**Exhibit 10.37**

 

**EXECUTION COPY**

 

[Published CUSIP Number:03234UAA3]

 

**CREDIT AGREEMENT**

 

Dated as of December 21, 2007

 

among

 

**AMYLIN PHARMACEUTICALS, INC.**and certain of its Subsidiaries party hereto,as the Borrowers,

 

**BANK OF AMERICA, N.A.**,as Administrative Agent, Collateral Agent andL/C Issuer,

 

**SILICON VALLEY BANK**

and **RBS ASSET FINANCE, INC.**,

 as SyndicationAgents,

 

**COMERICA BANK**

and **BMO CAPITAL MARKETS FINANCING, INC.**,

as Documentation Agents,

 

and

 

the **LENDERS**set forthon Schedule 2.01 hereto

 

** **

**BANK OF AMERICA, N.A.**,

 

as Sole Lead Arranger and Sole Book Manager

 

----

** **

**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                                              |       | 29       |
|         |                                    |                                                      |       |     |
| 1.06         |                                    | Letter of Credit  Amounts                                 |       | 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         |                                    | Letters of Credit                                         |       | 32       |
|         |                                    |                                                      |       |     |
| 2.04         |                                    | Permitted FX Facility                                     |       | 40       |
|         |                                    |                                                      |       |     |
| 2.05         |                                    | Prepayments                                               |       | 42       |
|         |                                    |                                                      |       |     |
| 2.06         |                                    | Termination or  Reduction of Commitments                  |       | 44       |
|         |                                    |                                                      |       |     |
| 2.07         |                                    | Repayment of Loans                                        |       | 45       |
|         |                                    |                                                      |       |     |
| 2.08         |                                    | Interest                                                  |       | 45       |
|         |                                    |                                                      |       |     |
| 2.09         |                                    | Fees                                                      |       | 46       |
|         |                                    |                                                      |       |     |
| 2.10         |                                    | Computation of Interest  and Fees                         |       | 47       |
|         |                                    |                                                      |       |     |
| 2.11         |                                    | Evidence of Debt                                          |       | 47       |
|         |                                    |                                                      |       |     |
| 2.12         |                                    | Payments Generally;  Administrative Agent’s Clawback |       | 47       |
|         |                                    |                                                      |       |     |
| 2.13         |                                    | Sharing of Payments by  Lenders                           |       | 49       |
|         |                                    |                                                      |       |     |
| ARTICLE  III | TAXES,  YIELD PROTECTION AND ILLEGALITY |                                                      | 50         |
|         |                                    |                                                      |       |     |
| 3.01         |                                    | Taxes                                                     |       | 50       |
|         |                                    |                                                      |       |     |
| 3.02         |                                    | Illegality                                                |       | 52       |
|         |                                    |                                                      |       |     |
| 3.03         |                                    | Inability to Determine  Rates                             |       | 53       |
|         |                                    |                                                      |       |     |
| 3.04         |                                    | Increased Costs;  Reserves on Eurocurrency Rate Loans     |       | 53       |
|         |                                    |                                                      |       |     |
| 3.05         |                                    | Compensation for Losses                                   |       | 55       |
|         |                                    |                                                      |       |     |
| 3.06         |                                    | Mitigation Obligations;  Replacement of Lenders           |       | 55       |
|         |                                    |                                                      |       |     |
| 3.07         |                                    | Survival                                                  |       | 56       |

 

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| ARTICLE  IV | CONDITIONS  PRECEDENT TO CREDIT EXTENSIONS |                                              | 56     |
|-------------|--------------------------------------------|---------------------------------------------------|--------|
|        |                                       |                                              |   |   |
| 4.01        |                                       | Conditions of Initial  Credit Extension           |   | 56 |
|        |                                       |                                              |   |   |
| 4.02        |                                       | Conditions to all  Credit Extensions              |   | 61 |
|        |                                       |                                              |   |   |
| ARTICLE  V  | REPRESENTATIONS  AND WARRANTIES            |                                              | 61     |
|        |                                       |                                              |   |   |
| 5.01        |                                       | Existence,  Qualification and Power               |   | 61 |
|        |                                       |                                              |   |   |
| 5.02        |                                       | Authorization; No  Contravention                  |   | 62 |
|        |                                       |                                              |   |   |
| 5.03        |                                       | Governmental  Authorization; Other Consents       |   | 62 |
|        |                                       |                                              |   |   |
| 5.04        |                                       | Binding Effect                                    |   | 62 |
|        |                                       |                                              |   |   |
| 5.05        |                                       | Financial Statements;  No Material Adverse Effect |   | 62 |
|        |                                       |                                              |   |   |
| 5.06        |                                       | Litigation                                        |   | 63 |
|        |                                       |                                              |   |   |
| 5.07        |                                       | No Default                                        |   | 63 |
|        |                                       |                                              |   |   |
| 5.08        |                                       | Ownership of Property;  Liens; Investments        |   | 63 |
|        |                                       |                                              |   |   |
| 5.09        |                                       | Environmental  Compliance                         |   | 64 |
|        |                                       |                                              |   |   |
| 5.10        |                                       | Insurance                                         |   | 65 |
|        |                                       |                                              |   |   |
| 5.11        |                                       | Taxes                                             |   | 65 |
|        |                                       |                                              |   |   |
| 5.12        |                                       | ERISA Compliance                                  |   | 65 |
|        |                                       |                                              |   |   |
| 5.13        |                                       | Subsidiaries; Equity  Interests; Loan Parties     |   | 66 |
|        |                                       |                                              |   |   |
| 5.14        |                                       | Margin Regulations;  Investment Company Act       |   | 67 |
|        |                                       |                                              |   |   |
| 5.15        |                                       | Disclosure                                        |   | 67 |
|        |                                       |                                              |   |   |
| 5.16        |                                       | FDA Regulations;  Compliance with Laws            |   | 67 |
|        |                                       |                                              |   |   |
| 5.17        |                                       | Solvency                                          |   | 68 |
|        |                                       |                                              |   |   |
| 5.18        |                                       | Casualty, Etc                                     |   | 68 |
|        |                                       |                                              |   |   |
| ARTICLE  VI | AFFIRMATIVE  COVENANTS                     |                                              | 68     |
|        |                                       |                                              |   |   |
| 6.01        |                                       | Financial Statements                              |   | 68 |
|        |                                       |                                              |   |   |
| 6.02        |                                       | Certificates; Other  Information                  |   | 69 |
|        |                                       |                                              |   |   |
| 6.03        |                                       | Notices                                           |   | 72 |
|        |                                       |                                              |   |   |
| 6.04        |                                       | Payment of Obligations                            |   | 73 |
|        |                                       |                                              |   |   |
| 6.05        |                                       | Preservation of  Existence, Etc                   |   | 73 |
|        |                                       |                                              |   |   |
| 6.06        |                                       | Maintenance of  Properties                        |   | 73 |
|        |                                       |                                              |   |   |
| 6.07        |                                       | Maintenance of  Insurance                         |   | 73 |
|        |                                       |                                              |   |   |
| 6.08        |                                       | Compliance with Laws                              |   | 73 |
|        |                                       |                                              |   |   |
| 6.09        |                                       | Books and Records                                 |   | 74 |

 

ii

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| 6.10          |                            | Inspection Rights                                   |   | 74     |
|---------------|---------------------------------|-----------------------------------------------------|--------|--------|
|          |                            |                                                |   |   |
| 6.11          |                            | Use of Proceeds                                     |   | 74     |
|          |                            |                                                |   |   |
| 6.12          |                            | Covenant to Guaranty  Obligations and Give Security |   | 74     |
|          |                            |                                                |   |   |
| 6.13          |                            | Compliance with  Environmental Laws                 |   | 77     |
|          |                            |                                                |   |   |
| 6.14          |                            | San Diego Landlord  Waivers                         |   | 77     |
|          |                            |                                                |   |   |
| 6.15          |                            | Further Assurances                                  |   | 77     |
|          |                            |                                                |   |   |
| 6.16          |                            | Compliance with Terms  of Leaseholds                |   | 77     |
|          |                            |                                                |   |   |
| 6.17          |                            | Material Contracts                                  |   | 78     |
|          |                            |                                                |   |   |
| 6.18          |                            | Cash and Cash  Equivalents                          |   | 78     |
|          |                            |                                                |   |   |
| ARTICLE  VII  | NEGATIVE  COVENANTS             |                                                | 78     |
|          |                            |                                                |   |   |
| 7.01          |                            | Liens                                               |   | 78     |
|          |                            |                                                |   |   |
| 7.02          |                            | Indebtedness                                        |   | 80     |
|          |                            |                                                |   |   |
| 7.03          |                            | Investments                                         |   | 83     |
|          |                            |                                                |   |   |
| 7.04          |                            | Fundamental Changes                                 |   | 85     |
|          |                            |                                                |   |   |
| 7.05          |                            | Dispositions.                                       |   | 86     |
|          |                            |                                                |   |   |
| 7.06          |                            | Restricted Payments                                 |   | 87     |
|          |                            |                                                |   |   |
| 7.07          |                            | Change in Nature of  Business                       |   | 88     |
|          |                            |                                                |   |   |
| 7.08          |                            | Transactions with  Affiliates                       |   | 88     |
|          |                            |                                                |   |   |
| 7.09          |                            | Burdensome Agreements                               |   | 89     |
|          |                            |                                                |   |   |
| 7.10          |                            | Use of Proceeds                                     |   | 89     |
|          |                            |                                                |   |   |
| 7.11          |                            | Amendments of  Organization Documents               |   | 89     |
|          |                            |                                                |   |   |
| 7.12          |                            | Accounting Changes                                  |   | 90     |
|          |                            |                                                |   |   |
| 7.13          |                            | Prepayments, Etc. of  Indebtedness                  |   | 90     |
|          |                            |                                                |   |   |
| ARTICLE  VIII | EVENTS  OF DEFAULT AND REMEDIES |                                                | 90     |
|          |                            |                                                |   |   |
| 8.01          |                            | Events of Default                                   |   | 90     |
|          |                            |                                                |   |   |
| 8.02          |                            | Remedies upon Event of  Default                     |   | 92     |
|          |                            |                                                |   |   |
| 8.03          |                            | Application of Funds                                |   | 93     |
|          |                            |                                                |   |   |
| ARTICLE  IX   | ADMINISTRATIVE  AGENT           |                                                | 94     |
|          |                            |                                                |   |   |
| 9.01          |                            | Appointment and  Authority                          |   | 94     |
|          |                            |                                                |   |   |
| 9.02          |                            | Rights as a Lender                                  |   | 95     |
|          |                            |                                                |   |   |
| 9.03          |                            | Exculpatory Provisions                              |   | 95     |
|          |                            |                                                |   |   |
| 9.04          |                            | Reliance by  Administrative Agent                   |   | 96     |

 

iii

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| 9.05       |          | Delegation of Duties                                    |   | 96     |
|------------|---------------|---------------------------------------------------------|--------|--------|
|       |          |                                                    |   |   |
| 9.06       |          | Resignation of  Administrative Agent                    |   | 96     |
|       |          |                                                    |   |   |
| 9.07       |          | Non-Reliance on  Administrative Agent and Other Lenders |   | 97     |
|       |          |                                                    |   |   |
| 9.08       |          | No Other Duties, Etc                                    |   | 98     |
|       |          |                                                    |   |   |
| 9.09       |          | Administrative Agent  May File Proofs of Claim     |   | 98     |
|       |          |                                                    |   |   |
| 9.10       |          | Collateral Matters                                      |   | 99     |
|       |          |                                                    |   |   |
| ARTICLE  X | MISCELLANEOUS |                                                    | 99     |
|       |          |                                                    |   |   |
| 10.01      |          | Amendments, Etc                                         |   | 99     |
|       |          |                                                    |   |   |
| 10.02      |          | Notices; Effectiveness;  Electronic Communications      |   | 101    |
|       |          |                                                    |   |   |
| 10.03      |          | No Waiver; Cumulative  Remedies                         |   | 103    |
|       |          |                                                    |   |   |
| 10.04      |          | Expenses; Indemnity;  Damage Waiver                     |   | 103    |
|       |          |                                                    |   |   |
| 10.05      |          | Payments Set Aside                                      |   | 105    |
|       |          |                                                    |   |   |
| 10.06      |          | Successors and Assigns                                  |   | 106    |
|       |          |                                                    |   |   |
| 10.07      |          | Treatment of Certain  Information; Confidentiality      |   | 110    |
|       |          |                                                    |   |   |
| 10.08      |          | Right of Setoff                                         |   | 110    |
|       |          |                                                    |   |   |
| 10.09      |          | Interest Rate  Limitation                               |   | 111    |
|       |          |                                                    |   |   |
| 10.10      |          | Counterparts;  Effectiveness                            |   | 111    |
|       |          |                                                    |   |   |
| 10.11      |          | Survival of  Representations and Warranties             |   | 111    |
|       |          |                                                    |   |   |
| 10.12      |          | Severability                                            |   | 112    |
|       |          |                                                    |   |   |
| 10.13      |          | Replacement of Lenders                                  |   | 112    |
|       |          |                                                    |   |   |
| 10.14      |          | Governing Law;  Jurisdiction; Etc                       |   | 113    |
|       |          |                                                    |   |   |
| 10.15      |          | Waiver of Jury Trial                                    |   | 114    |
|       |          |                                                    |   |   |
| 10.16      |          | No Advisory or  Fiduciary Responsibility                |   | 114    |
|       |          |                                                    |   |   |
| 10.17      |          | USA PATRIOT Act Notice                                  |   | 114    |
|       |          |                                                    |   |   |
| 10.18      |          | ENTIRE AGREEMENT                                        |   | 115    |
|            |               |                                                         |        |        |  |

 

iv

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| SCHEDULES      |     |                                                               |
|----------------|----------|--------------------------------------------------------------------|
|           |     |                                                               |   |
| 1.01           |     | Excluded Collateral                                                |   |
|           |     |                                                               |   |
| 1.01           | A        | Existing Letters of Credit                                         |   |
|           |     |                                                               |   |
| 1.01           | B        | Permitted Ohio Financing Facility Subordination  Agreement         |   |
|           |     |                                                               |   |
| 2.01           |     | Commitments and Applicable Percentages                             |   |
|           |     |                                                               |   |
| 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           |   |
|           |     |                                                               |   |
| 5.16           |     | Required Phase 4 Trials                                            |   |
|           |     |                                                               |   |
| 7.02           |     | Existing Indebtedness                                              |   |
|           |     |                                                               |   |
| 7.09           |     | Certain Agreements                                                 |   |
|           |     |                                                               |   |
| 10.02          |     | Administrative Agent’s Office, Certain Addresses for  Notices |   |
|           |     |                                                               |   |
| EXHIBITS       |     |                                                               |
|           |     |                                                               |   |
| *Form of* | * * | * *                                                           |
| * *       | * * | * *                                                           | * * |
| A              |     | Committed Loan Notice                                              |   |
|           |     |                                                               |   |
| B              |     | Term Note                                                          |   |
|           |     |                                                               |   |
| C              |     | Revolving Credit Note                                              |   |
|           |     |                                                               |   |
| D              |     | Compliance Certificate                                             |   |
|           |     |                                                               |   |
| E              |     | Assignment and Assumption                                          |   |
|           |     |                                                               |   |
| F              |     | Pledge and Security Agreement                                      |   |
|           |     |                                                               |   |
| G              |     | Mortgage                                                           |   |
|           |     |                                                               |   |
| H              | -1       | Opinion Matters – Counsel to Loan Parties                     |   |
|           |     |                                                               |   |
| H              | -2       | Opinion Matters – Local Counsel to Loan Parties               |   |
|           |     |                                                               |   |
| I              |     | Covenant Triggering Event Certificate                              |   |
|           |     |                                                               |   |
| J              |     | Company’s Investment Policy                                   |   |

 

v

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**CREDIT AGREEMENT**

** **

This **CREDIT AGREEMENT**(this “Agreement”)is entered into as of December 21,2007 among **AMYLIN PHARMACEUTICALS, INC.**, a Delawarecorporation (the “Company”), and each of its subsidiaries listed on theSignature Page hereto (collectively, together with the Company, the “Borrowers” and each, individually,a “Borrower”), each lender from time to time party hereto (collectively,the “Lenders”and individually, a “Lender”), and **BANK OF AMERICA, N.A.**,as Administrative Agent, Collateral Agent and L/C Issuer.

 

PRELIMINARY STATEMENTS:

 

The Borrowers have requested that the Lenders providea term loan facility and a revolving credit facility, and the Lenders haveindicated their willingness to lend and the L/C Issuer has indicated itswillingness to issue letters of credit, in each case, on the terms and subjectto the conditions set forth herein.

 

In consideration of the mutual covenants andagreements herein contained, the parties hereto covenant and agree as follows:

 

# **ARTICLE I**DEFINITIONS AND ACCOUNTING TERMS

#  

1.01         DefinedTerms.  As used in this Agreement,the following terms shall have the meanings set forth below:

 

“Account Control Agreements” has the meaning specified in theSecurity Agreement.

 

“Acquisition” by any Person, means thepurchase or acquisition in a single transaction or a series of relatedtransactions by any such Person, individually or, together with its Affiliates,of (a) any Equity Interest of any other Person (other than an existingSubsidiary of the Company) which are sufficient such that such other Personbecomes a direct or indirect Subsidiary of the Company or (b) all or asubstantial portion of the Property, including, without limitation, all or asubstantial portion of the property comprising a division, business unit orline of business, of any other Person (other than a Subsidiary of the Company), whether involving amerger or consolidation with such other Person. “Acquire” has a meaningcorrelative thereto.

 

“Activation Event” hasthe meaning specified in Section 6.18.

 

“AdministrativeAgent” means Bank of America in its capacity as administrative agentand collateral agent under any of the Loan Documents, or any successoradministrative agent and/or collateral agent.

 

“AdministrativeAgent’s Office” means the Administrative Agent’s address and, asappropriate, account as set forth on Schedule 10.02, or such otheraddress or account as the Administrative Agent may from time to time notify tothe Borrowers and the Lenders.

 

----

 

“AdministrativeQuestionnaire” means an Administrative Questionnaire in a formsupplied by the Administrative Agent.

 

“Affiliate”means, with respect to any Person, another Person that directly, or indirectlythrough one or more intermediaries, Controls or is Controlled by or is undercommon Control with the Person specified.

 

“AggregateCommitments” means the Commitments of all the Lenders.

 

“Aggregate CreditExposures” means, at any time, in respect of (a) the TermFacility, the aggregate amount of the Term Loans, outstanding at such time and (b) inrespect of the Revolving Credit Facility, the sum of (i) the unusedportion of the Revolving Credit Facility at such time and (ii) the TotalRevolving Credit Outstandings at such time.

 

“Aggregate BasketAmount” means, as of any date of determination, the aggregate amount of thefollowing transactions if (i) entering into such transaction gave rise toa Covenant Triggering Event or (ii) such transaction occurs during anyCovenant Trigger Period: (a) the aggregate amount (determined inaccordance with the penultimate sentence of the definition of “Guaranty”) ofGuaranties made in accordance with Section 7.02(i); (b) theaggregate principal amount of Indebtedness incurred to finance insurancepremiums in accordance with Section 7.02(j); (c) the aggregateprincipal amount of Indebtedness in respect of Capitalized Leases, SyntheticLease Obligations and purchase money obligations incurred in accordance with Section 7.02(k);(d) the aggregate principal amount of unsecured Indebtedness incurred inaccordance with Section 7.02(l); (e) the aggregate principalamount of Indebtedness in respect of performance bonds, bid bonds, appealbonds, surety bonds and similar obligations incurred in accordance with Section 7.02(m);(f) the aggregate amount (determined in accordance with the penultimatesentence of the definition of “Guaranty”) of guaranties made in accordance withSection 7.02(q); (g) the aggregate amount of advances toofficers, directors and employees of the Company and its Subsidiaries made inaccordance with Section 7.03(c); (h) the aggregate amount ofInvestments by any Loan Party in any Unrestricted Subsidiary in accordance withSection 7.03(d)(iv); (i) the aggregate amount of purchases oracquisitions made in accordance with Section 7.03(h), providedthat such amount(s) shall be calculated based upon the total cash andnoncash consideration (including the fair market value of all Equity Interestsissued or transferred to the sellers thereof, all indemnities, earnouts andother contingent payment obligations (to the extent such amounts can reasonablybe estimated as of the date of such calculation) to, and the aggregate amountspaid or to be paid under noncompete, consulting and other affiliated agreementswith, the sellers thereof and all assumptions of debt, liabilities and otherobligations in connection therewith) paid by or on behalf of the Company andits Subsidiaries for any such purchase or other acquisition; (j) theaggregate amount of Investments made in accordance with Section 7.03(i),provided that any determination of the amount of such Investment shallinclude all cash and noncash consideration (including the fair market value ofall Equity Interests issued or transferred to the sellers thereof, allindemnities, earnouts and other contingent payment obligations (to the extentsuch amounts can reasonably be estimated as of the date of such calculation)to, and the aggregate amounts paid or to be paid under noncompete, consultingand other affiliated agreements with, the sellers thereof and all assumptionsof debt, liabilities and other obligations in connection therewith) paid by oron behalf of the Company 

 

2

----

 

and its Subsidiaries in connection with suchInvestment; and (k) the aggregate amount of purchases of or payments inrespect of Equity Interests of the Company in accordance with Section 7.06(j).

 

“Agreement”means this Credit Agreement.

 

“Applicable Percentage”means (a) in respect of the Term Facility, with respect to any Term Lenderat any time, the percentage (carried out to the ninth decimal place) of theTerm Facility represented by (i) onor prior to the Closing Date, such Term Lender’s Term Commitment at suchtime and (ii) thereafter, the principal amount of such Term Lender’s TermLoans at such time and (b) inrespect of the Revolving Credit Facility, with respect to any Revolving CreditLender at any time, the percentage (carried out to the ninth decimal place) ofthe Revolving Credit Facility represented by such Revolving Credit Lender’sRevolving Credit Commitment at such time.  If the commitment of each Revolving CreditLender to make Revolving Credit Loans and the obligation of the L/C Issuer tomake L/C Credit Extensions have been terminated pursuant to Section 8.02,or if the Revolving Credit Commitments have expired, then the ApplicablePercentage of each Revolving Credit Lender in respect of the Revolving CreditFacility shall be determined based on the Applicable Percentage of suchRevolving Credit Lender in respect of the Revolving Credit Facility mostrecently in effect, giving effect to any subsequent assignments.  The initial Applicable Percentage of eachLender in respect of each Facility is set forth opposite the name of suchLender on Schedule 2.01 or in the Assignment and Assumption pursuant towhich such Lender becomes a party hereto, as applicable.

 

“Applicable Rate”means (a) in respect of the Term Facility, 1.75% per annum and (b) inrespect of the Revolving Credit Facility, 1.00% per annum.

 

“Applicable RevolvingCredit Percentage” means with respect to any Revolving Credit Lender at anytime, such Revolving Credit Lender’s Applicable Percentage in respect of theRevolving Credit Facility at such time.

 

“Appropriate Lender” means, atany time, (a) with respect to either the Term Facility or the RevolvingCredit Facility, a Lender that has a Commitment with respect to such Facilityor holds a Term Loan or a Revolving Credit Loan, respectively, at such time and(b) with respect to the Letter of Credit Sublimit, (i) the L/C Issuerand (ii) if any Letters of Credit have been issued pursuant to Section 2.03(a),the Revolving Credit Lenders.

 

“Approved Fund”means any Fund that is administered or managed by (a) a Lender, (b) anAffiliate of a Lender or (c) an entity or an Affiliate of an entity thatadministers or manages a Lender.

 

“Arranger”means Bank of America, in its capacity as sole lead arranger and sole bookmanager.

 

“Assignee Group”means two or more Eligible Assignees that are Affiliates of one another or twoor more Approved Funds managed by the same investment advisor.

 

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“Assignment andAssumption” means an assignment and assumption entered into by aLender and an Eligible Assignee (with the consent of any party whose consent isrequired by Section 10.06(b)), and accepted by the AdministrativeAgent, in substantially the form of Exhibit E or any other formapproved by the Administrative Agent.

 

“AttributableIndebtedness” means, on any date, (a) in respect of any CapitalizedLease of any Person, the capitalized amount thereof that would appear on abalance sheet of such Person prepared as of such date in accordance with GAAP, (b) inrespect of any Synthetic Lease Obligation, the capitalized amount of theremaining lease or similar payments under the relevant lease or otherapplicable agreement or instrument that would appear on a balance sheet of suchPerson prepared as of such date in accordance with GAAP if such lease or otheragreement or instrument were accounted for as a Capitalized Lease and (c) allSynthetic Debt of such Person.

 

“Audited FinancialStatements” means the audited consolidated balance sheet of theCompany and its Subsidiaries for the fiscal year ended December 31, 2006, and the related consolidated statements ofincome or operations, shareholders’ equity and cash flows for such fiscal yearof the Company and its Subsidiaries, including the notes thereto.

 

“Auto-Extension Letter of Credit”has the meaning specified in Section 2.03(b)(iii).

 

“AvailabilityPeriod” means in respect of the Revolving Credit Facility and thePermitted F/X Facility, the period from and including the Closing Date toearliest of (i) the Maturity Date for the Revolving Credit Facility, (ii) thedate of termination of the Revolving Credit Commitments pursuant to Section 2.06,and (iii) the date of termination of the commitment of each RevolvingCredit Lender to make Revolving Credit Loans and of the obligation of the L/CIssuer to make L/C Credit Extensions pursuant to Section 8.02.

 

“Bank of America”means Bank of America, N.A. and its successors.

 

“Base Rate”means for any day a fluctuating rate per annum equal to the higher of (a) theFederal Funds Rate plus 1⁄2 of 1% and (b) the rate of interest in effect forsuch day as publicly announced from time to time by Bank of America as its “primerate.”  The “prime rate” is a rate set byBank of America based upon various factors including Bank of America’s costsand desired return, general economic conditions and other factors, and is usedas a reference point for pricing some loans, which may be priced at, above, orbelow such announced rate.  Any change insuch rate announced by Bank of America shall take effect at the opening ofbusiness on the day specified in the public announcement of such change.

 

“Base Rate Loan”means a Revolving Credit Loan or a TermLoan that bears interest based on the Base Rate.

 

“Borrowers”has the meaning specified in the introductory paragraph hereto.

 

“Borrower Materials”has the meaning specified in Section 6.02.

 

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“Borrowing”means a Revolving Credit Borrowing or a Term Borrowing, as the context mayrequire.

 

“Business Day”means any day other than a Saturday, Sunday or other day on which commercialbanks are authorized to close under the Laws of, or are in fact closed in, thestate where the Administrative Agent’s Office is located and if such dayrelates to any Eurocurrency Rate Loan, means any such day on which dealings inDollar deposits are conducted by and between banks in the London interbankeurodollar market.

 

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

 

“Cash Collateralize”has the meaning specified in Section 2.03(g).

 

“Cash Equivalents” means anyof the following types of Investments, to the extent (i) permitted by theCompany’s Investment Policy as of the date acquired and (ii) owned by theCompany or any of its Subsidiaries free and clear of all Liens (other than Lienscreated under the Collateral Documents andother Liens permitted under Section 7.01):

 

(a)           readilymarketable obligations issued or directly and fully guarantied or insured bythe United States of America or any agency or instrumentality thereof having maturitiesof not more than two years from the date of acquisition thereof; provided that the full faith andcredit of the United States of America is pledged in support thereof;

 

(b)           marketabledirect obligations issued by any state of the United States or any politicalsubdivision of any such state or any public instrumentality thereof, in eachcase maturing not more than 365 days from the date of acquisition thereof;

 

(c)           timedeposits with, or insured certificates of deposit or bankers’ acceptances of, (a) anyLender or (b) any other commercial bank that (i) is organized underthe laws of the United States of America, any state thereof or the District ofColumbia or is the principal banking subsidiary of a bank holding companyorganized under the laws of the United States of America, any state thereof orthe 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 (d) ofthis definition and (iii) has combined capital and surplus of at least$100,000,000 (or foreign currency equivalent thereof), in each case withrespect to clauses (a) and (b) with maturities of not more than 365days from the date of acquisition thereof;

 

(d)           commercialpaper issued by any Person organized under the laws of any state of the UnitedStates of America and rated, at the time of acquisition thereof, at least “Prime-1”(or the then equivalent grade) by Moody’s or at least “A-1” (or the thenequivalent grade) by S&P, in each case with maturities of not morethan 270 days from the date of acquisition thereof;

 

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(e)           Investmentsin money market investment programs that (i) have at least 90% of theirassets invested continuously in the types of investments referred to in clauses(a) through (d) above and (ii) have net assets of not less than$100,000,000;

 

(f)            allother Investments permitted by the Company’s Investment Policy in effect as ofthe date hereof.

 

“Cash ManagementAgreement” means any agreement to provide cash management services,including treasury, depository, overdraft, credit or debit card, electronicfunds transfer and other cash management arrangements.

 

“Cash Management Bank” means anyPerson that, at the time it enters into a Cash Management Agreement, is aLender or an Affiliate of a Lender, in its capacity as a party to such CashManagement Agreement.

 

“CERCLA” means theComprehensive Environmental Response, Compensation and Liability Act of 1980.

 

“CERCLIS” means theComprehensive Environmental Response, Compensation and Liability InformationSystem maintained by the U.S. Environmental Protection Agency.

 

“CFC” means aPerson that is a controlled foreign corporation under Section 957 of theCode.

 

“Change in Law”means the occurrence, after the date of this Agreement, of any of thefollowing: (a) the adoption or taking effect of any law, rule, regulationor treaty, (b) any change in any law, rule, regulation or treaty or in theadministration, interpretation or application thereof by any GovernmentalAuthority or (c) the making or issuance of any request, guideline ordirective (whether or not having the force of law) by any GovernmentalAuthority.

 

“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) ofthe Securities Exchange Act of 1934, but excluding the Loan Parties, anyemployee benefit plan of the Company or its Subsidiaries, and any person orentity acting in its capacity as trustee, agent or other fiduciary oradministrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3and 13d-5 under the Securities Exchange Act of 1934, except that a person orgroup shall be deemed to have “beneficial ownership” of all securities thatsuch person or group has the right to acquire, whether such right isexercisable 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 Company****entitled to vote for members of the board of directors orequivalent governing body of the****Company on a fully-diluted basis (andtaking into account all such securities that such “person” or “group” has theright to acquire pursuant to any option right); or

 

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(b)           duringany period of 24 consecutive months, a majority of the members of the board ofdirectors or other equivalent governing body of the Company cease to becomposed of individuals (i) who were members of that board or equivalentgoverning body on the first day of such period, (ii) whose election ornomination to that board or equivalent governing body was approved byindividuals referred to in clause (i) above constituting at the time ofsuch election or nomination at least a majority of that board or equivalentgoverning body or (iii) whose election or nomination to that board orother equivalent governing body was approved by individuals referred to inclauses (i) and (ii) above constituting at the time of such electionor nomination at least a majority of that board or equivalent governing body(excluding, in the case of both clause (ii) and clause (iii), anyindividual whose initial nomination for, or assumption of office as, a member ofthat board or equivalent governing body occurs as a result of an actual orthreatened solicitation of proxies or consents for the election or removal ofone or more directors by any person or group other than a solicitation for theelection of one or more directors by or on behalf of the board of directors).

 

“Closing Date”means the first date all the conditions precedent in Section 4.01are satisfied or waived in accordance with Section 10.01.

 

“Code”means the Internal Revenue Code of 1986.

 

“Collateral”means all of the “Collateral”and “Mortgaged Property” referred to in the Collateral Documents and allof the other property that is or is intended under the terms of the CollateralDocuments to be subject to Liens in favor of the Administrative Agent for thebenefit of the Secured Parties, except that in no event shall Collateralinclude Excluded Collateral

 

“CollateralDocuments” means, collectively, the Security Agreement, theMortgages, the Account Control Agreements, each of the mortgages, collateralassignments, Perfection Certificate Supplements, security agreements, pledgeagreements or other similar agreements delivered to the Administrative Agentpursuant to Section 6.12, and each of the other agreements,instruments or documents that creates or purports to create a Lien in favor ofthe Administrative Agent for the benefit of the Secured Parties.

 

“Commitment”means a Term Commitment or a Revolving Credit Commitment, as the context mayrequire.

 

“CommitmentFee Rate” means, at any time, in respect of the Revolving Credit Facility,0.25% per annum.

 

“Committed LoanNotice” means a notice of (a) a Term Borrowing, (b) aRevolving Credit Borrowing, (c) a conversion of Loans from one Type to theother, or (d) a continuation of Eurocurrency Rate Loans, pursuant to Section 2.02(a),which, if in writing, shall be substantially in the form of Exhibit A.

 

“Company” has themeaning specified in the introductory paragraph hereto.

 

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“ComplianceCertificate” means a certificate substantially in the form of Exhibit D.

 

“ContractualObligation” means, as to any Person, any provision of any securityissued by such Person or of any agreement, instrument or other undertaking towhich 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 causethe direction of the management or policies of a Person, whether through theability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”have meanings correlative thereto.

 

“Covenant TriggerPeriod” means (i) the period commencing on the date of the initialCovenant Triggering Event, if any, and ending on the date such CovenantTriggering Event is cured as set forth in the definition thereof or (ii) theperiod commencing on the date of any subsequent Covenant Triggering Event andending on the Termination Date.

 

“Covenant TriggeringEvent” means the amount of Unrestricted Cash is less than $400,000,000; provided,however, that if at any time after the initial Covenant Triggering Eventthe amount of Unrestricted Cash is increased to $400,000,000 or more, suchinitial Covenant Trigger Event shall be deemed cured and no Covenant TriggeringEvent shall be deemed to be in effect until such time, if any, thereafter asthe amount of Unrestricted Cash is less than $400,000,000.

 

“Covenant TriggeringEvent Certificate” means a certificate substantially in the form of Exhibit I.

 

“Credit Extension”means each of the following:  (a) aBorrowing, (b) an L/C Credit Extension and (c) execution of a SecuredHedge Agreement under the Permitted FX Facility.

 

“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 similardebtor relief Laws of the United States or other applicable jurisdictions fromtime to time in effect and affecting the rights of creditors generally.

 

“Default”means any event or condition that constitutes an Event of Default or that, withthe giving of any notice, the passage of time, or both, would be an Event ofDefault.

 

“Default Rate”means (a) when used with respect to Obligations other than Letter ofCredit Fees, an interest rate equal to (i) the Base Rate plus (ii) 2%per annum; provided, however, that with respect to a EurocurrencyRate Loan, the Default Rate shall be an interest rate equal to the interestrate (including any Applicable Rate) otherwise applicable to such Loan plus2% per annum and (b) when used with respect to Letter of Credit Fees, arate equal to the Applicable Rate plus 2% per annum.

 

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“Defaulting Lender”means any Lender that (a) has failed to fund any portion of the TermLoans, Revolving Credit Loans or participations in L/C Obligations required tobe funded by it hereunder within one Business Day of the date required to befunded by it hereunder, (b) has otherwise failed to pay over to theAdministrative Agent or any other Lender any other amount required to be paidby it hereunder within one Business Day of the date when due, unless thesubject of a good faith dispute, or (c) has been deemed insolvent orbecome the subject of a bankruptcy or insolvency proceeding.

 

“Deferred CompensationPlan” means that certain Corporate Plan for Retirement (Executive Plan),filed as Exhibit 10.42 to Form 10-K of the Company on February 26,2007, as the same may be amended from time to time, or any successor retirementplan.

 

“Disposition”or “Dispose”means the sale, transfer, license, lease or other disposition (including anysale and leaseback transaction) of any property by any Person (or the grantingof 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 notesor accounts receivable or any rights and claims associated therewith.

 

“Dollar”and “$”mean lawful money of the United States.

 

“DomesticSubsidiary” means any Subsidiary that is organized under the laws ofany political subdivision of the United States.

 

“Eligible Assignee”means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii),(v) and (vi) (subject to such consents, if any, as maybe required under Section 10.06(b)(iii)).

 

“Environmental Laws”means any and all Federal, state, local, and foreign statutes, laws,regulations, ordinances, rules, judgments, orders, decrees, permits,concessions, grants, franchises, licenses, agreements or governmentalrestrictions relating to pollution and the protection of the environment or therelease of any materials into the environment, including those related tohazardous substances or wastes, air emissions and discharges to waste or publicsystems.

 

“EnvironmentalLiability” means any liability, contingent or otherwise (includingany liability for damages, costs of environmental remediation, fines, penaltiesor indemnities), of the Company or any of its respective Subsidiaries directlyor indirectly resulting from or based upon (a) violation of anyEnvironmental Law, (b) the generation, use, handling, transportation,storage, treatment or disposal of any Hazardous Materials, (c) exposure toany Hazardous Materials, (d) the release or threatened release of anyHazardous Materials into the environment or (e) any contract, agreement orother consensual arrangement pursuant to which liability is assumed or imposedwith respect to any of the foregoing.

 

“Environmental Permit” means anypermit, approval, identification number, license or other authorizationrequired under any Environmental Law.

 

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“Equity Interests” means,with respect to any Person, all of the shares of capital stock of (or otherownership or profit interests in) such Person, all of the warrants, options orother rights for the purchase or acquisition from such Person of shares ofcapital stock of (or other ownership or profit interests in) such Person, allof the securities convertible into or exchangeable for shares of capital stockof (or other ownership or profit interests in) such Person or warrants, rightsor options for the purchase or acquisition from such Person of such shares (orsuch other interests), and all of the other ownership or profit interests insuch Person (including partnership, member or trust interests therein), whethervoting or nonvoting, and whether or not such shares, warrants, options, rightsor other interests are outstanding on any date of determination.

 

“ERISA”means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate”means any trade or business (whether or not incorporated) under common controlwith the Borrowers within the meaning of Section 414(b) or (c) ofthe Code (and Sections 414(m) and (o) of the Code for purposes ofprovisions relating to Section 412 of the Code).

 

“ERISA Event”means (a) a Reportable Event with respect to a Pension Plan; (b) awithdrawal by any Borrower or any ERISA Affiliate from a Pension Plan subjectto Section 4063 of ERISA during a plan year in which it was a substantialemployer (as defined in Section 4001(a)(2) of ERISA) or a cessationof operations that is treated as such a withdrawal under Section 4062(e) ofERISA; (c) a complete or partial withdrawal by any Borrower or any ERISAAffiliate from a Multiemployer Plan or notification that a Multiemployer Planis in reorganization; (d) the filing of a notice of intent to terminate,the treatment of a Plan amendment as a termination under Section 4041 or4041A of ERISA, or the commencement of proceedings by the PBGC to terminate aPension Plan or Multiemployer Plan; (e) an event or condition whichconstitutes grounds under Section 4042 of ERISA for the termination of, orthe appointment of a trustee to administer, any Pension Plan or MultiemployerPlan; or (f) the imposition of any liability under Title IV of ERISA,other than for PBGC premiums due but not delinquent under Section 4007 ofERISA, upon the Borrowers or any ERISA Affiliate.

 

“Eurocurrency Rate”means for any Interest Period with respect to a Eurocurrency Rate Loan, therate per annum equal to the British Bankers Association LIBOR Rate (“BBALIBOR”), as published by Reuters (or other commercially available sourceproviding quotations of BBA LIBOR as designated by the Administrative Agentfrom time to time) at approximately 11:00 a.m., London time, two BusinessDays prior to the commencement of such Interest Period, for Dollar deposits(for delivery on the first day of such Interest Period) with a term equivalentto such Interest Period.  If such rate isnot available at such time for any reason, then the “Eurocurrency Rate” forsuch Interest Period shall be the rate per annum determined by the AdministrativeAgent to be the rate at which Dollar deposits for delivery on the first day ofsuch Interest Period in Same Day Funds in the approximate amount of theEurocurrency Rate Loan being made, continued or converted by Bank of Americaand with a term equivalent to such Interest Period would be offered by Bank ofAmerica’s London Branch to major banks in the London at their request atapproximately 11:00 a.m. (London time) two Business Days prior to thecommencement of such Interest Period.

 

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“Eurocurrency RateLoan” means a Revolving Credit Loan or a Term  Loan that bearsinterest at a rate based on the Eurocurrency Rate.

 

“Event of Default”has the meaning specified in Section 8.01.

 

“Excluded Collateral”means (i) the Equity Interests in any Subsidiary that is not awholly-owned Subsidiary, (ii) any Equity Interests in (A) PsylinNeurosciences, Inc. (or any successor thereto), (B) the Persons setforth on Schedule 1.01 hereto and (C) to the extent such Investmentis otherwise permitted under the Loan Documents, any other Person that is not aSubsidiary and in which any Loan Party owns Equity Interests (valued inaccordance with the last sentence of the definition of “Investments”)representing a minority interest in such Person in an aggregate amount not toexceed $25,000,000, (iii) Intellectual Property, (iv) up to$20,000,000 from time to time deposited to secure Swap Contracts, (v) cashin escrow in an amount up to $10,000,000 at any time on deposit for the purposeof securing the Permitted Ohio Financing Facility, (vi) that certainparcel of undeveloped real property located at 8835 Trade Port Drive, Hamilton,Ohio, 45011, (vii) the Ohio Sale/Leaseback Property and (viii) anyEquity Interests in, and assets held by, any Royalty-Backed FinancingSubsidiary to the extent such Royalty-Backed Financing Subsidiary is createdwith respect to a Permitted Royalty-Backed Financing permitted hereunder.

 

“Excluded Taxes”means, with respect to the Administrative Agent, any Lender, the L/C Issuer orany other recipient of any payment to be made by or on account of anyObligation of the Borrowers hereunder, (a) taxes imposed on or measured byits overall net income (however denominated), and franchise taxes imposed on it(in lieu of net income taxes) by (i) the United States or (ii) thejurisdiction (or any political subdivision thereof) under the laws of whichsuch recipient is organized or in which its principal office is located or, inthe case of any Lender, in which its applicable Lending Office is located,provided that this clause (a) shall have no application to taxes imposedby the United States other than those imposed upon or measured by net income, (b) anybranch profits taxes imposed by the United States or any similar tax imposed byany other jurisdiction in which any Borrower is located and (c) in thecase of a Foreign Lender (other than an assignee pursuant to a request by theBorrowers under Section 10.13), any withholding tax that is imposedon amounts payable to such Foreign Lender at the time such Foreign Lenderbecomes a party hereto (or designates a new Lending Office) or is attributableto such Foreign Lender’s failure or inability (other than as a result of aChange in Law) to comply with Section 3.01(e), except to the extentthat such Foreign Lender (or its assignor, if any) was entitled, at the time ofdesignation of a new Lending Office (or assignment), to receive additionalamounts from the Borrowers with respect to such withholding tax pursuant to Section 3.01(a).

 

“Existing Letters ofCredit” means the letters of credit identified on Schedule 1.01Ahereto; provided, that such letters of credit (i) may not beamended, restated, increased or otherwise modified at any time without theexpress written consent of the L/C Issuer and (ii) may not be replacedexcept by a Letter of Credit issued under and in accordance with the CreditAgreement.

 

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“Facility” means theTerm Facility or the Revolving Credit Facility, as the context may require.

 

“FDA” means theUnited States Food and Drug Administration, an agency of the United StatesDepartment of Health and Human Services.

 

“FDA Warning Letter”means, with respect to any Person, a Warning Letter to such Person from the FDAor U.S. Department of Health and Human Services, as the case may be.

 

“Federal Funds Rate”means, for any day, the rate per annum equal to the weighted average of therates on overnight Federal funds transactions with members of the FederalReserve System arranged by Federal funds brokers on such day, as published bythe Federal Reserve Bank of New York on the Business Day next succeeding suchday; provided that (a) if such day is not a Business Day, theFederal Funds Rate for such day shall be such rate on such transactions on thenext preceding Business Day as so published on the next succeeding BusinessDay, and (b) if no such rate is so published on such next succeedingBusiness 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 toBank of America on such day on such transactions as determined by theAdministrative Agent.

 

“Fee Letter”means the collective reference to (a) the summary of terms with respect tothe Term Loan Facility, dated October 5, 2007, between the Borrowers andthe Arranger and (b) the fee letter, dated December 20, 2007, amongthe Borrowers, the Administrative Agent and the Arranger.

 

“Foreign Government Scheme or Arrangement”has the meaning specified in Section 5.12(d).

 

“Foreign Lender”means any Lender that is organized under the laws of a jurisdiction other thanthat in which the Borrowers are resident for tax purposes.  For purposes of this definition, the UnitedStates, each State thereof and the District of Columbia shall be deemed toconstitute a single jurisdiction.

 

“ForeignPharmaceutical Regulator” means the International Conference onHarmonization or any foreign regulatory body substantially similar thereto orto the FDA.

 

“Foreign Plan” has the meaningspecified in Section 5.12(d).

 

“FRB”means the Board of Governors of the Federal Reserve System of the UnitedStates.

 

“Fund”means any Person (other than a natural person) that is (or will be) engaged inmaking, purchasing, holding or otherwise investing in commercial loans andsimilar extensions of credit in the ordinary course of its activities.

 

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“FX Facility Sublimit”means an amount equal to the lesser of the unused Revolving Credit Commitments and$15,000,000.  The FX Facility Sublimit ispart of, and not in addition to, the Revolving Credit Commitments.

 

“FX Swap Value”means, as of any date of determination with respect to any Secured HedgeAgreement under the Permitted FX Facility, an amount equal to (i) the amount determined as the mark-to-marketvalue for such Swap Contract as of such date, as determined by and inaccordance with such Swap Contract plus (ii) 10% of the notionalamount of such Swap Contract.

 

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

 

“GovernmentalAuthority” means the government of the United States or any othernation, or of any political subdivision thereof, whether state or local, andany agency, authority, instrumentality, regulatory body, court, central bank orother entity exercising executive, legislative, judicial, taxing, regulatory oradministrative powers or functions of or pertaining to government (includingany supra-national bodies such as the European Union or the European CentralBank).

 

“Guaranty”means, as to any Person, any (a) obligation, contingent or otherwise, ofsuch Person guarantying or having the economic effect of guarantying anyIndebtedness or other obligation payable or performable by another Person (the “primary obligor”)in any manner, whether directly or indirectly, and including any obligation ofsuch Person, direct or indirect, (i) to purchase or pay (or advance orsupply funds for the purchase or payment of) such Indebtedness or otherobligation, (ii) to purchase or lease property, securities or services forthe purpose of assuring the obligee in respect of such Indebtedness or otherobligation of the payment or performance of such Indebtedness or otherobligation, (iii) to maintain working capital, equity capital or any otherfinancial statement condition or liquidity or level of income or cash flow ofthe primary obligor so as to enable the primary obligor to pay suchIndebtedness or other obligation, or (iv) entered into for the purpose ofassuring in any other manner the obligee in respect of such Indebtedness orother obligation of the payment or performance thereof or to protect suchobligee against loss in respect thereof (in whole or in part), or (b) Lienon any assets of such Person securing any Indebtedness or other obligation ofany other Person, whether or not such Indebtedness or other obligation isassumed by such Person (or any right, contingent or otherwise, of any holder ofsuch Indebtedness to obtain any such Lien). The amount of any Guaranty shall be deemed to be an amount equal to thestated or determinable amount of the related primary obligation, or portionthereof, in respect of which such Guaranty is made or, if not stated ordeterminable, the maximum reasonably anticipated liability in respect thereofas determined by the guarantying Person in good faith.  The term “Guaranty” as a verb has acorresponding meaning.

 

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“HazardousMaterials” means all explosive or radioactive substances or wastesand all hazardous or toxic substances, wastes or other pollutants, includingpetroleum or petroleum distillates, asbestos or asbestos-containing materials,polychlorinated biphenyls, radon gas, infectious or medical wastes and allother substances or wastes of any nature regulated pursuant to anyEnvironmental Law.

 

“Hedge Bank” means anyPerson that, at the time it enters into a Secured Hedge Agreement, is a Lenderor an Affiliate of a Lender, in its capacity as a party to such Secured HedgeAgreement.

 

“Honor Date” has the meaning specified in Section 2.03(c)(i).

 

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

 

(a)           allobligations of such Person for borrowed money and all obligations of such Personevidenced by bonds, debentures, notes, loan agreements or other similarinstruments;

 

(b)           alldirect or contingent obligations of such Person relating to the face amount ofall letters of credit (including standby and commercial), bankers’ acceptances,bank guaranties, surety bonds and similar instruments, in each case issued forthe account of such Person or as to which such Person is otherwise liable forreimbursement thereon;

 

(c)           netobligations of such Person under any Swap Contract;

 

(d)           allobligations of such Person to pay the deferred purchase price of property orservices (other than trade accounts payable in the ordinary course of businessand not past due for more than 90days after the date on which such trade account was created);

 

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

 

(f)            allAttributable Indebtedness in respect of Capitalized Leases and Synthetic LeaseObligations of such Person and all Synthetic Debt of such Person;

 

(g)           allobligations of such Person to purchase, redeem, retire, defease or otherwisemake any payment in respect of any Equity Interest in such Person or any otherPerson or any warrant, right or option to acquire such Equity Interest to theextent such obligations mature (excluding any maturity as a result of anoptional redemption by such Person) on or prior to the fourth anniversary ofthe Closing Date; and

 

(h)           allGuaranties of such Person in respect of any of the foregoing.

 

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For all purposes hereof, the Indebtedness of anyPerson shall include the Indebtedness of any partnership or joint venture(other than a joint venture that is itself a corporation, limited liabilitycompany or similar legal entity) in which such Person is a general partner or ajoint venturer, unless such Indebtedness is expressly made non-recourse to suchPerson.  The amount of any net obligationunder any Swap Contract on any date shall be deemed to be the Swap TerminationObligation thereof as of such date.

 

“Indemnified Taxes”******means Taxes other than Excluded Taxes.

 

“Indemnitees”has the meaning specified in Section 10.04(b).

 

“Information” hasthe meaning specified in Section 10.07.

 

“Information Memorandum” means the information memorandumdated November 2007 used by the Arranger in connection with thesyndication of the Term Loan Commitments.

 

“Intellectual Property”means all of the Company’s and each other Loan Party’s now owned and hereafterarising or acquired:

 

(a)           patents, patent rights, patentapplications, copyrights, copyright rights, works which are the subject matterof copyrights, copyright registrations, trademarks, trade names, trade secrets,trade styles, trademark and service mark applications, inventions, formulae,processes, compounds, gene sequences, cell lines, assays, biological materials,drawings, designs, blueprints, surveys, reports, manuals, operating standards,customer and other lists in whatever form maintained, and licenses;

 

(b)           rights and licenses (whether in-boundor out-bound) to use any of the property listed in subsection (a) above,rights in works of authorship, and contract rights relating to computersoftware programs, in whatever form created or maintained;

 

(c)           extensions, renewals, reissues,divisions, continuations, continuations-in-part and goodwill of any of theproperty listed in subsections (a) and (b) above; and

 

(d)           rights to sue for past, present andfuture infringement of any of the foregoing.

 

“Interest PaymentDate” means, (a) as to any Eurocurrency Rate Loan, the last dayof each Interest Period applicable to such Loan and the Maturity Date of theFacility under which such Loan was made; provided, however, thatif any Interest Period for a Eurocurrency Rate Loan exceeds three months, therespective dates that fall every three months after the beginning of suchInterest Period shall also be Interest Payment Dates; and (b) as to anyBase Rate Loan, the last Business Day of each March, June, September and December and the MaturityDate of the Facility under which such Loan was made.

 

“Interest Period”means, as to each Eurocurrency Rate Loan, the period commencing on the datesuch Eurocurrency Rate Loan is disbursed or converted to or continued 

 

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as a Eurocurrency Rate Loan and ending on the dateone, two, three or six months thereafter, as selected by the Borrowers in theirCommitted Loan Notice; provided that:

 

(a)           anyInterest Period that would otherwise end on a day that is not a Business Dayshall be extended to the next succeeding Business Day unless such Business Dayfalls in another calendar month, in which case such Interest Period shall endon the next preceding Business Day;

 

(b)           anyInterest Period that begins on the last Business Day of a calendar month (or ona day for which there is no numerically corresponding day in the calendar monthat the end of such Interest Period) shall end on the last Business Day of thecalendar month at the end of such Interest Period; and

 

(c)           noInterest Period shall extend beyond the Maturity Date of the Facility underwhich such Loan was made.

 

“Investment”means, as to any Person, any direct or indirect acquisition or investment bysuch Person, whether by means of (a) the purchase or other acquisition ofEquity Interests of another Person, (b) a loan, advance or capitalcontribution to, Guaranty or assumption of debt of, or purchase or otheracquisition of any other debt or interest in, another Person, excluding allaccounts receivables acquired in the ordinary course of business, or (c) thepurchase 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 businessof, such Person.  For purposes ofcovenant compliance (including, without limitation, calculation of theAggregate Basket Amount), the amount of any Investment shall be the amountactually invested, without adjustment for subsequent increases or decreases inthe value of such Investment.

 

“Investment Policy”means the Investment Policy of the Company attached as Exhibit Jhereto and any amendment, modification or replacement thereof in effect fromtime to time.

 

“IRS”means the United States Internal Revenue Service.

 

“ISP” means, withrespect to any Letter of Credit, the “International Standby Practices 1998”published by the Institute of International Banking Law & Practice, Inc.(or such later version thereof as may be in effect at the time of issuance).

 

“Issuer Documents”means with respect to any Letter of Credit, the Letter of Credit Application,and any other document, agreement and instrument entered into by the L/C Issuerand any Borrower (or any Subsidiary) or in favor of the L/C Issuer and relatingto such Letter of Credit.

 

“Laws”means, collectively, all international, foreign, Federal, state and localstatutes, treaties, rules, regulations, ordinances, codes and administrative orjudicial precedents or authorities, including the interpretation oradministration thereof by any Governmental Authority charged with theenforcement, interpretation or administration thereof, and all applicable 

 

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administrative orders, directed duties, licenses,authorizations and permits of, and agreements with, any Governmental Authority,in each case whether or not having the force of law.

 

“L/C Advance”means, with respect to each Revolving Credit Lender, such Lender’s funding ofits participation in any L/C Borrowing in accordance with its ApplicableRevolving Credit Percentage.

 

“L/C Borrowing”means an extension of credit resulting from a drawing under any Letter ofCredit which has not been reimbursed on the date when made or refinanced as aRevolving Credit Borrowing.

 

“L/C CreditExtension” means, with respect to any Letter of Credit, the issuancethereof or extension of the expiry date thereof, or the increase of the amountthereof.

 

“L/C Issuer”means Bank of America in its capacity as issuer of Letters of Credit hereunder,or any successor or additional issuer of Letters of Credit hereunder.

 

“L/C Obligations”means, as at any date of determination, the aggregate amount available to bedrawn under all outstanding Letters of Credit plus the aggregate of allUnreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amountavailable to be drawn under any Letter of Credit, the amount of such Letter ofCredit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on anydate of determination a Letter of Credit has expired by its terms but anyamount may still be drawn thereunder by reason of the operation of Rule 3.14of the ISP, such Letter of Credit shall be deemed to be “outstanding” in theamount so remaining available to be drawn.

 

“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 suchin such Lender’s Administrative Questionnaire, or such other office or officesas a Lender may from time to time notify the Borrowers and the AdministrativeAgent.

 

“Letter of Credit”means any standby letter ofcredit issued hereunder and shall include the Existing Letters of Credit.Letters of Credit may be issued only in Dollars.

 

“Letter of CreditApplication” means an application and agreement for the issuance oramendment of a Letter of Credit in the form from time to time in use by the L/CIssuer.

 

“Letter of CreditExpiration Date” means the date that is one year after the Letter ofCredit Maturity Date.

 

“Letter of CreditMaturity Date” means the date that is the Maturity Date then in effect forthe Revolving Credit Facility (or, if such day is not a Business Day, the nextpreceding Business Day).

 

“Letter of Credit Fee”has the meaning specified in Section 2.03(i).

 

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“Letter of CreditSublimit” means an amount equal to the Revolving CreditCommitments.  The Letter of CreditSublimit is part of, and not in addition to, the Revolving Credit Facility.

 

“Lien”means any mortgage, pledge, hypothecation, assignment, deposit arrangement,encumbrance, lien (statutory or other), charge, or preference, priority orother security interest or preferential arrangement in the nature of a securityinterest of any kind or nature whatsoever (including any conditional sale orother title retention agreement, any easement, right of way or otherencumbrance on title to real property, and any financing lease havingsubstantially the same economic effect as any of the foregoing).

 

“Loan” meansan extension of credit by a Lender to the Borrowers under Article IIin the form of a Term Loan or a Revolving Credit Loan.

 

“Loan Documents”means, collectively, (a) this Agreement, (b) the Notes, (c) theCollateral Documents, (d) the Fee Letter, (e) each Issuer Document, (f) eachSecured Hedge Agreement, (g) each Secured Cash Management Agreement, (h) thePost Closing Agreement and (i) each other amendment or joinder withrespect to any of the foregoing entered into from time to time; providedthat for purposes of the definition of “Material Adverse Effect” and ArticlesIV through IX, “Loan Documents” shall not include Secured HedgeAgreements or Secured Cash Management Agreements.

 

“Loan Parties”means, collectively, the Borrowers and any other Subsidiaries of the Companythat become Loan Parties pursuant to Section 6.12(a).

 

“Material AdverseEffect” means (a) a material adverse change in, or a materialadverse effect upon, the operations, business, assets, properties, liabilities(actual or contingent) or condition (financial or otherwise) of the Company orthe Company and its Subsidiaries taken as a whole; (b) a materialimpairment of the rights and remedies of the Administrative Agent or any Lenderunder any Loan Document, or of the ability of any Loan Party to perform itsobligations under any Loan Document to which it is a party; or (c) amaterial adverse effect upon the legality, validity, binding effect orenforceability against any Loan Party of any Loan Document to which it is aparty.

 

“Material Contract”means, with respect to any Person, (i) each contract filed as an exhibitto the Company’s Annual Report on Form 10-K for the fiscal year ended on December 31,2006 and each other contract that from time to time is required to be includedas an exhibit to the Company’s annual or quarterly reports filed under theSecurities Exchange Act of 1934, as amended, and (ii) any other contractor agreement to which a Loan Party is a party if a default by such Loan Partythereunder could give rise to an Event of Default under Section 8.01(e) orotherwise could reasonably be expected to have a Material Adverse Effect.

 

“Maturity Date”means three years from the Closing Date; provided, however, that,in each case, if such date is not a Business Day, the Maturity Date shall bethe next preceding Business Day.

 

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“Maximum AggregateBasket Amount” means $25,000,000.

 

“Measurement Period”means, at any date of determination, the most recently completed four fiscalquarters of the Company or, iffewer than four consecutive fiscal quarters of the Borrowers have been completed since the Closing Date, thefiscal quarters of the Borrowers thathave been completed since the Closing Date.

 

“Minimum UnrestrictedCash Balance” means, as of any date of determination, an amount ofUnrestricted Cash on hand equal to 105% of the Total Outstandings as of suchdate plus the aggregate unused Revolving Credit Commitments as of suchdate.

 

“Moody’s”means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage” has themeaning specified in Section 4.01(a)(iv).

 

“Mortgage Policy” has themeaning specified in Section 4.01(a)(iv)(B).

 

“Multiemployer Plan”means any employee benefit plan of the type described in Section 4001(a)(3) ofERISA, to which any Borrower or any ERISA Affiliate makes or is obligated tomake contributions, or during the preceding five plan years, has made or beenobligated to make contributions.

 

“Non-Extension Notice Date” hasthe meaning specified in Section 2.03(b)(iii).

 

“Note”means a Term Note or a Revolving Credit Note, as the context may require.

 

“NPL” means theNational Priorities List under CERCLA.

 

“Obligations”means all advances to, and debts, liabilities, obligations, covenants andduties of, any Loan Party arising under any Loan Document or otherwise withrespect to any Loan or Letter of Credit, whether direct or indirect (includingthose acquired by assumption), absolute or contingent, due or to become due,now existing or hereafter arising and including interest and fees that accrueafter the commencement by or against any Loan Party or any Affiliate thereof ofany proceeding under any Debtor Relief Laws naming such Person as the debtor insuch proceeding, regardless of whether such interest and fees are allowedclaims in such proceeding.

 

“Ohio Sale/LeasebackProperty” means electrical equipment, a housing structure and relatedtangible property located at 8874 Tradeport Drive.

 

“OrganizationDocuments” means, (a) with respect to any corporation, thecertificate or articles of incorporation and the bylaws (or equivalent orcomparable constitutive documents with respect to any non-U.S. jurisdiction); (b) withrespect to any limited liability company, the certificate or articles offormation or organization and operating agreement; and (c) with respect toany partnership, joint venture, trust or other form of business entity, thepartnership, joint venture or other applicable agreement of formation ororganization and any 

 

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agreement, instrument, filing or notice with respectthereto filed in connection with its formation or organization with theapplicable Governmental Authority in the jurisdiction of its formation ororganization and, if applicable, any certificate or articles of formation ororganization of such entity.

 

“Other Taxes”means all present or future stamp or documentary taxes or any other excise orproperty taxes, charges or similar levies arising from any payment madehereunder or under any other Loan Document or from the execution, delivery orenforcement of, or otherwise with respect to, this Agreement or any other LoanDocument.

 

“Outstanding Amount”means (a) with respect to Term Loans and Revolving Credit Loans on anydate, the aggregate outstanding principal amount thereof after giving effect toany borrowings and prepayments or repayments of Term Loans and Revolving CreditLoans, as the case may be, occurring on such date; and (b) with respect toany L/C Obligations on any date, the amount of such L/C Obligations on suchdate after giving effect to any L/C Credit Extension occurring on such date andany other changes in the aggregate amount of the L/C Obligations as of suchdate, including as a result of any reimbursements by the Borrowers ofUnreimbursed Amounts.

 

“Overnight Rate”means, for any day, the greater of (a) the Federal Funds Rate and (b) anovernight rate determined by the Administrative Agent or the L/C Issuer, as thecase may be, in accordance with banking industry rules on interbankcompensation.

 

“Participant”has the meaning specified in Section 10.06(d).

 

“PBGC”means the Pension Benefit Guaranty Corporation.

 

“Pension Plan”means any “employee pension benefit plan” (as such term is defined in Section 3(2) ofERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISAand is sponsored or maintained by the Borrowers or any ERISA Affiliate or towhich the Borrowers or any ERISA Affiliate contributes or has an obligation tocontribute, or in the case of a multiple employer or other plan described in Section 4064(a) ofERISA, has made contributions at any time during the immediately preceding fiveplan years.

 

“Perfection Certificate” has the meaning given such term in Section 1.03of the Security Agreement.

 

“PerfectionCertificate Supplement” has the meaning specified in Section 1.03of the Security Agreement.

 

“Permitted Encumbrances” has the meaning specified in theMortgages.

 

“PermittedFX Facility” means each foreign exchange Swap Contract(s) entered intobetween the Company and Bank of America (or an affiliate thereof) in accordancewith Section 2.04; provided that the aggregate FX Swap Valueshall not exceed at any time the FX Facility Sublimit.

 

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“PermittedOhio Financing Facility” means a loan or other financing facility betweenthe Company or another Loan Party, as the case may be, as borrower, and theState of Ohio or Governmental Authority of the State of Ohio, as the case maybe, as lender, entered into in accordance with Section 7.02(c).

 

“Permitted OhioFinancing Facility Liens” means Liens upon the Collateral in favor of theState of Ohio in connection with the Permitted Ohio Financing Facility, whichshall be permitted hereunder only so long as (a) immediately before andafter giving pro forma effect to the Permitted Ohio Financing Facility, noDefault shall have occurred and be continuing, (b) all such Liens aresubject and subordinate to the Liens of the Secured Parties under the Loan Documentsand (c) the State of Ohio or appropriate Governmental Authority of theState of Ohio shall enter into a subordination agreement in favor of theSecured Parties substantially in the form of Schedule 1.01B hereto andotherwise reasonably satisfactory to the Administrative Agent.

 

“PermittedOhio Sale/Leaseback” means a sale, and the subsequent lease by the Companyor any subsidiary, of the Ohio Sale/Leaseback Property, provided suchfinancing shall be permitted only so long as immediately before and aftergiving effect to such transaction, no Covenant Triggering Event shall occur andno Default shall have occurred and be continuing.

 

“PermittedRoyalty-Backed Financing” means any financing transaction, including anyloan, note or bond issuance or sale, assignment or grant of royalty or revenueinterests, by a Royalty-Backed Financing Subsidiary, provided that (i) immediatelybefore and after giving effect to each such transaction, no Covenant TriggeringEvent shall occur and no Default shall have occurred and be continuing and (ii) ifapplicable, the average weighted maturity date for such financing shall not beearlier than a date that is at least four years after the Closing Date.

 

“Person”means any natural person, corporation, limited liability company, trust, jointventure, association, company, partnership, Governmental Authority or otherentity.

 

“Plan”means any “employee benefit plan” (as such term is defined in Section 3(3) ofERISA) established by any Borrower or, with respect to any such plan that issubject to Section 412 of the Code or Title IV of ERISA, any ERISAAffiliate.

 

“Platform” has themeaning specified in Section 6.02.

 

“Pledged Debt” has themeaning specified in Section 2.01(b) of the SecurityAgreement.

 

“PledgedEquity” has the meaning specified in Section 2.01(a) ofthe Security Agreement.

 

“Post Closing Agreement” means that certain Post ClosingAgreement, dated as of the date hereof, among the Borrowers and theAdministrative Agent.

 

“Public Lender”has the meaning specified in Section 6.02.

 

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“Register”has the meaning specified in Section 10.06(c).

 

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

 

“Reportable Event”means any of the events set forth in Section 4043(c) of ERISA, otherthan events for which the 30 day notice period has been waived.

 

“Request for CreditExtension” means (a) with respect to a Borrowing, conversion orcontinuation of Term Loans or Revolving Credit Loans, a Committed Loan Noticeand (b) with respect to an L/C Credit Extension, a Letter of CreditApplication.

 

“Required Additional Term Lenders” means, as of any date ofdetermination, Term Lenders holding morethan 50% of any Additional Term Facility on such date.

 

“Required Lenders”means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings (withthe aggregate amount of each Revolving Credit Lender’s risk participation andfunded participation in L/C Obligations) and (b) aggregate unusedRevolving Credit Commitments; provided that the unused Revolving CreditCommitment of, and the portion of the Total Outstandings held or deemed heldby, any Defaulting Lender shall be excluded for purposes of making adetermination of Required Lenders.

 

“Required RevolvingLenders” means, as of any date of determination, Revolving Credit Lendersholding more than 50% of the sumof the (a) Total Revolving Credit Outstandings (with the aggregate amountof each Revolving Credit Lender’s risk participation and funded participationin L/C Obligations) and (b) aggregate unused Revolving Credit Commitments;provided that the unused Revolving Credit Commitment of, and the portionof the Total Revolving Credit Outstandings held or deemed held by, anyDefaulting Lender shall be excluded for purposes of making a determination ofRequired Revolving Lenders.

 

“Required Term Lenders”means, as of any date of determination, Term Lenders holding more than 50% of the Term Facility onsuch date; provided that the portion of the Term Facility held by anyDefaulting Lender shall be excluded for purposes of making a determination ofRequired Term Lenders.

 

“ResponsibleOfficer” means the chief executive officer, president, chieffinancial officer, senior vice president and any vice president subject to thereporting requirements of Section 16 of the Securities Exchange Act of1934 of a Loan Party and, if the Loan Party is a limited liability company, anymanager of such Loan Party.  Any documentdelivered hereunder that is signed by a Responsible Officer of a Loan Partyshall be conclusively presumed to have been authorized by all necessary corporate,partnership and/or other action on the part of such Loan Party and suchResponsible Officer shall be conclusively presumed to have acted on behalf ofsuch Loan Party.

 

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“Restricted Payment”means any dividend or other distribution (whether in cash, securities or otherproperty) with respect to any capital stock or other Equity Interest of anyPerson or any of its Subsidiaries, or any payment (whether in cash, securitiesor other property), including any sinking fund or similar deposit, on accountof the purchase, redemption, retirement, defeasance, acquisition, cancellationor termination of any such capital stock or other Equity Interest, or onaccount of any return of capital to any Person’s stockholders, partners ormembers (or the equivalent of any thereof), or any option, warrant or otherright to acquire any such dividend or other distribution or payment.

 

“Revolving CreditBorrowing” means a borrowing consisting of simultaneous RevolvingCredit Loans of the same Type and, in the case of Eurocurrency Rate Loans,having the same Interest Period made by each of the Revolving Credit Lenderspursuant to Section 2.01(b).

 

“Revolving CreditCommitment” means, as to each Revolving Credit Lender, its obligationto (a) make Revolving Credit Loans to the Borrowers pursuant to Section 2.01(b) and(b) purchase participations in L/C Obligations in an aggregate principalamount at any one time outstanding not to exceed the amount set forth oppositesuch Lender’s name on Schedule 2.01 under the caption “Revolving CreditCommitment” or opposite such caption in the Assignment and Assumption pursuantto which such Lender becomes a party hereto, as applicable, as such amount maybe adjusted from time to time in accordance with this Agreement.

 

“Revolving CreditFacility” means, at any time, the aggregate amount of the RevolvingCredit Lenders’ Revolving Credit Commitments at such time.

 

“Revolving CreditLender” means, at any time, (a) so long as the Revolving CreditCommitments are outstanding, any Lender that has a Revolving Credit Commitmentat such time or (b) if the Revolving Credit Commitments have beenterminated or expired, any Lender that holds a Revolving Credit Loan, is partyto a Secured Hedge Agreement under the Permitted FX Facility or a holds aparticipation in L/C Obligations at such time.

 

“Revolving CreditLoan” has the meaning specified in Section 2.01(b).

 

“Revolving CreditNote”means a promissory note made by the Borrowers in favor of a Revolving CreditLender evidencing Revolving Credit Loans made by such Revolving Credit Lender,substantially in the form of Exhibit C.

 

“Rights Agreement”means the Rights Agreement, dated June 17, 2002, between the Company andAmerican Stock Transfer & Trust Company, as amended.

 

“Royalty-BackedFinancing Subsidiary” means a special purpose subsidiary of the LoanParties formed for the purpose of entering into a Permitted Royalty-BackedFinancing.

 

“S&P”means Standard & Poor’s Ratings Services, a division of The McGraw-HillCompanies, Inc., and any successor thereto.

 

“Same Day Funds”means immediately available funds.

 

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“SEC”means the Securities and Exchange Commission, or any Governmental Authoritysucceeding to any of its principal functions.

 

“Secured Cash Management Agreement” means any Cash Management Agreementthat is entered into by and between the Borrowers and any Cash Management Bank.

 

“Secured Hedge Agreement” means the Permitted FX Facility andany interest rate Swap Contract permitted under Article VI or VIIthat is entered into by and between the Borrowers and any Hedge Bank.

** **

“Secured Parties” means,collectively, the Administrative Agent, the Lenders, the L/C Issuer, the HedgeBanks, the Cash Management Banks, each co-agent or sub-agent appointed by theAdministrative Agent from time to time pursuant to Section 9.05,and the other Persons the Obligations owing to which are or are purported to besecured by the Collateral under the terms of the Collateral Documents.

 

“Security Agreement” has themeaning specified in Section 4.01(a)(iii).

 

“Senior 2004 Notes” means the 2.50% convertible seniornotes of the Company due 2011 in an aggregate principal amount of $200,000,000issued and sold on April 6, 2004.

 

“Senior 2007 Notes” means the 3.00% convertible seniornotes of the Company due 2014 in an aggregate principal amount of $575,000,000issued and sold on June 8, 2007.

 

“Senior Notes” means the Senior 2004 Notes and theSenior 2007 Notes.

 

“Senior 2004 Notes Documents” means that certain Indenturebetween Amylin Pharmaceuticals, Inc., a Delaware corporation, and J.P.Morgan Trust Company, National Association, as trustee, dated as of April 6,2004, the Senior 2004 Notes and all other agreements, instruments and otherdocuments pursuant to which the Senior 2004 Notes have been or will be issuedor otherwise setting forth the terms of the Senior 2004 Notes.

 

“Senior 2007 Notes Documents” means that certain Indenturebetween Amylin Pharmaceuticals, Inc., a Delaware corporation, and The Bankof New York Trust Company, N.A., a national banking association, as trustee,dated as of June 8, 2007, the Senior 2007 Notes and all other agreements, instruments and other documentspursuant to which the Senior 2007 Notes have been or will be issued orotherwise setting forth the terms of the Senior 2007 Notes.

 

“Senior Notes Documents” means the Senior 2004 NotesDocuments and the Senior 2007 Notes Documents.

 

“Solvent”and “Solvency” mean,with respect to any Person on any date of determination, that on such date (a) thefair value of the property of such Person is greater than the total amount ofliabilities, including contingent liabilities, of such Person, (b) thepresent fair salable value of the assets of such Person is not less than theamount that will be required to pay the probable liability of such Person onits debts as they become absolute and matured, (c) such Person does notintend to, and does not believe that it will, incur debts or liabilities beyondsuch 

 

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Person’s ability to pay such debts and liabilities asthey 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’sproperty would constitute an unreasonably small capital (provided, that,with respect to the Company and its Subsidiaries, this clause (d) shallapply only to the Company and the Company and its Subsidiaries on aconsolidated basis), and (e) such Person is able to pay its debts andliabilities, contingent obligations and other commitments as they mature in theordinary course of business.  The amountof contingent liabilities at any time shall be computed as the amount that, inthe light of all the facts and circumstances existing at such time, representsthe amount that can reasonably be expected to become an actual or maturedliability.

 

“Subsidiary”of a Person means a corporation, partnership, joint venture, limited liabilitycompany or other business entity of which a majority of the shares ofsecurities or other interests having ordinary voting power for the election ofdirectors or other governing body (other than securities or interests havingsuch power only by reason of the happening of a contingency) are at the timebeneficially owned, or the management of which is otherwise controlled,directly, or indirectly through one or more intermediaries, or both, by suchPerson.  Unless otherwise specified, allreferences herein to a “Subsidiary” or to “Subsidiaries” shallrefer to a Subsidiary or Subsidiaries of the Company.

 

“Swap Contract”means (a) any and all interest rate swap transactions, basis swaps, creditderivative transactions, forward interest rate transactions, commodity swaps,commodity options, forward commodity contracts, equity or equity index swaps oroptions, bond or bond price or bond index swaps or options or forward bond orforward bond price or forward bond index transactions, interest rate options,forward foreign exchange transactions, interest rate or foreign exchange ratecap, floor or collar transactions, currency swap transactions, cross-currencyrate swap transactions, currency options, spot contracts, or any other similartransactions or any combination of any of the foregoing (including any optionsto enter into any of the foregoing), whether or not any such transaction isgoverned by or subject to any Master Agreement (as defined below), and (b) anyand all transactions of any kind, and the related confirmations, which are subjectto the terms and conditions of, or governed by, any form of master agreementpublished by the International Swaps and Derivatives Association, Inc.,any International Foreign Exchange Master Agreement, or any other masteragreement (any such master agreement, together with any related schedules, a “Master Agreement”),including any such obligations or liabilities under any Master Agreement.

 

“Swap TerminationObligations” means, in respect of any one or more Swap Contracts ofany Person, after taking into account the effect of any legally enforceablenetting agreement relating to such Swap Contracts, (a) for any date on orafter the date such Swap Contracts have been closed out and termination value(s) determinedin accordance therewith, the termination value(s) payable by such Personto the counter party, and (b) for any date prior to the date referenced inclause (a), the amount(s) determined as the mark-to-market value(s) forsuch Swap Contracts, which will be the unrealized loss, if any, on such SwapContract of such Person, as determined based upon one or more mid-market orother readily available quotations provided by any recognized dealer in suchSwap Contracts (which may include a Lender or any Affiliate of a Lender).

 

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“Synthetic Debt”means, with respect to any Person as of any date of determination thereof, allobligations of such Person in respect of transactions entered into by suchPerson that are intended to function primarily as a borrowing of funds (including any minority interest transactionsthat function primarily as a borrowing) but are not otherwise includedin the definition of “Indebtedness” or as a liability on theconsolidated balance sheet of such Person and its Subsidiaries in accordancewith GAAP; provided, that with respect to any Loan Party, “SyntheticDebt” shall exclude operating leases.

 

“Synthetic LeaseObligation” means the monetary obligation of a Person under (a) aso-called synthetic, off-balance sheet or tax retention lease, or (b) anagreement for the use or possession of property (including sale and leasebacktransactions), in each case, creating obligations that do not appear on thebalance sheet of such Person but which, upon the application of any DebtorRelief Laws to such Person, would be characterized as the indebtedness of suchPerson (without regard to accounting treatment).

 

“Taxes”means all present or future taxes, levies, imposts, duties, deductions,withholdings, assessments, fees or other charges imposed by any GovernmentalAuthority, including any interest, additions to tax or penalties applicablethereto.

 

“Term Borrowing”means a borrowing consisting of simultaneous Term Loans of the same Type and,in the case of Eurocurrency Rate Loans, having the same Interest Period made byeach of the Term Lenders pursuant to Section 2.01(a).

 

“Term Commitment”means, as to each Term Lender, its obligation to make Term Loans to theBorrowers pursuant to Section 2.01(a) in an aggregateprincipal amount at any one time outstanding not to exceed the amount set forthopposite such Term Lender’s name on Schedule 2.01 under the caption “TermCommitment” or opposite such caption in the Assignment and Assumption pursuantto which such Term Lender becomes a party hereto, as applicable, as such amountmay be adjusted from time to time in accordance with this Agreement.

 

“Term Facility”means, at any time, (a) on orprior to the Closing Date, the aggregate amount of the Term Commitments at suchtime and (b) thereafter, the aggregate principal amount of the TermLoans of all Term Lenders outstanding at such time.

 

“Term Lender”means (a) at any time on or prior to the Closing Date, any Lender that hasa Term Commitment at such time and (b) at any time after the Closing Date,any Lender that holds Term Loans at such time.

 

“Term Loan”means an advance made by any Term Lender under the Term Facility.

 

“Term Note” meansa promissory note made by the Borrowers in favor of a Term Lender evidencingTerm Loans made by such Term Lender, substantially in the form of Exhibit B.

 

“Termination Date”has the meaning specified in the Security Agreement.

 

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“Threshold Amount”means $30,000,000.

 

“Total RevolvingCredit Outstandings” means the aggregate Outstanding Amount of allRevolving Credit Loans and L/C Obligations plus the aggregate FX SwapValue of all Secured Hedge Agreements under the Permitted FX Facility.

 

“Total Outstandings”means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

 

“Type”means, with respect to a Loan, its character as a Base Rate Loan or aEurocurrency Rate Loan.

 

“UCC” means theUniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect ofperfection or non-perfection or the priority of any security interest in anyCollateral is governed by the Uniform Commercial Code as in effect in ajurisdiction other than the State of NewYork, “UCC” means the Uniform Commercial Code as in effect fromtime to time in such other jurisdiction for purposes of the provisions hereofrelating to such perfection, effect of perfection or non-perfection orpriority.

 

“Unfunded PensionLiability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16)of ERISA, over the current value of that Pension Plan’s assets, determined inaccordance with the assumptions used for funding the Pension Plan pursuant to Section 412of the Code for the applicable plan year.

 

“Unrestricted Cash”means, with respect to the Company and the other Loan Parties, the aggregateamount of Unrestricted Cash Equivalents in each case subject to an AccountControl Agreement in favor of the Administrative Agent, for the benefit of theSecured Parties.

 

“Unrestricted CashEquivalents” means all cash and Cash Equivalents of the Loan Parties except:

 

(a)           asof any date of determination, Cash Equivalents described in clause (b) ofthe definition thereof that are rated lower than “AA” by S&P and “Aa” byMoody’s as of such date;

 

(b)           asof any date of determination, Cash Equivalents described in clause (d) ofthe definition thereof that are rated lower than “A-1” by S&P and “P-1” byMoody’s as of such date;

 

(c)           asof any date of determination, Cash Equivalents described in clause (d) ofthe definition thereof that are rated at least “A-1” by S&P and “P-1” byMoody’s as of such date (collectively, “Permitted Commercial Paper”)issued by a single issuer in an amount equal to the excess of all suchPermitted Commercial Paper issued by such single issuer over 5% of theaggregate amount of all Permitted Commercial Paper of all issuers as of suchdate;

 

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(d)           CashEquivalents described in clause (e) of the definition thereof that are notadministered by financial institutions that have the highest rating obtainablefrom either S&P or Moody’s;

 

(e)           CashEquivalents described in clause (f) of the definition thereof; and

 

(f)            cashthat constitutes Excluded Collateral.

 

“UnrestrictedSubsidiary” means any Royalty-Backed Financing Subsidiary and any otherSubsidiary of the Company that is not, and under the Loan Documents is notrequired to become, a Loan Party.

 

“United States”and “U.S.”mean the United States of America.

 

“UnreimbursedAmount” has the meaning specified in Section 2.03(c)(i).

 

“U.S. Loan Party”means any Loan Party that is organized under the laws of one of the states ofthe United States of America and that is not a CFC.

 

1.02         Other Interpretive Provisions.  With reference to this Agreement and eachother Loan Document, unless otherwise specified herein or in such other LoanDocument:

 

#### (a)   The definitions of terms herein shall apply equally to thesingular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include thecorresponding masculine, feminine and neuter forms.  The words “include,” “includes”and “including” shall be deemed to be followed by the phrase “withoutlimitation.”  The word “will”shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) anydefinition of or reference to any agreement, instrument or other document(including any Organization Document) shall be construed as referring to suchagreement, instrument or other document as from time to time amended,supplemented or otherwise modified (subject to any restrictions on suchamendments, supplements or modifications set forth herein or in any other LoanDocument), (ii) any reference herein to any Person shall be construed toinclude such Person’s successors and assigns, (iii) the words “herein,”“hereof” and “hereunder,” and words of similar import when usedin any Loan Document, shall be construed to refer to such Loan Document in itsentirety and not to any particular provision thereof, (iv) all referencesin a Loan Document to Articles, Sections, Preliminary Statements, Exhibits andSchedules shall be construed to refer to Articles and Sections of, andPreliminary Statements, Exhibits and Schedules to, the Loan Document in whichsuch references appear, (v) any reference to any law shall include allstatutory and regulatory provisions consolidating, amending, replacing orinterpreting such law and any reference to any law or regulation shall, unlessotherwise specified, refer to such law or regulation as amended, modified orsupplemented 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 andall tangible and intangible assets and properties, including cash, securities,accounts and contract rights.

 

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####  

#### (b)   In the computation of periods of time from a specified date to alater 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 areincluded for convenience of reference only and shall not affect theinterpretation of this Agreement or any other Loan Document.

####  

1.03         Accounting Terms.  (a)  Generally.  All accounting terms not specifically orcompletely defined herein shall be construed in conformity with, and allfinancial data (including financial ratios and other financial calculations)required to be submitted pursuant to this Agreement shall be prepared inconformity with, GAAP applied on a consistent basis, as in effect from time totime, applied in a manner consistent with that used in preparing the AuditedFinancial Statements, except as otherwise specifically prescribedherein.

####  

### (b)           Changes in GAAP.  If at any time any change in GAAP wouldaffect the computation of any financial ratio or requirement set forth in anyLoan Document, and either the Borrowers or the Required Lenders shall sorequest, the Administrative Agent, the Lenders and the Borrowers shallnegotiate in good faith to amend such ratio or requirement to preserve theoriginal intent thereof in light of such change in GAAP (subject to theapproval of the Required Lenders); provided that, until so amended, (i) suchratio or requirement shall continue to be computed in accordance with GAAPprior to such change therein and (ii) the Borrowers shall provide to theAdministrative Agent and the Lenders financial statements and other documentsrequired under this Agreement or as reasonably requested hereunder settingforth a reconciliation between calculations of such ratio or requirement madebefore and after giving effect to such change in GAAP.

###  

1.04         Rounding.  Any financial ratios required to be maintainedby the Borrowers pursuant to this Agreement shall be calculated by dividing theappropriate component by the other component, carrying the result to one placemore than the number of places by which such ratio is expressed herein androunding the result up or down to the nearest number (with a rounding-up ifthere is no nearest number).

 

1.05         Times of Day.  Unless otherwise specified, all referencesherein to times of day shall be references to Pacific time (daylight orstandard, as applicable).

 

1.06         Letter of Credit Amounts.  Unless otherwise specified herein, the amountof a Letter of Credit at any time shall be deemed to be the stated amount ofsuch Letter of Credit in effect at such time; provided, however, that withrespect to any Letter of Credit that, by its terms or the terms of any IssuerDocument related thereto, provides for one or more automatic increases in thestated amount thereof, the amount of such Letter of Credit shall be deemed tobe the maximum stated amount of such Letter of Credit after giving effect toall such increases, whether or not such maximum stated amount is in effect atsuch time.

 

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# ** **

# **ARTICLE II**THE COMMITMENTS AND CREDIT EXTENSIONS

#  

2.01         The Loans.  (a)  The Term Borrowing.  Subject to the terms and conditions set forthherein, each Term Lender severally agrees to make a single loan to theBorrowers in Dollars on the Closing Date in an amount not to exceed such TermLender’s Term Commitment.  The TermBorrowing shall consist of Term Loans made simultaneously by the Term Lendersin accordance with their respective Applicable Percentage of the TermFacility.  Amounts borrowed under this Section 2.01(a) andrepaid or prepaid may not be reborrowed. Term Loans may be Eurocurrency Rate Loans or Base Rate Loans, as furtherprovided herein.

 

### (b)           TheRevolving Credit Borrowings.  Subjectto the terms and conditions set forth herein, each Revolving Credit Lenderseverally agrees to make loans (each such loan, a “Revolving Credit Loan”) to the Borrowers in Dollars fromtime to time, on any Business Day during the Availability Period, in anaggregate amount not to exceed at any time outstanding the amount of suchLender’s Revolving Credit Commitment; provided, however, thatafter giving effect to any Revolving Credit Borrowing, (i) the TotalRevolving Credit Outstandings shall not exceed the Revolving Credit Facilityand (ii) the aggregate Outstanding Amount of the Revolving Credit Loans ofany Revolving Credit Lender, plus such Revolving Credit Lender’sApplicable Revolving Credit Percentage of the Outstanding Amount of all L/CObligations plus the aggregate FX Swap Value of all Secured HedgeAgreements (if any) of such Revolving Credit Lender under the Permitted FXFacility shall not exceed such Revolving Credit Lender’s Revolving CreditCommitment.  Within the limits of eachRevolving Credit Lender’s Revolving Credit Commitment, and subject to the otherterms and conditions hereof, the Borrowers may borrow under this Section 2.01(b),prepay under Section 2.05, and reborrow under this Section 2.01(b).  Revolving Credit Loans may be Base Rate Loansor Eurocurrency Rate Loans, as further provided herein.

###  

2.02         Borrowings, Conversions andContinuations of Loans.  (a)  Borrowings,Conversions and Continuations Generally. Each Term Borrowing, eachRevolving Credit Borrowing, each conversion of Term Loans or Revolving CreditLoans from one Type to the other, and each continuation of Eurocurrency RateLoans shall be made upon the Borrowers’ irrevocable notice to theAdministrative Agent, which may be given by telephone.  Each such notice must be received by theAdministrative Agent not later than 11:00 a.m. (i) three BusinessDays prior to the requested date of any Borrowing of, conversion to orcontinuation of Eurocurrency Rate Loans denominated in Dollars or of anyconversion of Eurocurrency Rate Loans denominated in Dollars to Base Rate Loansand (ii) on the requested date of any Borrowing of Base Rate Loans.  Each telephonic notice by the Borrowerspursuant to this Section 2.02(a) must be confirmed promptly bydelivery to the Administrative Agent of a written Committed Loan Notice,appropriately completed and signed by a Responsible Officer of the Borrowers.  Each Borrowing of, conversion to orcontinuation of Eurocurrency Rate Loans shall be in a principal amount of$1,000,000 or a whole multiple of $1,000,000 in excess thereof.  Except as provided in Section 2.03(c),each Borrowing of or conversion to Base Rate Loans shall be in a principalamount of $500,000 or a whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice  (whether telephonic or written) shall specify(i) whether the Borrowers are requesting a Term Borrowing, a Revolving CreditBorrowing, a conversion of Term Loans or

 

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Revolving Credit Loansfrom one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) therequested date of the Borrowing, conversion or continuation, as the case may be(which shall be a Business Day), (iii) the principal amount of Loans to beborrowed, converted or continued, (iv) the Type of Loans to be borrowed orto which Type existing Term Loans or Revolving Credit Loans are to be convertedand (v) if applicable, the duration of the Interest Period with respectthereto.  If the Borrowers fails tospecify a Type of Loan in a Committed Loan Notice or if the Borrowers fails togive a timely notice requesting a conversion or continuation, then theapplicable Term Loans or Revolving Credit Loans shall be made as, or convertedto, Base Rate Loans.  Any such automaticconversion to Base Rate Loans shall be effective as of the last day of theInterest Period then in effect with respect to the applicable Eurocurrency RateLoans.  If the Borrowers requests aBorrowing of, conversion to, or continuation of Eurocurrency Rate Loans in anysuch Committed Loan Notice, but fails to specify an Interest Period, it will bedeemed to have specified an Interest Period of one month.

 

### (b)           Notice to Lenders and Funding of Borrowings. Following receipt of a Committed Loan Notice, theAdministrative Agent shall promptly notify each Lender of the amount of itsApplicable Percentage under the applicable Facility of the applicable TermLoans or Revolving Credit Loans, and if no timely notice of a conversion orcontinuation is provided by the Borrowers, the Administrative Agent shallnotify each Lender of the details of any automatic conversion to Base RateLoans described in Section 2.02(a). In the case of a Term Borrowing or a Revolving Credit Borrowing,each Appropriate Lender shall make the amount of its Loan available to theAdministrative Agent in Same Day Funds at the Administrative Agent’s Office notlater than 1:00 p.m. on the Business Day specified in the applicableCommitted Loan Notice.  Upon satisfactionof the applicable conditions set forth in Section 4.02 (and, ifsuch Borrowing is the initial Credit Extension, Section 4.01), theAdministrative Agent shall make all funds so received available to theBorrowers in like funds as received by the Administrative Agent either by (i) creditingthe account of the Borrowers on the books of Bank of America with the amount ofsuch funds or (ii) wire transfer of such funds, in each case in accordancewith instructions provided to (and reasonably acceptable to) the AdministrativeAgent by the Borrowers; provided, however, that if, on the date aCommitted Loan Notice with respect to a Revolving Credit Borrowing denominatedin Dollars is given by the Borrowers, there are L/C Borrowings outstanding,then the proceeds of such Revolving Credit Borrowing, first, shall beapplied to the payment in full of any such L/C Borrowings, and second,shall be made available to the Borrowers as provided above.

###  

### (c)           Eurocurrency Rate Loans.Except as otherwise provided herein, a Eurocurrency Rate Loan may be continuedor converted only on the last day of an Interest Period for such EurocurrencyRate Loan.  During the existence of aDefault, no Loans may be requested as, converted to or continued as EurocurrencyRate Loans without the consent of the Required Lenders.

###  

### (d)           Notice of Interest Rate.The Administrative Agent shall promptly notify the Borrowers and the Lenders ofthe interest rate applicable to any Interest Period for Eurocurrency Rate Loansupon determination of such interest rate. At any time that Base Rate Loans are outstanding, the AdministrativeAgent shall notify the Borrowers and the Lenders of 

 

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###  

### anychange in Bank of America’s prime rate used in determining the Base Ratepromptly following the public announcement of such change.

###  

### (e)           Maximum Interest Periods.After giving effect to all Term Borrowings, all conversions of Term Loans fromone Type to the other, and all continuations of Term Loans as the same Type,there shall not be more than 5 Interest Periods in effect in respect of theTerm Facility.  After giving effect toall Revolving Credit Borrowings, all conversions of Revolving Credit Loans fromone Type to the other, and all continuations of Revolving Credit Loans as thesame Type, there shall not be more than 5 Interest Periods in effect in respectof the Revolving Credit Facility.

###  

### (f)            Lender Obligations.The failure of any Lender to make any Loan to be made by it as part of anyBorrowing shall not relieve any other Lender of its obligation, if any,hereunder to make its Loan on the date of such Borrowing, but no Lender shallbe responsible for the failure of any other Lender to make any Loan to be madeby such other Lender on the date of any Borrowing.

###  

2.03         Letters of Credit.  (a)  TheLetter of Credit Commitment.  (i) Subject to the terms and conditions set forth herein, (A) the L/C Issueragrees, in reliance upon the agreements of the Revolving Credit Lenders setforth in this Section 2.03, (1) from time to time on anyBusiness Day during the period from the Closing Date until the Letter of CreditMaturity Date, to issue Letters of Credit for the account of any of theBorrowers or their respective Subsidiaries, and to amend Letters of Creditpreviously issued by it, in accordance with Section 2.03(b), and (2) tohonor drawings under the Letters of Credit; and (B) the Revolving CreditLenders severally agree to participate in Letters of Credit issued for theaccount of the Borrowers or their respective Subsidiaries and any drawingsthereunder; provided that after giving effect to any L/C CreditExtension with respect to any Letter of Credit, (x) the Total RevolvingCredit Outstandings shall not exceed the Revolving Credit Facility, (y) theaggregate Outstanding Amount of the Revolving Credit Loans of any RevolvingCredit Lender, plus such Revolving Credit Lender’s Applicable RevolvingCredit Percentage of the Outstanding Amount of all L/C Obligations plusthe aggregate FX Swap Value of all Secured Hedge Agreements (if any) of suchRevolving Credit Lender under the Permitted FX Facility shall not exceed suchRevolving Credit Lender’s Revolving Credit Commitment, and (z) theOutstanding Amount of the L/C Obligations shall not exceed the Letter of CreditSublimit.  Each request by the Borrowersfor the issuance or amendment of a Letter of Credit shall be deemed to be arepresentation by the Borrowers that the L/C Credit Extension so requestedcomplies with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject tothe terms and conditions hereof, the Borrowers’ ability to obtain Letters ofCredit shall be fully revolving, and accordingly the Borrowers may, during theforegoing period, obtain Letters of Credit to replace Letters of Credit thathave expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall bedeemed to have been issued pursuant hereto, and from and after the Closing Dateshall be subject to and governed by the terms and conditions hereof.

 

##### (ii)           The L/C Issuer shall notissue any Letter of Credit if:

 

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(A)                  subject to Section 2.03(b)(iii), theexpiry date of such requested Letter of Credit would occur more than twelve monthsafter the date of issuance, unless the Required Revolving Lenders have approvedsuch expiry date; or

 

(B)                   the expiry date of such requested Letter of Creditafter the Letter of Credit Expiration Date, unless all the Lenders haveapproved such expiry date (provided, that any Letter of Creditoutstanding after the Letter of Credit Maturity Date shall be CashCollateralized in accordance with Section 2.03(g)).

 

##### (iii)          The L/C Issuer shall not be under any obligation toissue any Letter of Credit if:

#####  

(A)                  any order, judgment or decree of any GovernmentalAuthority or arbitrator shall by its terms purport to enjoin or restrain theL/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/CIssuer or any request or directive (whether or not having the force of law)from any Governmental Authority with jurisdiction over the L/C Issuer shallprohibit, or request that the L/C Issuer refrain from, the issuance of lettersof credit generally or such Letter of Credit in particular or shall impose uponthe L/C Issuer with respect to such Letter of Credit any restriction, reserveor capital requirement (for which the L/C Issuer is not otherwise compensatedhereunder) not in effect on the Closing Date, or shall impose upon the L/CIssuer any unreimbursed loss, cost or expense which was not applicable on theClosing Date and which the L/C Issuer in good faith deems material to it;

 

(B)                   the issuance of such Letter of Credit would violateone or more policies of the L/C Issuer applicable to letters of creditgenerally;

 

(C)                   except as otherwise agreed by the Administrative Agentand the L/C Issuer, such Letter of Credit is in an initial stated amount lessthan $50,000;

 

(D)                  such Letter of Credit is to be denominated in acurrency other than Dollars; or

 

(E)                   a default of any Lender’s obligations to fund under Section 2.03(c) existsor any Lender is at such time a Defaulting Lender hereunder, unless the L/CIssuer has entered into satisfactory arrangements with the Borrowers or suchLender to eliminate the L/C Issuer’s risk with respect to such Lender.

 

##### (iv)          The L/C Issuer shall not amend any Letter of Creditif the L/C Issuer would not be permitted at such time to issue such Letter ofCredit in its amended form under the terms hereof.

#####  

##### (v)           The L/C Issuer shall be under no obligation to amendany Letter of Credit if (A) the L/C Issuer would have no obligation atsuch time to issue such Letter of Credit in its amended form under the termshereof, or (B) the beneficiary of such Letter of Credit does not acceptthe proposed amendment to such Letter of Credit.

 

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#####  

##### (vi)          The L/C Issuer shall act on behalf of the RevolvingCredit Lenders with respect to any Letters of Credit issued by it and thedocuments associated therewith, and the L/C Issuer shall have all of thebenefits and immunities (A) provided to the Administrative Agent in Article IXwith respect to any acts taken or omissions suffered by the L/C Issuer inconnection with Letters of Credit issued by it or proposed to be issued by itand Issuer Documents pertaining to such Letters of Credit as fully as if theterm “Administrative Agent” as used in Article IX included the L/CIssuer with respect to such acts or omissions, and (B) as additionallyprovided herein with respect to the L/C Issuer.

#####  

### (b)           Procedures for Issuance and Amendment of Letters of Credit;Auto-Extension Letters of Credit.  (i)  Each Letter of Credit shall beissued or amended, as the case may be, upon the request of the Borrowersdelivered to the L/C Issuer (with a copy to the Administrative Agent) in theform of a Letter of Credit Application, appropriately completed and signed by aResponsible Officer of the Borrowers. Such Letter of Credit Application must be received by the L/C Issuer andthe Administrative Agent not later than 11:00 a.m. at least two BusinessDays (or such later date and time as the Administrative Agent and the L/CIssuer may agree in a particular instance in their sole discretion) prior tothe proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initialissuance of a Letter of Credit, such Letter of Credit Application shall specifyin form and detail satisfactory to the L/C Issuer:  (A) the proposed issuance date of therequested Letter of Credit (which shall be a Business Day); (B) the amountthereof; (C) the expiry date thereof; (D) the name and address of thebeneficiary thereof; (E) the documents to be presented by such beneficiaryin case of any drawing thereunder; (F) the full text of any certificate tobe presented by such beneficiary in case of any drawing thereunder; (G) thepurpose and nature of the requested Letter of Credit; and (H) such othermatters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter ofCredit, such Letter of Credit Application shall specify in form and detailsatisfactory to the L/C Issuer (1) the Letter of Credit to be amended; (2) theproposed date of amendment thereof (which shall be a Business Day); (3) thenature of the proposed amendment; and (4) such other matters as the L/CIssuer may require.  Additionally, theBorrowers shall furnish to the L/C Issuer and the Administrative Agent suchother documents and information pertaining to such requested Letter of Creditissuance or amendment, including any Issuer Documents, as the L/C Issuer or theAdministrative Agent may require.

###  

##### (ii)           Promptly after receipt of any Letter of CreditApplication, the L/C Issuer will confirm with the Administrative Agent (by telephoneor in writing) that the Administrative Agent has received a copy of such Letterof Credit Application from the Borrowers and, if not, the L/C Issuer willprovide the Administrative Agent with a copy thereof.  Unless the L/C Issuer has received writtennotice from any Revolving Credit Lender, the Administrative Agent or any LoanParty, at least one Business Day prior to the requested date of issuance oramendment of the applicable Letter of Credit, that one or more applicableconditions contained in Article IV shall not then be satisfied,then, subject to the terms and conditions hereof, the L/C Issuer shall, on therequested date, issue a Letter of Credit for the account of the Borrowers orenter into the applicable amendment, as the case may be, in each case inaccordance with the L/C Issuer’s usual and customary business practices.  Immediately upon the issuance of each Letterof 

 

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#####  

##### Credit, each Revolving Credit Lender shall be deemed to, and herebyirrevocably and unconditionally agrees to, purchase from the L/C Issuer a riskparticipation in such Letter of Credit in an amount equal to the product ofsuch Revolving Credit Lender’s Applicable Revolving Credit Percentage timesthe amount of such Letter of Credit.

#####  

##### (iii)          If the Company so requestsin any applicable Letter of Credit Application, the L/C Issuer may, in its soleand absolute discretion, agree to issue a Letter of Credit that has automaticextension provisions (each, an “Auto-Extension Letter of Credit”); providedthat any such Auto-Extension Letter of Credit must permit the L/C Issuer toprevent any such extension at least once in each twelve-month period(commencing with the date of issuance of such Letter of Credit) by giving priornotice to the beneficiary thereof not later than the date (the “Non-ExtensionNotice Date”) in each such twelve-month period to be agreed upon at thetime such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Company shall not berequired to make a specific request to the L/C Issuer for any suchextension.  Once an Auto-Extension Letterof Credit has been issued, the Revolving Credit Lenders shall be deemed to haveauthorized (but may not require) the L/C Issuer to permit the extension of suchLetter of Credit at any time to an expiry date not later than the Letter ofCredit Expiration Date; provided, however, that the L/C Issuershall not permit any such extension if (A) the L/C Issuer has determinedthat it would not be permitted, or would have no obligation at such time toissue such Letter of Credit in its revised form (as extended) under the termshereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) orotherwise), or (B) it has received notice (which may be by telephone or inwriting) on or before the day that is seven Business Days before theNon-Extension Notice Date (1) from the Administrative Agent that theRequired Revolving Lenders have elected not to permit such extension or (2) fromthe Administrative Agent, any Revolving Credit Lender or the Company that oneor more of the applicable conditions specified in Section 4.02 isnot then satisfied, and in each such case directing the L/C Issuer not topermit such extension.

#####  

##### (iv)          Promptly after its delivery of any Letter of Creditor any amendment to a Letter of Credit to an advising bank with respect theretoor to the beneficiary thereof, the L/C Issuer will also deliver to theBorrowers and the Administrative Agent a true and complete copy of such Letterof Credit or amendment.

#####  

### (c)           Drawings and Reimbursements; Funding of Participations.  (i)  Uponreceipt from the beneficiary of any Letter of Credit of any notice of a drawingunder such Letter of Credit, the L/C Issuer shall notify the Borrowers and the AdministrativeAgent thereof.  Not later than 11:00 a.m.on the date of any payment by the L/C Issuer under a Letter of Credit (eachsuch date, an “Honor Date”),the Borrowers shall reimburse the L/C Issuer through the Administrative Agentin an amount equal to the amount of such drawing.  If the Borrowers fails to so reimburse theL/C Issuer by such time, the Administrative Agent shall promptly notify eachRevolving Credit Lender of the Honor Date, the amount of the unreimburseddrawing (the “Unreimbursed Amount”), and the amount of such Revolving Credit Lender’sApplicable Revolving Credit Percentage thereof. In such event, the Borrowers shall be deemed to have requested aRevolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Datein an amount equal to the Unreimbursed Amount, without regard to the minimumand multiples 

 

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###  

### specifiedin Section 2.02 for the principal amount of Base Rate Loans, butsubject to the amount of the unutilized portion of the Revolving CreditCommitments and the conditions set forth in Section 4.02 (otherthan the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuantto this Section 2.03(c)(i) may be given by telephone ifimmediately confirmed in writing; provided that the lack of such animmediate confirmation shall not affect the conclusiveness or binding effect ofsuch notice.

###  

##### (ii)           Each Revolving Credit Lender shall upon any noticepursuant to Section 2.03(c)(i) make funds available to theAdministrative Agent for the account of the L/C Issuer at the AdministrativeAgent’s Office in an amount equal to its Applicable Revolving Credit Percentageof the Unreimbursed Amount not later than 1:00 p.m. on the Business Dayspecified in such notice by the Administrative Agent, whereupon, subject to theprovisions of Section 2.03(c)(iii), each Revolving Credit Lenderthat so makes funds available shall be deemed to have made a Base Rate Loan tothe Borrowers in such amount.  TheAdministrative Agent shall remit the funds so received to the L/C Issuer.

#####  

##### (iii)          With respect to any Unreimbursed Amount that is notfully refinanced by a Revolving Credit Borrowing of Base Rate Loans because theconditions set forth in Section 4.02 cannot be satisfied or for anyother reason, the Borrowers shall be deemed to have incurred from the L/CIssuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not sorefinanced, which L/C Borrowing shall be due and payable on demand (togetherwith interest) and shall bear interest at the Default Rate.  In such event, each Revolving Credit Lender’spayment to the Administrative Agent for the account of the L/C Issuer pursuantto Section 2.03(c)(ii) shall be deemed payment in respect ofits participation in such L/C Borrowing and shall constitute an L/C Advancefrom such Lender in satisfaction of its participation obligation under this Section 2.03.

#####  

##### (iv)          Until each Revolving Credit Lender funds itsRevolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) toreimburse the L/C Issuer for any amount drawn under any Letter of Credit,interest in respect of such Lender’s Applicable Revolving Credit Percentage ofsuch amount shall be solely for the account of the L/C Issuer.

#####  

##### (v)           Each Revolving Credit Lender’s obligation to makeRevolving Credit Loans or L/C Advances to reimburse the L/C Issuer for amountsdrawn under Letters of Credit, as contemplated by this Section 2.03(c),shall be absolute and unconditional and shall not be affected by anycircumstance, including (A) any setoff, counterclaim, recoupment, defenseor other right which such Lender may have against the L/C Issuer, the Borrowersor any other Person for any reason whatsoever; (B) the occurrence orcontinuance of a Default, or (C) any other occurrence, event or condition,whether or not similar to any of the foregoing; provided, however,that each Revolving Credit Lender’s obligation to make Revolving Credit Loanspursuant to this Section 2.03(c) is subject to the conditionsset forth in Section 4.02 (other than delivery by the Borrowers ofa Committed Loan Notice ).  No suchmaking of an L/C Advance shall relieve or otherwise impair the obligation ofthe Borrowers to reimburse the L/C Issuer for the amount of any 

 

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#####  

##### payment made by the L/C Issuer under any Letter of Credit, togetherwith interest as provided herein.

#####  

##### (vi)          If any Revolving Credit Lender fails to makeavailable to the Administrative Agent for the account of the L/C Issuer anyamount required to be paid by such Lender pursuant to the foregoing provisionsof this Section 2.03(c) by the time specified in Section 2.03(c)(ii),the L/C Issuer shall be entitled to recover from such Lender (acting throughthe Administrative Agent), on demand, such amount with interest thereon for theperiod from the date such payment is required to the date on which such paymentis immediately available to the L/C Issuer at a rate per annum equal to theOvernight Rate, plus any administrative, processing or similar fees customarilycharged by the L/C Issuer in connection with the foregoing.  If such Lender pays such amount (withinterest and fees as aforesaid), the amount so paid shall constitute suchLender’s Revolving Credit Loan included in the relevant Revolving CreditBorrowing or L/C Advance in respect of the relevant L/C Borrowing, as the casemay be.  A certificate of the L/C Issuersubmitted to any Revolving Credit Lender (through the Administrative Agent)with respect to any amounts owing under this Section 2.03(c)(vi) shallbe conclusive absent manifest error.

#####  

### (d)           Repayment of Participations.  (i)  At any time after the L/C Issuerhas made a payment under any Letter of Credit and has received from anyRevolving Credit Lender such Lender’s L/C Advance in respect of such payment inaccordance with Section 2.03(c), if the Administrative Agentreceives for the account of the L/C Issuer any payment in respect of therelated Unreimbursed Amount or interest thereon (whether directly from theBorrowers or otherwise, including proceeds of Cash Collateral applied theretoby the Administrative Agent), the Administrative Agent will distribute to suchLender its Applicable Revolving Credit Percentage thereof in Dollars in thesame funds as those received by the Administrative Agent.

###  

##### (ii)           If any payment received by the Administrative Agentfor the account of the L/C Issuer pursuant to Section 2.03(c)(i) isrequired to be returned under any of the circumstances described in Section 10.05(including pursuant to any settlement entered into by the L/C Issuer in itsdiscretion), each Revolving Credit Lender shall pay to the Administrative Agentfor the account of the L/C Issuer its Applicable Revolving Credit Percentagethereof on demand of the Administrative Agent, plus interest thereonfrom the date of such demand to the date such amount is returned by suchLender, at a rate per annum equal to the applicable Overnight Rate from time totime in effect.  The obligations of theLenders under this clause shall survive the payment in full of the Obligationsand the termination of this Agreement.

#####  

### (e)           Obligations Absolute.  The obligation of the Borrowers to reimbursethe L/C Issuer for each drawing under each Letter of Credit and to repay each L/CBorrowing shall be absolute, unconditional and irrevocable, and shall be paidstrictly in accordance with the terms of this Agreement under allcircumstances, including the following:

###  

##### (i)            any lack of validity or enforceability of suchLetter of Credit, this Agreement, or any other Loan Document;

 

37

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#####  

##### (ii)           the existence of any claim, counterclaim, setoff,defense or other right that the Borrowers or any Subsidiary may have at anytime against any beneficiary or any transferee of such Letter of Credit (or anyPerson for whom any such beneficiary or any such transferee may be acting), theL/C Issuer or any other Person, whether in connection with this Agreement, thetransactions contemplated hereby or by such Letter of Credit or any agreementor instrument relating thereto, or any unrelated transaction;

#####  

##### (iii)          any draft, demand, certificate or other documentpresented under such Letter of Credit proving to be forged, fraudulent, invalidor insufficient in any respect or any statement therein being untrue orinaccurate in any respect; or any loss or delay in the transmission orotherwise of any document required in order to make a drawing under such Letterof Credit;

#####  

##### (iv)          any payment by the L/C Issuer under such Letter ofCredit against presentation of a draft or certificate that does not strictlycomply with the terms of such Letter of Credit; or any payment made by the L/CIssuer under such Letter of Credit to any Person purporting to be a trustee inbankruptcy, debtor-in-possession, assignee for the benefit of creditors,liquidator, receiver or other representative of or successor to any beneficiaryor any transferee of such Letter of Credit, including any arising in connectionwith any proceeding under any Debtor Relief Law;

#####  

##### (v)           any exchange, release or non-perfection of anycollateral, or any release or amendment or waiver of or consent to thedeparture from any Guaranty or all or any of the Obligations of the Borrowersin respect of any Letter of Credit; or

#####  

##### (vi)          any other circumstance or happening whatsoever,whether or not similar to any of the foregoing, including any othercircumstance that might otherwise constitute a defense available to, or adischarge of, the Borrowers or any of its Subsidiaries.

#####  

The Borrowers shall promptly examine a copy of eachLetter of Credit and each amendment thereto that is delivered to it and, in theevent of any claim of noncompliance with the Borrowers’ instructions or otherirregularity, the Borrowers will immediately notify the L/C Issuer.  The Borrowers shall be conclusively deemed tohave waived any such claim against the L/C Issuer and its correspondents unlesssuch notice is given as aforesaid.

 

### (f)            Role of L/C Issuer.  Each Lender and the Borrowers agree that, inpaying any drawing under a Letter of Credit, the L/C Issuer shall not have anyresponsibility to obtain any document (other than any sight draft, certificatesand documents expressly required by the Letter of Credit) or to ascertain orinquire as to the validity or accuracy of any such document or the authority ofthe Person executing or delivering any such document.  None of the L/C Issuer, the AdministrativeAgent, any of their respective Related Parties nor any correspondent,participant or assignee of the L/C Issuer shall be liable to any Lender for (i) anyaction taken or omitted in connection herewith at the request or with theapproval of the Revolving Credit Lenders or the Required Revolving Lenders, asapplicable; (ii) any action taken or omitted in the absence of grossnegligence or willful misconduct; or (iii) the due execution,effectiveness, validity or enforceability of any document or instrument relatedto any Letter of Credit or Issuer 

 

38

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###  

### Document.  The Borrowers hereby jointly and severallyassume all risks of the acts or omissions of any beneficiary or transferee withrespect to its use of any Letter of Credit; provided, however,that this assumption is not intended to, and shall not, preclude any Borrower’spursuing such rights and remedies as it may have against the beneficiary ortransferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of theirrespective Related Parties nor any correspondent, participant or assignee ofthe L/C Issuer shall be liable or responsible for any of the matters describedin clauses (i) through (v) of Section 2.03(f); provided,however, that anything in such clauses to the contrary notwithstanding,the Borrowers may have a claim against the L/C Issuer, and the L/C Issuer maybe liable to the Borrowers, to the extent, but only to the extent, of anydirect, as opposed to consequential or exemplary, damages suffered by theBorrowers which the Borrowers prove were caused by the L/C Issuer’s willfulmisconduct or gross negligence or the L/C Issuer’s willful failure to pay underany Letter of Credit after the presentation to it by the beneficiary of a sightdraft and certificate(s) strictly complying with the terms and conditionsof a Letter of Credit.  In furtheranceand not in limitation of the foregoing, the L/C Issuer may accept documentsthat appear on their face to be in order, without responsibility for furtherinvestigation, regardless of any notice or information to the contrary, and theL/C Issuer shall not be responsible for the validity or sufficiency of anyinstrument transferring or assigning or purporting to transfer or assign aLetter of Credit or the rights or benefits thereunder or proceeds thereof, inwhole or in part, which may prove to be invalid or ineffective for any reason.

###  

### (g)           Cash Collateral.  If, as of the Letter of Credit Maturity Date,(i) any L/C Obligation for any reason remains outstanding or (ii) orthe expiry date for any Letter of Credit occurs after the Letter of CreditMaturity Date, the Borrowers shall immediately Cash Collateralize the thenOutstanding Amount of all L/C Obligations. Sections 2.05 and 8.02(c) set forth certainadditional requirements to deliver Cash Collateral hereunder.  For purposes of this Section 2.03,Section 2.05 and Section 8.02(c), “CashCollateralize” means topledge and deposit with or deliver to the Administrative Agent, for the benefitof the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cashor deposit account balances pursuant to documentation in form and substancesatisfactory to the Administrative Agent and the L/C Issuer (which documentsare hereby consented to by the Lenders). Derivatives of such term have corresponding meanings.  Each Borrower hereby grants to theAdministrative Agent, for the benefit of the L/C Issuer and the Lenders, asecurity interest in all such cash, deposit accounts and all balances thereinand all proceeds of the foregoing.  CashCollateral shall be maintained in blocked, non-interest bearing depositaccounts at Bank of America.  If at anytime the Administrative Agent determines that any funds held as Cash Collateralare subject to any right or claim of any Person other than the AdministrativeAgent or that the total amount of such funds is less than the aggregateOutstanding Amount of all L/C Obligations, the Borrowers will, forthwith upondemand by the Administrative Agent, pay to the Administrative Agent, asadditional funds to be deposited as Cash Collateral, an amount equal to theexcess of (x) such aggregate Outstanding Amount over (y) the totalamount of funds, if any, then held as Cash Collateral that the AdministrativeAgent determines to be free and clear of any such right and claim.  Upon the drawing of any Letter of Credit forwhich funds are on deposit as Cash Collateral, such funds shall be applied, tothe extent permitted under applicable Laws, to reimburse the L/C Issuer.

###  

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###  

### (h)           Applicability of ISP.  Unless otherwise expressly agreed by the L/CIssuer and the Borrowers when a Letter of Credit is issued (including any such agreementapplicable to an Existing Letter of Credit),the rules of the ISP shall apply to each standby Letter of Credit.

###  

### (i)            Letter of Credit Fees.  The Borrowers shall pay to the AdministrativeAgent for the account of each Revolving Credit Lender in accordance with itsApplicable Revolving Credit Percentage a Letter of Credit fee (the “Letterof Credit Fee”) for each Letter of Credit equal to the Applicable Rate forRevolving Credit Loans times the daily amount available to be drawnunder such Letter of Credit.  Forpurposes of computing the daily amount available to be drawn under any Letterof Credit, the amount of such Letter of Credit shall be determined inaccordance with Section 1.06. Letter of Credit Fees shall be (i) due and payable on the firstBusiness Day after the end of each March, June, September and December,commencing with the first such date to occur after the issuance of such Letterof Credit, on the Letter of Credit Expiration Date and thereafter on demand and(ii) computed on a quarterly basis in arrears.  If there is any change in the Applicable Rateduring any quarter, the daily amount available to be drawn under each standby Letter of Credit shall be computed and multiplied by theApplicable Rate separately for each period during such quarter that suchApplicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon therequest of the Required Revolving Lenders, while any Event of Default exists,all Letter of Credit Fees shall accrue at the Default Rate.

###  

### (j)            Documentary and Processing Charges Payable to L/C Issuer.  In addition to theLetter of Credit fees described in clause (i) of Section 2.03,the Borrowers shall pay directly to the L/C Issuer for its own account thecustomary issuance, presentation, amendment and other processing fees, andother standard costs and charges, of the L/C Issuer relating to letters ofcredit as from time to time in effect. Such customary fees and standard costs and charges are due and payableon demand and are nonrefundable.

###  

### (k)           Conflict with Issuer Documents.  In the event of anyconflict between the terms hereof and the terms of any Issuer Document, theterms hereof shall control.

###  

### (l)            Letters of Credit Issued forSubsidiaries.  Notwithstanding that a Letterof Credit issued or outstanding hereunder is in support of any obligations of,or is for the account of, a Subsidiary, the Borrowers shall be obligated toreimburse the L/C Issuer hereunder for any and all drawings under such Letterof Credit.  The Borrowers herebyacknowledge that the issuance of Letters of Credit for the account ofSubsidiaries inures to the benefit of the Borrowers, and that the Borrowers’business derives substantial benefits from the businesses of such Subsidiaries.

###  

2.04         Permitted FX Facility.  (a)   During the Availability Period, Bank ofAmerica at its discretion may enter into one or more Secured Hedge Agreementsunder the Permitted FX Facility with the Borrowers.

 

### (b)           Bankof America shall not be obligated to permit the Borrowers to enter into anySecured Hedge Agreement under the Permitted FX Facility if, immediately beforeor after giving effect thereto, (i) the FX Swap Value would exceed the FXFacility Sublimit or 

 

40

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###  

### (ii) theTotal Revolving Credit Outstandings would exceed the Revolving Credit Facility;provided, that if at any time the FX Swap Value exceeds the FX FacilitySublimit, the Borrowers shall Cash Collateralize the Permitted FX Facility inaccordance with Section 2.05(d). Bank of America shall determine the FX Swap Value of all Secured HedgeAgreements under the Permitted FX Facility monthly, on the date of any requestfor a new transaction under the Permitted FX Facility and on the date of anyCommitted Loan Notice and shall promptly notify the Company of each suchdetermination.

###  

### (c)           TheBorrowers shall pay Bank of America on demand Bank of America’s then standardPermitted FX Facility fees for each contract.

###  

### (d)           TheBorrowers shall enter into a Master Agreement and any other relateddocumentation as Bank of America shall reasonably request, in each case in formand substance satisfactory to Bank of America, with respect to each transactionrequested under the Permitted FX Facility.

###  

### (e)           NoSecured Hedge Agreement under the Permitted FX Facility will mature later thanthe Maturity Date of the Revolving Credit Facility.

###  

### (f)            TheBorrowers understand the risk of, and are financially able to bear any lossesresulting from, entering into Secured Hedge Agreements under the Permitted FXFacility.  Bank of America shall not beliable for any loss suffered by the Company or any of its Subsidiaries as aresult of the Borrowers’ foreign exchange trading. The Borrowers will enterinto each Secured Hedge Agreement under the Permitted FX Facility in relianceonly upon their own judgment.  TheBorrowers acknowledge that in entering into Secured Hedge Agreements under thePermitted FX Facility with the Borrowers, Bank of America is not acting as afiduciary.  The Borrowers understand thatneither Bank of America nor any Borrower has any obligation to enter into anyparticular Secured Hedge Agreement under the Permitted FX Facility with theother.

###  

### (g)           TheBorrowers hereby request Bank of America to rely upon and execute the Company’stelephonic instructions for each Secured Hedge Agreement under the Permitted FXFacility, and the Borrowers agree that Bank of America shall incur no liabilityfor its acts or omissions which result from interruption of communications,misunderstood communications or instructions from unauthorized persons, unlesscaused by the gross negligence or willful misconduct of Bank of America or itsofficers or employees.  The Borrowersjointly and severally agree to protect Bank of America and hold it harmlessfrom any and all loss, damage, claim, expense (including the reasonable fees ofoutside counsel) or inconvenience, however arising, which Bank of Americasuffers or incurs or might suffer or incur, based on or arising out of saidacts or omissions.

###  

### (h)           TheBorrowers agree to promptly review all confirmations sent to the Company byBank of America.  The Borrowersunderstand that these confirmations are not legal contracts but only evidenceof the valid and binding oral contract which the Borrowers have already enteredinto with Bank of America.  The Borrowersagree to promptly execute and return to Bank of America confirmations whichaccurately reflect the terms of a Secured Hedge

 

41

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###  

### Agreementunder the Permitted FX Facility, and immediately contact Bank of America if anyBorrower believes a confirmation is not accurate.  In the event of a conflict, inconsistency orambiguity between the provisions of this Agreement and the provisions of aconfirmation, the provisions of this Agreement will prevail.

###  

### (i)            TheBorrowers agree that Bank of America may electronically record all telephonicconversations with any Borrower relating to the Permitted FX Facility and thatsuch tape recordings may be submitted in evidence to any court or in any otherproceedings relating to such contracts. The Borrowers agree that in the event of a conflict, inconsistency orambiguity between the terms of a Secured Hedge Agreement under the Permitted FXFacility as reflected in a tape recording and the terms stated on aconfirmation, the terms reflected in the tape recording shall control.

###  

### (j)            Anysum owed to Bank of America under the Permitted FX Facility may, at the optionof Bank of America, may be converted to a Revolving Credit Loan. In such event,the Borrowers shall be deemed to have requested a Revolving Credit Borrowing ofBase Rate Loans to be disbursed in an amount equal to such sum owed to Bank ofAmerica under the Permitted FX Facility, without regard to the minimum andmultiples specified in Section 2.02 for the principal amount ofBase Rate Loans, but subject to the amount of the unutilized portion of theRevolving Credit Commitments and the conditions set forth in Section 4.02(other than the delivery of a Committed Loan Notice).

###  

### (k)           Inaddition to any other rights or remedies which Bank of America may have underthis Agreement or otherwise, upon the occurrence of an Event of Default, Bankof America may:

###  

###### (i)            suspend performance of itsobligations to the Borrowers under any Permitted FX Facility;

######  

###### (ii)           declare all Permitted FXFacilities, interest and any other amounts which are payable by the Borrowersto Bank of America immediately due and payable; and

######  

###### (iii)          without notice to theBorrowers, close out any or all foreign exchange contracts or positions of theBorrower with Bank of America.

######  

###### Bank of America shall not be under anyobligation to exercise any such rights or remedies or to exercise them at atime or in a manner beneficial to the Borrowers.  The Borrowers shall be jointly and severallyliable for any amounts owing to Bank of America after exercise or any suchrights and remedies.

######  

2.05         Prepayments.  (a)  Optional.  (i)  Revolving Credit Loans.  The Borrowers may, upon notice to the AdministrativeAgent, at any time or from time to time voluntarily prepay Revolving CreditLoans in whole or in part without premium or penalty; provided that (A) suchnotice must be received by the Administrative Agent not later than 11:00 a.m.(1) three (3) Business Days prior to any date of prepayment ofEurocurrency Rate Loans and (2) on the 

 

42

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date of prepayment ofBase Rate Loans; (B) any prepayment of Eurocurrency Rate Loans shall be ina principal amount of $1,000,000 or a whole multiple of $1,000,000 in excessthereof (or, if less, the aggregate outstanding principal amount of RevolvingCredit Loans); and (C) any prepayment of Base Rate Loans shall be in aprincipal amount of $500,000 or a whole multiple of $100,000 in excess thereofor, in each case, if less, the entire principal amount thereof thenoutstanding.  Each such notice shallspecify the date and amount of such prepayment, the Facility to which such prepaymentshall apply and the Type(s) of Loans to be prepaid and, if EurocurrencyRate Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notifyeach Lender of its receipt of each such notice, and of the amount of suchLender’s ratable portion of such prepayment (based on such Lender’s ApplicablePercentage in respect of the Revolving Credit Facility).  If such notice is given by the Borrowers, theBorrowers shall make such prepayment and the payment amount specified in suchnotice shall be due and payable on the date specified therein.  Any prepayment of a Eurocurrency Rate Loanshall be accompanied by all accrued interest on the amount prepaid, togetherwith any additional amounts required pursuant to Section 3.05.

 

##### (ii)           Term Loans.  Subject to the last sentence of this Section 2.05(a)(ii),the Borrowers may, upon notice to the Administrative Agent, at any time or fromtime to time voluntarily prepay Term Loans in whole or in part (A) priorto one (1) year from the Closing Date, subject to a prepayment charge ofthree percent (3%) of the amount prepaid, and (B)  after one (1) yearfrom the Closing Date, without premium, charge or penalty; provided that(x) such notice must be received by the Administrative Agent not laterthan 2:00 p.m. at least fifteen (15) days prior to any date of prepaymentof any Term Loans; (y) any prepayment of Eurocurrency Rate Loans shall bein a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excessthereof; and (z) any prepayment of Base Rate Loans shall be in a principalamount of $500,000 or a whole multiple of $100,000 in excess thereof or, ineach case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amountof such prepayment, the Facility to which such prepayment shall apply and theType(s) of Loans to be prepaid and, if Eurocurrency Rate Loans are to beprepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notifyeach Lender of its receipt of each such notice, and of the amount of suchLender’s ratable portion of such prepayment (based on such Lender’s ApplicablePercentage in respect of the relevant Facility).  If such notice is given by the Borrowers, theBorrowers shall make such prepayment and the payment amount specified in suchnotice shall be due and payable on the date specified therein.  Any prepayment of a Eurocurrency Rate Loanshall be accompanied by all accrued interest on the amount prepaid, togetherwith any additional amounts required pursuant to Section 3.05.  Each prepayment of the outstanding Term Loanpursuant to this Section 2.05(a)(ii) shall be applied to theTerm Facility and to the principal repayment installments thereof in inverseorder of maturity, and each such prepayment shall be paid to the Lenders inaccordance with their respective Applicable Percentages in respect of the TermFacility.  Notwithstanding anything tothe contrary contained herein, the Borrowers shall not be permitted to prepaythe Term Facility pursuant to this Section 2.05(a)(ii) duringthe period from the Closing Date through the date ten Business Days thereafter.

 

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###  

### (b)           Revolving Credit Prepayments.If for any reason the Total Revolving Credit Outstandings at any time exceedthe Revolving Credit Facility at such time, the Borrowers shall immediatelyprepay Revolving Credit Loans and L/C Borrowings and/or Cash Collateralize theL/C Obligations (other than the L/C Borrowings) and the Permitted FX Facilityin an aggregate amount equal to such excess.

###  

### (c)           Application of Prepayments.Prepayments of the Revolving Credit Facility made pursuant to Section 2.05(a)(i) orSection 2.05(b), first, shall be applied ratably to the L/CBorrowings, second, shall be applied ratably to the outstandingRevolving Credit Loans, and, third, shall be used to Cash Collateralizethe remaining L/C Obligations.  Upon thedrawing of any Letter of Credit that has been Cash Collateralized, the fundsheld as Cash Collateral shall be applied (without any further action by ornotice to or from the Borrowers or any other Loan Party) to reimburse the L/CIssuer or the Revolving Credit Lenders, as applicable.

###  

### (d)           Permitted FX Facility.If the Administrative Agent receives notice from the applicable Hedge Bank thatthe aggregate FX Swap Value of the Secured Hedge Agreements under the PermittedFX Facility at such time exceeds the FX Facility Sublimit then in effect, thenthe Administrative Agent shall promptly notify the Borrowers thereof and,within two Business Days after receipt of such notice, the Borrowers shall CashCollateralize the Permitted FX Facility in an aggregate amount sufficient toreduce such outstanding amount as of such date to an amount not to exceed theFX Facility Sublimit then in effect; provided, however, that theCompany shall not be required to Cash Collateralize the Permitted FX Facilitypursuant to this Section 2.05(d) unless after prepayment infull of the Revolving Credit Loans the Total Revolving Credit Outstandingswould exceed the FX Facility Sublimit then in effect.

 

2.06         Termination or Reduction of Commitments.  (a) Optional.  The Borrowers may, uponnotice to the Administrative Agent, terminate the Revolving Credit Facility orthe Letter of Credit Sublimit, or from time to time permanently reduce theRevolving Credit Facility or the Letter of Credit Sublimit; provided that (i) anysuch notice shall be received by the Administrative Agent not later than 11:00 a.m.five Business Days prior to the date of termination or reduction, (ii) anysuch partial reduction shall be in an aggregate amount of $1,000,000 or anywhole multiple of $1,000,000 in excess thereof and (iii) the Borrowersshall not terminate or reduce (A) the Revolving Credit Facility if, aftergiving effect thereto and to any concurrent prepayments hereunder, the TotalRevolving Credit Outstandings would exceed the Revolving Credit Facility, (B) theFX Facility Sublimit if, after giving effect thereto, the FX Swap Value of anyportion of the Permitted FX Facility not fully Cash Collateralized hereunderwould exceed the FX Facility Sublimit, or (C) the Letter of CreditSublimit if, after giving effect thereto, the Outstanding Amount of L/CObligations not fully Cash Collateralized hereunder would exceed the Letter ofCredit Sublimit.

 

### (b)           Mandatory.  Theaggregate Term Commitments shall be automatically and permanently reduced tozero on the date of the Term Borrowing.

###  

### (c)           Automatic Reduction of Subfacility. If after giving effect to any reduction or termination of RevolvingCredit Commitments under this Section 2.06, the Letter of Credit 

 

44

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###  

### Sublimitexceeds the Revolving Credit Facility at such time, the Letter of CreditSublimit shall be automatically reduced by the amount of such excess.

###  

### (d)           Application of Commitment Reductions; Payment of Fees.  The AdministrativeAgent will promptly notify the Lenders of any termination or reduction of theLetter of Credit Sublimit or the Revolving Credit Commitment under this Section 2.06.  Upon any reduction of the Revolving CreditCommitments, the Revolving Credit Commitment of each Revolving Credit Lendershall be reduced by such Lender’s Applicable Revolving Credit Percentage ofsuch reduction amount.  All fees inrespect of the Revolving Credit Facility that accrue but are unpaid on orbefore the effective date of any termination of the Revolving Credit Facilityshall be paid on the effective date of such termination.

 

2.07         Repayment of Loans.  (a)  TermLoans.  The Borrowers shall repay tothe Term Lenders the aggregate principal amount of all Term Loans outstandingon each fiscal quarter after the Closing Date in the respective amounts equalto the percentages of the Term Loans set forth below (which amounts shall bereduced as a result of the application of prepayments in accordance with theorder of priority set forth in Section 2.05):

 

| **Quarter** | ** ** | **Amount** | ** ** |
|-------------|------------|------------|------------|
| 1           |       | 0          | %          |
| 2           |       | 0          | %          |
| 3           |       | 0          | %          |
| 4           |       | 0          | %          |
| 5           |       | 6.25       | %          |
| 6           |       | 6.25       | %          |
| 7           |       | 6.25       | %          |
| 8           |       | 6.25       | %          |
| 9           |       | 6.25       | %          |
| 10          |       | 6.25       | %          |
| 11          |       | 6.25       | %          |
| 12          |       | 56.25      | %          |

 

provided, however, that the finalprincipal repayment installment of the Term Loans shall be repaid on theMaturity Date for the Term Facility and in any event shall be in an amountequal to the aggregate principal amount of all Term Loans outstanding on suchdate.

 

### (b)           Revolving Credit Loans.  The Borrowers shall repay to the RevolvingCredit Lenders on the Maturity Date for the Revolving Credit Facility theaggregate principal amount of all Revolving Credit Loans outstanding on suchdate.

 

2.08         Interest.  (a)  InterestRates. Subject to the provisions of Section 2.08(b), (i) eachEurocurrency Rate Loan under a Facility shall bear interest on the outstandingprincipal amount thereof for each Interest Period applicable thereto at a rateper annum equal to the Eurocurrency Rate for such Interest Period plus theApplicable Rate for such Facility; and 

 

45

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(ii) each Base Rate Loan under a Facility shall bear interest onthe outstanding principal amount thereof from the applicable borrowing date ata rate per annum equal to the Base Rate.

 

### (b)           Default Rate.(i)  If any amount of principal of any Loan is not paid when due (withoutregard to any applicable grace periods), whether at stated maturity, byacceleration or otherwise, such amount shall thereafter bear interest at afluctuating interest rate per annum at all times equal to the Default Rate tothe fullest extent permitted by applicable Laws.

###  

##### (ii)           If any amount (other than principal of any Loan)payable by the Borrowers under any Loan Document is not paid when due (withoutregard to any applicable grace periods), whether at stated maturity, byacceleration or otherwise, then upon the request of the Required Lenders suchamount shall thereafter bear interest at a fluctuating interest rate per annumat all times equal to the Default Rate to the fullest extent permitted byapplicable Laws.

#####  

##### (iii)          Upon the request of the Required Lenders, while anyEvent of Default exists, the Borrowers shall pay interest on the principalamount of all outstanding Obligations hereunder at a fluctuating interest rateper annum at all times equal to the Default Rate to the fullest extentpermitted by applicable Laws.

#####  

##### (iv)          Accrued and unpaid interest on past due amounts(including interest on past due interest) shall be due and payable upon demand.

#####  

### (c)           Interest Payment Date.Interest on each Loan shall be due and payable in arrears on each InterestPayment Date applicable thereto and at such other times as may be specifiedherein.  Interest hereunder shall be dueand payable in accordance with the terms hereof before and after judgment, andbefore and after the commencement of any proceeding under any Debtor ReliefLaw.

 

2.09         Fees.  In addition tocertain fees described in Sections 2.03(i) and (j):

 

### (a)           Commitment Fee.  The Borrowers shall pay to the AdministrativeAgent for the account of each Revolving Credit Lender in accordance with itsApplicable Revolving Credit Percentage, a commitment fee equal to theCommitment Fee Rate times the actual daily amount by which the RevolvingCredit Facility exceeds the sum of (i) the Outstanding Amount of RevolvingCredit Loans, (ii) the Outstanding Amount of L/C Obligations and (iii) theFX Swap Value of the Permitted FX Facility. The commitment fee shall accrue at all times during the AvailabilityPeriod, including at any time during which one or more of the conditions in Article IVis not met, and shall be due and payable quarterly in arrears on the lastBusiness Day of each March, June, September and December, commencing withthe first such date to occur after the Closing Date, and on the last day of theAvailability Period for the Revolving Credit Facility.

###  

### (b)           Other Fees.  The Borrowers shall pay to the Arranger andthe Administrative Agent for their own respective accounts fees in the amountsand at the times 

 

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### specifiedin the Fee Letter.  Such fees shall befully earned when paid and shall not be refundable for any reason whatsoever.

 

2.10         Computation of Interest and Fees.  (a) All computations of interest for Base Rate Loans when the Base Rate isdetermined by Bank of America’s “prime rate” shall be made on the basis of ayear of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interestshall be made on the basis of a 360-day year and actual days elapsed (whichresults in more fees or interest, as applicable, being paid than if computed onthe basis of a 365-day year).  Interestshall accrue on each Loan for the day on which the Loan is made, and shall notaccrue on a Loan, or any portion thereof, for the day on which the Loan or suchportion is paid, provided that any Loan that is repaid on the same dayon which it is made shall, subject to Section 2.12(a), bearinterest for one day.  Each determinationby the Administrative Agent of an interest rate or fee hereunder shall beconclusive and binding for all purposes, absent manifest error.

 

2.11         Evidence of Debt.  (a)  Accountsand Records of Credit Extensions. The Credit Extensions made by each Lendershall be evidenced by one or more accounts or records maintained by such Lenderand by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the AdministrativeAgent and each Lender shall be conclusive absent manifest error of the amountof the Credit Extensions made by the Lenders to the Borrowers and the interestand payments thereon.  Any failure to sorecord or any error in doing so shall not, however, limit or otherwise affectthe obligation of the Borrowers hereunder to pay any amount owing with respectto the Obligations.  In the event of anyconflict between the accounts and records maintained by any Lender and theaccounts and records of the Administrative Agent in respect of such matters,the accounts and records of the Administrative Agent shall control in theabsence of manifest error.  Upon therequest of any Lender made through the Administrative Agent, the Borrowersshall execute and deliver to such Lender (through the Administrative Agent) aNote, which shall evidence such Lender’s Loans in addition to such accounts orrecords.  Each Lender may attachschedules to its Note and endorse thereon the date, Type (if applicable),amount and maturity of its Loans and payments with respect thereto.

 

### (b)           Accounts and Records of Purchases and Sales. In addition to the accounts and records referred to in Section 2.11(a),each Lender and the Administrative Agent shall maintain in accordance with itsusual practice accounts or records evidencing the purchases and sales by suchLender of participations in Letters of Credit. In the event of any conflict between the accounts and records maintainedby the Administrative Agent and the accounts and records of any Lender inrespect of such matters, the accounts and records of the Administrative Agentshall control in the absence of manifest error.

 

2.12         Payments Generally; Administrative Agent’s Clawback.  (a) General.  All payments to be madeby the Borrowers shall be made without condition or deduction for anycounterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by theBorrowers hereunder shall be made to the Administrative Agent, for the accountof the respective Lenders to which such payment is owed, at the AdministrativeAgent’s Office in Dollars and in immediately available funds not later than2:00 p.m. on the date specified 

 

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herein.  Without limiting the generality of theforegoing, the Administrative Agent may require that any payments due underthis Agreement be made in the United States. The Administrative Agent willpromptly distribute to each Lender its Applicable Percentage in respect of therelevant Facility (or other applicable share as provided herein) of suchpayment in like funds as received by wire transfer to such Lender’s LendingOffice.  All payments received by theAdministrative Agent after 2:00 p.m. shall be deemed received on the nextsucceeding Business Day and any applicable interest or fee shall continue toaccrue.  If any payment to be made by theBorrowers shall come due on a day other than a Business Day, payment shall bemade on the next following Business Day, and such extension of time shall bereflected on computing interest or fees, as the case may be.

 

### (b)           (i)  Funding by Lenders; Presumption byAdministrative Agent.  Unless theAdministrative Agent shall have received notice from a Lender prior to theproposed date of any Borrowing of Eurocurrency Rate Loans (or, in the case ofany Borrowing of Base Rate Loans, prior to 12:00 noon on the date of suchBorrowing) that such Lender will not make available to the Administrative Agentsuch Lender’s share of such Borrowing, the Administrative Agent may assume thatsuch Lender has made such share available on such date in accordance with Section 2.02(or, in the case of a Borrowing of Base Rate Loans, that such Lender has madesuch share available in accordance with and at the time required by Section 2.02)and may, in reliance upon such assumption, make available to the Borrowers acorresponding amount.  In such event, ifa Lender has not in fact made its share of the applicable Borrowing availableto the Administrative Agent, then the applicable Lender and the Borrowersseverally agree to pay to the Administrative Agent forthwith on demand suchcorresponding amount in immediately available funds with interest thereon, foreach day from and including the date such amount is made available to theBorrowers to but excluding the date of payment to the Administrative Agent, at (A) inthe case of a payment to be made by such Lender, the Overnight Rate, plus anyadministrative, processing or similar fees customarily charged by the AdministrativeAgent in connection with the foregoing, and (B) in the case of a paymentto be made by the Borrowers, the interest rate applicable to Base RateLoans.  If the Borrowers and such Lendershall pay such interest to the Administrative Agent for the same or anoverlapping period, the Administrative Agent shall promptly remit to theBorrowers the amount of such interest paid by the Borrowers for suchperiod.  If such Lender pays its share ofthe applicable Borrowing to the Administrative Agent, then the amount so paidshall constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrowers shall be withoutprejudice to any claim the Borrowers may have against a Lender that shall havefailed to make such payment to the Administrative Agent.

###  

##### (ii)           Payments by Borrowers; Presumptions byAdministrative Agent.  Unless theAdministrative Agent shall have received notice from the Borrowers prior to thetime at which any payment is due to the Administrative Agent for the account ofthe Lenders or the L/C Issuer hereunder that the Borrowers will not make suchpayment, the Administrative Agent may assume that the Borrowers have made suchpayment on such date in accordance herewith and may, in reliance upon suchassumption, distribute to the Appropriate Lenders or the L/C Issuer, as thecase may be, the amount due.  In suchevent, if the Borrowers have not in fact made such payment, then each of theAppropriate Lenders or the L/C Issuer, as the case may be, severally agrees torepay to the 

 

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#####  

##### Administrative Agent forthwith on demand the amount so distributed tosuch Lender or the L/C Issuer, in immediately available funds with interestthereon, for each day from and including the date such amount is distributed toit to but excluding the date of payment to the Administrative Agent, at theOvernight Rate.

#####  

A notice of the Administrative Agent to any Lender orthe Borrowers with respect to any amount owing under this subsection (b) shallbe conclusive, absent manifest error.

 

### (c)           Failure to Satisfy Conditions Precedent.  If any Lender makesavailable to the Administrative Agent funds for any Loan to be made by suchLender as provided in the foregoing provisions of this Article II,and such funds are not made available to the Borrowers by the AdministrativeAgent because the conditions to the applicable Credit Extension set forth in Article IVare not satisfied or waived in accordance with the terms hereof, theAdministrative Agent shall return such funds (in like funds as received fromsuch Lender) to such Lender, without interest.

###  

### (d)           Obligations of Lenders Several.  The obligations ofthe Lenders hereunder to make Term Loans and Revolving Credit Loans, to fundparticipations in Letters of Credit and to make payments pursuant to Section 10.04(c) areseveral and not joint.  The failure ofany Lender to make any Loan, to fund any such participation or to make anypayment under Section 10.04(c) on any date required hereundershall not relieve any other Lender of its corresponding obligation to do so onsuch date, and no Lender shall be responsible for the failure of any otherLender to so make its Loan, to purchase its participation or to make itspayment under Section 10.04(c).

###  

### (e)           Funding Source.  Nothing herein shall be deemed to obligateany Lender to obtain the funds for any Loan in any particular place or manneror to constitute a representation by any Lender that it has obtained or willobtain the funds for any Loan in any particular place or manner.

###  

### (f)            InsufficientFunds.  If at any time insufficient funds arereceived by and available to the Administrative Agent to pay fully all amountsof principal, L/C Borrowings, interest and fees then due hereunder, such fundsshall be applied (i) first, toward payment of interest and feesthen due hereunder, ratably among the parties entitled thereto in accordancewith the amounts of interest and fees then due to such parties, and (ii) second,toward payment of principal and L/C Borrowings then due hereunder, ratablyamong the parties entitled thereto in accordance with the amounts of principaland L/C Borrowings then due to such parties.

 

2.13         Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaimor otherwise, obtain payment in respect of (a) Obligations in respect ofany of the Facilities due and payable to such Lender hereunder and under theother Loan Documents at such time in excess of its ratable share (according tothe proportion of (i) the amount of such Obligations due and payable tosuch Lender at such time to (ii) the aggregate amount of the Obligationsin respect of the Facilities due and payable to all Lenders hereunder and underthe other Loan Documents at such time) of payments on account of the Obligationsin respect of the Facilities due and payable to all Lenders hereunder and underthe other Loan 

 

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Documents at such timeobtained by all the Lenders at such time or (b) Obligations in respect ofany of the Facilities owing (but not due and payable) to such Lender hereunderand 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) theaggregate amount of the Obligations in respect of the Facilities owing (but notdue and payable) to all Lenders hereunder and under the other Loan Documents atsuch time) of payments on account of the Obligations in respect of theFacilities owing (but not due and payable) to all Lenders hereunder and underthe other Loan Documents at such time obtained by all of the Lenders at suchtime, then, in each case under clauses (a) and (b) above, the Lenderreceiving such greater proportion shall (A) notify the AdministrativeAgent of such fact, and (B) purchase (for cash at face value)participations in the Loans and subparticipations in L/C Obligations of theother Lenders, or make such other adjustments as shall be equitable, so thatthe benefit of all such payments shall be shared by the Lenders ratably inaccordance with the aggregate amount of Obligations in respect of theFacilities then due and payable to the Lenders or owing (but not due andpayable) to the Lenders, as the case may be, provided that:

 

(i)            if any such participationsor subparticipations are purchased and all or any portion of the payment givingrise thereto is recovered, such participations or subparticipations shall berescinded and the purchase price restored to the extent of such recovery,without interest; and

 

(ii)           the provisions of this Section shallnot be construed to apply to (A) any payment made by the Borrowerspursuant to and in accordance with the express terms of this Agreement or (B) anypayment obtained by a Lender as consideration for the assignment of or sale ofa participation in any of its Loans or subparticipations in L/C Obligations toany assignee or participant, other than to the Borrowers or any Subsidiarythereof (as to which the provisions of this Section shall apply).

 

The Borrowers consent to the foregoing and agree, tothe extent they may effectively do so under applicable law, that any Lenderacquiring a participation pursuant to the foregoing arrangements may exerciseagainst the Borrowers rights ofsetoff and counterclaim with respect to such participation as fully as if suchLender were a direct creditor of theBorrowers in the amount of such participation.

 

# **ARTICLE III**TAXES, YIELD PROTECTION AND ILLEGALITY

#  

3.01         Taxes.  (a)  PaymentsFree of Taxes.  Any and all paymentsby or on account of any obligation of the Borrowers hereunder or under anyother Loan Document shall be made free and clear of and without reduction orwithholding for any Indemnified Taxes or Other Taxes, provided that if theBorrowers shall be required by applicable law to deduct any Indemnified Taxes(including any Other Taxes) from such payments, then (i) unless such Taxis an Excluded Tax, the sum payable shall be increased as necessary so thatafter making all required deductions (including deductions applicable toadditional sums payable under this Section) the Administrative Agent, anyLender or the L/C Issuer, as the case may be, receives an amount equal to thesum it would have received had no such deductions been made, (ii) the 

 

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Borrowers shall make such deductions and (iii) the Borrowers shalltimely pay the full amount deducted to the relevant Governmental Authority inaccordance with applicable law.

 

### (b)           Payment of Other Taxes by the Borrowers.  Without limitingthe provisions of subsection (a) above, the Borrowers shall timely pay anyOther Taxes to the relevant Governmental Authority in accordance withapplicable law.

 

### (c)           Indemnification by the Borrowers.  The Borrowersshall, jointly and severally, indemnify the Administrative Agent, each Lenderand the L/C Issuer, within 10 days after demand therefor, for the full amountof any Indemnified Taxes or Other Taxes (including Indemnified Taxes or OtherTaxes imposed or asserted on or attributable to amounts payable under thisSection) paid by the Administrative Agent, such Lender or the L/C Issuer, asthe case may be, and any penalties, interest and reasonable expenses arisingtherefrom or with respect thereto, whether or not such Indemnified Taxes orOther Taxes were correctly or legally imposed or asserted by the relevantGovernmental Authority.  A certificate asto the amount of such payment or liability delivered to the Borrowers by aLender or the L/C Issuer (with a copy to the Administrative Agent), or by theAdministrative Agent on its own behalf or on behalf of a Lender or the L/CIssuer, shall be conclusive absent manifest error.

 

### (d)           Evidence of Payments.  As soon as practicable after any payment ofIndemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority,the Borrowers shall deliver to the Administrative Agent the original or acertified copy of a receipt issued by such Governmental Authority evidencingsuch payment, a copy of the return reporting such payment or other evidence ofsuch payment reasonably satisfactory to the Administrative Agent.

###  

### (e)           Status of Lenders.  Any Foreign Lender that is entitled to anexemption from or reduction of withholding tax under the law of thejurisdiction in which the Borrowers are resident for tax purposes, or anytreaty to which such jurisdiction is a party, with respect to paymentshereunder or under any other Loan Document shall deliver to the Borrowers (witha copy to the Administrative Agent), at the time or times prescribed byapplicable law or reasonably requested by the Borrowers or the AdministrativeAgent, such properly completed and executed documentation prescribed byapplicable law as will permit such payments to be made without withholding orat a reduced rate of withholding.  Inaddition, any Lender, if requested by the Borrowers or the AdministrativeAgent, shall deliver such other documentation prescribed by applicable law orreasonably requested by the Borrowers or the Administrative Agent as willenable the Borrowers or the Administrative Agent to determine whether or notsuch Lender is subject to backup withholding or information reportingrequirements.

###  

Without limiting the generality of the foregoing, ifthe Borrowers are resident for tax purposes in the United States, any ForeignLender shall deliver to the Borrowers and the Administrative Agent (in suchnumber of copies as shall be requested by the recipient) on or prior to thedate on which such Foreign Lender becomes a Lender under this Agreement (andfrom time to time thereafter upon the request of the Borrowers or theAdministrative Agent, but only if such Foreign Lender is legally entitled to doso), whichever of the following is applicable:

 

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(i)            duly completed copies of Internal Revenue Service Form W-8BENclaiming eligibility for benefits of an income tax treaty to which the UnitedStates is a party,

 

(ii)           duly completed copies of Internal Revenue Service Form W-8ECI,

 

(iii)          in the case of a Foreign Lenderclaiming the benefits of the exemption for portfolio interest under section 881(c) ofthe Code, (A) a certificate to the effect that such Foreign Lender is not (1) a“bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10percent shareholder” of the Borrowers within the meaning of section 881(c)(3)(B) ofthe Code, or (3) a “controlled foreign corporation” described in section881(c)(3)(C) of the Code and (B) duly completed copies of  Internal Revenue Service Form W-8BEN, or

 

(iv)          any other form prescribed by applicable law as a basis forclaiming exemption from or a reduction in United States Federal withholding taxduly completed,

 

in each case, together withsuch supplementary documentation as may be prescribed by applicable law topermit the Borrowers to determine the withholding or deduction required to bemade, if any.

 

### (f)            Treatment of Certain Refunds.  If the Administrative Agent, any Lender orthe L/C Issuer determines, in its sole discretion, that it has received a refundof any Taxes or Other Taxes as to which it has been indemnified by theBorrowers or with respect to which the Borrowers have paid additional amountspursuant to this Section, it shall pay to the Borrowers an amount equal to suchrefund (but only to the extent of indemnity payments made, or additionalamounts paid, by the Borrowers under this Section with respect to theTaxes or Other Taxes giving rise to such refund), net of all out-of-pocketexpenses of the Administrative Agent, such Lender or the L/C Issuer, as thecase may be, and without interest (other than any interest paid by the relevantGovernmental Authority with respect to such refund), provided that theBorrowers, upon the request of the Administrative Agent, such Lender or the L/CIssuer, agrees to repay the amount paid over to the Borrowers (plus anypenalties, interest or other charges imposed by the relevant GovernmentalAuthority) to the Administrative Agent, such Lender or the L/C Issuer if theAdministrative Agent, such Lender or the L/C Issuer is required to repay suchrefund to such Governmental Authority. This subsection shall not be construed to require the AdministrativeAgent, any Lender or the L/C Issuer to make available its tax returns (or anyother information relating to its taxes that it deems confidential) to theBorrowers or any other Person.

 

3.02         Illegality.  If any Lender determines that any Law hasmade it unlawful, or that any Governmental Authority has asserted that it isunlawful, for any Lender or its applicable Lending Office to make, maintain orfund Eurocurrency Rate Loans, or to determine or charge interest rates basedupon the Eurocurrency Rate, or any Governmental Authority has imposed materialrestrictions on the authority of such Lender to purchase or sell, or to takedeposits of, Dollars in the London interbank market, then, on notice thereof bysuch Lender to the Borrowers through the Administrative Agent, any obligationof such Lender to make or continue Eurocurrency Rate Loans or to convert BaseRate Loans to Eurocurrency Rate Loans shall be 

 

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suspended until suchLender notifies the Administrative Agent and the Borrowers that thecircumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrowersshall, upon demand from such Lender (with a copy to the Administrative Agent),prepay or, if applicable and such Loans are denominated in Dollars, convert allEurocurrency Rate Loans of such Lender to Base Rate Loans, either on the lastday of the Interest Period therefor, if such Lender may lawfully continue tomaintain such Eurocurrency Rate Loans to such day, or immediately, if suchLender may not lawfully continue to maintain such Eurocurrency Rate Loans.  Upon any such prepayment or conversion, theBorrowers shall also pay accrued interest on the amount so prepaid orconverted.

 

3.03         Inability to Determine Rates.  If the Required Lenders determine that forany reason in connection with any request for a Eurocurrency Rate Loan or aconversion to or continuation thereof that (a) deposits in Dollars are notbeing offered to banks in the London interbank market for Dollars for theapplicable amount and Interest Period of such Eurocurrency Rate Loan, (b) adequateand reasonable means do not exist for determining the Eurocurrency Rate for anyrequested Interest Period with respect to a proposed Eurocurrency Rate Loan, or(c) the Eurocurrency Rate for any requested Interest Period with respectto a proposed Eurocurrency Rate Loan does not adequately and fairly reflect thecost to such Lenders of funding such Loan, the Administrative Agent willpromptly so notify the Borrowers and each Lender.  Thereafter, the obligation of the Lenders tomake or maintain Eurocurrency Rate Loans shall be suspended until theAdministrative Agent (upon the instruction of the Required Lenders) revokessuch notice.  Upon receipt of suchnotice, the Borrowers may revoke any pending request for a Borrowing of, conversionto or continuation of Eurocurrency Rate Loans or, failing that, will be deemedto have converted such request into a request for a Committed Borrowing of BaseRate Loans in the amount specified therein.

 

3.04         Increased Costs; Reserves onEurocurrency Rate Loans.  (a) Increased Costs Generally.  If any Changein Law shall:

 

(i)            impose, modify or deem applicable any reserve, specialdeposit, compulsory loan, insurance charge or similar requirement againstassets of, deposits with or for the account of, or credit extended orparticipated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e)) or the L/C Issuer;

 

(ii)           subject any Lender or the L/C Issuer to any tax of anykind whatsoever with respect to this Agreement, any Letter of Credit, anyparticipation in a Letter of Credit or any Eurocurrency Rate Loan made by it,or change the basis of taxation of payments to such Lender or the L/C Issuer inrespect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01and the imposition of, or any change in the rate of, any Excluded Tax payableby such Lender or the L/C Issuer); or

 

(iii)          impose on any Lender or the L/C Issuer or the Londoninterbank market any other condition, cost or expense affecting this Agreementor Eurocurrency Rate Loans made by such Lender or any Letter of Credit orparticipation therein;

 

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and the result of any ofthe foregoing shall be to increase the cost to such Lender of making ormaintaining any Eurocurrency Rate Loan (or of maintaining its obligation tomake any such Loan), or to increase the cost to such Lender or the L/C Issuerof participating in, issuing or maintaining any Letter of Credit (or ofmaintaining its obligation to participate in or to issue any Letter of Credit),or to reduce the amount of any sum received or receivable by such Lender or theL/C Issuer hereunder (whether of principal, interest or any other amount) then,upon request of such Lender or the L/C Issuer, the Borrowers will pay to suchLender or the L/C Issuer, as the case may be, such additional amount or amountsas will compensate such Lender or the L/C Issuer, as the case may be, for suchadditional costs incurred or reduction suffered.

 

### (b)           Capital Requirements.  If any Lender or the L/C Issuer determinesthat any Change in Law affecting such Lender or the L/C Issuer or any LendingOffice of such Lender or such Lender’s or the L/C Issuer’s holding company, ifany, regarding capital requirements has or would have the effect of reducingthe rate of return on such Lender’s or the L/C Issuer’s capital or on thecapital of such Lender’s or the L/C Issuer’s holding company, if any, as aconsequence of this Agreement, the Commitments of such Lender or the Loans madeby, or participations in Letters of Credit held by, such Lender, or the Lettersof Credit issued by the L/C Issuer, to a level below that which such Lender orthe L/C Issuer or such Lender’s or the L/C Issuer’s holding company could haveachieved but for such Change in Law (taking into consideration such Lender’s orthe L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’sholding company with respect to capital adequacy), then from time to time theBorrowers will pay to such Lender or the L/C Issuer, as the case may be, suchadditional amount or amounts as will compensate such Lender or the L/C Issueror such Lender’s or the L/C Issuer’s holding company for any such reductionsuffered.

###  

### (c)           Certificates for Reimbursement.  A certificate of a Lender or the L/C Issuersetting forth the amount or amounts necessary to compensate such Lender or theL/C Issuer or its holding company, as the case may be, as specified insubsection (a) or (b) of this Section and delivered to theBorrowers shall be conclusive absent manifest error.  The Borrowers shall pay such Lender or theL/C Issuer, as the case may be, the amount shown as due on any such certificatewithin 10 days after receipt thereof.

###  

### (d)           Delay in Requests.  Failure or delay on the part of any Lender orthe L/C Issuer to demand compensation pursuant to the foregoing provisions ofthis Section shall not constitute a waiver of such Lender’s or the L/CIssuer’s right to demand such compensation, provided that the Borrowersshall not be required to compensate a Lender or the L/C Issuer pursuant to theforegoing provisions of this Section for any increased costs incurred orreductions suffered more than six months prior to the date that such Lender orthe L/C Issuer, as the case may be, notifies the Borrowers of the Change in Lawgiving rise to such increased costs or reductions and of such Lender’s or theL/C Issuer’s intention to claim compensation therefor (except that, if theChange in Law giving rise to such increased costs or reductions is retroactive,then the six-month period referred to above shall be extended to include theperiod of retroactive effect thereof).

###  

### (e)           Reserves on Eurocurrency Rate Loans.  The Borrowers shall pay to each Lender, aslong as such Lender shall be required to maintain reserves with respect to liabilitiesor 

 

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### assets consisting of or including Eurocurrencyfunds or deposits (currently known as “Eurocurrency liabilities”), additionalinterest on the unpaid principal amount of each Eurocurrency Rate Loan equal tothe actual costs of such reserves allocated to such Loan by such Lender (asdetermined by such Lender in good faith, which determination shall beconclusive), which shall be due and payable on each date on which interest ispayable on such Loan, provided the Borrowers shall have received atleast 10 days’ prior notice (with a copy to the Administrative Agent) of suchadditional interest from such Lender.  Ifa Lender fails to give notice 10 days prior to the relevant Interest PaymentDate, such additional interest shall be due and payable 10 days from receipt ofsuch notice.

 

3.05         Compensation for Losses.  Upon demand of any Lender (with a copy to theAdministrative Agent) from time to time, the Borrowers shall promptlycompensate such Lender for and hold such Lender harmless from any loss, cost orexpense incurred by it as a result of:

 

#### (a)   any continuation, conversion, payment or prepayment of any Loanother than a Base Rate Loan on a day other than the last day of the InterestPeriod for such Loan (whether voluntary, mandatory, automatic, by reason ofacceleration, or otherwise);

####  

#### (b)   any failure by the Borrowers (for a reason other than the failureof such Lender to make a Loan) to prepay, borrow, continue or convert any Loanother than a Base Rate Loan on the date or in the amount notified by theBorrowers; or

####  

#### (c)   any assignment of a Eurocurrency Rate Loan on a day other than thelast day of the Interest Period therefor as a result of a request by theBorrowers pursuant to Section 10.13;

####  

including any lossof anticipated profits, any foreign exchange losses and any loss orexpense arising from the liquidation or reemployment of funds obtained by it tomaintain such Loan or from fees payable to terminate the deposits from whichsuch funds were obtained or from the performance of any foreign exchangecontract. The Borrowers shall also pay any customary administrative fees chargedby such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by theBorrowers to the Lenders under this Section 3.05, each Lender shall be deemed to have funded eachEurocurrency Rate Loan made by it at the Eurocurrency Rate for such Loan by a matching deposit or otherborrowing in the London interbank eurodollar market for a comparable amount andfor a comparable period, whether or not such Eurocurrency Rate Loan was in factso funded.

 

3.06         Mitigation Obligations; Replacementof Lenders.  (a)  Designationof a Different Lending Office.  Ifany Lender requests compensation under Section 3.05, or theBorrowers are required to pay any additional amount to any Lender or anyGovernmental Authority for the account of any Lender pursuant to Section 3.01,or if any Lender gives a notice pursuant to Section 3.02, then suchLender shall use reasonable efforts to designate a different Lending Office forfunding or booking its Loans hereunder or to assign its rights and obligationshereunder to another of its offices, branches or affiliates, if, in thejudgment of such Lender, such 

 

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designation or assignment(i) would eliminate or reduce amounts payable pursuant to Section 3.01or 3.04, as the case may be, in the future, or eliminate the need forthe notice pursuant to Section 3.02, as applicable, and (ii) ineach case, would not subject such Lender to any unreimbursed cost or expenseand would not otherwise be disadvantageous to such Lender.  The Borrowers hereby jointly and severallyagree to pay all reasonable costs and expenses incurred by any Lender inconnection with any such designation or assignment.

 

### (b)           Replacement of Lenders.  If any Lender requests compensation under Section 3.05,or if the Borrowers are required to pay any additional amount to any Lender orany Governmental Authority for the account of any Lender pursuant to Section 3.01,the Borrowers may replace such Lender in accordance with Section 10.13.

 

3.07         Survival.  All of the Borrowers’ obligations under this Article IIIshall survive termination of the Aggregate Commitments and repayment of allother Obligations hereunder.

 

# **ARTICLE IV**CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01         Conditions of Initial CreditExtension.  The obligation of the L/CIssuer and each Lender to make its initial Credit Extension hereunder is subjectto satisfaction of the following conditions precedent:

 

#### (a)   Documents, Certificates, Opinions and Other Instruments.Subject to the Post Closing Agreement, the Administrative Agent’s receipt ofthe following, each of which shall be originals or telecopies (followedpromptly by originals) unless otherwise specified, each properly executed by aResponsible Officer of the signing Loan Party, each dated the Closing Date (or,in the case of certificates of governmental officials, a recent date before theClosing Date) and each in form and substance satisfactory to the AdministrativeAgent and each of the Lenders:

####  

###### (i)            executed counterparts of this Agreement, sufficient innumber for distribution to the Administrative Agent, each Lender and theBorrowers;

######  

###### (ii)           aNote executed by the Borrowers in favor of each Lender requesting a Note;

######  

###### (iii)          apledge and security agreement, insubstantially the form of Exhibit F (together with each other pledge and security agreement and PerfectionCertificate Supplement delivered pursuant to Section 6.12, ineach case as amended, the “Security Agreement”), duly executed by eachLoan Party, together with:

######  

                (A)          certificates representing the PledgedEquity referred to therein (to the extent such Pledged Equity is certificated) accompanied by undated stock powers executedin blank and instruments evidencing the Pledged Debt indorsed in blank,

 

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(B)           proper financing statements in formappropriate for filing under the Uniform Commercial Code of alljurisdictions that the Administrative Agent may deem necessary or desirable inorder to perfect the Liens created under the Security Agreement, covering theCollateral described in the Security Agreement,

 

(C)           completedrequests for information, dated on or before the date of the initial CreditExtension, listing all effectivefinancing statements filed in the jurisdictions referred to in clause (B) abovethat name any Loan Party as debtor, together with copies of such otherfinancing statements,

 

(D)          evidenceof the completion of all other actions, recordings and filings of or withrespect to the Security Agreement that the Administrative Agent may deemnecessary or desirable in order to perfect the Liens created thereby,

 

(E)           the Account Control Agreements referred to in the SecurityAgreement and duly executed by the appropriate parties,

 

(F)           Copiesof an appraisal of all equipment owned by the Loan Parties located at 8814 and8874 Trade Port Drive, Hamilton, Ohio 45011, and at the Company’s headquartersin San Diego, California, specifying the aggregate fair market value andorderly liquidation value of such equipment, which appraisal shall be from aPerson acceptable to the Lenders; and

 

(G)           evidencethat all other action that the Administrative Agent may deem necessary ordesirable in order to perfect the Liens created under the Security Agreementhas been taken (including receipt of duly executed payoff letters, UCC-3termination statements;

 

###### (iv)          deedsof trust, trust deeds, deeds to secure debt, mortgages, in substantially theform of Exhibit G (with such changes as may be satisfactory to theAdministrative Agent and its counsel to account for local law matters) andcovering the properties identified to bemortgaged on Schedule 5.08(c), as indicated by an asterisk on eachsuch Schedule (together with the Assignments of Leases and Rentsreferred to therein and each other mortgage delivered pursuant to Section 6.12,in each case as amended, the “Mortgages”), dulyexecuted by the appropriate Loan Party, together with:

######  

(A)          evidencethat counterparts of the Mortgages have been duly executed, acknowledged anddelivered and are in form suitable for filing or recording in all filing orrecording offices that the Administrative Agent may deem necessary or desirablein order to create a valid first and subsisting Lien on the property describedtherein in favor of the 

 

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Administrative Agent for the benefit of the Secured Parties and thatall filing, documentary, stamp, intangible and recording taxes and fees havebeen paid,

 

(B)           fullypaid American Land Title Association Lender’s Extended Coverage title insurancepolicies (the “Mortgage Policies”) in form and substance, withendorsements and in amounts acceptable to the Administrative Agent, issued,coinsured and reinsured by title insurers acceptable to the AdministrativeAgent, insuring the Mortgages to be valid first and subsisting Liens on theproperty described therein, free and clear of all defects (including, but notlimited to, mechanics’ and materialmen’s Liens) and encumbrances, exceptingonly Permitted Encumbrances and other Liens permitted under the Loan Documents,and providing for such other affirmative insurance (including endorsements forfuture advances under the Loan Documents, for mechanics’ and materialmen’sLiens and for zoning of the applicable property) and such coinsurance anddirect access reinsurance as the Administrative Agent may deem necessary ordesirable,

 

(C)           AmericanLand Title Association/American Congress on Surveying and Mapping form surveys,for which all necessary fees (where applicable) have been paid, and dated nomore than 30 days before the day of the initial Credit Extension, certified tothe Administrative Agent and the issuer of the Mortgage Policies in a mannersatisfactory to the Administrative Agent by a land surveyor duly registered andlicensed in the States in which the property described in such surveys islocated and acceptable to the Administrative Agent, showing all buildings andother improvements, any off-site improvements, the location of any easements,parking spaces, rights of way, building set-back lines and other dimensionalregulations and the absence of encroachments, either by such improvements or onto such property, and other defects, other than encroachments and other defectsacceptable to the Administrative Agent,

 

(D)          evidenceof the insurance required by the terms of the Mortgages,

 

(E)           anappraisal of the all real property of any Loan Party subject to the Mortgages, which appraisal shall be from a Personacceptable to the Lenders, and

 

(F)           evidencethat all other action that the Administrative Agent may deem necessary ordesirable in order to create valid first and subsisting Liens on the propertydescribed in the Mortgages has been taken;

 

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###### (v)           suchcertificates of resolutions or other action, incumbency certificates (includingspecimen signatures) and/or other certificates of Responsible Officers of eachLoan Party as the Administrative Agent may require evidencing the identity,authority and capacity of each Responsible Officer thereof authorized to act asa Responsible Officer in connection with this Agreement and the other LoanDocuments to which such Loan Party is a party or is to be a party;

######  

###### (vi)          suchdocuments and certifications as the Administrative Agent may reasonably requireto evidence that each Loan Party is duly organized or formed, and that theBorrowers is validly existing, in good standing and qualified to engage inbusiness in each jurisdiction whereits ownership, lease or operation of properties or the conduct of its businessrequires such qualification, except to the extent that failure to do so couldnot reasonably be expected to have a Material Adverse Effect;

######  

###### (vii)         afavorable opinion of Cooley Godward Kronish LLP, counsel to the Loan Parties,addressed to the Administrative Agent and each Lender, as to the matters setforth in Exhibit H-1 and such other matters concerning the LoanParties and the Loan Documents as the Required Lenders may reasonably request;

######  

###### (viii)        afavorable opinion of Dinsmore & Shohl, LLP, local counsel to the LoanParties in the State of Ohio, addressed to the Administrative Agent and eachLender, as to the matters set forth in Exhibit H-2 and such othermatters concerning the Loan Parties and the Loan Documents as the RequiredLenders may reasonably request;

######  

###### (ix)           acertificate of a Responsible Officer of each Loan Party either (A) attachingcopies of all consents, licenses and approvals required in connection with theLoan Documents and the execution, delivery and performance by such Loan Partyand the validity against such Loan Party of the Loan Documents to which it is aparty, and such consents, licenses and approvals shall be in full force andeffect, or (B) stating that no such consents, licenses or approvals are sorequired;

######  

###### (x)            acertificate signed by a Responsible Officer of the Borrowers certifying (A) thatthe conditions specified in Sections 4.02(a) and (b) havebeen satisfied, (B) thatthere has been no event or circumstance since March 31, 2007 that has hador could be reasonably expected to have, either individually or in theaggregate, a Material Adverse Effect, (C) there is no action, suit,investigation or proceeding pending or, to the knowledge of the Borrowers,threatened in any court or before any arbitrator or governmental authority thatcould reasonably be expected to have a Material Adverse Effect, and (D) acalculation of Unrestricted Cash as of the Closing Date;

 

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###### (xi)           anenvironmental assessment report from an environmental consulting firmacceptable to the Lenders, which report shall identify existing and potentialenvironmental concerns and shall quantify related costs and liabilities,associated with Real Property of the Company or any of its respectiveSubsidiaries that is subject to a Mortgage hereunder, and the Lenders shall besatisfied with the nature and amount of any such matters and with the Borrowers’ plans with respect thereto;

######  

###### (xii)          evidence that all insurance required to be maintained pursuant to theLoan Documents has been obtained and is in effect, together with thecertificates of insurance and the related endorsements, naming theAdministrative Agent, on behalf of the Lenders, as an additional insured orloss payee, as the case may be, under all insurance policies maintained withrespect to the assets and properties of the Loan Parties that constitutes Collateral;

######  

(xv)         suchenvironmental reports, asset appraisals, title insurance, field audits, FDAWarning Letters, reviews of manufacturing safety and efficacy data filed withthe FDA, and such other reports, audits or certifications as the Lenders mayreasonably request; and

 

(xvi)        suchother assurances, certificates, documents, consents or opinions as theAdministrative Agent, the L/C Issuer or any Lender reasonably may require.

 

#### (b)   Lender Fees. (i) All fees required to be paid to theAdministrative Agent and the Arranger on or before the Closing Date shall havebeen paid and (ii) all fees required to be paid to the Lenders on orbefore the Closing Date shall have been paid.

####  

#### (c)   Counsel Fees. Unless waived by the Administrative Agent,the Borrowers shall have paid all reasonable fees, charges and disbursements ofcounsel to the Administrative Agent (directly to such counsel if requested bythe Administrative Agent) to the extent invoiced prior to or on the ClosingDate, plus such additional amounts of such fees, charges and disbursements asshall constitute its reasonable estimate of such fees, charges anddisbursements incurred or to be incurred by it through the closing proceedings(provided that such estimate shall not thereafter preclude a finalsettling of accounts between the Borrowers and the Administrative Agent).

####  

Without limiting the generality of the provisions ofthe last paragraph of Section 9.03, for purposes of determiningcompliance with the conditions specified in this Section 4.01, eachLender that has signed this Agreement shall be deemed to have consented to,approved or accepted or to be satisfied with, each document or other matterrequired thereunder to be consented to or approved by or acceptable orsatisfactory to a Lender unless the Administrative Agent shall have receivednotice from such Lender prior to the proposed Closing Date specifying itsobjection thereto.

 

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4.02         Conditions to all Credit Extensions.  The obligation of each Lender to honor anyRequest for Credit Extension (other than a Committed Loan Notice requestingonly a conversion of Loans of one Type to another Type, or a continuation ofEurocurrency Rate Loans) is subject to the following conditions precedent:

 

#### (a)   Representations and Warranties. The representations andwarranties of the Borrowers contained in Article V or any otherLoan Document, or which are contained in any document furnished at any timeunder or in connection herewith or therewith, shall be true and correct on andas of the date of such Credit Extension, except to the extent that suchrepresentations and warranties specifically refer to an earlier date, in whichcase they shall be true and correct as of such earlier date, and except thatfor purposes of this Section 4.02, the representations andwarranties contained in Sections 5.05(a) and (b) shallbe deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and(b), respectively.

####  

#### (b)   No Default. No Default shall exist, or would result fromsuch proposed Credit Extension or from the application of the proceeds thereof.

####  

#### (c)   Request for Credit Extension. The Administrative Agent and,if applicable, the L/C Issuer shall have received a Request for CreditExtension in accordance with the requirements hereof.

####  

Each Request for Credit Extension (other than aCommitted Loan Notice requesting only a conversion of Loans to the other Typeor a continuation of Eurocurrency Rate Loans) submitted by the Borrowers shallbe deemed to be a representation and warranty that the conditions specified in Sections4.02(a) and (b) have been satisfied on and as of the dateof the applicable Credit Extension.

 

# **ARTICLE V**REPRESENTATIONS AND WARRANTIES

#  

Each of the Borrowers hereby represents and warrantsto the Administrative Agent and the Lenders that:

 

5.01         Existence, Qualification and Power.  Each Loan Party (a) is duly organized orformed, validly existing and, as applicable, in good standing under the Laws ofthe jurisdiction of its incorporation or organization, (b) has allrequisite power and authority and all requisite governmental licenses,authorizations, consents and approvals to (i) own or lease its assets andcarry on its business and (ii) execute, deliver and perform itsobligations under the Loan Documents to which it is a party, and (c) isduly qualified and is licensed and, as applicable, in good standing under theLaws of each jurisdiction where its ownership, lease or operation of propertiesor the conduct of its business requires such qualification or license; exceptin each case referred to in clause (b)(i) or (c), to the extent thatfailure to do so could not reasonably be expected to have a Material AdverseEffect.

 

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5.02         Authorization;No Contravention.  The execution,delivery and performance by each Loan Party of each Loan Document to which suchPerson is or is to be a party have been duly authorized by all necessarycorporate or other organizational action, and do not and will not (a) contravenethe terms of any of such Person’s Organization Documents; (b) conflictwith or result in any breach or contravention of, or the creation of any Lien(other than Liens created by the Loan Documents) under, or require any paymentto be made under (i) any material Contractual Obligation to which suchPerson is a party or affecting such Person or the properties of such Person orany of its Subsidiaries or (ii) any order, injunction, writ or decree ofany Governmental Authority or any arbitral award to which such Person or itsproperty is subject; or (c) violate any Law.

 

5.03         GovernmentalAuthorization; Other Consents. Except as set forth on Schedule 1.04 to the PerfectionCertificate, no approval, consent, exemption, authorization, or other actionby, or notice to, or filing with, any Governmental Authority or any otherPerson is necessary or required in connection with (a) the execution,delivery or performance by, or enforcement against, any Loan Party of thisAgreement or any other Loan Document, (b) the grant by any Loan Party ofthe Liens granted by it pursuant to the Collateral Documents, or (c) theperfection or maintenance of the Liens created under the Collateral Documents(including the first priority nature thereof), except such authorizations,approvals, actions, notices and filings that, if not obtained, taken, given ormade, could not reasonably be expected to have a Material Adverse Effect ormaterially impair the perfection of the Liens in favor of the Secured Partieson any material Collateral or material portion of the Collateral.

 

5.04         BindingEffect.  This Agreement has been, andeach other Loan Document, when delivered hereunder, will have been, dulyexecuted and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each otherLoan Document when so delivered will constitute, a legal, valid and bindingobligation of such Loan Party, enforceable against each Loan Party that isparty thereto in accordance with its terms, except as enforceability may belimited by Debtor Relief Laws or by general equitable principles (whetherenforcement is sought by proceedings in equity or at law).

 

5.05         FinancialStatements; No Material Adverse Effect. (a)  Audited Financial Statements. The Audited FinancialStatements (i) were prepared in accordance with GAAP consistently appliedthroughout the period covered thereby, except as otherwise expressly notedtherein; (ii) fairly present the financial condition of the Company andits Subsidiaries as of the date thereof and their results of operations for theperiod covered thereby in accordance with GAAP consistently applied throughoutthe period covered thereby, except as otherwise expressly noted therein; and (iii) showall material indebtedness and other liabilities, direct or contingent, of theCompany and its Subsidiaries as of the date thereof required to be shownthereon in accordance with GAAP, including any such liabilities for taxes,material commitments and Indebtedness.

 

### (b)           UnauditedFinancial Statements. The unaudited consolidated balance sheet of theCompany****and its Subsidiaries dated September 30, 2007, and therelated consolidated statements of income or operations, shareholders’ equityand cash flows for the fiscal quarter ended on that date (i) were preparedin accordance with GAAP consistently applied throughout 

 

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the period coveredthereby, except as otherwise expressly noted therein, and (ii) fairlypresent the financial condition of theCompany and its Subsidiaries as of the date thereof and their results ofoperations 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.

 

### (c)           NoMaterial Adverse Effect. Since the date of the Audited FinancialStatements, there has been no event or circumstance, either individually or inthe aggregate, that has had or could reasonably be expected to have a MaterialAdverse Effect.

 

### (d)           ForecastedBalance Sheets. The consolidated forecasted balance sheet, statements ofincome and cash flows of the Company and its Subsidiaries, if any,delivered pursuant to Section 6.01(c) were prepared in goodfaith on the basis of estimates and assumptions believed by the Company to bereasonable in light of the circumstances when made.

 

### 5.06         Litigation. There are no actions, suits, proceedings, claims or disputes pending or,to the knowledge of the Borrowers, threatened or contemplated, at law, inequity, in arbitration or before any Governmental Authority, by or against theCompany or any of its Subsidiaries or against any of their properties orrevenues that (a) purport to affect or pertain to this Agreement or anyother Loan Document, or (b) either individually or in the aggregate couldreasonably be expected to have a Material Adverse Effect.

 

### 5.07         No Default. Neither the Company nor any Subsidiary thereof is in default under orwith respect to, or a party to, any Contractual Obligation that could, eitherindividually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect.  No Default has occurredand is continuing or would result from the consummation of the transactionscontemplated by this Agreement or any other Loan Document.

 

### 5.08         Ownership of Property; Liens; Investments.  (a)  Title. The Loan Parties havegood record and marketable title in fee simple to, or valid leasehold interestsin, all material real property, free and clear of all Liens (other than Lienscreated or permitted by the Loan Documents) necessary or used in the ordinaryconduct of their business, except for such defects in title as could not,individually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect.

 

### (b)           List of Liens.  The property of the Loan Parties is subjectto no Liens, other than Liens set forth on Schedule 5.08(b) oras otherwise permitted by Section 7.01.

 

### (c)           Owned Real Property.  Schedule 5.08(c) sets fortha complete and accurate list of all real property owned by the Loan Parties as ofthe date hereof, showing as of the date hereof the street address, county orother relevant jurisdiction, state, record owner and the aggregate appraisedvalue thereof.  Each Loan Party has titleto the real property owned by it free and clear of all Liens, other than Lienscreated or permitted by the Loan Documents.

 

### (d)           Leased Real Property. (i) Schedule 5.08(d)(i) sets forth a complete and accurate list ofall leases of real property for the location at the Company’s headquarters inSan Diego, California and for any other real property covering in excess of10,000 square feet that 

 

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any Loan Party is thelessee as of the date hereof, showing as of the date hereof the street address,county or other relevant jurisdiction, state, lessor, lessee, expiration dateand annual rental cost thereof.  To thebest knowledge of the Company, each such lease is the legal, valid and bindingobligation of the lessee thereof, enforceable in accordance with its terms (exceptas enforceability may be limited by Debtor Relief Laws or by general equitableprinciples (whether enforcement is sought by proceedings in equity or at law)).

 

##### (ii)           Schedule 5.08(d)(ii) sets forth a complete andaccurate list of all leases of real property under which the Company or anySubsidiary of a Loan Party is the lessor, showing as of the date hereof thestreet address, county or other relevant jurisdiction, state, lessor, lessee,expiration date and annual rental cost thereof. To the best knowledge of the Company, each such lease is the legal,valid and binding obligation of the lessor thereof, enforceable in accordancewith its terms (except as enforceability may be limited by Debtor Relief Lawsor by general equitable principles (whether enforcement is sought byproceedings in equity or at law)).

 

### (e)           Investments.As of the Closing Date, Schedule 5.08(e) sets forth a completeand accurate list of all Investments held by the Loan Parties on December 14,2007, showing as of the date hereof the amount, obligor or issuer and maturity,if any, thereof (other than Investments held pursuant to the DeferredCompensation Plan and Investments permitted by Section 7.03(c) through(g)).

 

### 5.09         Environmental Compliance.  (a) Generally.  TheCompany and its respective Subsidiaries conduct in the ordinary course ofbusiness a review of the effect of existing Environmental Laws and claimsalleging potential liability or responsibility for violation of anyEnvironmental Law on their respective businesses, operations and properties,and as a result thereof the Borrowers have reasonably concluded that suchEnvironmental Laws and claims could not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect.

 

### (b)           No NPL or CERCLIS Listing. None of the propertiescurrently or formerly owned or operated by the Company or any of itsSubsidiaries is listed or proposed for listing on the NPL or on the CERCLIS orany analogous foreign, state or local list. Except with respect to any matters that would not reasonably be expectedto have a Material Adverse Effect, there are no and, to the best knowledge ofthe Loan Parties, never have been any underground or above-ground storage tanksor any surface impoundments, septic tanks, pits, sumps or lagoons in whichHazardous Materials are being or have been treated, stored or disposed on anyproperty currently owned or operated by the Company or any of its Subsidiariesor, to the best of the knowledge of the Loan Parties, on any property formerlyowned or operated by the Company or any of its Subsidiaries; and, to the bestknowledge of the Loan Parties, Hazardous Materials have not been released,discharged or disposed of on any property currently or formerly owned oroperated by the Company or any of its Subsidiaries in a manner that could giverise to liability under applicable Environmental Laws.

 

### (c)           No Hazardous Materials. Neither the Company nor anyof its Subsidiaries is undertaking, and has not completed, either individuallyor together with other potentially 

 

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responsible parties, anyinvestigation or assessment or remedial or response action relating to anyactual or threatened release, discharge or disposal of Hazardous Materials atany site, location or operation, either voluntarily or pursuant to the order ofany Governmental Authority or the requirements of any Environmental Law; andall Hazardous Materials generated, used, treated, handled or stored at, ortransported to or from, any property currently or formerly owned or operated bythe Company or any of its Subsidiaries have been disposed of in a manner notreasonably expected to result in material liability to the Company or any ofits Subsidiaries.

 

### 5.10         Insurance.  The properties of the Company and itsSubsidiaries are insured with financially sound and reputable insurancecompanies not Affiliates of the Borrowers, in such amounts, with suchdeductibles and covering such risks as are customarily carried by companiesengaged in similar businesses and owning similar properties in localities wherethe Company or the applicable Subsidiary operates.

 

### 5.11         Taxes. The Company and its Subsidiaries have filed all Federal, state and othermaterial tax returns and reports required to be filed, and have paid allFederal, state and other material taxes, assessments, fees and othergovernmental charges levied or imposed upon them or their properties, income orassets otherwise due and payable, except those which are being contested ingood faith by appropriate proceedings diligently conducted and for whichadequate reserves have been provided in accordance with GAAP.  There is no proposed tax assessment againstthe Company or any Subsidiary that could reasonably be expected to have aMaterial Adverse Effect.  Neither theCompany nor any Subsidiary thereof is party to any tax sharing agreement.

 

### 5.12         ERISA Compliance.  (a)  Generally. Each Plan is incompliance in all material respects with the applicable provisions of ERISA,the Code and other Federal or state Laws. Each Plan that is intended to qualify under Section 401(a) ofthe Code has either (i) applied for a favorable determination letter,prior to the expiration of the requisite remedial amendment period underapplicable Treasury Regulations or IRS pronouncements, but has not yet receiveda response; (ii) obtained at least one favorable determination,notification, advisory and/or opinion letter, as applicable, on which theBorrowers are entitled to rely, as to its qualified status from the IRS; or (iii) stillhas a remaining period of time to apply for such a determination letter fromthe IRS and to make any amendments necessary to obtain a favorabledetermination and, to the best knowledge of the Borrowers, nothing has occurredwhich would prevent, or cause the loss of, such qualification.  The Borrowers and each ERISA Affiliate havemade all required contributions to each Plan subject to Section 412 of theCode, and no application for a funding waiver or an extension of anyamortization period pursuant to Section 412 of the Code has been made withrespect to any Plan.

 

### (b)           No Claims. There are nopending or, to the best knowledge of the Borrowers, threatened claims, actionsor lawsuits, or action by any Governmental Authority, with respect to any Planthat could reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction orviolation of the fiduciary responsibility rules with respect to any Planthat has resulted or could reasonably be expected to result in a MaterialAdverse Effect.

 

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### (c)           NoERISA Event, Unfunded Pension Liabilities, etc. (i) No ERISA Event hasoccurred or is reasonably expected to occur; (ii) no Pension Plan has anyUnfunded Pension Liability; (iii) neither the Borrowers nor any ERISAAffiliate has incurred, or reasonably expects to incur, any liability underTitle IV of ERISA with respect to any Pension Plan (other than premiums due andnot delinquent under Section 4007 of ERISA); (iv) neither theBorrowers nor any ERISA Affiliate has incurred, or reasonably expects to incur,any liability (and no event has occurred which, with the giving of notice underSection 4219 of ERISA, would result in such liability) under Section 4201or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither theBorrowers nor any ERISA Affiliate has engaged in a transaction that could besubject to Section 4069 or 4212(c) of ERISA.

###  

### (d)           Foreign Plans. With respect to each scheme orarrangement mandated by a government other than the United States (a “Foreign Government Scheme or Arrangement”) and with respect to each employeebenefit plan maintained or contributed to by the Company or any Subsidiary ofany Loan Party that is not subject to United States law (a “Foreign Plan”):

###  

(i)            any employer andemployee contributions required by law or by the terms of any ForeignGovernment Scheme or Arrangement or any Foreign Plan have been made, or, ifapplicable, accrued, in accordance with normal accounting practices;

 

(ii)           the fair marketvalue of the assets of each funded Foreign Plan, the liability of each insurerfor any Foreign Plan funded through insurance or the book reserve establishedfor any Foreign Plan, together with any accrued contributions, is sufficient toprocure or provide for the accrued benefit obligations, as of the date hereof,with respect to all current and former participants in such Foreign Planaccording to the actuarial assumptions and valuations most recently used toaccount for such obligations in accordance with applicable generally acceptedaccounting principles; and

 

(iii)          each Foreign Plan required to be registeredhas been registered and has been maintained in good standing with applicableregulatory authorities.

 

### 5.13         Subsidiaries; Equity Interests; Loan Parties.  As of the date hereof and as of any date Schedule5.13 is updated, the Company has no Subsidiaries other than thosespecifically disclosed in Part (a) of Schedule 5.13 as ofsuch date, and all of the outstanding Equity Interests in such Subsidiarieshave been validly issued, are fully paid and non-assessable and are owned by aLoan Party in the amounts specified on Part (a) of Schedule 5.13free and clear of all Liens except those created under the Collateral Documentsand those permitted by Section 7.01(m).  As of the Closing Date, the Borrowers have no****equity investments in any othercorporation or entity other than those specifically disclosed in Part (b) ofSchedule 5.13.  Set forth on Part (c) ofSchedule 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 itsincorporation, the address of its principal place of business and its U.S.taxpayer identification number or, in the case of any non-U.S. Loan Party thatdoes not have a U.S. taxpayer identification number, its unique identificationnumber issued to it by the jurisdiction of its incorporation.  As of the date hereof, the copy of thecharter of each Loan Party and each amendment thereto provided pursuant to 

 

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Section 4.01(a)(vi) isa true and correct copy of each such document, each of which is valid and infull force and effect.

 

5.14         MarginRegulations; Investment Company Act. (a)  The Borrowers are not engaged and will not engage, principallyor as one of its important activities, in the business of purchasing orcarrying margin stock (within the meaning of Regulation U issued by the FRB),or extending credit for the purpose of purchasing or carrying margin stock.

 

### (b)           NoLoan Party is or is required to be registered as an “investment company” underthe Investment Company Act of 1940.

 

5.15         Disclosure.  The Company has disclosed to theAdministrative Agent and the Lenders all agreements, instruments and corporateor other restrictions to which it or any of its Subsidiaries is subject, andall other matters known to it, that, individually or in the aggregate, couldreasonably be expected to result in a Material Adverse Effect.  No report, financial statement, certificateor other written information furnished by or on behalf of any Loan Party to theAdministrative Agent or any Lender in connection with the transactionscontemplated hereby and the negotiation of this Agreement or delivered hereunderor under any other Loan Document (in each case as modified or supplemented byother information so furnished) contains any material misstatement of fact oromits to state any material fact necessary to make the statements therein, inthe light of the circumstances under which they were made, not misleading atthe time such statements were made; provided that, with respect to anyprojected financial information, the Borrowers represent only that suchinformation was prepared in good faith based upon assumptions believed to bereasonable at the time.

 

5.16         FDA Regulations; Compliance with Laws.

 

### (a)           Asof the Closing Date, other than as disclosed on Schedule 5.16, noproduct of any Loan Party that is subject to Section 8.01(m) isthe subject of Phase 4 trials required by the FDA the results of which have notbeen submitted to the FDA or similar research required by any ForeignPharmaceutical Regulator. No Loan Party has received a warning letter from theFDA or any Foreign Pharmaceutical Regulators that has not been resolved or isnot being resolved in good faith by appropriate proceedings. No Loan Party isthe subject of any claims, legal proceedings or judgments with respect toalleged violations of any U.S. federal, state or foreign pharmaceutical laws orregulations or health care fraud and abuse laws (including, without limitation,the Federal False Claims Act, HIPPA, and anti-bribing and anti-kickback lawsand regulations) which claims, proceedings or judgments, individually or in theaggregate, could reasonably be expected to have a Material Adverse Effect.

 

### (b)           The Company and each Subsidiarythereof is in compliance in all material respects with the requirements of allLaws and all orders, writs, injunctions and decrees applicable to it or to itsproperties, except in such instances in which (a) such requirement of Lawor order, writ, injunction or decree is being contested in good faith byappropriate proceedings diligently conducted or (b) the failure to complytherewith, either individually or in the aggregate, could not reasonably beexpected to have a Material Adverse Effect.

 

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5.17         Solvency.  The Company is, individually and togetherwith its Subsidiaries on a consolidated basis, Solvent.

 

5.18         Casualty,Etc.  Neither the businesses nor theproperties of the Company 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) that, either individually or in theaggregate, could reasonably be expected to have a Material Adverse Effect.

 

# **ARTICLE VI**AFFIRMATIVE COVENANTS

#  

So long as any Lender shall have any Commitmenthereunder, any Loan or other Obligation hereunder shall remain unpaid orunsatisfied (other than inchoate indemnification obligations), or any Letter ofCredit shall remain outstanding and not Cash Collateralized, the Company shall,and shall (except in the case of the covenants set forth in Sections 6.01,6.02, 6.03 and 6.11) cause each Subsidiary that is not anUnrestricted Subsidiary to:

 

6.01         FinancialStatements.  Deliver to theAdministrative Agent and each Lender, in form and detail satisfactory to theAdministrative Agent and the Required Lenders, each of the following:

 

#### (a)   Annual Financials. As soon asavailable, but in any event within 90 days after the end of each fiscal year ofthe Company,a consolidated balance sheet of theCompany and its Subsidiaries as at the end of such fiscal year, and therelated consolidated statements of income or operations, shareholders’ equityand cash flows for such fiscal year, setting forth in each case in comparativeform the figures for the previous fiscal year, all in reasonable detail andprepared in accordance with GAAP, audited and accompanied by a report andopinion of Ernst & Young or another independent certified publicaccountant of nationally recognized standing reasonably acceptable to theRequired Lenders, which report and opinion shall be prepared in accordance withgenerally accepted auditing standards and shall not be subject to any “goingconcern” or like qualification or exception or any qualification or exceptionas to the scope of such audit, andsuch consolidated statements to be certified by the chief executive officer,chief financial officer, treasurer or controller of the Borrowers to the effectthat such statements are fairly stated in all material respects when consideredin relation to the consolidated financial statements of the Company and itsSubsidiaries.

####  

#### (b)   Quarterly Financials. As soon asavailable, but in any event within 45 days after the end of each of the firstthree fiscal quarters of each fiscal year of the Borrowers, a consolidatedbalance sheet of the Company andits Subsidiaries as at the end of such fiscal quarter, and the relatedconsolidated statements of income or operations, shareholders’ equity and cashflows for such fiscal quarter and for the portion of the Borrowers’ fiscal year then ended, setting forth in eachcase in comparative form the figures for the corresponding fiscal quarter ofthe previous fiscal year and the corresponding portion of the previous fiscalyear, all in reasonable detail, certified by the 

 

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chief executiveofficer, chief financial officer, treasurer or controller of the Borrowers as fairly presenting thefinancial condition, results of operations, shareholders’ equity and cash flowsof the Company and itsSubsidiaries in accordance with GAAP, subject only to normal year-end auditadjustments and the absence of footnotes.

####  

#### (c)   Annual Business Plan and Budget. Assoon as available, but in any event at least 60 days after the end of each fiscalyear of theCompany, an annual business plan and budget of the Company and its Subsidiaries on a consolidated basis,including forecasts prepared by management of the Company, in form satisfactoryto the Administrative Agent and the Required Lenders, of consolidated balancesheets and statements of income or operations and cash flows of the Company and its Subsidiaries ona quarterly basis for theimmediately following fiscal year (including the fiscal year in which theMaturity Date for the Term Facility occurs).

####  

#### (d)   Additional Reporting.  As soon as available (but no less than 10days) after the occurrence of a Covenant Triggering Event, a CovenantTriggering Event Certificate and promptly upon request at any time during aCovenant Trigger Period, such other financial reporting as the AdministrativeAgent or Required Lenders may reasonably request from time to time.  As soon as available (but no less than 10days) after a cure of the initial Covenant Trigger Event, if any, a certificate(in form and substance reasonably acceptable to the Administrative Agent andexecuted on behalf of the Borrowers by a Responsible Officer of the Company)setting forth a calculation of the Aggregate Basket Amount as of the last dayof such Covenant Trigger Period.

 

As to any information contained in materials furnishedpursuant to Section 6.02(c), the Borrowers shall not be separatelyrequired to furnish such information under Section 6.01(a) or (b) above,but the foregoing shall not be in derogation of the obligation of the Borrowersto furnish the information and materials described in Sections 6.01(a) and(b) above at the times specified therein.

 

6.02         Certificates;Other Information.  Deliver to theAdministrative Agent and each Lender, in form and detail satisfactory to theAdministrative Agent and the Required Lenders, each of the following:

 

#### (a)   Compliance Certificate.  Concurrently with the delivery of thefinancial statements referred to in Sections 6.01(a) and (b),a duly completed Compliance Certificate signed by the chief executive officer,or any other Responsible Officer of the Company with financial duties.

 

#### (b)   Audit Reports, Management Letters andRecommendations.  Promptly after anyrequest by the Administrative Agent or any Lender, copies of any detailed auditreports, management letters or recommendations submitted to the board ofdirectors (or the audit committee of the board of directors) of any Loan Partyby independent accountants in connection with the accounts or books of theCompany or any of its Subsidiaries, or any audit of any of them.

 

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#### (c)   Securities Filings.  Promptly after the same are available, copiesof each annual report, proxy or financial statement or other report orcommunication sent to the stockholders of the Borrowers, and copies of allannual, regular, periodic and special reports and registration statements whichthe Company may file or be required to file with the SEC under Section 13or 15(d) of the Securities Exchange Act of 1934, or with any nationalsecurities exchange, and in any case not otherwise required to be delivered tothe Administrative Agent pursuant hereto.

 

#### (d)   Noteholder Reports.  Promptly after the furnishing thereof, copiesof any statement or report furnished to any holder of any Senior Notes or anyother debt securities of the Company or of any of its Subsidiaries pursuant tothe terms of any indenture, loan or credit or similar agreement and nototherwise required to be furnished to the Lenders pursuant to Section 6.01or any other clause of this Section 6.02.

 

#### (e)   Insurance Summary.  As soon as available, but in any event within90 days after the end of each fiscal year of the Borrowers, a report summarizingthe insurance coverage (specifying type, amount and carrier) in effect for theCompany and its Subsidiaries and containing such additional information as theAdministrative Agent, or any Lender through the Administrative Agent, mayreasonably specify.

 

#### (f)    SEC Correspondence.  Promptly, and in any event within ten daysafter receipt thereof by the Company or any Subsidiary thereof, copies of eachnotice or other correspondence received from the SEC (or comparable agency inany applicable non-U.S. jurisdiction) concerning any investigation or possibleinvestigation or other inquiry by such agency regarding financial or otheroperational results of the Company or any Subsidiary thereof (other thanroutine comment letters).

 

#### (g)   Regulatory Correspondence.  Promptly, and in any event within fiveBusiness Days (i) after a Responsible Officer of the Company has or shouldhave knowledge of receipt thereof by the Company or any Subsidiary thereof,copies of each (A) warning letter relating to any proposed suspension,termination or material restrictions referred to clause (C) below, (B) noticeof any required Phase 4 investigation described in Section 5.16(a) orsimilar required foreign research investigation relating to a jurisdictionwhere sales of the applicable product constitute more than five percent (5%) ofconsolidated gross revenues over the immediately preceding 12 monthperiod,  or (C) notice from the FDA,any Foreign Pharmaceutical Regulator or any other Governmental Entity that ithas or intends to suspend, terminate or materially restrict the right of theCompany or any of its Subsidiaries to market Byetta, Symlin or any otherproducts, in each case the sale of which, in the applicable jurisdiction,constitutes more than five percent (5%) of consolidated gross revenues over theimmediately preceding 12 month period, and (ii) after delivery thereof bythe Company or an of its Subsidiaries to the FDA or any Foreign PharmaceuticalRegulator, copies of all responses to any of the foregoing.

 

#### (h)   Correspondence.  Not later than ten days after receipt thereofby the Company or any other Loan Party thereof, copies of all material notices,requests and other documents (including amendments, waivers and othermodifications) so received under 

 

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#### or pursuant to any instrument,indenture, loan or credit or similar with respect to any Indebtedness subjectto Section 8.01(e) agreement and, from time to time upon request by theAdministrative Agent, such instruments, indentures and loan and credit andsimilar agreements as the Administrative Agent may reasonably request.

####  

#### (i)    Environmental Notices. Promptly aftera Responsible Officer of the Company obtains or should have obtained knowledgeof the assertion or occurrence thereof, notice of any action or proceedingagainst or of any noncompliance by the Company or any of Loan Party with anyEnvironmental Law or Environmental Permit that could (i) reasonably beexpected to have a Material Adverse Effect or (ii) cause any propertydescribed in the Mortgages to be subject to any material restrictions onownership, occupancy, use or transferability under any Environmental Law.

####  

#### (j)    Schedule Supplements. As soon asavailable, but in any event within 90 days after the end of each fiscal year ofthe Company,a report supplementing Schedules 5.08(c), 5.08(d)(i),5.08(d)(ii) and5.13, including an identification of all owned and leased real propertydisposed of by any Loan Partythereof during such fiscal year, a list and description (including the streetaddress, county or other relevant jurisdiction, state, record owner, book valuethereof and, in the case of leases of property, lessor, lessee, expiration dateand annual rental cost thereof) of all real property acquired or leased duringsuch fiscal year and a description of such other changes in the informationincluded in such schedules as may be necessary for such schedules to beaccurate and complete, such report to be signed by a Responsible Officer of theCompany and to be in a form reasonably satisfactory to the Administrative Agent.

####  

#### (k)   Additional Reporting. Promptly, suchadditional information regarding the business, financial, legal or corporateaffairs of the Company or any Subsidiary thereof, or compliance with the termsof the Loan Documents, as the Administrative Agent or any Lender may from timeto time reasonably request.

####  

Documents required to be delivered pursuant to Section 6.01(a) or(b) or Section 6.02(d) (to the extent any suchdocuments are included in materials otherwise filed with the SEC) may bedelivered electronically and if so delivered, shall be deemed to have beendelivered on the date (i) on which the Borrowers post such documents, orprovides a link thereto on the Borrowers’ website on the Internet at thewebsite address listed on Schedule 10.02; or (ii) on which suchdocuments are posted on the Borrowers’ behalf on an Internet or intranetwebsite, if any, to which each Lender and the Administrative Agent have access(whether a commercial, third-party website or whether sponsored by theAdministrative Agent); provided that: (i) the Borrowers shall deliver paper copies of such documents tothe Administrative Agent or any Lender that requests the Borrowers to deliversuch paper copies until a written request to cease delivering paper copies isgiven by the Administrative Agent or such Lender and (ii) the Borrowersshall notify the Administrative Agent and each Lender (by telecopier orelectronic mail) of the posting of any such documents and provide to theAdministrative Agent by electronic mail electronic versions (i.e., softcopies) of such documents. Notwithstanding anything contained herein, in every instance theBorrowers shall be required to provide paper copies of the ComplianceCertificates required by Section 6.02(b) to the AdministrativeAgent.

 

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Except for such Compliance Certificates, the Administrative Agent shallhave no obligation to request the delivery or to maintain copies of thedocuments referred to above, and in any event shall have no responsibility tomonitor compliance by the Borrowers with any such request for delivery, andeach Lender shall be solely responsible for requesting delivery to it ormaintaining its copies of such documents.

 

The Borrowers hereby acknowledge that (a) theAdministrative Agent and/or the Arranger will make available to the Lenders andthe L/C Issuer materials and/or information provided by or on behalf of theBorrowers hereunder (collectively, “Borrower Materials”) by posting theBorrower Materials on IntraLinks or another similar electronic system (the “Platform”)and (b) certain of the Lenders (each, a “Public Lender”) may havepersonnel who do not wish to receive material non-public information withrespect to the Borrowers or their respective Affiliates, or the respectivesecurities of any of the foregoing, and who may be engaged in investment andother market-related activities with respect to such Persons’ securities.  The Borrowers hereby agree that they will usecommercially reasonable efforts to identify that portion of the BorrowerMaterials that may be distributed to the Public Lenders and that (w) allsuch Borrower Materials shall be clearly and conspicuously marked “PUBLIC”which, at a minimum, shall mean that the word “PUBLIC” shall appear prominentlyon the first page thereof; (x) by marking Borrower Materials “PUBLIC,”the Borrowers shall be deemed to have authorized the Administrative Agent, theArranger, the L/C Issuer and the Lenders to treat such Borrower Materials asnot containing any material non-public information (although it may be sensitiveand proprietary) with respect to the Borrowers or its securities for purposesof United States Federal and state securities laws (provided, however,that to the extent such Borrower Materials constitute Information, they shallbe treated as set forth in Section 10.07); (y) all BorrowerMaterials marked “PUBLIC” are permitted to be made available through a portionof the Platform designated “Public Investor;” and (z) the AdministrativeAgent and the Arranger shall be entitled to treat any Borrower Materials thatare not marked “PUBLIC” as being suitable only for posting on a portion of thePlatform not designated “Public Investor.” Notwithstanding the foregoing,the Borrowers shall be under no Obligation to mark any Borrower Materials “PUBLIC”.

 

6.03         Notices. Promptly notify the Administrative Agent and each Lender:

 

#### (a)   ofthe occurrence of any Default;

 

#### (b)   ofany matter that has resulted or could reasonably be expected to result in aMaterial Adverse Effect;

 

#### (c)   ofthe occurrence of any ERISA Event;

 

#### (d)   ofany material change in accounting policies or financial reporting practices bythe Company or any Subsidiary thereof (unless required by GAAP); and

#### ** **

#### (e)   of any event of default or event, that with the passage of time orgiving of notice or both, would give rise to an event of default under anySenior Note Document and any other Indebtedness subject to Section 8.01(e).

 

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Eachnotice pursuant to this Section 6.03 shall be accompanied by astatement of a Responsible Officer of the Borrowers setting forth details ofthe occurrence referred to therein and stating what action the Borrowers havetaken and proposes to take with respect thereto.  Each notice pursuant to Section 6.03(a) shalldescribe with particularity any and all provisions of this Agreement and anyother Loan Document that have been breached.

 

6.04         Payment of Obligations.  Pay and discharge as the same shall becomedue and payable, all its material obligations and liabilities, including (a) alltax liabilities, assessments and governmental charges or levies upon it or itsproperties or assets, unless the same are being contested in good faith byappropriate proceedings diligently conducted and adequate reserves inaccordance with GAAP are being maintained by the Company or such Subsidiary; (b) alllawful claims which, if unpaid, would by law become a Lien upon its property;and (c) all Indebtedness subject to Section 8.01(e), as andwhen due and payable, but subject to any subordination provisions contained inany instrument or agreement evidencing such Indebtedness.

 

6.05         Preservation of Existence, Etc.  (a)  Preserve, renew and maintainin full force and effect their legal existence and good standing under the Lawsof the jurisdiction of its organization except in a transaction permitted by Section 7.04or 7.05; (b) take all reasonable action to maintain all rights,privileges, permits, licenses and franchises necessary or desirable in thenormal conduct of its business, except to the extent that failure to do socould not reasonably be expected to have a Material Adverse Effect; and (c) preserveor renew all of its registered patents, trademarks, trade names and servicemarks, the non-preservation of which could reasonably be expected to have aMaterial Adverse Effect.

 

6.06         Maintenance of Properties.  (a) Maintain, preserve and protect allof its material tangible properties and equipment necessary in the operation ofits business in good working order and condition, ordinary wear and tearexcepted; and (b) make all necessary repairs thereto and renewals andreplacements thereof except where the failure to do so could not reasonably beexpected to have a Material Adverse Effect.

 

6.07         Maintenance of Insurance.  Maintain with financially sound and reputableinsurance companies not Affiliates of the Borrowers, insurance with respect toits properties and business against loss or damage of the kinds customarilyinsured against by Persons engaged in the same or similar business, of suchtypes and in such amounts as are customarily carried under similarcircumstances by such other Persons and providing for not less than 30 days’prior notice to the Administrative Agent of termination, lapse or cancellationof such insurance.

 

6.08         Compliance with Laws.  Comply in all material respects with therequirements of all Laws and all orders, writs, injunctions and decreesapplicable to it or to its business or property, except in such instances inwhich (a) such requirement of Law or order, writ, injunction or decree isbeing contested in good faith by appropriate proceedings diligently conducted;or (b) the failure to comply therewith could not reasonably be expected tohave a Material Adverse Effect.

 

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6.09         Books and Records.  (a) Maintain proper books of record andaccount, in which full, true and correct entries in conformity with GAAPconsistently applied shall be made of all financial transactions and mattersinvolving the assets and business of the Company or such Subsidiary, as thecase may be; and (b) maintain such books of record and account in materialconformity with all applicable requirements of the FDA, each ForeignPharmaceutical Regulator and any other Governmental Authority having regulatoryjurisdiction over the Company or such Subsidiary, as the case may be.

 

6.10         Inspection Rights.  Not more than once per calendar year, permitrepresentatives and independent contractors of the Administrative Agent andeach Lender to conduct a field exam or otherwise visit and inspect any of itsproperties, to examine its corporate, financial and operating records, and makecopies thereof or abstracts therefrom, and to discuss its affairs, finances andaccounts with its directors, officers, and independent public accountants, allat the reasonable expense of the Borrowers and at such reasonable times duringnormal business hours, upon reasonable advance notice to the Borrowers; provided,however, that when an Event of Default exists the Administrative Agentor any Lender (or any of their respective representatives or independentcontractors) may do any of the foregoing at the reasonable expense of theBorrowers at any time during normal business hours and without advance notice.

 

6.11         Use of Proceeds.  Use the proceeds of the Credit Extensions forgeneral corporate purposes not in contravention of any Law or of any LoanDocument.

 

6.12         Covenant to Guaranty Obligations and Give Security.  (a)  Formation or Acquisition of NewSubsidiary. Upon the formation or acquisition of any new direct or indirectwholly-owned Subsidiary (other than any Royalty-Backed Financing Subsidiary andany CFC or a Subsidiary that is held directly or indirectly by a CFC)****by any Loan Party, then the Borrowers shall, at theBorrowers’ expense:

 

##### (i)            within 15 daysafter such formation or acquisition, cause such Subsidiary, and cause eachdirect and indirect parent of such Subsidiary (if it has not already done so),to duly execute and deliver to the Administrative Agent a joinder agreement,pursuant to which such other Loan Party shall join this Credit Agreement as aBorrower and pledge a security interest in and to all of its assets (other thanExcluded Collateral and subject to the limitation that solely 65% of the EquityInterests in any CFC to be pledged) in support of such joinder in accordancewith the terms and conditions of the Security Agreement,

 

##### (ii)           within 15 daysafter such formation or acquisition, furnish to the Administrative Agent adescription of the real and personal properties of such Subsidiary, in detailsatisfactory to the Administrative Agent,

 

##### (iii)          within 30 daysafter such formation or acquisition, cause such Subsidiary and each direct andindirect parent of such Subsidiary (if it has not already done so) to duly executeand deliver to the Administrative Agent deeds of trust, trust deeds, deeds tosecure debt, mortgages, Perfection Certificate Supplements and other securityand pledge agreements, as specified by and in form and substance satisfactoryto the Administrative 

 

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##### Agent(including delivery of all Pledged Debt and Pledged Equity (if certificated) inand 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, asthe case may be, under the Loan Documents and constituting Liens on all suchCollateral subject thereto,

#####  

##### (iv)          within 30 days aftersuch formation or acquisition, cause such Subsidiary and each direct andindirect parent of such Subsidiary (if it has not already done so) to takewhatever action (including the recording of mortgages, the filing of UniformCommercial Code financing statements, the giving of notices and the endorsementof notices on title documents) may be necessary or advisable in the reasonableopinion of the Administrative Agent to vest in the Administrative Agent (or inany representative of the Administrative Agent designated by it) valid andsubsisting Liens on the properties purported to be subject to the deeds oftrust, trust deeds, deeds to secure debt, mortgages, Perfection CertificateSupplements and security and pledge agreements delivered pursuant to this Section 6.12,enforceable against all third parties in accordance with their terms except asenforceability may be limited by Debtor Relief Laws or by general equitableprinciples (whether enforcement is sought by proceedings in equity or at law),

#####  

##### (v)           within 60 days aftersuch formation or acquisition, deliver to the Administrative Agent, upon therequest of the Administrative Agent in its sole discretion, a signed copy of afavorable opinion, addressed to the Administrative Agent and the other SecuredParties, of counsel for the Loan Parties acceptable to the Administrative Agentas to (A) the due organization and good standing of such Subsidiary, (B) thedue authorization, execution and delivery by such Subsidiary of such LoanDocuments, (C) the enforceability of such Loan Documents against suchSubsidiary, and (D) as to such other matters as the Administrative Agentmay reasonably request, and

#####  

##### (vi)          as promptly aspracticable after such formation or acquisition, deliver, upon the request ofthe Administrative Agent in its sole discretion, to the Administrative Agentwith respect to each parcel of real property owned by the entity that is thesubject of such formation or acquisition, title reports and, in the case ofreal property valued at $10,000,000 or more, surveys and engineering, soils andother reports, and environmental assessment reports, each in scope, form andsubstance satisfactory to the Administrative Agent, provided, however*,* that to the extent that the Company or any of itsSubsidiaries shall have otherwise received any of the foregoing items withrespect to such real property, such items shall, promptly after the receiptthereof, be delivered to the Administrative Agent.

#####  

### (b)           Acquisition ofProperty. Upon the acquisition of any property by any Loan Party, if suchproperty, in the judgment of the Administrative Agent, shall not already besubject to a perfected first priority security interest in favor of theAdministrative Agent for the benefit of the Secured Parties, then the Borrowersshall, at the Borrowers’ expense:

 

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##### (i)            within 15 daysafter such acquisition, furnish to the Administrative Agent a description ofthe property so acquired in detail satisfactory to the Administrative Agent,

#####  

##### (ii)           within 15 daysafter such acquisition, cause the applicable Subsidiary (other than any CFC ora Subsidiary that is held directly or indirectly by a CFC)****of the Company****to duly execute and deliver to the Administrative Agent deedsof trust, trust deeds, deeds to secure debt, mortgages, Perfection CertificateSupplements and other security and pledge agreements, as specified by and inform and substance satisfactory to the Administrative Agent, securing paymentof all the Obligations of such Subsidiary****underthe Loan Documents and constituting Liens on all such Collateral subjectthereto,

#####  

##### (iii)          within 30 daysafter such acquisition, cause each Subsidiary****(other than any CFC or a Subsidiary that is held directly orindirectly by a CFC)****of theCompany****to take whatever action(including the recording of mortgages, the filing of Uniform Commercial Codefinancing statements, the giving of notices and the endorsement of notices ontitle documents) may be necessary or advisable in the opinion of theAdministrative Agent to vest in the Administrative Agent (or in any representativeof the Administrative Agent designated by it) valid and subsisting Liens onsuch property, enforceable against all third parties in accordance with theirterms except as enforceability may be limited by Debtor Relief Laws or bygeneral equitable principles (whether enforcement is sought by proceedings inequity or at law)

#####  

##### (iv)          within 60 days aftersuch acquisition, deliver to the Administrative Agent, upon the request of theAdministrative Agent in its sole discretion, a signed copy of a favorable opinion,addressed to the Administrative Agent and the other Secured Parties, of counselfor the Loan Parties acceptable to the Administrative Agent as to (A) thedue organization and good standing of such Subsidiary, (B) the dueauthorization, execution and delivery by such Subsidiary of such LoanDocuments, (C) the enforceability of such Loan Documents against suchSubsidiary, and (D) as to such other matters as the Administrative Agentmay reasonably request, and

#####  

##### (v)           as promptly aspracticable after any acquisition of a real property, deliver, upon the requestof the Administrative Agent in its sole discretion, to the Administrative Agentwith respect to such real property title reports and, in the case of  real property valued at $10,000,000 or more,surveys and engineering, soils and other reports, and environmental assessmentreports, each in scope, form and substance satisfactory to the AdministrativeAgent, provided, however, that to the extent that the Company orany of its Subsidiaries shall have otherwise received any of the foregoingitems with respect to such real property, such items shall, promptly after thereceipt thereof, be delivered to the Administrative Agent,

#####  

### (c)           FurtherAssurances Generally. At any time upon request of the Administrative Agent,promptly execute and deliver any and all further instruments and documents andtake all such other action as the Administrative Agent may deem necessary ordesirable in obtaining the full benefits of, or (as applicable) in perfectingand preserving the 

 

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Liens of, such guaranties, deeds of trust, trust deeds, deeds to securedebt, mortgages, Perfection Certificate Supplements and other security andpledge agreements.

###  

6.13         Compliance with Environmental Laws.  Comply, and cause all lessees and otherPersons operating or occupying its properties to comply, in all materialrespects, with all applicable Environmental Laws and Environmental Permits;obtain and renew all Environmental Permits necessary for its operations andproperties; and conduct any investigation, study, sampling and testing, andundertake any cleanup, removal, remedial or other action necessary to removeand clean up all Hazardous Materials from any of its properties, in accordancewith the requirements of all Environmental Laws; provided, however, thatneither the Company nor any of its Subsidiaries shall be required to undertakeany such cleanup, removal, remedial or other action to the extent that itsobligation to do so is being contested in good faith and by proper proceedingsand appropriate reserves are being maintained with respect to suchcircumstances in accordance with GAAP.

 

6.14         San Diego Landlord Waivers.  Use commercially reasonable efforts to obtainlandlord consent agreements from each landlord of leased space at the Company’sSan Diego headquarters not later than 60 days after the Closing Date.

 

6.15         Further Assurances.  Promptly upon request by the AdministrativeAgent, or any Lender through the Administrative Agent, (a) correct anymaterial defect or error that may be discovered in any Loan Document withrespect to the Collateral or the Lien upon or security interests of the SecuredParties in the Collateral or in the execution, acknowledgment, filing orrecordation thereof, and (b) do, execute, acknowledge, deliver, record,re-record, file, re-file, register and re-register any and all such furtheracts, deeds, certificates, assurances and other instruments as theAdministrative Agent, or any Lender through the Administrative Agent, mayreasonably require from time to time in order to (i) carry out moreeffectively the purposes of the Loan Documents, (ii) to the fullest extentpermitted by applicable law, subject the Company’s or any of its Subsidiaries’properties, assets, rights or interests to the Liens now or hereafter intendedto be covered by any of the Collateral Documents, (iii) perfect andmaintain the validity, effectiveness and priority of any of the CollateralDocuments and any of the Liens intended to be created thereunder and (iv) assure,convey, grant, assign, transfer, preserve, protect and confirm more effectivelyunto the Secured Parties the rights granted or now or hereafter intended to begranted to the Secured Parties under any Loan Document or under any otherinstrument executed in connection with any Loan Document to which any LoanParty is or is to be a party, and cause each of its Subsidiaries that is not anUnrestricted Subsidiary to do so.

 

6.16         Compliancewith Terms of Leaseholds.  Make allpayments and otherwise perform all obligations in respect of all leases of realproperty to which the Company or any Subsidiary that is not an UnrestrictedSubsidiary is a party, keep such leases in full force and effect and not allowsuch leases to lapse or be terminated or any rights to renew such leases to beforfeited or cancelled, notify the Administrative Agent of any default by anyparty with respect to such leases and cooperate with the Administrative Agentin all respects to cure any such default, and cause each of its Subsidiaries(other than Unrestricted Subsidiaries) to do so, except, in any case, where thefailure to do so, either individually or in the aggregate, could not bereasonably likely to have a Material Adverse Effect.

 

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6.17         Material Contracts.  Perform and observe all the terms andprovisions of each Material Contract to be performed or observed by it andmaintain each such Material Contract in full force and effect except, in anycase, where the failure to do so, either individually or in the aggregate,could not be reasonably likely to have a Material Adverse Effect.

 

6.18         Cash and Cash Equivalents.  Maintain, at all times, the MinimumUnrestricted Cash Balance; provided, that if for any reason, theaggregate amount of Unrestricted Cash at any time shall be less than$280,000,000 at any other time (an “Activation Event”), the Borrowersimmediately shall notify the Administrative Agent and the Administrative Agentshall promptly upon receipt of such notice shall give instructions or issueorders under each Account Control Agreement.

 

# **ARTICLE VII**NEGATIVE COVENANTS

 

Solong as any Lender shall have any Commitment hereunder, any Loan or otherObligation hereunder (other than inchoate indemnification obligations) shallremain unpaid or unsatisfied, or any Letter of Credit shall remain outstandingbut not Cash Collateralized, the Company shall not, nor shall it permit anySubsidiary to, directly or indirectly:

 

7.01         Liens. Create, incur, assume or suffer to exist any Lien upon any of itsproperty, assets or revenues, whether now owned or hereafter acquired, or signor file or suffer to exist under the Uniform Commercial Code of anyjurisdiction a financing statement that names the Company or any of itsSubsidiaries as debtor, or assign any accounts or other right to receiveincome, other than the following:

 

#### (a)   Lienspursuant to any Loan Document;

 

(b)   Permitted Encumbrances and other Liensexisting on the date hereof and listed on Schedule 5.08(b) and anyrenewals or extensions thereof, provided that (i) the propertycovered thereby is not changed, (ii) the amount secured or benefitedthereby is not increased after the occurrence of a Covenant Triggering Eventexcept as contemplated by Section 7.02(g), (iii) the direct orany contingent obligor with respect thereto is not changed, and (iv) anyrenewal or extension of the obligations secured or benefited thereby after theoccurrence of a Covenant Triggering Event is permitted by Section 7.02(g);

####  

#### (c)   Liensfor taxes (i) not yet due or (ii) which are being contested in goodfaith and by appropriate proceedings diligently conducted, if adequate reserveswith respect thereto are maintained on the books of the applicable Person inaccordance with GAAP;

####  

#### (d)   carriers’,warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liensarising in the ordinary course of business (i) which are not overdue for aperiod of more than 30 days or (ii) which are being contested in goodfaith and by appropriate proceedings diligently conducted, if adequate reserveswith respect thereto are maintained on the books of the applicable Person;

 

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#### (e)   pledgesor 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;

####  

#### (f)    depositsto secure the performance of bids, trade contracts and leases (other thanIndebtedness), regulatory or statutory obligations, surety and appeal bonds,performance bonds and other obligations of a like nature incurred in theordinary course of business;

####  

#### (g)   Liensconstituting encumbrances in the nature of reservations, exceptions,encroachments, easements, rights of way, covenants running with the land, andother similar title exceptions or encumbrances affecting any real property; providedthat (i) as of the Closing Date, no such Liens shall exist with respect toany real property subject to a Mortgage except Permitted Encumbrances and (ii) withrespect to any parcel of real estate, all such Liens do not in the aggregatematerially detract from the value thereof or materially interfere with the useof such parcel in the ordinary conduct of the Company’s or such Subsidiary’sbusiness;

####  

#### (h)   Lienssecuring judgments for the payment of money not constituting an Event ofDefault under Section 8.01(h);

####  

#### (i)    Lienssecuring Indebtedness in respect of Capitalized Leases, Synthetic LeaseObligations and purchase money obligations for fixed or capital assets; providedthat (i) such Liens do not at any time encumber any property other thanthe property financed by such Indebtedness, (ii) the Indebtedness securedthereby does not exceed the cost (if a portion of such Indebtedness will beapplied to any improvements to such property, including the lesser of (x) thecost of such improvements and (y) the estimated fair market value of suchproperty after completion of such proposed improvements) or fair market value(or, if a portion of such Indebtedness will be applied to any improvements tosuch property, the estimated fair market value of such property upon completionof proposed improvements), whichever is lower, of the property being acquiredon the date of acquisition and (iii) after the occurrence of a CovenantTriggering Event, such Indebtedness is permitted under Section 7.02(k);

####  

#### (j)    Lienson the property of any Unrestricted Subsidiary which individually or in theaggregate could not reasonably be expected to result in a Material AdverseEffect;

####  

#### (k)   Lienson property of a Person existing at the time such Person is merged into orconsolidated with the Company or any other Loan Party or when such Personbecomes a Subsidiary of the Company or any other Loan Party; providedthat such Liens were not created in contemplation of such merger, consolidationor Investment and do not extend to any assets other than those of the Personmerged into or consolidated with the Company or such Loan Party or acquiredthereby, as the case may be, and, after the occurrence of a Covenant TriggeringEvent, the applicable Indebtedness secured by such Lien is permitted under Section 7.02(h) or7.02(i), as applicable;

 

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####  

#### (l)    UniformCommercial Code financing statements filed for notice purposes with respect toleased property not owned by the Company or any of its Subsidiaries;

 

#### (m)  Lienson Excluded Collateral;

 

#### (n)   Leasesand subleases of real property with annual rent payments, in the aggregate of$5,000,000 or less;

####  

#### (o)   PermittedOhio Financing Facility Liens;

####  

#### (p)   anyoption or other agreement with respect to a Disposition permitted under Section 7.05;and

 

#### (q)   Liensarising solely by virtue of any statutory or common law provision or granted tobanks in the ordinary course of business relating to banker’s Liens, rights ofset-off or similar rights and remedies as to deposit accounts or other fundsmaintained with a creditor depository institution; provided, that anysuch Liens with respect to any account subject to an Account Control Agreementshall be limited as set forth in and otherwise subject to such Account ControlAgreement.

 

7.02         Indebtedness. Create, incur, assume or suffer to exist (A) any Indebtednesssecured by any Lien other than a Lien permitted under Section 7.01(a),(i), (j), (k), (m) or (o), as the casemay be, (B) any unsecured Indebtedness in an aggregate principal amount inexcess of the Threshold Amount with a final maturity date before the date thatis four years from the Closing Date, (C) any Indebtedness (other thanIndebtedness permitted by Section 7.01(i), 7.01(j) or 7.01(o) orthe Permitted Ohio Sale-Leaseback) containing negative or financial covenants(other than covenants relating to the collateral for such Indebtedness) applicableto the Loan Parties that on the whole are materially more burdensome than thecovenants set forth in the Loan Documents (provided, that for theavoidance of doubt, any requirement to cash collateralize all or any portion ofany Indebtedness, other than cash collateral permitted under Section 7.01(m),shall be deemed to be materially more burdensome), or (D) any Indebtednessif, immediately before or after giving pro forma effect thereto, a Defaultwould occur and be continuing, or, at any time after the occurrence of anyCovenant Triggering Event, create, incur, assume or suffer to exist anyIndebtedness whatsoever, except:

 

#### (a)   obligations(contingent or otherwise) existing or arising under (i) the Permitted FXFacility and (ii) any other Swap Contract, provided with respect toclause (ii) that (x) such obligations are (or were) entered into bysuch Person in the ordinary course of business for the purpose of directlymitigating risks associated with fluctuations in interest rates or foreignexchange rates, (y) such Swap Contract does not contain any provisionexonerating the non-defaulting party from its obligation to make payments onoutstanding transactions to the defaulting party and (z) the aggregateSwap Termination Obligations of all such Swap Contracts shall not exceed$20,000,000;

 

#### (b)   Indebtednessevidenced by the Senior Notes;

 

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#### (c)   Indebtednessunder any Permitted Ohio Financing Facility, provided that (i) theaggregate principal amount of such Permitted Ohio Financing Facility shall notexceed $27,000,000 at any time outstanding, (ii) immediately before andafter giving pro forma effect to such Permitted Ohio Financing Facility, noDefault shall have occurred and be continuing, and (iii) the PermittedOhio Financing shall not result in any Liens on the Collateral except PermittedOhio Financing Liens;

####  

#### (d)   Indebtednessof the Company to any Loan Party and Indebtedness of a Subsidiary of theCompany owed to the Company or another Loan Party, which Indebtedness shall (i) inthe case of Indebtedness owed to a Loan Party, constitute “Pledged Debt” underthe Security Agreement and otherwise be on terms (including subordinationterms) required under the Security Agreement and (ii) be otherwise permittedunder the provisions of Section 7.03;

####  

#### (e)   Indebtednessunder the Loan Documents;

####  

#### (f)    Indebtednessof any Unrestricted Subsidiary to any Person, which Indebtedness, individuallyand in the aggregate, could not reasonably be expected to have a MaterialAdverse Effect;

####  

#### (g)   Indebtednessoutstanding on the Closing Date and listed on Schedule 7.02 and anyother Indebtedness outstanding immediately prior to a Covenant Triggering Event(so long as such Indebtedness was otherwise permitted under the Loan Documentsprior to such Covenant Triggering Event) and any refinancings, refundings,renewals or extensions thereof entered into prior to the date of such CovenantTriggering Event;

####  

#### (h)   Guarantiesof the Company or any Subsidiary in respect of Indebtedness otherwise permittedhereunder of the Company or any Loan Party;

####  

#### (i)    solong as immediately before and after giving pro forma effect to any suchGuaranty (whether such Guaranty gives rise to or is entered into after theoccurrence of a Covenant Triggering Event), the Aggregate Basket Amount as ofsuch date is less than or equal to the Maximum Aggregate Basket Amount,Guaranties of the Company or any Subsidiary in respect of Indebtednessotherwise permitted hereunder of any Unrestricted Subsidiary; provided,that no Guaranties in effect prior to the date of the Covenant Triggering Eventshall be extended, modified, amended, renewed or replaced, whether or not theunderlying Indebtedness shall be refinanced, increased, modified, refunded,renewed, extended or replaced, at any time after the occurrence of a CovenantTriggering Event;

####  

#### (j)    solong as immediately before and after giving pro forma effect to any suchIndebtedness (whether the incurrence of such Indebtedness gives rise to oroccurs after the occurrence of a Covenant Triggering Event), the AggregateBasket Amount as of such date is less than or equal to the Maximum AggregateBasket Amount, Indebtedness incurred to finance insurance premiums in theordinary course of business;

 

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(k)   so long asimmediately before and after giving pro forma effect to any such Indebtedness(whether the incurrence of such Indebtedness gives rise to or occurs after theoccurrence of a Covenant Triggering Event), the Aggregate Basket Amount as ofsuch date is less than or equal to the Maximum Aggregate Basket Amount,Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations andpurchase money obligations for fixed or capital assets within the limitationsset forth in Section 7.01(i);

####  

#### (l)    so long as immediately before and aftergiving pro forma effect to any such Indebtedness (whether the incurrence ofsuch Indebtedness gives rise to or occurs after the occurrence of a CovenantTriggering Event), the Aggregate Basket Amount as of such date is less than orequal to the Maximum Aggregate Basket Amount, unsecured Indebtedness notsubject to any other provision of this Section 7.02 (including,without limitation, convertible subordinated Indebtedness); provided, however,that no such unsecured Indebtedness incurred before a Covenant Triggering Eventmay be prepaid, refinanced, increased, modified, refunded, renewed, extended orreplaced at any time after the occurrence of a Covenant Triggering Event;

####  

#### (m)  so long as immediately before and after givingpro forma effect to any such Indebtedness (whether the incurrence of suchIndebtedness gives rise to or occurs after the occurrence of a CovenantTriggering Event), the Aggregate Basket Amount as of such date is less than orequal to the Maximum Aggregate Basket Amount, Indebtedness of the Company orany of its Subsidiaries in respect of performance bonds, bid bonds, appealbonds, surety bonds and similar obligations provided in the ordinary course ofbusiness to support the obligations of the Company and its Subsidiaries;

####  

#### (n)   Indebtedness incurred pursuant to a PermittedRoyalty-Backed Financing entered into before the occurrence of a CovenantTriggering Event; provided, however, that no PermittedRoyalty-Backed Financing may be prepaid, refinanced, increased, modified,refunded, renewed, extended or replaced at any time after the occurrence of aCovenant Triggering Event;

####  

#### (o)   Indebtedness incurred pursuant to a PermittedOhio Sale/Leaseback entered into before the occurrence of a Covenant TriggeringEvent; provided, however, that any Permitted Ohio Sale/Leasebackmay not be prepaid, modified, increased, refinanced, refunded, renewed,extended or replaced at any time after the occurrence of a Covenant TriggeringEvent;

####  

#### (p)   Indebtedness in respect of netting services,overdraft protections and other similar and customary services in connectionwith deposit accounts; provided, that any such Indebtedness with respectto any account subject to an Account Control Agreement shall be limited as setforth in and otherwise subject to such Account Control Agreement;

####  

#### (q)   so long as immediately before and aftergiving pro forma effect to any such guaranty (whether entering into suchguaranty gives rise to or occurs after the occurrence of a Covenant TriggeringEvent), the Aggregate Basket Amount as of such date is less than or equal tothe Maximum Aggregate Basket Amount, guaranties in the ordinary 

 

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####  

#### course ofbusiness of the obligations of suppliers, customers and licensees of theCompany and its Subsidiaries; and

####  

#### (r)    after the occurrence of the initial CovenantTriggering Event (but in no event after the occurrence of any subsequentCovenant Triggering Event), so long as immediately after giving effect to suchIndebtedness, the initial Covenant Triggering Event is cured, unsecuredIndebtedness consisting of a convertible notes financing or other public debtissuance.

 

7.03         Investments.  Make or hold any Investments (A) inviolation of Applicable Law or (B) if immediately before or after givingpro forma effect to such Investment a Default would occur and be continuing or,after the occurrence of a Covenant Triggering Event, make or hold anyInvestments whatsoever, except:

 

#### (a)   Investments held by the Company and itsSubsidiaries as of the date of such Covenant Triggering Event (collectively,the “Existing Investments”);

####  

#### (b)   Investments held by the Company and itsSubsidiaries in the form of Cash Equivalents;

####  

#### (c)   so long as immediately before and after givingpro forma effect to any such advances (whether the making of such advancesgives rise to or occurs after the occurrence of a Covenant Triggering Event),the Aggregate Basket Amount as of such date is less than or equal to theMaximum Aggregate Basket Amount, advances to officers, directors and employeesof the Company and Subsidiaries for travel, entertainment, relocation andanalogous ordinary business purposes;

####  

#### (d)   (i) Investments by the Company and itsSubsidiaries in their respective Subsidiaries outstanding on date of suchCovenant Triggering Event, (ii) additional Investments by the Company andits Subsidiaries in Loan Parties, (iii) additional Investments byUnrestricted Subsidiaries in Loan Parties or other Unrestricted Subsidiariesand (iv) Investments by any Loan Party in any Unrestricted Subsidiary, providedthat (x) immediately before and after giving pro forma effect to each suchInvestment, no Default shall have occurred and be continuing and (y) immediatelybefore and after giving pro forma effect to any Investments described insubclause (iv) (whether the making of such Investment gives rise to oroccurs the occurrence of a Covenant Triggering Event), the Aggregate BasketAmount as of such date is less than or equal to the Maximum Aggregate BasketAmount;

####  

#### (e)   Investments consisting of extensions ofcredit in the nature of accounts receivable or notes receivable arising fromthe grant of trade credit in the ordinary course of business, and Investmentsreceived in satisfaction or partial satisfaction thereof from financiallytroubled account debtors to the extent reasonably necessary in order to preventor limit loss;

####  

#### (f)    Guaranties permitted by Section 7.02;

 

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#### (g)   so long as immediately before and aftergiving pro forma effect to any such Investment (whether the making of suchInvestment gives rise to or occurs after the occurrence of a CovenantTriggering Event), the Aggregate Basket Amount as of such date is less than orequal to the Maximum Aggregate Basket Amount, Investments by the Borrowers inSwap Contracts permitted under Section 7.02(a);

####  

#### (h)   so long as immediately before and aftergiving pro forma effect to any such Investment (whether the making of suchInvestment gives rise to or occurs after the occurrence of a CovenantTriggering Event), the Aggregate Basket Amount as of such date is less than orequal to the Maximum Aggregate Basket Amount, the purchase or other acquisitionof all of the Equity Interests in, or all or substantially all of the propertyof, any Person that, upon the consummation thereof, will be wholly-owneddirectly by the Company or one or more of the other Loan Parties (including asa result of a merger or consolidation and the acquisition of any Investments heldby such Person as a result thereof); provided that, with respect to eachpurchase or other acquisition made pursuant to this Section 7.03(h):

####  

###### (i)            any such newly-created or acquiredwholly-owned Subsidiary shall comply with the requirements of Section 6.12;

######  

###### (ii)           the lines of business of the Personto be (or the property of which is to be) so purchased or otherwise acquiredshall be permitted pursuant to Section 7.07;

######  

###### (iii)          (A) immediately before andimmediately after giving pro forma effect to any such purchase or otheracquisition, no Default shall have occurred and be continuing and (B) immediatelyafter giving effect to such purchase or other acquisition, the Company and itsSubsidiaries shall be in pro forma compliance with the covenant set forth in Section 6.18,such compliance to be determined on the basis of the financial information mostrecently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or(b) as though such purchase or other acquisition had beenconsummated as of the first day of the fiscal period covered thereby; and

######  

###### (iv)          the Borrowers shall have delivered tothe Administrative Agent and each Lender, at least five Business Days prior tothe date on which any such purchase or other acquisition is to be consummated,a certificate of a Responsible Officer, in form and substance reasonablysatisfactory to the Administrative Agent and the Required Lenders, certifyingthat all of the requirements set forth in this clause (h) have beensatisfied or will be satisfied on or prior to the consummation of such purchaseor other acquisition; and

######  

#### (i)    so long as immediately before and aftergiving pro forma effect to any such Investment (whether such Investment gaverise to or is made after the occurrence of a Covenant Triggering Event) theAggregate Basket Amount as of such date is less than or equal to the MaximumAggregate Basket Amount, Investments by the Company and its 

 

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#### Subsidiaries not otherwisepermitted under this Section 7.03; provided that, withrespect to each Investment made pursuant to this Section 7.03(i):

####  

###### (i)            such Investment shall be in propertythat is part of, or in lines of business permitted under Section 7.07;and

######  

###### (ii)           (A) immediately before and immediatelyafter giving pro forma effect to any such purchase or other acquisition, noDefault shall have occurred and be continuing and (B) immediately aftergiving effect to such purchase or other acquisition, the Company and itsSubsidiaries shall be in pro forma compliance with the covenant set forth in Section 6.18,such compliance to be determined on the basis of the financial information mostrecently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or(b) as though such Investment had been consummated as of the firstday of the fiscal period covered thereby; and

######  

#### (j)    Investments made under and pursuant to theDeferred Compensation Plan as in effect on the date of such Covenant TriggeringEvent (but subject to any amendments required after such Covenant TriggeringEvent in order to comply with applicable Law).

 

7.04         FundamentalChanges.  Merge, dissolve, liquidate,consolidate with or into another Person, or Dispose of (whether in onetransaction or in a series of transactions) all or substantially all of itsassets (whether now owned or hereafter acquired) to or in favor of any Person,except that, so long as no Default exists or would result therefrom:

 

#### (a)   any Subsidiary may merge with (i) theCompany, provided that the Company shall be the continuing or survivingPerson, (ii) any other Loan Party, provided that the survivingPerson shall be or shall become a Loan Party or (iii) any one or moreother Subsidiaries, provided that when any wholly-owned Subsidiary ismerging with another Subsidiary, such wholly-owned Subsidiary shall be thesurviving Person;

 

#### (b)   any Loan Party may Dispose of all orsubstantially all of its assets (upon voluntary liquidation or otherwise) tothe Company or to another Loan Party;

####  

#### (c)   any Unrestricted Subsidiary may Dispose ofall or substantially all its assets (including any Disposition that is in thenature of a liquidation) to (i) another Unrestricted Subsidiary, (ii) toa Loan Party or (iii) to any other Person; provided, in the case ofclause (iii), that immediately before and after giving pro forma effect to anysuch Disposition, no Default shall have occurred and be continuing and noCovenant Triggering Event shall have occurred;

####  

#### (d)   in connection with any acquisition permittedunder Section 7.03, any Subsidiary of the Company may merge into orconsolidate with any other Person or permit any other Person to merge into orconsolidate with it; provided that (i) the Person surviving suchmerger shall be a wholly-owned Subsidiary of the Borrowers, (ii) in thecase of any such merger to which any Loan Party is a party, the survivingPerson is or 

 

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#### shall become a Loan Party and (iii) afterthe occurrence of any Covenant Triggering Event, the Person surviving suchmerger shall be a Loan Party;

####  

#### (e)   so long as immediately before and aftergiving effect to any such merger or consolidation no Default has occurred andis continuing, the Company may merge into or consolidate with any other Personor permit any other Person to merge into or consolidate with it; provided,however, that in each case, immediately after giving effect thereto, theCompany is the surviving corporation; and

####  

#### (f)    so long as immediately before and aftergiving effect to any such merger or consolidation no Default has occurred andis continuing, any Loan Party that is a Subsidiary of the Company may mergeinto or consolidate with any other Person or permit any other Person to mergeinto or consolidate with it; provided, however, that in eachcase, immediately after giving effect thereto, the surviving Person shall be orshall become a Loan Party (or, if two Loan Parties merge, one of the LoanParties is the surviving corporation).

 

7.05         Dispositions.Make any Disposition or enter into any agreement to make any Disposition,except:

 

#### (a)   Dispositions of obsolete or worn outproperty, whether now owned or hereafter acquired, in the ordinary course ofbusiness;

 

#### (b)   Dispositions of inventory and accountsreceivable in connection with collection, in each case in the ordinary courseof business;

####  

#### (c)   Dispositions of equipment or real property(excluding real property subject to a Mortgage in accordance herewith) to theextent that (i) such property is exchanged for credit against the purchaseprice of similar replacement property or (ii) the proceeds of suchDisposition are reasonably promptly applied to the purchase price of suchreplacement property;

 

#### (d)   Dispositions of property by any Subsidiary tothe Company or to any other Loan Party;

####  

#### (e)   Dispositions permitted by Section 7.04;

 

#### (f)    licenses of, and royalty-sharing andrevenue-sharing agreements with respect to, Intellectual Property;

 

#### (g)   any Disposition of the Ohio Sale/LeasebackProperty to the State of Ohio or a public utility or other GovernmentalAuthority of the State of Ohio pursuant to a Permitted Ohio Sale/Leaseback;

####  

#### (h)   Dispositions of property by any UnrestrictedSubsidiary that could not reasonably be expected individually or in theaggregate to have a Material Adverse Effect;

 

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#### (i)    Dispositions of Intellectual Property to aRoyalty-Backed Financing Subsidiary in accordance with a PermittedRoyalty-Backed Financing, provided that such Disposition occurs prior tothe date of any Covenant Triggering Event;

 

#### (j)    so long as immediately before and aftergiving pro forma effect to such Disposition no Covenant Triggering Event hasoccurred and no Default has occurred and is continuing, Dispositions ofproperty by the Company or any other Loan Party not otherwise permitted underthis Section 7.05 in an aggregate amount not to exceed $10,000,000in any fiscal year;

 

#### (k)   Disposition of cash and Cash Equivalents inthe ordinary course of business; provided, that after the occurrence ofan Activation Event, Dispositions of cash or Cash Equivalents held in anaccount subject to an Account Control Agreement shall be governed by suchAccount Control Agreement;

 

#### (l)    Disposition of condemned property bytransfer to the applicable Governmental Authority (whether by deed in lieu ofcondemnation or otherwise) and transfer of property subject to a casualty tothe applicable insurer of such property or its designee in connection with aninsurance settlement; and

 

#### (m)  leases and subleases of real propertypermitted by Section 7.01(o);

####  

provided, however, that anyDisposition pursuant to Section 7.05(a) through Section 7.05(f), Section 7.05(j), Section 7.05(k) andSection 7.05(m) shall be for fair market value.

 

7.06         RestrictedPayments.  Declare or make, directlyor indirectly, any Restricted Payment, or incur any obligation (contingent orotherwise) to do so, or issue or sell any Equity Interests or accept anycapital contributions, except that, so long as no Default shall have occurredand be continuing at the time of any action described below or would resulttherefrom:

 

#### (a)   each Subsidiary may make Restricted Paymentsto the Company and any other Person that owns a direct Equity Interest in suchSubsidiary, ratably according to their respective holdings of the type ofEquity Interest in respect of which such Restricted Payment is being made;

 

#### (b)   the Company and each Subsidiary may declareand make dividend payments or other distributions payable solely in the commonstock or other common Equity Interests of such Person;

####  

#### (c)   the Company and each Unrestricted Subsidiarymay purchase, redeem or otherwise acquire its Equity Interests with theproceeds received from the substantially concurrent issue of new EquityInterests;

####  

#### (d)   any Foreign Subsidiary may issue director’squalifying shares or similar Equity Interests to the extent required byApplicable Law;

 

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####  

#### (e)   the Company may issue (i) common EquityInterests and stock options, (ii) Series A Junior ParticipatingPreferred Stock in accordance with the Rights Agreement (so long as suchissuance would not result in a Change of Control), and (iii) so long as noCovenant Triggering Event has occurred or would occur as a result thereof, anyother form of Equity Interests;

####  

#### (f)    the Company may redeem or exchange rightsissued pursuant to the Rights Agreement (so long as such issuance would notresult in a Change of Control);

####  

#### (g)   any Subsidiary may issue Equity Interests toany Loan Party;

####  

#### (h)   payments or redemptions of the Senior Notesand any other Indebtedness consisting of convertible notes to the extentpermitted under Section 7.13;

####  

#### (i)    any Subsidiary may accept capitalcontributions made in connection with any Investment permitted under Section 7.03;and

####  

#### (j)    the Company may purchase shares of, or makepayments in respect of, its Equity Interests from, to or on behalf of itsdirectors, employees and consultants by net exercise or otherwise pursuant tothe terms of any employee stock options, restricted stock or incentive stockplan that has been filed with the SEC; provided, that after theoccurrence of a Covenant Triggering Event, the Company may make such purchases(other than by net exercise) only if immediately before and after giving proforma effect to any such purchase (whether the making of such purchase givesrise to or occurs after the occurrence of a Covenant Triggering Event), theAggregate Basket Amount as of such date is less than or equal to the MaximumAggregate Basket Amount.

####  

7.07         Changein Nature of Business.  Engage in anymaterial line of business substantially different from those lines of businessconducted by the Company and its Subsidiaries on the date hereof or anybusiness substantially related or incidental thereto, which shall include anybusiness in the pharmaceutical and biotechnology industries.

 

7.08         Transactionswith Affiliates.  Enter into anytransaction of any kind with any Unrestricted Subsidiary, or, after theoccurrence of a Covenant Triggering Event, enter into any transaction of anykind with any other Affiliate of the Company or any other Loan Party, whetheror not in the ordinary course of business, other than on fair and reasonableterms substantially as favorable to the Company or such Subsidiary as would be obtainableby the Company or such Subsidiary at the time in a comparable arm’s lengthtransaction with a Person other than an Unrestricted Subsidiary or otherAffiliate, as the case may be; provided that the foregoing restrictionshall not apply to (i) any transactions among Loan Parties, (ii) existingrelated party transactions described in the Company’s Annual Report on Form 10-Kfor the year ended December 31, 2006 or in the Company’s Definitive Proxyfor its 2007 Annual Meeting of Stockholders, (iii) any Restricted Paymentpermitted pursuant to Section 7.06, and (iv) any payments orother transaction pursuant to any tax sharing agreement between the Company andany other Person with which the Company files a consolidated tax  return or with which the Company is part of aconsolidated group for tax purposes.

 

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7.09         BurdensomeAgreements.  (a) Enter into orpermit to exist any Contractual Obligation (other than this Agreement or anyother Loan Document) that (i) limits the ability (A) of anySubsidiary (other than an Unrestricted Subsidiary) to Guaranty the Indebtednessof the Loan Parties or (B) of the Loan Parties or any Subsidiary tocreate, incur, assume or suffer to exist Liens on the Collateral; provided,however, that this clause (B) shall not prohibit any negativepledge incurred or provided in favor of any holder of Indebtedness permittedunder Section 7.02(c) or (k) solely to the extent any suchnegative pledge relates to the property financed by or the subject of suchIndebtedness; or (ii) requires the grant of a Lien to secure an obligationof such Person if a Lien is granted to secure another obligation of suchPerson, other than any such Contractual Obligation under the Permitted OhioFinancing with respect to Permitted Ohio Financing Liens.

 

(b)           Enterinto or permit to exist any Contractual Obligation (other than this Agreementor any other Loan Document) that limits the ability of any Subsidiary (otherthan any Unrestricted Subsidiary) to make Restricted Payments to the LoanParties or to otherwise transfer property to or invest in the Loan Parties,except for (A) any agreement in effect on (1) the Closing Date andset forth on Schedule 7.09, or (2) at the time any Subsidiarybecomes a Subsidiary of the Company, so long as such agreement was not enteredinto solely in contemplation of such Person becoming a Subsidiary of theCompany, (B) any agreement providing for the Disposition of property orassets, provided that (1) such prohibitions or limitations apply solely tothe property being Disposed and (2) Disposal of such property or assets ispermitted under Section 7.05, or (C) customary non-assignmentprovisions in leases, subleases, licenses and sublicenses.

 

7.10         Use of Proceeds.  Use the proceeds of any Credit Extension,whether directly or indirectly, and whether immediately, incidentally orultimately, to purchase or carry margin stock (within the meaning of RegulationU of the FRB) or to extend credit to others for the purpose of purchasing orcarrying margin stock or to refund indebtedness originally incurred for suchpurpose.

 

7.11         Amendments of Organization Documents.  Amend any of its Organization Documents inany manner that could reasonably be expected to impair the rights and remedies ofthe Administrative Agent or any Lender under any Loan Document or the abilityof any Loan Party to perform its obligations under any Loan Document to whichit is a party or that could otherwise reasonably be expected to have a materialadverse effect upon the legality, validity, binding effect or enforceabilityagainst any Loan Party of any Loan Document to which it is a party.

 

7.12         Accounting Changes.  Make any change in fiscal year or, at anytime after a Covenant Triggering Event, make any change in accounting policiesor reporting practices, except as required by GAAP.

 

7.13         Prepayments, Etc. of Indebtedness.  If a Covenant Triggering Event has occurredor any prepayment, redemption, purchase, defeasance or satisfaction would, on apro forma basis, result in a Covenant Triggering Event or Default, prepay,redeem, purchase, defease or otherwise satisfy prior to the scheduled maturitythereof in any manner, or make any payment 

 

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in violation of any subordinationterms of, any Indebtedness, except the prepayment of the Credit Extensions inaccordance with the terms of this Agreement.

 

# **ARTICLE VIII**EVENTS OF DEFAULT AND REMEDIES

#  

8.01         Events of Default.  Any of the following shall constitute anEvent of Default:

 

#### (a)   Non-Payment.  The Borrowers or any other Loan Party fail to(i) pay when and as required to be paid herein, any amount of principal ofany Loan or any L/C Obligation or deposit any funds as Cash Collateral inrespect of L/C Obligations, or (ii) pay within three days after the samebecomes due, any interest on any Loan or on any L/C Obligation, or any fee duehereunder, or (iii) pay within five days after the same becomes due, anyother amount payable hereunder or under any other Loan Document; or

 

#### (b)   Specific Covenants.  The Borrowers fail to perform or observe anyterm, covenant or agreement contained in any of Section 6.01, 6.03,6.05(a), 6.11, 6.18 or Article VII; or

 

#### (c)   Other Defaults.  Any Loan Party fails to perform or observeany other covenant or agreement (not specified in Section 8.01(a) or(b) above) contained in any Loan Document on its part to beperformed or observed and such failure continues for 30 days after the earlierof (i) the date on which a Responsible Officer of the Company knows orshould have known about such failure and (ii) the date the AdministrativeAgent or any Lender delivers notice thereof to the Company; or

 

#### (d)   Representations and Warranties.  Any written representation, warranty,certification or statement of fact made or deemed made by or on behalf of theBorrowers or any other Loan Party herein, in any other Loan Document, or in anydocument delivered in connection herewith or therewith shall be incorrect ormisleading in any material respect when made or deemed made; or

####  

#### (e)   Cross-Default.  (i) The occurrence of any event ofdefault under any Senior Note Document or any other Indebtedness consisting ofa convertible note indenture; (ii) any Loan Party or any Subsidiarythereof (A) fails to make any payment when due (whether by scheduledmaturity, required prepayment, acceleration, demand, or otherwise) in respectof any Indebtedness or Guaranty (other than Indebtedness hereunder andIndebtedness under Swap Contracts) having an aggregate principal amount (includingundrawn committed or available amounts and including amounts owing to allcreditors under any combined or syndicated credit arrangement) of more than theThreshold Amount, or (B) fails to observe or perform any other agreementor condition relating to any such Indebtedness or Guaranty or contained in anyinstrument or agreement evidencing, securing or relating thereto, or any otherevent occurs, the effect of which default or other event is to cause, or topermit the holder or holders of such Indebtedness or the beneficiary orbeneficiaries of such Guaranty (or a trustee or agent on 

 

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#### behalf of such holder orholders or beneficiary or beneficiaries) to cause, with the giving of notice ifrequired, such Indebtedness to be demanded or to become due or to berepurchased, prepaid, defeased or redeemed (automatically or otherwise), or anoffer to repurchase, prepay, defease or redeem such Indebtedness to be made,prior to its stated maturity, or such Guaranty to become payable or cashcollateral in respect thereof to be demanded; or (iii) there occurs underany Swap Contract an Early Termination Date (as defined in such Swap Contract)resulting from (A) any event of default under such Swap Contract as towhich a Loan Party or any Subsidiary thereof is the Defaulting Party (asdefined in such Swap Contract) or (B) any Termination Event (as sodefined) under such Swap Contract as to which a Loan Party or any Subsidiarythereof is an Affected Party (as so defined) and, in either event, the SwapTermination Obligations owed by such Loan Party or such Subsidiary as a resultthereof is greater than the Threshold Amount; or

####  

#### (f)    Insolvency Proceedings, Etc.  Any Loan Party institutes or consents to theinstitution of any proceeding under any Debtor Relief Law, or makes anassignment for the benefit of creditors; or applies for or consents to theappointment of any receiver, trustee, custodian, conservator, liquidator,rehabilitator or similar officer for it or for all or any material part of itsproperty; or any receiver, trustee, custodian, conservator, liquidator,rehabilitator or similar officer is appointed without the application orconsent of such Person and the appointment continues undischarged or unstayedfor 60 calendar days; or any proceeding under any Debtor Relief Law relating toany such Person or to all or any material part of its property is institutedwithout the consent of such Person and continues undismissed or unstayed for 60calendar days, or an order for relief is entered in any such proceeding; or theoccurrence of any of the foregoing with respect to an Unrestricted Subsidiarywhich results in a Material Adverse Effect; or

####  

#### (g)   Inability to Pay Debts; Attachment.  (i) Any Loan Party becomes unable oradmits in writing its inability or fails generally to pay its debts as theybecome due, or (ii) any writ or warrant of attachment or execution orsimilar process is issued or levied against all or any material part of theproperty of any such Person and is not released, vacated or fully bonded within30 days after its issue or levy, (iii) or the occurrence of any eventdescribed in the foregoing clauses (i) or (ii) with respect to anyUnrestricted Subsidiary resulting in a Material Adverse Effect; or

####  

#### (h)   Judgments.  There is entered against any Loan Party orany Subsidiary thereof (i) one or more final judgments or orders for thepayment of money in an aggregate amount (as to all such judgments and orders)exceeding the Threshold Amount (to the extent not covered by independentthird-party insurance as to which the insurer is rated at least “A” by A.M.Best Company, has been notified of the potential claim and does not disputecoverage), or (ii) any one or more non-monetary final judgments that have,or could reasonably be expected to have, individually or in the aggregate, aMaterial Adverse Effect and, in either case, (A) enforcement proceedingsare commenced by any creditor upon such judgment or order, or (B) there isa period of 30 consecutive days during which a stay of enforcement of suchjudgment, by reason of a pending appeal or otherwise, is not in effect; or

 

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#### (i)             ERISA.  (i) An ERISA Event occurs with respectto a Pension Plan or Multiemployer Plan which has resulted or could reasonablybe expected to result in liability of the Borrowers under Title IV ofERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregateamount in excess of the Threshold Amount, or (ii) the Borrowers or anyERISA Affiliate fails to pay when due, after the expiration of any applicablegrace period, any installment payment with respect to its withdrawal liabilityunder Section 4201 of ERISA under a Multiemployer Plan in an aggregateamount in excess of the Threshold Amount; or

####  

#### (j)             Invalidity of Loan Documents.  Any provision of any Loan Document, at anytime after its execution and delivery and for any reason other than as expresslypermitted hereunder or thereunder or satisfaction in full of all theObligations, ceases to be in full force and effect; or any Loan Party or anyother Person contests in any manner the validity or enforceability of anyprovision of any Loan Document; or any Loan Party denies that it has any orfurther liability or obligation under any provision of any Loan Document, orpurports to revoke, terminate or rescind any provision of any Loan Document(except as expressly permitted in accordance with such Loan Document); or

####  

#### (k)          Change of Control.  There occurs any Change of Control; or

####  

#### (l)             Collateral Documents.  Any Collateral Document after deliverythereof pursuant to Section 4.01 or 6.12 shall for anyreason (other than pursuant to the terms thereof) cease to create a valid andperfected first priority Lien (subject to Liens permitted by Section 7.01)on the Collateral purported to be covered thereby; or

####  

#### (m)       Suspension or Termination of ProductionRights. The FDA, any Foreign Pharmaceutical Regulator or any otherGovernmental Agency having jurisdiction over any Loan Party suspends,terminates or materially restricts the right of the Company or any of itsSubsidiaries to, or the Company or any of its Subsidiaries voluntarilywithdraws or ceases to, market Byetta, Symlin or any of its other products ineach case the sale of which constitute, in the applicable jurisdiction,constitutes more than five percent (5%) of the Company and its consolidatedSubsidiary’s consolidated gross revenues over the immediately preceding 12month period.

 

8.02                           Remediesupon Event of Default.  If any Eventof Default occurs and is continuing, the Administrative Agent shall, at therequest of, or may, with the consent of, the Required Lenders, take any or allof the following actions:

 

#### (a)          declare the commitment of each Lender to makeLoans, any obligation of Bank of America to enter into Secured Hedge Agreementsunder the Permitted FX Facility and any obligation of the L/C Issuer to makeL/C Credit Extensions to be terminated, whereupon such commitments andobligation shall be terminated;

####  

#### (b)         declare the unpaid principal amount of alloutstanding Loans, all interest accrued and unpaid thereon, and all otheramounts owing or payable hereunder or under any other Loan Document to beimmediately due and payable, without presentment, 

####  

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#### demand, protest or other notice of any kind, all of which are herebyexpressly waived by the Borrowers;

####  

#### (c)          require that the Borrowers Cash Collateralize(i) the L/C Obligations (in an amount equal to the then Outstanding Amountthereof) and (ii) the outstanding Secured Hedge Agreements under thePermitted FX Facility; and

####  

#### (d)         exercise on behalf of itself, the Lenders andthe L/C Issuer all rights and remedies available to it, the Lenders and the L/CIssuer under the Loan Documents;

####  

provided, however, that uponthe occurrence of an actual or deemed entry of an order for relief with respectto the Borrowers under the Bankruptcy Code of the United States, the obligationof each Lender to make Loans, any obligation of Bank of America to enter intoSecured Hedge Agreements under the Permitted FX Facility and any obligation ofthe L/C Issuer to make L/C Credit Extensions shall automatically terminate, theunpaid principal amount of all outstanding Loans and all interest and otheramounts as aforesaid shall automatically become due and payable, and theobligation of the Borrowers to Cash Collateralize the L/C Obligations andSecured Hedge Agreements under the Permitted FX Facility as aforesaid shallautomatically become effective, in each case without further act of theAdministrative Agent or any Lender.

 

8.03                           Applicationof Funds.  After the exercise ofremedies provided for in Section 8.02 (or after the Loans haveautomatically become immediately due and payable and the L/C Obligations andSecured Hedge Agreements under the Permitted FX Facility have automaticallybeen required to be Cash Collateralized as set forth in the proviso to Section 8.02),any amounts received on account of the Obligations shall be applied by theAdministrative Agent in the following order:

 

First, to payment of that portion ofthe Obligations constituting fees, indemnities, expenses and other amounts(including fees, charges and disbursements of counsel to the AdministrativeAgent and amounts payable under Article III) payable to theAdministrative Agent in its capacity as such;

 

Second, to payment of that portion of theObligations constituting fees, indemnities and other amounts (other thanprincipal, interest and Letter of Credit Fees) payable to the Lenders andthe L/C Issuer (including fees, charges and disbursements of counsel to therespective Lenders and the L/C Issuer andamounts payable under Article III, ratably among them in proportionto the respective amounts described in this clause Second payable tothem;

 

Third, to payment of that portion of theObligations constituting accrued and unpaid Letter of Credit Fees and intereston the Loans, L/C Borrowings and other Obligations, ratably among the Lendersand the L/C Issuer in proportion to the respective amounts described in thisclause Third payable to them;

 

Fourth, to payment of that portion of theObligations constituting unpaid principal of the Loans, L/C Borrowings andamounts owing under Secured Hedge Agreements and 

 

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Secured Cash ManagementAgreements, ratably among the Lenders, the L/C Issuer, the Hedge Banks and theCash Management Banks in proportion to the respective amounts described in thisclause Fourth held by them;

 

Fifth, to the Administrative Agent for the accountof the L/C Issuer and Bank of America, as party to any Secured Hedge Agreementsunder the Permitted FX Facility, to Cash Collateralize (a) that portion ofL/C Obligations comprised of the aggregate undrawn amount of Letters of Creditand (b) the FX Swap Value of outstanding Secured Hedge Agreements underthe Permitted FX Facility; and

 

Last, the balance, if any, after all of theObligations have been indefeasibly paid in full, to the Borrowers or asotherwise required by Law.

 

Subject to Section 2.03(c), amounts used to CashCollateralize the aggregate undrawn amount of Letters of Credit pursuant toclause Fifth above shall be applied to satisfy drawings under suchLetters of Credit as they occur.  If anyamount remains on deposit as Cash Collateral after (i) all Letters ofCredit have either been fully drawn or expired or (ii) any CashCollateralized Secured Hedge Agreement under the Permitted FX Facility has beenterminated and the obligations of the Borrowers thereunder paid and performedin full, such remaining amount shall be applied to the other Obligations, ifany, in the order set forth above.

 

# **ARTICLE IX**ADMINISTRATIVE AGENT

 

9.01                           Appointmentand Authority.  (a)  Each of theLenders and the L/C Issuer hereby irrevocably appoints Bank of America to acton its behalf as the Administrative Agent hereunder and under the other LoanDocuments and authorizes the Administrative Agent to take such actions on itsbehalf and to exercise such powers as are delegated to the Administrative Agentby the terms hereof or thereof, together with such actions and powers as arereasonably incidental thereto.  Theprovisions of this Article are solely for the benefit of theAdministrative Agent, the Lenders and the L/C Issuer, and the Borrowers shallnot have rights as a third party beneficiary of any of such provisions.

 

### (b)                                 The Administrative Agent shallalso act as the “collateral agent”under the Loan Documents, and each of the Lenders (in its capacities as aLender, potential Hedge Bank and potential Cash Management Bank) and the L/CIssuer hereby irrevocably appoints and authorizes the Administrative Agent toact as the agent of such Lender and the L/C Issuer for purposes of acquiring,holding and enforcing any and all Liens on Collateral granted by any of theLoan Parties to secure any of the Obligations, together with such powers anddiscretion as are reasonably incidental thereto.  In this connection, the Administrative Agent,as “collateral agent” and any co-agents, sub-agents and attorneys-in-factappointed by the Administrative Agent pursuant to Section 9.05 forpurposes of holding or enforcing any Lien on the Collateral (or any portionthereof) granted under the Collateral Documents, or for exercising any rightsand remedies thereunder at the direction of the Administrative Agent), shall beentitled to the benefits of all provisions of this Article IX and Article XI(including Section 10.04(c), as though such

 

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###  

### co-agents,sub-agents and attorneys-in-fact were the “collateral agent” under the LoanDocuments) as if set forth in full herein with respect thereto.

###  

9.02                           Rightsas a Lender.  The Person serving asthe Administrative Agent hereunder shall have the same rights and powers in itscapacity as a Lender as any other Lender and may exercise the same as though itwere 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 itsindividual capacity.  Such Person and itsAffiliates may accept deposits from, lend money to, act as the financial advisoror in any other advisory capacity for and generally engage in any kind ofbusiness with the Company or any Subsidiary or other Affiliate thereof as ifsuch Person were not the Administrative Agent hereunder and without any duty toaccount therefor to the Lenders.

 

9.03                           ExculpatoryProvisions.  The Administrative Agentshall not have any duties or obligations except those expressly set forthherein and in the other Loan Documents. Without limiting the generality of the foregoing, the AdministrativeAgent:

 

#### (a)          shall not be subject to any fiduciary orother implied duties, regardless of whether a Default has occurred and iscontinuing;

####  

#### (b)         shall not have any duty to take anydiscretionary action or exercise any discretionary powers, except discretionaryrights and powers expressly contemplated hereby or by the other Loan Documentsthat the Administrative Agent is required to exercise as directed in writing bythe Required Lenders (or such other number or percentage of the Lenders asshall be expressly provided for herein or in the other Loan Documents), providedthat the Administrative Agent shall not be required to take any action that, inits opinion or the opinion of its counsel, may expose the Administrative Agentto liability or that is contrary to any Loan Document or applicable law; and

####  

#### (c)          shall not, except as expressly set forthherein and in the other Loan Documents, have any duty to disclose, and shallnot be liable for the failure to disclose, any information relating to theBorrowers or any of its Affiliates that is communicated to or obtained by thePerson serving as the Administrative Agent or any of its Affiliates in anycapacity.

####  

TheAdministrative Agent shall not be liable for any action taken or not taken byit (i) with the consent or at the request of the Required Lenders (or suchother number or percentage of the Lenders as shall be necessary, or as theAdministrative Agent shall believe in good faith shall be necessary, under thecircumstances as provided in Sections 10.01 and 8.02) or (ii) inthe absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed notto have knowledge of any Default unless and until notice describing suchDefault is given to the Administrative Agent by the Borrowers, a Lender or theL/C Issuer.

 

TheAdministrative Agent shall not be responsible for or have any duty to ascertainor inquire into (i) any statement, warranty or representation made in orin connection with this Agreement or any other Loan Document, (ii) the contentsof any certificate, report or 

 

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other document delivered hereunder or thereunder or inconnection herewith or therewith, (iii) the performance or observance ofany of the covenants, agreements or other terms or conditions set forth hereinor therein or the occurrence of any Default, (iv) the validity,enforceability, effectiveness or genuineness of this Agreement, any other LoanDocument or any other agreement, instrument or document, or the creation,perfection or priority of any Lien purported to be created by the CollateralDocuments, (v) the value or the sufficiency of any Collateral, or (v) thesatisfaction of any condition set forth in Article IV or elsewhereherein, other than to confirm receipt of items expressly required to bedelivered to the Administrative Agent.

 

9.04                           Relianceby Administrative Agent.  TheAdministrative Agent shall be entitled to rely upon, and shall not incur anyliability for relying upon, any notice, request, certificate, consent,statement, instrument, document or other writing (including any electronicmessage, Internet or intranet website posting or other distribution) believedby it to be genuine and to have been signed, sent or otherwise authenticated bythe proper Person.  The AdministrativeAgent also may rely upon any statement made to it orally or by telephone andbelieved by it to have been made by the proper Person, and shall not incur anyliability for relying thereon.  Indetermining compliance with any condition hereunder to the making of a Loan, orthe issuance of a Letter of Credit, that by its terms must be fulfilled to thesatisfaction of a Lender or the L/C Issuer, the Administrative Agent maypresume that such condition is satisfactory to such Lender or the L/C Issuerunless the Administrative Agent shall have received notice to the contrary fromsuch Lender or the L/C Issuer prior to the making of such Loan or the issuanceof such Letter of Credit.  The AdministrativeAgent may consult with legal counsel (who may be counsel for the Borrowers),independent accountants and other experts selected by it, and shall not beliable for any action taken or not taken by it in accordance with the advice ofany such counsel, accountants or experts.

 

9.05                           Delegationof Duties.  The Administrative Agentmay perform any and all of its duties and exercise its rights and powershereunder or under any other Loan Document by or through any one or moresub-agents appointed by the Administrative Agent.  The Administrative Agent and any suchsub-agent may perform any and all of its duties and exercise its rights andpowers by or through their respective Related Parties.  The exculpatory provisions of this Article shallapply to any such sub-agent and to the Related Parties of the AdministrativeAgent and any such sub-agent, and shall apply to their respective activities inconnection with the syndication of the credit facilities provided for herein aswell as activities as Administrative Agent.

 

9.06                           Resignationof Administrative Agent.  TheAdministrative Agent may at any time give notice of its resignation to theLenders, the L/C Issuer and the Borrowers. Upon receipt of any such notice of resignation, the Required Lendersshall have the right, in consultation with the Borrowers, to appoint asuccessor, which shall be a bank with an office in the United States, or anAffiliate of any such bank with an office in the United States.  If no such successor shall have been soappointed by the Required Lenders and shall have accepted such appointmentwithin 30 days after the retiring Administrative Agent gives notice of itsresignation, then the retiring Administrative Agent may on behalf of theLenders and the L/C Issuer, appoint a successor Administrative Agent meetingthe qualifications set forth above; 

 

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provided that if the Administrative Agent shall notify the Borrowersand the Lenders that no qualifying Person has accepted such appointment, thensuch resignation shall nonetheless become effective in accordance with suchnotice and (a) the retiring Administrative Agent shall be discharged fromits duties and obligations hereunder and under the other Loan Documents (exceptthat in the case of any collateral security held by the Administrative Agent onbehalf of the Lenders or the L/C Issuer under any of the Loan Documents, theretiring Administrative Agent shall continue to hold such collateral securityuntil such time as a successor Administrative Agent is appointed) and (b) allpayments, communications and determinations provided to be made by, to orthrough the Administrative Agent shall instead be made by or to each Lender andthe L/C Issuer directly, until such time as the Required Lenders appoint asuccessor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’sappointment as Administrative Agent hereunder, such successor shall succeed toand become vested with all of the rights, powers, privileges and duties of theretiring (or retired) Administrative Agent, and the retiring AdministrativeAgent shall be discharged from all of its duties and obligations hereunder orunder the other Loan Documents (if not already discharged therefrom as providedabove in this Section).  The fees payableby the Borrowers to a successor Administrative Agent shall be the same as thosepayable to its predecessor unless otherwise agreed between the Borrowers andsuch successor.  After the retiringAdministrative Agent’s resignation hereunder and under the other LoanDocuments, the provisions of this Article and Section 10.04shall continue in effect for the benefit of such retiring Administrative Agent,its sub-agents and their respective Related Parties in respect of any actionstaken or omitted to be taken by any of them while the retiring AdministrativeAgent was acting as Administrative Agent.

 

Anyresignation by Bank of America as Administrative Agent pursuant to this Section shallalso constitute its resignation as L/C Issuer. Upon the acceptance of a successor’s appointment as Administrative Agenthereunder, (i) such successor shall succeed to and become vested with allof the rights, powers, privileges and duties of the retiring L/C Issuer, (ii) theretiring L/C Issuer shall be discharged from all of their respective duties andobligations hereunder or under the other Loan Documents, and (iii) thesuccessor L/C Issuer shall issue letters of credit in substitution for theLetters of Credit, if any, outstanding at the time of such succession or makeother arrangements satisfactory to the retiring L/C Issuer to effectivelyassume the obligations of the retiring L/C Issuer with respect to such Lettersof Credit.

 

9.07                           Non-Relianceon Administrative Agent and Other Lenders. Each Lender and the L/C Issuer acknowledges that it has, independentlyand without reliance upon the Administrative Agent or any other Lender or anyof their Related Parties and based on such documents and information as it hasdeemed appropriate, made its own credit analysis and decision to enter intothis Agreement.  Each Lender and the L/CIssuer also acknowledges that it will, independently and without reliance uponthe Administrative Agent or any other Lender or any of their Related Partiesand based on such documents and information as it shall from time to time deemappropriate, continue to make its own decisions in taking or not taking actionunder or based upon this Agreement, any other Loan Document or any relatedagreement or any document furnished hereunder or thereunder.

 

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9.08                           NoOther Duties, Etc.  Anything hereinto the contrary notwithstanding, none of the Bookrunners, Arrangers,Documentation Agents or Syndication Agents listed on the cover page hereofshall have any powers, duties or responsibilities under this Agreement or anyof the other Loan Documents, except in its capacity, as applicable, as theAdministrative Agent, a Lender or the L/C Issuer hereunder.

 

9.09                           AdministrativeAgent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law orany other judicial proceeding relative to any Loan Party, the AdministrativeAgent (irrespective of whether the principal of any Loan or L/C Obligationshall then be due and payable as herein expressed or by declaration orotherwise and irrespective of whether the Administrative Agent shall have madeany demand on the Borrowers) shall be entitled and empowered, by interventionin such proceeding or otherwise

 

#### (a)          to file and prove a claim for the wholeamount of the principal and interest owing and unpaid in respect of the Loans,L/C Obligations and all other Obligations that are owing and unpaid and to filesuch other documents as may be necessary or advisable in order to have theclaims of the Lenders, the L/C Issuer and the Administrative Agent (includingany claim for the reasonable compensation, expenses, disbursements and advancesof the Lenders, the L/C Issuer and the Administrative Agent and theirrespective agents and counsel and all other amounts due the Lenders, the L/CIssuer and the Administrative Agent under Sections 2.03(i) and (j),2.09 and 10.04) allowed in such judicial proceeding; and

####  

#### (b)         to collect and receive any monies or otherproperty 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 ishereby authorized by each Lender and the L/C Issuer to make such payments tothe Administrative Agent and, if the Administrative Agent shall consent to themaking of such payments directly to the Lenders and the L/C Issuer, to pay tothe Administrative Agent any amount due for the reasonable compensation,expenses, disbursements and advances of the Administrative Agent and its agentsand counsel, and any other amounts due the Administrative Agent under Sections 2.09and 10.04.

 

Nothingcontained herein shall be deemed to authorize the Administrative Agent toauthorize or consent to or accept or adopt on behalf of any Lender or the L/CIssuer any plan of reorganization, arrangement, adjustment or compositionaffecting the Obligations or the rights of any Lender or the L/C Issuer toauthorize the Administrative Agent to vote in respect of the claim of anyLender or the L/C Issuer or in any such proceeding.

 

9.10                           CollateralMatters.  The Lenders and the L/CIssuer irrevocably authorize the Administrative Agent, at its option and in itsdiscretion,

 

#### (a)          to release any Lien on any property grantedto or held by the Administrative Agent under any Loan Document (i) upontermination of the Aggregate Commitments and payment in full of all Obligations(other than contingent indemnification obligations) 

 

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#### and the expiration or termination of all Letters of Credit, (ii) thatDisposed of or to be Disposed of as part of or in connection with anyDisposition permitted hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in writing in accordance with Section 10.01;and

####  

#### (b)         to subordinate any Lien on any propertygranted to or held by the Administrative Agent under any Loan Document to theholder of any Lien on such property that is permitted by Section 7.01(i) orunder any Mortgage with respect to easements or other Liens arising inconnection with the Permitted Ohio Sale/Leaseback and/or the Duke PowerEasement (as defined in the Mortgage).

####  

Uponrequest by the Administrative Agent at any time, the Required Lenders willconfirm in writing the Administrative Agent’s authority to release orsubordinate its interest in particular types or items of property.  In each case as specified in this Section 9.10,the Administrative Agent will, at the Borrowers’ expense, execute and deliver tothe applicable Loan Party such documents as such Loan Party may reasonablyrequest to evidence the release of such item of Collateral from the assignmentand security interest granted under the Collateral Documents or to subordinateits interest in such item in accordance with the terms of the Loan Documentsand this Section 9.10.

 

# **ARTICLE X**MISCELLANEOUS

#  

10.01                     Amendments,Etc.  No amendment or waiver of anyprovision of this Agreement or any other Loan Document, and no consent to anydeparture by the Borrowers or any other Loan Party therefrom, shall beeffective unless in writing signed by the Required Lenders and the Borrowers orthe applicable Loan Party, as the case may be, and acknowledged by theAdministrative Agent, and each such waiver or consent shall be effective onlyin the specific instance and for the specific purpose for which given; provided,however, that no such amendment, waiver or consent shall:

 

#### (a)          waive any condition set forth in Section 4.01(other than Section 4.01(b)(i) or (c)), or, in the caseof the initial Credit Extension, Section 4.02, without the writtenconsent of each Lender;

####  

#### (b)         withoutlimiting the generality of clause (a) above, waive any condition set forthin Section 4.02 as to any Credit Extension under a particularFacility without the written consent of the Required Revolving Lenders or theapplicable Required Term Lenders, as the case may be;

####  

#### (c)          extend or increase the Commitment of anyLender (or reinstate any Commitment terminated pursuant to Section 8.02)without the written consent of such Lender or extend or increase the AggregateCommitments as of the Closing Date without the written consent of each Lender;

 

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#### (d)         postpone any date fixed by this Agreement or anyother Loan Document for  any payment****(excludingmandatory prepayments) of principal, interest, fees or other amounts dueto the Lenders (or any of them) hereunder or under such other Loan Documentwithout the written consent of each Lender entitled to such payment;

####  

#### (e)          reduce the principal of, or the rate ofinterest specified herein on, any Loan or L/C Borrowing, or (subject to clause (ii) of the second proviso tothis Section 10.01) any fees or other amounts payable hereunder orunder any other Loan Document without the written consent of each Lenderentitled to such amount; provided, however, that only the consentof the Required Lenders shall be necessary to amend the definition of “DefaultRate” or to waive any obligation of the Borrowers to pay interest or Letter ofCredit Fees at the Default Rate;

####  

#### (f)            change (i) Section 2.13or  Section 8.03 in a manner that would alter the pro ratasharing of payments required thereby without the written consent of each Lenderor (ii) the order of application of any reduction in the Commitments orany prepayment of Loans among the Facilities from the application thereof setforth in the applicable provisions of Section 2.05(c) or 2.06(b),respectively, in any manner that materially and adversely affects the Lendersunder a Facility without the written consent of (i) if such Facility isthe Term Facility, the Required Term Lenders and (ii) if such Facility isthe Revolving Credit Facility, the Required Revolving Lenders;

####  

#### (g)         change (i) any provision of this Section 10.01or the definition of “Required Lenders” or any other provision hereofspecifying the number or percentage of Lenders required to amend, waive orotherwise modify any rights hereunder or make any determination or grant anyconsent hereunder (other than the definitions specified in clause (ii) ofthis Section 10.01(g)), without the written consent of each Lenderor (ii) the definition of “Required Revolving Lenders” or “Required TermLenders” without the written consent of each Lender under the applicableFacility;

####  

#### (h)         release all or substantially all of theCollateral in any transaction or series of related transactions, without thewritten consent of each Lender;

####  

#### (i)             impose any greater restriction on theability of any Lender under a Facility to assign any of its rights orobligations hereunder without the written consent of (i) if such Facilityis the Term Facility, the Required Term Lenders and (ii) if such Facilityis the Revolving Credit Facility, the Required Revolving Lenders; or

####  

#### (j)             waive any condition set forth in Section 6.18or consent to any amendment of the definitions of “Activation Event,” “CovenantTriggering Event,” “Maximum Aggregate Basket Amount,” “Minimum UnrestrictedCash Balance,” “Unrestricted Cash” or “Unrestricted Cash Equivalents” withoutthe written consent of each Lender;

####  

and provided, further, that (i) no amendment, waiveror consent shall, unless in writing and signed by the L/C Issuer in addition tothe Lenders required above, affect the rights or duties of the L/C Issuer underthis Agreement or any Issuer Document relating to any Letter of Credit 

 

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issued or to be issued by it; and (ii) the Fee Letter may beamended, or rights or privileges thereunder waived, in a writing executed onlyby the parties thereto.  Notwithstandinganything to the contrary herein, no Defaulting Lender shall have any right toapprove or disapprove any amendment, waiver or consent hereunder, except that theCommitment of such Lender may not be increased or extended without the consentof such Lender.

 

10.02                     Notices;Effectiveness; Electronic Communications. (a)  Notices Generally. Except in the case of notices and other communications expresslypermitted to be given by telephone (and except as provided in subsection (b) below),all notices and other communications provided for herein shall be in writingand shall be delivered by hand or overnight courier service, mailed bycertified or registered mail or sent by telecopier as follows, and all noticesand other communications expressly permitted hereunder to be given by telephoneshall be made to the applicable telephone number, as follows:

 

##### (i)                                     ifto the Borrowers, the Administrative Agent or the L/C Issuer, to the address,telecopier number, electronic mail address or telephone number specified forsuch Person on Schedule 10.02; and

#####  

##### (ii)                                  ifto any other Lender, to the address, telecopier number, electronic mail addressor telephone number specified in its Administrative Questionnaire.

#####  

Notices sent by hand or overnight courier service, or mailed bycertified or registered mail, shall be deemed to have been given when received;notices sent by telecopier shall be deemed to have been given when sent (exceptthat, if not given during normal business hours for the recipient, shall bedeemed to have been given at the opening of business on the next business dayfor the recipient).  Notices deliveredthrough electronic communications to the extent provided in subsection (b) belowshall be effective as provided in such subsection (b).

 

### (b)                                 Electronic Communications.  Notices and other communications to theLenders and the L/C Issuer hereunder may be delivered or furnished byelectronic communication (including e-mail and Internet or intranet websites) pursuantto procedures approved by the Administrative Agent, provided that theforegoing shall not apply to notices to any Lender or the L/C Issuer pursuantto Article II if such Lender or the L/C Issuer, as applicable, hasnotified the Administrative Agent that it is incapable of receiving noticesunder such Article by electronic communication.  The Administrative Agent or the Borrowersmay, in its discretion, agree to accept notices and other communications to ithereunder by electronic communications pursuant to procedures approved by it, providedthat approval of such procedures may be limited to particular notices orcommunications.

###  

Unlessthe Administrative Agent otherwise prescribes, (i) notices and othercommunications sent to an e-mail address shall be deemed received upon thesender’s receipt of an acknowledgement from the intended recipient (such as bythe “return receipt requested” function, as available, return e-mail or otherwritten acknowledgement), provided that if such notice or other communicationis not sent during the normal business hours of the recipient, such notice orcommunication shall be deemed to have been sent at the opening of business onthe next business day for the recipient, and (ii) notices orcommunications posted to an Internet or

 

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intranet website shall bedeemed received upon the deemed receipt by the intended recipient at its e-mailaddress as described in the foregoing clause (i) of notification thatsuch notice or communication is available and identifying the website address therefor.

 

### (c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “ASAVAILABLE.”  THE AGENT PARTIES (ASDEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWERMATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FORERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED ORSTATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULARPURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHERCODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWERMATERIALS OR THE PLATFORM.  In no eventshall the Administrative Agent or any of its Related Parties (collectively, the“Agent Parties”) have any liability to the Borrowers, any Lender, theL/C Issuer or any other Person for losses, claims, damages, liabilities orexpenses of any kind (whether in tort, contract or otherwise) arising out ofthe Borrowers’ or the Administrative Agent’s transmission of Borrower Materialsthrough the Internet, except to the extent that such losses, claims, damages,liabilities or expenses are determined by a court of competent jurisdiction bya final and nonappealable judgment to have resulted from the gross negligenceor willful misconduct of such Agent Party; provided, however,that in no event shall any Agent Party have any liability to the Borrowers, anyLender, the L/C Issuer or any other Person for indirect, special, incidental,consequential or punitive damages (as opposed to direct or actual damages).

###  

### (d)           Change of Address, Etc.  Each of the Borrowers, the AdministrativeAgent and the L/C Issuer may change its address, telecopier or telephone numberfor notices and other communications hereunder by notice to the other partieshereto.  Each other Lender may change itsaddress, telecopier or telephone number for notices and other communicationshereunder by notice to the Borrowers, the Administrative Agent and the L/CIssuer.  In addition, each Lender agreesto notify the Administrative Agent from time to time to ensure that theAdministrative Agent has on record (i) an effective address, contact name,telephone number, telecopier number and electronic mail address to whichnotices and other communications may be sent and (ii) accurate wireinstructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individualat or on behalf of such Public Lender to at all times have selected the “PrivateSide Information” or similar designation on the content declaration screen of thePlatform in order to enable such Public Lender or its delegate, in accordancewith such Public Lender’s compliance procedures and applicable Law, includingUnited States Federal and state securities Laws, to make reference to BorrowerMaterials that are not made available through the “Public Side Information”portion of the Platform and that may contain material non-public informationwith respect to the Borrowers or its securities for purposes of United StatesFederal or state securities laws.

###  

### (e)           The Company as Agent for Noticefor the Borrowers.  Each Borrowerhereby appoints the Company as its agent for delivery and receipt of allnotices required hereunder and other the other Loan Documents.  Each Borrower hereby acknowledges and 

 

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### agreesthat, notwithstanding anything herein to the contrary, (i) the delivery bythe Administrative Agent, L/C Issuer or any Lender to the Company of any noticerequired or permitted to be delivered hereunder or under any other LoanDocument shall constitute and be deemed to be delivery to all the Borrowers and(ii) delivery by the Company of any notice required to be deliveredhereunder or under any other Loan Document shall constitute and shall be deemedto be delivered for and on behalf of all of the Borrowers, and each Borrowershall be deemed to have constructive notice of the delivery or receipt of andthe contents of each such notice.

###  

### (f)            Reliance by Administrative Agent,L/C Issuer and Lenders.** **The Administrative Agent, the L/CIssuer and the Lenders shall be entitled to rely and act upon any notices(including telephonic Committed Loan Notices) purportedly given by or on behalfof the Borrowers even if (i) such notices were not made in a mannerspecified herein, were incomplete or were not preceded or followed by any otherform of notice specified herein, or (ii) the terms thereof, as understoodby the recipient, varied from any confirmation thereof.  The Borrowers shall indemnify theAdministrative Agent, the L/C Issuer, each Lender and the Related Parties ofeach of them from all losses, costs, expenses and liabilities resulting fromthe reliance by such Person on each notice purportedly given by or on behalf ofthe Borrowers.  All telephonic notices toand other telephonic communications with the Administrative Agent may berecorded by the Administrative Agent, and each of the parties hereto herebyconsents to such recording.

###  

10.03       NoWaiver;  Cumulative Remedies.  No failure by any Lender, the L/C Issuer orthe Administrative Agent to exercise, and no delay by any such Person inexercising, any right, remedy, power or privilege hereunder or under any otherLoan Document shall operate as a waiver thereof; nor shall any single orpartial exercise of any right, remedy, power or privilege hereunder precludeany 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 otherLoan Document, are cumulative and not exclusive of any rights, remedies, powersand privileges provided by law.

 

10.04       Expenses;Indemnity; Damage Waiver.  (a) Costs and Expenses.  The Borrowers shallpay (i) all reasonable out-of-pocket expenses incurred by the AdministrativeAgent and its Affiliates (including the reasonable fees, charges anddisbursements of counsel for the Administrative Agent), in connection with thesyndication of the credit facilities provided for herein, the preparation,negotiation, execution, delivery and administration of this Agreement and theother Loan Documents or any amendments, modifications or waivers of theprovisions hereof or thereof (whether or not the transactions contemplatedhereby or thereby shall be consummated), (ii) all reasonable out-of-pocketexpenses incurred by the L/C Issuer in connection with the issuance, amendment,renewal or extension of any Letter of Credit or any demand for paymentthereunder and (iii) all out-of-pocket expenses incurred by theAdministrative Agent, any Lender or the L/C Issuer (including the fees, chargesand disbursements of any counsel for the Administrative Agent, any Lender orthe L/C Issuer), and shall pay all fees and time charges for attorneys who maybe employees of the Administrative Agent, any Lender or the L/C Issuer, inconnection with the enforcement or protection of its rights (A) inconnection with this Agreement and the other Loan Documents, including itsrights under this Section, or (B) in connection with Loans made or Lettersof Credit issued hereunder, 

 

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including all such out-of-pocket expenses incurred during any workout,restructuring or negotiations in respect of such Loans or Letters of Credit.

 

### (b)           Indemnification by the Borrowers.  The Borrowers shall indemnify theAdministrative Agent (and any sub-agent thereof), each Lender and the L/CIssuer, and each Related Party of any of the foregoing Persons (each suchPerson being called an “Indemnitee”) against, and hold each Indemniteeharmless from, any and all losses, claims, damages, liabilities and relatedexpenses (including the fees, charges and disbursements of any counsel for anyIndemnitee), and shall indemnify and hold harmless each Indemnitee from allfees and time charges and disbursements for attorneys who may be employees ofany Indemnitee, incurred by any Indemnitee or asserted against any Indemniteeby any third party or by the Borrowers or any other Loan Party arising out of,in connection with, or as a result of (i) the execution or delivery ofthis Agreement, any other Loan Document or any agreement or instrumentcontemplated hereby or thereby, the performance by the parties hereto of theirrespective obligations hereunder or thereunder or the consummation of thetransactions contemplated hereby or thereby, or, in the case of theAdministrative Agent (and any sub-agent thereof) and its Related Parties only,the administration of this Agreement and the other Loan Documents, (ii) anyLoan or Letter of Credit or the use or proposed use of the proceeds therefrom(including any refusal by the L/C Issuer to honor a demand for payment under aLetter of Credit if the documents presented in connection with such demand donot strictly comply with the terms of such Letter of Credit), (iii) anyactual or alleged presence or release of Hazardous Materials on or from anyproperty owned or operated by the Company or any of its Subsidiaries, or anyEnvironmental Liability related in any way to the Company or any of itsSubsidiaries, or (iv) any actual or prospective claim, litigation,investigation or proceeding relating to any of the foregoing, whether based oncontract, tort or any other theory, whether brought by a third party or by theBorrowers or any other Loan Party or any of the Borrowers’ or such Loan Party’sdirectors, shareholders or creditors,and regardless of whether any Indemnitee is a party thereto; providedthat such indemnity shall not, as to any Indemnitee, be available to the extentthat such losses, claims, damages, liabilities or related expenses (x) aredetermined by a court of competent jurisdiction by final and nonappealablejudgment to have resulted from the gross negligence or willful misconduct ofsuch Indemnitee or (y) result from a claim brought by the Borrowers or anyother Loan Party against an Indemnitee for breach in bad faith of suchIndemnitee’s obligations hereunder or under any other Loan Document, if theBorrowers or such Loan Party has obtained a final and nonappealable judgment inits favor on such claim as determined by a court of competent jurisdiction.

###  

### (c)           Reimbursement by Lenders.  To the extent that the Borrowers for anyreason fails to indefeasibly pay any amount required under subsection (a) or (b) ofthis Section to be paid by it to the Administrative Agent (or anysub-agent thereof), the L/C Issuer or any Related Party of any of theforegoing, each Lender severally agrees to pay to the Administrative Agent (orany such sub-agent), the L/C Issuer or such Related Party, as the case may be,such Lender’s Applicable Percentage (determined as of the time that theapplicable unreimbursed expense or indemnity payment is sought) of such unpaidamount, provided that the unreimbursed expense or indemnified loss,claim, damage, liability or related expense, as the case may be, was incurredby or asserted against the Administrative Agent (or any such sub-agent) or theL/C Issuer in its capacity as such, or against any Related Party of any of theforegoing acting for the 

 

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### AdministrativeAgent (or any such sub-agent) or L/C Issuer in connection with suchcapacity.  The obligations of the Lendersunder this subsection (c) are subject to the provisions of Section 2.12(d).

###  

### (d)           Waiver of Consequential Damages,Etc.  To the fullest extent permittedby applicable law, the Borrowers shall not assert, and hereby waives, any claimagainst 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, anyother Loan Document or any agreement or instrument contemplated hereby, thetransactions contemplated hereby or thereby, any Loan or Letter of Credit orthe use of the proceeds thereof.  NoIndemnitee referred to in subsection (b) above shall be liable for anydamages arising from the use by unintended recipients of any information orother materials distributed to such unintended recipients by such Indemniteethrough telecommunications, electronic or other information transmissionsystems in connection with this Agreement or the other Loan Documents or thetransactions contemplated hereby or thereby other than for direct or actualdamages resulting from the gross negligence or willful misconduct of suchIndemnitee as determined by a final and nonappealable judgment of a court ofcompetent jurisdiction.

###  

### (e)           Payments.  All amounts due under this Section shallbe payable not later than ten Business Days after demand therefor.

###  

### (f)            Survival.  The agreements in this Section shallsurvive the resignation of the Administrative Agent and the L/C Issuer, the replacement of any Lender, the termination of theAggregate Commitments and the repayment, satisfaction or discharge of all theother Obligations.

 

10.05       PaymentsSet Aside.  To the extent that anypayment by or on behalf of the Borrowers are made to the Administrative Agent,the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer orany Lender exercises its right of setoff, and such payment or the proceeds ofsuch setoff or any part thereof is subsequently invalidated, declared to befraudulent or preferential, set aside or required (including pursuant to anysettlement entered into by the Administrative Agent, the L/C Issuer or suchLender in its discretion) to be repaid to a trustee, receiver or any otherparty, in connection with any proceeding under any Debtor Relief Law orotherwise, then (a) to the extent of such recovery, the obligation or partthereof originally intended to be satisfied shall be revived and continued infull force and effect as if such payment had not been made or such setoff hadnot occurred, and (b) each Lender and the L/C Issuer severally agrees topay to the Administrative Agent upon demand its applicable share (withoutduplication) of any amount so recovered from or repaid by the AdministrativeAgent, plus interest thereon from the date of such demand to the date suchpayment is made at a rate per annum equal to the applicable Overnight Rate fromtime to time in effect.  The obligationsof the Lenders and the L/C Issuer under clause (b) of the precedingsentence shall survive the payment in full of the Obligations and thetermination of this Agreement.

 

10.06       Successorsand Assigns.  (a)  Successorsand Assigns Generally.  The provisions ofthis Agreement shall be binding upon and inure to the benefit of the partieshereto and their respective successors and assigns permitted hereby, exceptthat the Borrowers may 

 

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assign or otherwise transfer any of its rights or obligations hereunderwithout the prior written consent of the Administrative Agent and each Lenderand no Lender may assign or otherwise transfer any of its rights or obligationshereunder except (i) to an assignee in accordance with the provisions of Section 10.06(b),(ii) by way of participation in accordance with the provisions of Section 10.06(d),or (iii) by way of pledge or assignment of a security interest subject tothe restrictions of Section 10.06(f) (and any other attemptedassignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed orimplied, shall be construed to confer upon any Person (other than the parties hereto,their respective successors and assigns permitted hereby, Participants to theextent provided in subsection (d) of this Section and, to the extentexpressly contemplated hereby, the Related Parties of each of theAdministrative Agent, the L/C Issuer and the Lenders) any legal or equitableright, remedy or claim under or by reason of this Agreement.

 

### (b)           Assignments by Lenders.  Any Lender may at any time assign to one ormore assignees all or a portion of its rights and obligations under thisAgreement (including all or a portion of its Commitment(s) and the Loans(including for purposes of this Section 10.06(b), participations inL/C Obligations) at the time owing to it); provided that any suchassignment shall be subject to the following conditions:

###  

(i)            Minimum Amounts.

 

(A)          in the case of an assignment of theentire remaining amount of the assigning Lender’s Commitment under any Facilityand the Loans at the time owing to it under such Facility or in the case of anassignment to a Lender, an Affiliate of a Lender or an Approved Fund, nominimum amount need be assigned; and

 

(B)           in any case not described insubsection (b)(i)(A) of this Section, the aggregate amount of theCommitment (which for this purpose includes Loans outstanding thereunder) or,if the Commitment is not then in effect, the principal outstanding balance ofthe Loans of the assigning Lender subject to each such assignment, determinedas of the date the Assignment and Assumption with respect to such assignment isdelivered to the Administrative Agent or, if “Trade Date” is specified in theAssignment and Assumption, as of the Trade Date, shall not be less than$5,000,000, in the case of anyassignment in respect of the Revolving Credit Facility, or $1,000,000, in thecase of any assignment in respect of either Term Facility, unless each of theAdministrative Agent and, so long as no Event of Default has occurred and iscontinuing, the Borrowers otherwise consent (each such consent not to beunreasonably withheld or delayed); provided, however, thatconcurrent assignments to members of an Assignee Group and concurrentassignments from members of an Assignee Group to a single Eligible Assignee (orto an Eligible Assignee and members of its Assignee Group) will be treated as asingle assignment for purposes of determining whether such minimum amount hasbeen met;

 

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(ii)           Proportionate Amounts.  Each partial assignment shall be made as anassignment of a proportionate part of all the assigning Lender’s rights andobligations under this Agreement with respect to the Loans or the Commitmentassigned, except that this clause (ii) shall not prohibit any Lender fromassigning all or a portion of its rights and obligations among separateFacilities on a non-pro rata basis;

 

(iii)          Required Consents. No consent shall be required for any assignment except to the extentrequired by subsection (b)(i)(B) of this Section and, in addition:

 

(A)  the consent of the Borrowers (such consent notto be unreasonably withheld or delayed) shall be required unless (1) anEvent of Default has occurred and is continuing at the time of such assignmentor (2) such assignment is to a Lender, an Affiliate of a Lender or anApproved Fund;

 

(B)   the consent of the Administrative Agent (suchconsent not to be unreasonably withheld or delayed) shall be required forassignments in respect of (i) any Term Commitment or Revolving CreditCommitment if such assignment is to a Person that is not a Lender with aCommitment in respect of the applicable Facility, an Affiliate of such Lenderor an Approved Fund with respect to such Lender or (ii) any Term Loan to aPerson that is not a Lender, an Affiliate of a Lender or an Approved Fund; and

 

(C)   the consent of the L/C Issuer (such consentnot to be unreasonably withheld or delayed) shall be required for anyassignment that increases the obligation of the assignee to participate inexposure under one or more Letters of Credit (whether or not then outstanding).

 

(iv)          Assignment and Assumption.  The parties to each assignment shall executeand deliver to the Administrative Agent an Assignment and Assumption, togetherwith 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 anyassignment.  The assignee, if it is not aLender, shall deliver to the Administrative Agent an AdministrativeQuestionnaire.

 

(v)           No Assignment to Borrowers.  No such assignment shall be made to theCompany or any of the Company’s Affiliates or Subsidiaries.

 

(vi)          No Assignment to Natural Persons.  No such assignment shall be made to a naturalperson.

 

Subject to acceptance andrecording thereof by the Administrative Agent pursuant to subsection (c) ofthis Section, from and after the effective date specified in each Assignmentand Assumption, the assignee thereunder shall be a party to this Agreement and,to the extent of the interest assigned by such Assignment and Assumption, havethe rights and obligations of a Lender under this Agreement, and the assigningLender thereunder shall, to the extent of the interest assigned by suchAssignment and Assumption, be released from its obligations under 

 

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this Agreement (and, inthe case of an Assignment and Assumption covering all of the assigning Lender’srights and obligations under this Agreement, such Lender shall cease to be aparty hereto but shall continue to be entitled to the benefits of Sections3.01, 3.04, 3.05 and 10.04 with respect to facts andcircumstances occurring prior to the effective date of such assignment).  Upon request, the Borrowers (at its expense)shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender ofrights or obligations under this Agreement that does not comply with thissubsection shall be treated for purposes of this Agreement as a sale by suchLender of a participation in such rights and obligations in accordance with Section 10.06(d) (tothe extent such assignment or transfer complies with Section 10.06(d)).

 

### (c)           Register.  The Administrative Agent, acting solely forthis purpose as an agent of the Borrowers, shall maintain at the AdministrativeAgent’s Office a copy of each Assignment and Assumption delivered to it and aregister for the recordation of the names and addresses of the Lenders, and theCommitments of, and principal amounts of the Loans and L/C Obligations owingto, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries inthe Register shall be conclusive, and the Borrowers, the Administrative Agentand the Lenders may treat each Person whose name is recorded in the Registerpursuant to the terms hereof as a Lender hereunder for all purposes of thisAgreement, notwithstanding notice to the contrary.  The Register shall be available forinspection by the Borrowers and any Lender, at any reasonable time and fromtime to time upon reasonable prior notice.

###  

### (d)           Participations.  Any Lender may at any time, without theconsent of, or notice to, the Borrowers or the Administrative Agent, sellparticipations to any Person (other than a natural person or the Company or anyof the Company’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/orobligations under this Agreement (including all or a portion of its Commitmentand/or the Loans (including such Lender’s participations in L/C Obligations)owing to it); provided that (i) such Lender’s obligations underthis Agreement shall remain unchanged, (ii) such Lender shall remainsolely responsible to the other parties hereto for the performance of suchobligations and (iii) the Borrowers, the Administrative Agent, the Lendersand the L/C Issuer shall continue to deal solely and directly with such Lenderin connection with such Lender’s rights and obligations under thisAgreement.  Any agreement or instrumentpursuant to which a Lender sells such a participation shall provide that suchLender shall retain the sole right to enforce this Agreement and to approve anyamendment, modification or waiver of any provision of this Agreement; providedthat such agreement or instrument may provide that such Lender will not,without the consent of the Participant, agree to any amendment, waiver or othermodification described in the first proviso to Section 10.01 thataffects such Participant.  Subject to subsection(e) of this Section, the Borrowers agrees that each Participant shallbe 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 acquiredits interest by assignment pursuant to Section 10.06(b).  To the extent permitted by law, eachParticipant also shall be entitled to the benefits of Section 10.08**as though it were a Lender, provided suchParticipant agrees to be subject to Section 2.13 as though it werea Lender.

###  

### (e)           Limitations upon ParticipantRights.  A Participant shall not beentitled to receive any greater payment under Section 3.01 or 3.04**than the applicable Lender would have 

 

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### beenentitled to receive with respect to the participation sold to such Participant,unless the sale of the participation to such Participant is made with theBorrowers’ prior written consent.  AParticipant that would be a Foreign Lender if it were a Lender shall not beentitled to the benefits of Section 3.01 unless the Borrowers arenotified of the participation sold to such Participant and such Participantagrees, for the benefit of the Borrowers, to comply with Section 3.01(e) asthough it were a Lender.

###  

### (f)            Certain Pledges.  Any Lender may at any time pledge or assign asecurity 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 ReserveBank; provided that no such pledge or assignment shall release suchLender from any of its obligations hereunder or substitute any such pledgee orassignee for such Lender as a party hereto.

###  

### (g)           Electronic Execution ofAssignments.  The words “execution,” “signed,”“signature,” and words of like import in any Assignment and Assumption shall bedeemed to include electronic signatures or the keeping of records in electronicform, each of which shall be of the same legal effect, validity orenforceability as a manually executed signature or the use of a paper-basedrecordkeeping system, as the case may be, to the extent and as provided for inany applicable law, including the Federal Electronic Signatures in Global andNational Commerce Act, the New York State Electronic Signatures and RecordsAct, or any other similar state laws based on the Uniform ElectronicTransactions Act.

###  

### (h)           [Reserved.]

###  

### (i)            Resignation as L/C Issuer after Assignment.  Notwithstandinganything to the contrary contained herein, if at any time Bank of Americaassigns all of its Revolving Credit Commitment and Revolving Credit Loanspursuant to Section 10.06(b), Bank of America may, upon 30 days’notice to the Borrowers and the Lenders, resign as L/C Issuer.  In the event of any such resignation as L/CIssuer, the Borrowers shall be entitled to appoint from among the Lenders asuccessor L/C Issuer hereunder; provided, however, that nofailure by the Borrowers to appoint any such successor shall affect theresignation of Bank of America as L/C Issuer. If Bank of America resigns as L/C Issuer, it shall retain all therights, powers, privileges and duties of the L/C Issuer hereunder with respectto all Letters of Credit outstanding as of the effective date of itsresignation as L/C Issuer and all L/C Obligations with respect thereto(including the right to require the Lenders to make Base Rate Loans or fundrisk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  Upon the appointment of a successor L/CIssuer, (a) such successor shall succeed to and become vested with all ofthe rights, powers, privileges and duties of the retiring L/C Issuer and (b) thesuccessor L/C Issuer shall issue letters of credit in substitution for theLetters of Credit, if any, outstanding at the time of such succession or makeother arrangements satisfactory to Bank of America to effectively assume theobligations of Bank of America with respect to such Letters of Credit.

###  

10.07       Treatmentof Certain Information; Confidentiality. Each of the Administrative Agent, the Arranger, the Lenders and the L/CIssuer agrees to maintain the confidentiality of the Information (as definedbelow), except that Information may be disclosed 

 

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(a) to its Affiliates and to its and its Affiliates’ respectivepartners, directors, officers, employees, agents, advisors and representatives(it being understood that the Persons to whom such disclosure is made will beinformed of the confidential nature of such Information and instructed to keepsuch Information confidential), (b) to the extent requested by anyregulatory authority purporting to have jurisdiction over it (including anyself-regulatory authority, such as the National Association of InsuranceCommissioners), (c) to the extent required by applicable laws orregulations or by any subpoena or similar legal process, (d) to any otherparty hereto, (e) in connection with the exercise of any remedieshereunder or under any other Loan Document or any action or proceeding relatingto this Agreement or any other Loan Document or the enforcement of rightshereunder or thereunder, (f) subject to an agreement containing provisionssubstantially the same as those of this Section, to (i) any assignee of orParticipant in, or any prospective assignee of or Participant in, any of itsrights or obligations under this Agreement or (ii) any actual orprospective counterparty (or its advisors) to any swap or derivativetransaction relating to the Borrowers and its obligations, (g) with theconsent of the Borrowers or (h) to the extent such Information (i) becomespublicly available other than as a result of a breach of this Section or (ii) becomesavailable to the Administrative Agent, any Lender, the L/C Issuer or any oftheir respective Affiliates on a nonconfidential basis from a source other thanthe Borrowers.

 

For purposes of this Section, “Information”means all information received from any Loan Party or any Subsidiary thereofrelating to any Loan Party or any Subsidiary thereof or their respectivebusinesses, other than any such information that is available to theAdministrative Agent, any Lender or the L/C Issuer on a nonconfidential basisprior to disclosure by any Loan Party or any Subsidiary thereof, providedthat, in the case of information received from a Loan Party or any suchSubsidiary after the date hereof, such information is clearly identified at thetime of delivery as confidential.  AnyPerson required to maintain the confidentiality of Information as provided inthis Section shall be considered to have complied with its obligation todo so if such Person has exercised the same degree of care to maintain theconfidentiality of such Information as such Person would accord to its ownconfidential information.

 

Each of the Administrative Agent, the Lenders and theL/C Issuer acknowledges that (a) the Information may include materialnon-public information concerning the Company or a Subsidiary, as the case maybe, (b) it has developed compliance procedures regarding the use ofmaterial non-public information and (c) it will handle such materialnon-public information in accordance with applicable Law, including UnitedStates Federal and state securities Laws.

 

10.08       Rightof Setoff.  If an Event of Defaultshall have occurred and be continuing, each Lender, the L/C Issuer and each oftheir respective Affiliates is hereby authorized at any time and from time totime, after obtaining the prior written consent of the Administrative Agent, tothe fullest extent permitted by applicable law, to set off and apply any andall deposits (general or special, time or demand, provisional or final, inwhatever currency) at any time held and other obligations (in whatevercurrency) at any time owing by such Lender, the L/C Issuer or any suchAffiliate to or for the credit or the account of the Borrowers against any andall of the obligations of the Borrowers now or hereafter existing under thisAgreement or any other Loan Document to such Lender or the L/C Issuer,irrespective of whether or not such Lender or the L/C Issuer shall have madeany demand under this Agreement or any other Loan 

 

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Document and although such obligations of the Borrowers may becontingent or unmatured or are owed to a branch or office of such Lender or theL/C Issuer different from the branch or office holding such deposit orobligated on such indebtedness.  Therights of each Lender, the L/C Issuer and their respective Affiliates underthis Section are in addition to other rights and remedies (including otherrights of setoff) that such Lender, the L/C Issuer or their respectiveAffiliates may have.  Each Lender and theL/C Issuer agrees to notify the Borrowers and the Administrative Agent promptlyafter any such setoff and application, provided that the failure to give suchnotice shall not affect the validity of such setoff and application.

** **

10.09       InterestRate Limitation.  Notwithstandinganything to the contrary contained in any Loan Document, the interest paid oragreed to be paid under the Loan Documents shall not exceed the maximum rate ofnon-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lendershall receive interest in an amount that exceeds the Maximum Rate, the excessinterest shall be applied to the principal of the Loans or, if it exceeds suchunpaid principal, refunded to the Borrowers. In determining whether the interest contracted for, charged, or receivedby the Administrative Agent or a Lender exceeds the Maximum Rate, such Personmay, to the extent permitted by applicable Law, (a) characterize anypayment that is not principal as an expense, fee, or premium rather thaninterest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize,prorate, allocate, and spread in equal or unequal parts the total amount ofinterest throughout the contemplated term of the Obligations hereunder.

 

10.10       Counterparts;Effectiveness.  This Agreement may beexecuted in counterparts (and by different parties hereto in differentcounterparts), each of which shall constitute an original, but all of whichwhen taken together shall constitute a single contract.  Except as provided in Section 4.01,this Agreement shall become effective when it shall have been executed by theAdministrative Agent and when the Administrative Agent shall have received counterpartshereof that, when taken together, bear the signatures of each of the otherparties hereto.  Delivery of an executedcounterpart of a signature page of this Agreement by telecopy shall beeffective as delivery of a manually executed counterpart of this Agreement.

 

10.11       Survivalof Representations and Warranties. All representations and warranties made hereunder and in any other LoanDocument or other document delivered pursuant hereto or thereto or inconnection herewith or therewith shall survive the execution and deliveryhereof and thereof.  Such representationsand warranties have been or will be relied upon by the Administrative Agent andeach Lender, regardless of any investigation made by the Administrative Agentor any Lender or on their behalf and notwithstanding that the AdministrativeAgent or any Lender may have had notice or knowledge of any Default at the timeof any Credit Extension, and shall continue in full force and effect as long asany Loan or any other Obligation hereunder shall remain unpaid or unsatisfiedor any Letter of Credit shall remain outstanding.

 

10.12       Severability.  If any provision of this Agreement or theother Loan Documents is held to be illegal, invalid or unenforceable, (a) thelegality, validity and enforceability of the remaining provisions of thisAgreement and the other Loan Documents shall not be affected or impairedthereby and (b) the parties shall endeavor in good faith 

 

111

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negotiations to replace the illegal, invalid or unenforceableprovisions with valid provisions the economic effect of which comes as close aspossible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particularjurisdiction shall not invalidate or render unenforceable such provision in anyother jurisdiction.

 

10.13       Replacementof Lenders.  If (i) any Lenderrequests compensation under Section 3.04, (ii) the Borrowersare required to pay any additional amount to any Lender or any GovernmentalAuthority for the account of any Lender pursuant to Section 3.01, (iii) anyLender is a Defaulting Lender or (iv) a Lender refuses to consent to aproposed amendment, waiver, consent or release with respect to any LoanDocument that requires the consent of each Lender and that has been approved byat least the Required Lenders, then the Borrowers may, at its sole expense andeffort, upon notice to such Lender and the Administrative Agent, require suchLender to assign and delegate, without recourse (in accordance with and subjectto the restrictions contained in, and consents required by, Section 10.06),all of its interests, rights and obligations under this Agreement and therelated Loan Documents to an assignee that shall assume such obligations (whichassignee may be another Lender, if a Lender accepts such assignment), providedthat:

 

#### (a)   the Borrowers shall have paid to the Administrative Agent theassignment fee specified in Section 10.06(b);

####  

#### (b)   such Lender shall have received payment of an amount equal to theoutstanding principal of its Loans and L/C Advances, accrued interest thereon,accrued fees and all other amounts payable to it hereunder and under the otherLoan Documents (including any amounts under Section 3.05) from theassignee (to the extent of such outstanding principal and accrued interest andfees) or the Borrowers (in the case of all other amounts);

####  

#### (c)   in the case of any such assignment resulting from a claim forcompensation under Section 3.04 or payments required to be made pursuantto Section 3.01, such assignment will result in a reduction in suchcompensation or payments thereafter;

####  

#### (d)   such assignment does not conflict with applicable Laws; and

####  

#### (e)   with respect to any assignment pursuant to clause (iv), suchamendment, waiver, consent or release can be effected as a result of suchassignment (together with any other assignments made pursuant to clause (iv)).

####  

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

 

112

----

 

10.14       Governing Law; Jurisdiction; Etc.  (a) GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

### (b)           SUBMISSION TO JURISDICTION.  THE BORROWERS IRREVOCABLY AND UNCONDITIONALLYSUBMIT, FOR THEMSELVES AND THEIR PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OFTHE COURTS OF THE STATE OF NEW YORKSITTING IN MANHATTAN IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURTOF THE SOUTHERNDISTRICT OF NEW YORK SITTING IN MANHATTAN,AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISINGOUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FORRECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETOIRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCHACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCHACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHERJURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BYLAW.  NOTHING IN THIS AGREEMENT OR IN ANYOTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANYLENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION ORPROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THEBORROWERS OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.

###  

### (c)           WAIVER OF VENUE.  THE BORROWERS IRREVOCABLY AND UNCONDITIONALLYWAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THATTHEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION ORPROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTIN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLYWAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF ANINCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCHCOURT.

###  

### (d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TOSERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THERIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BYAPPLICABLE LAW

###  

10.15       Waiver of Jury Trial. EACH PARTYHERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLELAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDINGDIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS 

 

113

----

 

AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATEDHEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NOREPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OFLITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THATIT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENTAND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS ANDCERTIFICATIONS IN THIS SECTION.

 

10.16       NoAdvisory or Fiduciary Responsibility.** **In connection with all aspects ofeach transaction contemplated hereby (including in connection with anyamendment, waiver or other modification hereof or of any other Loan Document),the Borrowers acknowledge and agree that: (i) (A) the arranging andother services regarding this Agreement provided by the Administrative Agentand the Arranger are arm’s-length commercial transactions between the Borrowersand their respective Affiliates, on the one hand, and the Administrative Agentand the Arranger, on the other hand, (B) the Borrowers have consultedtheir own legal, accounting, regulatory and tax advisors to the extent theyhave deemed appropriate, and (C) the Borrowers are capable of evaluating,and understand and accept, the terms, risks and conditions of the transactionscontemplated hereby and by the other Loan Documents; (ii) (A) theAdministrative Agent and the Arranger each is and has been acting solely as aprincipal 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 fiduciaryfor the Borrowers or any of their respective Affiliates, or any other Personand (B) neither the Administrative Agent nor the Arranger has anyobligation to the Borrowers or any of their respective Affiliates with respectto the transactions contemplated hereby except those obligations expressly setforth herein and in the other Loan Documents; and (iii) the AdministrativeAgent and the Arranger and their respective Affiliates may be engaged in abroad range of transactions that involve interests that differ from those ofthe Borrowers and their respective Affiliates, and neither the AdministrativeAgent nor the Arranger has any obligation to disclose any of such interests tothe Borrowers or any of their respective Affiliates.  To the fullest extent permitted by law,****the Borrowers hereby waive and release any claims that theymay have against the Administrative Agent and the Arranger with respect to anybreach or alleged breach of agency or fiduciary duty in connection with any aspectof any transaction contemplated hereby.

 

10.17       USA PATRIOT Act Notice.  Each Lender that is subject to the Act (ashereinafter defined) and the Administrative Agent (for itself and not on behalfof any Lender) hereby notifies the Borrowers that pursuant to the requirementsof 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 recordinformation that identifies each Loan Party, which information includes thename and address of each Loan Party and other information that will allow suchLender or the Administrative Agent, as applicable, to identify each Loan Partyin accordance with the Act.

 

10.18       ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTSREPRESENT THE FINAL AGREEMENT AMONG THE PARTIES 

 

114

----

 

AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORALAGREEMENTS OF THE PARTIES.  THERE ARE NOUNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

115

----

 

***IN WITNESS WHEREOF****,*the parties hereto have caused this Agreement to beduly executed as of the date first above written.

 
| ** ** | **AMYLIN PHARMACEUTICALS, INC.** |
|------------|----------------------------------|
| ** ** | ** **                       |
|       | By:                              |                /s/  Mark G. Foletta |
|       | Name:                            |           Mark  G. Foletta |
|       | Title:                           |    Senior Vice President, Finance,  and |
|       |                             |  Chief Financial Officer |
|       |                             |
| ** ** | **AMYLIN OHIO LLC**              |
| ** ** | ** **                       |
|       | By:                              | Amylin Pharmaceuticals, Inc., |
|       |                             | Sole Manager of Amylin Ohio LLC |
|       |                             |
|       | By:                              |                /s/  Mark G. Foletta |
|       | Name:                            |           Mark  G. Foletta |
|       | Title:                           |    Senior Vice President, Finance,  and |
|       |                             |  Chief Financial Officer |
|       |                             |
| ** ** | **AMYLIN INVESTMENTS LLC**       |
| ** ** | ** **                       |
|       | By:                              | Amylin Pharmaceuticals, Inc., |
|       |                             | Sole Manager of Amylin Investments LLC |
|       |                             |
|       | By:                              |                /s/  Mark G. Foletta |
|       | Name:                            |           Mark  G. Foletta |
|       | Title:                           |    Senior Vice President, Finance,  and |
|       |                             |  Chief Financial Officer |
|            |                                  |  |  |  |  |  |  |  |  |  |  |

 

----

 
| ** ** | **BANK OF AMERICA, N.A.**, as |
|------------|-------------------------------|
| ** ** | Administrative Agent          |
| ** ** |                          |
|       | By:                           |               /s/  Brenda H. Little |
|       | Name:                         |          Brenda  H. Little |
|       | Title:                        |            Assistant  Vice President |
|            |                               |  |  |  |

 

----

 
| ** ** | **BANK OF AMERICA, N.A.**, as Revolving Credit |
|------------|------------------------------------------------|
| ** ** | Lender and L/C Issuer                          |
| ** ** |                                           |
|       | By:                                            |               /s/  Karin S. Barnes |
|       | Name:                                          |          Karin  S. Barnes |
|       | Title:                                         |            Senior  Vice President |
|            |                                                |  |  |  |

 

----

 
| ** ** | **BANC OF AMERICA LEASING & CAPITAL,** |
|------------|-------------------------------------------------|
| ** ** | **LLC**, as a Term Lender                       |
| ** ** |                                            |
|       | By:                                             |               /s/  Annemarie L. Warren |
|       | Name:                                           |          Annemarie  L. Warren |
|       | Title:                                          |            Vice  President |
|            |                                                 |  |  |  |

 

----

 
| ** ** | **SILICON VALLEY BANK**, as a Term Lender |
|------------|-------------------------------------------|
| ** ** |                                      |
|       | By:                                       |        /s/ Any  Pelletier |
|       | Name:                                     |   Andy Pelletier |
|       | Title:                                    |   Senior Relationship Manager |
|            |                                           |  |  |  |

 

----

 
| ** ** | **RBS ASSET FINANCE, INC.**, as a Term Lender |
|------------|-----------------------------------------------|
| ** ** |                                          |
|       | By:                                           |     /s/ Marybeth Corrente |
|       | Name:                                         |  Marybeth Corrente |
|       | Title:                                        |  Vice President |
|            |                                               |  |  |  |

 

----

 
| ** ** | **COMERICA BANK**, as a Term Lender |
|------------|-------------------------------------|
| ** ** |                                |
|       | By:                                 |     /s/ Greg Park |
|       | Name:                               |  Greg Park |
|       | Title:                              |  Vice President |
|            |                                     |  |  |  |

 

----

 
| ** ** | **BMO CAPITAL MARKETS FINANCING,** |
|------------|------------------------------------|
| ** ** | **INC.**, as a Term Lender         |
| ** ** |                               |
|       | By:                                |     /s/ Jay Sepanski |
|       | Name:                              |  Jay Sepanski |
|       | Title:                             |  Director |
|            |                                    |  |  |  |

 

----

 
| ** ** | **FIRST BANK**, as a Term Lender |
|------------|----------------------------------|
| ** ** | ** **                       |
|       | By:                              |     /s/ Robert A. Jondall |
|       | Name:                            |  Robert A. Jondall |
|       | Title:                           |  Senior Vice President |
|            |                                  |  |  |  |

 

----

 
| ** ** | **UNION BANK OF CALIFORNIA, N.A.**, as a |
|------------|------------------------------------------|
| ** ** | Term Lender                              |
| ** ** |                                     |
|       | By:                                      |             /s/  L. D. Hart |
|       | Name:                                    |        L. D. Hart |
|       | Title:                                   |          Vice  President |
|            |                                          |  |  |  |

 

----

***EXHIBIT******A***

 

**FORM OF LOAN NOTICE**

 

Date:                        ,            ,

 

To:         Bank of America, N.A., asAdministrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of December [      ],2007 (the “Agreement”; the terms defined therein being used herein astherein defined), among Amylin Pharmaceuticals, Inc., a Delawarecorporation (the “Company”),  andeach of its wholly-owned domestic subsidiaries party thereto (collectively,with the Company, the “Borrowers”), each lender from time to time partythereto and Bank of America, N.A., as Administrative Agent, Collateral Agentand L/C Issuer.

 

The undersigned hereby requests on behalf of the Borrowers (selectone):

 

o  A Borrowing of Loans                                                       o  A conversion or continuation of Loans

 

1.             On                                                               (a Business Day).

 

2.                                       Inthe amount of $                          .

 

3.                                       Classof Loan requested:

 

[Revolving Loan, TermLoan]

 

4.                                       Comprisedof                                                   .

 

[Type of Loanrequested:  Base Rate Loan or EurocurrencyRate Loan]

 

5.                                       ForEurocurrency Rate Loans:  with anInterest Period of                     months.

 

The Borrowing requested herein complies with the proviso to the firstsentence of Section 2.01(b) of the Agreement.

 

**AMYLINPHARMACEUTICALS, INC.**

 

 
|   | By:    |   |
|--------|--------|--------|
|   | Name:  |   |
|   | Title: |   |
|        |        |        |  |  |

 

A-1

----

***EXHIBIT B***

 

**FORM OF NOTE FORTERM LOANS**

 

FOR VALUE RECEIVED, the undersigned (the “Borrowers”), hereby jointlyand severally promise to pay to [                                          ]or its registered assigns permitted by the Agreement (as hereinafter defined)(the “Lender”), in accordance with the provisions of the Agreement, theprincipal amount of                         DOLLARS ($                    ),such principal amount being equal to the amount of a Term Loan made by theLender to the Borrowers under that certain Credit Agreement, dated as of December [    ],2007 (as amended, restated, extended, supplemented or otherwise modified inwriting from time to time, the “Agreement”; the terms defined thereinbeing used herein as therein defined), among the Borrowers, the Lender, theother lenders from time to time party thereto and Bank of America, N.A., as AdministrativeAgent and L/C Issuer.

 

The Borrowers jointly and severally promise to pay interest on theunpaid principal amount of each Term Loan from the date of such Term Loan untilsuch principal amount is paid in full, at such interest rates and at such timesas provided in the Agreement.  Allpayments of principal and interest shall be made to the Administrative Agentfor the account of the Lender in Dollars in immediately available funds at theAdministrative Agent’s Office.  If anyamount is not paid in full when due hereunder, such unpaid amount shall bearinterest, to be paid upon demand, from the due date thereof until the date ofactual payment (and before as well as after judgment) computed at the per annumrate set forth in the Agreement.

 

This Term Note is one of the Term Notes referred to in the Agreement,is entitled to the benefits thereof and may be prepaid in whole or in partsubject to the terms and conditions provided therein.  This Term Note is also secured by theCollateral.  If one or more of the Eventsof Default specified in the Agreement occurs and is continuing, all amountsthen remaining unpaid on this Term Note shall become under certaincircumstances, or may be declared to be, immediately due and payable all asprovided in the Agreement.  Term Loansmade by the Lender shall be evidenced by one or more loan accounts or recordsmaintained by the Lender in the ordinary course of business. The Lender mayalso attach schedules to this Term Note and endorse thereon the date, amountand maturity of its Term Loans and payments with respect thereto.

 

The Borrowers, for themselves and their respective successors andassigns, hereby waive diligence, presentment, protest and demand and notice ofprotest, demand, dishonor and non-payment of this Term Note.

 

 

[Signature Page Follows]

 

B-1

----

 

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

 
|   | **AMYLIN PHARMACEUTICALS, INC.**, |
|--------|-----------------------------------|
|   | a Delaware corporation            |
|   |                              |
|   | By:                               |   |
|   | Name:                             |   |
|   | Title:                            |   |
|        |                                   |  |  |  |

 
|   |                                 |
|--------|--------------------------------------|
|   | **AMYLIN OHIO LLC**,                 |
|   | a Delaware limited liability company |
|   |                                 |
|   | By:                                  | Amylin Pharmaceuticals, Inc., its sole   manager |
|   |                                 |
|   | By:                                  |   |
|   | Name:                                |   |
|   | Title:                               |   |
|        |                                      |  |  |  |

 
|   |                                 |
|--------|--------------------------------------|
|   | **AMYLIN INVESTMENTS LLC**,          |
|   | a Delaware limited liability company |
|   |                                 |
|   | By:                                  | Amylin Pharmaceuticals, Inc., its sole   manager |
|   |                                 |
|   | By:                                  |   |
|   | Name:                                |   |
|   | Title:                               |   |
|        |                                      |  |  |  |

 

 

Term NoteSignature Page

 

----

** **

**TERM LOANS AND PAYMENTSWITH RESPECT THERETO**

** **
| **Date**   | ** ** | **Type of  Term Loan  Made** | ** ** | **Amount of Term Loan Made** | ** ** | **End of  Interest  Period** | ** ** | **Amount of  Principal or  Interest  Paid This  Date** | ** ** | **Outstanding  Principal  Balance  This Date** | ** ** | **Notation  Made By** | ** ** |
|------------|------------|----------------------------------------|------------|----------------------------------------|------------|-----------------------------------|------------|-----------------------------------------------------------------------|------------|-----------------------------------------------------|------------|----------------------------|------------|
| ** ** | ** ** | ** **                             | ** ** | ** **                             | ** ** | ** **                        | ** ** | ** **                                                            | ** ** | ** **                                          | ** ** | ** **                 | ** ** |
| ** ** | ** ** | ** **                             | ** ** | ** **                             | ** ** | ** **                        | ** ** | ** **                                                            | ** ** | ** **                                          | ** ** | ** **                 | ** ** |
| ** ** | ** ** | ** **                             | ** ** | ** **                             | ** ** | ** **                        | ** ** | ** **                                                            | ** ** | ** **                                          | ** ** | ** **                 | ** ** |

 

----

***EXHIBITC***

 

**FORM OF NOTE FORREVOLVING LOANS**

** **

FOR VALUE RECEIVED, the undersigned (the “Borrowers”), hereby jointlyand severally promise to pay to [                                          ]or its registered assigns permitted by the Agreement (as hereinafter defined)(the “Lender”), in accordance with the provisions of the Agreement, theprincipal amount of each Revolving Credit Loan from time to time made by theLender to the Borrowers under that certain Credit Agreement, dated as of December [    ],2007 (as amended, restated, extended, supplemented or otherwise modified inwriting from time to time, the “Agreement”; the terms defined thereinbeing used herein as therein defined), among the Borrowers, the Lender, theother lenders from time to time party thereto and Bank of America, N.A., asAdministrative Agent and L/C Issuer.

 

The Borrowers jointly and severally promise to pay interest on theunpaid principal amount of each Revolving Credit Loan from the date of suchRevolving Credit Loan until such principal amount is paid in full, at suchinterest rates and at such times as provided in the Agreement.  All payments of principal and interest shallbe made to the Administrative Agent for the account of the Lender in Dollars inimmediately available funds at the Administrative Agent’s Office.  If any amount is not paid in full when duehereunder, such unpaid amount shall bear interest, to be paid upon demand, fromthe due date thereof until the date of actual payment (and before as well asafter judgment) computed at the per annum rate set forth in the Agreement.

 

This Revolving Credit Note is one of the Revolving Credit Notesreferred to in the Agreement, is entitled to the benefits thereof and may beprepaid in whole or in part subject to the terms and conditions providedtherein.  This Revolving Credit Note isalso secured by the Collateral.  If oneor more of the Events of Default specified in the Agreement occurs and iscontinuing, all amounts then remaining unpaid on this Revolving Credit Noteshall become under certain circumstances, or may be declared to be, immediatelydue and payable all as provided in the Agreement.  Revolving Credit Loans made by the Lendershall be evidenced by one or more loan accounts or records maintained by theLender in the ordinary course of business. The Lender may also attach schedulesto this Note and endorse thereon the date, amount and maturity of its RevolvingCredit Loans and payments with respect thereto.

 

The Borrowers, for themselves and their respective successors andassigns, hereby waive diligence, presentment, protest and demand and notice ofprotest, demand, dishonor and non-payment of this Revolving Credit Note.

 

 

[Signature Page Follows]

 

C-1

----

 

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

 
|   | **AMYLIN PHARMACEUTICALS, INC.**, |
|--------|-----------------------------------|
|   | a Delaware corporation            |
|   |                              |
|   | By:                               |   |
|   | Name:                             |   |
|   | Title:                            |   |
|        |                                   |  |  |  |

 
|   |                                 |
|--------|--------------------------------------|
|   | **AMYLIN OHIO LLC**,                 |
|   | a Delaware limited liability company |
|   |                                 |
|   | By:                                  | Amylin Pharmaceuticals, Inc., its sole   manager |
|   |                                 |
|   | By:                                  |   |
|   | Name:                                |   |
|   | Title:                               |   |
|        |                                      |  |  |  |

 
|   |                                 |
|--------|--------------------------------------|
|   | **AMYLIN INVESTMENTS LLC**,          |
|   | a Delaware limited liability company |
|   |                                 |
|   | By:                                  | Amylin Pharmaceuticals, Inc., its sole   manager |
|   |                                 |
|   | By:                                  |   |
|   | Name:                                |   |
|   | Title:                               |   |
|        |                                      |  |  |  |

 

Revolving Credit NoteSignature Page

 

----

** **

**REVOLVING LOANS ANDPAYMENTS WITH RESPECT THERETO**

** **
| **Date**   | ** ** | **Type of  Revolving  Loan Made** | ** ** | **Amount of  Revolving  Loan Made** | ** ** | **End of  Interest  Period** | ** ** | **Amount of  Principal or  Interest Paid  This Date** | ** ** | **Outstanding  Principal  Balance This  Date** | ** ** | **Notation  Made By** | ** ** |
|------------|------------|---------------------------------------------|------------|-----------------------------------------------|------------|-----------------------------------|------------|---------------------------------------------------------------------------|------------|-----------------------------------------------------|------------|----------------------------|------------|
| ** ** | ** ** | ** **                                  | ** ** | ** **                                    | ** ** | ** **                        | ** ** | ** **                                                                | ** ** | ** **                                          | ** ** | ** **                 | ** ** |
| ** ** | ** ** | ** **                                  | ** ** | ** **                                    | ** ** | ** **                        | ** ** | ** **                                                                | ** ** | ** **                                          | ** ** | ** **                 | ** ** |
| ** ** | ** ** | ** **                                  | ** ** | ** **                                    | ** ** | ** **                        | ** ** | ** **                                                                | ** ** | ** **                                          | ** ** | ** **                 | ** ** |

 

----

***EXHIBIT D***

 

**FORM OFCOMPLIANCE CERTIFICATE**

 

Financial Statement Date:                       ,          

 

To:          Bank of America,N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement,dated as of December [    ], 2007 (as amended,restated, extended, supplemented or otherwise modified in writing from time totime, the “Agreement;”.the terms defined therein being used herein as therein defined), among AmylinPharmaceuticals, Inc., a Delaware corporation (the “Company”),each of the Company’s wholly owned domestic subsidiaries party thereto (collectively,with the Company, the “Borrowers”), the Lenders from time to time partythereto, and Bank of America, N.A., as Administrative Agent, Collateral Agentand L/C Issuer.

 

The undersigned Responsible Officer hereby certifiesas of the date hereof that he/she is the                               of the Company, and that, as such, he/she is authorized to execute and deliverthis Certificate to the Administrative Agent on the behalf of the Borrowers,and that:

 

*[Usefollowing paragraph 1 for fiscal year-end financial statements]*

 

1.             TheCompany has delivered the year-end audited financial statements required by Section 6.01(a) ofthe Agreement for the fiscal year of the Company and its Subsidiaries ended asof the above date, together with the report and opinion of an independentcertified public accountant required by such section.

 

*[Usefollowing paragraph 1 for fiscal quarter-end financial statements]*

 

1.             TheCompany has delivered the unaudited financial statements required by Section 6.01(b) ofthe Agreement for the fiscal quarter of the Company and its Subsidiaries endedas of the above date.  Such consolidatedfinancial statements fairly present the financial condition, results ofoperations and cash flows of the Company and its Subsidiaries in accordancewith GAAP as at such date and for such period, subject only to normal year-endaudit adjustments and the absence of footnotes.

 

2.             Theundersigned has reviewed and is familiar with the terms of the Agreement andhas made, or has caused to be made under his/her supervision, a detailed reviewof the transactions and condition (financial or otherwise) of the Borrowers duringthe accounting period covered by such financial statements.

 

3.             Areview of the activities of the Borrowers during such fiscal period has beenmade under the supervision of the undersigned with a view to 

 

D-1

----

 

determining whether during such fiscal period the Borrowers performedand observed all of their  Obligationsunder the Loan Documents, and

 

*[select one:]*

 

[to the best knowledge of the undersigned, during suchfiscal period each Borrower performed and observed each covenant and conditionof the Loan Documents applicable to it, and no Covenant Triggering Event,Activation Event or Default has occurred and is continuing.]

 

—*or—*

 

[to the best knowledge of the undersigned, thefollowing covenants or conditions have not been performed or observed and thefollowing is a list of each such [Covenant Triggering Event] [ActivationEvent]  [Default] and its nature andstatus:]

 

4.             Attachedas an exhibit hereto is a true and correct listing of Unrestricted CashEquivalents and calculation of Unrestricted Cash as of [DATE](1).

 

5.             [*Use for certificate delivered in connection with fiscal year-end financial statements*] As of the date hereof, the Company is, individually and together with itsSubsidiaries on a consolidated basis, Solvent.

 

 6.            [*Use for certificatedelivered in connection withfiscal year-end financial statements* ] Attached as an exhibit heretois the insurance summary required under Section 6.02(e) of theAgreement.

 

7.             [*Use for certificate delivered in connection with fiscal year-end financial statements*]Attached as an exhibit hereto are the Schedule Supplements required under Section 6.02(j) ofthe Agreement.

 

[Signature Page Follows]

 

 

----

(1) No more than five (5) Business Days before the date ofthis certificate.

 

D-2

----

 

***INWITNESS WHEREOF****,* theundersigned has executed this Certificate on behalf of all the Borrowers as of                                         ,                            .

 
|   | **AMYLIN PHARMACEUTICALS, INC.** |
|--------|----------------------------------|
|   |                             |
|   | By:                              |   |
|   | Name:                            |   |
|   | Title:                           |   |
|        |                                  |  |  |  |

 

 

Signature PageCompliance Certificate

 

----

***EXHIBITE***

 

**ASSIGNMENT AND ASSUMPTION**

 

This Assignment and Assumption (this “Assignment and Assumption”)is dated as of the Effective Date set forth below and is entered into by andbetween [the][each](1) Assignor identified in item 1 below ([the][each,an] “Assignor”) and [the][each](2) Assignee identified in item 2below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [theAssignors][the Assignees](3) hereunder are several and not joint.](4) Capitalized terms used but not defined herein shall have the meanings given tothem in the Credit Agreement identified below (the “Credit Agreement”),receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forthin Annex 1 attached hereto are hereby agreed to and incorporated herein byreference and made a part of this Assignment and Assumption as if set forthherein in full.

 

For an agreed consideration, [the][each] Assignor hereby irrevocablysells and assigns to [the Assignee][the respective Assignees], and [the][each]Assignee hereby irrevocably purchases and assumes from [the Assignor][therespective Assignors], subject to and in accordance with the Standard Terms andConditions and the Credit Agreement, as of the Effective Date inserted by theAdministrative Agent as contemplated below (i) all of [the Assignor’s][therespective Assignors’] rights and obligations in [its capacity as a Lender][theirrespective capacities as Lenders] under the Credit Agreement and any otherdocuments or instruments delivered pursuant thereto to the extent related tothe amount and percentage interest identified below of all of such outstandingrights and obligations of [the Assignor][the respective Assignors] under therespective facilities identified below (including, without limitation, theLetters of Credit included in such facilities and the Collateral securing suchfacilities) and (ii) to the extent permitted to be assigned underapplicable law, all claims, suits, causes of action and any other right of [theAssignor (in its capacity as a Lender)][the respective Assignors (in theirrespective capacities as Lenders)] against any Person, whether known orunknown, arising under or in connection with the Credit Agreement, any otherdocuments or instruments delivered pursuant thereto or the loan transactionsgoverned thereby or in any way based on or related to any of the foregoing,including, but not limited to, contract claims, tort claims, malpracticeclaims, statutory claims and all other claims at law or in equity related tothe rights and obligations sold and assigned pursuant to clause (i) above(the rights and obligations sold and assigned by [the][any] Assignor to[the][any] Assignee pursuant to clauses (i) and (ii) above beingreferred to herein collectively as [the][an] “Assigned Interest”).  Each such sale and assignment is withoutrecourse to [the][any] Assignor and, except as expressly provided in thisAssignment and Assumption, without representation or warranty by [the][any]Assignor.

 
| 1. | Assignor[s]: |   |   |
|----|--------------|--------|--------|

 

----

(1) For bracketed language here and elsewhere inthis form relating to the Assignor(s), if the assignment is from a singleAssignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the secondbracketed language.

(2) For bracketed language here and elsewhere inthis form relating to the Assignee(s), if the assignment is to a singleAssignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketedlanguage.

(3) Select as appropriate.

(4) Include bracketed language if there areeither multiple Assignors or multiple Assignees.

 

E-1

----

 

 

2.             Assignee[s]:                                         [foreach Assignee, indicate [Affiliate][Approved Fund] of [*identifyLender*](5)]

 

3.             Borrowers:       Amylin Pharmaceuticals, Inc., aDelaware corporation, and certain of its wholly owned domestic subsidiaries

 

4.             Administrative Agent:  Bank of America, N.A., as the administrativeagent and collateral agent under the

 

Credit Agreement

 

5.             CreditAgreement:            The CreditAgreement, dated as of December [    ], 2007, among AmylinPharmaceuticals, Inc., a Delaware corporation, each of its wholly owneddomestic subsidiaries party thereto (collectively, the “Borrowers”), thelenders from time to time party thereto, Bank of America, N.A., asAdministrative Agent, Collateral Agent and L/C Issuer.

 

6.             Assigned Interest:

 

 
| **Assignor[s](6)** | ** ** | **Assignee[s](7)** | ** ** | **Facility  Assigned(8)** | ** ** | **Aggregate  Amount of  Commitment/  Loans  for all Lenders(9)** | ** ** | **Amount  of  Commitment  / Loans  Assigned** | ** ** | **Percentage  Assigned of  Commitment  /  Loans(10)** | ** ** | **CUSIP  Number** | ** ** |
|--------------------|------------|--------------------|------------|---------------------------|------------|---------------------------------------------------------------------------------|------------|-----------------------------------------------|------------|------------------------------------------------------------|------------|-------------------|------------|
|               |       |               |       |                      |       |                                                                            |       |                                          |       |                                                       |       |              |       |
|               |       |               |       |                      |       | $                                                                               |       |                                          | $          |                                                       |       |              | %          |   |   |
|               |       |               |       |                      |       | $                                                                               |       |                                          | $          |                                                       |       |              | %          |   |   |
|               |       |               |       |                      |       | $                                                                               |       |                                          | $          |                                                       |       |              | %          |   |   |

 

----

(5) Select asapplicable.

(6) List eachAssignor, as appropriate.

(7) List eachAssignee, as appropriate.

(8) Fill inthe appropriate terminology for the types of facilities under the CreditAgreement that are being assigned under this Assignment (e.g. “Revolving CreditCommitment”, “Term Loan Commitment”, etc.).

(9) Amountsin this column and in the column immediately to the right to be adjusted by thecounterparties to take into account any payments or prepayments made betweenthe Trade Date and the Effective Date.

(10) Setforth, to at least 9 decimals, as a percentage of the Commitment/Loans of allLenders thereunder.

 

E-2

----

 

[7.            Trade Date:                               ](11)

 

Effective Date:                                     ,20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICHSHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTERTHEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreedto:

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

 

 

----

(11) To be completed if the Assignor and theAssignee intend that the minimum assignment amount is to be determined as ofthe Trade Date.

 

E-3

----

 

[Consented to and](12)Accepted:

 
| BANK OF AMERICA, N.A.,  as                              |
|---------------------------------------------------------|
| Administrative Agent,  L/C Issuer and Swing Line Lender |
| By:                                                     |   |   |
|                                                    | Name: |
|                                                    | Title: |
|                                                    |
| [Consented to:](13)                                     |
|                                                    |
| AMYLIN PHARMACEUTICALS,  INC.                           |
| By:                                                     |   |   |
|                                                    | Name: |
|                                                    | Title: |

 

 

----

(12)To be added only if the consent of the Administrative Agent is required by theterms of the Credit Agreement.

(13) To be added to theextent the consent of the Borrowers and/or other parties (e.g. L/C Issuer) isrequired by the terms of the Credit Agreement.

 

E-4

----

 

***ANNEX 1 TO ASSIGNMENT AND ASSUMPTION***

 

AMYLIN CREDIT AGREEMENT

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT ANDASSUMPTION

 

1.             Representationsand Warranties.

 

1.1.          Assignor.  [The][Each] Assignor (a) represents andwarrants that (i) it is the legal and beneficial owner of [the][therelevant] Assigned Interest, (ii) [the][such] Assigned Interest is freeand clear of any lien, encumbrance or other adverse claim and (iii) it hasfull power and authority, and has taken all action necessary, to execute anddeliver this Assignment and Assumption and to consummate the transactionscontemplated hereby, and (b) assumes no responsibility with respect to (i) anystatements, warranties or representations made in or in connection with theCredit Agreement or any other Loan Document, (ii) the execution, legality,validity, enforceability, genuineness, sufficiency or value of the LoanDocuments or any Collateral thereunder, (iii) the financial condition ofthe Borrowers, any of the Subsidiaries or Affiliates or any other Personobligated in respect of any Loan Document or (iv) the performance orobservance by the Borrowers, any of the Subsidiaries or Affiliates or any otherPerson of any of their respective obligations under any Loan Document.

 

1.2.          Assignee.  [The][Each] Assignee (a) represents andwarrants that (i) it has full power and authority, and has taken allaction necessary, to execute and deliver this Assignment and Assumption and toconsummate the transactions contemplated hereby and to become a Lender underthe Credit Agreement, (ii) it meets all the requirements to be an assigneeunder Section 10.06(b)(iii), (v) and (vi) ofthe Credit Agreement (subject to such consents, if any, as may be requiredunder Section 10.06(b)(iii) of the Credit Agreement), (iii) fromand after the Effective Date, it shall be bound by the provisions of the CreditAgreement as a Lender thereunder and, to the extent of [the][the relevant]Assigned Interest, shall have the obligations of a Lender thereunder, (iv) itis sophisticated with respect to decisions to acquire assets of the typerepresented by [the][such] Assigned Interest and either it, or the Personexercising discretion in making its decision to acquire [the][such] AssignedInterest, is experienced in acquiring assets of such type, (v) it hasreceived a copy of the Credit Agreement, and has received or has been accordedthe opportunity to receive copies of the most recent financial statementsdelivered pursuant to Section 6.01 thereof, as applicable, and such otherdocuments and information as it deems appropriate to make its own creditanalysis and decision to enter into this Assignment and Assumption and topurchase [the][such] Assigned Interest, (vi) it has, independently andwithout reliance upon the Administrative Agent or any other Lender and based onsuch documents and information as it has deemed appropriate, made its owncredit analysis and decision to enter into this Assignment and Assumption andto purchase [the][such] Assigned Interest, and (vii) if it is a ForeignLender, attached hereto is any documentation required to be delivered by itpursuant to the terms of the Credit Agreement, duly completed and executed by [the][such]Assignee; and (b) agrees that (i) it will, independently and withoutreliance upon the Administrative Agent, [the][any] Assignor or any otherLender, and based on such documents and information as it shall deemappropriate at the time, continue to make its own credit decisions in taking ornot 

 

E-5

----

 

taking action under the Loan Documents, and (ii) itwill perform in accordance with their terms all of the obligations which by theterms of the Loan Documents are required to be performed by it as a Lender.

 

2.             Payments.  From and after the Effective Date, theAdministrative Agent shall make all payments in respect of [the][each] AssignedInterest (including payments of principal, interest, fees and other amounts) to[the][the relevant] Assignor for amounts which have accrued to but excludingthe Effective Date and to [the][the relevant] Assignee for amounts which haveaccrued from and after the Effective Date.

 

3.             GeneralProvisions.  This Assignment andAssumption shall be binding upon, and inure to the benefit of, the partieshereto and their respective successors and assigns.  This Assignment and Assumption may beexecuted in any number of counterparts, which together shall constitute oneinstrument.  Delivery of an executedcounterpart of a signature page of this Assignment and Assumption bytelecopy shall be effective as delivery of a manually executed counterpart ofthis Assignment and Assumption.  ThisAssignment and Assumption shall be governed by, and construed in accordancewith, the law of the State of New York.

 

E-6

----

**EXHIBIT F**

 

 

 

**PLEDGE ANDSECURITY AGREEMENT**

 

Dated as of December 21, 2007,

 

among

 

 

**AMYLIN PHARMACEUTICALS, INC.**,and**CERTAIN OF ITS WHOLLY OWNED DOMESTIC SUBSIDIARIES**party hereto from time to time,as Grantors,

 

and

 

**BANK OF AMERICA, N.A.**,as Administrative Agent

 

 

 

----

 

**Table of Contents**

 
|        |   |                                                                          | **Page** |
|-------------|--------|-------------------------------------------------------------------------------|----------|
|        |   |                                                                          |     |
| ARTICLE I   |   | DEFINITIONS                                                                   | 1        |
|        |   |                                                                          |     |
| 1.01        |   | Credit Agreement Definitions and Constructions                                | 1        |
|        |   |                                                                          |     |
| 1.02        |   | UCC Definitions                                                               | 1        |
|        |   |                                                                          |     |
| 1.03        |   | Other Defined Terms                                                           | 1        |
|        |   |                                                                          |     |
| ARTICLE II  |   | PLEDGED COLLATERAL                                                            | 7        |
|        |   |                                                                          |     |
| 2.01        |   | Pledged Collateral                                                            | 7        |
|        |   |                                                                          |     |
| 2.02        |   | Delivery of the Pledged Collateral                                            | 8        |
|        |   |                                                                          |     |
| 2.03        |   | Agreements of Issuers                                                         | 8        |
|        |   |                                                                          |     |
| 2.04        |   | Representations, Warranties and Covenants with respect to Pledged  Collateral | 9        |
|        |   |                                                                          |     |
| 2.05        |   | Voting Rights; Dividends and Interest, etc                                    | 10       |
|        |   |                                                                          |     |
| 2.06        |   | Registration in Nominee Name; Denominations                                   | 11       |
|        |   |                                                                          |     |
| ARTICLE III |   | SECURITY INTERESTS IN PERSONAL PROPERTY                                       | 12       |
|        |   |                                                                          |     |
| 3.01        |   | Security Interest                                                             | 12       |
|        |   |                                                                          |     |
| 3.02        |   | Filing Authorization                                                          | 14       |
|        |   |                                                                          |     |
| 3.03        |   | Continuing Security Interest; Transfer of Credit Extensions                   | 14       |
|        |   |                                                                          |     |
| 3.04        |   | Grantors Remain Liable                                                        | 14       |
|        |   |                                                                          |     |
| 3.05        |   | Security Interest Absolute                                                    | 15       |
|        |   |                                                                          |     |
| 3.06        |   | Waiver of Subrogation                                                         | 15       |
|        |   |                                                                          |     |
| 3.07        |   | Release; Termination                                                          | 16       |
|        |   |                                                                          |     |
| ARTICLE IV  |   | COVENANTS; REPRESENTATION AND WARRANTIES                                      | 16       |
|        |   |                                                                          |     |
| 4.01        |   | Perfection of Security Interest                                               | 16       |
|        |   |                                                                          |     |
| 4.02        |   | Representations and Warranties                                                | 19       |
|        |   |                                                                          |     |
| 4.03        |   | Covenants                                                                     | 19       |
|        |   |                                                                          |     |
| ARTICLE V   |   | REMEDIES                                                                      | 21       |
|        |   |                                                                          |     |
| 5.01        |   | Remedies upon Default                                                         | 21       |
|        |   |                                                                          |     |
| 5.02        |   | Application of Proceeds                                                       | 23       |
|        |   |                                                                          |     |
| 5.03        |   | Securities Act, etc                                                           | 23       |
|        |   |                                                                          |     |
| ARTICLE VI  |   | MISCELLANEOUS                                                                 | 24       |
|        |   |                                                                          |     |
| 6.01        |   | Notices                                                                       | 24       |
|        |   |                                                                          |     |
| 6.02        |   | Amendments, etc.; Additional Grantors; Successors and Assigns                 | 24       |
|        |   |                                                                          |     |
| 6.03        |   | Survival of Agreement                                                         | 24       |
|        |   |                                                                          |     |
| 6.04        |   | Administrative Agent Appointed Attorney-in-Fact                               | 25       |
|        |   |                                                                          |     |
| 6.05        |   | Waivers                                                                       | 25       |
|        |   |                                                                          |     |
| 6.06        |   | Severability                                                                  | 25       |
|        |   |                                                                          |     |
| 6.07        |   | Counterparts, Integration, Effectiveness                                      | 26       |

 

i

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**Table of Contents**

(continued)

 
|   |   |                             | **Page** |
|--------|--------|----------------------------------|----------|
|   |   |                             |     |
| 6.08   |   | Headings                         | 26       |
|   |   |                             |     |
| 6.09   |   | GOVERNING LAW; JURISDICTION; ETC | 26       |
|   |   |                             |     |
| 6.10   |   | WAIVER OF JURY TRIAL             | 27       |
|   |   |                             |     |
| 6.11   |   | ENTIRE AGREEMENT                 | 27       |
|   |   |                             |     |
| 6.12   |   | Mortgages                        | 27       |

 
| Exhibits       |   |                                |   |
|----------------|--------|-------------------------------------|--------|
|           |   |                                |   |
| Exhibit A |   | Form of Perfection Certificate |   |

 

ii

----

 

**PLEDGE ANDSECURITY AGREEMENT**

 

This **PLEDGE AND SECURITY AGREEMENT** dated as of December 21,2007 (this “Agreement”), among **AMYLIN PHARMACEUTICALS,INC.**, a Delaware corporation (the “Company”),  each of the Company’s wholly owned domesticsubsidiaries identified on the signature pages hereof (collectively, withthe Company, the “Borrowers”) and each Subsidiary of the Company thathereafter becomes a party hereto from time to time pursuant to Section 6.02(all such Subsidiaries, together with the Borrowers, hereinafter collectivelyreferred to as the “Grantors”, and each individually as a “Grantor”)and **BANK OF AMERICA, N.A.**, asadministrative and collateral agent (in such capacity, the “AdministrativeAgent”) for the Secured Parties.

 

**RECITALS**

 

**WHEREAS**,pursuant to the Credit Agreement, dated as of the date hereof (as amended,restated or otherwise modified from time to time, the “Credit Agreement”),among the Grantors from time to time party thereto, the Lenders from time totime party thereto, and the Administrative Agent, and the other Loan Documentsreferred to therein, the Lenders, the L/C Issuer and the other Secured Partieshave agreed to make certain credit extensions to or for the benefit of theBorrowers;

 

**WHEREAS**,the obligations of the Lenders to make such Credit Extensions under the CreditAgreement are conditioned upon, among other things, the execution and deliveryof this Agreement by each Grantor; and

 

**WHEREAS**,to obtain such benefits, each Grantor is willing to grant a Lien on theCollateral of such Grantor in favor of the Administrative Agent for the benefitof the Secured Parties as collateral security for its Obligations ashereinafter provided;

 

**NOWTHEREFORE**, for good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, each Grantor herebyagrees, for the benefit of each Secured Party, as follows:

 

**ARTICLEI**

**DEFINITIONS**

** **

**1.01****                        CreditAgreement Definitions and Constructions**. (a)  Capitalized terms used in this Agreement and not otherwisedefined herein have the meanings specified in Section 1.01 of the CreditAgreement.

 

(b)                                 Therules of construction specified in Sections 1.02 through 1.06 of theCredit Agreement also apply to this Agreement.

 

**1.02****                        UCCDefinitions**.  All terms defined inthe UCC and not defined in this Agreement have the meanings specified therein.

 

**1.03****                        OtherDefined Terms**.  As used in thisAgreement, the following terms have the meanings specified below:

 

“Account”means a right to payment of a monetary obligation, whether or not earned byperformance (and shall include invoices, contracts, rights, accountsreceivable, notes, refunds, indemnities, interest, late charges, fees,undertakings, and all other obligations and amounts owing to any Grantor fromany Person):  (a) for property thathas been or is to be sold, leased, licensed, assigned or otherwise disposed of;(b) for services rendered or to be rendered; (c) for a policy ofinsurance issued or to be issued; (d) for a secondary obligation incurredor to be incurred; (e) for energy provided or to be 

 

----

 

provided; or (f) arising out of the use of a credit or charge cardor information contained on or for use with the card.

 

“AccountControl Agreement” means an account control agreement in substantially theform of Exhibit C-1 or C-2 to the Perfection Certificate, asapplicable, or otherwise in form and substance reasonably satisfactory to theAdministrative Agent, entered into among a Grantor, the Administrative Agentand the bank or Securities Intermediary where a Deposit Account or SecuritiesAccount, respectively, of such Grantor is maintained.

 

“AccountDebtor” means any Person who is or who may become obligated to any Grantorunder, with respect to or on account of an Account.

 

“AdministrativeAgent” has the meaning specified in the introductory paragraph hereto (andshall include any successor acting in the capacity as successor administrativeagent and collateral agent for the Secured Parties pursuant to Section 9.06of the Credit Agreement).

 

“ChattelPaper” means a record or records that evidence both a monetary obligationand a security interest in specific goods, a security interest in specificgoods and software used in the goods, a security interest in specific goods andlicense of software used in the goods, a lease of specific goods, or a lease ofspecific goods and license of software used in the goods.

 

“Collateral”has the meaning provided in Section 3.01.

 

“CommercialTort Claim” means a claim arising in tort with respect to which theclaimant is a Grantor.

 

“CopyrightLicense” means any written agreement, now or hereafter in effect, grantingany right to any third party under any Copyright now or hereafter owned by anyGrantor or that any Grantor otherwise has the right to license, or granting anyright to any Grantor under any Copyright now or hereafter owned by any thirdparty, and all rights of any Grantor under any such agreement.

 

“Copyrights”means all of the following now owned or hereafter acquired by any Grantor, (a) allcopyright rights in any work subject to the copyright laws of the United Statesor any other country, whether as author, assignee, transferee or otherwise, and(b) all registrations and applications for registration of any suchcopyright in the United States or any other country, including registrations,recordings, supplemental registrations and pending applications forregistration in the United States Copyright Office.

 

“CreditAgreement” has the meaning specified in the recitals hereto.

 

“DepositAccount” means a demand, time, savings, passbook, or similar account(including all bank accounts, collection accounts and concentration accounts,together with all funds held therein and all certificates and instruments, ifany, from time to time representing or evidencing such accounts) maintainedwith a bank.

 

“DesignatedEvent of Default” means an Event of Default described under Sections 8.01(a),(f) or (g) of the Credit Agreement and, following written noticethereof from the Administrative Agent at the request of the Required Lenders,any other Event of Default.

 

“Documents”means a document of title or a receipt of the type described in Section 7-201(2) ofthe UCC.

 

2

----

 

“ElectronicChattel Paper” means Chattel Paper evidenced by a record or recordsconsisting of information stored in an electronic medium.

 

“EntitlementHolder” means a Person identified in the records of a SecuritiesIntermediary as the Person having a Security Entitlement against the SecuritiesIntermediary.  If a person acquires aSecurity Entitlement by virtue of Section 8-501(b)(2) or (3) ofthe UCC, such person is the Entitlement Holder.

 

“Equipment”means all machinery, equipment in all its forms (including without limitationall “Equipment” as defined in the UCC), wherever located, including, withoutlimitation, all laboratory research equipment, all repair equipment, officeequipment, motor vehicles, furniture and furnishings, all other propertysimilar to the foregoing (including tools, parts and supplies of every kind anddescription), components, parts and accessories installed thereon or affixedthereto and all parts thereof, and all Fixtures and all accessories, additions,attachments, improvements, substitutions and replacements thereto and therefor.

 

“FederalSecurities Laws” has the meaning specified in Section 5.03.

 

“FinancialAsset” means:

 

(a)                                  aSecurity;

 

(b)                                 anobligation of a Person or a share, participation or other interest in a Personor in property or an enterprise of a Person, which is, or is of a type, dealtwith in or traded on financial markets, or which is recognized in any area inwhich it is issued or dealt in as a medium for investment; or

 

(c)                                  anyproperty that is held by a Securities Intermediary for another person in aSecurities Account if the Securities Intermediary has expressly agreed with theother Person that the property is to be treated as a Financial Asset under Article 8of the UCC.  As the context requires, theterm Financial Asset shall mean either the interest itself or the means bywhich a Person’s claim to it is evidenced, including a certificated oruncertificated Security, a certificate representing a Security or a SecurityEntitlement.

 

“Fixtures”means all items of Goods, whether now owned or hereafter acquired, of anyGrantor that become so related to particular real property that an interest inthem arises under any real property law applicable thereto.

 

“GeneralIntangibles” means all “General Intangibles” as defined in the UCC,including things in action and all other intangible personal property of anyGrantor of every kind and nature (other than Accounts, Chattel Paper, CommercialTort Claims, Deposit Accounts, Documents, Goods, Instruments, InvestmentProperty, Letter-of-Credit Rights, Letters of Credit, and money) now owned orhereafter acquired by such Grantor, including corporate, limited liabilitycompany, limited partnership or other business records, indemnification claims,contract rights (including rights under leases, whether entered into as lessoror lessee, Swap Contracts and other agreements), Payment Intangibles and taxrefund claims.

 

“Goods”means all things that are movable when a security interest attaches (including (a) Fixturesand (b) computer programs embedded in goods and any supporting informationprovided in connection with a transaction relating to the program if (i) theprogram is associated with the goods in such a manner that is customarilyconsidered part of the goods, or (ii) by becoming the owner of the goods,a person acquires a right to use the program in connection with the goods).

 

3

----

 

“Grantors”has the meaning specified in the introductory paragraph hereto.

 

“Instrument”means a negotiable instrument or any other writing that evidences a right tothe payment of a monetary obligation, is not itself a security agreement orlease, and is of a type that in ordinary course of business is transferred bydelivery with any necessary endorsement or assignment.

 

“IntercompanyNote” means a promissory note evidencing Indebtedness for borrowed money ofthe Company or any of its direct or indirect Subsidiaries to and in favor ofany Grantor.

 

“Inventory”means Goods, other than farm products, which: (a) are leased by a Person as lessor; (b) are held by a Personfor sale or lease or to be furnished under a contract of service; (c) arefurnished by a Person under a contract of service; or (d) consist of rawmaterials, work in process, or materials used or consumed in a business, andincludes, without limitation, (i) finished goods, returned goods andmaterials and supplies of any kind, nature or description which are or might beused in connection with the manufacture, packing, shipping, advertising,selling or finishing of any of the foregoing, (ii) all goods in which aGrantor has an interest in mass or a joint or other interest or right of anykind (including goods in which a Grantor has an interest or right asconsignee), (iii) all goods which are returned to or repossessed by anyGrantor, and (iv) all accessions thereto, products thereof and documentstherefor.

 

“InvestmentProperty” means all Securities (whether certificated or uncertificated),Security Entitlements, Securities Accounts, Financial Assets, commoditycontracts and commodity accounts of each Grantor; provided, however,that Investment Property shall not include any Securities constituting PledgedCollateral and identified on Schedules 1.05 and 3.01 to the PerfectionCertificate as such Schedule may be supplemented from time to time.

 

“JoinderAgreement” means a joinder agreement, in form and substance satisfactory tothe Administrative Agent, entered into by any Subsidiary of the Company fromtime to time in accordance with Section 6.12 of the Credit Agreement.

 

“Letter-of-CreditRight” means a right to payment or performance under a letter of credit,whether or not the beneficiary has demanded or is at the time entitled todemand payment or performance, but excludes the right of a beneficiary todemand payment or performance under a letter of credit.

 

“License”means any Patent License, Trademark License, Copyright License or other licenseor sublicense agreement to which any Grantor is a party.

 

“PatentLicense” means any written agreement, now or hereafter in effect, grantingto any third party any right to make, use or sell any invention on which aPatent, now or hereafter owned by any Grantor or that any Grantor otherwise hasthe right to license, is in existence, or granting to any Grantor any right tomake, use or sell any invention on which a Patent, now or hereafter owned byany third party, is in existence, and all rights of any Grantor under any suchagreement.

 

“Patents”means all of the following now owned or hereafter acquired by any Grantor,  (a) all letters patent of the UnitedStates or the equivalent thereof in any other country, all registrations andrecordings thereof, and all applications for letters patent of the UnitedStates or the equivalent thereof in any other country, including registrations,recordings and pending applications in the United States Patent and TrademarkOffice or any similar offices in any other country, and (b) all reissues,continuations, divisions, continuations-in-part, renewals or extensionsthereof, and the inventions disclosed or claimed therein, including the rightto make, use and/or sell the inventions disclosed or claimed therein.

 

“PaymentIntangible” means a general intangible under which the account debtor’sprincipal obligation is a monetary obligation.

 

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“PerfectionCertificate” means a certificate substantially in the form of Exhibit Acompleted by the Borrowers on behalf of each Grantor to include the scheduledinformation contemplated by Exhibit A with respect to such Grantor,as such certificate and such schedules may be supplemented from time to time byany Perfection Certificate Supplement.

 

“PerfectionCertificate Supplement” means a Supplement to the Perfection Certificateexecuted by the Borrowers on behalf of each Grantor and delivered to theAdministrative Agent pursuant to Section 4.01(b) to supplementthe scheduled information contemplated by the Perfection Certificate for suchGrantor, including any additional Grantor who becomes a party to this Agreementby executing a Joinder Agreement.

 

“PermittedLiens” means Liens permitted by Section 7.01 of the Credit Agreement.

 

“PledgedCollateral” has the meaning specified in Section 2.01.

 

“PledgedDebt” has the meaning specified in Section 2.01.

 

“PledgedEquity” has the meaning specified in Section 2.01.

 

“PledgedSecurities” means any promissory notes (including Intercompany Notes),stock certificates or instruments, certificates and other documentsrepresenting or evidencing any of the Pledged Debt or Pledged Equity, as thecase may be.

 

“Proceeds”means the following property:

 

(a)                                  whateveris acquired upon the sale, lease, license, exchange, or other disposition ofthe Collateral;

 

(b)                                 whateveris collected on, or distributed on account of, the Collateral;

 

(c)                                  rightsarising out of the Collateral;

 

(d)                                 tothe extent of the value of the Collateral, claims arising out of the loss,nonconformity, or interference with the use of, defects or infringement ofrights in, or damage to, the Collateral; and

 

(e)                                  tothe extent of the value of the Collateral and to the extent payable to thedebtor or the secured party, insurance payable by reason of the loss ornonconformity of, defects or infringement of rights in, or damage to, theCollateral.

 

“Securities”means any obligations of an issuer or any shares, participations or otherinterests in an issuer or in property or an enterprise of an issuer which

 

(a)                                  arerepresented by a certificate representing a security in bearer or registeredform, or the transfer of which may be registered upon books maintained for thatpurpose by or on behalf of the issuer;

 

(b)                                 areone of a class or series or by its terms is divisible into a class or series ofshares, participations, interests or obligations; and

 

(c)                                  (i) are,or are of a type, dealt with or traded on securities exchanges or securitiesmarkets or (ii) are a medium for investment and by their terms expresslyprovide that they are a security governed by Article 8 of the UCC.

 

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“SecuritiesAccount” shall mean an account to which a Financial Asset is or may becredited in accordance with an agreement under which the Person maintaining theaccount undertakes to treat the Person for whom the account is maintained asentitled to exercise rights that comprise the Financial Asset.

 

“SecurityEntitlements” means the rights and property interests of an Entitlement Holderwith respect to a Financial Asset.

 

“SecurityInterest” has the meaning specified in Section 3.01.

 

“SecurityIntermediary” means:

 

(a)                                  aclearing corporation; or

 

(b)                                 aPerson, including a bank or broker, that in the ordinary course of its businessmaintains Securities Accounts for others and is acting in that capacity.

 

“Software”means a computer program and any supporting information provided in connectionwith a transaction relating to the program, not including a computer programthat is included in the definition of Goods.

 

“SupportingObligation” means a Letter-of-Credit Right or secondary obligation thatsupports the payment or performance of an Account, Chattel Paper, Document,General Intangible, Instrument or Investment Property, including, withoutlimitation, all security agreements, guaranties, leases and other contractssecuring or otherwise relating to any such Accounts, Chattel Paper, Documents,General Intangible, Instruments or Investment Property, including Goodsrepresented by the sale or lease of delivery which gave rise to any of theforegoing, returned or repossessed merchandise and rights of stoppage intransit, replevin, reclamation and other rights and remedies of an unpaidvendor, lien or secured party.

 

“TangibleChattel Paper” means Chattel Paper evidenced by a record or recordsconsisting of information that is inscribed on a tangible medium.

 

“TerminationDate” means the date on which the latest of the following eventsoccurs:  (i) the payment in full incash of the Obligations (or, with respect to Obligations consisting ofoutstanding Letters of Credit or Secured Hedge Agreements under the PermittedFX Facility, Cash Collateralization of such outstanding Letters of Credit andSecured Hedge Agreements) of all the Loan Parties; (ii) the termination orexpiration of the Availability Period; (iii) the termination, expirationor Cash Collateralization of all Letters of Credit; (iv) the terminationor Cash Collateralization of the Permitted FX Facility; and (v) thetermination or Cash Collateralization of all Secured Hedge Agreements to whicha Hedge Bank is a party and all Secured Cash Management Agreements to which aCash Management Bank is a party.

 

“TrademarkLicense” means any written agreement, now or hereafter in effect, grantingto any third party any right to use any Trademark now or hereafter owned by anyGrantor or that any Grantor otherwise has the right to license, or granting toany Grantor any right to use any Trademark now or hereafter owned by any thirdparty, and all rights of any Grantor under any such agreement.

 

“Trademarks”means all of the following now owned or hereafter acquired by any Grantor, (a) alltrademarks, service marks, trade names, corporate names, company names,business names, fictitious business names, trade styles, trade dress, logos,other source or business identifiers, designs and general intangibles of likenature, now existing or hereafter adopted or acquired, all registrations andrecordings 

 

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thereof, and all registration and recording applications filed inconnection therewith, including registrations and registration applications inthe United States Patent and Trademark Office or any similar offices in anyState of the United States or any other country or any political subdivisionthereof, and all extensions or renewals thereof, (b) all goodwillassociated therewith or symbolized thereby and (c) all other assets,rights and interests that uniquely reflect or embody such goodwill.

 

“Waiver Agreement”means a waiver agreement with a landlord or bailee of a Grantor substantiallyin the form of Exhibit A to the Perfection Certificate or otherwise inform and substance reasonably satisfactory to the Administrative Agent, enteredinto among such landlord or bailee, as the case may be, such Grantor and theAdministrative Agent, as such agreement may be amended, restated, amended andrestated, supplemented or otherwise modified from time to time.

 

**ARTICLEII**

**PLEDGEDCOLLATERAL**

** **

**2.01****                        PledgedCollateral**.  The Collateral pledgedby each Grantor under this Agreement shall include all of such Grantor’s right,title and interest in, to and under the following Equity Interests andIndebtedness now owned or hereafter acquired by such Grantor (collectively, the“Pledged Collateral”):

 

(a)                                  (i) theshares of capital stock, membership interests, limited partnership interestsand other Equity Interests in any Person owned by such Grantor on the ClosingDate and listed opposite the name of such Grantor on Schedule 1.05 to thePerfection Certificate, (ii) any other Equity Interests of any Personobtained in the future by such Grantor and identified on Schedule 1.05 to anyPerfection Certificate Supplement, and (iii) the certificates representingall such Equity Interests (collectively, the “Pledged Equity”); provided,however, that the Pledged Equity of any Grantor shall not include (A) morethan 65% of the aggregate issued and outstanding voting Equity Interests of anyCFC owned by such Grantor, (B) the Excluded Collateral, (C) EquitySecurities held pursuant to the Deferred Compensation Plan or (D) anyEquity Interest in any Person which is evidenced by a Security or a SecurityEntitlement which is maintained in a Securities Account which is either (1) maintainedwith the Administrative Agent or (2) maintained with any other SecuritiesIntermediary; provided that, to the extent required by Section 4.01(g),any such other Securities Intermediary shall have entered into an AccountControl Agreement with the Administrative Agent with respect to such SecuritiesAccount.

 

(b)                                 (i) thepromissory notes (including Intercompany Notes) and debt securities of anyother Person owned by such Grantor on the Closing Date and the loans andadvances for money borrowed made by such Grantor to any other Person which areoutstanding on the Closing Date, in each case, which are listed opposite thename of such Grantor on Schedule 3.01 of the Perfection Certificate, (ii) anypromissory notes (including Intercompany Notes), debt securities, and loans oradvances for money borrowed in the future issued to or owed to such Grantor byany other Person and identified on Schedule 3.01 to any Perfection CertificateSupplement, and (iii) the promissory notes (including, Intercompany Notes)and any other instruments as may hereafter be issued to evidence such loans oradvances for money borrowed (collectively, the “Pledged Debt”); provided,however, that the Pledged Debt of any Grantor shall not include (A) theExcluded Collateral, (B) any promissory notes, debt securities, loans oradvances of any Person held pursuant to the Deferred Compensation Plan or (C) anypromissory notes (including Intercompany Notes), debt securities, and loans oradvances of any Person which are evidenced by a Security or SecurityEntitlement which is maintained in a Securities Account which is either (1) maintainedwith the Administrative Agent or (2) maintained with any other SecuritiesIntermediary; provided that, to the extent required by Section 4.01(g),any such other Securities Intermediary shall have entered into an AccountControl Agreement with the Administrative Agent with respect to such SecuritiesAccount.

 

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(c)                                  subjectto Section 2.05, all payments of principal or interest, dividends,cash, instruments and other property from time to time received, receivable orotherwise distributed in respect of, in exchange for or upon the conversion ofthe items referred to in clauses (a) and (b) above;

 

(d)                                 subjectto Section 2.05, all rights and privileges of such Grantor withrespect to the securities, instruments and other property referred to inclauses (a), (b) and (c) above; and

 

(e)                                  allProceeds of any of the foregoing.

 

**2.02****                        Deliveryof the Pledged Collateral**.  (a) Each Grantor agrees promptly to deliver or cause to be delivered to theAdministrative Agent any and all Pledged Securities representing any PledgedEquity or Pledged Debt, as the case may be, other than (i) any promissorynotes (other than Intercompany Notes), debt securities, and loans or advancesin an amount less than $500,000 and (ii) any Indebtedness for borrowedmoney (A) owed to any Grantor by any other Grantor or (B) owed to anyGrantor by any Subsidiary of the Company other than a Grantor that individuallyor in the aggregate is in excess of $5,000,000.

 

(b)                                 EachGrantor will cause any Indebtedness for borrowed money owed to such Grantor byany other Grantor or by any other Subsidiary of the Company, in each case, tobe evidenced by a duly executed Intercompany Note to be pledged and deliveredto the Administrative Agent pursuant to the terms hereof, other than anyIndebtedness that is not required to be delivered to Administrative Agentpursuant to Section 2.02(a).

 

(c)                                  Upondelivery to the Administrative Agent, any Pledged Securities shall beaccompanied by stock powers, bond powers or other instruments of transferreasonably satisfactory to the Administrative Agent duly executed in blank bythe applicable Grantor and such other instruments and documents as theAdministrative Agent may reasonably request.

 

(d)                                 Atany time after the occurrence of an Activation Event, at the request of theAdministrative Agent, with respect to any Pledged Equity owned by any Grantorthat constitutes an uncertificated security of a Subsidiary or Affiliate ofsuch Grantor, such Grantor will cause the issuer thereof (if, eitherindividually or together with the Company and its other Affiliates, it controlssuch issuer) or will use commercially reasonable efforts to cause such issuer(if it does not so control such issuer) either (i) to register theAdministrative Agent as the registered owner of such Pledged Equity or (ii) (A) toacknowledge the security interest of the Administrative Agent in such PledgedEquity granted hereunder (to the extent not so acknowledged pursuant to Section 2.03),(B) to confirm to the Administrative Agent that it has not received noticeof any other Lien in such Pledged Equity (and has not agreed to acceptinstructions from any other Person in respect of such Pledged Equity other thanthe Administrative Agent) (to the extent not so acknowledged pursuant to Section 2.03)and (C) to agree in writing with such Grantor and the Administrative Agentthat such issuer will comply with instructions with respect to such PledgedEquity originated by the Administrative Agent without further consent of suchGrantor, such agreement to be in form and substance reasonably satisfactory tothe Administrative Agent (to the extent not so acknowledged pursuant to Section 2.03).

 

**2.03****                        Agreementsof Issuers**.

 

(a)                                  EachGrantor which is the issuer of any Pledged Equity owned by any other Grantor,hereby (i) acknowledges the security interest of the Administrative Agentin such Pledged Equity granted by such other Grantor hereunder, (ii) confirmsthat it has not received notice of any other Lien as of the Closing Date insuch Pledged Equity (and has not agreed to accept instructions from any otherperson in respect of such Pledged Equity other than the Administrative Agent) (iii) agreesthat it will comply with the instructions with respect to such Pledged Equityoriginated by the Administrative Agent 

 

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without further consentof such other Grantor and (iv) otherwise agrees that it will be bound bythe terms of this Agreement relating to the Pledged Collateral issued by it.

 

(b)                                 Inthe case of each Grantor which is a partner in a partnership, limited liabilitycompany or other entity, such Grantor hereby consents to the extent required byapplicable Organization Documents to the pledge by each other Grantor, pursuantto the terms hereof, of the Pledged Equity in such partnership, limitedliability company or other entity, and upon the occurrence and during thecontinuance of an Event of Default, to the transfer of such Pledged Equity tothe Administrative Agent or its nominee and to the substitution of theAdministrative Agent or its nominee as the substituted partner or member insuch limited partnership, limited liability company or other entity with allrights, powers and duties of a partner or a general partner or a limitedmember, as the case may be.

 

**2.04****                        Representations,Warranties and Covenants with respect to Pledged Collateral**.  The Grantors represent, warrant and covenantto and with the Administrative Agent, for the benefit of the Secured Parties asof the date hereof and as of the date of each Perfection CertificateSupplement, that:

 

(a)                                  PledgedCollateral.  Schedules 1.05 and 3.01of the Perfection Certificate (as supplemented from time to time by anyPerfection Certificate Supplement) accurately and completely set forth for eachGrantor the Pledged Equity and the Pledged Debt of such Grantor.

 

(b)                                 DueAuthorization and Issuance.  AllPledged Equity and Pledged Debt issued by any Subsidiary of the Company to anyGrantor has been, and to the extent that any Pledged Equity or Pledged Debt ishereafter issued, such Pledged Equity or Pledged Debt will be, upon suchissuance, duly and validly issued by such issuer.  All such Pledged Equity is fully paid andnonassessable.  All such Pledged Debt isthe legal, valid and binding obligation of the issuer thereof.

 

(c)                                  Title.  Each Grantor (i) is the owner,beneficially and of record, of the Pledged Collateral listed on Schedules 1.05and 3.01 of the Perfection Certificate (as supplemented from time to time byany Perfection Certificate Supplement) opposite the name of such Grantor, (ii) holdsthe same free and clear of all Liens, other than Liens created by thisAgreement and Permitted Liens, (iii) will make no assignment, pledge,hypothecation or transfer of, or create or permit to exist any securityinterest in or other Lien on, the Pledged Collateral, other than the SecurityInterest created by this Agreement and other assignments and transferspermitted pursuant to the Credit Agreement, and (iv) will defend its titleor interest hereto or therein against any and all Liens (other than theSecurity Interest created by this Agreement and other Permitted Liens), howeverarising, of all Persons.

 

(d)                                 Transferabilityof Pledged Collateral.  Except forrestrictions and limitations imposed by the Loan Documents or securities lawsgenerally or for consents required and obtained in connection herewith, thePledged Collateral is and will continue to be freely transferable andassignable to the Administrative Agent, and none of the Pledged Collateral isor will be subject to any option, right of first refusal, shareholdersagreement, provision of any Organization Document or contractual restriction ofany nature that might prohibit, impair, delay or otherwise affect the pledge ofsuch Pledged Collateral hereunder, the sale or disposition thereof pursuanthereto or the exercise by the Administrative Agent of rights and remedieshereunder.

 

(e)                                  Validityof Security Interest.  By virtue ofthe execution and delivery by each Grantor of this Agreement or a JoinderAgreement, as the case may be, when all Pledged Securities evidencing anyPledged Collateral of such Grantor are delivered to the Administrative Agent inaccordance with this Agreement, the Administrative Agent, for the benefit ofitself and the other Secured Parties, will obtain a valid and perfected firstpriority lien, subject to Permitted Liens, upon and security interest in allPledged Collateral of such Grantor, other than Pledged Collateral not requiredto be 

 

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delivered to theAdministrative Agent pursuant to Section 2.02(a) as securityfor the payment and performance of the Obligations of such Grantor.

 

(f)                                    Defaults.  Such Grantor is not in default in the paymentof any portion of any mandatory capital contribution, if any, required to bemade under any agreement to which such Grantor is a party relating to thePledged Equity pledged by it, and such Grantor is not in violation of any otherprovisions of any such agreement to which such Grantor is a party, or otherwisein default or violation thereunder.  NoPledged Equity pledged by such Grantor is subject to any defense, offset orcounterclaim, nor have any of the foregoing been asserted or alleged againstsuch Grantor by any Person with respect thereto, and on and as of the ClosingDate and as of the date of each Perfection Certificate Supplement and JoinderAgreement, there are no certificates, instruments, documents or other writings(other than the Organization Documents and certificates (if any) delivered tothe Administrative Agent) which evidence any Pledged Equity of such Grantor.

 

(g)                                 Notices.  Each Grantor agrees to furnish to theAdministrative Agent promptly upon receipt thereof copies of all materialnotices, requests and other documents received by such Grantor under orpursuant to the Pledged Equity and any other contract or agreement related tothe Pledged Equity to which it is a party, and from time to time (i) furnishto the Administrative Agent such information and reports regarding the PledgedEquity as the Administrative Agent may reasonably request, and (ii) uponthe reasonable request of the Administrative Agent, make to any other party tothe Pledged Equity or any other contract or agreement related to the PledgedEquity such demands and requests for information and reports or for action asthe Grantor is entitled to make thereunder.

 

(h)                                 Terminations,Modifications or Other Actions with respect to Pledged Equity.  At any time after the occurrence and duringthe continuation of an Event of Default, no Grantor of a Pledged Equity shall,except as otherwise permitted by the Credit Agreement:  (i) cancel or terminate any PledgedEquity or any other contract or agreement included in the Collateral to whichit is a party or consent to or accept any cancellation or termination thereof; (ii) amendor otherwise modify any such or any such contract or agreement or give anyconsent, waiver, or approval thereunder; (iii) waive any default under orbreach of any such Pledged Equity or any such other contract or agreement; or (iv) takeany other action in connection with any such Pledged Equity or any such othercontract or agreement the taking or omission of which could reasonably beexpected to impair the value of the interest or rights of such Grantorthereunder or that would impair the interest or rights of the AdministrativeAgent.

 

(i)                                     Amendments,Waivers or Other Actions with respect to Pledged Debt.  At any time after the occurrence and duringthe continuation of an Event of Default, no Grantor will, without the priorwritten consent of the Administrative Agent: (i) enter into any agreement amending, supplementing, or waiving anyprovision of any Pledged Debt (including any underlying instrument pursuant towhich such Pledged Debt is issued) or compromising or releasing or extendingthe time for payment of any obligation of the maker thereof; or (ii) takeor omit to take any action the taking or the omission of which could result inany impairment or alteration of any obligation of the maker of any Pledged Debtor other instrument constituting Collateral related to the Pledged Debt.

 

**2.05****                        VotingRights; Dividends and Interest, etc**. (a)  Unless and until a Designated Event of Default shall haveoccurred and be continuing, and thereafter:

 

(i)                                     EachGrantor shall be entitled to exercise any and all voting and/or otherconsensual rights and powers inuring to an owner of Pledged Collateral or anypart thereof for any purpose consistent with the terms of this Agreement, theCredit Agreement and the other Loan Documents; provided that such rightsand powers shall not be exercised in any manner that could reasonably beexpected to have a Material Adverse Effect.

 

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(ii)                                  TheAdministrative Agent shall be deemed without further action or formality tohave granted to each Grantor all necessary consents relating to voting rightsand shall, if necessary, upon written request of a Grantor and at the sole costand expense of the Grantors, from time to time execute and deliver (or cause tobe executed and delivered) to such Grantor all such instruments as Grantor mayreasonably request in order to permit such Grantor to exercise the voting andother rights which it is entitled to exercise pursuant to subparagraph (i) above.

 

(iii)                               EachGrantor shall be entitled to receive, retain, and to utilize free and clear ofany Lien hereof, any and all dividends, interest, principal and otherdistributions paid on or distributed in respect of the Pledged Collateral, butonly if and to the extent that such dividends, interest, principal and otherdistributions are not otherwise prohibited by the terms and conditions of theCredit Agreement, the other Loan Documents and applicable Laws; providedthat any noncash dividends, interest, principal or other distributions thatwould constitute Pledged Equity or Pledged Debt, whether resulting from asubdivision, combination or reclassification of the outstanding EquityInterests of the issuer of any Pledged Equity or received in exchange for anyPledged Debt or any part thereof, or in redemption thereof, or as a result ofany merger, consolidation, acquisition or other exchange of assets to whichsuch issuer may be a party or otherwise, shall be and become part of thePledged Collateral, and, if received by any Grantor, shall not be commingled bysuch Grantor with any of its other funds or property but shall be held separateand apart therefrom, shall be held in trust for the benefit of theAdministrative Agent and shall be forthwith delivered to the AdministrativeAgent as Pledged Collateral in the same form as so received (with any necessaryendorsement).

 

(b)                                 Uponthe occurrence and during the continuance of a Designated Event of Default, allrights of any Grantor to dividends, interest, principal or other distributionsthat such Grantor is authorized to receive pursuant to paragraph (a)(iii) ofthis Section 2.05 shall cease, and all such rights shall thereuponbecome vested in the Administrative Agent, which shall have the sole andexclusive right and authority to receive and retain such dividends, interest,principal or other distributions.  Alldividends, interest, principal or other distributions received by any Grantorcontrary to the provisions of this Section 2.05(b) shall beheld in trust for the benefit of the Administrative Agent, shall be segregatedfrom other property or funds of such Grantor and shall be forthwith deliveredto the Administrative Agent in the same form as so received (with any necessaryendorsement).  Any and all money andother property paid over to or received by the Administrative Agent pursuant tothe provisions of this Section 2.05(b) shall be retained bythe Administrative Agent in an account to be established by the AdministrativeAgent upon receipt of such money or other property and shall be applied inaccordance with the provisions of Section 5.02.

 

(c)                                  Uponthe occurrence and during the continuance of a Designated Event of Default, allrights of any Grantor to exercise the voting and consensual rights and powersit is entitled to exercise pursuant to paragraph (a)(i) of this Section 2.05,and the obligations of the Administrative Agent under paragraph (a)(ii) ofthis Section 2.05, shall cease, and all such rights shall thereuponbecome vested in the Administrative Agent, which shall have the sole andexclusive right and authority to exercise such voting and consensual rights andpowers.  If after the occurrence of aDesignated Event of Default, such Event of Default shall have been waivedpursuant to Section 10.01 of the Credit Agreement, each Grantor will againhave the right to exercise the voting and consensual rights and powers that suchGrantor would otherwise be entitled to exercise pursuant to the terms of paragraph(a)(i) above and the Administrative Agent shall again be subject tothe obligations under paragraph (a)(ii) of this Section 2.05.

 

**2.06****                        Registrationin Nominee Name; Denominations**.  TheAdministrative Agent, on behalf of the Secured Parties, shall have the right tohold as collateral the Pledged Collateral endorsed or 

 

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assigned in blank or infavor of the Administrative Agent.  Afterthe occurrence and during the continuance of an Event of Default, theAdministrative Agent, on behalf of the Secured Parties, shall also have theright (in its sole and absolute discretion) to hold the Pledged Collateral inits own name as pledgee, the name of its nominee (as pledgee or as sub-agent)or the name of the applicable Grantor. At the request of the Administrative Agent, each Grantor will promptlygive to the Administrative Agent copies of any notices or other communicationsreceived by it with respect to Pledged Securities registered in the name ofsuch Grantor.  The Administrative Agentshall at all times have the right to exchange the certificates or instruments(to the extent permitted by the terms thereof) representing Pledged Securitiesfor certificates or instruments of smaller or larger denominations for anypurpose consistent with this Agreement.

 

**ARTICLEIII**

**SECURITYINTERESTS IN PERSONAL PROPERTY**

** **

**3.01****                        SecurityInterest**.  Each Grantor herebycollaterally assigns and pledges to the Administrative Agent, its successorsand assigns, for the ratable benefit of the Secured Parties, and hereby grantsto the Administrative Agent, its successors and assigns, for the ratablebenefit of the Secured Parties, as security for the payment or performance infull of the Obligations of such Grantor, a security interest (the “SecurityInterest”) in all right, title and interest of such Grantor in, to andunder any and all of the following assets and properties now owned or at anytime hereafter acquired by such Grantor or in which such Grantor now has or atany time in the future may acquire any right, title or interest (collectively,the “Collateral”):

 

(a)                                  allAccounts;

 

(b)                                 allChattel Paper;

 

(c)                                  allcash, Cash Equivalents and Deposit Accounts;

 

(d)                                 allDocuments;

 

(e)                                  allEquipment, including all Fixtures;

 

(f)                                    allGeneral Intangibles;

 

(g)                                 allInstruments;

 

(h)                                 allInventory;

 

(i)                                     allInvestment Property;

 

(j)                                     allPledged Collateral;

 

(k)                                  allSupporting Obligations;

 

(l)                                     allCommercial Tort Claims of such Grantor described in the schedules to thePerfection Certificate in respect of such Grantor (as such schedule may besupplemented from time to time pursuant to any Perfection CertificateSupplement or otherwise);

 

(m)                               allother Goods;

 

(n)                                 allbooks and records pertaining to the Collateral;

 

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(o)                                 allletter of credit rights;

 

(p)                                 allother assets, properties and rights of every kind and description and intereststherein, including all moneys, securities and other property, now or hereafterheld or received by, or in transit to, any Grantor, the Administrative Agent orany other Secured Party, whether for safekeeping, pledge, custody,transmission, collection or otherwise; and

 

(q)                                 allProceeds of any and all of the foregoing;

 

provided, however, that notwithstandinganything to the contrary in clauses (a) through (q) above:

 

(i)                                     anyGeneral Intangible, Chattel Paper, Instrument or Account which by its termsprohibits the creation of a security interest therein (whether by assignment orotherwise) shall be excluded from the Lien of the Security Interest grantedunder this Section 3.01, and shall not be included in theCollateral of such Grantor, except to the extent that Sections 9-406(d), 9-407(a) or9-408(a) of the UCC are effective to render any such prohibitionineffective; provided, however, that if any General Intangible,Chattel Paper, Instrument or Account included in the Collateral contains anyterm, restricting or requiring the consent of any Person (other than a Grantor)obligated thereon to, any exercise of remedies hereunder in respect of, theSecurity Interest therein granted under this Section 3.01, then theenforcement of such Security Interest under this Agreement shall be subject to Section 5.01(c) (butsuch provision shall not limit the creation, attachment or perfection of theSecurity Interest hereunder);

 

(ii)                                  anypermit, lease, license (including any License) or franchise shall be excludedfrom the Lien of the Security Interest granted under this Section 3.01,and shall not be included in the Collateral, to the extent any Law applicablethereto is effective to prohibit the creation of a Security Interest therein;

 

(iii)                               anyEquipment (including  any Softwareincorporated therein) owned by any Grantor on the date hereof or hereafteracquired that is subject to a Lien securing a purchase money obligation orCapitalized Lease permitted to be incurred pursuant to the provisions of theCredit Agreement shall be excluded from the Lien of the Security Interestgranted under this Section 3.01, and shall not be included in theCollateral, to the extent that the contract or other agreement in which suchLien is granted (or the documentation providing for such purchase moneyobligation or Capitalized Lease) validly prohibits the creation of any otherLien on such Collateral; and

 

(iv)                              allExcluded Collateral shall be excluded from the Collateral of such Grantor.

 

With respectto property described in clauses (i) through (iv) above to the extentnot included in the Collateral of such Grantor (the “Excluded Property”),such property shall constitute Excluded Property only to the extent and for solong as the creation of a Lien on such property in favor of the AdministrativeAgent is, and remains, validly prohibited, and upon termination of suchprohibition (however occurring), such property shall cease to constituteExcluded Property.  The Grantors may berequired from time to time at the request of the Administrative Agent to givewritten notice to the Administrative Agent identifying in reasonable detail theExcluded Property (and stating in such notice that such property constitutesExcluded Property) and to provide the Administrative Agent with such otherinformation regarding the Excluded Property as the Administrative Agent mayreasonably request.

 

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**3.02        Filing Authorization**.  (a)  Each Grantor hereby irrevocablyauthorizes the Administrative Agent at any time and from time to time to filein any relevant jurisdiction any initial financing statements (includingfixture filings) with respect to the Collateral or any part thereof andamendments thereto that contain the information required by Article 9 ofthe UCC of each applicable jurisdiction for the filing of any financingstatement or amendment, including (i) if such Grantor is an organization,the type of organization and any organizational identification number issued tosuch Grantor, (ii) in the case of a financing statement filed as a fixturefiling, a sufficient description of the real property to which such Collateralrelates and (iii) a description of collateral that describes such propertyin any other manner as the Administrative Agent may reasonably determine isnecessary or advisable to ensure the perfection of the security interest in theCollateral granted to the Administrative Agent, including describing suchproperty as “all assets except the Excluded Collateral (as such term is definedin the Pledge and Security Agreement between debtor and secured party)” or “allproperty except the Excluded Collateral (as such term is defined in the Pledgeand Security Agreement between debtor and secured party).”  Each Grantor agrees to provide suchinformation to the Administrative Agent promptly upon request.

 

(b)           Each Grantor also ratifies itsauthorization for the Administrative Agent to file in any relevant jurisdictionany such initial financing statements or amendments thereto if filed prior tothe date hereof.

 

**3.03        Continuing Security Interest; Transferof Credit Extensions**. This Agreement shall create a continuing security interest in the Collateralof each Grantor and shall remain in full force and effect with respect to eachGrantor until the Termination Date for such Grantor, be binding upon eachGrantor, its successors, transferees and assigns, and inure, together with therights and remedies of the Administrative Agent hereunder, to the benefit ofthe Administrative Agent and each other Secured Party.  Without limiting the generality of theforegoing, any Secured Party may assign or otherwise transfer (in whole or inpart) any Commitment or Loan held by it to any other Person, and such otherPerson shall thereupon become vested with all the rights and benefits inrespect thereof granted to such Lender under any Loan Document (including thisAgreement) or otherwise, subject, however, to any contrary provisions in suchassignment or transfer, and to the provisions of Section 10.06 and Article IXof the Credit Agreement.

 

**3.04        Grantors Remain Liable**.  Anything herein to the contrarynotwithstanding

 

(a)           each Grantor shall remain liableunder the contracts and agreements included in the Collateral (including theMaterial Contracts) to the extent set forth therein, and shall perform all ofits duties and obligations under such contracts and agreements to the sameextent as if this Agreement had not been executed,

 

(b)           each Grantor will comply in allmaterial respects with all Laws relating to the ownership and operation of theCollateral, including all registration requirements under applicable Laws, andshall pay when due all taxes, fees and assessments imposed on or with respectto the Collateral, except to the extent the validity thereof is being contestedin good faith by appropriate proceedings for which adequate reserves inaccordance with GAAP have been set aside by such Grantor,

 

(c)           the exercise by the AdministrativeAgent of any of its rights hereunder shall not release any Grantor from any ofits duties or obligations under any such contracts or agreements included inthe Collateral, and

 

(d)           neither the Administrative Agent norany other Secured Party shall have any obligation or liability under any suchcontracts or agreements included in the Collateral by reason of this Agreement,nor shall the Administrative Agent or any other Secured Party be obligated toperform any of

 

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the obligations or duties ofany Grantor thereunder or to take any action to collect or enforce any claimfor payment assigned hereunder.

 

**3.05        Security Interest Absolute**.  All rights of the Administrative Agent andthe security interests granted to the Administrative Agent hereunder, and allobligations of each Grantor hereunder, shall be absolute and unconditional,irrespective of any of the following conditions, occurrences or events:

 

(a)           any lack of validity orenforceability of any Loan Document;

 

(b)           the failure of any Secured Party toassert any claim or demand or to enforce any right or remedy against theBorrowers, any other Grantor or any other Person under the provisions of anyLoan Document or otherwise or to exercise any right or remedy against any otherguarantor of, or collateral securing, any Obligation;

 

(c)           any change in the time, manner orplace of payment of, or in any other term of, all or any of the Obligations orany other extension, compromise or renewal of any Obligation, including anyincrease in the Obligations resulting from the extension of additional creditto any Grantor or any other obligor or otherwise;

 

(d)           any reduction, limitation, impairmentor termination of any Obligation for any reason, including any claim of waiver,release, surrender, alteration or compromise, and shall not be subject to (andeach Grantor hereby waives any right to or claim of) any defense or setoff,counterclaim, recoupment or termination whatsoever by reason of the invalidity,illegality, nongenuineness, irregularity, compromise, unenforceability of, orany other event or occurrence affecting, any Obligation or otherwise;

 

(e)           any amendment to, rescission, waiver,or other modification of, or any consent to departure from, any of the terms ofany Loan Document;

 

(f)            any addition, exchange, release,surrender or non-perfection of any collateral (including the Collateral), orany amendment to or waiver or release of or addition to or consent to departurefrom any guaranty, for any of the Obligations; or

 

(g)           any other circumstances which mightotherwise constitute a defense available to, or a legal or equitable dischargeof, the Borrowers, any other Grantor or otherwise.

 

**3.06        Waiver of Subrogation**.  Until the Termination Date, no Grantor shallexercise any claim or other rights which it may now or hereafter acquireagainst any other Grantor that arises from the existence, payment, performanceor enforcement of such Grantor’s Obligations under this Agreement, includingany right of subrogation, reimbursement, exoneration or indemnification, anyright to participate in any claim or remedy against any other Grantor or anycollateral which the Administrative Agent now has or hereafter acquires,whether or not such claim, remedy or right arises in equity or under contract,statute or common law, including the right to take or receive from any otherGrantor, directly or indirectly, in cash or other property or by setoff or inany manner, payment or security on account of such claim or other rights.  If any amount shall be paid to any Grantor inviolation of the preceding sentence, such amount shall be deemed to have beenpaid for the benefit of the Secured Parties, and shall forthwith be paid to theAdministrative Agent to be credited and applied upon the Obligations, whethermatured or unmatured.  Each Grantoracknowledges that it will receive direct and indirect benefits for thefinancing arrangements contemplated by the Loan Documents and that theagreement set forth in this Section is knowingly made in contemplation ofsuch benefits.

 

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**3.07        Release;Termination**.

 

(a)           Upon any sale, transfer or otherdisposition of any item of Collateral of any Grantor in accordance with Section 7.05of the Credit Agreement, the Administrative Agent will, at such Grantor’sexpense and without any representations, warranties or recourse of any kindwhatsoever, execute and deliver to such Grantor such documents as such Grantorshall reasonably request to evidence the release of such item of Collateralfrom the assignment and security interest granted hereby; provided, however,that (i) at the time of such request and such release no Default shallhave occurred and be continuing, and (ii) such Grantor shall havedelivered to the Administrative Agent, at least ten Business Days prior to thedate of the proposed release, a written request for release describing the itemof Collateral and the terms of the sale, lease, transfer or other dispositionin reasonable detail, including the price thereof and any expenses inconnection therewith, together with a form of release for execution by theAdministrative Agent (which release shall be in form and substance satisfactoryto the Administrative Agent) and a certificate of such Grantor to the effectthat the transaction is in compliance with the Loan Documents and as to suchother matters as the Administrative Agent (or the Required Lenders through theAdministrative Agent) may reasonably request.

 

(b)           Upon the Termination Date for anyGrantor, the pledge, assignment and security interest granted by such Grantorhereunder shall terminate and all rights to the Collateral of such Grantorshall revert to such Grantor.  Upon anysuch termination, the Administrative Agent will, at the applicable Grantor’sexpense and without any representations, warranties or recourse of any kindwhatsoever, execute and deliver to such Grantor such documents as such Grantorshall reasonably request to evidence such termination and deliver to suchGrantor all Pledged Securities, Instruments, Tangible Chattel Paper andnegotiable documents representing or evidencing the Collateral of such Grantorthen held by the Administrative Agent.

 

**ARTICLEIVCOVENANTS; REPRESENTATION AND WARRANTIES**

** **

Each Grantor represents and warrants to the Administrative Agent andthe Secured Parties as of the date hereof and as of the date of each PerfectionCertificate Supplement, and agrees that:

 

**4.01        Perfectionof Security Interest**.

 

(a)           Perfection Certificate.  The Perfection Certificate (as supplementedfrom time to time by Perfection Certificate Supplement delivered pursuant tosubsection (b) of this Section 4.01) has been duly preparedand completed and the information set forth therein for each Grantor, includingthe exact legal name and jurisdiction of organization of such Grantor, iscorrect and complete in all material respects.

 

(b)           Perfection Certificate Supplement.  Annually, at the time of delivery of theCompliance Certificate required to be delivered in connection with the annualfinancial statements delivered pursuant to Section 6.01(a) of theCredit Agreement, the Borrowers shall deliver to the Administrative Agent aduly completed Perfection Certificate Supplement, dated as of the date of suchCompliance Certificate, to supplement on behalf of each Grantor the scheduledinformation about such Grantor contemplated by the Perfection Certificate (orin lieu of any such Perfection Certificate Supplement, such ComplianceCertificate may instead include a statement confirming that there has been nomaterial change to the information in the Perfection Certificate, as previouslysupplemented by any Perfection Certificate Supplements delivered prior to thedate of such Compliance Certificate, and that the information in the PerfectionCertificate, as so supplemented, remains correct and complete in all materialrespects).  At the time any Grantorbecomes a party to this Agreement pursuant to a Joinder Agreement, theBorrowers shall deliver to the Administrative Agent a duly completed PerfectionCertificate 

 

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Supplement, dated as ofthe date of such Joinder Agreement, to supplement on behalf of such Grantorparty to a Joinder Agreement the scheduled information about such Grantor ascontemplated by the Perfection Certificate.

 

(c)           UCC Filings.  Uniform Commercial Code financing statements(including fixture filings, as applicable) or other appropriate filings,recordings or registrations covering any material Collateral or materialportion of the Collateral reasonably requested by the Administrative Agentcontaining a description of the Collateral have been prepared by the Grantorsbased upon the information provided to the Administrative Agent in the PerfectionCertificate (as supplemented from time to time) and have been delivered to theAdministrative Agent for filing in each governmental office specified inSchedule 1.04 to the Perfection Certificate, and constitute all the filings,recordings and registrations that are necessary to publish notice of andprotect the validity of and to establish a valid and perfected securityinterest in favor of the Administrative Agent (for the ratable benefit of theSecured Parties) in all material Collateral or any material portion of theCollateral in which the Security Interest may be perfected by filing, recordingor registration in the United States (or any political subdivision thereof) andits territories and possessions, and no further or subsequent filing, re-filing,recording, rerecording, registration or re-registration is necessary in anysuch jurisdiction (except upon expiration of any financing statements under theUniform Commercial Code after five years), except as follows:

 

(i)            filings required to be made in orwith the motor vehicle title records of any applicable state in order toperfect the Security Interest in Collateral consisting of motor vehiclesregistered in such state, including any such filings required by subsection (e) ofthis Section 4.01; and

 

(ii)           filings with respect to Real PropertyAssets excluded from the scope of UCC Article 9 pursuant to UCC Section 9-109.

 

(d)           [Reserved.].

 

(e)           Instruments and Tangible ChattelPaper.  If any amount payable underor in connection with any of the Collateral shall be or become evidenced by anypromissory note or other instrument, or if any Grantor shall at any time holdor acquire any Instruments (other than any Instruments evidencing Indebtednessfor money borrowed comprising part of the Pledged Collateral which has beendelivered to the Administrative Agent pursuant to Section 2.02) orTangible Chattel Paper, at the request of the Administrative Agent, suchGrantor shall forthwith endorse, assign and deliver the same to theAdministrative Agent, accompanied by such instruments of transfer or assignmentduly executed in blank as the Administrative Agent may from time to timereasonably request.  At any time that noEvent of Default has occurred and is continuing no such request shall be madeby the Administrative Agent with respect to Instruments (other than any PledgedCollateral) or any Tangible Chattel Paper which individually or in theaggregate is not in excess of $1,000,000.

 

(f)            Deposit Accounts.  As of the Closing Date, or the date that isno more than 15 Business Days after the date on which a deposit account isopened by a Grantor or the date of any Joinder Agreement, as the case may be,each Grantor shall enter into an Account Control Agreement with each depositarybank with which such Grantor from time to time opens or maintains a DepositAccount, in each case to cause the depositary bank to agree to comply at anytime with instructions from the Administrative Agent to such depositary bankdirecting the disposition of funds from time to time credited to such DepositAccount without further consent of such Grantor or any other Person, pursuantto such Account Control Agreement; provided, however, that anyGrantor shall not be required to deliver an Account Control Agreement inrespect of any Deposit Account that consists solely of ExcludedCollateral.  The Administrative Agenthereby acknowledges and agrees with each Grantor that the Administrative Agentshall not give any such instructions pursuant to any Account Control Agreement,

 

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unless an ActivationEvent or Designated Event of Default has occurred and is continuing.  No Grantor shall grant control of any DepositAccount to any Person other than the Administrative Agent.

 

(g)           Investment Property.  As of the Closing Date or the date of anyJoinder Agreement, as the case may be, and, otherwise, within 15 Business Daysof the date that any Securities, other than any Pledged Equity issued by aGrantor and pledged pursuant to Article II, whether certificated oruncertificated, or other Investment Property now or hereafter acquired by anyGrantor are held by such Grantor or its nominee through a SecuritiesIntermediary, such Grantor shall immediately notify the Administrative Agentthereof and pursuant to an Account Control Agreement, cause such SecuritiesIntermediary to agree to comply with entitlement orders or other instructionsfrom the Administrative Agent to such Securities Intermediary as to suchSecurities or other Investment Property, in each case without further consentof any Grantor or such nominee; provided, however, that anyGrantor shall not be required to give notice to Administrative Agent or deliveran Account Control Agreement in respect of any Securities or other InvestmentProperty that is subject to the Deferred Compensation Plan or is ExcludedCollateral.  The Administrative Agenthereby agrees with each of the Grantors that the Administrative Agent shall notgive any such entitlement orders or instructions or directions to any suchissuer or Securities Intermediary pursuant to any Account Control Agreement,and shall not withhold its consent to the exercise of any withdrawal or dealingrights by any Grantor, unless an Activation Event or a Designated Event ofDefault has occurred and is continuing.

 

(h)           Electronic Chattel Paper andTransferable Records.  If any Grantorat any time holds or acquires an interest in any Electronic Chattel Paper orany “transferable record”, as that term is defined in Section 201 of theFederal Electronic Signatures in Global and National Commerce Act or in Section 16of the Uniform Electronic Transactions Act as in effect in any relevantjurisdiction, such Grantor shall promptly notify the Administrative Agentthereof and, at the request of the Administrative Agent, shall take such actionas the Administrative Agent may reasonably request to vest in theAdministrative Agent control under UCC Section 9-105 of such ElectronicChattel Paper or control under Section 201 of the Federal ElectronicSignatures in Global and National Commerce Act or, as the case may be, Section 16of the Uniform Electronic Transactions Act, as so in effect in suchjurisdiction, of such transferable record. At any time that no Event of Default has occurred and is continuing theAdministrative Agent shall not deliver any such written request with respect toElectronic Chattel Paper or “transferable” records of a single obligor and itsAffiliates with an aggregate stated amount not exceeding $1,000,000.  The Administrative Agent agrees with suchGrantor that the Administrative Agent will arrange, pursuant to proceduresreasonably satisfactory to the Administrative Agent and so long as suchprocedures will not result in the Administrative Agent’s loss of control, forthe Grantor to make alterations to the Electronic Chattel Paper or transferablerecord permitted under UCC Section 9-105 or, as the case may be, Section 201of the Federal Electronic Signatures in Global and National Commerce Act or Section 16of the Uniform Electronic Transactions Act for a party in control to allowwithout loss of control, unless an Event of Default has occurred and iscontinuing.

 

(i)            Letter-of-Credit Rights.  If any Grantor is at any time a beneficiaryunder a letter of credit now or hereafter issued in favor of such Grantor, suchGrantor or the Company, on behalf of such Grantor, shall promptly notify theAdministrative Agent thereof and, at the written request and option of theAdministrative Agent, such Grantor shall, pursuant to an agreement in form andsubstance reasonably satisfactory to the Administrative Agent, arrange for theissuer and any confirmer of such letter of credit to consent to an assignmentto the Administrative Agent of the proceeds of any drawing under such letter ofcredit with the Administrative Agent agreeing that the proceeds of any drawingunder such letter of credit are to be paid to the applicable Grantor unless anEvent of Default has occurred and is continuing.  At any time that no Event of Default hasoccurred and is continuing the Administrative Agent shall not request that suchGrantor enter into such an agreement with respect to letters of credit issuedfor a single account party or its Affiliates with an aggregate stated amount ofless than $1,000,000.

 

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(j)            Commercial Tort Claims.  If any Grantor shall at any time hold oracquire a Commercial Tort Claim that it intends to pursue, the Grantor, byitself or through the Company, shall promptly notify the Administrative Agentthereof by including a summary description of such claim on Schedule 5.01 ofthe next Perfection Certificate Supplement delivered to the AdministrativeAgent pursuant to Section 4.01(b).

 

(k)           Equipment and Inventory Locations.  If requested by the Administrative Agent,each Grantor shall, at its own expense, use commercially reasonable efforts tocause any landlord from which any Grantor leases real property to enter into aWaiver Agreement; provided, however, that at any time that noEvent of Default has occurred and is continuing the Administrative Agent shallnot request that such Grantor enter into such a Waiver Agreement with anylandlord other than the landlord(s) from which the Company leases itsheadquarters in San Diego, California or unless such Grantor is leasing inexcess of 10,000 square feet from such landlord.  If requested by the Administrative Agent,each Grantor shall, at its own expense, use commercially reasonable efforts tocause any bailee, warehouseman or processor with control over or withpossession of any Equipment (including Fixtures) and Inventory of such Grantorto enter into a Waiver Agreement; provided, however, that at anytime no Event of Default has occurred and is continuing the AdministrativeAgent shall not request that such Grantor enter into such a Waiver Agreementwith any bailee, warehouseman or processor, housing Collateral valued lowerthan $10,000,000.

 

**4.02        Representationsand Warranties**.

 

(a)           Validity of Security Interest.  The Security Interest granted by each Grantorconstitutes (i) a legal and valid security interest in the Collateral ofsuch Grantor securing the payment and performance of the Obligations of suchGrantor and (ii) subject to the filings described in Section 4.01(c),a perfected security interest in the Collateral (other than as provided in suchSection) in which a security interest may be perfected under Article 9 ofthe UCC by filing, recording or registering a financing statement or analogousdocument in the United States (or any political subdivision thereof) and itsterritories and possessions pursuant to the UCC in such jurisdictions.  The Security Interest is and shall be priorto any other Lien on any of the Collateral, other than Permitted Liens.

 

(b)           Other Financing Statements.  The Collateral is owned by the Grantors freeand clear of any Lien, other than Permitted Liens.  None of the Grantors has filed or consentedto the filing of (i) any financing statement or analogous document underthe UCC or any other applicable Laws covering any Collateral, other than inrespect of Permitted Liens or (ii) any assignment in which any Grantorassigns any Collateral or any security agreement or similar instrument coveringany Collateral with any foreign governmental, municipal or other office, whichfinancing statement or analogous document, assignment, security agreement orsimilar instrument is still in effect, except, in each case, for PermittedLiens.

 

**4.03        Covenants**.  (a)  Change of Name, etc.  Each Grantor agrees to provide at least 30days prior written notice to the Administrative Agent of any change (i) inits legal name, (ii) in its identity or type of organization or corporatestructure, (iii) in its Federal Taxpayer Identification Number ororganizational identification number or (iv) in its jurisdiction oforganization.  Each Grantor agrees topromptly provide the Administrative Agent with certified organizationaldocuments reflecting any of the changes described in the immediately precedingsentence, to the extent applicable.  EachGrantor agrees not to effect or permit any change referred to in the firstsentence of this paragraph (a) unless all filings have been made under theapplicable UCC or otherwise that are required in order for the AdministrativeAgent to continue at all times following such change to have a valid, legal andperfected first priority security interest in all the Collateral subject toPermitted Liens.

 

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(b)           Maintenance of Records.  Each Grantor agrees to maintain, at its owncost and expense, such complete and accurate records with respect to theCollateral owned by it in accordance with reasonably prudent and standardpractices used in industries that are the same as or similar to those in whichsuch Grantor is engaged, and, at such time or times as the Administrative Agentmay reasonably request in respect of any material portion of any Collateral, toprepare and deliver to the Administrative Agent a schedule or schedules in formand detail reasonably satisfactory to the Administrative Agent showing theidentity, amount and location of any and all Collateral specified in any suchrequest.

 

(c)           Further Assurances.  (i)  Each Grantor shall, at its ownexpense, take any and all commercially reasonable actions necessary to defendtitle to all material Collateral against all Persons and to defend the SecurityInterest of the Administrative Agent in all material Collateral and thepriority thereof against any Lien not expressly permitted to be prior to theSecurity Interest pursuant to Section 7.01 of the Credit Agreement.

 

(ii)           If at any time any Grantor shall takea security interest in any property of an Account Debtor or any other Person tosecure payment and performance of an Account, such Grantor shall promptlyassign such security interest to the Administrative Agent to the extentpermitted by any effective provision of the contracts or arrangements to whichsuch property is subject.  Suchassignment need not be filed of public record unless necessary to continue theperfected status of the security interest against creditors of and transfereesfrom the Account Debtor or other Person granting the security interest.  Each Grantor shall remain liable to observeand perform all the conditions and obligations to be observed and performed byit under each contract, agreement or instrument relating to or consisting partof the Collateral, all in accordance with the terms and conditions thereof, andeach Grantor jointly and severally agrees to indemnify and hold harmless each SecuredParty from and against any and all liability for such performance (except tothe extent such liability is found in a final, non-appealable judgment by acourt of competent jurisdiction to have resulted from such Secured Party’sgross negligence or willful misconduct).

 

(iii)          Each Grantor agrees, at its ownexpense, to execute, acknowledge, deliver and cause to be duly filed all suchfurther instruments and documents and take all such actions as theAdministrative Agent may from time to time reasonably request to better assure,preserve, protect and perfect the Security Interest and the rights and remediescreated hereby, including the payment of any fees and taxes required inconnection with the execution and delivery of this Agreement, the granting ofthe Security Interest and the filing of any financing statements (includingfixture filings) or other documents in connection herewith or therewith.

 

(d)           Insurance.  The Grantors, at their own expense, shallmaintain or cause to be maintained insurance covering physical loss or damageto the Inventory and Equipment in accordance with the requirements set forth inSection 6.07 of the Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints theAdministrative Agent (and all officers, employees or agents designated by theAdministrative Agent) as such Grantor’s true and lawful agent (andattorney-in-fact) for the purpose, during the continuance of an Event ofDefault, of making, settling and adjusting claims in respect of Collateralunder policies of insurance, endorsing the name of such Grantor on any check,draft, instrument or other item of payment for the proceeds of such policies ofinsurance and for making all determinations and decisions with respect thereto.  In the event that any Grantor at any time ortimes shall fail to obtain or maintain any of the policies of insurancerequired hereby or to pay any premium in whole or part relating thereto, theAdministrative Agent may, without waiving or releasing any obligation orliability of any Grantor hereunder or any Event of Default, in its solediscretion, obtain and maintain such policies of insurance and pay such premiumand take any other actions with respect thereto as the Adminstrative Agentreasonably deems advisable. All sums disbursed by the Administrative Agent inconnection with

 

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this Subsection4.03(d), including reasonable attorneys’ fees, court costs, expenses andother charges relating thereto, shall be payable, upon demand, by the Grantorsto the Administrative Agent and shall be additional Obligations secured hereby.

 

(e)           Inspection Rights.  Without in any way limiting or expanding therights of any Lender or the Administrative Agent pursuant to Section 6.10of the Credit Agreement, not more than once per calendar year, theAdministrative Agent and such Persons as the Administrative Agent mayreasonably designate shall have the right, at the Grantors’ cost and expense,to inspect the Collateral, all records related thereto (and to make extractsand copies from such records) and the premises upon which any of the Collateralis located, at reasonable times and intervals during normal business hours uponreasonable advance notice to the respective Grantor, to discuss the Grantors’affairs with the officers of the Grantors and their independent accountants andto verify under reasonable procedures, the validity, amount, quality, quantity,value, condition and status of, or any other matter relating to, theCollateral, provided, however, that if an Event of Default hasoccurred and is continuing, the Administrative Agent and such Persons as theAdministrative Agent may reasonably designate shall have the right to do any ofthe foregoing at any time during regular business hours and upon reasonableadvance notice.  In the case of Accountsor Collateral in the possession of any third person, at any time that an Eventof Default has occurred and is continuing, by contacting Account Debtors or thethird person possessing such Collateral for the purpose of making such averification.  Subject toSection 10.07 of the Credit Agreement, the Administrative Agent shall havethe right to share any information it gains from such inspection or verificationwith any Secured Party.

 

(f)            Payment of Taxes.  At its option, the Administrative Agent maydischarge past due taxes, assessments, charges, fees, Liens, security interestsor other encumbrances at any time levied or placed on the Collateral (otherthan Permitted Liens), and may pay for the maintenance and preservation of theCollateral to the extent any Grantor fails to do so as required by the CreditAgreement or this Agreement, and the Grantors agree to reimburse theAdministrative Agent on demand for any payment made or any reasonable expense incurredby the Administrative Agent pursuant to the foregoing authorization and shallbe additional Obligations secured hereby; provided, however, thatnothing in this Section 4.03(f) shall be interpreted asexcusing any Grantor from the performance of, or imposing any obligation on theAdministrative Agent or any Secured Party to cure or perform, any covenants orother promises of any Grantor with respect to taxes, assessments, charges,fees, Liens, security interests or other encumbrances and maintenance as setforth herein or in the other Loan Documents.

 

**ARTICLEVREMEDIES**

** **

**5.01        Remedies upon Default**.  (a)  Upon the occurrence and during thecontinuance of an Event of Default, each Grantor agrees to deliver all or anyitem of Collateral to the Administrative Agent on demand, and it is agreed thatthe Administrative Agent shall have the right to take any of or all thefollowing actions at the same or different times:  (i) with or without legal process andwith or without prior notice or demand for performance, to take possession ofthe Collateral and without liability for trespass to enter any premises wherethe Collateral may be located for the purpose of taking possession of orremoving the Collateral; (ii) enforce compliance with and take any and allaction with respect to the Pledged Collateral and other Collateral to thefullest extent as though the Administrative Agent were the absolute ownerthereof, including the right to receive distributions and other payments withrespect to the Pledged Collateral and the other Collateral; and(iii) generally with respect to all Collateral, to exercise any and allrights afforded to a secured party under the Uniform Commercial Code or otherapplicable Law.  Without limiting thegenerality of the foregoing, each Grantor agrees that the Administrative Agentshall have the right to sell or otherwise dispose of all or any part of theCollateral at a public or private sale or at any broker’s board or on anysecurities exchange, for cash, upon credit or for future delivery as 

 

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the Administrative Agentshall deem appropriate.  TheAdministrative Agent shall be authorized at any such sale of securities (if itdeems it advisable to do so) to restrict the prospective bidders or purchasersto Persons who will represent and agree that they are purchasing the Collateralfor their own account for investment and not with a view to the distribution orsale thereof, and upon consummation of any such sale of Collateral the AdministrativeAgent shall have the right to assign, transfer and deliver to the purchaser orpurchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property soldabsolutely, free from any claim or right on the part of any Grantor, and eachGrantor hereby waives and releases (to the extent permitted by law) all rightsof redemption, stay, valuation and appraisal that such Grantor now has or mayat any time in the future have under any rule of Law or statute now existingor hereafter enacted.

 

(b)           The Administrative Agent shall givethe Borrowers 10 days’ written notice (which each Grantor agrees is reasonablenotice within the meaning of Section 9-611 of the UCC or its equivalent inother jurisdictions) of the Administrative Agent’s intention to make any saleof Collateral.  Such notice, in the caseof a public sale, shall state the time and place for such sale and, in the caseof a sale at a broker’s board or on a securities exchange, shall state theboard or exchange at which such sale is to be made and the day on which theCollateral, or portion thereof, will first be offered for sale at such board orexchange.  Any such public sale shall beheld at such time or times within ordinary business hours and at such place orplaces as the Administrative Agent may fix and state in the notice (if any) ofsuch sale.  At any such sale, theCollateral, or portion thereof, to be sold may be sold in one lot as anentirety or in separate parcels, as the Administrative Agent may (in its soleand absolute discretion) determine.  TheAdministrative Agent shall not be obligated to make any sale of any Collateralif it shall determine not to do so, regardless of the fact that notice of saleof such Collateral shall have been given. The Administrative Agent may, without notice or publication, adjourn anypublic or private sale or cause the same to be adjourned from time to time byannouncement at the time and place fixed for sale, and such sale may, withoutfurther notice, be made at the time and place to which the same was soadjourned.  In case any sale of all orany part of the Collateral is made on credit or for future delivery, theCollateral so sold may be retained by the Administrative Agent until the saleprice is paid by the purchaser or purchasers thereof, but the AdministrativeAgent shall not incur any liability in case any such purchaser or purchasersshall fail to take up and pay for the Collateral so sold and, in case of anysuch failure, such Collateral may be sold again upon like notice.  At any public (or, to the extent permitted bylaw, private) sale made pursuant to this Section 5.01, any SecuredParty may bid for or purchase for cash, free (to the extent permitted by law)from any right of redemption, stay, valuation or appraisal on the part of anyGrantor (all said rights being also hereby waived and released to the extentpermitted by law), the Collateral or any part thereof offered for sale and suchSecured Party may, upon compliance with the terms of sale, hold, retain and disposeof such property without further accountability to any Grantor therefor.  For purposes hereof, a written agreement topurchase the Collateral or any portion thereof shall be treated as a salethereof; the Administrative Agent shall be free to carry out such sale pursuantto such agreement and no Grantor shall be entitled to the return of theCollateral or any portion thereof subject thereto, notwithstanding the factthat after the Administrative Agent shall have entered into such an agreementall Events of Default shall have been remedied and the Obligations paid infull.  As an alternative to exercisingthe power of sale herein conferred upon it, the Administrative Agent mayproceed by a suit or suits at law or in equity to foreclose this Agreement andto sell the Collateral or any portion thereof pursuant to a judgment or decreeof a court or courts having competent jurisdiction or pursuant to a proceedingby a court-appointed receiver.  Any salepursuant to the provisions of this Section 5.01 shall be deemed toconform to the commercially reasonable standards as provided inSection 9-610(b) of the UCC or its equivalent in other jurisdictions.

 

(c)           Notwithstanding anything to thecontrary contained in this Agreement, if any enforceable term of any promissorynote, contract, agreement, permit, lease, license (including any License) orother General Intangible included as a part of the Collateral requires theconsent of the Person 

 

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obligated on such promissorynote or any Person (other than the applicable Grantor) obligated on such lease,contract or agreement, or which has issued such permit or license or otherGeneral Intangible (i) for the creation, attachment or perfection of theLien of this Agreement in such Collateral or (ii) for the assignment ortransfer thereof or the creation, attachment or perfection of such Lien not togive rise to a default, breach, right of recoupment, claim, defense,termination, right of termination or other remedy thereunder, then the receiptof any such necessary consent shall be a condition to any exercise of remediesagainst such Collateral under this Section 5.01 (but not to thecreation, attachment or perfection of the Lien of this Agreement as providedherein).

 

**5.02        Application of Proceeds**.  All cash proceeds received by theAdministrative Agent in respect of any sale of, collection from, or otherrealization upon all or any part of the Collateral of any Grantor may, in thediscretion of the Administrative Agent, be held, to the extent permitted underapplicable Law, by the Administrative Agent as additional collateral securityfor all or any part of the Obligations of such Grantor, and/or then or at anytime thereafter shall be applied (after payment of any amounts payable to theAdministrative Agent pursuant to Section 10.04 of the Credit Agreement andSection 4.03(f)) in whole or in part by the Administrative Agentfor the ratable benefit of the Secured Parties against all or any part of theObligations of such Grantor in accordance with Section 8.03 of the CreditAgreement.  Any surplus of such cash orcash proceeds of any Grantor held by the Administrative Agent and remaining onthe Termination Date for such Grantor shall be paid over to such Grantor or towhomsoever may be lawfully entitled to receive such surplus.

 

**5.03        Securities Act, etc**.  In view of the position of the Grantors inrelation to the Pledged Collateral, or because of other current or futurecircumstances, a question may arise under the Securities Act of 1933, as now orhereafter in effect, or any similar statute hereafter enacted analogous inpurpose or effect (such Act and any such similar statute as from time to timein effect being called the “Federal Securities Laws”) with respect toany disposition of the Pledged Collateral or any Investment Property permittedhereunder.  Each Grantor understands thatcompliance with the Federal Securities Laws might very strictly limit thecourse of conduct of the Administrative Agent if the Administrative Agent wereto attempt to dispose of all or any part of the Pledged Collateral or anyInvestment Property, and might also limit the extent to which or the manner inwhich any subsequent transferee of any Pledged Collateral or any InvestmentProperty could dispose of the same. Similarly, there may be other legal restrictions or limitationsaffecting the Administrative Agent in any attempt to dispose of all or part ofthe Pledged Collateral or any Investment Property under applicable Blue Sky orother state securities laws or similar laws analogous in purpose oreffect.  Each Grantor recognizes that inlight of such restrictions and limitations the Administrative Agent may, withrespect to any sale of the Pledged Collateral or any Investment Property, limitthe purchasers to those who will agree, among other things, to acquire suchPledged Collateral or any such Investment Property for their own account, forinvestment, and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that inlight of such restrictions and limitations, the Administrative Agent, whenexercising remedies on behalf of the Secured Parties after an Event of Defaulthas occurred and is continuing, (a) may proceed to make such a salewhether or not a registration statement for the purpose of registering suchPledged Collateral or Investment Property or part thereof shall have been filedunder the Federal Securities Laws and (b) may approach and negotiate witha single potential purchaser to effect such sale.  Each Grantor acknowledges and agrees that anysuch sale might result in prices and other terms less favorable to the sellerthan if such sale were a public sale without such restrictions.  In the event of any such sale, theAdministrative Agent shall incur no responsibility or liability for selling allor any part of the Pledged Collateral or Investment Property at a price thatthe Administrative Agent, in its sole and absolute discretion, may in goodfaith deem reasonable under the circumstances, notwithstanding the possibilitythat a substantially higher price might have been realized if the sale weredeferred until after registration as aforesaid or if more than a singlepurchaser were approached.  Theprovisions of this Section 5.04 will apply notwithstanding the 

 

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existence of a public orprivate market upon which the quotations or sales prices may exceedsubstantially the price at which the Administrative Agent sells.

 

**ARTICLEVIMISCELLANEOUS**

** **

**6.01        Notices**.  All notices and other communications providedfor hereunder shall be in writing and mailed, delivered or transmitted bytelecopies to each party hereto at the address set forth in Section 10.02of the Credit Agreement (with any notice to a Grantor other than the Borrowersbeing delivered to such Grantor in care of the Company).  All such notices and other communicationsshall be deemed to be given or made at the times provided in Section 10.02of the Credit Agreement.

 

**6.02        Amendments, etc.; Additional Grantors;Successors and Assigns**.

 

(a)           No amendment to or waiver of anyprovision of this Agreement nor consent to any departure by any Grantorherefrom, shall in any event be effective unless the same shall be in writingand signed by the Administrative Agent and, with respect to any such amendment,by the Grantors, and then such waiver or consent shall be effective only in thespecific instance and for the specific purpose for which given.  This Agreement shall be construed as aseparate agreement with respect to each Grantor and may be amended, modified,supplemented, waived or released with respect to any Grantor without theapproval of any other Grantor and without affecting the obligations of anyother Grantor hereunder.

 

(b)           Upon execution and delivery by theAdministrative Agent and any Person of a Joinder Agreement, such Person shallbecome a Grantor hereunder with the same force and effect as if originallynamed as a Grantor herein.  The executionand delivery of any such Joinder Agreement shall not require the consent of anyother Grantor hereunder.  The rights andobligations of each Grantor hereunder shall remain in full force and effectnotwithstanding the addition of any new Grantor as a party to this Agreement.

 

(c)           Upon the delivery by the Borrowers ofeach Perfection Certificate Supplement certifying supplements to the Schedulesto the Perfection Certificate in respect of any Grantor pursuant to Section 4.01(b),such schedule supplements shall be incorporated into and become a part of andsupplement the Schedules to the Perfection Certificate and the AdministrativeAgent may attach such schedule supplements to such Schedules, and eachreference to the Schedules to the Perfection Certificate shall mean and be areference to such Schedules, as supplemented pursuant to any such PerfectionCertificate Supplement.  For theavoidance of doubt, the delivery of any Perfection Certificate Supplement shallnot effect any release of the security interest granted by any Grantorhereunder unless and until such release shall be effective pursuant to Section 3.07.

 

(d)           This Agreement shall be binding uponeach Grantor and its successors, transferees and assigns and shall inure to thebenefit of the Administrative Agent and each other Secured Party and theirrespective successors, transferees and permitted assigns; provided, however,that no Grantor may assign its obligations hereunder without the prior writtenconsent of the Administrative Agent.

 

**6.03        Survival of Agreement**.  All covenants, agreements, representationsand warranties made by each Grantor in the Loan Documents and in thecertificates or other instruments prepared or delivered in connection with orpursuant to this Agreement or any other Loan Document shall be considered tohave been relied upon by the Lenders and shall survive the execution anddelivery of the Loan Documents and the making of any Loans and the issuance ofany Letters of Credit, regardless of any investigation made by any Lender or onits behalf and notwithstanding that the Administrative Agent, the L/C Issuer orany Lender may have had notice or knowledge of any Default or incorrectrepresentation or 

 

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warranty at the time anycredit is extended under the Credit Agreement, and shall continue in full forceand effect until the Termination Date for such Grantor or any earlier releaseof such Grantor hereunder pursuant to Section 3.07.

 

**6.04        Administrative Agent AppointedAttorney-in-Fact**.  EachGrantor hereby appoints the Administrative Agent the attorney-in-fact of suchGrantor for the purpose, upon the occurrence and during the continuance of anEvent of Default, of carrying out the provisions of this Agreement and takingany action and executing any instrument that the Administrative Agent may deemnecessary or advisable to accomplish the purposes hereof, which appointment isirrevocable and coupled with an interest. Without limiting the generality of the foregoing, the Administrative Agentshall have the right, upon the occurrence and during the continuance of anEvent of Default, with full power of substitution either in the AdministrativeAgent’s name or in the name of such Grantor, (a) to receive, endorse,assign and/or deliver any and all notes, acceptances, checks, drafts, moneyorders or other evidences of payment relating to the Collateral or any partthereof, (b) to demand, collect, receive payment of, give receipt for andgive discharges and releases of all or any of the Collateral, (c) to askfor, demand, sue for, collect, receive and give acquittance for any and allmoneys due or to become due under and by virtue of any Collateral, (d) tosign the name of any Grantor on any invoice or bill of lading relating to anyof the Collateral, (e) to send verifications of Accounts to any AccountDebtor, (f) to commence and prosecute any and all suits, actions orproceedings at law or in equity in any court of competent jurisdiction tocollect or otherwise realize on all or any of the Collateral or to enforce anyrights in respect of any Collateral, (g) to settle, compromise, compound,adjust or defend any actions, suits or proceedings relating to all or any ofthe Collateral, (h) to notify, or to require any Grantor to notify,Account Debtors to make payment directly to the Administrative Agent, and(i) to use, sell, assign, transfer, pledge, make any agreement withrespect to or otherwise deal with all or any of the Collateral, and to do allother acts and things necessary to carry out the purposes of this Agreement, asfully and completely as though the Administrative Agent were the absolute ownerof the Collateral for all purposes; provided, that nothing hereincontained shall be construed as requiring or obligating the AdministrativeAgent to make any commitment or to make any inquiry as to the nature orsufficiency of any payment received by the Administrative Agent, or to presentor file any claim or notice, or to take any action with respect to theCollateral or any part thereof or the moneys due or to become due in respect thereofor any property covered thereby.  TheAdministrative Agent and the other Secured Parties shall be accountable onlyfor amounts actually received as a result of the exercise of the powers grantedto them herein, and neither they nor their officers, directors, employees oragents shall be responsible to any Grantor for any act or failure to acthereunder, except for their own gross negligence or willful misconduct.

 

**6.05        Waivers**.  No failure or delay by the AdministrativeAgent or any other Secured Party in exercising any right, power or remedyhereunder or under any other Loan Document shall operate as a waiver thereof,nor shall any single or partial exercise of any such right, power or remedy, orany abandonment or discontinuance of steps to enforce such a right, power orremedy, preclude any other or further exercise thereof or the exercise of anyother right, power or remedy.  Therights, powers and remedies of the Administrative Agent, the L/C Issuer and theLenders hereunder and under the other Loan Documents are cumulative and are notexclusive of any rights, powers or remedies that they would otherwisehave.  Without limiting the generality ofthe foregoing, the making of a Loan or the issuance of a Letter of Credit shallnot be construed as a waiver of any Default, regardless of whether theAdministrative Agent, any Lender or the L/C Issuer may have had notice orknowledge of such Default at the time. No notice or demand on any Loan Party in any case shall entitle any LoanParty to any other or further notice or demand in similar or othercircumstances.

 

**6.06        Severability**.  If any provision of this Agreement is held tobe illegal, invalid or unenforceable, (a) the legality, validity andenforceability of the remaining provisions of this Agreement shall not beaffected or impaired thereby and (b) the parties shall endeavor in goodfaith negotiations to 

 

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replace the illegal,invalid or unenforceable provisions with valid provisions the economic effectof which comes as close as possible to that of the illegal, invalid orunenforceable provisions.  The invalidityof a provision in a particular jurisdiction shall not invalidate or renderunenforceable such provision in any other jurisdiction.

 

**6.07        Counterparts, Integration, Effectiveness**.  This Agreement may be executed incounterparts (and by different parties hereto in different counterparts), eachof which shall constitute an original, but all of which when taken togethershall constitute a single contract.  ThisAgreement and the other Loan Documents constitute the entire contract among theparties relating to the subject matter hereof and supersede any and allprevious agreements and understandings, oral or written, relating to thesubject matter hereof.  This Agreementshall become effective when it shall have been executed by the AdministrativeAgent and when the Administrative Agent shall have received counterparts hereofthat, when taken together, bear the signatures of each of the other partieshereto.  Delivery of an executedcounterpart of a signature page of this Agreement by telecopy shall beeffective as delivery of a manually executed counterpart of this Agreement.

 

**6.08        Headings**.  Article and Section headings usedherein are for the purpose of reference only, are not part of this Agreementand are not to affect the construction of, or to be taken into consideration ininterpreting, this Agreement.

 

**6.09        GOVERNING LAW; JURISDICTION; ETC**.

 

(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY ANDCONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(b)           SUBMISSION TO JURISDICTION.  EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLYSUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THECOURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITEDSTATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF SUCH STATE, AND ANY APPELLATECOURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATINGTO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENTOF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLYAGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BEHEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT AFINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE ANDMAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANYOTHER MANNER PROVIDED BY LAW.  NOTHING INTHIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THEADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TOBRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOANDOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERITES IN THE COURTS OF ANYJURISDICTION.

 

(c)           WAIVER OF VENUE.  EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLYWAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THATIT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION ORPROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOANDOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLYWAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, 

 

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THE DEFENSE OF ANINCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCHCOURT.

 

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TOSERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02 OFTHE CREDIT AGREEMENT.  NOTHING IN THISAGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANYOTHER MANNER PERMITTED BY APPLICABLE LAW.

 

**6.10        WAIVER OF JURY TRIAL**.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVETO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUTOF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONSCONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHERTHEORY).  EACH PARTY HERETO(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSONHAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, INTHE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TOENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

**6.11        ENTIRE AGREEMENT**.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTSREPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BECONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORALAGREEMENTS OF THE PARTIES OR BY PRIOR OR CONTEMPORANEONS WRITTENAGREEMENTS.  THERE ARE NO UNWRITTEN ORALAGREEMENTS AMONG THE PARTIES.

 

**6.12        Mortgages**.  In the event that any of the Collateralhereunder is also subject to a valid and enforceable Lien under the terms ofany Mortgage and the terms of such Mortgage are inconsistent with the terms ofthis Agreement, then with respect to such Collateral, the terms of suchMortgage shall be controlling in the case of Fixtures and real estate leases,letting and licenses of, and contracts and agreements relating to the lease of,real property covered by such Mortgage, and the terms of this Agreement shallbe controlling in the case of all other Collateral.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, theparties hereto have duly executed this Agreement as of the day and year firstabove written.

 
| **Grantors:** | **AMYLIN  PHARMACEUTICALS, INC.** |
|---------------|-----------------------------------|
|          |                              |
|          |                              |
|          | By:                               |   |
|          |                              | Name: |
|          |                              | Title: |
|          |                              |
|          |                              |
|          | **AMYLIN  INVESTMENTS LLC**       |
|          |                              |
| ** **    | **By:**                           | **Amylin  Pharmaceuticals, Inc., its sole manager** |
|          |                              |
|          |                              |
|          | By:                               |   |
|          |                              | Name: |
|          |                              | Title: |
|          |                              |
|          |                              |
|          | **AMYLIN  OHIO LLC**              |
|          |                              |
| ** **    | **By:**                           | **Amylin  Pharmaceuticals, Inc., its sole manager** |
|          |                              |
|          |                              |
|          | By:                               |   |
|          |                              | Name: |
|          |                              | Title: |
|               |                                   |  |  |  |  |  |

 

 

Signaturepage

Pledgeand Security Agreement

 

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| **Administrative  Agent:** | **BANK  OF AMERICA, N.A.**,  as Administrative Agent |
|----------------------------|------------------------------------------------------|
| ** **                 | ** **                                           |
| ** **                 | ** **                                           |
|                       | By:                                                  |   |
|                       |                                                 | Name: |
|                       |                                                 | Title: |

 

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** **

**EXHIBIT A**

to Pledge and Security Agreement

 

**PERFECTION CERTIFICATE**

 

A-1

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***EXHIBIT G***

 

Preparedby and

UponRecording return to:

 

StaciE. Rosche, Esquire

McGuireWoodsLLP

100North Tryon Street, Suite 2900

Charlotte,North Carolina  28202-4011

 

 

OPEN-END MORTGAGE, ASSIGNMENT OF RENTS ANDLEASES,

SECURITY AGREEMENT AND FIXTURE FILING

IN THE MAXIMUM PRINCIPAL AMOUNT OF$140,000,000

 

(ThisDocument Serves as a Fixture Filing under Section 9-502 of the OhioUniform Commercial Code.)

 

Mortgagor’s Organizational IdentificationNumber:  DE-4070998

 

THIS OPEN-END MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, SECURITYAGREEMENT AND FIXTURE FILING (this “Mortgage”) is made this 21st day ofDecember, 2007, by AMYLIN OHIO LLC, a Delaware limited liability company whoseaddress is c/o Amylin Pharmaceuticals, Inc., 9360 Towne Center Drive, Suite 110,San Diego, California 92121 (“Mortgagor”), for the benefit of BANK OFAMERICA, N.A., a national banking association whose address is 100 North TryonStreet, Charlotte, North Carolina 28255 (together with its successors andassigns, “Mortgagee”).

 

RECITALS

 

A.           Mortgagor,Mortgagee and Amylin Pharmaceuticals, Inc., a Delaware corporation (“Borrower”)have entered into that certain Credit Agreement dated December 21, 2007(the “Credit Agreement”) evidencing indebtedness in the maximumprincipal amount of One Hundred Forty Million and No/100 Dollars($140,000,000.00) (the “Loan”).

 

B.             To induceMortgagee to enter into the Credit Agreement and consummate the transactionscontemplated therein, Mortgagor has agreed to execute and deliver this Mortgageas security for the Obligations (as defined in the Credit Agreeement).

 

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NOW,THEREFORE, in consideration of the matters set forth above and the sum of TenDollars ($10.00) cash in hand paid to Mortgagor, and for other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, Mortgagor agrees as follows:

 

ARTICLE 1

 

# **Definitions; Granting Clauses;Secured Indebtedness**

 

Section 1.1. Amount Secured.  ThisMortgage secures the aggregate principal amount of the Loan plus otherobligations as provided herein and such additional****amountsas Mortgagee may from time to time advance pursuant to the terms and conditionsof this Mortgage or for the protection of the lien of this Mortgage, togetherwith interest thereon.

 

Section 1.2. Definitions. (a) In addition to other terms defined herein, each of thefollowing terms shall have the meaning assigned to it, such definitions to beapplicable equally to the singular and the plural forms of such terms and toall genders:

 

“Borrower”:  AmylinPharmaceuticals, Inc., a Delaware corporation, whose address is 9360 TowneCenter Drive, Suite 110, San Diego, California 92121, and its permittedsuccessors and assigns.

 

“Maturity Date”:  shallhave the meaning set forth in the Credit Agreement.

 

“Mortgagee”: Bank of America, N.A., a national banking association, its successorsand assigns, whose place of business is 100 North Tryon Street, Charlotte,North Carolina 28255.

 

“Mortgagor”:  Amylin Ohio, LLC, a Delaware limited liabiltycompany, whose address is c/o Amylin Pharmaceuticals, Inc., 9360 TowneCenter Drive, Suite 110, San Diego, California 92121, and its permittedsuccessors and assigns.

 

“Swap Contract” means anyagreement, whether or not in writing, relating to any Swap Transaction,including, unless the context otherwise clearly requires, any form of masteragreement published by the International Swaps and Derivatives Association, Inc.,or any other master agreement, entered into prior to the date hereof or anytime after the date hereof, between Swap Counterparty and Mortgagor (or itsAffiliate (as defined in the Credit Agreement)), together with any relatedschedule and confirmation, as amended, supplemented, superseded or replacedfrom time to time.

 

“Swap Counterparty”means Mortgagee or its Affiliate, in its capacity as counterparty under anySwap Contract.

 

“Swap Transaction”means any transaction that is a rate swap, basis swap, forward ratetransaction, commodity swap, commodity option, equity or equity index swap oroption, bond option, note or bill option, interest rate option, forward foreignexchange transaction, cap transaction, collar transaction, floor transaction,currency swap transaction, cross-currency rate 

 

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swap transaction, swapoption, currency option, credit swap or default transaction, T-lock, or anyother similar transaction (including any option to enter into the foregoing) orany combination of the foregoing, entered into prior to the date hereof oranytime after the date hereof between Swap Counterparty and Mortgagor (or itsAffiliate) so long as a writing, such as a Swap Contract, evidences the parties’intent that such obligations shall be secured by this Mortgage in connectionwith the Credit Agreement.

 

(b)           Any term used or defined in the OhioUniform Commercial Code, as in effect from time to time, and not defined inthis Mortgage has the meaning given to the term in the Ohio Uniform CommercialCode, as in effect from time to time, when used in this Mortgage; provided,however, if a term is defined in Chapter 9 of the Ohio Uniform Commercial Codedifferently than in another chapter of the Ohio Uniform Commercial Code, theterm has the meaning specified in Chapter 9.

 

(c)           Capitalized terms used but notdefined in this Mortgage have the respective meanings ascribed to them in theCredit Agreement, the provisions of which are incorporated herein by thisreference to the extent such provisions are necessary to interpret this Mortgage.

 

Section 1.3. Granting Clause.

 

(a)           Mortgagor does hereby grant, bargain,sell, alien, remise, release, convey, assign, transfer, mortgage,  hypothecate, pledge, deliver, set over,warrant and confirm unto Mortgagee, its successors and assigns forever allright, title and interest of Mortgagor in and to the following:  (a)  the real propertydescribed in Exhibit A which is attached hereto and incorporatedherein by reference (the “Land”) together with: (i) any and allbuildings, structures, improvements, alterations or appurtenances now orhereafter situated or to be situated on the Land (collectively the “Improvements”);and (ii) all right, title and interest of Mortgagor, now owned orhereafter acquired, in and to (1) all streets, roads, alleys, easements,rights-of-way, licenses, rights of ingress and egress, vehicleparking rights and public places, existing or proposed, abutting, adjacent,used in connection with or pertaining to the Land or the Improvements; (2) anystrips or gores between the Land and abutting or adjacent properties; (3) alloptions to purchase the Land or the Improvements or any portion thereof orinterest therein, and any greater estate in the Land or the Improvements; and (4) allwater and water rights, timber, crops and mineral interests on or pertaining tothe Land (the Land, Improvements and other rights, titles and interestsreferred to in this clause (a) being herein sometimes collectively calledthe “Premises”); (b)  all fixtures, equipment, systems, machinery,furniture, furnishings, appliances, inventory, goods, building and constructionmaterials, supplies, and articles of personal property, of every kind andcharacter, tangible and intangible (including software embedded therein), nowowned or hereafter acquired by Mortgagor, which are now or hereafter attachedto or situated in, on or about the Land or the Improvements, or used in ornecessary to the complete and proper planning, development, use, occupancy oroperation thereof, or acquired (whether delivered to the Land or storedelsewhere) for use or installation in or on the Land or the Improvements, andall renewals and replacements of, substitutions for and additions to theforegoing (the properties referred to in this clause (b) being hereinsometimes collectively called the “Accessories,” all of which are herebydeclared to be permanent accessions to the Land); (c) all (i) plansand specifications for the Improvements; 

 

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(ii) Mortgagor’srights, but not liability for any breach by Mortgagor, under all commitments(including any commitment for financing to pay any of the Secured Indebtedness,as defined below), insurance policies, (or additional or supplemental coveragerelated thereto, including from an insurance provider meeting the requirementsof the Loan Documents or from or through any state or federal governmentsponsored program or entity), Swap Contracts, contracts and agreements for thedesign, construction, operation or inspection of the Improvements and othercontracts and general intangibles (including but not limited to paymentintangibles and goodwill but excluding trademarks, patents, trade names,copyrights or other intellectual property) related to the Premises or theAccessories or the operation thereof; (iii) deposits and deposit accountsarising from or related to any transactions related to the Premises or theAccessories (including but not limited to Mortgagor’s rights in tenants’security deposits, deposits with respect to utility services to the Premises,and any deposits, deposit accounts or reserves hereunder or under any otherLoan Documents for taxes, insurance or otherwise), rebates or refunds of impactfees or other taxes, assessments or charges, money, accounts (including depositaccounts), instruments, documents, promissory notes and chattel paper (whethertangible or electronic) arising from or by virtue of any transactions relatedto the Premises or the Accessories and any account or deposit account fromwhich Mortgagor may from time to time authorize Mortgagee to debit and/orcredit payments due with respect to the Loan or any Swap Contract, all rightsto the payment of money from Mortgagee under any Swap Contract, and allaccounts, deposit accounts and general intangibles, including paymentintangibles, described in any Swap Contract; (iv) permits, licenses,franchises, certificates, development rights, commitments and rights forutilities, and other rights and privileges obtained in connection with thePremises or the Accessories; (v) leases, rents, royalties, bonuses,issues, profits, revenues and other benefits of the Premises and theAccessories (without derogation of Article 3 hereof); (vi) as-extractedcollateral produced from or allocated to the Land including, without limitation,oil, gas and other hydrocarbons and other minerals and all products processedor obtained therefrom, and the proceeds thereof; and (vii) engineering,accounting, title, legal, and other technical or business data concerning thePremises which are in the possession of Mortgagor or in which Mortgagor canotherwise grant a security interest; and (d) all (i) accounts andproceeds (cash or non-cash and including payment intangibles) of or arisingfrom the properties, rights, titles and interests referred to above in this Section 1.3,including but not limited to proceeds of any sale, lease or other dispositionthereof, proceeds of each policy of insurance (or additional or supplementalcoverage related thereto, including from an insurance provider meeting the requirementsof the Loan Documents or from or through any state or federal governmentsponsored program or entity) relating thereto, proceeds of the taking thereofor of any rights appurtenant thereto, including change of grade of streets,curb cuts or other rights of access, by condemnation, eminent domain ortransfer in lieu thereof for public or quasi-public use under any law,and proceeds arising out of any damage thereto; (ii) all letter-of-creditrights (whether or not the letter of credit is evidenced by a writing)Mortgagor now has or hereafter acquires relating to the properties, rights,titles and interests referred to in this Section 1.3; (iii) allcommercial tort claims Mortgagor now has or hereafter acquires relating to theproperties, rights, titles and interests referred to in this Section 1.3;and (iv) other interests of every kind and character which Mortgagor nowhas or hereafter acquires in, to or for the benefit of the properties, rights,titles and interests referred to above in this Section 1.3 and allproperty used or useful in connection therewith, including but not limited torights of ingress and egress and remainders, reversions and 

 

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reversionary rights orinterests; and if the estate of Mortgagor in any of the property referred toabove in this Section 1.3 is a leasehold estate, this conveyance shallinclude, and the lien and security interest created hereby shall encumber andextend to, all other or additional title, estates, interests or rights whichare now owned or may hereafter be acquired by Mortgagor in or to the propertydemised under the lease creating the leasehold estate; provided, however,the foregoing rights, interests and properties shall not included (X) anyof the Ohio/Sale Leaseback Property (as defined in the Credit Agreement) fromand after the consummation of the Permitted Ohio Sale/Leaseback (as defined inthe Credit Agreement) and (Y) any Excluded Collateral (as defined in theCredit Agreement).

 

(b)           TO HAVE AND TO HOLD the foregoingrights, interests and properties, together with all rights, estates, powers,privileges, hereditaments, easements and appurtenances thereto (hereincollectively called the “Property”) to the Mortgagee and the Mortgagee’ssuccessors and assigns to secure and enforce the payment and performance of thefollowing obligations, indebtedness, duties and liabilities and all renewals,extensions, supplements, increases and modifications thereof in whole or inpart from time to time (collectively, the “Secured Indebtedness”):  (A) the performance and observance byBorrower and Mortgagor of all covenants and conditions contained in the CreditAgreement, and any promissory notes given in substitution therefor or inmodification, supplement, increase, renewal or extension thereof, in whole orin part, in this Mortgage, and in all other instruments securing the CreditAgreement; and (B) all indebtedness, liabilities, duties, covenants,promises and other obligations whether joint or several, direct or indirect,fixed or contingent, liquidated or unliquidated, and the collection of all suchamounts, owed by Borrower and/or Mortgagor to Mortgagee now or hereafterincurred or arising pursuant to or permitted by the provisions of the CreditAgreement, this Mortgage, or any other document now or hereafter evidencing,governing, guaranteeing, securing or otherwise executed in connection with theloans made pursuant to the Credit Agreement, including but not limited to anyloan or other credit agreement, letter of credit or reimbursement agreement,tri-party financing agreement, any Swap Contracts or other agreement betweenMortgagor and Mortgagee, or among Mortgagor, Mortgagee and any other party orparties, pertaining to the repayment or use of the proceeds of the loans madepursuant to the Credit Agreement (the Credit Agreement, this Mortgage, any SwapContracts and such other documents, as they or any of them may have been or maybe from time to time renewed, extended, supplemented, increased or modified, beingherein sometimes collectively called the “Loan Documents”); provided,however, this Mortgage shall not secure any such other loan, advance, debt,obligation or liability with respect to which Mortgagee is by applicable lawprohibited from obtaining a lien on real estate.

 

Section 1.4.  Security Interest.  Mortgagor hereby grants to Mortgagee asecurity interest in all of the Property which constitutes personal property orfixtures, all proceeds and products thereof, and all supporting obligationsancillary to or arising in any way in connection therewith (herein sometimescollectively called the “Collateral”) to secure the obligations ofBorrower and Mortgagor under the Credit Agreement and Loan Documents and allother indebtedness and matters defined as Secured Indebtedness in Section 1.5of this Mortgage.  In addition to itsrights hereunder or otherwise, Mortgagee shall have all of the rights of asecured party under the Ohio UniformCommercial Code, as in effect from time to time, or under the UniformCommercial Code in force, from time to time, in any other state to the extentthe same is applicable law.  It isintended 

 

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thatas to the Collateral this Mortgage shall be effective as a financing statementfiled as a fixture filing from the date of its filing for record in the realestate records of the county in which the Land is located.  Information concerning the security interestcreated by this instrument may be obtained from the Mortgagee as secured partyor the Mortgagor as debtor at the addresses shown herein.

 

ARTICLE 2

 

Representations, Warranties and Covenants

 

Section 2.1.  Mortgagorrepresents, warrants, and covenants as follows:

 

(a)  Payment and Performance.  Mortgagor will make (or cause Borrower tomake, as applicable) due and punctual payment of the Secured Indebtedness.  Mortgagor will timely and properly performand comply with all of the covenants, agreements, and conditions imposed uponit by this Mortgage and the other Loan Documents.  Time shall be of the essence in thisMortgage.

 

(b)  Title and Permitted Encumbrances.  Mortgagor has, in Mortgagor’s own right, andMortgagor covenants to maintain, lawful, good and marketable title to theProperty, is lawfully seized and possessed of the Property and every partthereof, and has the right to convey the same, free and clear of all liens,charges, claims, security interests, and encumbrances except for (i) thematters, if any, shown as exceptions in the lender’s policy of title insuranceinsuring the lien of this Mortgage, which are Permitted Encumbrances only tothe extent the same are valid and subsisting and affect the Property, (ii) theliens and security interests evidenced or granted by this Mortgage, (iii) minorimperfections of title that do not detract from the value or impair the use ofthe Property, (iv) liens for taxes not yet due or for taxes that theCompany is contesting in good faith through appropriate proceedings, and thelien for any assessments not yet due under any school, improvement or specialdistrict bonds issued by any governmental authority where the proceeds are usedto finance public improvements and/or services; (v) covenants, conditionsand restrictions of general applicability to the use and occupancy of theProperty and other contiguous properties that evidence a common plan ofdevelopment; (vi) utility, storm drainage, access, landscaping, and othernon-exclusive easements for use of portions of a Property that do not detractfrom the value or impair the use of the Property; (vii) mineral, water orpatent rights reserved or granted by a predecessor in interest to the UnitedStates of America or any successor in interest; (viii) any Permitted OhioFinancing Facility Liens (as defined in the Credit Agreement); (ix) easements,including exclusive easements and access easements, granted to the State ofOhio or any governmental agency thereof or utility for the purpose of building,operating and maintaining an electrical substation and related equipment andelectrical wires (collectively, the “Duke Energy Easements”); and (x) lienspermitted by Section 7.01(d), (f), (h), (i), (l), (n), and (o) of theCredit Agreement (the matters described in the foregoing clauses (i) through(x) being herein called the “Permitted Encumbrances”).  Mortgagor, and Mortgagor’s successors andassigns, will warrant generally and forever defend title to the Property,subject as aforesaid, to Mortgagee and its successors or substitutes andassigns, against the claims and demands of all persons claiming or to claim thesame or any part thereof.  Mortgagor willpunctually pay, perform, observe in all material respects and keep all materialcovenants, obligations and 

 

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conditions in or pursuant to any Permitted Encumbrance and will notmodify or permit modification of any Permitted Encumbrance without the priorwritten consent of Mortgagee, which consent shall not be unreasonably withheld,conditioned or delayed.  Inclusion of anymatter as a Permitted Encumbrance does not constitute approval or waiver byMortgagee of any existing or future violation or other breach thereof byMortgagor, by the Property or otherwise. If any right or interest of Mortgagee in the Property or any partthereof shall be endangered or questioned or shall be attacked directly orindirectly, Mortgagee (whether or not named as party to legal proceedings withrespect thereto), following notice to Mortgagor and after reasonableopportunity for Mortgagor to cure in accordance with the Loan Documents, ishereby authorized and empowered to take such steps as in its discretion may beproper for the defense of any such legal proceedings or the protection of suchright or interest of Mortgagee, including but not limited to the employment ofindependent counsel, the prosecution or defense of litigation, and thecompromise or discharge of adverse claims. All expenditures so made of every kind and character shall be a demandobligation (which obligation Mortgagor hereby promises to pay) owing byMortgagor to Mortgagee, and the Mortgagee shall be subrogated to all rights ofthe person receiving such payment.  Uponthe request of Mortgagor, the lien of this Mortgage shall be subordinated tothe Duke Energy Easements.  Mortgagoragrees that it shall pay for all legal fees, title insurance endorsementpremiums and other expenses reasonably incurred by Mortgagee in connection withthe subordination of the lien of this Mortgage to the Duke Energy Easements.

 

(c)  Taxes and Other Impositions.  Mortgagor will pay, or cause to be paid, alltaxes, assessments and other charges or levies imposed upon or against or withrespect to the Property or the ownership, use, occupancy or enjoyment of anyportion thereof, or any utility service thereto, as the same become due andpayable, including but not limited to all real estate taxes assessed againstthe Property or any part thereof, and shall deliver promptly to Mortgagee suchevidence of the payment thereof as Mortgagee may require.

 

(d)  Insurance.  Mortgagorshall obtain and maintain at Mortgagor’s sole expense: (1) propertyinsurance with respect to the Premises and all permanently installed fixturesand improvements against loss or damage by such hazards as are presentlyincluded in an Insurance Services Office (ISO) Special Causes of Loss Form CP1030 or its equivalent, in an amount not less than 100% of the full replacementcost, including the cost of debris removal, without deduction for depreciationand sufficient to prevent Mortgagor and Mortgagee from becoming a coinsurer,such insurance to be in “builder’s risk” completed value (non-reporting)form during and with respect to any construction on the Premises; (2) ifand to the extent any portion of the Improvements is, under the Flood Disaster ProtectionAct of 1973 (“FDPA”), as it may be amended from time to time, in aSpecial Flood Hazard Area, within a Flood Zone designated A or V in aparticipating community, a flood insurance policy in an amount required byMortgagee, but in no event less than the amount sufficient to meet therequirements of applicable law and the FDPA, as such requirements may from timeto time be in effect; (3) commercial general liability insurance, on an “occurrence”basis, against claims for “personal injury” liability, including bodily injury,death or property damage liability, for the benefit of Mortgagor as namedinsured and Mortgagee as additional insured with minimum coverage limits of atleast One Million Dollars ($1,000,000.000) combined single limit per occurrence/aggregate;(4) statutory workers’ 

 

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compensation insurance covering all employees of Mortgagor employed atthe Premises (including employer’s liability insurance, if required byMortgagee); (5) during the course of any construction at the Premises,Mortgagor shall cause each of its contractors and subcontractors to maintain (A) workers’compensation insurance required by law (including employer’s liabilityinsurance, if required by Mortgagee); and (B) commercial general liabilityinsurance, including products and completed operations coverage with minimumcoverage limits of at least Two Million Dollars ($2,000,000.00) combined singlelimit per occurrence/aggregate, and otherwise meeting the same policy requirementsas set forth in (3) above****but withMortgagor and Mortgagee as additional insureds; and (6) such otherinsurance on the Property and endorsements as may from time to time be requiredby Mortgagee and against other insurable hazards or casualties which at thetime are commonly insured against in the case of premises similarly situated,due regard being given to the height, type, construction, location, use andoccupancy of buildings and improvements. All insurance policies shall be issued and maintained by insurers, inamounts, with deductibles, limits and retentions as are commercially available,and in forms satisfactory to Mortgagee, and shall require not less than ten (10) days’prior written notice to Mortgagee of any cancellation for nonpayment ofpremiums, and not less than thirty (30) days’ prior written notice to Mortgageeof any other cancellation or any change of coverage.  All insurance companies must be licensed todo business in the state in which the Property is located and must have an A.M.Best Company financial and performance ratings of A-:IX or better.  All insurance policies maintained, or causedto be maintained, by Mortgagor with respect to the Property, except for generalliability insurance, shall provide that each such policy shall be primarywithout right of contribution from any other insurance that may be carried byMortgagor or Mortgagee and that all of the provisions thereof, except thelimits of liability, shall operate in the same manner as if there were aseparate policy covering each insured. Without limiting the discretion of Mortgagee with respect to requiredendorsements to insurance policies, all such policies for loss of or damage tothe Property shall contain a standard “loss payee” endorsement (form #438 BFU orequivalent), providing for all loss proceeds under such policies to be payableto Mortgagee, such proceeds to be held for application as provided in the LoanDocuments.  True and complete copies ofthe originals of each initial insurance policy (or to the extent permitted byMortgagee, such other evidence of insurance acceptable to Mortgagee) shall bedelivered to Mortgagee at the time of execution of this Mortgage, with allpremiums fully paid current, and a report summarizing the insurance coverage shallbe delivered to Mortgagee in accordance with the terms and provisions of theCredit Agreement.  Mortgagor shall payall premiums on policies required hereunder as they become due and payable andpromptly deliver to Mortgagee, upon Mortgagee’s request, evidence satisfactoryto Mortgagee of the timely payment thereof. If any loss occurs at any time when Mortgagor has failed to performMortgagor’s covenants and agreements in this paragraph with respect to anyinsurance payable because of loss sustained to any part of the Property whetheror not such insurance is required by Mortgagee, Mortgagee shall nevertheless beentitled to the benefit of all insurance covering the loss and held by or forMortgagor, to the same extent as if it had been made payable to Mortgagee.  Upon any foreclosure hereof or transfer oftitle to the Property in extinguishment of the whole or any part of the SecuredIndebtedness, all of Mortgagor’s right, title and interest in and to theinsurance policies referred to in this Section (including unearnedpremiums) and all proceeds payable thereunder shall thereupon vest in thepurchaser at foreclosure or other such transferee, to the extent permissibleunder such policies.  Upon a Default,Mortgagee shall have the right (but not 

 

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the obligation) to make proof of loss for, settle and adjust any claimunder, and receive the proceeds of, all insurance for loss of or damage to theProperty regardless of whether or not such insurance policies are required byMortgagee, and the expenses incurred by Mortgagee in the adjustment andcollection of insurance proceeds shall be a part of the Secured Indebtednessand shall be due and payable to Mortgagee on demand.  Mortgagee shall not be, under any circumstances,liable or responsible for failure to collect or exercise diligence in thecollection of any of such proceeds or for the obtaining, maintaining oradequacy of any insurance or for failure to see to the proper application ofany amount paid over to Mortgagor.  Anysuch proceeds received by Mortgagee shall, after deduction therefrom of allreasonable expenses actually incurred by Mortgagee, including attorneys’ fees,at Mortgagee’s option be (1) released to Mortgagor, or (2) applied(upon compliance with such terms and conditions as may be required byMortgagee) to repair or restoration, either partly or entirely, of the Propertyso damaged, or (3) applied to the payment of the Secured Indebtedness insuch order and manner as Mortgagee, in its sole discretion, may elect, whetheror not due.  In any event, the unpaidportion of the Secured Indebtedness shall remain in full force and effect andthe payment thereof shall not be excused. Mortgagor shall at all times comply with the requirements of the insurancepolicies required hereunder and of the issuers of such policies and of anyboard of fire underwriters or similar body as applicable to or affecting theProperty.

 

(e)  Reserve for Insurance, Taxes and Assessments.  Upon a Default, to secure the payment andperformance of the Secured Indebtedness, but not in lieu of such payment andperformance, Mortgagor, upon written demand by Mortgagee, will deposit withMortgagee a sum equal to real estate taxes, assessments and charges (whichcharges for the purposes of this paragraph shall include without limitation anyrecurring charge which could result in a lien against the Property) against theProperty for the current year and the premiums for such policies of insurancefor the current year, all as estimated by Mortgagee and prorated to the end ofthe calendar month following the month during which Mortgagee’s request ismade, and thereafter will deposit with Mortgagee, on each date when aninstallment of principal and/or interest is due as set forth in the CreditAgreement, sufficient funds (as estimated from time to time by Mortgagee) topermit Mortgagee to pay at least fifteen (15) days prior to the due datethereof, the next maturing real estate taxes, assessments and charges andpremiums for such policies of insurance. Mortgagee shall have the right to rely upon tax information furnished byapplicable taxing authorities in the payment of such taxes or assessments andshall have no obligation to make any protest of any such taxes orassessments.  Any excess over the amountsrequired for such purposes shall be held by Mortgagee for future use, appliedto any Secured Indebtedness or refunded to Mortgagor, at Mortgagee’s option,and any deficiency in such funds so deposited shall be made up by Mortgagorupon demand of Mortgagee.  All such fundsso deposited shall bear no interest, may be comingled with the general funds ofMortgagee and shall be applied by Mortgagee toward the payment of such taxes,assessments, charges and premiums when statements therefor are presented toMortgagee by Mortgagor (which statements shall be presented by Mortgagor toMortgagee a reasonable time before the applicable amount is due).  The conveyance or transfer of Mortgagor’sinterest in the Property for any reason (including without limitation theforeclosure of a subordinate lien or security interest or a transfer byoperation of law) shall constitute an assignment or transfer of Mortgagor’sinterest in and rights to such funds held by Mortgagee under this paragraph butsubject to the rights of Mortgagee hereunder.

 

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(f)  Condemnation. Mortgagor shall notify Mortgagee immediately of any threatened orpending proceeding for condemnation affecting the Property or arising out ofdamage to the Property, and Mortgagor shall, at Mortgagor’s expense, diligentlyprosecute any such proceedings.  If aDefault shall have occurred hereunder, Mortgagee shall have the right (but notthe obligation) to participate in any such proceeding and to be represented bycounsel of its own choice.  Mortgageeshall be entitled to receive all sums which may be awarded or become payable toMortgagor for the condemnation of the Property, or any part thereof, for publicor quasi-public use, or by virtue of private sale in lieu thereof, andany sums which may be awarded or become payable to Mortgagor for injury ordamage to the Property.  Mortgagor shall,promptly upon request of Mortgagee, execute such additional assignments andother documents as may be necessary from time to time to permit suchparticipation and to enable Mortgagee to collect and receipt for any suchsums.  All such sums are hereby assignedto Mortgagee, and shall, after deduction therefrom of all reasonable expensesactually incurred by Mortgagee, including attorneys’ fees, be (1) releasedto Mortgagor to repair and restore the Property, or (2) if a Default shallthen exist and be continuing, at Mortgagee’s option, applied to the payment ofthe Secured Indebtedness in such order and manner as Mortgagee, in its solediscretion, may elect, whether or not due. In any event the unpaid portion of the Secured Indebtedness shall remainin full force and effect and the payment thereof shall not be excused.  Mortgagee shall not be, under anycircumstances, liable or responsible for failure to collect or to exercisediligence in the collection of any such sum or for failure to see to the properapplication of any amount paid over to Mortgagor.  Mortgagee is hereby authorized, in the nameof Mortgagor, to execute and deliver valid acquittances for, and to appealfrom, any such award, judgment or decree. All costs and expenses (including but not limited to attorneys’ fees)incurred by Mortgagee in connection with any condemnation shall be a demandobligation owing by Mortgagor (which Mortgagor hereby promises to pay) toMortgagee pursuant to this Mortgage.

 

(g)  Compliance with Legal Requirements.  The Property and the use, operation andmaintenance thereof and all activities thereon do and shall at all times complyin all material respects with all applicable Legal Requirements (hereinafterdefined).  The Property is not, and shallnot be, dependent on any other property or premises or any interest thereinother than the Property to fulfill any requirement of any LegalRequirement.  Mortgagor shall not, by actor omission, permit any building or other improvement not subject to the lienof this Mortgage to rely on the Property or any interest therein to fulfill anyrequirement of any Legal Requirement.  Noimprovement upon or use of any part of the Property constitutes a nonconforminguse under any zoning law or similar law or ordinance.  Mortgagor has obtained and shall preserve inforce all requisite zoning, utility, building, health, environmental and operatingpermits from the governmental authorities having jurisdiction over theProperty.

 

If Mortgagor receives a notice or claim from any person that theProperty, or any use, activity, operation or maintenance thereof or thereon, isnot in compliance with any Legal Requirement, Mortgagor will promptly furnish acopy of such notice or claim to Mortgagee. As used in this Mortgage:  (i) theterm “Legal Requirement” means any Law (hereinafter defined), agreement,covenant, restriction, easement or condition (including, without limitation ofthe foregoing, any condition or requirement imposed by any insurance or suretycompany), as any of the same now 

 

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exists or may be changed or amended or come into effect in the future,the violation of which would reasonably be expected to have a material adverseeffect on the Mortgagor’s ordinary use or occupation of the Premises (suchmaterial adverse effect, a “Material Adverse Effect”); and (ii) theterm “Law” means any federal, state or local law, statute, ordinance,code, rule, regulation, license, permit, authorization, decision, order,injunction or decree, domestic or foreign.

 

(h)  Maintenance, Repair and Restoration.  Mortgagor will keep the Property in goodorder, repair and operating condition (ordinary wear and tear excepted),causing all necessary repairs, renewals, replacements, additions andimprovements to be promptly made, and will not allow any of the Property to bemisused, abused or wasted or to deteriorate in any material respect.  Notwithstanding the foregoing, Mortgagor willnot, without the prior written consent of Mortgagee, (i) remove from theProperty any fixtures or personal property encumbered by this Mortgage exceptas permitted by the Credit Agreement, or (ii) make any structuralalteration to the Property or any other alteration thereto which materiallyimpairs the value thereof (except for modifications contemplated by thePermitted Ohio Sale/Leaseback and the grant of the Duke Energy Easements). Ifany act or occurrence of any kind or nature (including any condemnation or anycasualty for which insurance was not obtained or obtainable) shall result indamage to or loss or destruction of the Property, Mortgagor shall give promptnotice thereof to Mortgagee and Mortgagor shall promptly, at Mortgagor’s solecost and expense and regardless of whether insurance or condemnation proceeds(if any) shall be available or sufficient for the purpose, secure the Propertyas necessary and commence and continue diligently to completion to restore,repair, replace and rebuild the Property as reasonably necessary for theconduct of Mortgagor’s business operations.

 

(i)  No Other Liens.  Mortgagor will not, without the prior written consent of Mortgagee,create, place or permit to be created or placed, or through any act or failureto act, acquiesce in the placing of, or allow to remain, any mortgage,voluntary or involuntary lien, whether statutory, constitutional orcontractual, security interest, encumbrance or charge, or conditional sale orother title retention document, against or covering the Property, or any partthereof, other than the Permitted Encumbrances, regardless of whether the sameare expressly or otherwise subordinate to the lien or security interest createdin this Mortgage, and should any of the foregoing become attached hereafter inany manner to any part of the Property without the prior written consent ofMortgagee, Mortgagor will cause the same to be promptly discharged andreleased.  Mortgagor will not acquire anyfixtures, equipment or other property (including software embedded therein)forming a part of the Property pursuant to a lease, license, security agreementor similar agreement, whereby any party has or may obtain the right to repossessor remove same, without the prior written consent of Mortgagee; provided,however, that the prohibition on acquisitions in the foregoing sentenceshall not apply unless there has been a Default.  Except for Permitted Encumbrances, ifMortgagee consents to the voluntary grant by Mortgagor of any mortgage, lien,security interest, or other encumbrance (hereinafter called “SubordinateLien”) covering any of the Premises or if the foregoing prohibition isdetermined by a court of competent jurisdiction to be unenforceable as to aSubordinate Lien, any such Subordinate Lien shall contain express covenants tothe effect that: (1) the Subordinate Lien is unconditionally subordinateto this Mortgage and all Leases (hereinafter defined); (2) if any action(whether judicial or pursuant to a 

 

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power of sale) shall be instituted toforeclose or otherwise enforce the Subordinate Lien, no tenant of any of theLeases (hereinafter defined) shall be named as a party defendant, and no actionshall be taken that would terminate any occupancy or tenancy without the priorwritten consent of Mortgagee; (3) Rents (hereinafter defined), ifcollected by or for the holder of the Subordinate Lien, shall be applied firstto the payment of the Secured Indebtedness then due and expenses incurred inthe ownership, operation and maintenance of the Premises in such order asMortgagee may determine, prior to being applied to any indebtedness secured bythe Subordinate Lien; (4) written notice of default under the SubordinateLien and written notice of the commencement of any action (whether judicial orpursuant to a power of sale) to foreclose or otherwise enforce the SubordinateLien or to seek the appointment of a receiver for all or any part of thePremises shall be given to Mortgagee with or immediately after the occurrenceof any such default or commencement; and (5) neither the holder of theSubordinate Lien, nor any purchaser at foreclosure thereunder, nor anyoneclaiming by, through or under any of them shall succeed to any of Mortgagor’srights hereunder without the prior written consent of Mortgagee.  Mortgagor represents and warrants that nonotices of commencement (as identified in Ohio Revised Code Section 1311.04)as to the Premises has been filed or will be filed prior to the filing forrecord of this Mortgage and that Mortgagor shall promptly provide Mortgageewith a copy of all notices of furnishing (as identified in Ohio Revised Code Section 1311.05)received by Mortgagor.

 

(j)  Operation of Property. Mortgagor will operate the Property in a good and workmanlike manner andin accordance with all material Legal Requirements and will pay all fees orcharges of any kind in connection therewith, except for such fees or charges forwhich the non-payment thereof could not reasonably be expected to have aMaterial Adverse Effect.  Mortgagor willkeep the Property occupied so as not to impair the insurance carried thereon.  Mortgagor will not use or occupy or conductany activity on, or allow the use or occupancy of or the conduct of anyactivity on, the Premises in any manner which violates any Legal Requirement orwhich constitutes a public or private nuisance or which makes void, voidable orcancelable, or increases the premium of, any insurance then in force withrespect thereto.  Mortgagor will notinitiate or permit any zoning reclassification of the Premises or seek anyvariance under existing zoning ordinances applicable to the Premises or use orpermit the use of the Premises in such a manner which would result in such usebecoming a nonconforming use under applicable zoning ordinances or other LegalRequirement.  Mortgagor will not imposeany easement, restrictive covenant or encumbrance upon the Premises (except forPermitted Encumbrances), execute or file any subdivision plat or condominiumdeclaration affecting the Property or consent to the annexation of the Propertyto any municipality, without the prior written consent of Mortgagee.  Mortgagor will use commercially reasonableefforts to preserve, protect, renew, extend and retain all material rights andprivileges granted for or applicable to the Premises.  Without the prior written consent ofMortgagee, there shall be no drilling or exploration for or extraction, removalor production of any mineral, hydrocarbon, gas, natural element, compound orsubstance (including sand and gravel) from the surface or subsurface of theLand regardless of the depth thereof or the method of mining or extractionthereof.  Mortgagor will cause allmaterial debts and liabilities of any character (including without limitationall debts and liabilities for labor, material and equipment (including softwareembedded therein) and all material debts and charges for utilities servicingthe Property) incurred in the construction, maintenance, operation and 

 

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development of the Property to be promptly paid, except where suchdebts and charges are being contested in good faith.

 

(k) [Reserved].

 

(l)  Status of Mortgagor; Suits and Claims; Loan Documents.  Mortgagor is not a “foreign person”within the meaning of the Internal Revenue Code of 1986, as amended, Sections1445 and 7701 (i.e. Mortgagor is not a non-resident alien, foreigncorporation, foreign partnership, foreign trust or foreign estate as thoseterms are defined therein and in any regulations promulgated thereunder).  The Loan is solely for business and/orinvestment purposes, and is not intended for personal, family, household oragricultural purposes.  Mortgagor furtherwarrants that the proceeds of the Credit Agreement shall be used for commercialpurposes and stipulates that the Loan shall be construed for all purposes as acommercial loan.  Mortgagor’s exact legalname is correctly set forth at the end of this Mortgage.  If Mortgagor is not an individual, Mortgagoris an organization of the type and (if not an unregistered entity) isincorporated in or organized under the laws of the state specified in theintroductory paragraph of this Mortgage. Mortgagor will not cause or permit any change to be made in its name,identity (including its trade name or names), or corporate or partnershipstructure, unless Mortgagor shall have notified Mortgagee in writing of suchchange at least 30 days prior to the effective date of such change, and shallhave first taken all action required by Mortgagee for the purpose of furtherperfecting or protecting the lien and security interest of Mortgagee in theProperty.  In addition, Mortgagor shallnot change its limited liability company structure without first obtaining theprior written consent of Mortgagee. Mortgagor’s principal place of business and chief executive office, andthe place where Mortgagor keeps its books and records, including recorded dataof any kind or nature, regardless of the medium of recording including, withoutlimitation, software, writings, plans, specifications and schematics concerningthe Premises, has for the preceding four months (or, if less, the entire periodof the existence of Mortgagor) been and will continue to be (unless Mortgagornotifies Mortgagee of any change in writing at least 30 days prior to the dateof such change) the address of Mortgagor set forth at the end of thisMortgage.  Mortgagor’s organizationalidentification number, if any, assigned by the state of incorporation ororganization is correctly set forth on the first page of thisMortgage.  Mortgagor shall promptlynotify Mortgagee (i) of any change of its organizational identificationnumber, or (ii) if Mortgagor does not now have an organizationidentification number and later obtains one, of such organizationalidentification number.

 

(m)  Certain Environmental Matters.  Mortgagor shall comply with the terms andcovenants of that certain Environmental Indemnity Agreement dated of even dateherewith (the “Environmental Agreement”).

 

(n)  Further Assurances. Mortgagor will, promptly on request of Mortgagee, (i) correct anydefect, error or omission which may be discovered in the contents, execution oracknowledgment of this Mortgage or any other Loan Document; (ii) execute,acknowledge, deliver, procure and record and/or file such further documents(including, without limitation, further mortgages, security agreements, andassignments of rents or leases) and do such further acts as may be necessary,desirable or proper to carry out more effectively the purposes of this Mortgageand the 

 

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other Loan Documents, to more fully identify and subject to the liensand security interests hereof any property intended to be covered hereby(including specifically, but without limitation, any renewals, additions,substitutions, replacements, or appurtenances to the Property) or as deemedadvisable by Mortgagee to protect the lien or the security interest hereunderagainst the rights or interests of third persons; and (iii) provide suchcertificates, documents, reports, information, affidavits and other instrumentsand do such further acts as may be necessary, desirable or proper in thereasonable determination of Mortgagee to enable Mortgagee to comply with therequirements or requests of any agency having jurisdiction over Mortgagee orany examiners of such agencies with respect to the indebtedness secured hereby,Mortgagor or the Property.  Mortgagorshall pay all costs connected with any of the foregoing, which shall be ademand obligation owing by Mortgagor (which Mortgagor hereby promises to pay)to Mortgagee pursuant to this Mortgage.

 

(o)  Fees and Expenses. Without limitation of any other provision of this Mortgage or of anyother Loan Document and to the extent not prohibited by applicable law,Mortgagor will pay, and will reimburse to Mortgagee on demand to the extentpaid by Mortgagee: (i) all appraisal fees, filing, registration andrecording fees, recordation, transfer and other taxes, brokerage fees andcommissions, abstract fees, title search or examination fees, title policy andendorsement premiums and fees, uniform commercial code search fees, judgmentand tax lien search fees, escrow fees, attorneys’ fees, architect fees,engineer fees, construction consultant fees, environmental inspection fees,survey fees, and all other costs and expenses of every character incurred byMortgagor or Mortgagee in connection with the preparation of the LoanDocuments, the evaluation, closing and funding of the loan evidenced by theLoan Documents, and any and all amendments and supplements to this Mortgage,the Credit Agreement or any other Loan Documents or any approval, consent,waiver, release or other matter requested or required hereunder or thereunder,or otherwise attributable or chargeable to Mortgagor as owner of the Property;and (ii) all costs and expenses, including attorneys’ fees and expenses,incurred or expended in connection with the exercise of any right or remedy, orthe defense of any right or remedy or the enforcement of any obligation ofMortgagor, hereunder or under any other Loan Document.

 

(p)  Indemnification.

 

(i)  Mortgagor will indemnify and hold harmless Mortgagee from andagainst, and reimburse it on demand for, any and all Indemnified Matters(hereinafter defined).  For purposes ofthis paragraph (p), the term “Mortgagee” shall include Mortgagee, andany persons owned or controlled by, owning or controlling, or under commoncontrol or affiliated with Mortgagee and the directors, officers, partners,employees, attorneys, agents and representatives of Mortgagee.  Without limitation, the foregoing indemnitiesshall apply to each indemnified person with respect to matters which in wholeor in part are caused by or arise out of the negligence of such (and/or anyother) indemnified person.  However, suchindemnities shall not apply to a particular indemnified person to the extentthat the subject of the indemnification is caused by or arises out of the grossnegligence or willful misconduct of that indemnified person.  Any amount to be paid under this paragraph (p) byMortgagor to Mortgagee shall be a demand obligation owing by Mortgagor (whichMortgagor hereby promises to pay) to Mortgagee pursuant to this Mortgage.  

 

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Nothing in this paragraph, elsewhere in this Mortgage or in any otherLoan Document shall limit or impair any rights or remedies of Mortgagee(including without limitation any rights of contribution or indemnification)against Mortgagor or any other person under any other provision of thisMortgage, any other Loan Document, any other agreement or any applicable LegalRequirement.

 

(ii)  As used herein, the term “Indemnified Matters” meansany and all claims, demands, liabilities (including strict liability), losses,damages (including consequential damages), causes of action, judgments,penalties, fines, costs and expenses (including without limitation, reasonablefees and expenses of attorneys and other professional consultants and experts,and of the investigation and defense of any claim, whether or not such claim isultimately defeated, and the settlement of any claim or judgment including allvalue paid or given in settlement) of every kind, known or unknown, foreseeableor unforeseeable, which may be imposed upon, asserted against or incurred orpaid by Mortgagee at any time and from time to time, whenever imposed, assertedor incurred, because of, resulting from, in connection with, or arising out ofany transaction, act, omission, event or circumstance in any way connected withthe Property or with this Mortgage or any other Loan Document, including butnot limited to any bodily injury or death or property damage occurring in orupon or in the vicinity of the Property through any cause whatsoever at anytime on or before the Release Date (hereinafter defined) any act performed oromitted to be performed hereunder or under any other Loan Document, any breachby Mortgagor of any representation, warranty, covenant, agreement or conditioncontained in this Mortgage or in any other Loan Document, any default asdefined herein, any claim under or with respect to any Lease (hereinafterdefined) or arising under the Environmental Agreement.  The term “Release Date” as used hereinmeans the earlier of the following two dates: (i) the date on which theindebtedness and obligations secured hereby have been paid and performed infull and this Mortgage has been released, or (ii) the date on which thelien of this Mortgage is fully and finally foreclosed or a conveyance by deedin lieu of such foreclosure is fully and finally effective, and possession ofthe Property has been given to the purchaser or grantee free of occupancy andclaims to occupancy by Mortgagor and Mortgagor’s heirs, devisees,representatives, successors and assigns; provided, that if such payment,performance, release, foreclosure or conveyance is challenged, in bankruptcyproceedings or otherwise, the Release Date shall be deemed not to have occurreduntil such challenge is rejected, dismissed or withdrawn with prejudice.  The indemnities in this paragraph (p) shallnot terminate upon the Release Date or upon the release, foreclosure or othertermination of this Mortgage but will survive the Release Date, foreclosure ofthis Mortgage or conveyance in lieu of foreclosure, the repayment of theSecured Indebtedness, the termination of any and all Swap Contracts, thedischarge and release of this Mortgage and the other Loan Documents, anybankruptcy or other debtor relief proceeding, and any other event whatsoever.

 

(q)  [Reserved].

 

(r)  Taxes on Credit Agreement or Mortgage.  Mortgagor will promptly pay or cause to bepaid all income, franchise and other taxes owing by Mortgagor and any stamp,documentary, recordation and transfer taxes or other taxes (unless such paymentby Mortgagor is prohibited by law) which may be required to be paid withrespect to the Credit Agreement, this Mortgage or 

 

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any other instrument evidencing or securing any of the SecuredIndebtedness.  In the event of theenactment after this date of any law of any governmental entity applicable toMortgagee, the Credit Agreement, the Property or this Mortgage deducting fromthe value of property for the purpose of taxation any lien or security interestthereon, or imposing upon Mortgagee the payment of the whole or any part of thetaxes or assessments or charges or liens herein required to be paid byMortgagor, or changing in any way the laws relating to the taxation ofmortgages or security agreements or debts secured by mortgages or securityagreements or the interest of the mortgagee or secured party in the propertycovered thereby, or the manner of collection of such taxes, so as to adverselyaffect this Mortgage or the Secured Indebtedness or Mortgagee, then, and in anysuch event, Mortgagor, upon demand by Mortgagee, shall pay such taxes,assessments, charges or liens, or reimburse Mortgagee therefor.

 

(s)  [Reserved].

 

(t)  Letter-of-Credit Rights.  If, after the occurrence and during thecontinuance of a Default hereunder or an Event of Default under the CreditAgreement, Mortgagor is at any time a beneficiary under a letter of credit(whether or not the letter of credit is evidenced by a writing) relating to theproperties, rights, titles and interests referred to in Section 1.3 ofthis Mortgage now or hereafter issued in favor of Mortgagor, Mortgagor shallpromptly notify Mortgagee thereof and, at the request and option of Mortgagee,Mortgagor shall, pursuant to an agreement in form and substance satisfactory toMortgagee, either (i) arrange for the issuer and any confirmer of suchletter of credit to consent to an assignment to Mortgagee of the proceeds ofany drawing under the letter of credit or (ii) arrange for Mortgagee tobecome the transferee beneficiary of the letter of credit, with Mortgageeagreeing, in each case, that the proceeds of any drawing under the letter ofcredit are to be applied as provided in Section 5.2 of this Mortgage.

 

(u)  Updated Appraisal. After the occurrence and during the continuance of a Default hereunderor an Event of Default under the Credit Agreement, Mortgagee may obtain anappraisal of all or any part of the Property prepared in accordance withwritten instructions from Mortgagee by a third-party appraiser engageddirectly by Mortgagee.  The appraiser andappraisal shall be satisfactory to Mortgagee (including satisfaction of applicableregulatory requirements).  The cost ofany such appraisal shall be borne by Mortgagor, and such cost is due andpayable by Mortgagor on demand and shall be a part of the Secured Indebtedness.

 

Section 2.2.  Performanceby Mortgagee on Mortgagor’s Behalf. Mortgagor agrees that, if Mortgagor fails to perform any act or to takeany action under this Mortgage, then Mortgagee may, following notice toMortgagor and after a reasonable opportunity to cure in accordance with theLoan Documents, in Mortgagor’s name or its own name, but shall not be obligatedto, perform or cause to be performed such act or take such action or pay suchmoney, and any expenses so incurred by Mortgagee and any money so paid byMortgagee shall be a demand obligation owing by Mortgagor to Mortgagee (whichobligation Mortgagor hereby promises to pay), shall be a part of theindebtedness secured hereby, and Mortgagee, upon making such payment, shall besubrogated to all of the rights of the person, entity or body politic receivingsuch payment.  Mortgagee and itsdesignees shall have the right to enter upon the Property at any time and fromtime to time for any such purposes.  Nosuch payment or performance by 

 

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Mortgagee shall waive or cure any default or waive any right, remedy orrecourse of Mortgagee.  Any such paymentmay be made by Mortgagee in reliance on any statement, invoice or claim withoutinquiry into the validity or accuracy thereof. Each amount due and owing by Mortgagor to Mortgagee pursuant to thisMortgage shall bear interest, from the date such amount becomes due until paid,at the rate per annum provided in the Credit Agreement for interest on past dueprincipal owed under the Credit Agreement but never in excess of the maximumnonusurious amount permitted by applicable law, which interest shall be payableto Mortgagee on demand; and all such amounts, together with such interestthereon, shall automatically and without notice be a part of the indebtednesssecured hereby.

 

Section 2.3.  Absence ofObligations of Mortgagee with Respect to Property.  Notwithstanding anything in this Mortgage tothe contrary, including, without limitation, the definition of “Property”and/or the provisions of Article 3 hereof, (i) to the extentpermitted by applicable law, the Property is composed of Mortgagor’s rights,title and interests therein but not Mortgagor’s obligations, duties orliabilities pertaining thereto, (ii) Mortgagee neither assumes nor shallhave any obligations, duties or liabilities in connection with any portion ofthe items described in the definition of “Property” herein, either prior to orafter obtaining title to such Property, whether by foreclosure sale, thegranting of a deed in lieu of foreclosure or otherwise, and (iii) Mortgageemay, at any time prior to or after the acquisition of title to any portion ofthe Property as above described, advise any party in writing as to the extentof Mortgagee’s interest therein and/or expressly disaffirm in writing any rights,interests, obligations, duties and/or liabilities with respect to such Propertyor matters related thereto.  Withoutlimiting the generality of the foregoing, except for the Permitted OhioSale/Leaseback (as defined in the Credit Agreement) it is understood and agreedthat Mortgagee shall have no obligations, duties or liabilities prior to orafter acquisition of title to any portion of the Property, as lessee under anylease or purchaser or seller under any contract or option unless Mortgageeelects otherwise by written notification.

 

Section 2.4.          Authorizationto File Financing Statements; Power of Attorney.  Mortgagor hereby authorizes Mortgagee at anytime and from time to time to file any initial financing statements, amendmentsthereto and continuation statements as authorized by applicable law, requiredby Mortgagee to establish or maintain the validity, perfection and priority ofthe security interests granted in this Mortgage.  For purposes of such filings, Mortgagoragrees to furnish any information requested by Mortgagee promptly upon requestby Mortgagee.  Mortgagor also ratifiesits authorization for Mortgagee to have filed any like initial financingstatements, amendments thereto or continuation statements if filed prior to thedate of this Mortgage.  Mortgagor herebyirrevocably constitutes and appoints Mortgagee and any officer or agent ofMortgagee, with full power of substitution, as its true and lawfulattorneys-in-fact with full irrevocable power and authority in the place andstead of Mortgagor or in Mortgagor’s own name to execute in Mortgagor’s nameany such documents and to otherwise carry out the purposes of this Section 2.4,to the extent that Mortgagor’s authorization above is not sufficient.  To the extent permitted by law, Mortgagorhereby ratifies all acts said attorneys-in-fact shall lawfully do, have done inthe past or cause to be done in the future by virtue hereof.  This power of attorney is a power coupledwith an interest and shall be irrevocable.

 

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ARTICLE 3

 

Assignment of Rents andLeases

 

Section 3.1.  Assignment.Mortgagor hereby assigns to Mortgagee all Rents (hereinafter defined) and allof Mortgagor’s rights in and under all Leases (hereinafter defined).  So long as no Default (hereinafter defined)has occurred, Mortgagor shall have a license (which license shall terminateautomatically and without further notice upon the occurrence of a Default) tocollect, but not prior to accrual, the Rents under the Leases and, whereapplicable, subleases, such Rents to be held in trust for Mortgagee and tootherwise deal with all Leases as permitted by this Mortgage.  Each month, provided no Default has occurred,Mortgagor may retain such Rents as were collected that month and held in trustfor Mortgagee.  Upon the revocation ofsuch license, all Rents shall be paid directly to Mortgagee and not throughMortgagor, all without the necessity of any further action by Mortgagee,including, without limitation, any action to obtain possession of the Land,Improvements or any other portion of the Property or any action for theappointment of a receiver.  Mortgagorhereby authorizes and directs the tenants under the Leases to pay Rents toMortgagee upon written demand by Mortgagee, without further consent of Mortgagor,without any obligation of such tenants to determine whether a Default has infact occurred and regardless of whether Mortgagee has taken possession of anyportion of the Property, and the tenants may rely upon any written statementdelivered by Mortgagee to the tenants. Any such payments to Mortgagee shall constitute payments to Mortgagorunder the Leases, and Mortgagor hereby irrevocably appoints Mortgagee as itsattorney-in-fact, after a Default, to collect Rents with or without suit andapplying the same, less expenses of collection, to any of the obligationssecured hereunder or to expenses of operating and maintaining the Property(including reasonable reserves for anticipated expenses), at the option of theMortgagee, all in such manner as may be determined by Mortgagee, or at theoption of Mortgagee, holding the same as security for the payment of allObligations.  The curing of such Default,unless other Defaults also then exist, shall entitle Mortgagor to recover itsaforesaid license to do any such things which Mortgagor might otherwise do withrespect to the Property and the Leases thereon and to again collect suchRents.  The powers and rights granted inthis paragraph shall be in addition to the other remedies herein provided forupon the occurrence of a Default and may be exercised independently of orconcurrently with any of said remedies. Nothing in the foregoing shall be construed to impose any obligationupon Mortgagee to exercise any power or right granted in this paragraph or toassume any liability under any Lease of any part of the Property and noliability shall attach to Mortgagee for failure or inability to collect anyRents under any such Lease.  Theassignment contained in this Section shall become null and void upon therelease of this Mortgage.  As usedherein: (i) “Lease” means each existing or future lease, sublease(to the extent of Mortgagor’s rights thereunder), or other agreement under theterms of which any person has or acquires any right to occupy or use theProperty, or any part thereof, or interest therein, and each existing or futureguaranty of payment or performance thereunder, and all extensions, renewals,modifications and replacements of each such lease, sublease, agreement orguaranty; and (ii) “Rents” means all of the rents, revenue, income,profits and proceeds derived and to be derived from the Property or arisingfrom the use or enjoyment of any portion thereof or from any Lease, includingbut not limited to the proceeds from any negotiated lease termination or buyoutof such lease, liquidated damages following default under any such Lease, allproceeds payable under any 

 

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policy of insurance covering loss of rents resulting fromuntenantability caused by damage to any part of the Property, all ofMortgagor’s rights to recover monetary amounts from any tenant in bankruptcyincluding, without limitation, rights of recovery for use and occupancy anddamage claims arising out of Lease defaults, including rejections, under anyapplicable Debtor Relief Law (hereinafter defined), together with any sums ofmoney that may now or at any time hereafter be or become due and payable toMortgagor by virtue of any and all royalties, overriding royalties, bonuses,delay rentals and any other amount of any kind or character arising under anyand all present and all future oil, gas, mineral and mining leases covering theProperty or any part thereof, and all proceeds and other amounts paid or owingto Mortgagor under or pursuant to any and all contracts and bonds relating tothe construction or renovation of the Property.

 

Section 3.2.  Covenants,Representations and Warranties Concerning Leases and Rents.  Mortgagor covenants, represents and warrantsthat Mortgagor has title to and the right to assign the Leases and Rents toMortgagee, and no other assignment of the Leases or Rents has been granted.

 

Section 3.3.  [Reserved].

 

Section 3.4.  NoLiability of Mortgagee.  Mortgagee’sacceptance of this assignment shall not be deemed to constitute Mortgagee a“mortgagee in possession,” nor obligate Mortgagee to appear in or defend anyproceeding relating to any Lease or to the Property, or to take any actionhereunder, expend any money, incur any expenses, or perform any obligation orliability under any Lease, or assume any obligation for any deposit deliveredto Mortgagor by any tenant and not as such delivered to and accepted byMortgagee.  Mortgagee shall not be liablefor any injury or damage to person or property in or about the Property, or forMortgagee’s failure to collect or to exercise diligence in collecting Rents,but shall be accountable only for Rents that it shall actually receive.  Neither the assignment of Leases and Rentsnor enforcement of Mortgagee’s rights regarding Leases and Rents (includingcollection of Rents) nor possession of the Property by Mortgagee norMortgagee’s consent to or approval of any Lease (nor all of the same), shallrender Mortgagee liable on any obligation under or with respect to any Lease orconstitute affirmation of, or any subordination to, any Lease, occupancy, useor option.

 

If Mortgagee seeks or obtains any judicial relief regarding Rents orLeases, the same shall in no way prevent the concurrent or subsequentemployment of any other appropriate rights or remedies nor shall sameconstitute an election of judicial relief for any foreclosure or any otherpurpose.  Mortgagee neither has norassumes any obligations as lessor or landlord with respect to any Lease.  The rights of Mortgagee under this Article 3shall be cumulative of all other rights of Mortgagee under the Loan Documentsor otherwise.

 

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ARTICLE 4

 

Default

 

Section 4.1.  Events ofDefault.  The occurrence of any oneof the following shall be a default under this Mortgage (“default” or “Default”):

 

(a)  Failure to Pay Indebtedness.  Any of the Secured Indebtedness is not paidwhen due in accordance with the Credit Agreement, regardless of how such amountmay have become due.

 

(b)  Nonperformance of Covenants.  Any covenant, agreement or condition hereinis not fully and timely performed, observed or kept, and such failure continuesfor thirty (30) days after the earlier of (i) the date on which aResponsible Officer (as defined in the Credit Agreement) knows or should haveknown about such failure and (ii) the date the Mortgagee delivers noticethereof to the Mortgagor.

 

(c)  Default Under Other Loan Documents.  The occurrence of an Event of Default underthe Credit Agreement.

 

(d)  Grant of Easement, Etc.  Without the prior written consent ofMortgagee, Mortgagor grants any easement or dedication, files any plat,condominium declaration, or restriction, or otherwise encumbers the Property(other than Permitted Encumbrances), or seeks or permits any zoningreclassification or variance, unless such action is expressly permitted by theLoan Documents or does not affect the Property.

 

Section 4.2.  Notice andCure.  If any provision of thisMortgage or any other Loan Document provides for Mortgagee to give to Mortgagorany notice regarding a default or incipient default, then if Mortgagee shallfail to give such notice to Mortgagor as provided, the sole and exclusiveremedy of Mortgagor for such failure shall be to seek appropriate equitablerelief to enforce the agreement to give such notice and to have anyacceleration of the maturity of the Loan and the Secured Indebtedness postponedor revoked and foreclosure proceedings in connection therewith delayed orterminated pending or upon the curing of such default in the manner and duringthe period of time permitted by such agreement, if any, and Mortgagor shallhave no right to damages or any other type of relief not herein specificallyset out against Mortgagee, all of which damages or other relief are herebywaived by Mortgagor.  Nothing herein orin any other Loan Document shall operate or be construed to add on or makecumulative any cure or grace periods specified in any of the Loan Documents.

 

ARTICLE 5

 

Remedies

 

Section 5.1.  CertainRemedies.  If a Default shall occur,Mortgagee may (but shall have no obligation to) exercise any one or more of thefollowing remedies, without notice (unless notice is required by applicablestatute):

 

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(a)  Acceleration. Subject to the Credit Agreement, Mortgagee may at any time and from timeto time declare any or all of the Secured Indebtedness immediately due andpayable and may terminate any and all Swap Contracts.  Upon any such declaration, such SecuredIndebtedness shall thereupon be immediately due and payable, and such SwapContracts shall immediately terminate, without presentment, demand, protest,notice of protest, notice of acceleration or of intention to accelerate or anyother notice or declaration of any kind, all of which are hereby expresslywaived by Mortgagor.  Without limitationof the foregoing, upon the occurrence of a default described in clauses (A), (C) or(D) of subparagraph (i) of paragraph (d) of Section 4.1,hereof, all of the Secured Indebtedness shall thereupon be immediately due andpayable, without presentment, demand, protest, notice of protest, declarationor notice of acceleration or intention to accelerate, or any other notice,declaration or act of any kind, all of which are hereby expressly waived byMortgagor.

 

(b)  Enforcement of Assignment of Rents.  In addition to the rights of Mortgagee under Article 3hereof, prior or subsequent to taking possession of any portion of the Propertyor taking any action with respect to such possession, Mortgagee may: (1) collectand/or sue for the Rents in Mortgagee’s own name, give receipts and releasestherefor, and after deducting all expenses of collection, including attorneys’fees and expenses, apply the net proceeds thereof to the Secured Indebtednessin such manner and order as Mortgagee may elect; and (2) require Mortgagorto transfer all security deposits and records thereof to Mortgagee togetherwith original counterparts of the Leases.

 

(c)  Foreclosure. Uponfailure to pay the Secured Indebtedness in full at any stated or acceleratedmaturity, the Mortgagee may foreclose the lien of this Mortgage and sell, as anentirety or in separate lots or parcels, the Property, under the judgment ordecree of a court or courts of competent jurisdiction.  Mortgagee shall take action either by suchproceedings or by the exercise of its powers with respect to entry or takingpossession, or both, as the Mortgagee may determine.  Mortgagee, at its option, is authorized toforeclose this Mortgage subject to the rights of any tenants of the Propertyand the failure to make any such tenants parties defendant to any suchforeclosure proceedings and to foreclose their rights will not be, nor beasserted by Mortgagor to be, a defense to any proceedings instituted byMortgagee to collect the sums secured hereby or to collect any deficiencyremaining unpaid after the foreclosure sale of the Property.

 

(d) Purchase by Mortgagee.  Upon anysuch foreclosure sale, Mortgagee may bid for and purchase the Premises and,upon compliance with the terms of sale, may hold, retain and possess anddispose of such property in its own absolute right without furtheraccountability.  Upon any suchforeclosure sale, Mortgagee may, if permitted by law, after allowing for theproportion of the total purchase price required to be paid in cash and for thecosts and expenses of the sale, compensation and other charges, in paying thepurchase price apply any portion of or all sums due to Mortgagee under theCredit Agreement, this Mortgage or any other instrument securing the CreditAgreement, in lieu of cash, to the amount which shall, upon distribution of thenet proceeds of such sale, be payable thereon.

 

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(e)  Uniform Commercial Code.  Without limitation of Mortgagee’s rights ofenforcement with respect to the Collateral or any part thereof in accordancewith the procedures for foreclosure of real estate, Mortgagee may exercise itsrights of enforcement with respect to the Collateral or any part thereof underthe Ohio Uniform Commercial Code, as in effect from time to time (or under theUniform Commercial Code in force, from time to time, in any other state to theextent the same is applicable law), and in conjunction with, in addition to orin substitution for those rights and remedies: (1)  Mortgagee may enterupon Mortgagor’s premises to take possession of, assemble and collect theCollateral or, to the extent and for those items of the Collateral permittedunder applicable law, to render it unusable; (2) Mortgagee may requireMortgagor to assemble the Collateral and make it available at a place Mortgageedesignates which is mutually convenient to allow Mortgagee to take possessionor dispose of the Collateral; (3) written notice mailed to Mortgagor asprovided herein at least five (5) days prior to the date of public sale ofthe Collateral or prior to the date after which private sale of the Collateralwill be made shall constitute reasonable notice; provided that, if Mortgageefails to comply with this clause (3) in any respect, its liability forsuch failure shall be limited to the liability (if any) imposed on it as amatter of law under the Ohio Uniform Commercial Code, as in effect from time totime (or under the Uniform Commercial Code, in force from time to time, in anyother state to the extent the same is applicable law); (4) any sale madepursuant to the provisions of this paragraph shall be deemed to have been apublic sale conducted in a commercially reasonable manner if heldcontemporaneously with and upon the same notice as required for the sale of theProperty under power of sale as provided in paragraph (c) above in this Section 5.1;(5) in the event of a foreclosure sale, the Collateral and the otherProperty may, at the option of Mortgagee, be sold as a whole; (6) it shallnot be necessary that Mortgagee take possession of the Collateral or any partthereof prior to the time that any sale pursuant to the provisions of this Section isconducted and it shall not be necessary that the Collateral or any part thereofbe present at the location of such sale; (7) with respect to applicationof proceeds from disposition of the Collateral under Section 5.2 hereof,the costs and expenses incident to disposition shall include the reasonableexpenses of retaking, holding, preparing for sale or lease, selling, leasingand the like and the reasonable attorneys’ fees and legal expenses (including,without limitation, the allocated costs for in-house legal services) incurred byMortgagee; (8) any and all statements of fact or other recitals made inany bill of sale or assignment or other instrument evidencing any foreclosuresale hereunder as to nonpayment of the Secured Indebtedness or as to theoccurrence of any default, or as to Mortgagee having declared all of suchindebtedness to be due and payable, or as to notice of time, place and terms ofsale and of the properties to be sold having been duly given, or as to anyother act or thing having been duly done by Mortgagee, shall be taken as primafacie evidence of the truth of the facts so stated and recited; (9) Mortgageemay appoint or delegate any one or more persons as agent to perform any act oracts necessary or incident to any sale held by Mortgagee, including the sendingof notices and the conduct of the sale, but in the name and on behalf ofMortgagee; (10) Mortgagee may comply with any applicable state or federallaw or regulatory requirements in connection with a disposition of theCollateral, and such compliance will not be considered to affect adversely thecommercial reasonableness of any sale of the Collateral; (11) Mortgagee maysell the Collateral without giving any warranties as to the Collateral, andspecifically disclaim all warranties including, without limitation, warrantiesrelating to title, possession, quiet enjoyment and the like, and all warrantiesof quality, merchantability and fitness for a specific purpose, and thisprocedure will 

 

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not be considered to affect adversely the commercial reasonableness ofany sale of the Collateral; (12) Mortgagor acknowledges that a private sale ofthe Collateral may result in less proceeds than a public sale; and (13)Mortgagor acknowledges that the Collateral may be sold at a loss to Mortgagor,and that, in such event, Mortgagee shall have no liability or responsibility toMortgagor for such loss.

 

(f)  Lawsuits. Mortgagee may proceed by a suit or suits in equity or at law, whetherfor collection of the indebtedness secured hereby, the specific performance ofany covenant or agreement herein contained or in aid of the execution of anypower herein granted, or for any foreclosure hereunder or for the sale of theProperty under the judgment or decree of any court or courts of competentjurisdiction.

 

(g)  Entry on Property. Mortgagee is authorized, subsequent to the institution of anyforeclosure proceedings, to the fullest extent permitted by applicable law, toenter upon the Property, or any part thereof. In connection with any action taken by Mortgagee pursuant to thisSection, Mortgagee shall not be obligated to perform or discharge anyobligation, duty or liability of Mortgagor arising under any lease or otheragreement relating to the Property or arising under any Permitted Encumbranceor otherwise arising.

 

(h)  [Reserved].

 

(i)  Termination of Commitment to Lend.  Mortgagee may terminate any commitment orobligation to lend or disburse funds in accordance with the provisions of theCredit Agreement.

 

(j)  Other Rights and Remedies.  Mortgagee may exercise any and all otherrights and remedies which Mortgagee may have under the Loan Documents, or atlaw or in equity or otherwise.

 

Section 5.2.  Proceeds ofForeclosure.  The proceeds of anysale in foreclosure of the liens and security interests evidenced hereby shallbe applied in accordance with the requirements of applicable laws and to theextent consistent therewith, FIRST, to the payment of all necessarycosts and expenses incident to such foreclosure sale, including but not limitedto all attorneys’ fees and legal expenses, advertising costs, auctioneer’sfees, costs of title rundowns and lien searches, inspection fees, appraisalcosts, fees for professional services, environmental assessment and remediationfees, all court costs and charges of every character, and to the payment of theother Secured Indebtedness, including specifically without limitation theprincipal, accrued interest and attorneys’ fees due and unpaid on the Loan andthe amounts due and unpaid and owed to Mortgagee under this Mortgage and theamounts due and unpaid and owed to Mortgagee (or its Affiliates) under any SwapContracts, the order and manner of application to the items in this clause FIRSTto be in Mortgagee’s sole discretion; and SECOND, the remainder, if anythere shall be, shall be paid to Mortgagor, or to Mortgagor’s heirs, devisees,representatives, successors or assigns, or such other persons (including theholder or beneficiary of any inferior lien) as may be entitled thereto by law;provided, however, that if Mortgagee is uncertain which person or persons areso entitled, Mortgagee may interplead such remainder in any court of competentjurisdiction, and the amount of any attorneys’ fees, court costs and 

 

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expenses incurred in such action shall be a part of the SecuredIndebtedness and shall be reimbursable (without limitation) from suchremainder.

 

Section 5.3.  Mortgageeas Purchaser.  Mortgagee shall havethe right to become the purchaser at any sale by any receiver or public officeror at any public sale, and Mortgagee shall have the right to credit upon theamount of Mortgagee’s successful bid, to the extent necessary to satisfy suchbid, all or any part of the Secured Indebtedness in such manner and order asMortgagee may elect.

 

Section 5.4.  RemediesCumulative.  All rights and remediesprovided for herein and in any other Loan Document are cumulative of each otherand of any and all other rights and remedies existing at law or in equity, andMortgagee shall, in addition to the rights and remedies provided herein or inany other Loan Document, be entitled to avail itself of all such other rightsand remedies as may now or hereafter exist at law or in equity for the collectionof the Secured Indebtedness and the enforcement of the covenants herein and theforeclosure of the liens and security interests evidenced hereby, and theresort to any right or remedy provided for hereunder or under any such otherLoan Document or provided for by law or in equity shall not prevent theconcurrent or subsequent employment of any other appropriate right or rights orremedy or remedies.

 

Section 5.5.  Discretionas to Security.  Mortgagee may resortto any security given by this Mortgage or to any other security now existing orhereafter given to secure the payment of the Secured Indebtedness, in whole orin part, and in such portions and in such order as may seem best to Mortgageein its sole and uncontrolled discretion, and any such action shall not inanywise be considered as a waiver of any of the rights, benefits, liens orsecurity interests evidenced by this Mortgage.

 

Section 5.6.  Mortgagor’sWaiver of Certain Rights.  To thefull extent Mortgagor may do so, Mortgagor agrees that Mortgagor will not atany time insist upon, plead, claim or take the benefit or advantage of any lawnow or hereafter in force providing for any appraisement, valuation, stay,extension or redemption, homestead, moratorium, reinstatement, marshaling orforbearance, and Mortgagor, for Mortgagor, Mortgagor’s heirs, devisees,representatives, successors and assigns, and for any and all persons everclaiming any interest in the Property, to the extent permitted by applicablelaw, hereby waives and releases all rights of redemption, valuation,appraisement, stay of execution, notice of intention to mature or declare duethe whole of the Secured Indebtedness, notice of election to mature or declaredue the whole of the Secured Indebtedness and all rights to a marshaling ofassets of Mortgagor, including the Property, or to a sale in inverse order ofalienation in the event of foreclosure of the liens and/or security interestshereby created.  Mortgagor shall not haveor assert any right under any statute or rule of law pertaining to themarshaling of assets, sale in inverse order of alienation, the exemption ofhomestead, the administration of estates of decedents, or other matterswhatsoever to defeat, reduce or affect the right of Mortgagee under the termsof this Mortgage to a sale of the Property for the collection of the SecuredIndebtedness without any prior or different resort for collection, or the rightof Mortgagee under the terms of this Mortgage to the payment of the SecuredIndebtedness out of the proceeds of sale of the Property in preference to everyother claimant 

 

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whatsoever.  Mortgagor waives anyright or remedy which Mortgagor may have or be able to assert pursuant to anyprovision of Ohio law pertaining to the rights and remedies of sureties.  If any law referred to in this Section andnow in force, of which Mortgagor or Mortgagor’s heirs, devisees,representatives, successors or assigns or any other persons claiming anyinterest in the Property might take advantage despite this Section, shallhereafter be repealed or cease to be in force, such law shall not thereafter bedeemed to preclude the application of this Section.

 

Section 5.7.  Delivery ofPossession After Foreclosure.  In theevent there is a foreclosure sale hereunder and at the time of such sale,Mortgagor or Mortgagor’s heirs, devisees, representatives, or successors asowners of the Property are occupying or using the Property, or any partthereof, each and all shall immediately become the tenant of the purchaser atsuch sale, which tenancy shall be a tenancy from day to day, terminable at thewill of purchaser, at a reasonable rental per day based upon the value of theproperty occupied, such rental to be due daily to the purchaser; and to theextent permitted by applicable law, the purchaser at such sale shall,notwithstanding any language herein apparently to the contrary, have the soleoption to demand immediate possession following the sale or to permit theoccupants to remain as tenants at will. After such foreclosure, any Leases to tenants or subtenants that aresubject to this Mortgage (either by their date, their express terms, or byagreement of the tenant or subtenant) and which tenants or subtenants are thirdparties unrelated to Mortgagor, its subsidiaries or affiliates, shall, at thesole option of Mortgagee or any purchaser at such sale, either (i) continuein full force and effect, and the tenant(s) or subtenant(s) thereunderwill, upon request, attorn to and acknowledge in writing to the purchaser orpurchasers at such sale or sales as landlord thereunder, or (ii) uponnotice to such effect from Mortgagee, or any purchaser or purchasers, terminatewithin thirty (30) days from the date of sale. In the event the tenant fails to surrender possession of the Propertyupon demand, the purchaser shall be entitled to institute and maintain asummary action for possession of the Property (such as an action for forcibledetainer) in any court having jurisdiction.

 

ARTICLE 6

 

Miscellaneous

 

Section 6.1.  Scope ofMortgage.  This Mortgage is amortgage of both real and personal property, a security agreement, anassignment of rents and leases, a financing statement and a collateralassignment, and also covers proceeds and fixtures.

 

Section 6.2.  Effectiveas a Financing Statement.  ThisMortgage shall be effective as a financing statement filed as a fixture filingwith respect to all fixtures included within the Property and is to be filedfor record in the real estate records of each county where any part of theProperty (including said fixtures) is situated. This Mortgage shall also be effective as a financing statement coveringas-extracted collateral (including oil and gas), accounts and generalintangibles under the Ohio Uniform Commercial Code, as in effect from time totime, and the Uniform Commercial Code, as in effect from time to time, in anyother state where the Property is situated which will be financed at thewellhead or minehead of the wells or mines located on the Property and is to befiled for record in the real estate records of each county where any part ofthe Property is situated.  This Mortgageshall also be effective as a financing statement 

 

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covering any other Property and may be filed in any other appropriatefiling or recording office.  The mailingaddress of Mortgagor and the Mortgagee are set forth at the end of thisMortgage.  A carbon, photographic orother reproduction of this Mortgage or of any financing statement relating tothis Mortgage shall be sufficient as a financing statement for any of thepurposes referred to in this Section.

 

Section 6.3.  Notice toAccount Debtors.  In addition to therights granted elsewhere in this Mortgage, Mortgagee may at any time notify theaccount debtors or obligors of any accounts, chattel paper, generalintangibles, negotiable instruments or other evidences of indebtedness includedin the Collateral to pay Mortgagee directly.

 

Section 6.4.  Waiver byMortgagee.  Mortgagee may at any timeand from time to time by a specific writing intended for the purpose: (a) waivecompliance by Mortgagor with any covenant herein made by Mortgagor to theextent and in the manner specified in such writing; (b) consent toMortgagor’s doing any act which hereunder Mortgagor is prohibited from doing,or to Mortgagor’s failing to do any act which hereunder Mortgagor is requiredto do, to the extent and in the manner specified in such writing; (c) releaseany part of the Property or any interest therein from the lien and securityinterest of this Mortgage; or (d) release any party liable, eitherdirectly or indirectly, for the Secured Indebtedness or for any covenant hereinor in any other Loan Document, without impairing or releasing the liability ofany other party.  No such act shall inany way affect the rights or powers of Mortgagee hereunder except to the extentspecifically agreed to by Mortgagee in such writing.

 

Section 6.5.  NoImpairment of Security.  The lien,security interest and other security rights of Mortgagee hereunder or under anyother Loan Document shall not be impaired by any indulgence, moratorium orrelease granted by Mortgagee including, but not limited to, any renewal,extension or modification which Mortgagee may grant with respect to any SecuredIndebtedness, or any surrender, compromise, release, renewal, extension,exchange or substitution which Mortgagee may grant in respect of the Property,or any part thereof or any interest therein, or any release or indulgence grantedto any endorser, guarantor or surety of any Secured Indebtedness.  The taking of additional security byMortgagee shall not release or impair the lien, security interest or othersecurity rights of Mortgagee hereunder or affect the liability of Mortgagor orof any endorser, guarantor or surety, or improve the right of any juniorlienholder in the Property (without implying hereby Mortgagee’s consent to anyjunior lien).

 

Section 6.6.  [Reserved].

 

Section 6.7.  [Reserved].

 

Section 6.8.  Place of Payment.  All Secured Indebtedness which may be owinghereunder at any time by Mortgagor shall be payable at the place designated inthe Credit Agreement (or if no such designation is made, at the address ofMortgagee indicated at the end of this Mortgage).

 

Section 6.9.  Subrogationto Existing Liens; Vendor’s Lien.  Tothe extent that proceeds of the Loan are used to pay indebtedness secured byany outstanding lien, security interest, charge or 

 

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prior encumbrance against the Property, such proceeds have beenadvanced by Mortgagee at Mortgagor’s request, and Mortgagee shall be subrogatedto any and all rights, security interests and liens owned by any owner orholder of such outstanding liens, security interests, charges or encumbrances,however remote, irrespective of whether said liens, security interests, chargesor encumbrances are released, and all of the same are recognized as valid andsubsisting and are renewed and continued and merged herein to secure theSecured Indebtedness, but the terms and provisions of this Mortgage shallgovern and control the manner and terms of enforcement of the liens, securityinterests, charges and encumbrances to which Mortgagee is subrogated hereunder.  It is expressly understood that, inconsideration of the payment of such indebtedness by Mortgagee, Mortgagorhereby waives and releases all demands and causes of action for offsets andpayments in connection with the said indebtedness.  If all or any portion of the proceeds of theLoan or of any other secured indebtedness has been advanced for the purpose ofpaying the purchase price for all or a part of the Property, no vendor’s lienis waived; and Mortgagee shall have, and is hereby granted, a vendor’s lien onthe Property as cumulative additional security for the SecuredIndebtedness.  Mortgagee may forecloseunder this Mortgage or under the vendor’s lien without waiving the other or mayforeclose under both.

 

Section 6.10.  [Reserved].

 

Section 6.11.  [Reserved].

 

Section 6.12.  Releases.  If all of the Secured Indebtedness be paid asthe same becomes due and payable and all of the covenants, warranties,undertakings and agreements made in this Mortgage are kept and performed, andall Swap Contracts and all obligations, if any, of Mortgagee for furtheradvances have been terminated, then, and in that event only, all rights underthis Mortgage shall terminate (except to the extent expressly provided hereinwith respect to indemnifications, representations and warranties and otherrights which are to continue following the release hereof) and the Propertyshall become wholly clear of the liens, security interests, conveyances andassignments evidenced hereby, and such liens and security interests shall bereleased by Mortgagee in due form at Mortgagor’s cost.  Without limitation, all provisions herein forindemnity of Mortgagee shall survive discharge of the Secured Indebtedness, thetermination of any and all Swap Contracts and any foreclosure, release ortermination of this Mortgage.

 

Section 6.13.  Notices.  All notices, requests, consents, demands andother communications required or which any party desires to give hereunder orunder any other Loan Document shall be in writing and given as provided in theCredit Agreement.

 

Section 6.14.  Invalidityof Certain Provisions.  Adetermination that any provision of this Mortgage is unenforceable or invalidshall not affect the enforceability or validity of any other provision and thedetermination that the application of any provision of this Mortgage to anyperson or circumstance is illegal or unenforceable shall not affect theenforceability or validity of such provision as it may apply to other personsor circumstances.

 

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Section 6.15.  Gender;Titles; Construction.  Within thisMortgage, words of any gender shall be held and construed to include any othergender, and words in the singular number shall be held and construed to includethe plural, unless the context otherwise requires.  Titles appearing at the beginning of anysubdivisions hereof are for convenience only, do not constitute any part ofsuch subdivisions, and shall be disregarded in construing the languagecontained in such subdivisions.  The useof the words “herein,” “hereof,” “hereunder” and othersimilar compounds of the word “here” shall refer to this entire Mortgageand not to any particular Article, Section, paragraph or provision.  The term “person” and words importingpersons as used in this Mortgage shall include firms, associations,partnerships (including limited partnerships), joint ventures, trusts,corporations, limited liability companies and other legal entities, includingpublic or governmental bodies, agencies or instrumentalities, as well as naturalpersons.

 

Section 6.16.  ReportingCompliance.  Mortgagor agrees tocomply with any and all reporting requirements applicable to the transactionevidenced by the Credit Agreement and secured by this Mortgage which are setforth in any law, statute, ordinance, rule, regulation, order or determinationof any governmental authority, including but not limited to The InternationalInvestment Survey Act of 1976, The Agricultural Foreign Investment DisclosureAct of 1978, The Foreign Investment in Real Property Tax Act of 1980 and theTax Reform Act of 1984 and further agrees upon request of Mortgagee to furnishMortgagee with evidence of such compliance.

 

Section 6.17. Mortgagee’s Consent.  In any instance hereunder where the approval,consent or the exercise of judgment of Mortgagee is required or requested, (a) thegranting or denial of such approval or consent and the exercise of suchjudgment shall be within the reasonable discretion of Mortgagee (provided,however, that following a Default hereunder or an Event of Default underthe Credit Agreement, the granting or denial of any such approval or consentand the exercise of such judgment shall be within the sole discretion ofMortgagee, and Mortgagee shall not, for any reason or to any extent, berequired to grant such approval or consent or exercise such judgment in anyparticular manner, regardless of the reasonableness of either the request orMortgagee’s judgment), and (b) no approval or consent of Mortgagee shallbe deemed to have been given except by a specific writing intended for thepurpose and executed by an authorized representative of Mortgagee.

 

Section 6.18.  Mortgagor.  Unless the context clearly indicatesotherwise, as used in this Mortgage, “Grantor” means the Mortgagorsnamed in Section 1.1 hereof or any of them.  The obligations of Mortgagor hereunder shallbe joint and several.  If any Mortgagor,or any signatory who signs on behalf of any Mortgagor, is a corporation,partnership or other legal entity, Mortgagor and any such signatory, and theperson or persons signing for it, represent and warrant to Mortgagee that thisinstrument is executed, acknowledged and delivered by Mortgagor’s dulyauthorized representatives.  If Mortgagoris an individual, no power of attorney granted by Mortgagor herein shallterminate on Mortgagor’s disability.

 

Section 6.19.  Execution;Recording.  This Mortgage has beenexecuted in several counterparts, all of which are identical, and all of whichcounterparts together shall constitute one and the same instrument.  The date or dates reflected in theacknowledgments hereto indicate the 

 

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date or dates of actual execution of this Mortgage, but such executionis as of the date shown on the first page hereof, and for purposes ofidentification and reference the date of this Mortgage shall be deemed to bethe date reflected on the first page hereof.  Mortgagor will cause this Mortgage and allamendments and supplements thereto and substitutions therefor and all financingstatements and continuation statements relating thereto to be recorded, filed,re-recorded and refiled in such manner and in such places as Mortgageeshall reasonably request and will pay all such recording, filing, re-recordingand refiling taxes, fees and other charges.

 

Section 6.20.  Successorsand Assigns.  The terms, provisions,covenants and conditions hereof shall be binding upon Mortgagor, and the heirs,devisees, representatives, successors and assigns of Mortgagor, and shall inureto the benefit of Mortgagee and shall constitute covenants running with theLand.  All references in this Mortgage toMortgagor shall be deemed to include all such heirs, devisees, representatives,successors and assigns of Mortgagor.

 

Section 6.21.  Modificationor Termination.  The Loan Documentsmay only be modified or terminated by a written instrument or instrumentsintended for that purpose and executed by the party against which enforcementof the modification or termination is asserted. Any alleged modification or termination which is not so documented shallnot be effective as to any party.

 

Section 6.22.  NoPartnership, Etc..  The relationshipbetween Mortgagee and Mortgagor is solely that of lender and borrower.  Mortgagee has no fiduciary or other special relationshipwith Mortgagor.  Nothing contained in theLoan Documents is intended to create any partnership, joint venture,association or special relationship between Mortgagor and Mortgagee or in anyway make Mortgagee a co-principal with Mortgagor with reference to theProperty. All agreed contractual duties between or among Mortgagee andMortgagor are set forth herein and in the other Loan Documents and anyadditional implied covenants or duties are hereby disclaimed.  Any inferences to the contrary of any of theforegoing are hereby expressly negated.

 

Section 6.23.  ApplicableLaw.

 

(a)   THIS MORTGAGE, AND ITSVALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY AND CONSTRUED,INTERPRETED AND ENFORCED IN ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THESTATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) ANDAPPLICABLE UNITED STATES FEDERAL LAW, EXCEPT THAT AT ALL TIMES THE PROVISIONSOF THIS MORTGAGE PROVIDING FOR THE CREATION, PERFECTION AND ENFORCEMENT OF THELIEN CREATED PURSUANT TO THIS MORTGAGE SHALL BE GOVERNED BY AND CONSTRUEDACCORDING TO THE LAWS OF THE STATE OF OHIO, IT BEING UNDERSTOOD THAT, TO THEFULLEST EXTENT PERMITTED BY THE LAWS OF THE STATE OF OHIO, THE LAWS OF THESTATE OF NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL LOANDOCUMENTS AND THE INDEBTEDNESS EVIDENCED THEREBY.

 

(b)   Mortgagor hereby irrevocablysubmits generally and unconditionally for itself and in respect of its propertyto the non exclusive jurisdiction of any New York or Ohio state court, or 

 

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any United States federal court, sitting in the county where the Landis located and in which the Secured Indebtedness is payable, over any suit,action or proceeding arising out of or relating to this Mortgage or the SecuredIndebtedness.  Mortgagor herebyirrevocably waives, to the fullest extent permitted by law, any objection thatMortgagor may now or hereafter have to the laying of venue in any such courtand any claim that any such court is an inconvenient forum.  Mortgagor hereby agrees and consents that, inaddition to any methods of service of process provided for under applicablelaw, all service of process in any such suit, action or proceeding in any Ohiostate court, or any United States federal court, may be made by certified orregistered mail, return receipt requested, directed to Mortgagor at its addressstated at the end of this Mortgage, or at a subsequent address of Mortgagor ofwhich Mortgagee received actual notice from Mortgagor in accordance with thisMortgage.  Nothing herein shall affectthe right of Mortgagee to serve process in any manner permitted by law or limitthe right of Mortgagee to bring proceedings against Mortgagor in any othercourt or jurisdiction.

 

Section 6.24.  ExecutionUnder Seal.  Mortgagor agrees thatthis instrument is executed under seal. If Mortgagor is a corporation, the designation (“SEAL”) on thisinstrument shall be as effective as the affixing of Mortgagor’s corporate sealphysically to this instrument.

 

Section 6.25.  EntireAgreement.  The Loan Documentsconstitute the entire understanding and agreement between Mortgagor andMortgagee with respect to the transactions arising in connection with theSecured Indebtedness and supersede all prior written or oral understandings andagreements between Mortgagor and Mortgagee with respect to the mattersaddressed in the Loan Documents. Mortgagor hereby acknowledges that, except as incorporated in writing inthe Loan Documents, there are not, and were not, and no persons are or wereauthorized by Mortgagee to make, any representations, understandings,stipulations, agreements or promises, oral or written, with respect to thematters addressed in the Loan Documents.

 

Section 6.26.  Greater Estate.  In the event that Mortgagor is the owner of aleasehold estate with respect to any portion of the Property and, prior to thesatisfaction of the indebtedness and the cancellation of this Mortgage ofrecord, Mortgagor obtains a fee estate in such portion of the Property, then,such fee estate shall automatically, and without further action of any kind onthe part of Mortgagor, be and become subject to the security lien of thisMortgage.

 

Section 6.27.  [Reserved].

 

Section 6.28.  CertainObligations Secured.  The SecuredIndebtedness may include interest which is deferred, accrued or capitalized.

 

Section 6.29.        StateSpecific Provisions.

 

(a)   OPEN-END MORTGAGE MAXIMUMPRINCIPAL AMOUNT.  This Mortgage isan open-end mortgage made pursuant to Section 5301.232 of the Ohio RevisedCode, and shall secure the payment of all loan advances included within theterm “Debt”, regardless of the time such advances are made.  The making of such advances is obligatory onthe part of the Mortgagee subject to the terms and conditions provided for inthe Loan Documents.  The 

 

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maximum amount of unpaid loan indebtedness, exclusive of interestthereon, which may be outstanding at any time and secured hereby shall be themaximum principal amount stated on the cover page of this Mortgage.  As permitted and provided in Section 5301.233of the Ohio Revised Code, this Mortgage shall also secure unpaid balances ofadvances made with respect to the Property for the payment of taxes, assessments,insurance premiums, or costs incurred for the protection of the Property andother costs which Mortgagee is authorized by this Mortgage to pay onMortgagor’s, plus interest thereon, regardless of the time when such advancesare made.

 

(b)   OHIO REMEDIES.  Without limitation to the other terms andprovisions of this Mortgage, Mortgagee may, at its option, do all thingsprovided or permitted to be done by a mortgagee under Section 1311.14 ofthe Ohio Revised Code and any amendment thereto, for the protection ofMortgagee’s interest in the Property.

 

(c)   CONFLICTING PROVISIONS.  The provisions of this Section areintended to supplement, and not limit, the other provisions of this Mortgage; provided,however, that in the event the provisions of this Section contradictany other provision of this Mortgage, the provisions of this Section shallgovern.

 

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IN WITNESS WHEREOF, Mortgagor has executed this instrument under sealas of the date first written on page 1 hereof.

 
|   | Mortgagor:                           |
|--------|--------------------------------------|
|   |                                 |
|   | AMYLIN OHIO LLC,                     |
|   | a Delaware limited liability company |
|   |                                 |
|   | By:                                  | AMYLIN PHARMACEUTICALS, INC., |
|   |                                 | a Delaware corporation, |
|   |                                 | its sole member |
|   |                                 |   |
|   |                                 |   |
|   |                                 | By: |   |
|   |                                 | Name: |   |
|   |                                 | Title: |   |
|        |                                      |  |  |  |

 

 

 
| STATE OF  | ) |   |
|-----------|---|--------|
|      | ) | SS.:   |
| COUNTY OF | ) |   |

 

On the         day of             ,2007, before me, the undersigned, a Notary Public in and for said State,personally appeared                                    ,known to me on the basis of satisfactory evidence to be the individual(s) whosename(s) is/are subscribed to the within instrument and acknowledged thathe/she/they executed the same in his/her/their capacity(ies), and that byhis/her/their signature(s) on the instrument, the individual(s), or theperson upon behalf of which the individual(s) acted, executed theinstrument.

 
|   |                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------|
|   | Notary Public                                                                                                                 |
|   |                                                                                                                          |
|   | My  commission expires:                  |

 

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EXHIBIT A

 

LAND

 

All those certain pieces or parcels of land, together with theimprovements thereon and appurtenances thereunto belonging, lying, situate andbeing in Butler County, Ohio, being more particularly described as follows:

 

Parcel 1

 

Parcel No. M5620-008-000-041

 

Situated in Section 10, Town 2, Range 2, West Chester Township,Butler County, Ohio and being a 10.910 acre tract of land being all of Lot 3 ofPort Union Distribution Center as set forth on plat filed January 10,2001, in Plat Envelope 3248, Pages A & B of the Butler County,Ohio Records, being further described as follows:

 

Beginning at a point found by measuring from the southeast corner ofaforementioned Section 10, said point being in the centerline intersectionof Princeton-Glendale Road and Port Union Road, along the southerly line ofsaid section and along the centerline of Port Union Road, South 82° 35’ 30”West, 1070.40 feet; thence leaving said section line and said centerline North07° 24’ 30” West, 199.68 feet; thence along a 200.00 foot radius curve to theright an arc length of 50.39 feet, a chord bearing of North 00° 11’ 24” West, achord distance of 50.26 feet; thence North 07° 01’ 43” East, 159.76 feet;thence along a 200.00 foot radius curve to the left an arc length of 236.74feet, a chord bearing of North 26° 52’ 56” West, a chord distance of 233.16feet; thence North 60° 47’ 34” West, 280.76 feet; thence along a 200.00 footradius curve to the left an arc length of 28.48 feet, a chord bearing of North64° 52’ 20” West, a chord distance of 28.46 feet; thence North 68° 57’ 07”West, 352.11 feet; thence North 21° 02’ 53” East, 30.00 feet to the true pointof beginning; thence from the point of beginning thus found along a 68.00 footradius curve to the left an arc length of 64.18 feet, a chord bearing of South84° 00’ 37” West, a chord distance of 61.82 feet; thence North 33° 01’ 38” West,159.78 feet; thence North 07° 11’ 40” West, 178.43 feet; thence North 13° 20’41” East, 611.93 feet; thence South 60° 50’ 40” East, 741.26 feet; thence South29° 12’ 26” West, 732.11 feet; thence North 68° 57’ 07” West, 279.03 feet tothe point of beginning, containing 475,239.60 square feet or 10.910 acres ofland and being subject to all easements, conditions, restrictions andright-of-ways of record, including the Declaration of Protective Covenants,Agreements, Easement, Charges and Liens recorded in Book 6533, Page 1960of the Official Records of Butler County, Ohio.

 

Together with appurtenant easements from drainage and utilities perPlat Envelope 3248, Pages A & B and also shown in Deed Book 899, Page 551of the records of the Recorder of Butler County, Ohio.

 

The Plat of Survey from which the above description is prepared isrecorded in Volume 3248, Pages A & B of the Butler County, OhioRecords.

 

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Parcel 2

 

Parcel No. M5620-008-000-042

 

Situated in Section 10, Town 2, Range 2, West Chester Township,Butler County, Ohio and being a 16.1560 acre tract of land being all of Lot 4of Port Union Distribution Center as set forth on plat filed January 10,.2001, In Plat Envelope 3248, Pages A & B of the Butler County,Ohio Records, being further described as follows:

 

Together with appurtenant easements for drainage and utilities shown inEasement Agreement recorded July 24, 2000 in Official Record Book 6496, Page 139by and between Board of County Commissioners Butler County, Ohio and IndustrialDevelopments International of the records of the Recorder of Butler County,Ohio.

 

METES AND BOUNDS DESCRIPTION:

 

Situated in Section 10, Town 2, Range 2, West Chester, Township,Butler County, Ohio and being Entire Lot #4 of Port Union Distribution Centeras recorded in Plat Envelope 3248, Page A-B of the Butler County recordsand being further described as follows:

Beginning at the Southwest corner of aforementioned Lot #4, said pointbeing in the Northerly right-of-way of Trade Port Drive;

 

thence along the boundary of said Lot #4, North 29° 12’ 26” East,732.11 feet; thence South 60° 50’ 40” East, 419.35 feet to a found 3/8” ironpin; thence South 51° 07’ 31” East 93.39 feet to a found 5/8” iron pin; thenceSouth 52° 34’ 37” East 98.68 feet to a found 5/8” iron pin; thence South 03°49’ 48” West, 145.85 feet to a found iron pipe (bent); thence South 39° 45’ 30”East, 234.78 feet; thence South 04° 11’ 51” West, 310.81 feet to a found 5/8”iron pin; thence South 51° 21’ 44” West, 111.00 feet to a found 5/8” iron pin;thence South 82° 40’ 14” West, 283.78 feet to a set 5/8” iron pin; thence South03° 47’ 11” West, 276.69 feet to a point in the Northerly right-of-way line ofPort Union Road; thence along said Northerly right-of-way line South 61° 01’24” West, 95.00 feet; thence South 82° 35’ 30” West, 34.38 feet; thence along acurve to the right having a radius of 30.00 feet, through a central angle of90° 00’ 00” an arc length of 47.12 feet, a chord bearing of North 52° 24’ 30”West, a chord distance of 42.43 feet to a point in the Easterly right-of-wayline of Trade Port Drive; thence along said Easterly right-of-way, North 07°24’ 30” West, 119.68 feet; thence along a curve to the right, having a radiusof 170.00 feet, through a central angle of 14° 26’ 13” an arc length of 42.83feet, a chord bearing of North 00° 11’ 24” West, a chord distance of 42.72feet; thence North 07° 01’ 43” East, 159.76 feet; thence along a curve to theleft, having a radius of 230.00 feet, through a central angle of 67° 49’ 17” anarc length of 272.25 feet, a chord bearing of North 26° 52’ 56” West, a chorddistance of 256.63 feet to a point in the Northerly right-of-way line of TradePort Drive; thence along said Northerly right-of-way line, North 60° 47’ 34”West, 280.76 feet; thence along a curve to the left, having a radius of 230.00feet, through a central angle of 08° 09’ 33” an arc length of 32.75 feet, achord bearing of North 64° 52’ 20” West, a chord distance of 32.73 feet; thenceNorth 68° 57’ 07” West, 73.07 feet to the point of beginning containing703,769.90 square feet or 16.156 acres of land and being subject to alleasements and right-of-ways of record.

 

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***Exhibit H-1***

 

GIAN-MICHELE A MARCA

(415) 693-2148

 

 

December 21,2007

 

Bank of America, N.A., as Lender,

Administrative Agent and L/C Issuer

and the other Lenders identified on

Exhibit A hereto

 

**RE:**                        CreditAgreement

 

Ladies and Gentlemen:

 

We have actedas counsel to Amylin Pharmaceuticals, Inc., a Delaware corporation (the “***Company***”), Amylin Ohio LLC, aDelaware limited liability company (“***Amylin Ohio***”),and Amylin Investments LLC, a Delaware limited liability company (“***Amylin Investments***” and togetherwith Amylin Ohio and  the Company,collectively, the “***Borrowers***”), in connectionwith the execution and delivery of the Credit Agreement, dated as of December 21,2007 (the “***Credit Agreement***”), by andamong the Company, Amylin Ohio, Amylin Investments, Bank of America, N.A., asAdministrative Agent and L/C Issuer (“***Administrative Agent***”),and each of the Lenders listed on **Exhibit A**hereto (each a “***Lender***” and collectively, the“***Lenders***”). This opinion is furnishedto you at the request and on behalf of the Company pursuant to Section 4.01(a)(vii) ofthe Credit Agreement.  All capitalizedterms not otherwise defined herein shall have the meanings given to them in theCredit Agreement.  For purposes of theopinions expressed herein, we have examined the following documents, each datedas of the date hereof (collectively, the documents referred to in (a) through(d) below being the “***Transaction Documents***”):

 

**(a)          **the Credit Agreement andthe Notes;

 

**(b)          **the Pledge and SecurityAgreement, by and among the Borrowers and the Administrative Agent for thebenefit of the Secured Parties;

 

**(c)          **the Deposit AccountControl Agreements and Securities Account Control Agreements listed on **Exhibit B** hereto;

 

**(d)          **the Mortgage listed on Exhibit Bhereto; and

 

**(e)          **unfiled copies of financingstatements on Form UCC-1 provided to us by you or your counsel andattached hereto as **Exhibit C**naming each Borrower, respectively, as debtor and the Administrative Agent assecured party (the “***Delaware Financing Statements***”).

 

In addition, we have examined the followingdocuments:

 

 

101 CALIFORNIA STREET, 5THFLOOR, SAN FRANCISCO, CA 94111-5800  T:(415) 693-2000  F: (415) 693-2222  WWW.COOLEY.COM

 

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**(i)           **Amended and RestatedCertificate of Incorporation of the Company, filed on January 25, 1992 andamended by filings with the Secretary of State of the State of Delaware on May 29,1998, March 23, 1999, November 16, 1999, June 11, 2001, June 14,2002, and May 23, 2007, and each as certified by the Secretary of State ofthe State of Delaware on December 19, 2007;

 

**(ii)          **Bylaws of the Companycertified to us by an officer of the Company to be in full force and effect asof the date hereof;

 

**(iii)         **Resolutions of theFinance Committee of the Board of Directors of the Company relating to theTransaction Documents and the transactions contemplated thereby adopted bywritten consent on December 19, 2007 and resolutions of the Board ofDirectors of the Company relating to the delegation of authority to the FinanceCommittee adopted at a meeting held on May 16-17, 2006;

 

**(iv)          **Certificate of Formationof Amylin Ohio, filed on December 5, 2005, and certified by the Secretaryof State of the State of Delaware on December 19, 2007;

 

**(v)           **Limited LiabilityCompany Agreement of Amylin Ohio certified to us by the Sole Manager of AmylinOhio to be in full force and effect as of the date hereof;

 

**(vi)          **Resolutions of the solemember and the sole manager of Amylin Ohio relating to the TransactionDocuments and the transactions contemplated thereby adopted by written consent onDecember 20, 2007;

 

**(vii)        **Certificate of Formationof Amylin Investments, dated as of April 13, 2007, and certified by theSecretary of State of the State of Delaware on December 19, 2007;

 

**(viii)       **Limited LiabilityCompany Agreement of Amylin Investments certified to us by the Sole Manager ofAmylin Investments to be in full force and effect as of the date hereof;

 

**(ix)         **Resolutions of the solemember and the sole manager of Amylin Investments relating to the TransactionDocuments and the transactions contemplated thereby adopted by written consenton December 20, 2007;

 

**(x)           **copies of the MaterialAgreements (as defined below) listed on **Schedule A**hereto;

 

**(xi)         **Certificate of GoodStanding issued by the Secretary of State of Delaware stating that the Companyis a domestic corporation in good standing in such state, dated as of December 19,2007;

 

**(xii)        **Certificate of GoodStanding issued by the Secretary of State of Delaware stating that Amylin Ohiois a domestic limited liability company in good standing in such state, datedas of December 19, 2007; and

 

2

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**(xiii)       **Certificate of GoodStanding issued by the Secretary of State of Delaware stating that AmylinInvestments is a domestic limited liability company in good standing in suchstate, dated as of December 19, 2007;

 

**(xiv)        **such other certificatesof status issued by the states set forth on **Schedule B**hereto, stating that a Borrower is entitled to transact intrastate business inand is in good standing under the laws of such state (together with items (xi),(xii) and (xiii) above, the “***Good Standing Certificates***”).

 

Items (i), (ii), (iv),(v), (vii) and (viii) above are collectively referred to as the “***Organizational Documents***”.

 

In connection with this opinion, we haveexamined and relied upon the representations and warranties as to factualmatters contained in and made pursuant to the Transaction Documents by thevarious parties and upon originals or copies certified to our satisfaction ofsuch records, documents, certificates, opinions, memoranda and otherinstruments as in our judgment are necessary or appropriate to enable us torender the opinions expressed below.

 

As to certain factual matters, we have reliedupon certificates of officers of each of the Borrowers and have not soughtindependently to verify such matters. Where we render an opinion “to our knowledge” or concerning an item“known to us” or our opinion otherwise refers to our knowledge, it is based solelyupon (i) an inquiry of attorneys currently within this firm who representthe Borrowers in this transaction, (ii) receipt of certificates executedby an officer of each of the Borrowers covering such matters or items, and (iii) suchother investigation, if any, that we specifically set forth herein.  In addition, with regard to our opinions inparagraphs 4 and 5 below with respect to orders, judgments, or decrees that arebinding upon the Borrowers or their respective properties and our opinion in paragraph7 below with respect to pending or overtly threatened litigation, we also havechecked the records of this firm to ascertain that we are not acting as counselof record for the Borrowers with respect to any of the foregoing.  We have made no further investigation.

 

In rendering the opinions expressed below, wehave assumed, without investigation:

 

**(a)          **the genuineness andauthenticity of all signatures on original documents (except that suchassumption is not made, as to the Borrowers, with respect to the signatures ofthe person(s) executing the Transaction Documents on behalf of theBorrowers);

 

**(b)          **the authenticity of alldocuments submitted to us as originals;

 

**(c)          **the conformity tooriginals of all documents submitted to us as copies;

 

**(d)          **the accuracy,completeness and authenticity of certificates of public officials;

 

**(e)          **the due incorporation orformation, valid existence, good standing in the jurisdiction of incorporationor formation and the corporate, limited liability company or similar power toenter into and perform the Transaction Documents in accordance with theirrespective 

 

3

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terms, of all Personsparty to any Transaction Document (except that such assumption is not made asto the Borrowers);

 

**(f)           **the due authorization,execution and delivery of all documents (except that such assumption is notmade with respect to the due authorization, execution and delivery of theTransaction Documents by the Borrowers), in each case where the authorization,execution and delivery thereof by such parties are prerequisites to theeffectiveness of such documents;

 

**(g)          **the legal capacity ofall individuals executing and delivering documents to so execute and deliver;

 

**(h)          **compliance by Lenders orBank of America, N.A. in its capacity as Administrative Agent and L/C Issuer,as applicable, with any state or federal laws or regulations applicable to thetransactions contemplated by the Transaction Documents because of the nature ofsuch Person’s business;

 

**(i)           **the TransactionDocuments are valid and binding obligations, enforceable in accordance withtheir respective terms against all parties thereto (except that such assumptionis not made with respect to the Borrowers); and

 

**(j)           **there are no extrinsicagreements or understandings among the parties to the Transaction Documents orthe Material Agreements that would modify or interpret the terms of theTransaction Documents or such Material Agreements or the respective rights orobligations of the parties thereunder.

 

Our opinion is expressed only (i) withrespect to the federal laws of the United States of America and the internallaws of the State of New York, (ii) for the purposes of our opinion inparagraphs 1 and 2 below, the General Corporation Law of the State of Delawareand the Delaware Limited Liability Company Act, and (iii) for the purposesof our opinion in paragraph 10 below, the relevant provisions of Revised Article 9of the Delaware Uniform Commercial Code (“***DEUCC***”) asreflected in unofficial compilations.  Wedid not review the official version of the DEUCC or any decisions interpretingthe DEUCC.  We did not obtain specialrulings of authorities administering the DEUCC or any opinion of counsel inDelaware.  Our opinions with respect to the Mortgage aresubject to Section 6.23(a) of the Mortgage which specify theapplicable governing law for such documents, and we have assumed that a courtwould give effect to this provision.  Weexpress no opinion as to the provisions of the Mortgage providing for thecreation, perfection or enforcement of the liens created pursuant to theMortgage, and we understand that you are relying on the opinion of Dinsmore &Shohl LLP with respect thereto.  Wenote that the parties to one of the Account Control Agreements have designatedthe laws of the State of Pennsylvania as the laws governing such AccountControl Agreement.  Our opinion inparagraph 3 below as to the validity, binding effect and enforceability of thesuch Account Control Agreement and our opinions in paragraphs 10 and 11 beloware premised upon the result that would obtain if the securities intermediary’sjurisdiction was the State of New York and such Account Control Agreement wasgoverned by the laws of the State of New York (notwithstanding the actualdesignation in such Account Control Agreements of the laws of the State ofPennsylvania) to the interpretation and enforcement of such Account Control 

 

4

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Agreement.** **We do not express any opinionherein covering any other laws, and except as provided herein with respect tothe laws of the State of New York, we express no opinion as to whether the lawsof any particular jurisdiction apply and no opinion to the extent that the lawsof any other jurisdiction are applicable to the subject matter hereof.  For purposes of this Opinion, “***NYUCC***” means the New York UniformCommercial Code as in effect in the State of New York on the date hereof.

 

We are not rendering any opinion as to anylaw, rule or regulation relating to antitrust, banking, insurance, theregulation of insurers or insurance-related companies, land use, safety, theregulation of pharmaceutical companies or pharmaceutical products,environmental, pension, employee benefit, fraudulent conveyance, tax or thelegality of investments for regulated entities. We express no opinion as to anylocal law.  Furthermore, we express noopinion with respect to compliance with: antifraud laws, rules orregulations; laws, rules or regulations relating to securities or theoffer and sale thereof; state securities or blue sky laws, rules orregulations; the Investment Company Act of 1940, as amended (the “***Investment Company Act***”), except asexpressly set forth in paragraph 12 below; or laws, rules or regulationsthat place limitations on corporate distributions.

 

With regard to our opinion in paragraph 1below with regard to (i) the valid existence and good standing of eachBorrower as a domestic corporation or limited liability company, as the casemay be, in the State of Delaware and (ii) the qualification to do businessas a foreign corporation or foreign limited liability company, as the case maybe, and good**standing of each Borrower in thejurisdictions set forth opposite the name of such Borrower on **Schedule B** hereto, we have based our opinion solely upon ourreview of the Good Standing Certificates. We have made no further investigation.

With regard to our opinions in paragraph 3below concerning the validity, binding nature and enforceability of eachBorrower’s obligations under the Transaction Documents:

** **

**(i)           **This opinion is subjectto, and may be limited by, applicable bankruptcy, reorganization, insolvency,moratorium, fraudulent conveyance, debtor and creditor, and similar laws whichrelate to or affect creditors’ rights generally.  This opinion is also subject to, and may belimited by, general principles of equity and the exercise of judicialdiscretion (regardless of whether such validity or enforceability is consideredin a proceeding in equity or at law), including the possible unavailability ofspecific performance, injunctive relief or any other equitable remedy andconcepts of materiality, reasonableness, conscionability, good faith and fairdealing.

** **

**(ii)          **No opinion is expressedas to the enforceability of any provision of any Transaction Document:

** **

**(1)         **under which any partywaives any rights, defenses or offsets afforded to it under law, constitutionalprovision, or as a matter of public policy, or by which any party waives anyright afforded to it by applicable law after a default, including, withoutlimitation, any waiver of a right to cause a marshaling of assets or to a trialby jury;

 

5

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**(2)         **under which any partymay be obligated to pay legal and other professional fees incurred by or on behalfof another party or the cost of collection following a default, to the extent acourt may conclude that such fees or costs are unreasonable;

** **

**(3)         **under which theprovisions of any Transaction Document are severable in the event a provisionthat is determined by a court to be an essential part of the agreed exchange isdetermined to be invalid or unenforceable;

** **

**(4)         **specifying that theprovisions of any Transaction Document may be waived only in writing, to theextent that an oral agreement or an implied agreement by trade practice orcourse of conduct has been created that modifies any provision of suchTransaction Document;

** **

**(5)         **under which a party’swaiver of any breach of any provision of an agreement is not to be construed asa waiver by such party of any prior breach of such provision or of any otherprovision of any agreement;

** **

**(6)         **purporting to give anyparty the right to accelerate obligations or exercise remedies without notice;

** **

**(7)         **specifying that theliability of any indemnitor or guarantor shall not be affected by actions orfailures to act on the part of the beneficiaries of the indemnity or guarantyor by amendments or waivers of provisions of documents creating and governingthe indemnified or guaranteed obligations if such actions, failures to act,amendments or waivers change the essential nature of the terms and conditionsof the indemnified or guaranteed obligations;

** **

**(8)         **regarding any provisionrequiring indemnification, contribution or exculpation to the extent the samemay be violative of public policy or purports to require indemnification orcontribution for a party’s own willful misconduct or gross negligence (or if nostandard of gross negligence has been agreed upon, for a party’s ownnegligence);

** **

**(9)         **providing for a right orremedy which may be held to be arbitrary or unconscionable, a penalty orotherwise in violation of public policy;

** **

**(10)       **restricting (or, in thecase of remedies, purporting to assure) the availability of legal or equitableremedies or defenses;

** **

**(11)       **imposing penalties,forfeitures, higher rates of interest and/or late payments in the event of adefault or upon a delinquency in payment or otherwise;

** **

**(12)       **regarding “choice offorum” or “submission to jurisdiction” provisions; or

** **

**(13)       **purporting to assign orgrant a lien upon or security interest in or to any contract, right, agreementor other property right or the proceeds thereof (other than assignments orsecurity interests in accounts, general intangibles, chattel paper orpromissory 

 

6

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notes to the extent provided by Sections9-406(d), 9-407 and 9-408 of the NYUCC), which by its terms or under applicablelaw, rule or regulation is not so assignable or under which the grant ofsuch a lien or security interest is prohibited.

** **

**(iii)         **Our opinions herein,insofar as they relate to the enforceability of the choice of law provisions ofthe Transaction Documents designating the law of the State of New York as thelaw applicable to the construction and interpretation of the TransactionDocuments, are predicated upon Section 5-1401 of the New York GeneralObligations Law which permits contracting parties to specify that the law ofthe State of New York is applicable if the requirements of such Section aresatisfied, and are limited to such choice of law provisions being enforced by aNew York court.

** **

**(iv)          **We have assumed that theLenders, Administrative Agent and other Secured Parties will act fairly, ingood faith and in a commercially reasonable and prudent manner in exercisingtheir respective rights and will not trespass or commit any breach of peace inany taking of possession of any of the Collateral.

** **

**(v)           **Any provisions of theTransaction Documents that purport to permit any Person to sell or otherwisedispose of any Collateral or exercise any rights with respect thereto otherwisethan in accordance with applicable law may not be enforceable.  The exercise of remedies by theAdministrative Agent, Lenders and other Secured Parties under the TransactionDocuments will generally be subject to compliance with, and the limitationsimposed by, the NYUCC and DEUCC relating to the exercise of remedies by asecured creditor including, without limitation, the procedural requirements of Section 9-601et seq. of the NYUCC and DEUCC relating to the exercise of remedies by alender.  Any provisions of theTransaction Documents that prohibit transfers to the extent they may includetransfers described in Section 9-401 and 9-408 of the NYUCC may not beenforceable.  We also call your attentionto the fact that the right of a secured party to enforce a security interest inproceeds is limited under Section 9-315 of the NYUCC.  Insofar as the Transaction Documents purportto create a security interest in after-acquired property, we advise you thatsuch security interest will be subject to Sections 547 and 552 of Title 11 ofthe United States Code.

** **

**(vi)          **We express no opinion asto the enforceability of any provision of the Transaction Documents thatpurports to permit the Administrative Agent or any Lender to act as any party’sagent or attorney-in-fact after the occurrence and during the continuance of anevent of default.

** **

**(vii)        **We express no opinion asto the enforceability of any provision in the Transaction Documents to theextent any Borrower agrees to or is otherwise required to cause a Person otherthan itself or its wholly-owned subsidiary to take or refrain from taking anyaction.

 

With regard to our opinion in paragraph 4below, we have relied solely upon (1) a list supplied to us by theBorrowers of written agreements, contracts, undertakings, indentures orinstruments (the “***Material Agreements***”) towhich any Borrower is a party, a copy of which is attached hereto as **Schedule A**, and (2) an examination of the MaterialAgreements in the form provided to us by the Borrowers.  We have made no further investigation.  Further, with regard to our 

 

7

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opinion in paragraph 4 below concerning theMaterial Agreements, we express no opinion as to (1) financial covenantsor similar provisions therein requiring financial calculations ordeterminations to ascertain compliance, (2) provisions therein relating tothe occurrence of a “material adverse event” or words of similar import, or (3) anystatement or writing that may constitute parol evidence bearing oninterpretation or construction.  We haveassumed that each Material Agreement would be governed or interpreted under NewYork law even in cases where New York law is not the governing law of suchMaterial Agreement.

 

Our opinions regarding the validity andperfection of security interests are subject to our assumptions that (x) theCollateral exists, (y) the applicable Borrower has rights in or title to,or the power to transfer to a secured party rights in, the Collateral in whichit has granted a security interest (and we do not express any opinion herein asto any of such rights or title), and (z) the applicable Borrower hasreceived “value” (as defined in Section 1-201(44) of the NYUCC and forpurposes of NYUCC Section 9-203(b)(1)) in exchange for granting a securityinterest in the Collateral.  In addition,our opinions regarding the validity and perfection of security interests aresubject to the following:

** **

**(i)           **We have assumed that allinformation included in the Delaware Financing Statements regarding the nameand mailing address of the Administrative Agent is complete and accurate;

** **

**(ii)          **We express no opinion asto the accuracy or sufficiency of the description of the Collateral in the TransactionDocuments or the Delaware Financing Statements; and

** **

**(iii)         **We express no opinion asto any real property, fixtures or any property or transactions excluded fromcoverage under or of a type not subject to, Article 8 or Article 9 ofthe NYUCC or DEUCC, including, without limitation, pursuant to Section 9-109thereof.

** **

**(iv)          **With regard to our opinion in paragraph 10below, we have assumed that (a) the jurisdiction of each depository banklisted on **Exhibit B**hereto,within the meaning of Section 9304 of the NYUCC, is the State of New York,and (b) the Deposit Accounts covered by the Deposit Account ControlAgreements listed on **Exhibit B**heretoconstitute “deposit accounts” as defined in Section 9102(a)(29) of theNYUCC.

** **

**(v)           **Withregard to our opinion in paragraph 11 below, we have assumed that (a) eachsecurities intermediary listed on **Exhibit B**is a securities intermediary within the meaning of Section 8102(a)(14) ofthe NYUCC, (b) the jurisdiction of each such securities intermediary,within the meaning of Section 9305(a)(3) and Section 8110(e) ofthe NYUCC is the State of New York, and (c) the Securities Accountscovered by the Securities Account Control Agreements listed on **Exhibit B**hereto constitute“securities accounts” as defined in Section 8501 of the NYUCC.

** **

**(vi)          **Forpurposes of our opinion, we have assumed at the time of the Closing (i) thedue recording of the Mortgage in the official records of Butler County, Ohio asrequired by law for perfection of the security interest contemplated in theMortgage, (ii) all recording and related taxes will be paid, and (iii) thatthe applicable Borrowers have rights in the real and 

 

8

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personal propertycollateral in which they purport to create a security interest under theMortgage.

 

On the basisof the foregoing, in reliance thereon, and subject to the qualifications andexceptions herein contained, we are of the opinion that:

 

**1.            **Each Borrower has beenduly formed and is validly existing and in good standing under the laws of theState of Delaware.  Each Borrower is dulyqualified to do business as a foreign corporation or a foreign limitedliability company, as the case may be, and is in good**standingunder the laws of****the states identified next to thesame of such Borrower on **Schedule B**hereof.

 

**2.            **The execution anddelivery by each Borrower of and performance of its obligations under theTransaction Documents to which it is a party have been duly authorized by allnecessary corporate or limited liability company action, as the case may be, onthe part of such Borrower, and the Transaction Documents to which it is a partyhave been duly executed and delivered by such Borrower.  Each Borrower has the requisite corporate orlimited liability company power, as the case may be, to enter into and performits obligations under the Transaction Documents to which it is a party.

 

**3.            **Each of the TransactionDocuments to which any Borrower is a party constitutes the legal, valid andbinding obligation of each such Borrower enforceable against such Borrower inaccordance with its terms.

 

**4.            **Each Borrower’sexecution and delivery of and performance as of the date hereof of itsobligations under the Transaction Documents to which it is a party do notviolate, or constitute a default under, (a) any provision of suchBorrower’s Organizational Documents, (b) any material term or provision of anyMaterial Agreement to which such Borrower is a party or (c) any order,writ, judgment, injunction, decree, determination or award which has beenentered against such Borrower and of which we are aware, in the case of (b) and(c) to the extent such violation or default would materially and adverselyaffect the Company and its subsidiaries taken as a whole.

 

**5.            **The execution anddelivery by the Borrowers of, and performance as of the date hereof of theirrespective obligations under, the Transaction Documents to which such Borrowersare a party do not violate or contravene any New York state or federal statuteor regulation which is applicable generally to borrowers in commercialtransactions of the nature contemplated by the Transaction Documents, in each case to the extent theviolation of which would materially and adversely affect the Company and itssubsidiaries, taken as a whole.  Weexpress no opinion as to any provisions of the Mortgage which by their termsare governed by the laws of the State of Ohio.

 

**6.            **All orders, consents,permits or approvals of any New York state or federal governmental authoritywhich are applicable generally to borrowers in commercial transactions of thenature contemplated by the Transaction Documents and required for the executionand delivery by the Borrowers of, and performance by the Borrowers of theirrespective obligations under, the Transaction Documents to which the Borrowersare party, have been obtained,

 

9

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except for filings,recordings or registrations that are required to perfect the AdministrativeAgent’s security interests in property identified as Collateral under theTransaction Documents.

 

**7.            **To our knowledge, thereare no actions, suits or proceedings pending or threatened against any Borrowerbefore any court, arbitrator or governmental agency that questions thelegality, validity or enforceability of the Loan Documents.

 

**8.            **With regard to thepersonal property Collateral identified and described in the Pledge andSecurity Agreement, the Pledge and Security Agreement is sufficient to create asecurity interest under the NYUCC in such Collateral in favor of theAdministrative Agent, to the extent a security interest can be created thereinunder Article 9 of the NYUCC.

 

**9.            **The Delaware FinancingStatements to be filed by the Administrative Agent or its counsel with thefiling office of the Secretary of State of the State of Delaware are in formsufficient for filing with such filing office. Upon the due filing of the Delaware Financing Statements with the filingoffice of the Secretary of State of the State of Delaware, the securityinterest of the Administrative Agent in the Collateral identified and describedin the Pledge and Security Agreement, to the extent identified and described inthe Delaware Financing Statements, will be perfected to the extent that asecurity interest in such Collateral can be perfected under the DEUCC by thefiling of a UCC-1 financing statement in such filing office.

 

**10.         **TheAdministrative Agent will have a perfected security interest in the Deposit Accounts identified in the Deposit Account ControlAgreements listed on **Exhibit B**hereto upon the execution by the parties thereto of such Deposit AccountControl Agreements.

 

**11.         **TheAdministrative Agent will have a perfected security interest in the Securities Accounts identified in the Securities Account ControlAgreements listed on **Exhibit B**hereto upon the execution by the parties thereto of such Securities AccountControl Agreements.

 

**12.         **The Company is not an“investment company” within the meaning of the Investment Company Act.

 

Our opinion set forth above is limited to thematters expressly set forth in this letter, and no opinion is implied or may beinferred beyond the matters expressly stated. This opinion speaks only as to law and facts in effect or existing as ofthe date hereof, and we undertake no obligation or responsibility to update orsupplement this letter to reflect any facts or circumstances that may hereaftercome to our attention or any changes in law that may hereafter occur.

 

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Our opinion inthis letter is rendered solely for the benefit of Bank of America, in itscapacity as Administrative Agent and L/C Issuer and each of the Lenders inconnection with the transactions described above and may be relied upon only bysuch Persons, their respective successors, transferees and assigns, includingparticipants.

 

Very truly yours,

 

Cooley Godward Kronish LLP

 

 

Gian-Michele a Marca

 

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** **

**EXHIBIT A**

 

**LENDERS**

 

Bancof America Leasing & Capital, LLC

SiliconValley Bank

RBSAsset Finance, Inc.

ComericaBank

BMOCapital Markets Financing, Inc.

FirstBank

UnionBank of California, N.A.

Bankof America, N.A.

 

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** **

**EXHIBIT B**

 

**DEPOSIT ACCOUNT CONTROL AGREEMENTS,**

**SECURITIES ACCOUNT CONTROL AGREEMENTS ANDMORTGAGE**

 

Deposit Account Control Agreement dated as of December 21,2007, among the Company, Amylin Ohio LLC (collectively, the “Company”), Bank ofAmerica, N.A. as lender and the Administrative Agent.

 

ControlAgreement dated as of December 21, 2007, among the Company, Mellon Bankand the Administrative Agent.

 

Uncertificated Securities Control Agreement dated as of December 21,2007 among the Company, the Administrative Agent, Merrill Lynch Funds forInstitutions Series and State Street Bank and Trust Company through itsservice provider, Boston Financial Data Services, Inc.

 

AccountControl Agreement With Activation dated as of December 21, 2007, among theCompany, the Administrative Agent and Brown Brothers Harriman & Co.

 

AccountControl Agreement dated as of December 21, 2007 among Amylin Ohio, theAdministrative Agent and Fifth ThirdBank.

 

AccountControl Agreement dated as of December 21, 2007 among the Company, theAdministrative Agent and First Bank.

 

Open-End Mortgage, Assignment of Rents and Leases, Security Agreementand Fixture Filing dated as of December 21, 2007 by Amylin Ohio for thebenefit of the Administrative Agent.

 

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** **

**EXHIBIT C**

 

**DELAWARE FINANCING STATEMENTS**

 

----

** **

**SCHEDULE A**

 

**MATERIAL AGREEMENTS**

 

Registration Rights Agreement, dated September 19, 2002, betweenthe Company and Eli Lilly and Company;

 

Rights Agreement, dated June 17, 2002, between the Company andAmerican Stock Transfer & Trust Company;

 

First Amendment to Rights Agreement, dated December 13, 2002,between the Company and American Stock Transfer and Trust Company;

 

Form of Indemnity Agreement entered into between the Company andcertain of its directors and officers;

 

1991 Stock Option Plan, as amended (the “***1991Plan***”);

 

Form of Incentive Stock Option Agreement under the 1991 Plan;

 

Form of Supplemental Stock Option Agreement under the 1991 Plan;

 

Form of Supplemental Stock Option Agreement not granted under the1991 Plan with Related Schedule;

 

Amended and Restated Employee Stock Purchase Plan;

 

Non-Employee Directors’ Stock Option Plan (the “***Directors’Plan***”);

 

Phantom Stock Unit Agreement, dated January 4, 1995, between theCompany and Farview Management Co., L.P.;

 

Patent and Technology License Agreement, Consulting Agreement andNonstatutory Stock Option Agreement, dated October 1, 1996, between theCompany and Dr. John Eng;

 

Directors’ Deferred Compensation Plan;

 

Directors’ Plan Stock Option Agreement, as amended;

 

Special Form of Incentive Stock Option Agreement under the 1991Plan;

 

Stock Option Agreement, dated March 25, 1998, between Company andJoseph C. Cook, Jr.;

 

Development and License Agreement, dated May 15, 2000, between theCompany and Alkermes Controlled Therapeutics II, Inc.;

 

2001 Equity Incentive Plan, as amended;

 

Collaboration Agreement, dated September 19, 2002, between theCompany and Eli Lilly and Company (“***Eli Lilly***”);

 

U.S. Co-Promotion Agreement, dated September 19, 2002, between theCompany and Eli Lilly;

 

Milestone Conversion Agreement, dated September 19, 2002, betweenthe Company and Eli Lilly;

 

Stock Purchase Agreement, dated September 19, 2002, between theCompany and Eli Lilly;

 

Security Agreement, dated June 20, 2003, between the Company andEli Lilly;

 

Device Development and Manufacturing Agreement, dated July 1,2003, between the Company and Eli Lilly;

 

----

 

Form of 2001 Equity Incentive Plan Officer Stock Option Agreement,as amended;

 

Form of 2001 Equity Incentive Plan Stock Option Agreement, asamended;

 

Manufacturing Agreement, dated May 12, 2003, between the Companyand UCB S.A.;

 

Exenatide Manufacturing Agreement, dated October 21, 2003, betweenthe Company and Mallinckrodt Inc.;

 

Commercial Supply Agreement for Exenatide, dated December 23,2003, between the Company and Bachem, Inc.;

 

Commercial Supply Agreement, dated February 14, 2005, between theCompany and Baxter Pharmaceutical Solutions LLC;

 

Commercial Supply Agreement, dated October 7, 2004, between theCompany and CP Pharmaceuticals Ltd.;

 

Commercial Supply Agreement, dated March 2, 2005, between theCompany and Baxter Pharmaceutical Solutions LLC;

 

Summary Description of Company’s Named Executive Officer Oral At-WillEmployment Agreements;

 

Description of Company’s Executive Cash Bonus Plan;

 

Amendment to Development and License Agreement, dated October 24,2005, between Company and Alkermes Controlled Therapeutics II;

 

Underwriting Agreement, dated March 29, 2006, by and betweenCompany, Morgan Stanley & Co. Incorporated, Goldman, Sachs &Co., Bear Stearns & Co. and Lehman Brothers Inc.;

 

Commercial Supply Agreement, dated June 28, 2005, between Companyand Bachem, Inc.;

 

Employment Succession Agreement, dated June 1, 2006, betweenCompany and Daniel M. Bradbury;

 

Commercial Supply Agreement, dated October 12, 2006, betweenCompany and Wockhardt UK (Holdings) Ltd.;

 

Amendment to Collaboration Agreement, dated October 31, 2006,between Company and Eli Lilly and Company;

 

Deferred Compensation Plan;

 

Employment Agreement, dated March 7, 2007, between Company andDaniel M. Bradbury;

 

Amended and Restated Officer Change in Control Severance Benefit Plan;

 

Indenture, dated April 6, 2004, between Company and J.P. MorganStanley & Co. Incorporated and Goldman, Sachs & Co.;

 

Form of 2.50% Convertible Senior Note due 2011;

 

Registration Rights Agreement, dated April 6, 2004, betweenCompany and J.P. Morgan Stanley & Co. Incorporated and Goldman, Sachs &Co.;

 

Indenture, dated June 8, 2007, between Company and The Bank of NewYork Trust Company, N.A.;

 

Form of 3.00% Convertible Senior Note due 2014;

 

Registration Rights Agreement, dated June 8, 2007, between Companyand The Bank of New York Trust Company, N.A.

 

 

----

 

**SCHEDULE B**

 

**FOREIGN QUALIFICATIONS**

 

Company: California.

 

Amylin Ohio: Ohio.

 

Amylin Investments: None.

 

----

***EXHIBIT H-2***

 

 

December 21, 2007

 

 

Bankof America, N.A.

1000North Tryon Street

Charlotte,North Carolina  28255

 

Ladiesand Gentlemen:

 

We have acted as local Ohio counsel to Amylin Ohio LLC (“Borrower”), aDelaware limited liability company,in connection with the closing of a $140,000,000.00 loan (the “Loan”) from Bankof America, N.A. (“Lender”), secured by certain real property (the “RealProperty”) located in Butler County, Ohio, and related personal property (the “PersonalProperty;” the Real Property and the Personal Property being hereinaftercollectively referred to as the “Property”).

 

The opinions set forth herein are limited to the laws of the State ofOhio and applicable federal laws.

 

In connection with the Loan, we have examined the following documents(the “Loan Documents”), executed by Borrower:

 

(a)                                  Open-EndMortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing(the “Mortgage”);

 

(b)*                                *Environmental Indemnification and Release Agreement (the “EnvironmentalAgreement”);

 

Wehave not made or undertaken to make any investigation as to factual matters oras to the accuracy or completeness of any representation, warranty, data or anyother information, whether written or oral, that may have been made by or onbehalf of the parties to the Credit Agreement (as such term is defined in theMortgage) or otherwise (but have no actual knowledge of the inaccuracy orincompleteness of any of the same), and we assume, in giving this opinion, thatnone of such information, if any, contains any untrue statement of a materialfact or omits to state a material fact necessary to make the statements made,in light of the circumstances in which they are made, not misleading.  When we use the words “actual knowledge” or “ourknowledge” and similar language herein, the relevant knowledge is limited tothe actual knowledge (without any inquiry or investigation except as expresslyset forth in this opinion) of the lawyers within our firm who have worked onthe transaction described in the Credit Agreement on behalf of the Borrower.

 

----

 

Wehave not made any investigation of and do not express an opinion as to anymatters of title to the Property or any other property (whether real, personalor mixed) or as to any title matters relating to the existence or priority ofany liens, charges or other encumbrances with respect to the Property or otherproperty.  We do not express any opinionas to whether the legal description of the Property satisfy current, local requirementsfor conveyances upon foreclosure of such Property.  We also do not express any opinion as to theaccuracy of the descriptions of the Property or property described in the LoanDocuments.

 

Forpurposes of this opinion, we have, with your permission, assumed withoutindependent investigation that:

 

(i)                                     the documentssubmitted to us as originals are authentic and the documents submitted to us ascopies conform to the original documents;

 

(ii)                                  the Mortgagehas been duly authorized, executed and delivered by each of the partiesthereto;

 

(iii)                               the persons whoexecuted, acknowledged and delivered the Mortgage were duly authorized;

 

(iv)                              Borrower hasbeen duly organized in the State of Delaware, is validly existing under thelaws of the State of Delaware, and is in good standing under the laws of theState of Delaware;

 

(v)                                 all signatureson the Loan Documents are genuine and all documents submitted to us ascertified, conformed or photostatic copies are authentic;

 

(vi)                              the Mortgagewill be properly and duly recorded and all applicable recording fees andcharges imposed thereon will be paid;

 

(vii)                           the Borrowerhas an interest in the Property in which the Borrower grants the Mortgage;

 

(viii)                        all parties tothe Credit Agreement will enforce their respective rights thereunder incircumstances and in a manner which are commercially reasonable; and

 

(ix)                                Ohio law andNew York law are the same in all relevant respects.

 

Eachof the Loan Documents is dated as of December 21, 2007.

 

On the basis of the foregoing, in reliancethereon, and subject to the qualifications and exceptions herein contained, weare of the opinion that:

 

1.             Borrower is qualified to dobusiness in State of Ohio.

 

----

 

2.             The execution and delivery byBorrower of the Loan Documents, to our knowledge, do not (a) violate anyconstitution, statute, regulation, rule, order or law known to us to whichBorrower or the Property is subject, (b) constitute a breach or defaultunder any other written agreements known to us to which Borrower is a party orby which Borrower or the Property is bound, or (c) violate any judicial oradministrative decree, writ, judgment or order known to us to which Borrower orthe Property is subject.

 

3.             Except as setforth below, no consent, authorization or approval of any agency or authorityof the State of Ohio or filing, registration or qualification with anygovernmental authority of the State of Ohio (other than the recording of theMortgage in the appropriate recording office) is required for the execution,delivery, performance and enforcement of any of the Loan Documents.  The execution, delivery, performance andenforcement of the Mortgage will not conflict with or constitute a breach orviolation of the applicable laws of the State of Ohio.  O.R.C. § 1703.03 requires all foreigncorporations to obtain a license from the Ohio Secretary of State in order todo business within Ohio and to bring a lawsuit in Ohio.  Similar statutes exist with respect tolimited liability companies (See O.R.C. § 1705.54), limited partnerships (SeeO.R.C. § 1782.49), limited liability partnerships (See O.R.C. § 1775.64) andbusiness trusts (See O.R.C. § 1746.04). What constitutes doing business islargely a factual determination. However, the failure of a foreign entity to qualify to do business inOhio will not affect the validity of any contract with such entity.  Rather, the entity is merely prevented frombringing legal action in a court in Ohio and may have exposure for some nominalmonetary penalties.  Please note that inat least one court decision in Ohio, P.K. Springfield, Inc. v. Hogan(Clark 1993) 621 N.E.2d 1253, it was held that an unlicensed foreigncorporation was prohibited from bringing a crossclaim in a foreclosure actionto protect its right to receive distribution in the foreclosure proceeding;however, the same court ultimately would not exclude that corporation from thedistribution of the mortgage foreclosure proceeds since to do so would have theeffect of invalidating its mortgage contract with the debtor.  Further, if the Lender is not a United Statescitizen or is not domiciled in the United States of America (“U.S.”), O.R.C. §5301.254 (Nonresident Alien Registration Act) may require that informationalreturns be filed with the Secretary of State of Ohio.  O.R.C. § 5301.254 requires any person who isnot a U.S. citizen and who is not domiciled in the U.S. to file such aninformational return if that person acquires, directly or indirectly, aninterest in real property in Ohio.

 

4.             The Loan Documents are valid andenforceable against Borrower in accordance with their respective terms, exceptto the extent that such enforceability is limited by laws generally affectingthe enforcement of creditors’ rights, which laws will not materially preventthe realization by Lender of the benefits intended by the Loan Documents,provided that the Mortgage should be re-recorded within twenty-one (21) yearsafter the original recording thereof if the Loan is still outstanding at thattime.

 

5.             The recording of the Mortgage inthe real property records of the County of Butler will provide a perfectedinterest in the Real Property and the Personal Property, including fixtures, infavor of Lender.

 

----

 

6.             Toour knowledge, there is no litigation or other proceeding pending before anycourt or administrative agency against Borrower or the Property, which, ifadversely determined, would have a material adverse effect on the Property orthe financial condition of Borrower.

 

Ouropinions expressed above are subject to the following qualifications:

 

(a)                   Any opinionas to perfection of the Lender’s security interest in any of the Property orany other property is subject to the assumption that the Lender has not waived,subordinated or agreed with any third party to any modification of theperfection of any of such security interest.

 

(b)                   No opinionis expressed with regard to whether the Lender will be entitled to collect anypre-payment penalty in connection with an acceleration of the Loan.

 

(c)                   Thisopinion letter is strictly limited to those matters expressly addressedherein.  We express no opinion as to anymatter not specifically stated to be and numbered above as an opinion.  Except as otherwise expressly stated in theforegoing opinions and without limiting the generality of the foregoing, weexpress no opinion with respect to (i) securities laws or regulations; (ii) bankinglaws or regulations; (iii) pension and employee benefit laws andregulations; (iv) antitrust laws and unfair competition laws andregulations; (v) tax laws and regulations, environmental, zoning, land useor subdivision laws or regulations; (vi) patent, copyright, trademark andother intellectual property laws and regulations; (vii) health and safetylaws and regulations; (viii) labor laws and regulations; (ix) federaland state statutes of general application to the extent they provide forcriminal prosecution; and (x) building codes.

 

(d)                   The opinionsset forth herein are subject to the effect of bankruptcy, insolvency,reorganization, receivership, moratorium and other similar laws affecting therights and remedies of creditors generally, including, without limitation, thefollowing:

 

(i)            the federalBankruptcy Code and thus comprehends, among others, matters of turn-over,automatic stay, avoiding powers, fraudulent transfer, preference, discharge,conversion of a non-recourse obligation into a recourse claim, limitations onipso facto and anti-assignment clauses, and the coverage of pre-petitionsecurity agreements applicable to property acquired after a petition is filed;

 

(ii)           all other federaland state bankruptcy, insolvency, reorganization, receivership, moratorium,arrangement and assignment for the benefit of creditors laws that affect therights and remedies of creditors generally (not just creditors and specifictypes of debtors);

 

(iii)          all other federalbankruptcy, insolvency, reorganization, receivership, moratorium, arrangementand assignment for the benefit of creditors laws that have reference to oraffect generally only creditors of specific types of 

 

----

 

debtorsand state laws of like character affecting generally only creditors offinancial institutions;

 

(iv)          federal and statefraudulent transfer and conveyance laws; and

 

(v)           judicially developeddoctrines relevant to any of the foregoing laws, such as substantiveconsolidation of entities.

 

(e)           In addition, the opinions set forthherein are subject to the effect of general principles of equity, whetherapplied by a court of law or equity, including, without limitation, suchprinciples:

 

(i)            governing theavailability of specific performance, injunctive relief or other equitableremedies that generally place the award of such remedies, subject to certainguidelines, in the discretion of the court to which application for such reliefis made;

 

(ii)           affording equitabledefenses (e.g., waiver, laches and estoppel) against a party seekingenforcement;

 

(iii)          requiring goodfaith, fair dealing and reasonableness in the performance and enforcement of aninstrument by the party seeking enforcement or limiting or affecting theenforcement of provisions of an instrument which purport to require waiver ofthe obligations of good faith, fair dealing, diligence and reasonableness;

 

(iv)          requiringconsideration of the materiality of (1) a party’s breach and (2) theconsequences of the breach to the party seeking enforcement;

 

(v)           requiringconsideration of the impracticability or impossibility of performance at thetime of attempted enforcement; and

 

(vi)          affording defensesbased upon the unconscionability of the enforcing party’s conduct after theparties have entered into the instrument.

 

(f)            The opinions set forth herein aresubject to the effect of generally applicable rules of law that:

 

(i)            provide that forumselection clauses in an instrument are not necessarily binding on the court(s) inthe forum selected;

 

(ii)           limit theavailability of a remedy under certain circumstances where another remedy hasbeen selected;

 

(iii)          limit the right ofa creditor to use force or cause a breach of the peace in enforcing rights;

 

----

 

(iv)          relate to the saleor disposition of collateral or the requirements of a commercially reasonablesale;

 

(v)           limit theenforceability of provisions releasing, exculpating or exempting a party from,or requiring indemnification of a party for, liability for its own action orinaction, to the extent the action or inaction involves negligence,recklessness, willful misconduct or unlawful conduct;

 

(vi)          may, where less thanall of an instrument may be unenforceable, limit the enforceability of thebalance of the instrument to circumstances in which the enforceable portion isnot an essential part of the agreed exchange or limit the ability to reform theunenforceable portion;

 

(vii)         govern and affordjudicial discretion regarding the determination of damages and entitlements toattorneys’ fees and other costs;

 

(viii)        may, in the absenceof a waiver or consent, discharge a guarantor to the extent that (1) actionby a creditor impairs the value of collateral securing guaranteed debt to thedetriment of the guarantor or (2) the guaranteed debt is materiallymodified; and

 

(ix)           may permit a partywhich has materially failed to render or offer performance required by aninstrument to cure that failure unless (1) permitting a cure wouldunreasonably hinder the aggrieved party from making substitute arrangements forperformance or (2) it was important in the circumstances to the aggrievedparty that performance occur by the date stated in the instrument.

 

(g)           Except to the extent expresslyprovided herein, we express no opinion as to the effect of the complianceor non-compliance of the Lender with any state orfederal laws or regulations applicable because of its legal or regulatorystatus or the nature of its business or its participation in the transactionscontemplated by the Credit Agreement.

 

(h)           We express no opinion as to thevalidity, binding effect or enforceability of any provision in the LoanDocuments that purports to: (i) permit the Lenderor any other person to sell or otherwise dispose of any of the Property(including, without limitation, any self-help or taking possession remedy),except in compliance with the applicable laws of the State of Ohio, theapplicable federal laws of the U.S., and other applicable state and local laws;(ii) impose on, or waive for the benefit of the Lender’sstandards for the care of the Property or any other property in the possessionof the Lender; (iii) limit the ability of the Lenderor any other person to transfer voluntarily or involuntarily (by way of sale,creation of a security interest, attachment, levy, garnishment or otherjudicial process) its right, title or interest in or to any of the Property orany other property; (iv) waive, or consent to waiver of, any rights of adebtor or duties owing to it, existing as a matter of law, except to the extentthat such debtor may so waive or consent as a matter of law; (v) providefor a security interest in the proceeds of any of the Property subject thereto;or (vi) provide for or effect a confession of judgment on the part of the Lenderin any amount.  Furthermore, we express 

 

----

 

no opinion as to the validity, binding effect,enforceability or perfection of the Mortgage in so far as it relates tointerests in or claims in or under any policy of insurance.

 

(i)            We express no opinion with respectto provisions in the Loan Documents (i) permitting the unilateral or exparte appointment of a receiver; (ii) prohibiting oral modifications tothe agreement; (iii) waiving statutes of limitations, trial by jury,notices in connection with the exercise of remedies or the marshalling ofassets; (iv) to the effect that the failure to exercise, or a delay inexercising, a right or remedy will not operate as a waiver of such right orremedy; (v) appointing a third party as an attorney-in-fact to act onbehalf of the Lender; (vi) providing for attorney’s fees; or (vii) providingfor remedies for the enforcement of security interests in property thatconflict with the provisions of O.R.C. § 1309.607, the provisions of which maynot be waived or varied.

 

(j)            The opinions set forthherein with respect to the Mortgage are solely based upon and limited to theterms and provisions of the Mortgage without reference to or incorporation ofany terms or provisions of any of the other documents, and we express noopinion with respect to any terms or provisions of any of the other documentsthat replace or supersede terms or provisions of the Mortgage or the effectthat any such replacing or superseding terms or provisions of such otherdocuments may have upon the Mortgage.

 

(k)           We have assumed thatthe Lender at all times will act equitably and in good faith in a commerciallyreasonable manner and in compliance with the applicable laws and regulations.

 

(l)            We express no opinion as tothe creation or perfection of any liens on or security interests in anyproperty (i) the nature of which would require a filing under a federal orother specialized registry such as may be required under the federal CopyrightAct, the Lanham Act or the like; (ii) which is or may be comprised of “depositaccounts” or “mobile goods” under the UCC; (iii) which is brought into astate subject to a security interest perfected under the laws of anotherjurisdiction as to which perfection is not re-perfected on a timely basis; (iv) followingany change of name or identity of the Borrower made after the date of thisletter; or (v) which consists of personal property, accounts, contractrights, certificated or uncertificated securities, security entitlements,securities accounts, commodity contracts, commodity accounts, chattel paper,documents, instruments, general intangibles or other intangible personalproperty or motor vehicles, minerals (including oil and gas), consumer goods,farm products, crops, timber to be cut or the like or accounts arising from thesale thereof.

 

(m)          We express no opinionas to the value of any property owned or possessed by any party to the CreditAgreement.

 

(n)           We have assumed that the LoanDocuments will not be terminated, released and/or amended in a manner thatmight jeopardize their effectiveness.

 

Weare admitted to practice in the State of Ohio, and the foregoing opinions arelimited to the laws of the State of Ohio (but expressly excluding any statutes,ordinances, 

 

----

 

administrativedecisions, rules or regulations of any political subdivision of the Stateof Ohio except to the extent expressly provided herein).  We shall have no continuing obligations toinform you of changes in law or fact subsequent to the date hereof or of factsof which we become aware after the date hereof. References to the “O.R.C.” refer to the Ohio Revised Code as in effecton the date of this opinion letter.

 

This opinion letter is provided to you for theexclusive use solely of yourself and your participants and assigns inconnection with the Loan and may not be relied upon by any other person or forany other purpose without our prior written consent.

 

Verytruly yours,

 
|   |   | Dinsmore &  Shohl LLP |
|--------|--------|--------------------------------|
|   |   |                           |   |
|   |   | By:                            |   |
|   |   |                           | Steven  H. Schreiber |
|        |        |                                |  |  |  |

 

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***EXHIBIT I***

** **

**FORM OF**

**COVENANTTRIGGERING EVENT CERTIFICATE**

** **

To:          Bank of America,N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement,dated as of December [    ], 2007 (as amended,restated, extended, supplemented or otherwise modified in writing from time totime, the “Agreement;”the terms defined therein being used herein as therein defined), among AmylinPharmaceuticals, Inc., a Delaware corporation (the “Company”),each of the Company’s wholly owned domestic subsidiaries party thereto (collectively,with the Company, the “Borrowers”), the Lenders from time to time partythereto, and Bank of America, N.A., as Administrative Agent, Collateral Agentand L/C Issuer.

 

The undersigned Responsible Officer hereby certifiesas of the date hereof that he/she is the                                of the Company, and that, as such, he/she is authorized to execute and deliverthis Certificate to the Administrative Agent on the behalf of the Borrowers,and that:

 

1.             Theaggregate amount of Unrestricted Cash as of [DATE] (the “Measurement Date”)was $                              ,resulting in a Covenant Triggering Event.

 

2.             Theamounts of Indebtedness and Investments set forth on Schedule 1 hereto are trueand correct as of the Measurement Date.

 

3.             Tothe best knowledge of the undersigned, as of the date hereof, no Default hasoccurred and is continuing.

 

4.             TheBorrowers have maintained, at all times, the Minimum Unrestricted Cash Balance,in accordance with Section 6.18 of the Agreement.  A true and correct schedule of allUnrestricted Cash (including the amount on deposit or value of Cash Equivalentsin each account and, with respect to Cash Equivalents, a complete list thereof)as of the Measurement Date is attached as Schedule 2 hereto.

 

 

[Signature Page Follows]

 

----

 

*IN WITNESS WHEREOF,* theundersigned has executed this Certificate as of                                         ,                   .

 

**AMYLINPHARMACEUTICALS, INC.**

 
|   | By:    |   |
|--------|--------|--------|
|   | Name:  |   |
|   | Title: |   |
|        |        |        |  |  |

 

 

Signature PageCovenant Triggering Event Certificate

 

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SCHEDULE 1

 

**A.            Indebtedness**

 
| **Type of Indebtedness**                                                                                              | ** ** | **AMOUNT** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|
| 1. Aggregate  amount of Indebtedness permitted under Section 7.02(g) as of the  Measurement Date(1):                  |       | $          |       |   |
|                                                                                                                            |       |       |       |   |
| 2. Aggregate  amount of Indebtedness secured by guaranties subject to  Section 7.02(i) as of the Measurement Date(1): |       | $          |       |   |
|                                                                                                                            |       |       |       |   |
| 3. Aggregate  amount of Indebtedness permitted under Section 7.02(j) as of the  Measurement Date(1):                  |       | $          |       |   |
|                                                                                                                            |       |       |       |   |
| 4. Aggregate  amount of Indebtedness permitted under Section 7.02(k) as of the  Measurement Date(1):                  |       | $          |       |   |
|                                                                                                                            |       |       |       |   |
| 5. Aggregate  amount of Indebtedness permitted under Section 7.02(l) as of the  Measurement Date(1):                  |       | $          |       |   |
|                                                                                                                            |       |       |       |   |
| 6. Aggregate  amount of Indebtedness permitted under Section 7.02(m) as of the  Measurement Date(1):                  |       | $          |       |   |
|                                                                                                                            |       |       |       |   |
| 7. Aggregate  amount of Indebtedness permitted under Section 7.02(n) as of the  Measurement Date(1):                  |       | $          |       |   |
|                                                                                                                            |       |       |       |   |
| 8. Aggregate  amount of Indebtedness permitted under Section 7.02(o) as of the  Measurement Date(1):                  |       | $          |       |   |
|                                                                                                                            |       |       |       |   |
| 9. Aggregate  amount of Indebtedness secured by guaranties subject to  Section 7.02(q) as of the Measurement Date(1): |       | $          |       |   |

 

**B.            Investments**

 
| **Type of Investments**                                                                                                                                                                                                                                | ** ** | **AMOUNT** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|
| 1. Aggregate  amount of Investments held by the Company and its Subsidiaries permitted under  Section 7.03(a) as of the Measurement Date(2):                                                                                                           |       | $          |       |   |
|                                                                                                                                                                                                                                                             |       |       |       |   |
| 2. Aggregate  amount of advances to officers, directors and employees of the Company and  Subsidiaries for travel, entertainment, relocation and analogous ordinary  business purposes permitted under Section 7.03(c) as of the  Measurement Date(2): |       | $          |       |   |

 

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(1) Attach list settingforth all Indebtedness included in this calculation, including effective date,principal amount, obligor(s), lender(s) and maturity date.

(2) Attached list setting forth allInvestments included in this calculation, including amount actually investedand any maturity date(s).

 

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| 3. Aggregate  amount of Investments by the Company and its Subsidiaries in their respective  Subsidiaries permitted under Section 7.03(d)(i) as of the  Measurement Date(2):  |   | $      |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
|                                                                                                                                                                                    |   |   |   |   |
| 4. Aggregate  amount of Investments by the Company and its Subsidiaries in their respective  Subsidiaries permitted under Section 7.03(d)(iv) as of the  Measurement Date(2): |   | $      |   |   |
|                                                                                                                                                                                    |   |   |   |   |
| 5. Aggregate  amount of Investments permitted under Section 7.03(g) as of the  Measurement Date(2):                                                                           |   | $      |   |   |
|                                                                                                                                                                                    |   |   |   |   |
| 6. Aggregate  amount of Investments permitted under Section 7.03(h) as of the  Measurement Date(2):                                                                           |   | $      |   |   |
|                                                                                                                                                                                    |   |   |   |   |
| 7. Aggregate  amount of Investments by the Company and its Subsidiaries permitted under  Section 7.03(i) as of the Measurement Date(2):                                       |   | $      |   |   |

 

** **

**C.            Dispositions**

** **
| **Type of Disposition**                                                                                                                                                      | ** ** | **AMOUNT** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|
| 1. Aggregate  amount of Dispositions by the Company and any other Loan Party during the  current fiscal year permitted under Section 7.05(j) as of the  Measurement Date(3): |       | $          |       |   |
|                                                                                                                                                                                        |            |            |            |  |

** **

**D.            Restricted Payments**

** **
| **Type of Restricted Payment**                                                                                                                                        | ** ** | **AMOUNT** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|
| 1. Aggregate  amount of purchased shares of, payments made in respect of, the Company’s  Equity Interests pursuant to Section 7.06(j) as of the Measurement  Date(4): |       | $          |       |   |
|                                                                                                                                                                                      |            |            |            |  |

 

**E.             Aggregate Basket Amount**

 
| ** **                                                                                         | ** ** | **AMOUNT** | ** ** |
|----------------------------------------------------------------------------------------------------|------------|------------|------------|
| Aggregate Basket  Amount (sum of lines: A.2, A.3, A.4, A.5, A.6, A.9, B.2, B.4, B.6, B.7 and  D.1) |       | $          |       |   |
|                                                                                                    |            |            |            |  |

 

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(3) Attached list settingforth each Disposition included in this calculation, including date,description of property and proceeds.

(4) Attached list settingforth each Restricted Payment included in this calculation, including date,description of payment, payee, payor and amount.

 

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SCHEDULE 2

 

**UnrestrictedCash**

 

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***EXHIBIT J***

 
| **Policy Title:** | **Investment  Policy for Amylin Pharmaceuticals, Inc.** |
|-------------------|--------------------------------------------------------------|
| ***Created:***    | ***2001; updated 2007***                                     |
| **Approved:**     | **March 6,  2007**                                      |
| **Version:**      | 3.0                                                          |

 

**Table of Contents**

 
| 1.0    | Purpose                                   |
|--------|-------------------------------------------|
|   |                                      |
| 2.0    | Objectives                                |
|   |                                      |
| 3.0    | Scope                                     |
|   |                                      |
| 4.0    | Approved Investments                      |
|   |                                      |
| 5.0    | Maturity and Diversification Requirements |
|   |                                      |
| 6.0    | Liquidity                                 |
|   |                                      |
| 7.0    | Investment Performance                    |
|   |                                      |
| 8.0    | Portfolio Monitoring                      |
|   |                                      |
| 9.0    | Trading Guidelines                        |
|   |                                      |
| 10.0   | Custody                                   |
|   |                                      |
| 11.0   | Policy Oversight / Fiduciary Discretion   |
|   |                                      |
| 12.0   | Authorizations                            |

 

###### **Exhibits**

 
| A      | Approved Investments                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                  |
| **1.** | **PURPOSE**                                                                                                                                           |
|   |                                                                                                                                                  |
|   | The purpose of this  policy is to set guidelines for the parameters, responsibilities and controls  for the investment of short-term corporate funds. |
|   |                                                                                                                                                  |
| **2.** | **OBJECTIVES**                                                                                                                                        |
|   |                                                                                                                                                  |
|   | *The  objectives of the policy are, in order of priority:*                                                                                            |
|   |                                                                                                                                                  |
|   | 2.1                                                                                                                                                   | Safety and Preservation  of capital. |

 

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|   | 2.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Fulfillment of  liquidity needs.                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | 2.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | To obtain the best  available total return consistent with safety and liquidity.                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | 2.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | To observe standardized  guidelines throughout the Company.                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **3.** | **SCOPE**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | This policy applies to  Amylin Pharmaceuticals, Inc. and any wholly owned subsidiaries.  Investments are restricted to short-term  investments as defined in this policy.   For the purposes of this policy, the Chief Financial Officer, Director  – Finance and any of their appointees have the roles and responsibilities as  defined in the policy for the Company as a whole.  Such that they might exist from time to  time, this policy does not cover 401 (k), profit sharing, deferred compensation,  stock purchase or any deferred director’s fee plans. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **4.** | **APPROVED  LIST OF SHORT-TERM INVESTMENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 4.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Exhibit  “A” sets  forth the approved list of short term investments.                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **5.** | **MATURITY  AND DIVERSIFICATION REQUIREMENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 5.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Maximum maturity of an individual security is 36  months.  Maximum average effective  duration for the portfolio is 18 months.   For securities that have put, reset, or weighted average life dates,  the put, reset or weighted average life date will be used, instead of the  final maturity dates, for maturity limit purposes.  For securities that have call dates, the  final maturity dates will be used for maturity limit purposes. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 5.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Amylin may take simultaneous debt (borrowing) and  investment positions.  In other words,  the Company may incur debt to finance various activities, capital  expenditures, etc.,  while still  maintaining an overall positive cash surplus.   The CFO has full discretion in determining the size of these  positions.                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 5.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | There is no limit to the percentage of the portfolio  that may be maintained in U.S. Treasury or Agency obligations.                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 5.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | With the exception of U.S. Treasury or agency  obligations, no one issuer or group of issuers from the same holding company  is to exceed 5% of the market value of the portfolio at time of purchase.                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | 5.5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | To provide for diversification, investments are  limited to 5% of the outstanding issue per entity for corporate related  investments.                                                                                                                                                                                                                                                                                                                        |

 

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|       | 5.6                         | Auction - rate securities  are limited to no more than 5% of the portfolio.                                                                                                                                                                                                                                             |
|------------|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                        |
| **6.**     | **LIQUIDITY**               |
|       |                        |
|       | 6.1                         | Liquidity will be governed by the Corporate Cash  Forecast to be updated and supplied at a minimum of quarterly to money  management firms.6.1Liquidity will be governed by the Corporate Cash Forecast  to be updated and supplied at a minimum of quarterly to money management  firms.                               |
|       |                        |
|       | 6.2                         | To support the Company’s most immediate short term  liquidity needs, funds may be directly managed by the Company in an amount up  to $50MM principal, invested in such instruments as determined by the  Company, subject to compliance with the criteria set forth in Section 4  and Section 5 herein. |
|       |                        |
| **7.**     | **INVESTMENT  PERFORMANCE** |
|       |                        |
|       | 7.1                         | The investment  manager(s) will issue a quarterly investment performance analysis using  time-weighted measures.                                                                                                                                                                                                   |
|       |                        |
|       | 7.2                         | A quarterly meeting will be held with the Chief  Financial Officer to review portfolio performance figures and any updated  liquidity needs.                                                                                                                                                                            |
|       |                        |
| **8.**     | **PORTFOLIO  MONITORING**   |
|       |                        |
|       | 8.1                         | Trends for a given company or industry will be  reviewed periodically by the investment manager and adjustments made  accordingly.                                                                                                                                                                                      |
|       |                        |
|       | 8.2                         | The investment  manager(s) will monitor the portfolio and promptly notify Management  should any investment held in the portfolio become non-compliant with this  policy due to the size or creditworthiness of the investment. Management will  respond promptly as required.                                     |
|       |                        |
| **9.**     | **TRADING  GUIDELINES**     |
| ** ** | ** **                  |
| ** ** | 9.1                         | Normal investing  practice is to reinvest the funds on the day a security matures, to minimize  lost interest.                                                                                                                                                                                                          |
| ** ** | ** **                  |
| ** ** | 9.2                         | A transaction summary  will be maintained and be available for review.                                                                                                                                                                                                                                                  |
| ** ** | ** **                  |
| **10.**    | **CUSTODY**                 |
| ** ** | ** **                  |
| ** ** | 10.1                        | Assets are to be held in a segregated custody  account with separate fiduciary documents executed by the custodian. Assets  shall not be held in the account of a portfolio investment manager or  securities dealer.                                                                                                   |

 

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| **11.**    | **POLICY  OVERSIGHT / FIDUCIARY DISCRETION** |
|------------|----------------------------------------------|
| ** ** |                                         |
| ** ** | 11.1                                         | The Chief Financial Officer or other individual  appointed by the Board and his/her authorized designates are responsible for  securing and managing investments and cash for operations. |
| ** ** |                                         |   |
| ** ** | 11.2                                         | These individuals have full discretion to invest any  excess capital subject to strict adherence to these guidelines. |
| ** ** |                                         |   |
| ** ** | 11.3                                         | These guidelines are to be reviewed periodically  with the Chief Financial Officer and revisions made consistent with  objectives set forth herein. |
| ** ** |                                         |
| **12.**    | **AUTHORIZATIONS**                           |
| ** ** |                                         |
| ** ** | 12.1                                         | The Chief Financial Officer is authorized to  designate individuals to invest corporate funds in accordance with the  Investment Policy for Amylin Pharmaceuticals, Inc.  A list of authorized investors will be  distributed to approved financial institutions and updated annually.  Approved financial institutions may be  periodically audited to verify their records of authorized investors are  accurate and current. |
| ** ** |                                         |   |
| ** ** | 12.2                                         | The designation of an external firm as an authorized  Investment Manager shall be at the recommendation of the Director-Finance and  approval of the Chief Financial Officer. |

 

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**EXHIBITA**

**InvestmentPolicy for Amylin Pharmaceuticals, Inc**

**ApprovedList of Short-term Investments**

 
| ***Created:*** | ***2001; updated 2007***                                       |
|----------------|----------------------------------------------------------------|
| **Approved:**  | **Version 3.0 reviewed and  approved by Audit Committee 2007** |

###### ** **

# **APPROVED INVESTMENTS:**

·                  **All investments must be U.S. Dollar denominated**

·                  **Tax-exempt and tax-advantaged investments are approvedonly if the Company is a tax payer.**

 

# **I.**                                         U.S. Treasury bills, notes, and bonds

Includes putable,callable, and floating-rate obligations

 

##### **II.**                                     U.S. agency & mortgageobligations

Includes putable,callable, and floating-rate obligations

 

**III.**                                 Corporatedebt obligations

·                  Includesvariable-rate demand notes

·                  Includesputable, callable, and floating-rate obligations

·                  IncludesEurodollar and Yankee debt obligations

Corporatedebt obligations must be rated “Strong” (A-1 / A S&P) or “Superior” (P-1 /A Moodys)

 

**IV.**                                Bankdebt and deposit obligations

·                  Includesvariable-rate demand notes

·                  Includesputable, callable, and floating-rate obligations

·                  Includes Eurodollarand Yankee debt obligations

Limitedto $5MM for banks with minimum capital of $5B or greater

Limitedto $10MM for banks with minimum capital of $10B or greater

Limited to 5% ofportfolio for banks with minimum capital of $20B or greater

 

**V.****                                   ****SEC-registered moneymarket funds**

·                  Maintain a net asset value of $1.00/share

·                  90% of a fund or greater will be invested insecurities as designated within this policy.

##### ** **

##### **VI.**                                Repurchase agreements

·                  Fullycollateralized by any of the securities approved under this policy

·                  Collateralmay not have maturities in excess of 24 months

 

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##### **VII.**                            Taxable and tax-exempt auction rate debtand preferred securities

·                  RatedLong Term “High Quality” (Aa Moody’s) or “Very Strong” (AA S&P)

·                  RatedShort Term “Strong” (A-1 S&P) or “Superior” (P-1 Moodys)

 

**VIII.****                       ****Asset-backed securities**

·                  RatedLong Term “High Quality” (Aa Moody’s) or “Very Strong” (AA S&P)

·                  RatedShort Term “Strong” (A-1 S&P) or “Superior” (P-1 Moodys)

 

**IX.****                                Asset-backedcommercial paper**

·                  RatedLong Term “High Quality” (Aa Moody’s) or “Very Strong” (AA S&P)

·                  RatedShort Term “Strong” (A-1 S&P) or “Superior” (P-1 Moodys)

** **

**X.****                                    Taxableand Tax Exempt Municipal Debt Obligations**

·                  RatedA or higher by Moody’sor Standard & Poor’s

·                  MIG2or VMIG2 by Moody’s and SP1 or higher by Standard & Poor’s

·                  P1by Moody’s and A1 or higher by Standard & Poor’s

 

**PROHIBITEDINVESTMENTS:**

 

·                  Equities,equity funds

 

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