Borrower and its
Subsidiaries, taken as a whole;
(k)    transfers of property subject to Casualty Events upon receipt of the Net
Proceeds of such Casualty Event;
(l)    Dispositions of Investments in joint ventures to the extent required by,
or made pursuant to customary buy/sell arrangements between, the joint venture
parties set forth in joint venture arrangements and similar binding
arrangements;

84

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

 

(m)    the lapse or abandonment of any IP Rights (other than Material IP Rights)
or registrations (or applications for registration) with respect thereto which
in the good faith judgment of the Borrower are no longer used or useful in its
business, to the extent permitted under the Security Agreement;
(n)    the unwinding of Swap Contracts permitted hereunder pursuant to their
terms; and
(o)    Dispositions of IP Rights (other than an assignment of Patents and
Trademarks that are Cystic Fibrosis Drug Franchise Assets) owned by a Loan Party
to a Foreign Subsidiary of the Borrower; provided that (i) the Foreign
Subsidiary receiving such IP Rights shall covenant and agree not to pledge any
interest in such IP Rights to any Person, (ii) any such transferred IP Rights
shall be subject to an exclusive license in favor of the Loan Parties for use in
the United States in form and substance reasonably satisfactory to the
Administrative Agent, and which license shall not be subject to any
anti-assignment or change of control provisions (in each case limiting the Loan
Party), shall expressly permit the creation, continuation and performance of the
Security Interests (as defined in the Security Agreement), shall be terminable
at will and subject to a first lien security interest in favor of the
Administrative Agent, and (iii) any Foreign Subsidiary receiving such IP Rights
shall not conduct any other material business other than (1) holding such IP
Rights, (2) entering into license agreements in the ordinary course of business
with Foreign Subsidiaries for use of such IP Rights in foreign jurisdictions and
(3) entering into license agreements with third parties for use in foreign
jurisdictions in the ordinary course of business in the life sciences industry;
provided that the license agreement referred to in clause (ii) shall, at a
minimum, (1) be perpetual, (2) provide the Administrative Agent and its
successors and assigns the rights and remedies upon an Event of Default provided
for other permitted IP Rights licenses and arrangements under the Security
Agreement, (3) require the Administrative Agent’s consent for any amendment of
the license agreement that alters the terms and conditions of the license
agreement in any manner adverse to the interests of a Loan Party or the Lenders,
(4) specify that it may not be terminated in connection with a Loan Party’s
bankruptcy, (5) include the right of any Loan Party that is a party thereto to
assume and assign the license in the event of its bankruptcy or insolvency, and
(6) include a covenant by the Foreign Subsidiary not to move for, or consent to,
the termination of or rejection of the license in a bankruptcy or insolvency of
the Foreign Subsidiary;
provided, however, that (x) any Disposition pursuant to subsections (a) through
(l)) shall be for fair market value, other than any Disposition of the type
referenced in the proviso to subsections (d), (i) and (k) above and (y) the
Dispositions permitted under subsections (e) (other than with respect to
7.02(o)), (g), (l)and (m) above shall not be permitted to the extent relating to
Cystic Fibrosis Drug Franchise Assets or the Borrower or Subsidiaries that own
or otherwise have rights with respect thereto.
7.06    Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Event

85

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

 

of Default shall have occurred and be continuing at the time of any action
described below or would result therefrom:
(a)    each Subsidiary may make Restricted Payments to the Borrower, the
Guarantors and any other Person that owns an Equity Interest in such Subsidiary,
ratably according to their respective holdings of the type of Equity Interest in
respect of which such Restricted Payment is being made;
(b)    the Borrower and each Subsidiary may declare and make dividend payments
or other distributions payable solely in the common stock or other common Equity
Interests of such Person;
(c)    the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire Equity Interests issued by it with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
Equity Interests; and
(d)    the Borrower and each of its Subsidiaries may (A) repurchase at the issue
price Equity Interests held by former directors, officers, employees and
consultants; (B) pay withholding or similar Taxes payable by present or former
directors, officers, employees or consultants in respect of their Equity
Interests and (C) repurchase Equity Interests deemed to occur upon a cashless
exercise of options or warrants, provided, that such payments in clauses (A) and
(B) shall not exceed $5,000,000 in the aggregate;
(e)    to the extent constituting Restricted Payments, the Borrower and its
Subsidiaries may enter into transactions expressly permitted by Sections 7.02
and 7.04; and
(f)    the Borrower or any of its Subsidiaries may (i) pay cash in lieu of
fractional shares in connection with any dividend, split or combination thereof
or any Permitted Acquisition and (ii) honor any non-cash conversion request by a
holder of convertible Indebtedness and make cash payments in lieu of fractional
shares in connection with any such conversion.
7.07    Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.
7.08    Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate, provided that the foregoing restriction shall not apply
to transactions between or among the Borrower and any Guarantor or between and
among any Guarantors.
7.09    Burdensome Agreements. Enter into any Contractual Obligation (other than
this Agreement or any other Loan Document) that (a) limits the ability (i) of
any Subsidiary to make

86

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

 

Restricted Payments to the Borrower or any Guarantor or to otherwise transfer
property to the Borrower or any Guarantor (other than covenants in debt
agreements permitted by Section 7.03(g) (j) or (n) in respect of Foreign
Subsidiaries), (ii) of any Domestic Subsidiary to Guarantee the Indebtedness of
the Borrower or (iii) of the Borrower or any Domestic 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 (A) any holder of Indebtedness permitted under
Section 7.03(e) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness or (B) any party to a
Customer Agreement, license or other similar agreement or arrangement permitted
by Section 7.10; 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.
7.10    Customer Agreements. Enter into any Customer Agreement, license or other
similar agreement or arrangement that restricts security interests or other
assignments or that would restrict or otherwise impair the rights of the
Administrative Agent and the Lenders in the event of a “change in control” (or
like term), unless either (a) the Borrower determines in its good faith business
judgment that such a restriction is commercially reasonable under the
circumstances (provided that this clause (a) shall not apply to such
arrangements among the Borrower and its Subsidiaries) or (b) the Administrative
Agent and the Required Lenders shall have given their prior written consent.
7.11    Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose; provided
that the Borrower and its Subsidiaries may receive and hold margin stock under
Customer Agreements, licenses and similar agreements or arrangements with an
aggregate value not to exceed 10% of the consolidated assets of the Borrower and
its Subsidiaries at any time.
7.12    Kalydeco Product Revenue. Borrower shall maintain a minimum trailing
twelve months Kalydeco Product US and Foreign Revenue of at least $400,000,000
tested on a quarterly basis and calculated using the foreign currency exchange
rates used in producing the financial statements delivered under clauses (a) and
(b) of Section 6.01 and otherwise calculated in a manner consistent with the
manner in which revenue is calculated for such financial statements (or, in the
event Kalydeco Product US and Foreign Revenue is less than $400,000,000, but
greater than $300,000,000, the Borrower may use the foreign currency exchange
rates for the relevant currencies that were in effect on the Closing Date to the
extent as such exchange rates are obtained from the same source as the rates
used in producing the most recent financial statements delivered under clauses
(a) and (b) of Section 6.01).
7.13    Capital Expenditures. Make or become legally obligated to make any
expenditure in respect of the purchase or other acquisition of any fixed or
capital asset (excluding normal replacements and maintenance which are properly
charged to current operations) at any time when an Event of Default (including
non-compliance with Section 7.11) has occurred and is continuing.
7.14    Amendment of Organization Documents. Amend any of its Organization
Documents in a manner adverse to the Lenders in any material respect.

87

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

 

7.15    Accounting Changes. Make any change in (a) accounting policies or
reporting practices, except as required by GAAP, or (b) fiscal year.
7.16    Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Indebtedness, except
(a) the prepayment of the Credit Extensions in accordance with the terms of this
Agreement and (b) regularly scheduled or required repayments or redemptions of
Indebtedness set forth in Schedule 7.03 and refinancings and refundings of such
Indebtedness in compliance with Section 7.03(g).
7.17    Designation of Senior Debt. Designate any Indebtedness (other than the
Indebtedness under the Loan Documents) of the Borrower or any of its
Subsidiaries as “Designated Senior Debt” (or any similar term) under, and as
defined in, any Subordinated Indebtedness.
7.18    Amendment, Etc. of Material Contracts and Indebtedness. (a) Take any
action (including modifications and terminations) in connection with any
Material Contract (other than as set forth in clauses (b) and (c) below) that
would impair the value of the interest or rights of any Loan Party thereunder or
that would adversely impair the rights or interests of the Administrative Agent
or any Lender in any material respect, except with the written consent of the
Required Lenders, which consent may not be unreasonably withheld or delayed or
(b) amend, modify or change in any manner any term or condition of any
Indebtedness (other than Subordinated Indebtedness) set forth in Schedule 7.03,
except for any refinancing, refunding, renewal or extension thereof permitted by
Section 7.03(g), that would impair the value of the interest or rights of any
Loan Party thereunder or that would adversely impair the rights or interests of
the Administrative Agent or any Lender in any material respect, except with the
written consent of the Required Lenders, which consent may not be unreasonably
withheld or delayed or (c) amend, modify or change in any manner any term or
condition of any Subordinated Indebtedness other than pursuant to the
subordination provisions thereof.
7.19    Sanctions. Directly or indirectly, use the proceeds of any Credit
Extension, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other individual or entity, to fund any
activities of or business with any individual or entity, or in any Designated
Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or
in any other manner that will result in a violation by any individual or entity
(including any individual or entity participating in the transaction, whether as
Lender, Administrative Agent, or otherwise) of Sanctions.
7.20    Anti-Corruption Laws. Directly or indirectly use the proceeds of any
Credit Extension 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.
7.21    Pension Plan. Adopt, sponsor or maintain a Pension Plan or retiree group
medical plan.
7.22    Massachusetts Security Corporation.

88

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

 

(a)    The Borrower shall not permit any Subsidiary that is a Massachusetts
Security Corporation to hold cash, Cash Equivalents or other investments or
securities with an aggregate value in excess of $1.00, unless the Loan Parties
maintain at least $300,000,000 in cash and/or Cash Equivalents (which value will
be determined on a daily basis) in Deposit Accounts and/or Securities Accounts,
which cash, Cash Equivalents, Deposit Accounts and Securities Accounts are
subject to the control of the Administrative Agent under Control Agreements (as
defined in the Security Agreement). For the avoidance of doubt, the Loan Parties
are not required to maintain any minimum balance in cash and/or Cash Equivalents
in Deposit Accounts and/or Securities Accounts, which cash, Cash Equivalents,
Deposit Accounts and Securities Accounts are subject to the control of the
Administrative Agent under Control Agreements.
(b)    With regard to the Massachusetts Security Corporation, conduct, transact
or otherwise engage in any material operating or business activities other than
investment activities that would not reasonably be expected to result in the
loss of the Massachusetts Security Corporation’s qualification as a
Massachusetts security corporation under Mass. Gen. L. c. 63, §38B.
ARTICLE VIII.    EVENTS OF DEFAULT AND REMEDIES
8.01    Events of Default. Any of the following shall constitute an Event of
Default:
(z)    Non-Payment. The Borrower or any other Loan Party fails to pay (i) when
and as required to be paid herein, any amount of principal of any Loan, or (ii)
within three Business Days after the same becomes due, any interest on any Loan,
or any fee due hereunder, or (iii) within five Business Days after the same
becomes due, any other amount payable hereunder or under any other Loan
Document; or
(aa)    Specific Covenants. (i) The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Section 6.03, 6.05, 6.10, 6.11,
6.12, 6.15, 6.17, 6.19, 6.20, 6.21 or Article VII, (ii) the Borrower fails to
perform or observe any term, covenant or agreement contained in Section 6.01 or
6.02 for five (5) Business Days, or (iii) any of the Loan Parties fails to
perform or observe any term, covenant or agreement contained in
Sections 2.02(a), 2.06(b), 2.06(c), 3.04(f), 3.04(g), 3.05(e) and 3.06 of the
Security Agreement; or
(bb)    Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or
(cc)    Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or

89

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

 

(dd)    Cross-Default. (i) In respect of any Indebtedness or Guarantee (other
than Indebtedness hereunder and Indebtedness under Swap Contracts) having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, the Borrower or any Subsidiary
(A) fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of such Indebtedness
or Guarantee, or (B) fails to observe or perform any other agreement or
condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any
Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which the
Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap Contract
as to which the Borrower or any Subsidiary is an Affected Party (as so defined)
and, in either event, the Swap Termination Value owed by the Borrower or such
Subsidiary as a result thereof is greater than the Threshold Amount; or
(ee)    Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
(other than Immaterial Subsidiaries) institutes or consents to the institution
of any proceeding under any Debtor Relief Law, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for 60 calendar days; or any proceeding under
any Debtor Relief Law relating to any such Person or to all or any material part
of its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(ff)    Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary
(other than Immaterial Subsidiaries) becomes unable or admits in writing its
inability or fails generally to pay its debts as they become due, or (ii) any
writ or warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within 30 days after its issue or levy;
or
(gg)    Judgments. There is entered against the Borrower or any Subsidiary
(i) one or more final judgments or orders for the payment of money in an
aggregate amount (as to

90

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

 

all such judgments or orders) exceeding the Threshold Amount (to the extent not
covered by independent third-party insurance as to which the insurer does not
dispute coverage), or (ii) any one or more non-monetary final judgments that
have, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 10 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
(hh)    ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(ii)    Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document;
(jj)    Collateral Documents. Any Collateral Document after delivery thereof
pursuant to Section 4.01 or 6.12 shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority Lien
(subject to Liens permitted by Section 7.01) on the Collateral purported to be
covered thereby; or
(kk)    Subordination. (i) The subordination provisions of Subordinated
Indebtedness (the “Subordination Provisions”) shall, in whole or in part,
terminate, cease to be effective or cease to be legally valid, binding and
enforceable against any holder of the applicable Subordinated Indebtedness; or
(ii) the Borrower or any other Loan Party shall, directly or indirectly, disavow
or contest in any manner (A) the effectiveness, validity or enforceability of
any of the Subordination Provisions, (B) that the Subordination Provisions exist
for the benefit of the Administrative Agent and the Lenders or (C) that all
payments of principal of or premium and interest on the applicable Subordinated
Indebtedness, or realized from the liquidation of any property of any Loan
Party, shall be subject to any of the Subordination Provisions.
(ll)    IP Event of Default. There occurs any IP Event of Default; or
(mm)    Change of Control. There occurs any Change of Control.

91

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

 

8.02    Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:
declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, any Make Whole Premium required under Section
2.03(c) and all other premiums with respect thereto, and all other amounts owing
or payable hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however, that
upon the occurrence of an actual or deemed entry of an order for relief with
respect to the Borrower under the Bankruptcy Code of the United States, the
unpaid principal amount of all outstanding Loans and all interest, any Make
Whole Premium required under Section 2.03(c) and all other premiums and other
amounts as aforesaid shall automatically become due and payable, without further
act of the Administrative Agent or any Lender.
8.03    Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable), any amounts received on account of the Obligations shall be applied by
the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including fees, charges and disbursements of counsel to the respective
(including fees and time charges for attorneys who may be employees of any
Lender and amounts payable under Article III), ratably among them in proportion
to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and other Obligations, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to
them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.
ARTICLE IX.    ADMINISTRATIVE AGENT
9.01    Appointment and Authority. (1) Each of the Lenders hereby irrevocably
appoints Macquarie US Trading LLC to act on its behalf as the Administrative
Agent hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions

92

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

 

of this Article are solely for the benefit of the Administrative Agent, the
Lenders, and neither the Borrower nor any other Loan Party shall have rights as
a third party beneficiary of any of such provisions. 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 the Administrative 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.
(w)    The Administrative Agent shall also act as the “collateral agent” under
the Loan Documents, and each of the Lenders hereby irrevocably appoints and
authorizes the Administrative Agent to act as the agent of such Lender for
purposes of acquiring, holding and enforcing any and all Liens on Collateral
granted by any of the Loan Parties to secure any of the Obligations, together
with such powers and discretion as are reasonably incidental thereto. In this
connection, the Administrative Agent, as “collateral agent” and any co-agents,
sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant
to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral
(or any portion thereof) granted under the Collateral Documents, or for
exercising any rights and remedies thereunder at the direction of the
Administrative Agent), shall be entitled to the benefits of all provisions of
this Article IX and Article XI (including Section 11.04(c), as though such
co-agents, and attorneys-in-fact were the “collateral agent” under the Loan
Documents) as if set forth in full herein with respect thereto.
9.02    Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, own
securities of, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.
9.03    Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents, and its duties hereunder shall be administrative in nature.
Without limiting the generality of the foregoing, the Administrative Agent:
(p)    shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing;
(q)    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 Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or

93

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

 

the opinion of its counsel, may expose the Administrative Agent to liability or
that is contrary to any Loan Document or applicable law or regulation, including
for the avoidance of doubt any action that may be in violation of the automatic
stay under any Debtor Relief Law; and
(r)    shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.01 and 8.02) 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. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given in writing to the Administrative Agent
by the Borrower or a Lender.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or the creation,
perfection or priority of any Lien purported to be created by the Collateral
Documents, (v) the value of the sufficiency of any Collateral or (vi) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
9.04    Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan that by its terms must be fulfilled to the satisfaction of
a Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

94

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

 

9.05    Delegation of Duties. The Administrative Agent may perform any and all
of its duties and exercise its rights and powers hereunder or under any other
Loan Document by or through any one or more sub agents appointed by the
Administrative Agent; provided, however, than any such sub-agent receiving
payments from the Loan Parties shall be a U.S. Person or shall be permitted to
and shall agree to accept responsibility for all U.S. federal income tax and
information reporting with respect to payments made by or on behalf of any Loan
Party under the Loan Documents. The Administrative Agent and any such sub agent
meeting the requirements of the previous sentence 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 the Administrative Agent and any such sub
agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent. The Administrative Agent shall not 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 non appealable judgment that
the Administrative Agent acted with gross negligence or willful misconduct in
the selection of such sub-agents.
9.06    Resignation of Administrative Agent.
(a)    The Administrative Agent may at any time give notice of its resignation
to the Lenders and the Borrower. Upon receipt of any such notice of resignation,
the Required Lenders shall have the right, in consultation with the Borrower, so
long as no Event of Default has occurred and is continuing, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States to which payments
made by the Loan Parties hereunder shall be made and shall agree to accept
responsibility for all U.S. federal income tax and information reporting with
respect to payments made by or on behalf of any Loan Party under the Loan
Documents; provided that the Administrative Agent may propose that an Affiliate
succeed as Administrative Agent, in which case such Affiliate shall
automatically be appointed as successor. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation (or such earlier day as shall be agreed by the Required Lenders)
(the “Resignation Effective Date”), then the retiring Administrative Agent may
(but shall not be obligated to) on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above. Whether or not
a successor has been appointed, such resignation shall become effective in
accordance with such notice on the Resignation Effective Date.
(b)    With effect from the Resignation Effective Date or the Removal Effective
Date (as applicable) (1) the retiring or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the under any of the Loan
Documents, the retiring or removed Administrative Agent shall continue to hold
such collateral security until such time as a successor Administrative Agent is
appointed) and (2) except for any indemnity payments or other amounts then owed
to the retiring or removed Administrative Agent, all payments,

95

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

 

communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender directly, until
such time, if any, as the Required Lenders appoint a successor Administrative
Agent as provided for above. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
removed) Administrative Agent (other than as provided in Section 3.01(g) and
other than any rights to indemnity payments or other amounts owed to the
retiring or removed Administrative Agent as of the Resignation Effective Date or
the Removal Effective Date, as applicable), and the retiring or removed
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring or removed Administrative Agent’s resignation or removal
hereunder and under the other Loan Documents, the provisions of this Article and
Section 10.04 shall continue in effect for the benefit of such retiring or
removed Administrative Agent, its sub‑agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring or removed Administrative Agent was acting as Administrative
Agent.
9.07    Non-Reliance on Administrative Agent and Other Lenders. Each Lender and
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.
9.08    No Other Duties, Etc. Anything herein to the contrary notwithstanding,
none of the Bookrunners listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent or
a Lender or the hereunder.
9.09    Administrative Agent May File Proofs of Claim. In case of the pendency
of any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise
(f)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims

96

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

 

of the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders and
the Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders and the Administrative Agent under 2.06 and 11.04)
allowed in such judicial proceeding; and
(g)    to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.06 and 11.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender to authorize the Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.
The Secured Parties hereby irrevocably authorize the Administrative Agent, at
the direction of the Required Lenders, to credit bid all or any portion of the
Obligations (including accepting some or all of the Collateral in satisfaction
of some or all of the Obligations pursuant to a deed in lieu of foreclosure or
otherwise) and in such manner purchase (either directly or through one or more
acquisition vehicles) all or any portion of the Collateral (a) at any sale
thereof conducted under the provisions of the Bankruptcy Code of the United
States, including under Sections 363, 1123 or 1129 of the Bankruptcy Code of the
United States, or any similar Laws in any other jurisdictions to which a Loan
Party is subject, (b) at any other sale or foreclosure or acceptance of
collateral in lieu of debt conducted by (or with the consent or at the direction
of) the Administrative Agent (whether by judicial action or otherwise) in
accordance with any applicable Law. In connection with any such credit bid and
purchase, the Obligations owed to the Secured Parties shall be entitled to be,
and shall be, credit bid on a ratable basis (with Obligations with respect to
contingent or unliquidated claims receiving contingent interests in the acquired
assets on a ratable basis that would vest upon the liquidation of such claims in
an amount proportional to the liquidated portion of the contingent claim amount
used in allocating the contingent interests) in the asset or assets so purchased
(or in the Equity Interests or debt instruments of the acquisition vehicle or
vehicles that are used to consummate such purchase).  In connection with any
such bid (i) the Administrative Agent shall be authorized to form one or more
acquisition vehicles to make a bid, (ii) to adopt documents providing for the
governance of the acquisition vehicle or vehicles (provided that any actions by
the Administrative Agent with respect to such acquisition vehicle or vehicles,
including any disposition of the assets or Equity Interests thereof shall be
governed, directly or indirectly, by the vote of the Required Lenders,
irrespective of the termination of this Agreement and without giving effect to
the limitations on actions by the Required Lenders contained in clauses (a)
through (j) of Section 11.01 of this Agreement, (iii) the Administrative Agent
shall be authorized to assign

97

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

 

the relevant Obligations to any such acquisition vehicle pro rata by the
Lenders, as a result of which each of the Lenders shall be deemed to have
received a pro rata portion of any Equity Interests and/or debt instruments
issued by such an acquisition vehicle on account of the assignment of the
Obligations to be credit bid, all without the need for any Secured Party or
acquisition vehicle to take any further action, and (iv) to the extent that
Obligations that are assigned to an acquisition vehicle are not used to acquire
Collateral for any reason (as a result of another bid being higher or better,
because the amount of Obligations assigned to the acquisition vehicle exceeds
the amount of debt credit bid by the acquisition vehicle or otherwise), such
Obligations shall automatically be reassigned to the Lenders pro rata and the
Equity Interests and/or debt instruments issued by any acquisition vehicle on
account of the Obligations that had been assigned to the acquisition vehicle
shall automatically be cancelled, without the need for any Secured Party or any
acquisition vehicle to take any further action.
9.10    Collateral and Guaranty Matters. Without limiting the provision of
Section 9.10, the of the Lenders irrevocably authorize the Administrative Agent,
at its option and in its discretion or as otherwise provided under this
Agreement,
(a)    to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations), (ii) that is sold or otherwise disposed
of or to be sold or otherwise disposed of as part of or in connection with any
sale or other disposition permitted hereunder or under any other Loan Document
to a Person that is not a Loan Party, (iii) that constitutes “Excluded Property”
(as such term is defined in the Security Agreement), or (iv) if approved,
authorized or ratified in writing in accordance with Section 11.01;
(b)    to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01(i); and
(c)    to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted under
the Loan Documents.
Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
9.11. In each case as specified in this Section 9.11, the Administrative Agent
will, at the Borrower’s expense, execute and deliver to the applicable Loan
Party such documents as such Loan Party may reasonably request to evidence the
release of such item of Collateral from the assignment and security interest
granted under the Collateral Documents or to subordinate its interest in such
item, or to release such Guarantor from its obligations under the Guaranty, in
each case in accordance with the terms of the Loan Documents and this Section
9.11.
The Administrative Agent shall not be responsible for or have a duty to
ascertain or inquire into any representation or warranty regarding the
existence, value or collectability of the Collateral,

98

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

 

the existence, priority or perfection of the Administrative Agent’s Lien
thereon, or any certificate prepared by any Loan Party in connection therewith,
nor shall the Administrative Agent be responsible or liable to the Lenders for
any failure to monitor or maintain any portion of the Collateral.
ARTICLE X.    CONTINUING GUARANTY
10.01    Guaranty. Each Guarantor hereby absolutely and unconditionally
guarantees, as a guaranty of payment and performance and not merely as a
guaranty of collection, prompt payment when due, whether at stated maturity, by
required prepayment, upon acceleration, demand or otherwise, and at all times
thereafter, of any and all of the Obligations, whether for principal, interest,
premiums, fees, indemnities, damages, costs, expenses or otherwise, of the
Borrower to the Secured Parties, and whether arising hereunder or under any
other Loan Document (including all renewals, extensions, amendments,
refinancings and other modifications thereof and all costs, attorneys’ fees and
expenses incurred by the Secured Parties in connection with the collection or
enforcement thereof). The Administrative Agent’s books and records showing the
amount of the Obligations shall be admissible in evidence in any action or
proceeding, and shall be binding upon each Guarantor, and conclusive for the
purpose of establishing the amount of the Obligations. This Guaranty shall not
be affected by the genuineness, validity, regularity or enforceability of the
Obligations or any instrument or agreement evidencing any Obligations, or by the
existence, validity, enforceability, perfection, non-perfection or extent of any
collateral therefor, or by any fact or circumstance relating to the Obligations
which might otherwise constitute a defense to the obligations of each Guarantor
under this Guaranty, and each Guarantor hereby irrevocably waives any defenses
it may now have or hereafter acquire in any way relating to any or all of the
foregoing.
10.02    Rights of Lenders. Each Guarantor consents and agrees that the Secured
Parties may, at any time and from time to time, without notice or demand, and
without affecting the enforceability or continuing effectiveness hereof: (a)
amend, extend, renew, compromise, discharge, accelerate or otherwise change the
time for payment or the terms of the Obligations or any part thereof; (b) take,
hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise
dispose of any security for the payment of this Guaranty or any Obligations; (c)
apply such security and direct the order or manner of sale thereof as the
Administrative Agent and the Lenders in their sole discretion may determine; and
(d) release or substitute one or more of any endorsers or other guarantors of
any of the Obligations. Without limiting the generality of the foregoing, each
Guarantor consents to the taking of, or failure to take, any action which might
in any manner or to any extent vary the risks of Holdings under this Guaranty or
which, but for this provision, might operate as a discharge of each Guarantor.
10.03    Certain Waivers. Each Guarantor waives (a) any defense arising by
reason of any disability or other defense of the Borrower or any other
guarantor, or the cessation from any cause whatsoever (including any act or
omission of any Secured Party) of the liability of the Borrower; (b) any defense
based on any claim that each Guarantor’s obligations exceed or are more
burdensome than those of the Borrower; (c) the benefit of any statute of
limitations affecting each Guarantor’s liability hereunder; (d) any right to
proceed against the Borrower, proceed against or exhaust any security for the
Obligations, or pursue any other remedy in the power of any Secured Party

99

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

 

whatsoever; (e) any benefit of and any right to participate in any security now
or hereafter held by any Secured Party; and (f) to the fullest extent permitted
by law, any and all other defenses or benefits that may be derived from or
afforded by applicable law limiting the liability of or exonerating guarantors
or sureties. Each Guarantor expressly waives all setoffs and counterclaims and
all presentments, demands for payment or performance, notices of nonpayment or
nonperformance, protests, notices of protest, notices of dishonor and all other
notices or demands of any kind or nature whatsoever with respect to the
Obligations, and all notices of acceptance of this Guaranty or of the existence,
creation or incurrence of new or additional Obligations.
10.04    Obligations Independent. The obligations of each Guarantor hereunder
are those of primary obligor, and not merely as surety, and are independent of
the Obligations and the obligations of any other guarantor, and a separate
action may be brought against each Guarantor to enforce this Guaranty whether or
not the Borrower or any other person or entity is joined as a party.
10.05    Subrogation. No Guarantor shall exercise any right of subrogation,
contribution, indemnity, reimbursement or similar rights with respect to any
payments it makes under this Guaranty until all of the Obligations and any
amounts payable under this Guaranty have been indefeasibly paid and performed in
full. If any amounts are paid to any Guarantor in violation of the foregoing
limitation, then such amounts shall be held in trust for the benefit of the
Secured Parties and shall forthwith be paid to the Secured Parties to reduce the
amount of the Obligations, whether matured or unmatured.
10.06    Termination; Reinstatement. This Guaranty is a continuing and
irrevocable guaranty of all Obligations now or hereafter existing and shall
remain in full force and effect until all Obligations and any other amounts
payable under this Guaranty are indefeasibly paid in full in cash.
Notwithstanding the foregoing, this Guaranty shall continue in full force and
effect or be revived, as the case may be, if any payment by or on behalf of the
Borrower or any Guarantor is made, or any of the Secured Parties exercises its
right of setoff, in respect of the Obligations and such payment or the proceeds
of such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by any of the Secured Parties in their discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Laws or otherwise, all as if such payment had
not been made or such setoff had not occurred and whether or not the Secured
Parties are in possession of or have released this Guaranty and regardless of
any prior revocation, rescission, termination or reduction. The obligations of
each Guarantor under this paragraph shall survive termination of this Guaranty.
10.07    Subordination. Each Guarantor hereby subordinates the payment of all
obligations and indebtedness of the Borrower owing to such Guarantor, whether
now existing or hereafter arising, including but not limited to any obligation
of the Borrower to such Guarantor as subrogee of the Secured Parties or
resulting from such Guarantor’s performance under this Guaranty, to the
indefeasible payment in full in cash of all Obligations. If the Secured Parties
so request, any such obligation or indebtedness of the Borrower to any Guarantor
shall be enforced and performance received by such Guarantor as trustee for the
Secured Parties and the proceeds thereof shall be paid

100

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

 

over to the Secured Parties on account of the Obligations, but without reducing
or affecting in any manner the liability of any Guarantor under this Guaranty.
10.08    Stay of Acceleration. If acceleration of the time for payment of any of
the Obligations is stayed, in connection with any case commenced by or against
any Guarantor or the Borrower under any Debtor Relief Laws, or otherwise, all
such amounts shall nonetheless be payable by Holdings immediately upon demand by
the Secured Parties.
10.09    Condition of Borrower. Each Guarantor acknowledges and agrees that it
has the sole responsibility for, and has adequate means of, obtaining from the
Borrower and any other guarantor such information concerning the financial
condition, business and operations of the Borrower and any such other guarantor
as each Guarantor requires, and that none of the Secured Parties has any duty,
and no Guarantor is relying on the Secured Parties at any time, to disclose to
any Guarantor any information relating to the business, operations or financial
condition of the Borrower or any other guarantor (Each Guarantor waiving any
duty on the part of the Secured Parties to disclose such information and any
defense relating to the failure to provide the same).
ARTICLE XI.    MISCELLANEOUS
11.01    Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(s)    impose any greater restriction on the ability of any Lender to assign any
of its rights or obligations hereunder without the written consent of Lenders
having more than 50% of the Total Outstandings then in effect.
(t)    waive any condition set forth in Section 4.01(a) without the written
consent of each Lender;
(u)    extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(v)    postpone any date fixed by this Agreement or any other Loan Document for
any payment or mandatory prepayment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
(w)    reduce the principal of, or the rate of interest specified herein on, any
Loan, or (subject to clause (iv) of the second proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the

101

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

 

Required Lenders shall be necessary to amend the definition of “Default Rate” or
to waive any obligation of the Borrower to pay interest at the Default Rate;
(x)    change Section 2.09 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;
(y)    change any provision of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender;
(z)    release all or substantially all of the Collateral in any transaction or
series of related transactions without the consent of all the Lenders; or
(aa)    release any Guarantor from a Guaranty without the written consent of
each Lender, except to the extent the release of any Guarantor is permitted
pursuant to Section 9.10 (in which case such release may be made by the
Administrative Agent acting alone);
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; and (ii) any fee letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto.
11.02    Notices; Effectiveness; Electronic Communication.
(g)    Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:
(vii)    if to the Borrower or any other Loan Party or the Administrative Agent,
to the address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 11.02; and
(viii)    if to any other Lender, to the address, facsimile number, electronic
mail address or telephone number specified in its Administrative Questionnaire
(including, as appropriate, notices delivered solely to the Person designated by
a Lender on its Administrative Questionnaire then in effect for the delivery of
notices that may contain material non-public information relating to the
Borrower).
Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other

102

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

 

communications sent by facsimile shall be deemed to have been given when sent
(except that, if not given during normal business hours for the recipient, shall
be deemed to have been given at the opening of business on the next Business Day
for the recipient). Notices and other communications delivered through
electronic communications, to the extent provided in subsection (b) below, shall
be effective as provided in such subsection (b).
(h)    Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e‑mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not
apply to notices to any pursuant to Article II if such Lender has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may each, in its discretion, agree to accept notices and other communications to
it hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses (i)
and (ii), if such notice, email or other communication is not sent during the
normal business hours of the recipient, such notice, email or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.
(i)    The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrower, any Lender or any other
Person for losses, claims, damages, liabilities or expenses of any kind (whether
in tort, contract or otherwise) arising out of the Borrower’s, any Loan Party’s
or the Administrative Agent’s transmission of Borrower Materials or notices
through the Platform, any other electronic messaging service, or through the
Internet.

103

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

 

(j)    Change of Address, Etc. Each of the Borrower and the Administrative Agent
may change its address, facsimile or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, facsimile or telephone number for notices and
other communications hereunder by notice to the Borrower and the Administrative
Agent. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, facsimile number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender. Furthermore, each Public
Lender agrees to cause at least one individual at or on behalf of such Public
Lender to at all times have selected the “Private Side Information” or similar
designation on the content declaration screen of the Platform in order to enable
such Public Lender or its delegate, in accordance with such Public Lender’s
compliance procedures and applicable Law, including United States Federal and
state securities Laws, to make reference to Borrower Materials that are not made
available through the “Public Side Information” portion of the Platform and that
may contain material non-public information with respect to the Borrower or its
securities for purposes of United States Federal or state securities laws.
(k)    Reliance by Administrative Agent and Lenders. The Administrative Agent
and the Lenders shall be entitled to rely and act upon any notices purportedly
given by or on behalf of the Borrower even if (i) such notices were not made in
a manner specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The Borrower
shall indemnify the Administrative Agent, each Lender and the Related Parties of
each of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower. All telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.
11.03    No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender
or the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder or under any other
Loan Document 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, and
provided under each other Loan Document, are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Loan Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the
Lenders; provided, however, that the foregoing shall not prohibit (a) the
Administrative Agent from exercising on its

104

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

 

own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Administrative Agent) hereunder and under the other Loan Documents,
(b) any Lender from exercising setoff rights in accordance with Section 10.08
(subject to the terms of Section 2.09), or (d) any Lender from filing proofs of
claim or appearing and filing pleadings on its own behalf during the pendency of
a proceeding relative to any Loan Party under any Debtor Relief Law; and
provided, further, that if at any time there is no Person acting as
Administrative Agent hereunder and under the other Loan Documents, then (i) the
Required Lenders shall have the rights otherwise ascribed to the Administrative
Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in
clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.09,
any Lender may, with the consent of the Required Lenders, enforce any rights and
remedies available to it and as authorized by the Required Lenders.
11.04    Expenses; Indemnity; Damage Waiver.
(c)    Costs and Expenses. The Borrower shall pay (i) all reasonable
out‑of‑pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated) (ii) and all reasonable out‑of‑pocket expenses incurred by the
Administrative Agent or any Lender (including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent and one counsel, for
all the other Lenders and, if reasonably necessary or advisable, the reasonable
fees, charges and disbursements of one local counsel per jurisdiction and one
additional counsel for each group of affected persons, taken as a whole, to the
extent of any actual or perceived conflict of interest), in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made hereunder, including all such out‑of‑pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans.
(d)    Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and each Related
Party of any of the foregoing Persons (each such Person being called a “Borrower
Indemnitee”) against, and hold each Borrower Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses (including the
fees, charges and disbursements of any counsel for any Borrower Indemnitee), and
shall indemnify and hold harmless each Borrower Indemnitee from all fees and
time charges and disbursements for attorneys who may be employees of any
Borrower Indemnitee, incurred by any Borrower Indemnitee or asserted against any
Indemnitee by any Person (including the Borrower or any other Loan Party) other
than such Borrower Indemnitee and its Related Parties arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder,

105

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

 

the consummation of the transactions contemplated hereby or thereby, or, in the
case of the Administrative Agent (and any sub-agent thereof) and its Related
Parties only, the administration of this Agreement and the other Loan Documents
(including in respect of any matters addressed in Section 3.01), (ii) any Loan
or the use or proposed use of the proceeds therefrom, (iii) any actual,
threatened, or alleged presence or Release of Hazardous Materials at, on, under,
or from any property owned, leased, operated or otherwise occupied by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Borrower
Indemnitee or its Related Parties or (y) result from a claim brought by the
Borrower or any other Loan Party against a Borrower Indemnitee for material
breach of such Borrower Indemnitee’s obligations hereunder or under any other
Loan Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction. Without limiting the provisions of Section 3.01(c), this
Section 11.04(b) shall not apply with respect to Taxes other than any Taxes that
represent losses, claims, damages, etc. arising from any non-Tax claim.
(e)    Indemnification by Lenders. The Lenders agree to indemnify the
Administrative Agent and its officers, directors, employees, affiliates, agents,
advisors and controlling persons (each, an “Agent Indemnitee”) (to the extent
required to be reimbursed but not reimbursed by the Borrower and without
limiting the obligation the Borrower to do so), ratably according to their
respective Applicable Percentage in effect on the date on which indemnification
is sought under this paragraph, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time (whether
before or after the payment of the Loans) be imposed on, incurred by or asserted
against such Agent Indemnitee in any way relating to or arising out of, the
Loans, 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
Indemnitee under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from any Agent
Indemnitee’s gross negligence or willful misconduct. The agreements in this
paragraph shall survive the termination of this Agreement and the payment of the
Loan and all other amounts payable hereunder. The obligations of the Lenders
under this subsection (c) are subject to the provisions of Section 2.08(d).

106

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

 

(f)    Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrower and each Indemnitee shall not assert, and hereby
waives, and acknowledges that no other Person shall have, any claim against any
Loan Party or related party of any Loan Party or any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Loan or the use of the proceeds thereof. No Indemnitee referred to in
subsection (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed to such
unintended recipients by such Indemnitee through telecommunications, electronic
or other information transmission systems in connection with this Agreement or
the other Loan Documents or the transactions contemplated hereby or thereby
other than for direct or actual damages resulting from the gross negligence or
willful misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.
(g)    Payments. All amounts due under this Section shall be payable not later
than ten Business Days after demand therefor.
(h)    Survival. The agreements in this Section and the indemnity provisions of
Section 10.02(e) shall survive the resignation of the Administrative Agent, the
replacement of any Lender and the repayment, satisfaction or discharge of all
the other Obligations.
11.05    Payments Set Aside. To the extent that any payment by or on behalf of
the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect. The obligations of
the Lenders under clause (b) of the preceding sentence shall survive the payment
in full of the Obligations and the termination of this Agreement.
11.06    Successors and Assigns.
(a)    Successors and Assigns Generally. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrower nor any other Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or

107

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

 

otherwise transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection (d)
of this Section, or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection (d)
of this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b)    Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Loans at the time owing to it); provided that
any such assignment shall be subject to the following conditions:
(vii)    Minimum Amounts.
(A)    in the case of an assignment of the entire remaining amount of the
assigning Lender’s Loans at the time owing to it or contemporaneous assignments
to related Approved Funds that equal at least the amount specified in
paragraph (b)(i)(B) of this Section in the aggregate or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and
(B)    in any case not described in subsection (b)(i)(A) of this Section, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $1,000.000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed).
(viii)    Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans assigned;
(ix)    Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:
(A)    the consent of the Borrower (such consent not to be unreasonably withheld
or delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written

108

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

 

notice to the Administrative Agent within five (5) Business Days after having
received notice thereof; and provided, further, that the Borrower’s consent
shall not be required during the primary syndication of the credit facility
provided herein;
(B)    the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required if such assignment is to a
Person that is not a Lender, an Affiliate of such Lender or an Approved Fund
with respect to such Lender and
(x)    Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee in the amount of $3,500; provided,
however, that the Administrative Agent may, in its sole discretion, elect to
waive such processing and recordation fee in the case of any assignment. The
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
(xi)    No Assignment to Certain Persons. No such assignment shall be made
(A) to the Borrower or any of the Borrower’s Subsidiaries, or (B) to a natural
Person.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 11.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(a)    Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower (and such agency being solely for tax purposes), shall
maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it (or the equivalent thereof in electronic form) and a
register for the recordation of the names and addresses of the Lenders, and
principal amounts (and related interest amounts) of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”).
Notwithstanding anything in the contrary herein, the entries in the Register
shall be conclusive absent manifest error, and the Borrower, the Administrative
Agent and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender and the owner of the amounts
owing to it under the Loan Documents as reflected in the Register for all
purposes of the Loan Documents. The Register shall be

109

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

 

available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(b)    Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural Person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of the Loans owing to it); provided that (i) such Lender’s obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. For the avoidance of
doubt, each Lender shall be responsible for the indemnity under Section 11.04(c)
without regard to the existence of any participation.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 11.01 that affects such Participant. The Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section (it being understood that
the documentation required under Section 3.01(e) shall be delivered to the
Lender who sells the participation) to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to paragraph (b) of this
Section; provided that such Participant (A) agrees to be subject to the
provisions of Sections 3.06 and 11.13 as if it were an assignee under paragraph
(b) of this Section and (B) shall not be entitled to receive any greater payment
under Sections 3.01 or 3.04, with respect to any participation, than the Lender
from whom it acquired the applicable participation 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. Each Lender that sells a participation agrees, at the
Borrower’s request and expense, to use reasonable efforts to cooperate with the
Borrower to effectuate the provisions of Section 3.06 with respect to any
Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.08 as though it were a Lender; provided
that such Participant agrees to be subject to Section 2.09 as though it were a
Lender. Each Lender that sells a participation (including under Section 2.10)
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 related interest amounts) 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 or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations or as
otherwise required

110

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

 

thereunder. Notwithstanding anything to the contrary herein, the entries in the
Participant Register shall be conclusive absent manifest error, and each Person
whose name is recorded in the Participant Register shall be treated 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.
(c)    Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
11.07    Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed (a)
to its Affiliates and to its Related Parties (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent required or requested by any regulatory
authority purporting to have jurisdiction over such Person or its Related
Parties (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights and obligations under this Agreement or (ii) any actual or
prospective party (or its Related Parties) to any swap, derivative or other
transaction under which payments are to be made by reference to the Borrower and
its obligations, this Agreement or payments hereunder, (g) on a confidential
basis to (i) any rating agency in connection with rating the Borrower or its
Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP
Service Bureau or any similar agency in connection with the issuance and
monitoring of CUSIP numbers or other market identifiers with respect to the
credit facilities provided hereunder, (h) with the consent of the Borrower or
(i) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender, or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower. For purposes of
this Section, “Information” means all information received from the Borrower or
any Subsidiary relating to the Borrower or any Subsidiary or any of their
respective businesses, other than any such information that is available to the
Administrative Agent, any Lender on a nonconfidential basis prior to disclosure
by the Borrower or any Subsidiary, provided that, in the case of information
received from the Borrower or any Subsidiary after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to

111

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

 

do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning the Borrower
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
United States Federal and state securities Laws.
11.08    Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document to such Lender or its respective
Affiliates, irrespective of whether or not such Lender or Affiliate shall have
made any demand under this Agreement or any other Loan Document and although
such obligations of the Borrower may be contingent or unmatured or are owed to a
branch, office or Affiliate of such Lender different from the branch, office or
Affiliate holding such deposit or obligated on such indebtedness. The rights of
each Lender and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of setoff) that such Lender
or their respective Affiliates may have. Each Lender agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.
11.09    Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
11.10    Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents, and any separate letter agreements with respect to fees payable
to the Administrative Agent, constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become

112

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

 

effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart of this Agreement.
11.11    Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied.
11.12    Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11.13    Replacement of Lenders. If the Borrower is entitled to replace a Lender
pursuant to the provisions of Section 3.06, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in, and consents required by,
Section 11.06), all of its interests, rights (other than its existing rights to
payments pursuant to Sections 3.01 and 3.04) 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 11.06(b);
(b)    such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 3.05) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);
(c)    in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter;

113

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

 

(d)    the Borrower shall pay such Lender any Make Whole that would be
applicable to such assignment as if the assigned Loan was repaid by the
Borrower; and
(e)    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.
11.14    Governing Law; Jurisdiction; Etc.
(a)    GOVERNING LAW. This Agreement and the other Loan Documents and any
claims, controversy, dispute or cause of action (whether in contract or tort or
otherwise) based upon, arising out of or relating to this Agreement or any other
Loan Document (except, as to any other Loan Document, as expressly set forth
therein) and the transactions contemplated hereby and thereby shall be governed
by, and construed in accordance with, the law of the State of NEW YORK.
(b)    SUBMISSION TO JURISDICTION. ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL
OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT’S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION,
LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(c)    WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT

114

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

 

FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d)    SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.
11.15    Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY), EXCEPT WITH RESPECT TO ANY PATENT PROCEEDING. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
11.16    No Advisory or Fiduciary Responsibility. In connection with all aspects
of each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
the Borrower acknowledges and agrees that: (i) (A) the arranging and other
services regarding this Agreement provided by the Administrative Agent and the
Lenders are arm’s-length commercial transactions between the Borrower and its
Affiliates, on the one hand, and the Administrative Agent and the Lenders, on
the other hand, (B) the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and (C) the
Borrower is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Administrative Agent and each Lender is and has been
acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor,
agent or fiduciary for the Borrower or any of its Affiliates, or any other
Person and (B) neither the Administrative Agent nor any Lender has any
obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (iii) the Administrative Agent and
the Lenders and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrower and
its Affiliates, and neither the Administrative Agent, nor any Lender has any
obligation to disclose any of such interests to the Borrower or its Affiliates.
To the fullest extent permitted by law, the Borrower hereby waives and releases
any claims that it may have against the Administrative Agent or any Lender with
respect

115

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

 

to any breach or alleged breach of agency or fiduciary duty in connection with
any aspect of any transaction contemplated hereby.
11.17    Electronic Execution of Assignments and Certain Other Documents. The
words “execute”, “execution”, “signed”, “signature”, and words of like import in
any Assignment and Assumption or in any amendment or other modification hereof
(including waivers and consents) shall be deemed to include electronic
signatures, the electronic matching of assignment terms and contract formations
on electronic platforms approved by the Administrative Agent, or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.
11.18    USA PATRIOT Act. Each Lender that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrower that pursuant to the requirements of the
USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act. The
Borrower shall, promptly following a request by the Administrative Agent or any
Lender, provide all documentation and other information that the Administrative
Agent or such Lender requests in order to comply with its ongoing obligations
under applicable “know your customer” and anti‑money laundering rules and
regulations, including the Act.
11.19    Licenses.
Each party hereto agrees that, as provided for in the Security Agreement, upon
any exercise of remedies by the Administrative Agent or the Lenders, any
then-existing license agreement or other arrangements relating primarily to IP
Rights (other than Cystic Fibrosis Drug Franchise Assets) shall survive in full
force and effect and be accepted by the Administrative Agent, and that neither
the Administrative Agent nor any Lender (or anyone acting on behalf of any of
the foregoing) shall (i) terminate such license or arrangements, or petition a
court to do so, (ii) take any steps to oppose such licensee’s exercise of any
rights under Section 365(n) of the Bankruptcy Code, or (iii) interfere with the
rights of such licensee to such IP Rights as provided in the applicable license
agreement or arrangements, or petition a court to do so.

116

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
 
 
VERTEX PHARMACEUTICALS INCORPORATED,
as Borrower
 
 
 
 
By:
/s/ Jeffrey Leiden
 
Name:
Jeffrey Leiden
 
Title:
Chief Executive Officer
 
 
 
 
By:
/s/ Ian Smith
 
Name:
Ian Smith
 
Title:
Chief Financial Officer

 
 
MACQUARIE US TRADING LLC, as Administrative Agent
 
 
 
 
By:
/s/ Robert M. Perdock
 
Name:
Robert M. Perdock
 
Title:
Managing Director
 
 
 
 
By:
/s/ Anita Chiu
 
Name:
Anita Chiu
 
Title:
Associate Director

 
 
MACQUARIE CAF LLC, as Lender
 
 
 
 
By:
/s/ David Prince
 
Name:
David Prince
 
Title:
Authorized Signatory
 
 
 
 
By:
/s/ Althea Hennedige
 
Name:
Althea Hennedige
 
Title:
Authorized Signatory

 

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

 

 
 
VERTEX PHARMACEUTICALS (SAN DIEGO) LLC,
as a Guarantor
 
 
 
 
By:
/s/ Ian Smith
 
Name:
Ian Smith
 
Title:
Treasurer

 
 
VERTEX PHARMACEUTICALS (DELAWARE) LLC,
as a Guarantor
 
 
 
 
By:
/s/ Ian Smith
 
Name:
Ian Smith
 
Title:
Treasurer

 
 
VERTEX HOLDINGS, INC.,
as a Guarantor
 
 
 
 
By:
/s/ Ian Smith
 
Name:
Ian Smith
 
Title:
Treasurer

 
 
VERTEX PHARMACEUTICALS (DISTRIBUTION) INCORPORATED,
as a Guarantor
 
 
 
 
By:
/s/ Ian Smith
 
Name:
Ian Smith
 
Title:
Treasurer