Document:

Exhibit
10.36

 

Amylin Pharmaceuticals, Inc. 2001

Non-Qualified Deferred

Compensation Plan

 

November 2007

 

 

TABLE OF CONTENTS

 

PREAMBLE

 

	
  ARTICLE
  1 – GENERAL

  
	
  1.1

  	
  Plan

  
	
  1.2

  	
  Effective Dates

  
	
  1.3

  	
  Amounts Not Subject to
  Code Section 409A

  
	
   

  	
   

  
	
  ARTICLE
  2 – DEFINITIONS

  
	
  2.1

  	
  Account

  
	
  2.2

  	
  Account Balance Plan

  
	
  2.3

  	
  Administrator

  
	
  2.4

  	
  Adoption Agreement

  
	
  2.5

  	
  Beneficiary

  
	
  2.6

  	
  Board or Board of
  Directors

  
	
  2.7

  	
  Bonus

  
	
  2.8

  	
  Change in Control

  
	
  2.9

  	
  Code

  
	
  2.10

  	
  Compensation

  
	
  2.11

  	
  Director

  
	
  2.12

  	
  Disabled

  
	
  2.13

  	
  Eligible Employee

  
	
  2.14

  	
  Employer

  
	
  2.15

  	
  ERISA

  
	
  2.16

  	
  Exchange Act

  
	
  2.17

  	
  Identification Date

  
	
  2.18

  	
  Key Employee

  
	
  2.19

  	
  Participant

  
	
  2.20

  	
  Performance-Based
  Compensation

  
	
  2.21

  	
  Plan

  
	
  2.22

  	
  Plan Sponsor

  
	
  2.23

  	
  Plan Year

  
	
  2.24

  	
  Related Employer

  
	
  2.25

  	
  Retirement

  
	
  2.26

  	
  Separation from Service

  
	
  2.27

  	
  Specified Date

  
	
  2.28

  	
  Unforeseeable Emergency

  
	
  2.29

  	
  Valuation Date

  
	
  2.30

  	
  Years of Service

  
	
   

  	
   

  
	
  ARTICLE 3 – PARTICIPATION

  
	
  3.1

  	
  Participation

  
	
  3.2

  	
  Termination of
  Participation

  

 

i

 

	
  ARTICLE 4 – PARTICIPANT ELECTIONS

  
	
  4.1

  	
  Deferral Agreement

  
	
  4.2

  	
  Amount of Deferral

  
	
  4.3

  	
  Timing of Election to
  Defer

  
	
  4.4

  	
  Election of Payment
  Schedule and Form of Payment

  
	
   

  	
   

  
	
  ARTICLE 5 – EMPLOYER CONTRIBUTIONS

  
	
  5.1

  	
  Matching Contributions

  
	
  5.2

  	
  Other Contributions

  
	
   

  	
   

  
	
  ARTICLE 6 – ACCOUNTS AND CREDITS

  
	
  6.1

  	
  Establishment of
  Account

  
	
  6.2

  	
  Credits to Account

  
	
  6.3

  	
  Account Statements

  
	
   

  	
   

  
	
  ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS

  
	
  7.1

  	
  Investment Options

  
	
  7.2

  	
  Adjustment of Accounts

  
	
   

  	
   

  
	
  ARTICLE 8 – RIGHT TO BENEFITS

  
	
  8.1

  	
  Vesting

  
	
  8.2

  	
  Death

  
	
  8.3

  	
  Disability

  
	
   

  	
   

  
	
  ARTICLE 9 –  DISTRIBUTION OF BENEFITS

  
	
  9.1

  	
  Amount of Benefits

  
	
  9.2

  	
  Method and Timing of
  Distributions

  
	
  9.3

  	
  Unforeseeable Emergency

  
	
  9.4

  	
  Payment
  Election Overrides

  
	
  9.5

  	
  Cashouts of Amounts Not
  Exceeding Stated Limit

  
	
  9.6

  	
  Required Delay in
  Payment to Key Employees

  
	
  9.7

  	
  Change in Control

  
	
  9.8

  	
  Permissible Delays in
  Payment

  

 

ii

 

	
  ARTICLE 10 –  AMENDMENT AND TERMINATION

  
	
  10.1

  	
  Amendment by Plan
  Sponsor

  
	
  10.2

  	
  Plan Termination
  Following Change in Control or Corporate Dissolution

  
	
  10.3

  	
  Other Plan Terminations

  
	
  10.4

  	
  Plan Suspension

  
	
   

  	
   

  
	
  ARTICLE 11 –  THE TRUST

  
	
  11.1

  	
  Establishment of Trust

  
	
  11.2

  	
  Grantor Trust

  
	
  11.3

  	
  Investment of Trust
  Funds

  
	
   

  	
   

  
	
  ARTICLE 12 – PLAN ADMINISTRATION

  
	
  12.1

  	
  Powers and
  Responsibilities of the Administrator

  
	
  12.2

  	
  Claims and Review
  Procedures

  
	
  12.3

  	
  Plan Administrative
  Costs

  
	
  12.4

  	
  No Discretionary
  Distributions

  
	
  12.5

  	
  Permitted Acceleration
  of Payment

  
	
   

  	
   

  
	
  ARTICLE 13 –  SECURITIES LAWS COMPLIANCE

  
	
  13.1

  	
  Designation of
  Participants

  
	
  13.2

  	
  Action by Administrator

  
	
  13.3

  	
  Compliance with
  Section 16

  
	
  13.4

  	
  Capitalization Changes

  
	
   

  	
   

  
	
  ARTICLE 14 –  MISCELLANEOUS

  
	
  14.1

  	
  Unsecured
  General Creditor of the Employer

  
	
  14.2

  	
  Employer’s
  Liability

  
	
  14.3

  	
  Limitation
  of Rights

  
	
  14.4

  	
  Anti-Assignment

  
	
  14.5

  	
  Facility
  of Payment

  
	
  14.6

  	
  Notices

  
	
  14.7

  	
  Tax
  Withholding

  
	
  14.8

  	
  Indemnification

  
	
  14.9

  	
  Successors

  
	
  14.10

  	
  Validity

  
	
  14.11

  	
  Scrivener’s
  Error

  
	
  14.12

  	
  Disclaimer

  
	
  14.13

  	
  Governing
  Law

  

 

iii

 

PREAMBLE

 

The Plan is intended to
be a “plan which is unfunded and is maintained by an employer primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees” within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974, as
amended, or an “excess benefit plan” within the meaning of Section 3(36)
of the Employee Retirement Income Security Act of 1974, as amended, or a
combination of both.  The Plan is further
intended to conform with the requirements of Internal Revenue Code Section 409A
and the final regulations and other guidance issued thereunder (“Section 409A”)
and shall be implemented, interpreted and administered in a manner consistent
therewith.  To the extent one or more provisions
of this Plan do not comply with Section 409A, such provision shall be
automatically and immediately voided, and shall be amended as soon as
administratively feasible and shall be administered to so comply.

 

 

ARTICLE 1 – GENERAL

 

1.1                               Plan.  The Plan will be referred to by the name
specified in the Adoption Agreement.

 

1.2                               Effective
Dates.

 

(a)                                  Original
Effective Date.  The Original
Effective Date is the date as of which the Plan was initially adopted.

 

(b)                                 Amendment
Effective Date.  The Amendment
Effective Date is the date specified in the Adoption Agreement as of which the
Plan is amended and restated.  Except to
the extent otherwise provided herein or in the Adoption Agreement, from and
after the Amendment Effective Date the amended and restated Plan shall apply to
all amounts deferred under the Plan, including amounts deferred before the
Amendment Effective Date, and shall apply to any benefit payments made on or
after the Amendment Effective Date.

 

(c)                                  Special
Effective Date.  A Special Effective
Date may apply to any given provision if so specified in Appendix A of the
Adoption Agreement.  A Special Effective
Date will control over the Original Effective Date or Amendment Effective Date,
whichever is applicable, with respect to such provision of the Plan.

 

1.3                               Amounts
Not Subject to Code Section 409A

 

As provided in Section 1.01
of the Adoption Agreement, all amounts deferred under the Plan before January 1,
2008, including amounts not subject to Code Section 409A, will be
administered in accordance with the terms of this amended and restated Plan
document on and after the Amendment Effective Date.

 

1

 

ARTICLE 2 – DEFINITIONS

 

Pronouns
used in the Plan are in the masculine gender but include the feminine gender
unless the context clearly indicates otherwise. 
Wherever used herein, the following terms have the meanings set forth
below, unless a different meaning is clearly required by the context:

 

2.1                               “Account”
means an account established for the purpose of recording amounts credited on
behalf of a Participant and any income, expenses, gains, losses or
distributions included thereon.  The
Account shall be a bookkeeping entry only and shall be utilized solely as a
device for the measurement and determination of the amounts to be paid to a
Participant  or to the Participant’s
Beneficiary pursuant to the Plan.

 

2.2                               “Account
Balance Plan” means any non-qualified deferred compensation account balance
plan (as defined in §31.3121(v)(2)-1(c)(1)(ii)(A) of the Treasury
Regulations) sponsored by the Plan Sponsor or any Employer that would be
aggregated with the Plan for purposes of Section 409A.

 

2.3                               “Administrator”
means the person or persons designated by the Plan Sponsor in Section 1.05
of the Adoption Agreement to be responsible for the administration of the
Plan.  If no Administrator is designated
in the Adoption Agreement, the Administrator is the Plan Sponsor.

 

2.4                               “Adoption
Agreement” means the agreement adopted by the Plan Sponsor that establishes
the Plan.

 

2.5                               “Beneficiary”
means the persons, trusts, estates or other entities entitled under Section 8.2
to receive benefits under the Plan upon the death of a Participant.

 

2.6                               “Board”
or “Board of Directors” means the Board of Directors of the Plan Sponsor.

 

2.7                               “Bonus”
means an amount of incentive remuneration payable by the Employer to a
Participant.

 

2.8                               “Change
in Control” means the occurrence of an event involving the Plan Sponsor
that is described in Section 9.7.

 

2.9                               “Code”
means the Internal Revenue Code of 1986, as amended.

 

1

 

2.10                        “Compensation”
has the meaning specified in Section 3.01 of the Adoption Agreement.

 

2.11                        “Director”
means a non-employee member of the Board who has been designated by the
Employer as eligible to participate in the Plan.

 

2.12                        “Disabled”
 means a determination by the
Administrator that the Participant is either (a) unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, or (b) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or last for a continuous period of not less than
twelve months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Employer.  A Participant will be
considered Disabled if he is determined to be totally disabled by the Social
Security Administration or the Railroad Retirement Board.

 

2.13                        “Eligible
Employee” means an employee of the Employer who satisfies the requirements
in Section 2.01 of the Adoption Agreement.

 

2.14                        “Employer”
means the Plan Sponsor and any other entity which is authorized by the Plan
Sponsor to participate in and, in fact, does adopt the Plan.

 

2.15                        “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

2.16                        “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.  Reference to a section of the Exchange Act
shall include that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes such section.

 

2.17                        “Identification
Date” means the date as of which Key Employees are determined which is
specified in Section 1.06 of the Adoption Agreement.

 

2.18                        “Key
Employee” means an employee who satisfies the conditions set forth in Section 9.6.

 

2.19                        “Participant”
means an Eligible Employee or Director who commences participation in the
Plan in accordance with Article 3.

 

2.20                        “Performance-Based Compensation” means Compensation that
meets the requirements of performance-based compensation specified in Section 409A(a)(4)(B)(iii) of
the Code and regulations and other guidance 

 

2

 

promulgated
thereunder.  Performance-Based
Compensation shall be designated as such by the Employer as contingent upon the
satisfaction of performance goals and must relate to services performed by the
Participant during a designated incentive period of at least twelve (12)
months.  The performance goals must be
pre-established by the Employer in writing no later than ninety (90) days after
the commencement of the performance period, and the outcome must be
substantially uncertain at the time the criteria are established.

 

2.21                        “Plan”
means the unfunded plan of deferred compensation set forth herein,
including the Adoption Agreement and any trust agreement, as adopted by the
Plan Sponsor and as amended from time to time.

 

2.22                        “Plan
Sponsor” means the entity identified in Section 1.03 of the Adoption
Agreement.

 

2.23                        “Plan
Year” means the period identified in Section 1.02 of the Adoption
Agreement.

 

2.24                        “Related
Employer” means the Employer and (a) any corporation that is a member
of a controlled group of corporations as defined in Code Section 414(b) that
includes the Employer and (b) any trade or business that is under common
control as defined in Code Section 414(c) that includes the Employer.

 

2.25                        “Retirement”
has the meaning specified in 6.01(f) of the Adoption Agreement.

 

2.26                        “Separation
from Service” means the date that the Participant dies, retires or otherwise
has a termination of employment with respect to all entities comprising the
Related Employer.  All determinations of
whether a Separation from Service has occurred will be made in a manner
consistent with Section 409A and the following provisions, to the extent
applicable.

 

A Separation from Service
does not occur if the Participant is on military leave, sick leave or other
bona fide leave of absence if the period of leave does not exceed six months or
such longer period during which the Participant’s right to re-employment is
provided by statute or contract.  If the
period of leave exceeds six months and the Participant’s right to re-employment
is not provided either by statute or contract, a Separation from Service will
be deemed to have occurred on the first day following the six-month
period.  If the period of leave is due to
any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than six months, where the impairment causes the Participant to be unable
to perform the duties of his or her position of employment or any substantially
similar position of employment, a 29 month period of absence may be substituted
for the six month period.

 

3

 

Whether a termination of
employment has occurred is based on whether the facts and circumstances,
indicate that the Related Employer and the Participant reasonably anticipated
that no further services would be performed after a certain date or that the
level of bona fide services the Participant would perform as an employee after
such date would permanently decrease to no more than 20 percent of the average
level of bona fide services performed over the immediately preceding 36 month
period (or the full period of services to the Related Employer if the employee
has been providing services to the Related Employer for less than 36 months).
If a Participant continues to provide services to a Related Employer in a
capacity other than as an employee, the Participant will not be deemed to have
a termination of employment if the Participant is providing services at an
annual rate that is at least 50 percent of the services rendered by such
individual, on average, during the immediately preceding 36 month period of
employment (or such lesser period of employment) and the annual remuneration
for such services is at least 50 percent of the average annual remuneration
earned during the final 36 calendar months of employment (or such less period
of employment).

 

An independent contractor
is considered to have experienced a Separation from Service with the Related
Employer upon the expiration of the contract (or, in the case of more than one
contract all contracts) under which services are performed for the Related Employer
if the expiration constitutes a good-faith and complete termination of the
contractual relationship.

 

If a Participant provides
services as both an employee and an independent contractor of the Related
Employer, the Participant must separate from service both as an employee and as
an independent contractor to be treated as having incurred a Separation from
Service.  If a Participant ceases
providing services as an independent contractor and begins providing services
as an employee, or ceases providing services as an employee and begins
providing services as an independent contractor, the Participant will not be
considered to have experienced a Separation from Service until the Participant
has ceased providing services in both capacities.

 

If a Participant provides
services both as an employee and as a member of the board of directors of a
corporate Related Employer (or an analogous position with respect to a
noncorporate Related Employer), the services provided as a director are not
taken into account in determining whether the Participant has incurred a
Separation from Service as an employee for purposes of a nonqualified deferred
compensation plan in which the Participant participates as an employee that is
not aggregated under Code Section 409A with any plan in which the
Participant participates as a director.

 

4

 

If a Participant provides
services both as an employee and as a member of the board of directors of a
corporate related Employer (or an analogous position with respect to a
noncorporate Related Employer), the services provided as an employee are not
taken into account in determining whether the Participant has experienced a
Separation from Service as a director for purposes of a nonqualified deferred
compensation plan in which the Participant participates as a director that is
not aggregated under Section 409A with any plan in which the Participant
participates as an employee.  To give
effect to the foregoing provision, the Plan shall maintain separate accounting
for the portion of the Participant’s Account attributable to Director deferrals
and Employer contributions to Director Accounts, and any related earnings and
distributions with respect to such amounts.

 

2.27                        “Specified
Date” means a date specified by the Participant on the deferral agreement
which will trigger distribution of the elected portion of the Participant’s
Account.

 

2.28                        “Unforeseeable
Emergency” means a severe financial
hardship of the Participant resulting from an illness or accident of the
Participant, the Participant’s spouse, the Participant’s Beneficiary, or the
Participant’s dependent (as defined in Code Section 152, without regard to
Code section 152(b)(i), (b)(2) and (d)(i)(B); loss of the Participant’s
property due to casualty; or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant.

 

2.29                        “Valuation
Date” means each business day of the Plan Year.

 

2.30                        “Years
of Service” means each one year period for which the Participant receives
service credit in accordance with the provisions of Section 7.01(d) of
the Adoption Agreement.

 

5

 

ARTICLE 3
– PARTICIPATION

 

3.1                               Participation.  The Participants in the Plan shall be those Directors
and employees of the Employer who satisfy the requirements of Section 2.01
of the Adoption Agreement.

 

3.2                               Termination of Participation. 
The Administrator may terminate a Participant’s participation in the
Plan only in a manner consistent with Code Section 409A.  The Administrator may determine that a
Participant that has not had a Separation from Service shall no longer be
eligible to participate in the Plan.  If
the Administrator terminates a Participant’s eligibility to participate in the
Plan prior to the Participant’s Separation from Service, then the Participant’s
vested Account balance, if any, shall remain in the Plan and will be paid out
in accordance with the terms of this Plan and the applicable deferral election.

 

1

 

ARTICLE 4 – PARTICIPANT ELECTIONS

 

4.1                               Deferral Agreement.  If
permitted by the Plan Sponsor in accordance with Section 4.01 of the
Adoption Agreement, each Eligible Employee and Director may elect to defer his
Compensation within the meaning of Section 3.01 of the Adoption Agreement
by executing in writing or electronically, a deferral agreement in accordance
with rules and procedures established by the Administrator and the
provisions of this Article 4.

 

A new deferral agreement
must be timely executed for each Plan Year during which the Eligible Employee
or Director desires to defer Compensation. 
An Eligible Employee or Director who does not timely execute a deferral
agreement shall be deemed to have elected zero deferrals of Compensation for
such Plan Year.

 

A deferral agreement may be
changed or revoked during the period specified by the Administrator.  Except as provided in Section 9.3 of the
Plan or in Section 4.01(c) of the Adoption Agreement, a deferral
agreement becomes irrevocable at the close of the specified period.

 

4.2                               Amount
of Deferral.  An Eligible
Employee or Director may elect to defer Compensation in any amount permitted by
Section 4.01(a) of the Adoption Agreement.

 

4.3                               Timing of Election to Defer.  Each Eligible Employee or
Director who desires to defer Compensation otherwise payable during a Plan Year
must execute a deferral agreement within the period preceding the Plan Year
specified by the Administrator.  Each
Eligible Employee who desires to defer Compensation that is a Bonus must
execute a deferral agreement within the period preceding the Plan Year during
which the Bonus is earned that is specified by the Administrator, except that
if the Bonus can be treated as Performance Based Compensation as described in
Code Section 409A(a)(4)(B)(iii), the deferral agreement may be executed
within the period specified by the Administrator, which period, in no event,
shall end after the date which is six months prior to the end of the period
during which the Bonus is earned, provided that (i) such compensation has
not yet become readily ascertainable, and (ii) the Participant has
performed services continuously from the later of (y) the beginning of the
performance period, or (z) the date the performance goals are established
through the date of filing of the deferral agreement.  In addition, if the Compensation qualifies as
‘fiscal year compensation’ within the meaning of Reg. Sec. 1.409A -2(a)(6), the
deferral agreement may be made not later than the end of the Employer’s taxable
year immediately preceding the first taxable year of the Employer in which any
services are performed for which such Compensation is payable.

 

1

 

Except
as otherwise provided below, an employee who is classified or designated as an
Eligible Employee during a Plan Year or a Director who is designated as
eligible to participate during a Plan Year may elect to defer Compensation
otherwise payable during the remainder of such Plan Year in accordance with the
rules of this Section 4.3 by executing a deferral agreement within
the thirty (30) day period beginning on the date the employee is classified or
designated as an Eligible Employee or the date the Director is designated as
eligible, whichever is applicable, if permitted by Section 2.01 of the
Adoption Agreement.  If Compensation is
based on a specified performance period that begins before the Eligible
Employee or Director executes his deferral agreement, the election will be
deemed to apply to the portion of such Compensation equal to the total amount
of Compensation for the performance period multiplied by the ratio of the
number of days remaining in the performance period after the election becomes
irrevocable and effective over the total number of days in the performance
period.

 

The
deferral election cannot apply during the first year that the Participant first
becomes eligible to participate in the Plan if the Participant previously was
eligible to participate in any other Account Balance Plan.  For purposes of the initial eligibility
election, a Participant that previously ceased to be eligible to participate in
the Plan will also be treated as being initially eligible to participate in the
Plan if the Participant has not been eligible to participate in the Plan (other
than the accrual of earnings) at any time during the 24-month period ending on
the date the Participant again becomes eligible to participate in the Plan.

 

4.4                               Election of Payment Schedule
and Form of Payment.

 

All
elections of a payment schedule and a form of payment will be made in accordance
with rules and procedures established by the Administrator and the
provisions of this Section 4.4.

 

(a)           If the Plan Sponsor has elected to
permit annual distribution elections in accordance with Section 6.01(h) of
the Adoption Agreement the following rules apply.  At the time an Eligible Employee of Director
completes a deferral agreement, the Eligible Employee or Director must elect a
distribution event (which includes a specified time) and a form of payment for
the Compensation subject to the deferral agreement and for any Employer
contributions that may be credited to the Participant’s Account during the Plan
Year from among the options the Plan Sponsor has made available for this
purpose and which are specified in 6.01(b) of the Adoption Agreement.  If an Eligible Employee or Director fails to
elect 

 

2

 

a
distribution event, he shall be deemed to have elected Separation from Service
as the distribution event.  If he fails
to elect a form of payment, he shall be deemed to have elected a lump sum form
of payment.

 

(b)           If the Plan Sponsor has elected not
to permit annual distribution elections in accordance with Section 6.01(h) of
the Adoption Agreement the following rules apply.  At the time an Eligible Employee or Director
first completes a deferral agreement, the Eligible Employee or Director must
elect a distribution event (which includes a specified time) and a form of
payment for amounts credited to his Account from among the options the Plan
Sponsor has made available for this purpose and which are specified in Section 6.01(b) of
the Adoption Agreement.  If an Eligible
Employee or Director fails to elect a distribution event, such Participant
shall be deemed to have elected Separation from Service in the distribution
event.  If the Participant fails to elect
a form of payment, the Participant shall be deemed to have elected a lump sum
form of payment.

 

3

 

ARTICLE 5 – EMPLOYER CONTRIBUTIONS

 

5.1                               Matching Contributions.  If elected by the Plan Sponsor in Section 5.01(a) of
the Adoption Agreement, the Employer will credit the Participant’s Account with
a matching contribution determined in accordance with the formula specified in Section 5.01(a) of
the Adoption Agreement.  The matching
contribution will be treated as allocated to the Participant’s Account at the
time specified in Section 5.01(a)(iii) of the Adoption Agreement.

 

5.2                               Other Contributions.  If elected by the Plan Sponsor in Section 5.01(b) of
the Adoption Agreement, the Employer will credit the Participant’s Account with
a contribution determined in accordance with the formula or method specified in
Section 5.01(b) of the Adoption Agreement.  The contribution will be treated as allocated
to the Participant’s Account at the time specified in Section 5.01(b)(iii) of
the Adoption Agreement.

 

1

 

ARTICLE 6 – ACCOUNTS AND CREDITS

 

6.1                               Establishment of Account.  For
accounting and computational purposes only, the Administrator will establish
and maintain an Account on behalf of each Participant which will reflect the
credits made pursuant to Section 6.2, distributions or withdrawals, along
with the earnings, expenses, gains and losses allocated thereto, attributable
to the hypothetical investments made with the amounts in the Account as
provided in Article 7.  The
Administrator will establish and maintain such other records and accounts, as
it decides in its discretion to be reasonably required or appropriate to
discharge its duties under the Plan.

 

6.2                               Credits to Account.  A
Participant’s Account will be credited for each Plan Year with the amount of
his elective deferrals under Section 4.1 at the time the amount subject to
the deferral election would otherwise have been payable to the Participant and
the amount of Employer contributions treated as allocated on his behalf under Article 5.

 

6.3                               Account Statements.  Participants shall receive Plan Account
statements at least annually in accordance with procedures established by the
Administrator.

 

1

 

ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS

 

7.1                               Investment Options.  The
amount credited to each Account shall be treated as invested in the investment
options designated for this purpose by the Administrator.

 

7.2                               Adjustment of Accounts.  The
amount credited to each Account shall be adjusted for hypothetical investment
earnings, expenses, gains or losses in an amount equal to the earnings,
expenses, gains or losses attributable to the investment options selected by
the party designated in Section 9.01 of the Adoption Agreement from among
the investment options provided in Section 7.1.  If permitted by Section 9.01 of the
Adoption Agreement, a Participant (or the Participant’s Beneficiary after the
death of the Participant) may, in accordance with rules and procedures
established by the Administrator, select the investments from among the options
provided in Section 7.1 to be used for the purpose of calculating future
hypothetical investment adjustments to the Account or to future credits to the
Account under Section 6.2 effective as of the Valuation Date coincident
with or next following notice to the Administrator.  Each Account shall be adjusted as of each
Valuation Date to reflect: (a) the hypothetical earnings, expenses, gains
and losses described above; (b) amounts credited pursuant to Section 6.2;
and (c) distributions or withdrawals. 
In addition, each Account may be adjusted for its allocable share of the
hypothetical costs and expenses associated with the maintenance of the
hypothetical investments provided in Section 7.1.

 

1

 

ARTICLE 8 – RIGHT TO BENEFITS

 

8.1                               Vesting.  A
Participant, at all times, has the 100% nonforfeitable interest in the amounts
credited to his Account attributable to his elective deferrals made in
accordance with Section 4.1.

 

A
Participant’s right to the amounts credited to his Account attributable to
Employer contributions made in accordance with Article 5 shall be
determined in accordance with the relevant schedule and provisions in Section 7.01
of the Adoption Agreement.

 

8.2                               Death.  The Plan Sponsor may elect to accelerate vesting
upon the death of the Participant in accordance with Section 7.01(c) of
the Adoption Agreement and/or to accelerate distributions upon Death in
accordance with Section 6.01(b) or Section 6.01(d) of the
Adoption Agreement.  If the Plan Sponsor
does not elect to accelerate distributions upon death in accordance with Section 6.01(b) or
Section 6.01(d) of the Adoption Agreement, the vested amount credited
to the Participant’s Account will be paid in accordance with the provisions of Article 9.

 

                                                A Participant may
designate a Beneficiary or Beneficiaries, or change any prior designation of
Beneficiary or Beneficiaries in accordance with rules and procedures
established by the Administrator.

 

A
copy of the death notice or other sufficient documentation must be filed with
and approved by the Administrator.  If
upon the death of the Participant there is, in the opinion of the
Administrator, no designated Beneficiary for part or all of the Participant’s
vested Account, such amount will be paid to his estate (such estate shall be
deemed to be the Beneficiary for purposes of the Plan) in accordance with the
provisions of Article 9.

 

8.3                               Disability.  If the Plan Sponsor has elected to accelerate
vesting upon the occurrence of a Disability in accordance with Section 7.01(c) of
the Adoption Agreement and/or to permit distributions upon Disability in
accordance with Section 6.01(b) or Section 6.01(d) of the
Adoption Agreement, the determination of whether a Participant has incurred a
Disability shall be made by the Administrator in a manner consistent with the
requirements of Section 409A.

 

1

 

ARTICLE 9 – DISTRIBUTION OF BENEFITS

 

9.1                               Amount of Benefits.  The
vested amount credited to a Participant’s Account as determined under Articles
6, 7 and 8 shall determine and constitute the basis for the value of benefits
payable to the Participant under the Plan.

 

9.2                               Method and Timing of Distributions.  Except as otherwise provided in this Article 9, distributions under the Plan
shall be made in accordance with the elections made or deemed made by the
Participant under Article 4. 
Subject to the provisions of Section 9.6 requiring a six month
delay for certain distributions to Key Employees, distributions following a
payment event shall commence at the time specified in Section 6.01(a) of
the Adoption Agreement.  If permitted by Section 6.01(g) of
the Adoption Agreement, a Participant may elect, at least twelve months before
a scheduled distribution event, to delay the payment date for a minimum period
of sixty months from the originally scheduled date of payment.  The distribution election change must be made
in accordance with procedures and rules established by the
Administrator.  The Participant may, at
the same time the date of payment is deferred, change the form of payment but
such change in the form of payment may not effect an acceleration of payment in
violation of Code Section 409A or the provisions of Reg. Sec.
1.409A-2(b).  For purposes of this Section 9.2,
a series of installment payments is always treated as a single payment and not
as a series of separate payments.

 

Notwithstanding
anything to the contrary set forth herein, in accordance with the transition
relief available under IRS Notice 2007-86 and any applicable procedures
established by the Administrator, a Participant may at any time on or before December 31,
2008, upon approval of the Administrator, elect to change his or her prior
election with respect to the time and/or form of payment of all or any portion
of the Participant’s Account balance, and may make separate election changes
with respect to portions of the Account balance attributable to amounts
deferred for different Plan Years.  Such
election changes may apply only to that portion of the Account balance that
would not otherwise be payable in the year such election is made, and may not
cause any portion of the Account balance to be paid in the year such election
is made that would not otherwise be payable in such year.  Such election changes shall be made by filing
a new election form with the Administrator on or before December 31, 2008,
in such form as the Administrator may determine.

 

9.3                               Unforeseeable Emergency.  A Participant may request a distribution due
to an Unforeseeable Emergency if the Plan Sponsor has elected to permit
Unforeseeable Emergency withdrawals under Section 8.01(a) of the

 

1

 

Adoption
Agreement.  The request must be in
writing and must be submitted to the Administrator along with evidence that the
circumstances constitute an Unforeseeable Emergency. The Administrator has the
discretion to require whatever evidence it deems necessary to determine whether
a distribution is warranted, and may require the Participant to certify that
the need cannot be reasonably met from other sources.   Whether a Participant has incurred an
Unforeseeable Emergency will be determined by the Administrator on the basis of
the relevant facts and circumstances in its sole discretion, but, in no event,
will an Unforeseeable Emergency be deemed to exist if the hardship can be
relieved:  (a) through reimbursement
or compensation by insurance or otherwise, (b) by liquidation of the
Participant’s assets to the extent such liquidation would not itself cause
severe financial hardship, or (c) by cessation of deferrals under the
Plan.  A distribution due to an
Unforeseeable Emergency must be limited to the amount reasonably necessary to
satisfy the emergency need and may include any amounts necessary to pay any
federal, state or local income tax penalties reasonably anticipated to result
from the distribution.  The
distribution will be made in the form of a single lump sum cash payment.  If permitted by Section 8.01(b) of
the Adoption Agreement, a Participant’s deferral elections for the remainder of
the Plan Year will be cancelled upon a withdrawal due to an Unforeseeable
Emergency.  If the payment of all or any
portion of the Participant’s vested Account is being delayed in accordance with
Section 9.6 at the time he experiences an Unforeseeable Emergency, the
amount being delayed shall not be subject to the provisions of this Section 9.3
until the expiration of the six month period of delay required by section 9.6.

 

9.4                               Payment Election Overrides.  If
the Plan Sponsor has elected one or more payment election overrides in
accordance with Section 6.01(d) of the Adoption Agreement, the
following provisions apply.  Upon the
occurrence  of the first event selected
by the Plan Sponsor, the remaining vested amount credited to the Participant’s
Account shall be paid in the form designated by the Participant or his
Beneficiary regardless of whether the Participant had made different elections
of time and/or form of payment or whether the Participant was receiving
installment payments at the time of the event.

 

9.5                               Cashouts Of Amounts Not Exceeding Stated
Limit.  If
the vested amount credited to the Participant’s Account does not exceed the
limit established for this purpose by the Plan Sponsor in Section 6.01(e) of
the Adoption Agreement at the time he separates from service with the Related
Employer for any reason, the Employer shall distribute such amount to the
Participant at the time specified in Section 6.01(a) of the Adoption
Agreement in a single lump sum cash payment following such termination
regardless of whether the Participant had made different elections of time or
form of payment as to the vested amount credited to his Account or whether the
Participant was receiving installments at the time of such termination.  A Participant’s Account, for purposes of this
Section 9.5, shall include any amounts described in Section 1.3.

 

2

 

9.6                               Required Delay in Payment to Key Employees.  Except as otherwise provided in this Section 9.6,
a distribution made on account of Separation from Service (or Retirement, if
applicable) to a Participant who is a Key Employee as of the date of his
Separation from Service (or Retirement, if applicable) shall not be made before
the date which is six months after the Separation from Service (or Retirement,
if applicable).

 

(a) A
Participant is treated as a Key Employee if (i) he is employed by a
Related Employer any of whose stock is publicly traded on an established
securities market, and (ii) he satisfies the requirements of Code Section 416(i)(1)(A)(i),
(ii) or (iii), determined without regard to Code Section 416(i)(5),
at any time during the twelve month period ending on the Identification Date,
which would generally include:

 

(i)            An officer of an Employer having an
annual compensation greater than $130,000, as adjusted at the same time and in
the same manner as under Section 415(d) of the Code, except that the
base period shall be the calendar quarter beginning July 1, 2001 (which
amount is $135,000 for the Plan Year beginning January 1, 2005, $140,000
for the Plan Year beginning January 1, 2006, and $145,000 for the Plan Year
beginning January 1, 2007).  Not
more than fifty (50) employees or, if less, the greater of three (3) employees
or ten percent (10%) of the Employer’s employees shall be considered as
officers for purposes of this subsection.

 

(ii)           A five percent owner of the Employer.

 

(iii)          A one percent owner of the Employer
having an annual Compensation from the Employer of more than $150,000.

 

Whether
an Employee is a five percent owner or a one percent owner shall be determined
in accordance with Section 416(i)(1)(B) of the Code.

 

(b) A
Participant who is a Key Employee on an Identification Date shall be treated as
a Key Employee for purposes of the six month delay in distributions for the
twelve month period beginning on the first day of a month no later than the fourth
month following the Identification Date. 
The Identification Date and the effective date of the delay in
distributions shall be determined in accordance with Section 1.06 of the
Adoption Agreement.

 

(c) The
Plan Sponsor may elect to apply an alternative method to identify Participants
who will be treated as Key Employees for purposes of the six month delay in
distributions if the method satisfies each of the following requirements.  The alternative method is reasonably designed
to include 

 

3

 

all
Key Employees, is an objectively determinable standard providing no direct or
indirect election to any Participant regarding its application, and results in
either all Key Employees or no more than 200 Key Employees being identified in
the class as of any date.  Use of an
alternative method that satisfies the requirements of this Section 9.6(c )
will not be treated as a change in the time and form of payment for purposes of
Reg. Sec. 1.409A-2(b).

 

(d) The six month delay does not apply to
payments described in Section 13.9 or to payments that occur after the
death of the Participant.  If the payment
of all or any portion of the Participant’s vested Account is being delayed in
accordance with this Section 9.6 at the time he incurs a Disability which
would otherwise require a distribution under the terms of the Plan, no amount
shall be paid until the expiration of the six month period of delay required by
this Section 9.6.

 

9.7                               Change in Control.  If the Plan Sponsor has elected to permit
distributions upon a Change in Control, the following provisions shall
apply.  A distribution made upon a Change
in Control will be made at the time specified in Section 6.01(a) of
the Adoption Agreement in the form elected by the Participant in accordance
with the procedures described in Article 4.  Alternatively, if the Plan Sponsor has
elected in accordance with Section 11.02 of the Adoption Agreement to
require distributions upon a Change in Control, the Participant’s remaining vested
Account shall be paid to the Participant or the Participant’s Beneficiary at
the time specified in Section 6.01(a) of the Adoption Agreement as a
single lump sum payment.  A Change in
Control, for purposes of the Plan, will occur upon a change in the ownership of
the Plan Sponsor, a change in the effective control of the Plan Sponsor or a
change in the ownership of a substantial portion of the assets of the Plan
Sponsor, but only if elected by the Plan Sponsor in Section 11.03 of the
Adoption Agreement.  The Plan Sponsor,
for this purpose, includes any corporation identified in this Section 9.7.  All distributions made in accordance with
this Section 9.7 are subject to the provisions of Section 9.6.

 

If
a Participant continues to make deferrals in accordance with Article 4
after he has received a distribution due to a Change in Control, the residual
amount payable to the Participant shall be paid at the time and in the form
specified in the elections he makes in accordance with Article 4 or upon
his death or Disability as provided in Article 8.

 

Whether
a Change in Control has occurred will be determined by the Administrator in
accordance with the rules and definitions set forth in this Section 9.7.  A distribution to the Participant will be
treated as occurring upon a Change in Control if the Plan Sponsor terminates
the Plan in accordance with Section 10.2 and distributes the Participant’s
benefits within twelve months of a Change in Control as provided in Section 10.3.

 

4

 

(a)                      Relevant Corporations. 
To constitute a Change in Control for purposes of the Plan, the event
must relate to (i) the corporation for whom the Participant is performing
services at the time of the Change in Control, (ii) the corporation that
is liable for the payment of the Participant’s benefits under the Plan (or all
corporations liable if more than one corporation is liable) but only if either
the deferred compensation is attributable to the performance of services by the
Participant for such corporation (or corporations) or there is a bona fide
business purpose for such corporation (or corporations) to be liable for such
payment and, in either case, no significant purpose of making such corporation
(or corporations) liable for such payment is the avoidance of federal income
tax, or (iii) a corporation that is a majority shareholder of a
corporation identified in (i) or (ii), or any corporation in a chain of
corporations in which each corporation is a majority shareholder of another
corporation in the chain, ending in a corporation identified in (i) or
(ii).  A majority shareholder is defined
as a shareholder owning more than fifty percent (50%) of the total fair market
value and voting power of such corporation.

 

(b)                     Stock Ownership. 
Code Section 318(a) applies for purposes of determining stock
ownership.  Stock underlying a vested
option is considered owned by the individual who owns the vested option (and
the stock underlying an unvested option is not considered owned by the
individual who holds the unvested option). 
If, however, a vested option is exercisable for stock that is not
substantially vested (as defined by Treasury Regulation Section 1.83-3(b) and
(j)) the stock underlying the option is not treated as owned by the individual
who holds the option.

 

(c)                      Change in the Ownership of a
Corporation.  A change in the ownership of a corporation
occurs on the date that any one person or more than one person acting as a
group, acquires ownership of stock of the corporation that, together with stock
held by such person or group, constitutes more than fifty percent (50%) of the
total fair market value or total voting power of the stock of such
corporation.  If any one person or more
than one person acting as a proxy is considered to own more than fifty percent
(50%) of the total fair market value or total voting power of the stock of a
corporation, the acquisition of additional stock by the same person or persons
is not considered to cause a change in the ownership of the corporation (or to
cause a change in the effective control of the corporation as discussed below
in Section 9.7(d)).  An increase in
the percentage of stock owned by any one person, or persons acting as a group,
as a result of a transaction in which the corporation acquires its stock in 

 

5

 

exchange for
property will be treated as an acquisition of stock.  Section 9.7(c) applies only when
there is a transfer of stock of a corporation (or issuance of stock of a
corporation) and stock in such corporation remains outstanding after the
transaction.  For purposes of this Section 9.7(c),
persons will not be considered to be acting as a group solely because they
purchase or own stock of the same corporation at the same time or as a result
of a public offering.  Persons will,
however, be considered to be acting as a group if they are owners of a
corporation that enters into a merger, consolidation, purchase or acquisition
of stock, or similar business transaction with the corporation.  If a person, including an entity, owns stock
in both corporations that enter into a merger, consolidation, purchase or
acquisition of stock, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders in a corporation prior to the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

 

(d)                     Change in the effective control
of a corporation.  A change in the effective control of a
corporation occurs on the date that either (i) any one person, or more
than one person acting as a group, acquires (or has acquired during the twelve
month period ending on the date of the most recent acquisition by such person
or persons) ownership of stock of the corporation possessing thirty (30%) or
more of the total voting power of the stock of such corporation, or (ii) a
majority of members of the corporation’s board of directors is replaced during
any twelve month period by directors whose appointment or election is not
endorsed by a majority of the members of the corporation’s board of directors
prior to the date of the appointment or election, provided that for purposes of
this paragraph (ii), the term corporation refers solely to the relevant
corporation identified in Section 9.7(a) for which no other
corporation is a majority shareholder for purposes of Section 9.7(a).  In the absence of an event described in Section 9.7(d)(i) or
(ii), a change in the effective control of a corporation will not have
occurred.  A change in effective control
may also occur in any transaction in which either of the two corporations
involved in the transaction has a change in the ownership of such corporation
as described in Section 9.7(c) or a change in the ownership of a
substantial portion of the assets of such corporation as described in Section 9.7(e).  If any one person, or more than one person
acting as a group, is considered to effectively control a corporation within
the meaning of this Section 9.7(d), the acquisition of additional control
of the corporation by the same person or persons is not considered to cause a
change in the effective control of the corporation or to cause a change in the
ownership of the corporation within the meaning of Section 9.7(c).  For purposes of this Section 9.7(d),
persons will or will not be considered to be acting as a group in accordance
with 

 

6

 

rules similar
to those set forth in Section 9.7(c) with the following
exception.  If a person, including an
entity, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in a
corporation only with respect to the ownership in that corporation prior to the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

 

(e)                      Change
in the ownership of a substantial portion of a corporation’s assets.  A change in the ownership of a substantial
portion of a corporation’s assets occurs on the date that any one person, or
more than one person acting as a group (as determined in accordance with rules similar
to those set forth in Section 9.7(d)), acquires (or has acquired during
the twelve month period ending on the date of the most recent acquisition by
such person or persons) assets from the corporation that have a total gross
fair market value equal to or more than forty percent (40%) of the total gross
fair market value of all of the assets of the corporation immediately prior to
such acquisition or acquisitions.  For
this purpose, gross fair market value means the value of the assets of the
corporation of the value of the assets being disposed of determined without
regard to any liabilities associated with such assets.  There is no Change in Control event under
this Section 9.7(e) when there is a transfer to an entity that is
controlled by the shareholders of the transferring corporation immediately
after the transfer.  A transfer of assets
by a corporation is not treated as a change in ownership of such assets if the
assets are transferred to (i) a shareholder of the corporation
(immediately before the asset transfer) in exchange for or with respect to its
stock, (ii) an entity, fifty percent (50%) or more of the total value or
voting power of which is owned, directly or indirectly, by the corporation, (iii) a
person, or more than one person acting as a group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of
all the outstanding stock of the corporation, or (iv) an entity, at least
fifty (50%) of the total value or voting power of which is owned, directly or
indirectly, by a person described in Section 9.7(e)(iii).  For purposes of the foregoing, and except as
otherwise provided, a person’s status is determined immediately after the
transfer of assets.

 

9.8                               Permissible Delays in Payment.  Distributions may be delayed beyond the date
payment would otherwise occur in accordance with the provisions of Articles 8
and 9 in any of the following circumstances as long as the Employer treats all
payments to similarly situated Participants on a reasonably consistent basis.

 

7

 

(a)                        The Employer
may delay payment if it reasonably anticipates that its deduction with respect
to such payment would be limited or eliminated by the application of Code Section 162(m).  Payment must be made during the Participant’s
first taxable year in which the Employer reasonably anticipates, or should
reasonably anticipate, that if the payment is made during such year the
deduction of such payment will not be barred by the application of Code Section 162(m) or
during the period beginning with the Participant’s Separation from Service and
ending on the later of the last day of the Employer’s taxable year in which the
Participant separates from service or the 15th day of the third month following
the Participant’s Separation from Service. 
If a scheduled payment to a Participant is delayed in accordance with
this Section 9.8(a), all scheduled payments to the Participant that could
be delayed in accordance with this Section 9.8(a) will also be
delayed.

 

(b)                       The Employer
may also delay payment if it reasonably anticipates that the making of the
payment will violate federal securities laws or other applicable laws provided
payment is made at the earliest date on which the Employer reasonably
anticipates that the making of the payment will not cause such violation.

 

(c)                        The Employer
reserves the right to amend the Plan to provide for a delay in payment upon
such other events and conditions as the Secretary of the Treasury may prescribe
in generally applicable guidance published in the Internal Revenue Bulletin.

 

8

 

ARTICLE 10 – AMENDMENT AND TERMINATION

 

10.1                        Amendment
by Plan Sponsor.  The Plan Sponsor reserves the right to
amend the Plan (for
itself and each Employer) through action of its Board
of Directors.  No amendment can directly or
indirectly deprive any
current or former Participant or Beneficiary of all or
any portion of his
Account which had accrued and become vested prior to the amendment.

 

10.2                        Plan
Termination Following Change in Control or Corporate Dissolution.  If so elected by the Plan Sponsor in
11.01 of the Adoption  Agreement, the Plan Sponsor reserves the
right to terminate the Plan and  distribute all amounts credited to all
Participant Accounts within the 30
days preceding or the
twelve months following a Change in Control as
determined in
accordance with the rules set forth in Section 9.7. For this
purpose, the Plan will
be treated as terminated only if all agreements, methods, programs and other
arrangements sponsored by the Related Employer immediately after the Change in
Control which are treated as a single plan under Reg. Sec. 1.409A-1(c)(2) are
also terminated so that all participants under the Plan and all similar
arrangements are required to  receive all amounts deferred under the
terminated arrangements within  twelve months of the date the Plan
Sponsor irrevocably takes all necessary action to terminate the arrangements.
In addition,  the Plan Sponsor reserves the right to
terminate the Plan within twelve months
of a corporate
dissolution taxed under Code Section 331 or with the
approval of a
bankruptcy court pursuant to 11 U. S. C. Section 503(b)(1)(A) provided
that amounts deferred under the Plan are included
in the gross incomes
of Participants in the latest of (a) the calendar year in
which the termination occurs,
(b) the first calendar year in which the amount is
no longer subject to a
substantial risk of forfeiture, or (c) the first calendar
year in which payment
is administratively practicable.

 

10.3                        Other
Plan Terminations.  The Plan Sponsor
retains the discretion
to terminate the Plan if (a) all arrangements
sponsored by the Plan
Sponsor that would be aggregated with any terminated
arrangement under  Code Section 409A and Reg. Sec.
1.409A-1(c)(2) are terminated, (b) no
payments other than
payments that would be payable under the terms of
the arrangements if
the termination had not occurred are made within
twelve months of the
termination of the arrangements, (c) all payments
are made within
twenty-four months of the termination of the
arrangements, (d) the
Plan Sponsor does not adopt a new arrangement that
would be aggregated
with any terminated arrangement under Code Section 409A and the
regulations thereunder at any time within the three year period following the
date of termination of
the arrangement, and (e) the termination does not occur proximate to a
downturn in the financial health of the Plan sponsor.  The Plan Sponsor also reserves the
right to amend

 

1

 

the
Plan to provide that termination of the Plan will occur under such conditions and events as may
be  prescribed by the Secretary of the Treasury in
generally applicable  guidance published in the Internal
Revenue Bulletin.

 

10.4                        Plan Suspension. 
The Plan may be suspended or “frozen” at any time by the Plan Sponsor
with respect to new contributions.  In
the event that the Plan is suspended or “frozen,” benefits shall be held in the
Plan and paid out in accordance with the terms of the Plan and any applicable
deferral election.

 

2

 

ARTICLE 11 – THE TRUST

 

11.1                        Establishment of Trust.  The
Plan Sponsor may but is not required to establish a trust to hold amounts which
the Plan Sponsor may contribute from time to time to correspond to some or all
amounts credited to Participants under Section 6.2.  If the Plan Sponsor elects to establish a
trust in accordance with Section 10.01 of the Adoption Agreement, the
provisions of Sections 11.2 and 11.3 shall become operative.

 

11.2                        Grantor Trust. 
Any trust established by
the Plan Sponsor shall be between the Plan Sponsor and a trustee pursuant to a
separate written agreement under which assets are held, administered and
managed, subject to the claims of the Plan Sponsor’s creditors in the event of
the Plan Sponsor’s insolvency.  The trust
is intended to be treated as a grantor trust under the Code, and the
establishment of the trust shall not cause the Participant to realize current
income on amounts contributed thereto. 
The Plan Sponsor must notify the trustee in the event of a bankruptcy or
insolvency.

 

11.3                        Investment of Trust Funds.  Any
amounts contributed to the trust by the Plan Sponsor shall be invested by the
trustee in accordance with the provisions of the trust and the instructions of
the Administrator.  Trust investments
need not reflect the hypothetical investments selected by Participants under Section 7.1
for the purpose of adjusting Accounts and the earnings or investment results of
the trust need not affect the hypothetical investment adjustments to
Participant Accounts under the Plan.

 

1

 

ARTICLE 12 – PLAN ADMINISTRATION

 

12.1                        Powers and Responsibilities of the
Administrator.  The
Administrator has the full power and the full responsibility to administer the
Plan in all of its details, subject, however, to the applicable requirements of
ERISA.  The Administrator’s powers and
responsibilities include, but are not limited to, the following:

 

	
  (a)

  	
   

  	
  To
  make and enforce such rules and procedures as it deems necessary or
  proper for the efficient administration of the Plan;

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  To
  interpret the Plan, its interpretation thereof to be final, except as
  provided in Section 12.2, on all persons claiming benefits under the
  Plan;

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  To
  decide all questions concerning the Plan and the eligibility of any person to
  participate in the Plan;

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  To
  administer the claims and review procedures specified in Section 12.2;

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  To
  compute the amount of benefits which will be payable to any Participant,
  former Participant or Beneficiary in accordance with the provisions of the
  Plan;

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  To
  determine the person or persons to whom such benefits will be paid;

  
	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  To
  authorize the payment of benefits;

  
	
   

  	
   

  	
   

  
	
  (h)

  	
   

  	
  To
  comply with the reporting and disclosure requirements of Part 1 of
  Subtitle B of Title I of ERISA;

  
	
   

  	
   

  	
   

  
	
  (i)

  	
   

  	
  To
  appoint such agents, counsel, accountants, and consultants as may be required
  to assist in administering the Plan;

  
	
   

  	
   

  	
   

  
	
  (j)

  	
   

  	
  By
  written instrument, to allocate and delegate its responsibilities, including
  the formation of an Administrative Committee to administer the Plan.

  

 

1

 

12.2        Claims and Review Procedures.

 

(a)           Claims
Procedure.

 

If
any person believes he is being denied any rights or benefits under the Plan,
such person may file a claim in writing with the Administrator.  If any such claim is wholly or partially
denied, the Administrator will notify such person of its decision in writing.  Such notification will contain (i) specific
reasons for the denial, (ii) specific reference to pertinent Plan
provisions, (iii) a description of any additional material or information
necessary for such person to perfect such claim and an explanation of why such
material or information is necessary, and (iv) a description of the Plan’s
review procedures and the time limits applicable to such procedures, including
a statement of the person’s right to bring a civil action  following an adverse decision on review.  Such notification will be given within 90
days (45 days in the case of a claim regarding Disability) after the claim is
received by the Administrator.  The
Administrator may extend the period for providing the notification by 90 days
(30 days in the case of a claim regarding Disability) if special circumstances
require an extension of time for processing the claim and if written notice of
such extension and circumstance is given to such person within the initial 90
day period (45 day period in the case of a claim regarding Disability).  If such notification is not given within such
period, the claim will be considered denied as of the last day of such period
and such person may request a review of his claim.

 

(b)           Review
Procedure.

 

Within
60 days (180 days in the case of a claim regarding Disability) after the date
on which a person receives a written notification of denial of claim (or, if
written notification is not provided, within 60 days (180 days in the case of a
claim regarding Disability) of the date denial is considered to have occurred),
such person (or his duly authorized representative) may (i) file a written
request with the Administrator for a review of his denied claim and of
pertinent documents and (ii) submit written issues and comments to the
Administrator.  The Administrator will
notify such person of its decision in writing. 
Such notification will be written in a manner calculated to be
understood by such person and will contain specific reasons for the decision as
well as specific references to pertinent Plan provisions.  The notification will explain that the person
is entitled to receive, upon request and free of charge, 

 

2

 

reasonable
access to and copies of all pertinent documents and has the right to bring a
civil action following an adverse decision on review.  The decision on review will be made within 60
days (45 days in the case of a claim regarding Disability).  The Administrator may extend the period for
making the decision on review by 60 days (45 days in the case of a claim
regarding Disability) if special circumstances require an extension of time for
processing the request such as an election by the Administrator to hold a
hearing, and if written notice of such extension and circumstances is given to
such person within the initial 60-day period (45 days in the case of a claim
regarding Disability).  If the decision
on review is not made within such period, the claim will be considered denied.

 

No
legal action for benefits under the Plan may be brought until the claimant (i) has
submitted a written application for benefits in accordance with the procedures
described above, (ii) has been notified by the Administrator that the
application is denied, (iii) has filed a written request for a review of
the application in accordance with the appeal procedure described above, and (iv) has
been notified in writing that the Administrator has denied the appeal.

 

12.3                        Plan
Administrative Costs.  All reasonable costs and expenses
(including legal,
accounting, and employee communication fees) incurred
by the Administrator
in administering the Plan shall be paid by Plan
to the extent not paid by the Employer.

 

12.4                        No Discretionary Distributions.  Except as expressly provided herein, the
Administrator shall not exercise discretion with respect to the timing or form
of distributions from the Plan, but shall make distributions at the time and in
the form elected by the Participant or as otherwise specified in the Plan.  Notwithstanding anything to the contrary set
forth herein, the Administrator retains the right, in its sole discretion, to
delay or accelerate distributions under the Plan to the extent permitted by Section 409A.

 

12.5                        Permitted
Acceleration of Payment.  The Administrator may permit acceleration of
the time or schedule of any payment or amount scheduled to be paid pursuant to
a payment under the Plan provided such acceleration would be permitted by the
provisions of Reg. Sec. 1.409A-3(j)(4), including the following events:

 

	
  (a)

  	
   

  	
  Domestic
  Relations Order. A payment may be
  accelerated if such payment is made to an alternate payee pursuant to and
  following the receipt and qualification of a domestic relations order as
  defined in Section 414(p) of the Code.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Compliance
  with Ethics Agreements and Legal Requirements.
  A payment may be accelerated as may be necessary to comply

  

 

3

 

	
   

  	
   

  	
  with
  ethics agreements with the Federal government or as may be reasonably
  necessary to avoid the violation of Federal, state, local or foreign ethics
  law or conflicts of laws, in accordance with the requirements of Section 409A.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  De
  Minimis Amounts.  A payment will be accelerated if (i) the
  amount of the payment is not greater than the applicable dollar amount under Section 402(g)(1)(B) of
  the Code, (ii) at the time the payment is made the amount constitutes
  the Participant’s entire interest under the Plan and all other Account
  Balance Plans.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  FICA
  Tax.  A payment may be accelerated to the extent
  required to pay the Federal Insurance Contributions Act tax imposed under
  Sections 3101, 3121(a) and 3121(v)(2) of the Code with respect to
  compensation deferred under the Plan (the “FICA Amount”).  Additionally, a payment may be accelerated
  to pay the income tax on wages imposed under Section 3401 of the Code on
  the FICA Amount and to pay the additional income tax at source on wages
  attributable to the pyramiding Section 3401 wages and taxes.  The total payment under this subsection (d) may
  not exceed the aggregate of the FICA Amount and the income tax withholding
  related to the FICA Amount.

  

 

	
  (e)

  	
   

  	
  Section 409A
  Additional Tax.  A payment may be accelerated if the Plan
  fails to meet the requirements of Section 409A; provided that such
  payment may not exceed the amount required to be included in income as a
  result of the failure to comply with the requirements of Section 409A.

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  Offset.  A payment may be accelerated in the
  Administrator’s discretion as satisfaction of a debt of the Participant to
  the Employer, where such debt is incurred in the ordinary course of the
  service relationship between the Participant and the Employer, the entire
  amount of the reduction in any of the Employer’s taxable years does not
  exceed $5,000, and the reduction is made at the same time and in the same
  amount as the debt otherwise would have been due and collected from the
  Participant.

  
	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  Other
  Events.  A payment may be accelerated in the
  Administrator’s discretion in connection with such other events and
  conditions as permitted by Section 409A.

  

 

4

 

ARTICLE 13 – SECURITIES LAWS COMPLIANCE

 

13.1                        Designation of Participants.  Notwithstanding anything to the contrary set
forth herein, with respect to any Director, only the Board or its Compensation
Committee may designate such Director as eligible to participate in the Plan.

 

13.2                        Action by Administrator.  With
respect to any Participant who is then subject to Section 16 of the
Exchange Act, notwithstanding anything to the contrary set forth herein, any
function of the Administrator under the Plan relating to such Participant shall
be performed solely by the Board or its Compensation Committee, if and to the
extent required to ensure the availability of an exemption under Section 16
of the Exchange Act for any transaction relating to such Participant under the
Plan.

 

13.3                        Compliance with Section 16.  Notwithstanding
any other provision of the Plan or any rule, instruction, election form or
other form, the Plan and any such rule, instruction or form shall be subject to
any additional conditions or limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including any amendment to Rule 16b-3)
that are requirements for the application of such exemptive rule.  To the extent permitted by applicable law,
such provision, rule, instruction or form shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.

 

13.4                        Capitalization Changes.  In
the event of capitalization changes affecting the Plan Sponsor’s common stock,
the Board or its Compensation Committee shall make an appropriate and equitable
adjustment to the number of Plan Sponsor shares credited to the Director’s
Account.

 

1

 

ARTICLE 14 – MISCELLANEOUS

 

14.1                        Unsecured
General Creditor of the Employer.  Participants
and their Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of the
Employer.  For purposes of the payment of
benefits under the Plan, any and all of the Employer’s assets shall be, and
shall remain, the general, unpledged, unrestricted assets of the Employer.  Each Employer’s obligation under the Plan
shall be merely that of an unfunded and unsecured promise to pay money in the future.

 

14.2                        Employer’s
Liability.  Each
Employer’s liability for the payment of benefits under the Plan shall be
defined only by the Plan and by the deferral agreements entered into between a
Participant and the Employer.  An
Employer shall have no obligation or liability to a Participant under the Plan
except as provided by the Plan and a deferral agreement or agreements.  An Employer shall have no liability to
Participants employed by other Employers.

 

14.3                        Limitation
of Rights.  Neither the establishment of the Plan, nor
any amendment thereof, nor the creation of any fund or account, nor the payment
of any benefits, will be construed as giving to the Participant or any other
person any legal or equitable right against the Employer, the Plan or the Administrator,
except as provided herein; and in no event will the terms of employment or
service of the Participant be modified or in any way affected hereby.

 

14.4                        Anti-Assignment.  Except as may be necessary to fulfill a
domestic relations order within the meaning of Code Section 414(p), none
of the benefits or rights of a Participant or any Beneficiary of a Participant
shall be subject to the claim of any creditor. 
In particular, to the fullest extent permitted by law, all such benefits
and rights shall be free from attachment, garnishment, or any other legal or
equitable process available to any creditor of the Participant and his or her
Beneficiary.  Neither the Participant nor
his or her Beneficiary shall have the right to alienate, anticipate, commute, pledge,
encumber, or assign any of the payments which he or she may expect to receive,
contingently or otherwise, under the Plan, except the right to designate a
Beneficiary to receive death benefits provided hereunder.

 

14.5                        Facility
of Payment.  If the Administrator determines, on the basis
of medical reports or other evidence satisfactory to the Administrator, that
the recipient of any benefit payments under the Plan is incapable of handling
his affairs by reason of minority, illness, infirmity or other incapacity, the
Administrator may direct the Employer to disburse such payments to a person or
institution designated by a court which has jurisdiction over such recipient or
a person or institution otherwise having the legal authority under State law
for the care 

 

1

 

and
control of such recipient. The receipt by such person or institution of any
such payments therefore, and any such payment to the extent thereof, shall
discharge the liability of the Employer, the Plan and the Administrator  for the payment of benefits hereunder to such
recipient.

 

14.6                        Notices.  Any notice or other communication to the
Employer or Administrator in connection with the Plan shall be deemed delivered
in writing if addressed to the Plan Sponsor at the address specified in Section 1.03
of the Adoption Agreement and if either actually delivered at said address or,
in the case or a letter, 5 business days shall have elapsed after the same
shall have been deposited in the United States mails, first-class postage
prepaid and registered or certified.

 

14.7                        Tax
Withholding.   If the Employer concludes that tax is owing
with respect to any deferral or payment hereunder, the Employer shall withhold
such amounts from any payments due the Participant, as permitted by law, or
otherwise make appropriate arrangements with the Participant or his Beneficiary
for satisfaction of such obligation. 
Tax, for purposes of this Section 14.7 means any federal, state,
local or any other governmental income tax, employment or payroll tax, excise
tax, or any other tax or assessment owing with respect to amounts deferred, any
earnings thereon, and any payments made to Participants under the Plan.  By electing to make a deferral under this
Plan, the Participant authorizes any required withholding from, at the Employer’s
election, distributions and any other amounts payable to the Participant, and
the Participant otherwise agrees to make adequate provision for any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Employer, if any, which arise in connection with payments
from this Plan.  Unless the tax
withholding obligations of the Employer are satisfied, the Employer shall have
no obligation to make distributions under this Plan.  For each Plan Year in which a deferral amount
is being contributed to the Plan, if applicable, the Employer shall withhold
from that portion of the Participant’s Compensation that is not being deferred,
in a manner determined by the Employer, the Participant’s share of FICA and
other employment taxes on such deferral amount. 
If necessary, the Employer may reduce the deferral amount in order to
comply with this Section 14.7.

 

14.8                        Indemnification.  Each
Employer shall indemnify and hold harmless each employee, officer, or director
of an Employer to whom is delegated duties, responsibilities, and authority
with respect to the Plan against all claims, liabilities, fines and penalties,
and all expenses reasonably incurred by or imposed upon him (including but not
limited to reasonable attorney fees) which arise as a result of his actions or
failure to act in connection with the operation and administration of the Plan
to the extent lawfully allowable and to the extent that such claim, liability, fine,
penalty, or expense is not paid for by liability insurance purchased or paid
for by an Employer. Notwithstanding the foregoing, an Employer shall not
indemnify any person for any such amount incurred through any settlement or
compromise of any action unless 

 

2

 

the
Employer consents in writing to such settlement or compromise.  Indemnification under this Section 13.8
shall not be applicable to any person if the cost, loss, liability, or expense
is due to the person’s gross negligence, fraud or willful misconduct or if the
person refuses to assist in the defense of the claim against him.

 

14.9                        Successors.  The provisions of this Plan shall bind and
inure to the benefit of the Plan Sponsor, the Participant’s Employer and their
successors and assigns and the Participant and the Participant’s designated
Beneficiaries.

 

14.10                 Validity.  In case any provision of this Plan shall be
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been inserted
herein.

 

14.11                 Scrivener’s Error.  Notwithstanding any other provision of this
Plan to the contrary, if there is a scrivener’s error in properly transcribing
this Plan document, it shall not be a violation of the Plan terms to operate
the Plan in accordance with its proper provisions, rather than in accordance
with the terms of the Plan document, pending correction of the Plan document
through an amendment.  In addition, any
provisions of the Plan document improperly added as a result of scrivener’s
error shall be considered null and void as of the date such error occurred.

 

14.12                 Disclaimer.  It is the Plan Sponsor’s intention that this
arrangement comply with the requirements of Section 409A.  Notwithstanding the foregoing or anything
else to the contrary in the Plan, neither the Plan Sponsor nor any Employer
shall have any liability to any Participant should any provision of the Plan
fail to satisfy the requirements of Section 409A.

 

14.13                 Governing
Law.  The Plan will be construed, administered
and enforced  according to the laws of the
State specified by the
Plan Sponsor in Section 12.01 of the Adoption Agreement.

 

3

 

AMYLIN PHARMACEUTICALS, INC.

 

2001 NON-QUALIFIED DEFERRED COMPENSATION PLAN

 

ADOPTION AGREEMENT

 

Capitalized
terms not otherwise defined herein have the meanings set forth in the Amylin
Pharmaceuticals, Inc. 2001 Non-Qualified Deferred Compensation Plan document

 

1.01        PREAMBLE

 

By
the execution of this Adoption Agreement the Plan Sponsor hereby [complete (a) or
(b)]

 

(a)   o    adopts a new plan as of
                      
[month, day, year]

 

(b)   x   amends and restates its existing plan as of 01/01/2008  [month, day, year] which is the Amendment
Effective Date.  All deferrals made under
the existing plan prior to the Amendment Effective Date shall also be governed
by the terms of this amended and restated Plan on and after the Amendment
Effective Date.

 

Original Effective Date:  04/01/2000
[month, day, year]

 

Pre-409A Grandfathering:      o Yes      x No

 

1.02        PLAN

 

Plan Name: Amylin
Pharmaceuticals, Inc. 2001 Non-Qualified Deferred Compensation Plan

 

Plan Year:  the annual period ending 12/31

 

1.03        PLAN
SPONSOR

 

	
  Name:

  	
    Amylin
  Pharmaceuticals, Inc.

  
	
  Address:

  	
    9360
  Towne Center Drive, San Diego, CA 92121

  
	
  Phone
  # :

  	
    (858)
  309-7529

  
	
  EIN:

  	
    33-0266089

  
	
  Fiscal
  Yr:

  	
    Ends
  12/31

  

 

Is
stock of the Plan Sponsor, any Employer or any Related Employer publicly traded
on an established securities market?

 

	
  x Yes

  	
   

  	
  o No

  

 

1.04        EMPLOYER

 

The
following entities have been authorized by the Plan Sponsor to participate in
and have adopted the Plan (insert “Not Applicable” if none have been
authorized):

 

1

 

	
  Entity

  	
   

  	
  Publicly Traded on Est. Securities Market

  

 

	
   

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Amylin
  Pharmaceuticals, Inc.

  	
   

  	
  x

  	
   

  	
  o

  
	
   

  	
   

  	
  o

  	
   

  	
  o

  
	
   

  	
   

  	
  o

  	
   

  	
  o

  
	
   

  	
   

  	
  o

  	
   

  	
  o

  
	
   

  	
   

  	
  o

  	
   

  	
  o

  
	
   

  	
   

  	
  o

  	
   

  	
  o

  

 

1.05                        ADMINISTRATOR

 

The
Plan Sponsor has designated the following party or parties to be responsible
for the administration of the Plan prior to a Change in Control.  From and after any Change in Control,
responsibility for administration of the Plan shall be as set forth on Appendix
C.

 

	
  Name:

  	
    Amylin
  Pharmaceuticals, Inc.

  
	
  Address:

  	
    9360
  Towne Center Drive, San Diego, CA 92121

  

 

Note:                 The Administrator is the person or persons
designated by the Plan Sponsor to be responsible for the administration of the
Plan.  Neither Fidelity Employer Services
Company nor any other Fidelity affiliate can be the Administrator.

 

1.06                        KEY EMPLOYEE DETERMINATION DATES

 

The Employer has designated December 31       
as the Identification Date for purposes of determining Key Employees.

 

In the absence of a designation, the Identification
Date is December 31.

 

The Employer has designated April 1       
as the effective date for purposes of applying the six month delay in
distributions to Key Employees.

 

In the absence of a designation, the effective date is
the first day of the fourth month following the Identification Date.

 

2

 

2.01                        PARTICIPATION

 

(a)  x    Employees
[complete (i), (ii) or (iii)]

 

(i)    o    Eligible
Employees are selected by the Employer.

 

(ii)   x   Eligible
Employees are those employees of the Employer who satisfy the following
criteria:

 

The Employer shall determine in its sole discretion the Employees who may
participate in the Plan, which may include Employees internally designated as
“directors” or higher and whose compensation exceeds the amount defined in Section 414(q) of
the Internal Revenue Code by at least $10,000.

 

(iii)  o   Employees
are not eligible to participate.

 

(b)  x    Directors
[complete (i), (ii) or (iii)]

 

(i)    x   All
Directors who are non-employee board members are eligible to participate.

 

(ii)   o   Only
Directors selected by the Employer are eligible to participate.

 

(iii)  o   Directors
are not eligible to participate.

 

3

 

3.01        COMPENSATION

 

For purposes of determining Participant contributions under Article 4
and Employer contributions under Article 5, Compensation shall be defined
in the following manner [complete (a) or (b) and select (c) and/or
(d), if applicable]:

 

	
   (a)

  	
  x

  	
   

  	
  Employee Compensation is defined as:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  the Eligible Employee’s “Base Salary” and “Employee
  Performance Bonus.” 

   

  ·      “Base Salary” shall mean the
  Eligible Employee’s base pay including any severance benefit payments made on
  or before termination of employment, but excluding incentive pay, premium
  pay, commissions, overtime, bonuses, other forms of variable compensation,
  and any post-termination severance benefit payments.

  ·      “Employee Performance Bonus”
  shall mean the Eligible Employee’s bonus which is determined based upon the
  Eligible Employee’s and/or the Employer’s achievement of performance goals
  over a designated performance period.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   (b)

  	
  o

  	
   

  	
  Compensation as defined in [insert name of
  qualified plan] without regard to the limitation in  Section 401(a)(17)
  of the Code for such Plan Year.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   (c)

  	
  x

  	
   

  	
  Director Compensation is defined as:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  All cash fees paid to Directors by an Employer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   (d)

  	
  o

  	
   

  	
  Compensation shall, for all Plan purposes, be
  limited to $          .

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   (e)

  	
  o

  	
   

  	
  Not Applicable.

  	
   

  

 

3.02                        BONUSES

 

Compensation,
as defined in Section 3.01 of the Adoption Agreement, includes the
following type of bonuses:

 

	
  Type

  	
  Will be treated as Performance

  Based Compensation

  
	
   

  	
   

  
	
   

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
	
  Employee
  Performance Bonus

  	
   

  	
  x

  	
   

  	
  o

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  o

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  o

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  o

  	
   

  
	
   

  	
   

  	
  o

  	
   

  	
  o

  	
   

  

 

	
  o

  	
  Not
  Applicable.

  

 

4

 

4.01        PARTICIPANT CONTRIBUTIONS

 

If Participant contributions are permitted, complete (a), (b), and
(c).  Otherwise complete (d).

 

(a)           Amount
of Deferrals

 

A
Participant may elect within the period specified in Section 4.01(b) of
the Adoption Agreement to defer the following amounts of remuneration.  For each type of remuneration listed,
complete “dollar amount” and / or “percentage amount”.

 

(i)             Compensation Other than Bonuses [do not complete
if you complete (iii)]

 

	
   

  	
   

  	
  Dollar Amount

  	
   

  	
  % Amount

  	
   

  	
   

  	
   

  
	
  Type of Remuneration

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Increment

  	
   

  
	
  (a)    Base
  Salary

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
  %

  	
  80

  	
  %

  	
  1

  	
  %

  
	
  (b)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Note:  The increment is required to determine the
permissible deferral amounts.  For
example, a minimum of 0% and maximum of 20% with a 5% increment would allow an
individual to defer 0%, 5%, 10%, 15% or 20%.

 

(ii)          Bonuses [do not complete if you complete (iii)]

 

	
   

  	
   

  	
  Dollar Amount

  	
   

  	
  % Amount

  	
   

  	
   

  	
   

  
	
  Type of Bonus

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Increment

  	
   

  
	
  (a) Employee
  Performance Bonus

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
  %

  	
  80

  	
  %

  	
  1

  	
  %

  
	
  (b)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(iii)       Compensation [do not complete if you completed (i) and (ii)]

 

	
  Dollar Amount

  	
   

  	
  % Amount

  	
   

  	
   

  	
   

  
	
  Min

  	
   

  	
  Max

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Increment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(iv)      Director Compensation

 

	
   

  	
   

  	
  Dollar Amount

  	
   

  	
  % Amount

  	
   

  	
   

  	
   

  
	
  Type of Compensation

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Increment

  	
   

  
	
  Cash Fees

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
  %

  	
  100

  	
  %

  	
  1

  	
  %

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

5

 

(b)           Election
Period

 

(i)    Performance
Based Compensation

 

A
special election period

 

	
  o

  	
  Does

  	
   

  	
  x

  	
  Does
  Not

  

 

apply
to each eligible type of performance based compensation referenced in Section 3.02
of the Adoption Agreement.

 

The
special election period, if applicable, will be determined by the Employer.

 

(ii)          Newly Eligible Participants

 

An
employee or Director who is classified or designated as an Eligible Employee or
Director during a Plan Year

 

	
  x

  	
  May

  	
   

  	
  o

  	
  May Not

  

 

elect
to defer Compensation earned during the remaining eligible period of the Plan
Year by completing a deferral agreement within the 30 day period beginning on
the date he is eligible to participate in the Plan.  Such election shall become effective
commencing with the first day of the first quarterly period that commences
following the effective date of the deferral election.

 

(c)                                  Revocation of Deferral Agreement

 

A Participant’s deferral agreement

 

	
  x

  	
  Will
  

  
	
  o

  	
  Will
  Not

  

 

be
cancelled for the remainder of any Plan Year during which he receives a
hardship distribution of elective deferrals from a qualified cash or deferred
arrangement maintained by the Employer. 
If cancellation occurs, the Participant may resume participation in
accordance with Article 4 of the Plan.

 

(d)                                  No Participant Contributions

 

o                          Participant contributions are not permitted
under the Plan.

 

6

 

5.01                        EMPLOYER CONTRIBUTIONS

 

If Employer contributions are permitted, complete (a) and/or
(b).  Otherwise complete (c).

 

(a)                                  Matching Contributions

 

(i)             Amount

 

For each Plan Year, the Employer shall make a Matching Contribution on
behalf of each Participant who defers Compensation for the Plan Year and
satisfies the requirements of Section 5.01(a)(ii) of the Adoption
Agreement equal to [complete the ones that are applicable]:

 

	
  (A)

  	
  o

  	
               [insert
  percentage] of the Compensation the Participant has elected to defer for the
  Plan Year

  
	
   

  	
   

  	
   

  
	
  (B)

  	
  o

  	
  An amount determined by the Employer in its sole
  discretion

  
	
   

  	
   

  	
   

  
	
  (C)

  	
  o

  	
  Matching Contributions for each Participant shall be
  limited to $                  and/or                 % of
  Compensation.

  
	
   

  	
   

  	
   

  
	
  (D)

  	
  o

  	
  Other:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (E)

  	
  o

  	
  Not Applicable [Proceed to Section 5.01(b)]

  
	
   

  	
   

  	
   

  

(ii)    Eligibility for Matching Contribution

 

A Participant who defers Compensation for the Plan Year shall receive
an allocation of Matching Contributions determined in accordance with Section 5.01(a)(i) provided
he satisfies the following requirements [complete the ones that are
applicable]:

 

	
   (A)  o

  	
  Describe
  requirements: 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   (B)  o

  	
  Is
  selected by the Employer in its sole discretion to receive an allocation of
  Matching Contributions

  
	
   

  	
   

  
	
   (C)  o

  	
  No
  requirements

  

 

7

 

(iii)       Time of Allocation

 

Matching Contributions, if made, shall be treated as allocated [select
one]:

 

	
  (A)  o

  	
  As
  of the last day of the Plan Year

  
	
   

  	
   

  
	
  (B)  o

  	
  At
  such times as the Employer shall determine in it sole discretion

  
	
   

  	
   

  
	
  (C)  o

  	
  At
  the time the Compensation on account of which the Matching Contribution is
  being made would otherwise have been paid to the Participant

  
	
   

  	
   

  
	
  (D)  o

  	
  Other:

  
	
   

  	
   

  
	
   

  	
   

  

 

(b)           Other
Contributions

 

(i)    Amount

 

The Employer shall make a contribution on behalf of each Participant
who satisfies the requirements of Section 5.01(b)(ii) equal to
[complete the ones that are applicable]:

 

	
  (A)  o

  	
  An
  amount equal to              [insert
  number] % of the Participant’s Compensation

  
	
   

  	
   

  
	
  (B)  x

  	
  An
  amount determined by the Employer in its sole discretion

  
	
   

  	
   

  
	
  (C)  o

  	
  Contributions
  for each Participant shall be limited to $                      

  
	
   

  	
   

  
	
  (D)  o

  	
  Other:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (E)  o

  	
  Not
  Applicable [Proceed to Section 6.01]

  

 

8

 

(ii)          Eligibility for Other Contributions

 

A Participant shall receive an allocation of other Employer
contributions determined in accordance with Section 5.01(b)(i) for
the Plan Year if he satisfies the following requirements [complete the one that
is applicable]:

 

	
  (A)  o

  	
  Describe
  requirements:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (B)  x

  	
  Is
  selected by the Employer in its sole discretion to receive an allocation of
  other Employer contributions

  
	
   

  	
   

  
	
  (C)  o

  	
  No
  requirements

  

 

(iii)       Time of Allocation

 

Employer contributions, if made, shall be treated as allocated [select
one]:

 

	
  (A)  o

  	
  As
  of the last day of the Plan Year

  
	
   

  	
   

  
	
  (B)  x

  	
  At
  such time or times as the Employer shall determine in its sole discretion

  
	
   

  	
   

  
	
  (C)  o

  	
  Other:

  
	
   

  	
   

  
	
   

  	
   

  

 

(c)           No
Employer Contributions

 

o         Employer contributions are not permitted under the
Plan.

 

9

 

6.01        DISTRIBUTIONS

 

The
timing and form of payment of distributions made from the Participant’s vested
Account shall be made in accordance with the elections made in this Section 6.01
of the Adoption Agreement except when Section 9.6 of the Plan requires a
six month delay for certain distributions to Key Employees of publicly traded
companies. Distributions shall be made in cash, except as noted in Appendix B.

 

(a)          Timing of Distributions

 

	
  (i)

  	
  All
  distributions shall commence in accordance with the following [choose one]:

  
	
   

  	
   

  
	
   

  	
  (A)

  	
  o

  	
  As
  soon as administratively feasible following the distribution event

  
	
   

  	
  (B)

  	
  x

  	
  Monthly
  on specified day 15th [insert day]

  
	
   

  	
  (C)

  	
  o

  	
  Annually
  on specified month and day         [insert
  month and day]

  
	
   

  	
  (D)

  	
  o

  	
  Calendar
  quarter on specified month and day [          month of quarter (insert 1,2 or 3);        
  day (insert day)]

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
  The
  timing of distributions as determined in Section 6.01(a)(i) shall
  be modified by the adoption of:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (A)

  	
  x

  	
  Event
  Delay – Distribution events other than those based on Specified Date or
  Specified Age will be treated as not having occurred for 1 month
  following such event, except as follows:

  
	
   

  	
   

  	
   

  	
   

  	
  A
  distribution event applicable to any Director or Key Employee will be treated
  as not having occurred for 6 months following such event in the case
  of any distribution event to such Participant (other than due to a selected
  Specified Date or Specified Age).

  A
  distribution event due to any Participant’s death will be treated as not
  having occurred for 6 months following such event.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (B)

  	
  o

  	
  Hold
  Until Next Year – Distribution events other than those based on Specified
  Date or Specified Age will be treated as not having occurred for twelve
  months from the date of the event if payment pursuant to Section 6.01(a)(i) will
  thereby occur in the next calendar year or on the first payment date in the
  next calendar year in all other cases.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (C)

  	
  o

  	
  Immediate
  Processing – The timing method selected by the Plan Sponsor under
  Section 6.01(a)(i) shall be overridden for the following
  distribution events [insert events]:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (D)

  	
  o

  	
  Not
  applicable.

  

 

10

 

(b)          Distribution Events

 

Participants may elect the following payment events
and form of payment. If multiple events are selected, the earliest to occur
will trigger payment. If a Specified Date event is followed by either a
Retirement event or a Change in Control event, the Retirement or Change in
Control election will govern the distribution of any then unpaid remaining
portion of the Account applicable to such election, if applicable. If a
Retirement event is followed by a Change in Control event, the Participant’s
Change in Control election will govern the distribution of any then unpaid
remaining portion of the Account applicable to such election, if applicable. For
example, if a Participant elects 10 installment payments for a Specified Date
distribution event and 15 installment payments for a Change in Control
distribution event, and a Change in Control occurs after 2 Specified Date
distribution event installment payments have already been made, the portion of
the Participant’s Account that would otherwise have been paid in 8 remaining
Specified Date installment payments in the absence of a Change in Control will
instead be paid in 15 annual installment payments following the Change in
Control.

 

For installments, insert the range of available
periods (e.g., 5-15) or insert the periods available (e.g., 5,7,9).

 

	
   

  	
   

  	
   

  	
  Lump

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Sum

  	
   

  	
  Installments

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
  x

  	
  Specified
  Date

  	
  x

  	
   

  	
  2-15 years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
  o

  	
  Specified
  Age

  	
   

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
  x

  	
  Separation
  from Service

  	
  x

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
  o

  	
  Separation
  from Service plus 6 months

  	
   

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
  o

  	
  Separation
  from Service plus
              months
  [not to exceed          months]

  	
   

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
  x

  	
  Retirement

  	
  x

  	
   

  	
  2-15 years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vii)

  	
  o

  	
  Retirement
  plus 6 months

  	
   

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (viii)

  	
  o

  	
  Retirement
  plus            months [not
  to exceed          months]

  	
   

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ix)

  	
  o

  	
  Later
  of Separation from Service or Specified Age

  	
   

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (x)

  	
  o

  	
  Later
  of Separation from Service or Specified Date

  	
   

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (xi)

  	
  o

  	
  Disability

  	
   

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (xii)

  	
  o

  	
  Death

  	
   

  	
   

  	
  years

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (xiii)

  	
  x

  	
  Change
  in Control

  	
  x

  	
   

  	
  2-15 years

  

 

11

 

The minimum deferral period
for Specified Date or Specified Age event shall be 1 year.

 

Installments may be paid
[select each that applies]

 

	
  o

  	
  Monthly

  
	
  o

  	
  Quarterly

  
	
  x

  	
  Annually

  

 

(c)          Specified Date and Specified
Age elections may not extend beyond age
         [insert age or “Not Applicable”
if no maximum age applies].

 

12

 

(d)         Payment Election Override

 

Payment of the remaining vested balance of the Participant’s Account
will automatically occur at the time specified in Section 6.01(a) of
the Adoption Agreement in the form indicated upon the earliest to occur of the
following events [check each event that applies and for each event include only
a single form of payment]:

 

	
   

  	
  EVENTS

  	
   

  	
  FORM OF PAYMENT

  
	
  o

  	
  Separation from Service

  	
   

  	
   

  	
  Lump sum

  	
  Installments

  
	
  x

  	
  Separation from  Service before Retirement

  	
   

  	
  x

  	
  Lump sum

  	
  Installments

  
	
  x

  	
  Death

  	
   

  	
  x

  	
  Lump sum

  	
  Installments

  
	
  o

  	
  Disability

  	
   

  	
   

  	
  Lump sum

  	
  Installments

  
	
  o

  	
  Not Applicable

  	
   

  	
   

  	
   

  	
   

  

 

(e)          Involuntary Cashouts

 

	
  x

  	
  If
  the Participant’s vested Account at the time of his Separation from Service
  does not exceed $IRC 402(g) limit ($15,500 indexed) distribution
  of the vested Account shall automatically be made in the form of a single
  lump sum in accordance with Section 9.5 of the Plan.

  
	
   

  	
   

  
	
  o

  	
  There
  are no involuntary cashouts.

  

 

(f)            Retirement

 

	
  x

  	
  Retirement
  shall be defined as a Separation from Service that occurs on or after the
  Participant [insert description of requirements]:

  
	
   

  	
   

  
	
   

  	
  Attains
  age 55 or older with 5 or more Years of Service, or attains age 65

  
	
   

  	
   

  
	
  o

  	
  No
  special definition of Retirement applies.

  

 

13

 

(g)         Distribution Election Change

 

A Participant

 

	
  x

  	
  Shall

  
	
  o

  	
  Shall Not

  

 

be permitted to modify a
scheduled distribution date and/or payment option in accordance with Section 9.2
of the Plan.

 

A Participant shall
generally be permitted to elect such modification any number of times.

 

Administratively, allowable
distribution events will be modified to reflect all options necessary to
fulfill the distribution change election provision.

 

(h)         Frequency of Elections

 

The Plan Sponsor

 

	
  x

  	
  Has

  
	
  o

  	
  Has Not

  

 

Elected
to permit annual elections of a time and form of payment for amounts deferred
under the Plan.

 

14

 

7.01                        VESTING

 

(a)         Matching Contributions

 

The Participant’s vested interest in the amount credited to his Account
attributable to Matching Contributions shall be based on the following
schedule:

 

	
  o

  	
  Years of Service

  	
  Vesting %

  	
   

  
	
   

  	
  0

  	
   

  	
  (insert
  ‘100’ if there is immediate vesting)

  
	
   

  	
  1

  	
   

  	
   

  
	
   

  	
  2

  	
   

  	
   

  
	
   

  	
  3

  	
   

  	
   

  
	
   

  	
  4

  	
   

  
	
   

  	
  5

  	
   

  
	
   

  	
  6

  	
   

  
	
   

  	
  7

  	
   

  
	
   

  	
  8

  	
   

  
	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  
	
  o

  	
  Other:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  o

  	
  Class year
  vesting applies.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  x

  	
  Not applicable.

  	
   

  
					

 

(b)         Other Employer Contributions

 

A Director’s vested interest in the amount credited to his Account
attributable to Employer contributions shall be immediately 100% vested. The
Eligible Employee’s vested interest in the amount credited to his Account
attributable to Employer contributions other than Matching Contributions shall
be based on the following schedule:

 

	
  x

  	
  Years of Service

  	
  Vesting %

  	
   

  
	
   

  	
  0

  	
  0%

  	
  (insert
  ‘100’ if there is immediate vesting)

  
	
   

  	
  1

  	
  25%

  	
   

  
	
   

  	
  2

  	
  50%

  	
   

  
	
   

  	
  3

  	
  75%

  	
   

  
	
   

  	
  4

  	
  100%

  	
   

  
	
   

  	
  5

  	
   

  	
   

  
	
   

  	
  6

  	
   

  	
   

  
	
   

  	
  7

  	
   

  	
   

  
	
   

  	
  8

  	
   

  	
   

  
	
   

  	
  9

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Other:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Class year
  vesting applies.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Not
  applicable.

  	
   

  	
   

  

 

15

 

(c)          Clawback Provision: In the event
that an Eligible Employee or Director is terminated for “Cause” all Employer
contributions to such Participant’s account, whether or not vested, will be
immediately forfeited and neither the Plan Sponsor, any Employer or the Plan
shall be liable for the payment of such forfeited amounts, and neither the
Participant nor his or her beneficiaries shall thereafter have any rights with
respect to such forfeited amounts. “Cause” means, with respect to a
Participant, that, in the reasonable determination of the Company, such
Participant has (i) been convicted of or pleaded guilty or nolo contendere
to a felony or any crime involving moral turpitude or dishonesty; (ii) participated
in a fraud or act of dishonesty against the Company; (iii) willfully and
materially breached a Company policy; (iv) intentionally damaged the
Company’s property; (v) willfully and materially breached such Participant’s
Proprietary Information and Inventions Agreement with the Company; (vi) engaged
in conduct that demonstrates gross unfitness to serve; or (vii) repeatedly
failed to satisfactorily perform job duties to which such Participant
previously agreed in writing. The conduct described under clauses (iii), (vi) and
(vii) above will only constitute Cause if such conduct is not cured within
90 days after the Participant’s receipt of written notice from the Company
specifying the particulars of the conduct that may constitute Cause.

 

(d)          Acceleration of Vesting

 

A Participant’s vested interest in his Account will automatically be
100% upon the occurrence of the following events: [select the ones that are
applicable]:

 

	
  (i)

  	
  x

  	
  Death

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
  o

  	
  Disability

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
  o

  	
  Change
  in Control

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
  x

  	
  Eligibility
  for Retirement

  
	
   

  	
   

  	
   

  
	
  (v)

  	
  o

  	
  Other:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
  o

  	
  Not
  applicable.

  

 

(e)          Years of Service

 

(i)                    A Participant’s Years of
Service shall include all service performed for the Employer and

 

	
  x

  	
  Shall

  
	
  o

  	
  Shall
  Not

  

 

include
service performed for the Related Employer.

 

16

 

(ii)                    Years of Service shall also
include service performed for the following entities:

 

 

(iii)                 Years of Service shall be
determined in accordance with (select one)

 

	
  (A)  x

  	
  The
  elapsed time method in Treas. Reg. Sec.  1.410(a)-7

  
	
   

  	
   

  
	
  (B)  o

  	
  The
  general method in DOL Reg. Sec. 2530.200b-1 through b-4

  
	
   

  	
   

  
	
  (C)  o

  	
  The
  Participant’s Years of Service credited under [insert name of plan]

  
	
   

  	
   

  
	
   

  	
   

  
	
  (D)  o

  	
  Other:

  

 

(iv)                o Not
applicable.

 

17

 

8.01                        UNFORESEEABLE
EMERGENCY

 

(a)           A withdrawal due to an Unforeseeable
Emergency as defined in Section 2.24:

 

	
  x

  	
  Will

  
	
  o

  	
  Will
  Not [if Unforeseeable Emergency withdrawals are not permitted, proceed to
  Section 9.01]

  

 

be
allowed.

 

(b)                                 Upon a
withdrawal due to an Unforeseeable Emergency, a Participant’s deferral election
for the remainder of the Plan Year:

 

	
  x

  	
  Will

  
	
  o

  	
  Will
  Not

  

 

be
cancelled. If cancellation occurs, the Participant may resume participation in
accordance with Article 4 of the Plan.

 

18

 

9.01        INVESTMENT DECISIONS

 

Investment
decisions regarding the hypothetical amounts credited to a Participant’s
Account shall be made by:

 

	
  (a)

  	
   

  	
  x

  	
   

  	
  The
  Participant or his Beneficiary, except as specified in 9.01(b) and
  subject to the specifications in Appendix B.

  
	
  (b)

  	
   

  	
  x

  	
   

  	
  The
  Employer to the extent specified in Appendix B.

  

 

19

 

10.01      GRANTOR
TRUST

 

The
Employer [select one]:

 

	
  x

  	
   

  	
  Does

  
	
  o

  	
   

  	
  Does
  Not

  

 

intend
to establish a grantor trust in connection with the Plan.

 

20

 

11.01      TERMINATION
UPON CHANGE IN CONTROL

 

The
Plan Sponsor

 

	
  x

  	
   

  	
  Reserves

  
	
  o

  	
   

  	
  Does
  Not Reserve

  

 

the
right to terminate the Plan and distribute all vested amounts credited to
Participant Accounts upon a Change in Control as described in Section 9.7.

 

11.02      AUTOMATIC  DISTRIBUTION UPON CHANGE IN CONTROL

 

Distribution
of the remaining vested balance of each Participant’s Account

 

	
   

  	
   

  	
  o

  	
   

  	
  Shall

  
	
   

  	
   

  	
  x

  	
   

  	
  Shall
  Not

  

 

automatically
be paid as a lump sum payment upon the occurrence of a Change in Control as
provided in Section 9.7.

 

11.03      CHANGE
IN CONTROL

 

A
Change in Control for Plan purposes includes the following [select each
definition that applies]:

 

	
  (a)

  	
   

  	
  x

  	
   

  	
  A
  change in the ownership of the Employer as described in
  Section 9.7(c) of the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  x

  	
   

  	
  A
  change in the effective control of the Employer as described in
  Section 9.7(d) of the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  x

  	
   

  	
  A
  change in the ownership of a substantial portion of the assets of the
  Employer as described in Section 9.7(e) of the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  o

  	
   

  	
  Not
  Applicable.

  

 

21

 

12.01      GOVERNING
STATE LAW

 

The
laws of California  shall apply in
the administration of the Plan to the extent not preempted by ERISA.

 

22

 

EXECUTION PAGE

 

The
Plan Sponsor has caused this Adoption Agreement to be executed this 21st day of
December, 2007.

 

	
   

  	
  PLAN SPONSOR:

  	
   

  	
  Amylin
  Pharmaceuticals, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Lloyd A. Rowland

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Vice
  President, Governance and Compliance,

  and Secretary

  

 

23

 

APPENDIX A

 

SPECIAL EFFECTIVE DATES

 

24

 

APPENDIX B

 

STOCK INVESTMENT OPTIONS

 

The investment options made available to
Participants in accordance with Section 7.1 shall be subject to the
following restrictions:

 

With respect to Employees, the Amylin
Pharmaceuticals Common Stock Fund (RTLC) shall not be an available investment
option.

 

With respect to Directors, the Amylin
Pharmaceuticals Common Stock Fund (RTLC) shall be an available investment
option.

 

To the extent that a distribution is to be made
under the Plan on behalf of a Director, any amounts treated as invested in the
Amylin Pharmaceuticals Common Stock Fund (RTCL) shall be distributed in-kind as
stock.

 

With respect to Employer contributions, the
Employer shall determine the applicable investment option for such
contributions.

 

25

 

APPENDIX C

 

PLAN ADMINISTRATION UPON A CHANGE
IN CONTROL

 

Upon and after the occurrence of a Change in Control, the Plan
Administrator shall be a committee of not fewer than three nor more than five
individuals to be selected by the person who was, immediately prior to such
event, the Plan Sponsor’s Chief Executive Officer or, if no one was serving in
such capacity or such person refuses to act, the Plan Sponsor’s highest ranking
officer at such time who is willing to so act (the “Appointing Officer”);
provided, however, the Administrator, as constituted immediately prior to a
Change in Control, shall continue to act as the Administrator of this Plan
until the date on which the persons selected by the Appointing Officer have
accepted the responsibilities of administrator under this Plan.

 

The persons administering the Plan following a Change in Control shall
have all of the powers accorded to the Administrator under the Plan, including
under Article 12 of the Plan, at such time as they accept the
responsibilities of Administrator under the Plan; provided, however, upon and
after the occurrence of a Change in Control, the Administrator shall have no
power to direct the investment of Plan or Trust assets or select any investment
manager or custodial firm for the Plan or Trust, which decisions shall be made
by the Plan Sponsor.  Upon and after the
occurrence of a Change in Control, the Plan Sponsor must: (1) pay all
reasonable administrative expenses and fees of the Administrator; (2) indemnify
the Administrator against any costs, expenses and liabilities including,
without limitation, attorney’s fees and expenses arising in connection with the
performance of the administrator hereunder, except with respect to matters
resulting from the gross negligence or willful misconduct of the Administrator
or its employees or agents; and (3) supply full and timely information to
the Administrator on all matters relating to the Plan, the Trust, the
Participants and their Beneficiaries, the Account Balances of the Participants,
the date and circumstances of the disability, death or termination of
employment of the Participants, and such other pertinent information as the
Administrator may reasonably require. 
Upon and after a Change in Control, the Administrator may only be
terminated (and a replacement appointed) by the Appointing Officer.  Upon and after a Change in Control, the
Administrator may not be terminated by the Plan Sponsor or its rights or
responsibilities diminished by any amendment to the Plan.”

 

26Exhibit 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 and

L/C Issuer,

 

SILICON VALLEY BANK

and RBS ASSET FINANCE, INC.,

 as Syndication
Agents,

 

COMERICA BANK

and BMO CAPITAL MARKETS FINANCING, INC.,

as Documentation Agents,

 

and

 

the LENDERS  set forth

on 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

  

 

i

 

	
  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

 

	
  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

 

	
  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

 

	
  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

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT
(this “Agreement”)
is entered into as of December 21,
2007 among AMYLIN PHARMACEUTICALS, INC., a Delaware
corporation (the “Company”), and each of its subsidiaries listed on the
Signature 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 provide
a term loan facility and a revolving credit facility, and the Lenders have
indicated their willingness to lend and the L/C Issuer has indicated its
willingness to issue letters of credit, in each case, on the terms and subject
to the conditions set forth herein.

 

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

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

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

 

“Acquisition” by any Person, means the
purchase or acquisition in a single transaction or a series of related
transactions by any such Person, individually or, together with its Affiliates,
of (a) any Equity Interest of any other Person (other than an existing
Subsidiary of the Company) which are sufficient such that such other Person
becomes a direct or indirect Subsidiary of the Company or (b) all or a
substantial portion of the Property, including, without limitation, all or a
substantial portion of the property comprising a division, business unit or
line of business, of any other Person (other than a Subsidiary of the Company), whether involving a
merger or consolidation with such other Person. “Acquire” has a meaning
correlative thereto.

 

“Activation Event” has
the meaning specified in Section 6.18.

 

“Administrative
Agent” means Bank of America in its capacity as administrative agent
and collateral agent under any of the Loan Documents, or any successor
administrative agent and/or collateral agent.

 

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

 

 

“Administrative
Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

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

 

“Aggregate
Commitments” means the Commitments of all the Lenders.

 

“Aggregate Credit
Exposures” means, at any time, in respect of (a) the Term
Facility, the aggregate amount of the Term Loans, outstanding at such time and (b) in
respect of the Revolving Credit Facility, the sum of (i) the unused
portion of the Revolving Credit Facility at such time and (ii) the Total
Revolving Credit Outstandings at such time.

 

“Aggregate Basket
Amount” means, as of any date of determination, the aggregate amount of the
following transactions if (i) entering into such transaction gave rise to
a Covenant Triggering Event or (ii) such transaction occurs during any
Covenant Trigger Period: (a) the aggregate amount (determined in
accordance with the penultimate sentence of the definition of “Guaranty”) of
Guaranties made in accordance with Section 7.02(i); (b) the
aggregate principal amount of Indebtedness incurred to finance insurance
premiums in accordance with Section 7.02(j); (c) the aggregate
principal amount of Indebtedness in respect of Capitalized Leases, Synthetic
Lease Obligations and purchase money obligations incurred in accordance with Section 7.02(k);
(d) the aggregate principal amount of unsecured Indebtedness incurred in
accordance with Section 7.02(l); (e) the aggregate principal
amount of Indebtedness in respect of performance bonds, bid bonds, appeal
bonds, surety bonds and similar obligations incurred in accordance with Section 7.02(m);
(f) the aggregate amount (determined in accordance with the penultimate
sentence of the definition of “Guaranty”) of guaranties made in accordance with
Section 7.02(q); (g) the aggregate amount of advances to
officers, directors and employees of the Company and its Subsidiaries made in
accordance with Section 7.03(c); (h) the aggregate amount of
Investments by any Loan Party in any Unrestricted Subsidiary in accordance with
Section 7.03(d)(iv); (i) the aggregate amount of purchases or
acquisitions made in accordance with Section 7.03(h), provided
that such amount(s) shall be calculated based upon the total cash and
noncash consideration (including the fair market value of all Equity Interests
issued or transferred to the sellers thereof, all indemnities, earnouts and
other contingent payment obligations (to the extent such amounts can reasonably
be estimated as of the date of such calculation) to, and the aggregate amounts
paid or to be paid under noncompete, consulting and other affiliated agreements
with, the sellers thereof and all assumptions of debt, liabilities and other
obligations in connection therewith) paid by or on behalf of the Company and
its Subsidiaries for any such purchase or other acquisition; (j) the
aggregate amount of Investments made in accordance with Section 7.03(i),
provided that any determination of the amount of such Investment shall
include all cash and noncash consideration (including the fair market value of
all Equity Interests issued or transferred to the sellers thereof, all
indemnities, earnouts and other contingent payment obligations (to the extent
such amounts can reasonably be estimated as of the date of such calculation)
to, and the aggregate amounts paid or to be paid under noncompete, consulting
and other affiliated agreements with, the sellers thereof and all assumptions
of debt, liabilities and other obligations in connection therewith) paid by or
on behalf of the Company 

 

2

 

and its Subsidiaries in connection with such
Investment; and (k) the aggregate amount of purchases of or payments in
respect 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 Lender
at any time, the percentage (carried out to the ninth decimal place) of the
Term Facility represented by (i) on
or prior to the Closing Date, such Term Lender’s Term Commitment at such
time and (ii) thereafter, the principal amount of such Term Lender’s Term
Loans at such time and (b) in
respect of the Revolving Credit Facility, with respect to any Revolving Credit
Lender at any time, the percentage (carried out to the ninth decimal place) of
the Revolving Credit Facility represented by such Revolving Credit Lender’s
Revolving Credit Commitment at such time.  If the commitment of each Revolving Credit
Lender to make Revolving Credit Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 8.02,
or if the Revolving Credit Commitments have expired, then the Applicable
Percentage of each Revolving Credit Lender in respect of the Revolving Credit
Facility shall be determined based on the Applicable Percentage of such
Revolving Credit Lender in respect of the Revolving Credit Facility most
recently in effect, giving effect to any subsequent assignments.  The initial Applicable Percentage of each
Lender in respect of each Facility is set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.

 

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

 

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

 

“Appropriate Lender” means, at
any time, (a) with respect to either the Term Facility or the Revolving
Credit Facility, a Lender that has a Commitment with respect to such Facility
or 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 Issuer
and (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) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

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

 

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

 

3

 

“Assignment and
Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit E or any other form
approved by the Administrative Agent.

 

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

 

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

 

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

 

“Availability
Period” means in respect of the Revolving Credit Facility and the
Permitted F/X Facility, the period from and including the Closing Date to
earliest of (i) the Maturity Date for the Revolving Credit Facility, (ii) the
date of termination of the Revolving Credit Commitments pursuant to Section 2.06,
and (iii) the date of termination of the commitment of each Revolving
Credit Lender to make Revolving Credit Loans and of the obligation of the L/C
Issuer 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) the
Federal Funds Rate plus 1⁄2 of 1% and (b) the rate of interest in effect for
such day as publicly announced from time to time by Bank of America as its “prime
rate.”  The “prime rate” is a rate set by
Bank of America based upon various factors including Bank of America’s costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate.  Any change in
such rate announced by Bank of America shall take effect at the opening of
business on the day specified in the public announcement of such change.

 

“Base Rate Loan”
means a Revolving Credit Loan or a Term
Loan 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.

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof, in each
case maturing not more than 365 days from the date of acquisition thereof;

 

(c)           time
deposits with, or insured certificates of deposit or bankers’ acceptances of, (a) any
Lender or (b) any other commercial bank that (i) is organized under
the laws of the United States of America, any state thereof or the District of
Columbia or is the principal banking subsidiary of a bank holding company
organized under the laws of the United States of America, any state thereof or
the District of Columbia, and is a member of the Federal Reserve System, (ii) issues
(or the parent of which issues) commercial paper rated as described in clause (d) of
this definition and (iii) has combined capital and surplus of at least
$100,000,000 (or foreign currency equivalent thereof), in each case with
respect to clauses (a) and (b) with maturities of not more than 365
days from the date of acquisition thereof;

 

(d)           commercial
paper issued by any Person organized under the laws of any state of the United
States 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 then
equivalent grade) by S&P, in each case with maturities of not more
than 270 days from the date of acquisition thereof;

 

5

 

(e)           Investments
in money market investment programs that (i) have at least 90% of their
assets 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)            all
other Investments permitted by the Company’s Investment Policy in effect as of
the date hereof.

 

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

 

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

 

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

 

“CERCLIS” means the
Comprehensive Environmental Response, Compensation and Liability Information
System maintained by the U.S. Environmental Protection Agency.

 

“CFC” means a
Person that is a controlled foreign corporation under Section 957 of the
Code.

 

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

 

“Change of Control”
means an event or series of events by which:

 

(a)           any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, but excluding the Loan Parties, any
employee benefit plan of the Company or its Subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have “beneficial ownership” of all securities that
such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time (such right, an “option right”)),
directly or indirectly, of 35% or more of the equity securities of the Company
entitled to vote for members of the board of directors or
equivalent governing body of the  Company on a fully-diluted basis (and
taking into account all such securities that such “person” or “group” has the
right to acquire pursuant to any option right); or

 

6

 

(b)           during
any period of 24 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Company cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of
such election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election
or nomination at least a majority of that board or equivalent governing body
(excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a member of
that board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors).

 

“Closing Date”
means the first date all the conditions precedent in Section 4.01
are 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 all
of the other property that is or is intended under the terms of the Collateral
Documents to be subject to Liens in favor of the Administrative Agent for the
benefit of the Secured Parties, except that in no event shall Collateral
include Excluded Collateral

 

“Collateral
Documents” means, collectively, the Security Agreement, the
Mortgages, the Account Control Agreements, each of the mortgages, collateral
assignments, Perfection Certificate Supplements, security agreements, pledge
agreements or other similar agreements delivered to the Administrative Agent
pursuant to Section 6.12, and each of the other agreements,
instruments or documents that creates or purports to create a Lien in favor of
the Administrative Agent for the benefit of the Secured Parties.

 

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

 

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

 

“Committed Loan
Notice” means a notice of (a) a Term Borrowing, (b) a
Revolving Credit Borrowing, (c) a conversion of Loans from one Type to the
other, 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 the
meaning specified in the introductory paragraph hereto.

 

7

 

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

 

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

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.

 

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

 

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

 

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

 

“Credit Extension”
means each of the following:  (a) a
Borrowing, (b) an L/C Credit Extension and (c) execution of a Secured
Hedge 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 similar
debtor relief Laws of the United States or other applicable jurisdictions from
time 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, with
the giving of any notice, the passage of time, or both, would be an Event of
Default.

 

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

 

8

 

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

 

“Deferred Compensation
Plan” 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 retirement
plan.

 

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

 

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

 

“Domestic
Subsidiary” means any Subsidiary that is organized under the laws of
any 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 may
be 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 governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

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

 

“Environmental Permit” means any
permit, approval, identification number, license or other authorization
required under any Environmental Law.

 

9

 

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

 

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

 

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

 

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

 

“Eurocurrency Rate”
means for any Interest Period with respect to a Eurocurrency Rate Loan, the
rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent
from time to time) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, for Dollar deposits
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period.  If such rate is
not available at such time for any reason, then the “Eurocurrency Rate” for
such Interest Period shall be the rate per annum determined by the Administrative
Agent to be the rate at which Dollar deposits for delivery on the first day of
such Interest Period in Same Day Funds in the approximate amount of the
Eurocurrency Rate Loan being made, continued or converted by Bank of America
and with a term equivalent to such Interest Period would be offered by Bank of
America’s London Branch to major banks in the London at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.

 

10

 

“Eurocurrency Rate
Loan” means a Revolving Credit Loan or a Term  Loan that bears
interest 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 a
wholly-owned Subsidiary, (ii) any Equity Interests in (A) Psylin
Neurosciences, Inc. (or any successor thereto), (B) the Persons set
forth on Schedule 1.01 hereto and (C) to the extent such Investment
is otherwise permitted under the Loan Documents, any other Person that is not a
Subsidiary and in which any Loan Party owns Equity Interests (valued in
accordance with the last sentence of the definition of “Investments”)
representing a minority interest in such Person in an aggregate amount not to
exceed $25,000,000, (iii) Intellectual Property, (iv) up to
$20,000,000 from time to time deposited to secure Swap Contracts, (v) cash
in escrow in an amount up to $10,000,000 at any time on deposit for the purpose
of securing the Permitted Ohio Financing Facility, (vi) that certain
parcel of undeveloped real property located at 8835 Trade Port Drive, Hamilton,
Ohio, 45011, (vii) the Ohio Sale/Leaseback Property and (viii) any
Equity Interests in, and assets held by, any Royalty-Backed Financing
Subsidiary to the extent such Royalty-Backed Financing Subsidiary is created
with respect to a Permitted Royalty-Backed Financing permitted hereunder.

 

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

 

“Existing Letters of
Credit” means the letters of credit identified on Schedule 1.01A
hereto; provided, that such letters of credit (i) may not be
amended, restated, increased or otherwise modified at any time without the
express written consent of the L/C Issuer and (ii) may not be replaced
except by a Letter of Credit issued under and in accordance with the Credit
Agreement.

 

11

 

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

 

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

 

“FDA Warning Letter”
means, with respect to any Person, a Warning Letter to such Person from the FDA
or 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 the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
(rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
Bank of America on such day on such transactions as determined by the
Administrative Agent.

 

“Fee Letter”
means the collective reference to (a) the summary of terms with respect to
the Term Loan Facility, dated October 5, 2007, between the Borrowers and
the Arranger and (b) the fee letter, dated December 20, 2007, among
the 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 than
that in which the Borrowers are resident for tax purposes.  For purposes of this definition, the United
States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

 

“Foreign
Pharmaceutical Regulator” means the International Conference on
Harmonization or any foreign regulatory body substantially similar thereto or
to the FDA.

 

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

 

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

 

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

 

12

 

“FX Facility Sublimit”
means an amount equal to the lesser of the unused Revolving Credit Commitments and
$15,000,000.  The FX Facility Sublimit is
part 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 Hedge
Agreement under the Permitted FX Facility, 
an amount equal to (i) the amount determined as the mark-to-market
value for such Swap Contract as of such date, as determined by and in
accordance with such Swap Contract plus (ii) 10% of the notional
amount of such Swap Contract.

 

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

 

“Governmental
Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).

 

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

 

13

 

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

 

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

 

“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 the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:

 

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

 

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

 

(c)           net
obligations of such Person under any Swap Contract;

 

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

 

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

 

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

 

(g)           all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other
Person or any warrant, right or option to acquire such Equity Interest to the
extent such obligations mature (excluding any maturity as a result of an
optional redemption by such Person) on or prior to the fourth anniversary of
the Closing Date; and

 

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

 

14

 

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

 

“Indemnified Taxes”  means Taxes other than Excluded Taxes.

 

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

 

“Information” has
the meaning specified in Section 10.07.

 

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

 

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

 

(a)           patents, patent rights, patent
applications, copyrights, copyright rights, works which are the subject matter
of 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-bound
or out-bound) to use any of the property listed in subsection (a) above,
rights in works of authorship, and contract rights relating to computer
software programs, in whatever form created or maintained;

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

(c)           no
Interest Period shall extend beyond the Maturity Date of the Facility under
which such Loan was made.

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
Equity Interests of another Person, (b) a loan, advance or capital
contribution to, Guaranty or assumption of debt of, or purchase or other
acquisition of any other debt or interest in, another Person, excluding all
accounts receivables acquired in the ordinary course of business, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit or all or a substantial part of the business
of, such Person.  For purposes of
covenant compliance (including, without limitation, calculation of the
Aggregate Basket Amount), the amount of any Investment shall be the amount
actually invested, without adjustment for subsequent increases or decreases in
the value of such Investment.

 

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

 

“IRS”
means the United States Internal Revenue Service.

 

“ISP” means, with
respect 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 Issuer
and any Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating
to such Letter of Credit.

 

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

 

16

 

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 of
its participation in any L/C Borrowing in accordance with its Applicable
Revolving Credit Percentage.

 

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

 

“L/C Credit
Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

 

“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 be
drawn under all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount 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 such
in such Lender’s Administrative Questionnaire, or such other office or offices
as a Lender may from time to time notify the Borrowers and the Administrative
Agent.

 

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

 

“Letter of Credit
Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C
Issuer.

 

“Letter of Credit
Expiration Date” means the date that is one year after the Letter of
Credit Maturity Date.

 

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

 

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

 

17

 

“Letter of Credit
Sublimit” means an amount equal to the Revolving Credit
Commitments.  The Letter of Credit
Sublimit 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 or
other security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Loan” means
an extension of credit by a Lender to the Borrowers under Article II
in the form of a Term Loan or a Revolving Credit Loan.

 

“Loan Documents”
means, collectively, (a) this Agreement, (b) the Notes, (c) the
Collateral Documents, (d) the Fee Letter, (e) each Issuer Document, (f) each
Secured Hedge Agreement, (g) each Secured Cash Management Agreement, (h) the
Post Closing Agreement and (i) each other amendment or joinder with
respect to any of the foregoing entered into from time to time; provided
that for purposes of the definition of “Material Adverse Effect” and Articles
IV through IX, “Loan Documents” shall not include Secured Hedge
Agreements or Secured Cash Management Agreements.

 

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

 

“Material Adverse
Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, assets, properties, liabilities
(actual or contingent) or condition (financial or otherwise) of the Company or
the Company and its Subsidiaries taken as a whole; (b) a material
impairment of the rights and remedies of the Administrative Agent or any Lender
under any Loan Document, or of the ability of any Loan Party to perform its
obligations under any Loan Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a
party.

 

“Material Contract”
means, with respect to any Person, (i) each contract filed as an exhibit
to 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 included
as an exhibit to the Company’s annual or quarterly reports filed under the
Securities Exchange Act of 1934, as amended, and (ii) any other contract
or agreement to which a Loan Party is a party if a default by such Loan Party
thereunder could give rise to an Event of Default under Section 8.01(e) or
otherwise 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 be
the next preceding Business Day.

 

18

 

“Maximum Aggregate
Basket Amount” means $25,000,000.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Non-Extension Notice Date” has
the 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 the
National Priorities List under CERCLA.

 

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

 

“Ohio Sale/Leaseback
Property” means electrical equipment, a housing structure and related
tangible property located at 8874 Tradeport Drive.

 

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

 

19

 

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

 

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

 

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

 

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

 

“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) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by the Borrowers or any ERISA Affiliate or to
which the Borrowers or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of
ERISA, has made contributions at any time during the immediately preceding five
plan years.

 

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

 

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

 

“Permitted Encumbrances” has the meaning specified in the
Mortgages.

 

“Permitted
FX Facility” means each foreign exchange Swap Contract(s) entered into
between the Company and Bank of America (or an affiliate thereof) in accordance
with Section 2.04; provided that the aggregate FX Swap Value
shall not exceed at any time the FX Facility Sublimit.

 

20

 

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

 

“Permitted Ohio
Financing Facility Liens” means Liens upon the Collateral in favor of the
State of Ohio in connection with the Permitted Ohio Financing Facility, which
shall be permitted hereunder only so long as (a) immediately before and
after giving pro forma effect to the Permitted Ohio Financing Facility, no
Default shall have occurred and be continuing, (b) all such Liens are
subject and subordinate to the Liens of the Secured Parties under the Loan Documents
and (c) the State of Ohio or appropriate Governmental Authority of the
State of Ohio shall enter into a subordination agreement in favor of the
Secured Parties substantially in the form of Schedule 1.01B hereto and
otherwise reasonably satisfactory to the Administrative Agent.

 

“Permitted
Ohio Sale/Leaseback” means a sale, and the subsequent lease by the Company
or any subsidiary, of the Ohio Sale/Leaseback Property, provided such
financing shall be permitted only so long as immediately before and after
giving effect to such transaction, no Covenant Triggering Event shall occur and
no Default shall have occurred and be continuing.

 

“Permitted
Royalty-Backed Financing” means any financing transaction, including any
loan, note or bond issuance or sale, assignment or grant of royalty or revenue
interests, by a Royalty-Backed Financing Subsidiary, provided that (i) immediately
before and after giving effect to each such transaction, no Covenant Triggering
Event shall occur and no Default shall have occurred and be continuing and (ii) if
applicable, the average weighted maturity date for such financing shall not be
earlier than a date that is at least four years after the Closing Date.

 

“Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.

 

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

 

“Platform” has the
meaning specified in Section 6.02.

 

“Pledged Debt” has the
meaning specified in Section 2.01(b) of the Security
Agreement.

 

“Pledged
Equity” has the meaning specified in Section 2.01(a) of
the Security Agreement.

 

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

 

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

 

21

 

“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 such
Person’s Affiliates.

 

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

 

“Request for Credit
Extension” means (a) with respect to a Borrowing, conversion or
continuation of Term Loans or Revolving Credit Loans, a Committed Loan Notice
and (b) with respect to an L/C Credit Extension, a Letter of Credit
Application.

 

“Required Additional Term Lenders” means, as of any date of
determination, Term Lenders holding more
than 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 (with
the aggregate amount of each Revolving Credit Lender’s risk participation and
funded participation in L/C Obligations) and (b) aggregate unused
Revolving Credit Commitments; provided that the unused Revolving Credit
Commitment of, and the portion of the Total Outstandings held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

 

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

 

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

 

“Responsible
Officer” means the chief executive officer, president, chief
financial officer, senior vice president and any vice president subject to the
reporting requirements of Section 16 of the Securities Exchange Act of
1934 of a Loan Party and, if the Loan Party is a limited liability company, any
manager of such Loan Party.  Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.

 

22

 

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

 

“Revolving Credit
Borrowing” means a borrowing consisting of simultaneous Revolving
Credit 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 Lenders
pursuant to Section 2.01(b).

 

“Revolving Credit
Commitment” means, as to each Revolving Credit Lender, its obligation
to (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 principal
amount at any one time outstanding not to exceed the amount set forth opposite
such Lender’s name on Schedule 2.01 under the caption “Revolving Credit
Commitment” or opposite such caption in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable, as such amount may
be adjusted from time to time in accordance with this Agreement.

 

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

 

“Revolving Credit
Lender” means, at any time, (a) so long as the Revolving Credit
Commitments are outstanding, any Lender that has a Revolving Credit Commitment
at such time or (b) if the Revolving Credit Commitments have been
terminated or expired, any Lender that holds a Revolving Credit Loan, is party
to a Secured Hedge Agreement under the Permitted FX Facility or a holds a
participation in L/C Obligations at such time.

 

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

 

“Revolving Credit
Note”
means a promissory note made by the Borrowers in favor of a Revolving Credit
Lender 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 and
American Stock Transfer & Trust Company, as amended.

 

“Royalty-Backed
Financing Subsidiary” means a special purpose subsidiary of the Loan
Parties formed for the purpose of entering into a Permitted Royalty-Backed
Financing.

 

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

 

“Same Day Funds”
means immediately available funds.

 

23

 

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

 

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

 

“Secured Hedge Agreement” means the Permitted FX Facility and
any interest rate Swap Contract permitted under Article VI or VII
that 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 Hedge
Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the
Administrative Agent from time to time pursuant to Section 9.05,
and the other Persons the Obligations owing to which are or are purported to be
secured by the Collateral under the terms of the Collateral Documents.

 

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

 

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

 

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

 

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

 

“Senior 2004 Notes Documents” means that certain Indenture
between 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 other
documents pursuant to which the Senior 2004 Notes have been or will be issued
or otherwise setting forth the terms of the Senior 2004 Notes.

 

“Senior 2007 Notes Documents” means that certain Indenture
between Amylin Pharmaceuticals, Inc., a Delaware corporation, and The Bank
of 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 documents
pursuant to which the Senior 2007 Notes have been or will be issued or
otherwise setting forth the terms of the Senior 2007 Notes.

 

“Senior Notes Documents” means the Senior 2004 Notes
Documents 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) the
fair value of the property of such Person is greater than the total amount of
liabilities, including contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond
such 

 

24

 

Person’s ability to pay such debts and liabilities as
they mature, (d) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small capital (provided, that,
with respect to the Company and its Subsidiaries, this clause (d) shall
apply only to the Company and the Company and its Subsidiaries on a
consolidated basis), and (e) such Person is able to pay its debts and
liabilities, contingent obligations and other commitments as they mature in the
ordinary course of business.  The amount
of contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.

 

“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall
refer to a Subsidiary or Subsidiaries of the Company.

 

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

 

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

 

25

 

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

 

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

 

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

 

“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 by
each 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 the
Borrowers pursuant to Section 2.01(a) in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Term Lender’s name on Schedule 2.01 under the caption “Term
Commitment” or opposite such caption in the Assignment and Assumption pursuant
to which such Term Lender becomes a party hereto, as applicable, as such amount
may be adjusted from time to time in accordance with this Agreement.

 

“Term Facility”
means, at any time, (a) on or
prior to the Closing Date, the aggregate amount of the Term Commitments at such
time and (b) thereafter, the aggregate principal amount of the Term
Loans 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 has
a 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” means
a promissory note made by the Borrowers in favor of a Term Lender evidencing
Term Loans made by such Term Lender, substantially in the form of Exhibit B.

 

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

 

26

 

“Threshold Amount”
means $30,000,000.

 

“Total Revolving
Credit Outstandings” means the aggregate Outstanding Amount of all
Revolving Credit Loans and L/C Obligations plus the aggregate FX Swap
Value 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 a
Eurocurrency Rate Loan.

 

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

 

“Unfunded Pension
Liability” means 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 in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.

 

“Unrestricted Cash”
means, with respect to the Company and the other Loan Parties, the aggregate
amount of Unrestricted Cash Equivalents in each case subject to an Account
Control Agreement in favor of the Administrative Agent, for the benefit of the
Secured Parties.

 

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

 

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

 

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

 

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

 

27

 

(d)           Cash
Equivalents described in clause (e) of the definition thereof that are not
administered by financial institutions that have the highest rating obtainable
from either S&P or Moody’s;

 

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

 

(f)            cash
that constitutes Excluded Collateral.

 

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

 

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

 

“Unreimbursed
Amount” 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 of
the United States of America and that is not a CFC.

 

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

 

(a)   The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. 
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document
(including any Organization Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein,”
“hereof” and “hereunder,” and words of similar import when used
in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references
in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and
Preliminary Statements, Exhibits and Schedules to, the Loan Document in which
such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

28

 

(b)   In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including;”
the words “to” and “until” each mean “to but excluding;”
and the word “through” means “to and including.”

 

(c)   Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.

 

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

 

(b)           Changes in GAAP.  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrowers or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrowers shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the
approval of the Required Lenders); provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Borrowers shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting
forth a reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP.

 

1.04         Rounding.  Any financial ratios required to be maintained
by the Borrowers pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

 

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

 

1.06         Letter of Credit Amounts.  Unless otherwise specified herein, the amount
of a Letter of Credit at any time shall be deemed to be the stated amount of
such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Document related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to
be the maximum stated amount of such Letter of Credit after giving effect to
all such increases, whether or not such maximum stated amount is in effect at
such time.

 

29

 

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

 

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

 

(b)           The
Revolving Credit Borrowings.  Subject
to the terms and conditions set forth herein, each Revolving Credit Lender
severally agrees to make loans (each such loan, a “Revolving Credit Loan”) to the Borrowers in Dollars from
time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender’s Revolving Credit Commitment; provided, however, that
after giving effect to any Revolving Credit Borrowing, (i) the Total
Revolving Credit Outstandings shall not exceed the Revolving Credit Facility
and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of
any Revolving Credit Lender, plus such Revolving Credit Lender’s
Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C
Obligations plus the aggregate FX Swap Value of all Secured Hedge
Agreements (if any) of such Revolving Credit Lender under the Permitted FX
Facility shall not exceed such Revolving Credit Lender’s Revolving Credit
Commitment.  Within the limits of each
Revolving Credit Lender’s Revolving Credit Commitment, and subject to the other
terms 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 Loans
or Eurocurrency Rate Loans, as further provided herein.

 

2.02         Borrowings, Conversions and
Continuations of Loans.  (a)  Borrowings,
Conversions and Continuations Generally. Each Term Borrowing, each
Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit
Loans from one Type to the other, and each continuation of Eurocurrency Rate
Loans shall be made upon the Borrowers’ irrevocable notice to the
Administrative Agent, which may be given by telephone.  Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (i) three Business
Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurocurrency Rate Loans denominated in Dollars or of any
conversion of Eurocurrency Rate Loans denominated in Dollars to Base Rate Loans
and (ii) on the requested date of any Borrowing of Base Rate Loans.  Each telephonic notice by the Borrowers
pursuant to this Section 2.02(a) must be confirmed promptly by
delivery 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 or
continuation 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 principal
amount 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 Credit
Borrowing, a conversion of Term Loans or

 

30

 

Revolving Credit Loans
from one Type to the other, or a continuation of Eurocurrency Rate Loans, (ii) the
requested 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 be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or
to which Type existing Term Loans or Revolving Credit Loans are to be converted
and (v) if applicable, the duration of the Interest Period with respect
thereto.  If the Borrowers fails to
specify a Type of Loan in a Committed Loan Notice or if the Borrowers fails to
give a timely notice requesting a conversion or continuation, then the
applicable Term Loans or Revolving Credit Loans shall be made as, or converted
to, Base Rate Loans.  Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurocurrency Rate
Loans.  If the Borrowers requests a
Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any
such Committed Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month.

 

(b)           Notice to Lenders and Funding of Borrowings. Following receipt of a Committed Loan Notice, the
Administrative Agent shall promptly notify each Lender of the amount of its
Applicable Percentage under the applicable Facility of the applicable Term
Loans or Revolving Credit Loans, and if no timely notice of a conversion or
continuation is provided by the Borrowers, the Administrative Agent shall
notify each Lender of the details of any automatic conversion to Base Rate
Loans 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 the
Administrative Agent in Same Day Funds at the Administrative Agent’s Office not
later than 1:00 p.m. on the Business Day specified in the applicable
Committed Loan Notice.  Upon satisfaction
of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the
Borrowers in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrowers on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance
with instructions provided to (and reasonably acceptable to) the Administrative
Agent by the Borrowers; provided, however, that if, on the date a
Committed Loan Notice with respect to a Revolving Credit Borrowing denominated
in Dollars is given by the Borrowers, there are L/C Borrowings outstanding,
then the proceeds of such Revolving Credit Borrowing, first, shall be
applied 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 continued
or converted only on the last day of an Interest Period for such Eurocurrency
Rate Loan.  During the existence of a
Default, no Loans may be requested as, converted to or continued as Eurocurrency
Rate Loans without the consent of the Required Lenders.

 

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

 

31

 

any
change in Bank of America’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

 

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

 

(f)            Lender Obligations.
The failure of any Lender to make any Loan to be made by it as part of any
Borrowing 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 shall
be responsible for the failure of any other Lender to make any Loan to be made
by such other Lender on the date of any Borrowing.

 

2.03         Letters of Credit.  (a)  The
Letter of Credit Commitment.  (i) 
Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Revolving Credit Lenders set
forth in this Section 2.03, (1) from time to time on any
Business Day during the period from the Closing Date until the Letter of Credit
Maturity Date, to issue Letters of Credit for the account of any of the
Borrowers or their respective Subsidiaries, and to amend Letters of Credit
previously issued by it, in accordance with Section 2.03(b), and (2) to
honor drawings under the Letters of Credit; and (B) the Revolving Credit
Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrowers or their respective Subsidiaries and any drawings
thereunder; provided that after giving effect to any L/C Credit
Extension with respect to any Letter of Credit, (x) the Total Revolving
Credit Outstandings shall not exceed the Revolving Credit Facility, (y) the
aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving
Credit Lender, plus such Revolving Credit Lender’s Applicable Revolving
Credit Percentage of the Outstanding Amount of all L/C Obligations plus
the aggregate FX Swap Value of all Secured Hedge Agreements (if any) of such
Revolving Credit Lender under the Permitted FX Facility shall not exceed such
Revolving Credit Lender’s Revolving Credit Commitment, and (z) the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit.  Each request by the Borrowers
for the issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Borrowers that the L/C Credit Extension so requested
complies with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrowers’ ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrowers may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall be
deemed to have been issued pursuant hereto, and from and after the Closing Date
shall be subject to and governed by the terms and conditions hereof.

 

(ii)           The L/C Issuer shall not
issue any Letter of Credit if:

 

32

 

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

 

(B)                   the expiry date of such requested Letter of Credit
after the Letter of Credit Expiration Date, unless all the Lenders have
approved such expiry date (provided, that any Letter of Credit
outstanding after the Letter of Credit Maturity Date shall be Cash
Collateralized in accordance with Section 2.03(g)).

 

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

 

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

 

(B)                   the issuance of such Letter of Credit would violate
one or more policies of the L/C Issuer applicable to letters of credit
generally;

 

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

 

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

 

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

 

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

 

(v)           The L/C Issuer shall be under no obligation to amend
any Letter of Credit if (A) the L/C Issuer would have no obligation at
such time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.

 

33

 

(vi)          The L/C Issuer shall act on behalf of the Revolving
Credit Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and the L/C Issuer shall have all of the
benefits and immunities (A) provided to the Administrative Agent in Article IX
with respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and Issuer Documents pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in Article IX included the L/C
Issuer with respect to such acts or omissions, and (B) as additionally
provided 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 be
issued or amended, as the case may be, upon the request of the Borrowers
delivered to the L/C Issuer (with a copy to the Administrative Agent) in the
form of a Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrowers. 
Such Letter of Credit Application must be received by the L/C Issuer and
the Administrative Agent not later than 11:00 a.m. at least two Business
Days (or such later date and time as the Administrative Agent and the L/C
Issuer may agree in a particular instance in their sole discretion) prior to
the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall specify
in form and detail satisfactory to the L/C Issuer:  (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary
in case of any drawing thereunder; (F) the full text of any certificate to
be presented by such beneficiary in case of any drawing thereunder; (G) the
purpose and nature of the requested Letter of Credit; and (H) such other
matters as the L/C Issuer may require. 
In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (1) the Letter of Credit to be amended; (2) the
proposed date of amendment thereof (which shall be a Business Day); (3) the
nature of the proposed amendment; and (4) such other matters as the L/C
Issuer may require.  Additionally, the
Borrowers shall furnish to the L/C Issuer and the Administrative Agent such
other documents and information pertaining to such requested Letter of Credit
issuance or amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may require.

 

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

 

34

 

Credit, each Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk
participation in such Letter of Credit in an amount equal to the product of
such Revolving Credit Lender’s Applicable Revolving Credit Percentage times
the amount of such Letter of Credit.

 

(iii)          If the Company so requests
in any applicable Letter of Credit Application, the L/C Issuer may, in its sole
and absolute discretion, agree to issue a Letter of Credit that has automatic
extension provisions (each, an “Auto-Extension Letter of Credit”); provided
that any such Auto-Extension Letter of Credit must permit the L/C Issuer to
prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than the date (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the
time such Letter of Credit is issued. 
Unless otherwise directed by the L/C Issuer, the Company shall not be
required to make a specific request to the L/C Issuer for any such
extension.  Once an Auto-Extension Letter
of Credit has been issued, the Revolving Credit Lenders shall be deemed to have
authorized (but may not require) the L/C Issuer to permit the extension of such
Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the L/C Issuer
shall not permit any such extension if (A) the L/C Issuer has determined
that it would not be permitted, or would have no obligation at such time to
issue such Letter of Credit in its revised form (as extended) under the terms
hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is seven Business Days before the
Non-Extension Notice Date (1) from the Administrative Agent that the
Required Revolving Lenders have elected not to permit such extension or (2) from
the Administrative Agent, any Revolving Credit Lender or the Company that one
or more of the applicable conditions specified in Section 4.02 is
not then satisfied, and in each such case directing the L/C Issuer not to
permit such extension.

 

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

 

(c)           Drawings and Reimbursements; Funding of Participations.  (i)  Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the L/C Issuer shall notify the Borrowers and the Administrative
Agent thereof.  Not later than 11:00 a.m.
on the date of any payment by the L/C Issuer under a Letter of Credit (each
such date, an “Honor Date”),
the Borrowers shall reimburse the L/C Issuer through the Administrative Agent
in an amount equal to the amount of such drawing.  If the Borrowers fails to so reimburse the
L/C Issuer by such time, the Administrative Agent shall promptly notify each
Revolving Credit Lender of the Honor Date, the amount of the unreimbursed
drawing (the “Unreimbursed Amount”), and the amount of such Revolving Credit Lender’s
Applicable Revolving Credit Percentage thereof. 
In such event, the Borrowers shall be deemed to have requested a
Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to the minimum
and multiples 

 

35

 

specified
in Section 2.02 for the principal amount of Base Rate Loans, but
subject to the amount of the unutilized portion of the Revolving Credit
Commitments and the conditions set forth in Section 4.02 (other
than the delivery of a Committed Loan Notice). 
Any notice given by the L/C Issuer or the Administrative Agent pursuant
to this Section 2.03(c)(i) may be given by telephone if
immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

 

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

 

(iii)          With respect to any Unreimbursed Amount that is not
fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any
other reason, the Borrowers shall be deemed to have incurred from the L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the Default Rate.  In such event, each Revolving Credit Lender’s
payment to the Administrative Agent for the account of the L/C Issuer pursuant
to Section 2.03(c)(ii) shall be deemed payment in respect of
its participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under this Section 2.03.

 

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

 

(v)           Each Revolving Credit Lender’s obligation to make
Revolving Credit Loans or L/C Advances to reimburse the L/C Issuer for amounts
drawn under Letters of Credit, as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the L/C Issuer, the Borrowers
or any other Person for any reason whatsoever; (B) the occurrence or
continuance 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 Loans
pursuant to this Section 2.03(c) is subject to the conditions
set forth in Section 4.02 (other than delivery by the Borrowers of
a Committed Loan Notice ).  No such
making of an L/C Advance shall relieve or otherwise impair the obligation of
the Borrowers to reimburse the L/C Issuer for the amount of any 

 

36

 

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

 

(vi)          If any Revolving Credit Lender fails to make
available to the Administrative Agent for the account of the L/C Issuer any
amount required to be paid by such Lender pursuant to the foregoing provisions
of 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 through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the
Overnight Rate, plus any administrative, processing or similar fees customarily
charged by the L/C Issuer in connection with the foregoing.  If such Lender pays such amount (with
interest and fees as aforesaid), the amount so paid shall constitute such
Lender’s Revolving Credit Loan included in the relevant Revolving Credit
Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case
may be.  A certificate of the L/C Issuer
submitted to any Revolving Credit Lender (through the Administrative Agent)
with respect to any amounts owing under this Section 2.03(c)(vi) shall
be conclusive absent manifest error.

 

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

 

(ii)           If any payment received by the Administrative Agent
for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is
required 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 its
discretion), each Revolving Credit Lender shall pay to the Administrative Agent
for the account of the L/C Issuer its Applicable Revolving Credit Percentage
thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such
Lender, at a rate per annum equal to the applicable Overnight Rate from time to
time in effect.  The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations
and the termination of this Agreement.

 

(e)           Obligations Absolute.  The obligation of the Borrowers to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

 

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

 

37

 

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

 

(iii)          any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such Letter
of Credit;

 

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

 

(v)           any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to the
departure from any Guaranty or all or any of the Obligations of the Borrowers
in 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 other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrowers or any of its Subsidiaries.

 

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

 

(f)            Role of L/C Issuer.  Each Lender and the Borrowers agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the L/C Issuer, the Administrative
Agent, 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) any
action taken or omitted in connection herewith at the request or with the
approval of the Revolving Credit Lenders or the Required Revolving Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer 

 

38

 

Document.  The Borrowers hereby jointly and severally
assume all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude any Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. 
None of the L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of
the L/C Issuer shall be liable or responsible for any of the matters described
in 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 may
be liable to the Borrowers, to the extent, but only to the extent, of any
direct, as opposed to consequential or exemplary, damages suffered by the
Borrowers which the Borrowers prove were caused by the L/C Issuer’s willful
misconduct or gross negligence or the L/C Issuer’s willful failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions
of a Letter of Credit.  In furtherance
and not in limitation of the foregoing, the L/C Issuer may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary, and the
L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole 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) or
the expiry date for any Letter of Credit occurs after the Letter of Credit
Maturity Date, the Borrowers shall immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations. 
Sections 2.05 and 8.02(c) set forth certain
additional requirements to deliver Cash Collateral hereunder.  For purposes of this Section 2.03,
Section 2.05 and Section 8.02(c), “Cash
Collateralize” means to
pledge and deposit with or deliver to the Administrative Agent, for the benefit
of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash
or deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the L/C Issuer (which documents
are hereby consented to by the Lenders). 
Derivatives of such term have corresponding meanings.  Each Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing.  Cash
Collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Bank of America.  If at any
time the Administrative Agent determines that any funds held as Cash Collateral
are subject to any right or claim of any Person other than the Administrative
Agent or that the total amount of such funds is less than the aggregate
Outstanding Amount of all L/C Obligations, the Borrowers will, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited as Cash Collateral, an amount equal to the
excess of (x) such aggregate Outstanding Amount over (y) the total
amount of funds, if any, then held as Cash Collateral that the Administrative
Agent determines to be free and clear of any such right and claim.  Upon the drawing of any Letter of Credit for
which funds are on deposit as Cash Collateral, such funds shall be applied, to
the extent permitted under applicable Laws, to reimburse the L/C Issuer.

 

39

 

(h)           Applicability of ISP.  Unless otherwise expressly agreed by the L/C
Issuer and the Borrowers when a Letter of Credit is issued (including any such agreement
applicable 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 Administrative
Agent for the account of each Revolving Credit Lender in accordance with its
Applicable Revolving Credit Percentage a Letter of Credit fee (the “Letter
of Credit Fee”) for each Letter of Credit equal to the Applicable Rate for
Revolving Credit Loans times the daily amount available to be drawn
under such Letter of Credit.  For
purposes of computing the daily amount available to be drawn under any Letter
of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.06. 
Letter of Credit Fees shall be (i) due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of 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 Rate
during any quarter, the daily amount available to be drawn under each standby Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect. 
Notwithstanding anything to the contrary contained herein, upon the
request 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 the
Letter 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 the
customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the L/C Issuer relating to letters of
credit as from time to time in effect. 
Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.

 

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

 

(l)            Letters of Credit Issued for
Subsidiaries.  Notwithstanding that a Letter
of 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 to
reimburse the L/C Issuer hereunder for any and all drawings under such Letter
of Credit.  The Borrowers hereby
acknowledge that the issuance of Letters of Credit for the account of
Subsidiaries 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 of
America at its discretion may enter into one or more Secured Hedge Agreements
under the Permitted FX Facility with the Borrowers.

 

(b)           Bank
of America shall not be obligated to permit the Borrowers to enter into any
Secured Hedge Agreement under the Permitted FX Facility if, immediately before
or after giving effect thereto, (i) the FX Swap Value would exceed the FX
Facility Sublimit or 

 

40

 

(ii) the
Total Revolving Credit Outstandings would exceed the Revolving Credit Facility;
provided, that if at any time the FX Swap Value exceeds the FX Facility
Sublimit, the Borrowers shall Cash Collateralize the Permitted FX Facility in
accordance with Section 2.05(d). 
Bank of America shall determine the FX Swap Value of all Secured Hedge
Agreements under the Permitted FX Facility monthly, on the date of any request
for a new transaction under the Permitted FX Facility and on the date of any
Committed Loan Notice and shall promptly notify the Company of each such
determination.

 

(c)           The
Borrowers shall pay Bank of America on demand Bank of America’s then standard
Permitted FX Facility fees for each contract.

 

(d)           The
Borrowers shall enter into a Master Agreement and any other related
documentation as Bank of America shall reasonably request, in each case in form
and substance satisfactory to Bank of America, with respect to each transaction
requested under the Permitted FX Facility.

 

(e)           No
Secured Hedge Agreement under the Permitted FX Facility will mature later than
the Maturity Date of the Revolving Credit Facility.

 

(f)            The
Borrowers understand the risk of, and are financially able to bear any losses
resulting from, entering into Secured Hedge Agreements under the Permitted FX
Facility.  Bank of America shall not be
liable for any loss suffered by the Company or any of its Subsidiaries as a
result of the Borrowers’ foreign exchange trading. The Borrowers will enter
into each Secured Hedge Agreement under the Permitted FX Facility in reliance
only upon their own judgment.  The
Borrowers acknowledge that in entering into Secured Hedge Agreements under the
Permitted FX Facility with the Borrowers, Bank of America is not acting as a
fiduciary.  The Borrowers understand that
neither Bank of America nor any Borrower has any obligation to enter into any
particular Secured Hedge Agreement under the Permitted FX Facility with the
other.

 

(g)           The
Borrowers hereby request Bank of America to rely upon and execute the Company’s
telephonic instructions for each Secured Hedge Agreement under the Permitted FX
Facility, and the Borrowers agree that Bank of America shall incur no liability
for its acts or omissions which result from interruption of communications,
misunderstood communications or instructions from unauthorized persons, unless
caused by the gross negligence or willful misconduct of Bank of America or its
officers or employees.  The Borrowers
jointly and severally agree to protect Bank of America and hold it harmless
from any and all loss, damage, claim, expense (including the reasonable fees of
outside counsel) or inconvenience, however arising, which Bank of America
suffers or incurs or might suffer or incur, based on or arising out of said
acts or omissions.

 

(h)           The
Borrowers agree to promptly review all confirmations sent to the Company by
Bank of America.  The Borrowers
understand that these confirmations are not legal contracts but only evidence
of the valid and binding oral contract which the Borrowers have already entered
into with Bank of America.  The Borrowers
agree to promptly execute and return to Bank of America confirmations which
accurately reflect the terms of a Secured Hedge

 

41

 

Agreement
under the Permitted FX Facility, and immediately contact Bank of America if any
Borrower believes a confirmation is not accurate.  In the event of a conflict, inconsistency or
ambiguity between the provisions of this Agreement and the provisions of a
confirmation, the provisions of this Agreement will prevail.

 

(i)            The
Borrowers agree that Bank of America may electronically record all telephonic
conversations with any Borrower relating to the Permitted FX Facility and that
such tape recordings may be submitted in evidence to any court or in any other
proceedings relating to such contracts. 
The Borrowers agree that in the event of a conflict, inconsistency or
ambiguity between the terms of a Secured Hedge Agreement under the Permitted FX
Facility as reflected in a tape recording and the terms stated on a
confirmation, the terms reflected in the tape recording shall control.

 

(j)            Any
sum owed to Bank of America under the Permitted FX Facility may, at the option
of 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 of
Base Rate Loans to be disbursed in an amount equal to such sum owed to Bank of
America under the Permitted FX Facility, without regard to the minimum and
multiples specified in Section 2.02 for the principal amount of
Base Rate Loans, but subject to the amount of the unutilized portion of the
Revolving Credit Commitments and the conditions set forth in Section 4.02
(other than the delivery of a Committed Loan Notice).

 

(k)           In
addition to any other rights or remedies which Bank of America may have under
this Agreement or otherwise, upon the occurrence of an Event of Default, Bank
of America may:

 

(i)            suspend performance of its
obligations to the Borrowers under any Permitted FX Facility;

 

(ii)           declare all Permitted FX
Facilities, interest and any other amounts which are payable by the Borrowers
to Bank of America immediately due and payable; and

 

(iii)          without notice to the
Borrowers, close out any or all foreign exchange contracts or positions of the
Borrower with Bank of America.

 

Bank of America shall not be under any
obligation to exercise any such rights or remedies or to exercise them at a
time or in a manner beneficial to the Borrowers.  The Borrowers shall be jointly and severally
liable for any amounts owing to Bank of America after exercise or any such
rights and remedies.

 

2.05         Prepayments.  (a)  Optional.  (i)  Revolving Credit Loans.  The Borrowers may, upon notice to the Administrative
Agent, at any time or from time to time voluntarily prepay Revolving Credit
Loans in whole or in part without premium or penalty; provided that (A) such
notice 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 of
Eurocurrency Rate Loans and (2) on the 

 

42

 

date of prepayment of
Base Rate Loans; (B) any prepayment 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 (or, if less, the aggregate outstanding principal amount of Revolving
Credit Loans); and (C) any prepayment of Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then
outstanding.  Each such notice shall
specify the date and amount of such prepayment, the Facility to which such prepayment
shall apply and the Type(s) of Loans to be prepaid and, if Eurocurrency
Rate Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s ratable portion of such prepayment (based on such Lender’s Applicable
Percentage in respect of the Revolving Credit Facility).  If such notice is given by the Borrowers, the
Borrowers shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.  Any prepayment of a Eurocurrency Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with 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 from
time to time voluntarily prepay Term Loans in whole or in part (A) prior
to one (1) year from the Closing Date, subject to a prepayment charge of
three percent (3%) of the amount prepaid, and (B)  after one (1) year
from the Closing Date, without premium, charge or penalty; provided that
(x) such notice must be received by the Administrative Agent not later
than 2:00 p.m. at least fifteen (15) days prior to any date of prepayment
of any Term Loans; (y) any prepayment 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; and (z) any prepayment of Base Rate Loans shall be in a principal
amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in
each case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount
of such prepayment, the Facility to which such prepayment shall apply and the
Type(s) of Loans to be prepaid and, if Eurocurrency Rate Loans are to be
prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s ratable portion of such prepayment (based on such Lender’s Applicable
Percentage in respect of the relevant Facility).  If such notice is given by the Borrowers, the
Borrowers shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.  Any prepayment of a Eurocurrency Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 3.05.  Each prepayment of the outstanding Term Loan
pursuant to this Section 2.05(a)(ii) shall be applied to the
Term Facility and to the principal repayment installments thereof in inverse
order of maturity, and each such prepayment shall be paid to the Lenders in
accordance with their respective Applicable Percentages in respect of the Term
Facility.  Notwithstanding anything to
the contrary contained herein, the Borrowers shall not be permitted to prepay
the Term Facility pursuant to this Section 2.05(a)(ii) during
the period from the Closing Date through the date ten Business Days thereafter.

 

43

 

(b)           Revolving Credit Prepayments.
If for any reason the Total Revolving Credit Outstandings at any time exceed
the Revolving Credit Facility at such time, the Borrowers shall immediately
prepay Revolving Credit Loans and L/C Borrowings and/or Cash Collateralize the
L/C Obligations (other than the L/C Borrowings) and the Permitted FX Facility
in 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) or
Section 2.05(b), first, shall be applied ratably to the L/C
Borrowings, second, shall be applied ratably to the outstanding
Revolving Credit Loans, and, third, shall be used to Cash Collateralize
the remaining L/C Obligations.  Upon the
drawing of any Letter of Credit that has been Cash Collateralized, the funds
held as Cash Collateral shall be applied (without any further action by or
notice to or from the Borrowers or any other Loan Party) to reimburse the L/C
Issuer or the Revolving Credit Lenders, as applicable.

 

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

 

2.06         Termination or Reduction of Commitments.  (a) 
Optional.  The Borrowers may, upon
notice to the Administrative Agent, terminate the Revolving Credit Facility or
the Letter of Credit Sublimit, or from time to time permanently reduce the
Revolving Credit Facility or the Letter of Credit Sublimit; provided that (i) any
such 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) any
such partial reduction shall be in an aggregate amount of $1,000,000 or any
whole multiple of $1,000,000 in excess thereof and (iii) the Borrowers
shall not terminate or reduce (A) the Revolving Credit Facility if, after
giving effect thereto and to any concurrent prepayments hereunder, the Total
Revolving Credit Outstandings would exceed the Revolving Credit Facility, (B) the
FX Facility Sublimit if, after giving effect thereto, the FX Swap Value of any
portion of the Permitted FX Facility not fully Cash Collateralized hereunder
would exceed the FX Facility Sublimit, or (C) the Letter of Credit
Sublimit if, after giving effect thereto, the Outstanding Amount of L/C
Obligations not fully Cash Collateralized hereunder would exceed the Letter of
Credit Sublimit.

 

(b)           Mandatory.  The
aggregate Term Commitments shall be automatically and permanently reduced to
zero on the date of the Term Borrowing.

 

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

 

44

 

Sublimit
exceeds the Revolving Credit Facility at such time, the Letter of Credit
Sublimit shall be automatically reduced by the amount of such excess.

 

(d)           Application of Commitment Reductions; Payment of Fees.  The Administrative
Agent will promptly notify the Lenders of any termination or reduction of the
Letter of Credit Sublimit or the Revolving Credit Commitment under this Section 2.06.  Upon any reduction of the Revolving Credit
Commitments, the Revolving Credit Commitment of each Revolving Credit Lender
shall be reduced by such Lender’s Applicable Revolving Credit Percentage of
such reduction amount.  All fees in
respect of the Revolving Credit Facility that accrue but are unpaid on or
before the effective date of any termination of the Revolving Credit Facility
shall be paid on the effective date of such termination.

 

2.07         Repayment of Loans.  (a)  Term
Loans.  The Borrowers shall repay to
the Term Lenders the aggregate principal amount of all Term Loans outstanding
on each fiscal quarter after the Closing Date in the respective amounts equal
to the percentages of the Term Loans set forth below (which amounts shall be
reduced as a result of the application of prepayments in accordance with the
order of priority set forth in Section 2.05):

 

	
  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 final
principal repayment installment of the Term Loans shall be repaid on the
Maturity Date for the Term Facility and in any event shall be in an amount
equal to the aggregate principal amount of all Term Loans outstanding on such
date.

 

(b)           Revolving Credit Loans.  The Borrowers shall repay to the Revolving
Credit Lenders on the Maturity Date for the Revolving Credit Facility the
aggregate principal amount of all Revolving Credit Loans outstanding on such
date.

 

2.08         Interest.  (a)  Interest
Rates. Subject to the provisions of Section 2.08(b), (i) each
Eurocurrency Rate Loan under a Facility shall bear interest on the outstanding
principal amount thereof for each Interest Period applicable thereto at a rate
per annum equal to the Eurocurrency Rate for such Interest Period plus the
Applicable Rate for such Facility; and 

 

45

 

(ii) each Base Rate Loan under a Facility shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at
a 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 (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

 

(ii)           If any amount (other than principal of any Loan)
payable by the Borrowers under any Loan Document is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, then upon the request of the Required Lenders such
amount shall thereafter bear interest at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

 

(iii)          Upon the request of the Required Lenders, while any
Event of Default exists, the Borrowers shall pay interest on the principal
amount of all outstanding Obligations hereunder at a fluctuating interest rate
per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

 

(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 Interest
Payment Date applicable thereto and at such other times as may be specified
herein.  Interest hereunder shall be due
and payable in accordance with the terms hereof before and after judgment, and
before and after the commencement of any proceeding under any Debtor Relief
Law.

 

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

 

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

 

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

 

46

 

specified
in the Fee Letter.  Such fees shall be
fully 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 is
determined by Bank of America’s “prime rate” shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on
the basis of a 365-day year).  Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid, provided that any Loan that is repaid on the same day
on which it is made shall, subject to Section 2.12(a), bear
interest for one day.  Each determination
by the Administrative Agent of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.

 

2.11         Evidence of Debt.  (a)  Accounts
and Records of Credit Extensions. The Credit Extensions made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative
Agent and each Lender shall be conclusive absent manifest error of the amount
of the Credit Extensions made by the Lenders to the Borrowers and the interest
and payments thereon.  Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrowers hereunder to pay any amount owing with respect
to the Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.  Upon the
request of any Lender made through the Administrative Agent, the Borrowers
shall execute and deliver to such Lender (through the Administrative Agent) a
Note, which shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.

 

(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 its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit. 
In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.

 

2.12         Payments Generally; Administrative Agent’s Clawback.  (a) 
General.  All payments to be made
by the Borrowers shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. 
Except as otherwise expressly provided herein, all payments by the
Borrowers hereunder shall be made to the Administrative Agent, for the account
of the respective Lenders to which such payment is owed, at the Administrative
Agent’s Office in Dollars and in immediately available funds not later than
2:00 p.m. on the date specified 

 

47

 

herein.  Without limiting the generality of the
foregoing, the Administrative Agent may require that any payments due under
this Agreement be made in the United States. The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage in respect of the
relevant Facility (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender’s Lending
Office.  All payments received by the
Administrative Agent after 2:00 p.m. shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.  If any payment to be made by the
Borrowers shall come due on a day other than a Business Day, payment shall be
made on the next following Business Day, and such extension of time shall be
reflected on computing interest or fees, as the case may be.

 

(b)           (i)  Funding by Lenders; Presumption by
Administrative Agent.  Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurocurrency Rate Loans (or, in the case of
any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such
Borrowing) that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such 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 made
such 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 a
corresponding amount.  In such event, if
a Lender has not in fact made its share of the applicable Borrowing available
to the Administrative Agent, then the applicable Lender and the Borrowers
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is made available to the
Borrowers to but excluding the date of payment to the Administrative Agent, at (A) in
the case of a payment to be made by such Lender, the Overnight Rate, plus any
administrative, processing or similar fees customarily charged by the Administrative
Agent in connection with the foregoing, and (B) in the case of a payment
to be made by the Borrowers, the interest rate applicable to Base Rate
Loans.  If the Borrowers and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrowers the amount of such interest paid by the Borrowers for such
period.  If such Lender pays its share of
the applicable Borrowing to the Administrative Agent, then the amount so paid
shall constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrowers shall be without
prejudice to any claim the Borrowers may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

 

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

 

48

 

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

 

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

 

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

 

(d)           Obligations of Lenders Several.  The obligations of
the Lenders hereunder to make Term Loans and Revolving Credit Loans, to fund
participations in Letters of Credit and to make payments pursuant to Section 10.04(c) are
several and not joint.  The failure of
any Lender to make any Loan, to fund any such participation or to make any
payment under Section 10.04(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Loan, to purchase its participation or to make its
payment under Section 10.04(c).

 

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

 

(f)            Insufficient
Funds.  If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, L/C Borrowings, interest and fees then due hereunder, such funds
shall be applied (i) first, toward payment of interest and fees
then due hereunder, ratably among the parties entitled thereto in accordance
with 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, ratably
among the parties entitled thereto in accordance with the amounts of principal
and 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 counterclaim
or otherwise, obtain payment in respect of (a) Obligations in respect of
any of the Facilities due and payable to such Lender hereunder and under the
other Loan Documents at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations due and payable to
such Lender at such time to (ii) the aggregate amount of the Obligations
in respect of the Facilities due and payable to all Lenders hereunder and under
the other Loan Documents at such time) of payments on account of the Obligations
in respect of the Facilities due and payable to all Lenders hereunder and under
the other Loan 

 

49

 

Documents at such time
obtained by all the Lenders at such time or (b) Obligations in respect of
any of the Facilities owing (but not due and payable) to such Lender hereunder
and under the other Loan Documents at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing
(but not due and payable) to such Lender at such time to (ii) the
aggregate amount of the Obligations in respect of the Facilities owing (but not
due and payable) to all Lenders hereunder and under the other Loan Documents at
such time) of payments on account of the Obligations in respect of the
Facilities owing (but not due and payable) to all Lenders hereunder and under
the other Loan Documents at such time obtained by all of the Lenders at such
time, then, in each case under clauses (a) and (b) above, the Lender
receiving such greater proportion shall (A) notify the Administrative
Agent of such fact, and (B) purchase (for cash at face value)
participations in the Loans and subparticipations in L/C Obligations of the
other Lenders, or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of Obligations in respect of the
Facilities then due and payable to the Lenders or owing (but not due and
payable) to the Lenders, as the case may be, provided that:

 

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

 

(ii)           the provisions of this Section shall
not be construed to apply to (A) any payment made by the Borrowers
pursuant to and in accordance with the express terms of this Agreement or (B) any
payment obtained by a Lender as consideration for the assignment of or sale of
a participation in any of its Loans or subparticipations in L/C Obligations to
any assignee or participant, other than to the Borrowers or any Subsidiary
thereof (as to which the provisions of this Section shall apply).

 

The Borrowers consent to the foregoing and agree, to
the extent they may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrowers rights of
setoff and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the
Borrowers in the amount of such participation.

 

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

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

 

50

 

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

 

(b)           Payment of Other Taxes by the Borrowers.  Without limiting
the provisions of subsection (a) above, the Borrowers shall timely pay any
Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

 

(c)           Indemnification by the Borrowers.  The Borrowers
shall, jointly and severally, indemnify the Administrative Agent, each Lender
and the L/C Issuer, within 10 days after demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) paid by the Administrative Agent, such Lender or the L/C Issuer, as
the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as
to the amount of such payment or liability delivered to the Borrowers by a
Lender or the L/C Issuer (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the L/C
Issuer, shall be conclusive absent manifest error.

 

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

 

(e)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrowers are resident for tax purposes, or any
treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrowers (with
a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrowers or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or
at a reduced rate of withholding.  In
addition, any Lender, if requested by the Borrowers or the Administrative
Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrowers or the Administrative Agent as will
enable the Borrowers or the Administrative Agent to determine whether or not
such Lender is subject to backup withholding or information reporting
requirements.

 

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

 

51

 

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

 

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

 

(iii)          in the case of a Foreign Lender
claiming the benefits of the exemption for portfolio interest under section 881(c) of
the Code, (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 “10
percent shareholder” of the Borrowers within the meaning of section 881(c)(3)(B) of
the Code, or (3) a “controlled foreign corporation” described in section
881(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 for
claiming exemption from or a reduction in United States Federal withholding tax
duly completed,

 

in each case, together with
such supplementary documentation as may be prescribed by applicable law to
permit the Borrowers to determine the withholding or deduction required to be
made, if any.

 

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

 

3.02         Illegality.  If any Lender determines that any Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurocurrency Rate Loans, or to determine or charge interest rates based
upon the Eurocurrency Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to the Borrowers through the Administrative Agent, any obligation
of such Lender to make or continue Eurocurrency Rate Loans or to convert Base
Rate Loans to Eurocurrency Rate Loans shall be 

 

52

 

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

 

3.03         Inability to Determine Rates.  If the Required Lenders determine that for
any reason in connection with any request for a Eurocurrency Rate Loan or a
conversion to or continuation thereof that (a) deposits in Dollars are not
being offered to banks in the London interbank market for Dollars for the
applicable amount and Interest Period of such Eurocurrency Rate Loan, (b) adequate
and reasonable means do not exist for determining the Eurocurrency Rate for any
requested Interest Period with respect to a proposed Eurocurrency Rate Loan, or
(c) the Eurocurrency Rate for any requested Interest Period with respect
to a proposed Eurocurrency Rate Loan does not adequately and fairly reflect the
cost to such Lenders of funding such Loan, the Administrative Agent will
promptly so notify the Borrowers and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain Eurocurrency Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice.  Upon receipt of such
notice, the Borrowers may revoke any pending request for a Borrowing of, conversion
to or continuation of Eurocurrency Rate Loans or, failing that, will be deemed
to have converted such request into a request for a Committed Borrowing of Base
Rate Loans in the amount specified therein.

 

3.04         Increased Costs; Reserves on
Eurocurrency Rate Loans.  (a) 
Increased Costs Generally.  If any Change
in Law shall:

 

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

 

(ii)           subject any Lender or the L/C Issuer to any tax of any
kind whatsoever with respect to this Agreement, any Letter of Credit, any
participation 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 in
respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01
and the imposition of, or any change in the rate of, any Excluded Tax payable
by such Lender or the L/C Issuer); or

 

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

 

53

 

and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurocurrency Rate Loan (or of maintaining its obligation to
make any such Loan), or to increase the cost to such Lender or the L/C Issuer
of participating in, issuing or maintaining any Letter of Credit (or of
maintaining 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 the
L/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 such
Lender or the L/C Issuer, as the case may be, such additional amount or amounts
as will compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.

 

(b)           Capital Requirements.  If any Lender or the L/C Issuer determines
that any Change in Law affecting such Lender or the L/C Issuer or any Lending
Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if
any, regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the L/C Issuer’s capital or on the
capital of such Lender’s or the L/C Issuer’s holding company, if any, as a
consequence of this Agreement, the Commitments of such Lender or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the L/C Issuer, to a level below that which such Lender or
the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s
holding company with respect to capital adequacy), then from time to time the
Borrowers will pay to such Lender or the L/C Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer
or such Lender’s or the L/C Issuer’s holding company for any such reduction
suffered.

 

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

 

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

 

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

 

54

 

assets consisting of or including Eurocurrency
funds or deposits (currently known as “Eurocurrency liabilities”), additional
interest on the unpaid principal amount of each Eurocurrency Rate Loan equal to
the actual costs of such reserves allocated to such Loan by such Lender (as
determined by such Lender in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest is
payable on such Loan, provided the Borrowers shall have received at
least 10 days’ prior notice (with a copy to the Administrative Agent) of such
additional interest from such Lender.  If
a Lender fails to give notice 10 days prior to the relevant Interest Payment
Date, such additional interest shall be due and payable 10 days from receipt of
such notice.

 

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

 

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

 

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

 

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

 

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

 

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

 

3.06         Mitigation Obligations; Replacement
of Lenders.  (a)  Designation
of a Different Lending Office.  If
any Lender requests compensation under Section 3.05, or the
Borrowers are required to pay any additional amount to any Lender or any
Governmental 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 such
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such 

 

55

 

designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01
or 3.04, as the case may be, in the future, or eliminate the need for
the notice pursuant to Section 3.02, as applicable, and (ii) in
each case, would not subject such Lender to any unreimbursed cost or expense
and would not otherwise be disadvantageous to such Lender.  The Borrowers hereby jointly and severally
agree to pay all reasonable costs and expenses incurred by any Lender in
connection 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 or
any 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 III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

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

 

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

 

(i)            executed counterparts of this Agreement, sufficient in
number for distribution to the Administrative Agent, each Lender and the
Borrowers;

 

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

 

(iii)          a
pledge and security agreement, in
substantially the form of Exhibit F (together with each other pledge and security agreement and Perfection
Certificate Supplement delivered pursuant to Section 6.12, in
each case as amended, the “Security Agreement”), duly executed by each
Loan Party, together with:

 

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

 

56

 

(B)           proper financing statements in form
appropriate for filing under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may deem necessary or desirable in
order to perfect the Liens created under the Security Agreement, covering the
Collateral described in the Security Agreement,

 

(C)           completed
requests for information, dated on or before the date of the initial Credit
Extension, listing all effective
financing statements filed in the jurisdictions referred to in clause (B) above
that name any Loan Party as debtor, together with copies of such other
financing statements,

 

(D)          evidence
of the completion of all other actions, recordings and filings of or with
respect to the Security Agreement that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created thereby,

 

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

 

(F)           Copies
of an appraisal of all equipment owned by the Loan Parties located at 8814 and
8874 Trade Port Drive, Hamilton, Ohio 45011, and at the Company’s headquarters
in San Diego, California, specifying the aggregate fair market value and
orderly liquidation value of such equipment, which appraisal shall be from a
Person acceptable to the Lenders; and

 

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

 

(iv)          deeds
of trust, trust deeds, deeds to secure debt, mortgages, in substantially the
form of Exhibit G (with such changes as may be satisfactory to the
Administrative Agent and its counsel to account for local law matters) and
covering the properties identified to be
mortgaged on Schedule 5.08(c), as indicated by an asterisk on each
such Schedule (together with the Assignments of Leases and Rents
referred to therein and each other mortgage delivered pursuant to Section 6.12,
in each case as amended, the “Mortgages”), duly
executed by the appropriate Loan Party, together with:

 

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

 

57

 

Administrative Agent for the benefit of the Secured Parties and that
all filing, documentary, stamp, intangible and recording taxes and fees have
been paid,

 

(B)           fully
paid American Land Title Association Lender’s Extended Coverage title insurance
policies (the “Mortgage Policies”) in form and substance, with
endorsements and in amounts acceptable to the Administrative Agent, issued,
coinsured and reinsured by title insurers acceptable to the Administrative
Agent, insuring the Mortgages to be valid first and subsisting Liens on the
property described therein, free and clear of all defects (including, but not
limited to, mechanics’ and materialmen’s Liens) and encumbrances, excepting
only Permitted Encumbrances and other Liens permitted under the Loan Documents,
and providing for such other affirmative insurance (including endorsements for
future advances under the Loan Documents, for mechanics’ and materialmen’s
Liens and for zoning of the applicable property) and such coinsurance and
direct access reinsurance as the Administrative Agent may deem necessary or
desirable,

 

(C)           American
Land Title Association/American Congress on Surveying and Mapping form surveys,
for which all necessary fees (where applicable) have been paid, and dated no
more than 30 days before the day of the initial Credit Extension, certified to
the Administrative Agent and the issuer of the Mortgage Policies in a manner
satisfactory to the Administrative Agent by a land surveyor duly registered and
licensed in the States in which the property described in such surveys is
located and acceptable to the Administrative Agent, showing all buildings and
other improvements, any off-site improvements, the location of any easements,
parking spaces, rights of way, building set-back lines and other dimensional
regulations and the absence of encroachments, either by such improvements or on
to such property, and other defects, other than encroachments and other defects
acceptable to the Administrative Agent,

 

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

 

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

 

(F)           evidence
that all other action that the Administrative Agent may deem necessary or
desirable in order to create valid first and subsisting Liens on the property
described in the Mortgages has been taken;

 

58

 

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

 

(vi)          such
documents and certifications as the Administrative Agent may reasonably require
to evidence that each Loan Party is duly organized or formed, and that the
Borrowers is validly existing, in good standing and qualified to engage in
business in each jurisdiction where
its ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;

 

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

 

(viii)        a
favorable opinion of Dinsmore & Shohl, LLP, local counsel to the Loan
Parties in the State of Ohio, addressed to the Administrative Agent and each
Lender, as to the matters set forth in Exhibit H-2 and such other
matters concerning the Loan Parties and the Loan Documents as the Required
Lenders may reasonably request;

 

(ix)           a
certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required in connection with the
Loan Documents and the execution, delivery and performance by such Loan Party
and the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;

 

(x)            a
certificate signed by a Responsible Officer of the Borrowers certifying (A) that
the conditions specified in Sections 4.02(a) and (b) have
been satisfied, (B) that
there has been no event or circumstance since March 31, 2007 that has had
or could be reasonably expected to have, either individually or in the
aggregate, 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 that
could reasonably be expected to have a Material Adverse Effect, and (D) a
calculation of Unrestricted Cash as of the Closing Date;

 

59

 

(xi)           an
environmental assessment report from an environmental consulting firm
acceptable to the Lenders, which report shall identify existing and potential
environmental concerns and shall quantify related costs and liabilities,
associated with Real Property of the Company or any of its respective
Subsidiaries that is subject to a Mortgage hereunder, and the Lenders shall be
satisfied 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 the
Loan Documents has been obtained and is in effect, together with the
certificates of insurance and the related endorsements, naming the
Administrative Agent, on behalf of the Lenders, as an additional insured or
loss payee, as the case may be, under all insurance policies maintained with
respect to the assets and properties of the Loan Parties that constitutes Collateral;

 

(xv)         such
environmental reports, asset appraisals, title insurance, field audits, FDA
Warning Letters, reviews of manufacturing safety and efficacy data filed with
the FDA, and such other reports, audits or certifications as the Lenders may
reasonably request; and

 

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

 

(b)   Lender Fees. (i) All fees required to be paid to the
Administrative Agent and the Arranger on or before the Closing Date shall have
been paid and (ii) all fees required to be paid to the Lenders on or
before 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 of
counsel to the Administrative Agent (directly to such counsel if requested by
the Administrative Agent) to the extent invoiced prior to or on the Closing
Date, plus such additional amounts of such fees, charges and disbursements as
shall constitute its reasonable estimate of such fees, charges and
disbursements incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude a final
settling of accounts between the Borrowers and the Administrative Agent).

 

Without limiting the generality of the provisions of
the last paragraph of Section 9.03, for purposes of determining
compliance with the conditions specified in this Section 4.01, each
Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

 

60

 

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

 

(a)   Representations and Warranties. The representations and
warranties of the Borrowers contained in Article V or any other
Loan Document, or which are contained in any document furnished at any time
under or in connection herewith or therewith, shall be true and correct on and
as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that
for purposes of this Section 4.02, the representations and
warranties contained in Sections 5.05(a) and (b) shall
be 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 from
such 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 Credit
Extension in accordance with the requirements hereof.

 

Each Request for Credit Extension (other than a
Committed Loan Notice requesting only a conversion of Loans to the other Type
or a continuation of Eurocurrency Rate Loans) submitted by the Borrowers shall
be deemed to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date
of the applicable Credit Extension.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

61

 

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

 

5.03         Governmental
Authorization; Other Consents. 
Except as set forth on Schedule 1.04 to the Perfection
Certificate, no approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority or any other
Person is necessary or required in connection with (a) the execution,
delivery or performance by, or enforcement against, any Loan Party of this
Agreement or any other Loan Document, (b) the grant by any Loan Party of
the Liens granted by it pursuant to the Collateral Documents, or (c) the
perfection 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 or
made, could not reasonably be expected to have a Material Adverse Effect or
materially impair the perfection of the Liens in favor of the Secured Parties
on any material Collateral or material portion of the Collateral.

 

5.04         Binding
Effect.  This Agreement has been, and
each other Loan Document, when delivered hereunder, will have been, duly
executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is
party thereto in accordance with its terms, except as enforceability may be
limited by Debtor Relief Laws or by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

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

 

(b)           Unaudited
Financial Statements. The unaudited consolidated balance sheet of the
Company  and its Subsidiaries dated September 30, 2007, and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for the fiscal quarter ended on that date (i) were prepared
in accordance with GAAP consistently applied throughout 

 

62

 

the period covered
thereby, except as otherwise expressly noted therein, and (ii) fairly
present the financial condition of the
Company and its Subsidiaries as of the date thereof and their results of
operations 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)           No
Material Adverse Effect. Since the date of the Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.

 

(d)           Forecasted
Balance Sheets. The consolidated forecasted balance sheet, statements of
income and cash flows of the Company and its Subsidiaries, if any,
delivered pursuant to Section 6.01(c) were prepared in good
faith on the basis of estimates and assumptions believed by the Company to be
reasonable 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, in
equity, in arbitration or before any Governmental Authority, by or against the
Company or any of its Subsidiaries or against any of their properties or
revenues that (a) purport to affect or pertain to this Agreement or any
other Loan Document, or (b) either individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.

 

5.07         No Default. 
Neither the Company nor any Subsidiary thereof is in default under or
with respect to, or a party to, any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  No Default has occurred
and is continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.

 

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

 

(b)           List of Liens.  The property of the Loan Parties is subject
to no Liens, other than Liens set forth on Schedule 5.08(b) or
as otherwise permitted by Section 7.01.

 

(c)           Owned Real Property.  Schedule 5.08(c) sets forth
a complete and accurate list of all real property owned by the Loan Parties as of
the date hereof, showing as of the date hereof the street address, county or
other relevant jurisdiction, state, record owner and the aggregate appraised
value thereof.  Each Loan Party has title
to the real property owned by it free and clear of all Liens, other than Liens
created or permitted by the Loan Documents.

 

(d)           Leased Real Property. (i) 
Schedule 5.08(d)(i) sets forth a complete and accurate list of
all leases of real property for the location at the Company’s headquarters in
San Diego, California and for any other real property covering in excess of
10,000 square feet that 

 

63

 

any Loan Party is the
lessee as of the date hereof, showing as of the date hereof the street 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 lessee thereof, enforceable in accordance with its terms (except
as enforceability may be limited by Debtor Relief Laws or by general equitable
principles (whether enforcement is sought by proceedings in equity or at law)).

 

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

 

(e)           Investments.
As of the Closing Date, Schedule 5.08(e) sets forth a complete
and 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 Deferred
Compensation Plan and Investments permitted by Section 7.03(c) through
(g)).

 

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

 

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

 

(c)           No Hazardous Materials. Neither the Company nor any
of its Subsidiaries is undertaking, and has not completed, either individually
or together with other potentially 

 

64

 

responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law; and
all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
the Company or any of its Subsidiaries have been disposed of in a manner not
reasonably expected to result in material liability to the Company or any of
its Subsidiaries.

 

5.10         Insurance.  The properties of the Company and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of the Borrowers, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Company or the applicable Subsidiary operates.

 

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

 

5.12         ERISA Compliance.  (a)  Generally. Each Plan is in
compliance 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) of
the Code has either (i) applied for a favorable determination letter,
prior to the expiration of the requisite remedial amendment period under
applicable Treasury Regulations or IRS pronouncements, but has not yet received
a response; (ii) obtained at least one favorable determination,
notification, advisory and/or opinion letter, as applicable, on which the
Borrowers are entitled to rely, as to its qualified status from the IRS; or (iii) still
has a remaining period of time to apply for such a determination letter from
the IRS and to make any amendments necessary to obtain a favorable
determination and, to the best knowledge of the Borrowers, nothing has occurred
which would prevent, or cause the loss of, such qualification.  The Borrowers and each ERISA Affiliate have
made all required contributions to each Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.

 

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

 

65

 

(c)           No
ERISA Event, Unfunded Pension Liabilities, etc. (i) No ERISA Event has
occurred or is reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii) neither the Borrowers nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) neither the
Borrowers nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrowers nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.

 

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

 

(i)            any employer and
employee contributions required by law or by the terms of any Foreign
Government Scheme or Arrangement or any Foreign Plan have been made, or, if
applicable, accrued, in accordance with normal accounting practices;

 

(ii)           the fair market
value of the assets of each funded Foreign Plan, the liability of each insurer
for any Foreign Plan funded through insurance or the book reserve established
for any Foreign Plan, together with any accrued contributions, is sufficient to
procure or provide for the accrued benefit obligations, as of the date hereof,
with respect to all current and former participants in such Foreign Plan
according to the actuarial assumptions and valuations most recently used to
account for such obligations in accordance with applicable generally accepted
accounting principles; and

 

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

 

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

 

66

 

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

 

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

 

(b)           No
Loan Party is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.

 

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

 

5.16         FDA Regulations; Compliance with Laws.

 

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

 

(b)           The Company and each Subsidiary
thereof is in compliance in all material respects with the requirements of all
Laws and all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

67

 

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

 

5.18         Casualty,
Etc.  Neither the businesses nor the
properties 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 the
aggregate, could reasonably be expected to have a Material Adverse Effect.

 

ARTICLE VI

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied (other than inchoate indemnification obligations), or any Letter of
Credit 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 an
Unrestricted Subsidiary to:

 

6.01         Financial
Statements.  Deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders, each of the following:

 

(a)   Annual Financials. As soon as
available, but in any event within 90 days after the end of each fiscal year of
the Company,
a consolidated balance sheet of the
Company and its Subsidiaries as at the end of such fiscal year, and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
prepared in accordance with GAAP, audited and accompanied by a report and
opinion of Ernst & Young or another independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any “going
concern” or like qualification or exception or any qualification or exception
as to the scope of such audit, and
such consolidated statements to be certified by the chief executive officer,
chief financial officer, treasurer or controller of the Borrowers to the effect
that such statements are fairly stated in all material respects when considered
in relation to the consolidated financial statements of the Company and its
Subsidiaries.

 

(b)   Quarterly Financials. As soon as
available, but in any event within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrowers, a consolidated
balance sheet of the Company and
its Subsidiaries as at the end of such fiscal quarter, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal quarter and for the portion of the Borrowers’ fiscal year then ended, setting forth in each
case in comparative form the figures for the corresponding fiscal quarter of
the previous fiscal year and the corresponding portion of the previous fiscal
year, all in reasonable detail, certified by the 

 

68

 

chief executive
officer, chief financial officer, treasurer or controller of the Borrowers as fairly presenting the
financial condition, results of operations, shareholders’ equity and cash flows
of the Company and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.

 

(c)   Annual Business Plan and Budget. As
soon as available, but in any event at least 60 days after the end of each fiscal
year of the
Company, 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 satisfactory
to the Administrative Agent and the Required Lenders, of consolidated balance
sheets and statements of income or operations and cash flows of the Company and its Subsidiaries on
a quarterly basis for the
immediately following fiscal year (including the fiscal year in which the
Maturity Date for the Term Facility occurs).

 

(d)   Additional Reporting.  As soon as available (but no less than 10
days) after the occurrence of a Covenant Triggering Event, a Covenant
Triggering Event Certificate and promptly upon request at any time during a
Covenant Trigger Period, such other financial reporting as the Administrative
Agent or Required Lenders may reasonably request from time to time.  As soon as available (but no less than 10
days) after a cure of the initial Covenant Trigger Event, if any, a certificate
(in form and substance reasonably acceptable to the Administrative Agent and
executed 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 day
of such Covenant Trigger Period.

 

As to any information contained in materials furnished
pursuant to Section 6.02(c), the Borrowers shall not be separately
required 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 Borrowers
to 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 the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders, each of the following:

 

(a)   Compliance Certificate.  Concurrently with the delivery of the
financial 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 and
Recommendations.  Promptly after any
request by the Administrative Agent or any Lender, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of any Loan Party
by independent accountants in connection with the accounts or books of the
Company or any of its Subsidiaries, or any audit of any of them.

 

69

 

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

 

(d)   Noteholder Reports.  Promptly after the furnishing thereof, copies
of any statement or report furnished to any holder of any Senior Notes or any
other debt securities of the Company or of any of its Subsidiaries pursuant to
the terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lenders pursuant to Section 6.01
or any other clause of this Section 6.02.

 

(e)   Insurance Summary.  As soon as available, but in any event within
90 days after the end of each fiscal year of the Borrowers, a report summarizing
the insurance coverage (specifying type, amount and carrier) in effect for the
Company and its Subsidiaries and containing such additional information as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably specify.

 

(f)    SEC Correspondence.  Promptly, and in any event within ten days
after receipt thereof by the Company or any Subsidiary thereof, copies of each
notice or other correspondence received from the SEC (or comparable agency in
any applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of the Company or any Subsidiary thereof (other than
routine comment letters).

 

(g)   Regulatory Correspondence.  Promptly, and in any event within five
Business Days (i) after a Responsible Officer of the Company has or should
have 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) notice
of any required Phase 4 investigation described in Section 5.16(a) or
similar required foreign research investigation relating to a jurisdiction
where sales of the applicable product constitute more than five percent (5%) of
consolidated gross revenues over the immediately preceding 12 month
period,  or (C) notice from the FDA,
any Foreign Pharmaceutical Regulator or any other Governmental Entity that it
has or intends to suspend, terminate or materially restrict the right of the
Company or any of its Subsidiaries to market Byetta, Symlin or any other
products, in each case the sale of which, in the applicable jurisdiction,
constitutes more than five percent (5%) of consolidated gross revenues over the
immediately preceding 12 month period, and (ii) after delivery thereof by
the Company or an of its Subsidiaries to the FDA or any Foreign Pharmaceutical
Regulator, copies of all responses to any of the foregoing.

 

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

 

70

 

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

 

(i)    Environmental Notices. Promptly after
a Responsible Officer of the Company obtains or should have obtained knowledge
of the assertion or occurrence thereof, notice of any action or proceeding
against or of any noncompliance by the Company or any of Loan Party with any
Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any material restrictions on
ownership, occupancy, use or transferability under any Environmental Law.

 

(j)    Schedule Supplements. As soon as
available, but in any event within 90 days after the end of each fiscal year of
the Company,
a report supplementing Schedules 5.08(c), 5.08(d)(i),  5.08(d)(ii) and
5.13, including an identification of all owned and leased real property
disposed of by any Loan Party
thereof during such fiscal year, a list and description (including the street
address, county or other relevant jurisdiction, state, record owner, book value
thereof and, in the case of leases of property, lessor, lessee, expiration date
and annual rental cost thereof) of all real property acquired or leased during
such fiscal year and a description of such other changes in the information
included in such schedules as may be necessary for such schedules to be
accurate and complete, such report to be signed by a Responsible Officer of the
Company and to be in a form reasonably satisfactory to the Administrative Agent.

 

(k)   Additional Reporting. Promptly, such
additional information regarding the business, financial, legal or corporate
affairs of the Company or any Subsidiary thereof, or compliance with the terms
of the Loan Documents, as the Administrative Agent or any Lender may from time
to 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 such
documents are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrowers post such documents, or
provides a link thereto on the Borrowers’ website on the Internet at the
website address listed on Schedule 10.02; or (ii) on which such
documents are posted on the Borrowers’ behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: 
(i) the Borrowers shall deliver paper copies of such documents to
the Administrative Agent or any Lender that requests the Borrowers to deliver
such paper copies until a written request to cease delivering paper copies is
given by the Administrative Agent or such Lender and (ii) the Borrowers
shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. 
Notwithstanding anything contained herein, in every instance the
Borrowers shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative
Agent.

 

71

 

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

 

The Borrowers hereby acknowledge that (a) the
Administrative Agent and/or the Arranger will make available to the Lenders and
the L/C Issuer materials and/or information provided by or on behalf of the
Borrowers hereunder (collectively, “Borrower Materials”) by posting the
Borrower Materials on IntraLinks or another similar electronic system (the “Platform”)
and (b) certain of the Lenders (each, a “Public Lender”) may have
personnel who do not wish to receive material non-public information with
respect to the Borrowers or their respective Affiliates, or the respective
securities of any of the foregoing, and who may be engaged in investment and
other market-related activities with respect to such Persons’ securities.  The Borrowers hereby agree that they will use
commercially reasonable efforts to identify that portion of the Borrower
Materials that may be distributed to the Public Lenders and that (w) all
such Borrower Materials shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently
on the first page thereof; (x) by marking Borrower Materials “PUBLIC,”
the Borrowers shall be deemed to have authorized the Administrative Agent, the
Arranger, the L/C Issuer and the Lenders to treat such Borrower Materials as
not containing any material non-public information (although it may be sensitive
and proprietary) with respect to the Borrowers or its securities for purposes
of United States Federal and state securities laws (provided, however,
that to the extent such Borrower Materials constitute Information, they shall
be treated as set forth in Section 10.07); (y) all Borrower
Materials marked “PUBLIC” are permitted to be made available through a portion
of the Platform designated “Public Investor;” and (z) the Administrative
Agent and the Arranger shall be entitled to treat any Borrower Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not designated “Public 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)   of
the occurrence of any Default;

 

(b)   of
any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect;

 

(c)   of
the occurrence of any ERISA Event;

 

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

 

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

 

72

 

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

 

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

 

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

 

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

 

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

 

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

 

73

 

6.09         Books and Records.  (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company or such Subsidiary, as the
case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of the FDA, each Foreign
Pharmaceutical Regulator and any other Governmental Authority having regulatory
jurisdiction over the Company or such Subsidiary, as the case may be.

 

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

 

6.11         Use of Proceeds.  Use the proceeds of the Credit Extensions for
general corporate purposes not in contravention of any Law or of any Loan
Document.

 

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

 

(i)            within 15 days
after such formation or acquisition, cause such Subsidiary, and cause each
direct 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 a
Borrower and pledge a security interest in and to all of its assets (other than
Excluded Collateral and subject to the limitation that solely 65% of the Equity
Interests in any CFC to be pledged) in support of such joinder in accordance
with the terms and conditions of the Security Agreement,

 

(ii)           within 15 days
after such formation or acquisition, furnish to the Administrative Agent a
description of the real and personal properties of such Subsidiary, in detail
satisfactory to the Administrative Agent,

 

(iii)          within 30 days
after such formation or acquisition, cause such Subsidiary and each direct and
indirect parent of such Subsidiary (if it has not already done so) to duly execute
and deliver to the Administrative Agent deeds of trust, trust deeds, deeds to
secure debt, mortgages, Perfection Certificate Supplements and other security
and pledge agreements, as specified by and in form and substance satisfactory
to the Administrative 

 

74

 

Agent
(including delivery of all Pledged Debt and Pledged Equity (if certificated) in
and of such Subsidiary, and other instruments of the type specified in Section 4.01(a)(iii)),
securing payment of all the Obligations of such Subsidiary or such parent, as
the case may be, under the Loan Documents and constituting Liens on all such
Collateral subject thereto,

 

(iv)          within 30 days after
such formation or acquisition, cause such Subsidiary and each direct and
indirect parent of such Subsidiary (if it has not already done so) to take
whatever action (including the recording of mortgages, the filing of Uniform
Commercial Code financing statements, the giving of notices and the endorsement
of notices on title documents) may be necessary or advisable in the reasonable
opinion of the Administrative Agent to vest in the Administrative Agent (or in
any representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the deeds of
trust, trust deeds, deeds to secure debt, mortgages, Perfection Certificate
Supplements and security and pledge agreements delivered pursuant to this Section 6.12,
enforceable against all third parties in accordance with their terms except as
enforceability may be limited by Debtor Relief Laws or by general equitable
principles (whether enforcement is sought by proceedings in equity or at law),

 

(v)           within 60 days after
such formation or acquisition, deliver to the Administrative Agent, upon the
request of the Administrative Agent in its sole discretion, a signed copy of a
favorable opinion, addressed to the Administrative Agent and the other Secured
Parties, of counsel for the Loan Parties acceptable to the Administrative Agent
as to (A) the due organization and good standing of such Subsidiary, (B) the
due authorization, execution and delivery by such Subsidiary of such Loan
Documents, (C) the enforceability of such Loan Documents against such
Subsidiary, and (D) as to such other matters as the Administrative Agent
may reasonably request, and

 

(vi)          as promptly as
practicable after such formation or acquisition, deliver, upon the request of
the Administrative Agent in its sole discretion, to the Administrative Agent
with respect to each parcel of real property owned by the entity that is the
subject of such formation or acquisition, 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 assessment reports, each in scope, form and
substance satisfactory to the Administrative Agent, provided, however, that to the extent that the Company or any of its
Subsidiaries shall have otherwise received any of the foregoing items with
respect to such real property, such items shall, promptly after the receipt
thereof, be delivered to the Administrative Agent.

 

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

 

75

 

(i)            within 15 days
after such acquisition, furnish to the Administrative Agent a description of
the property so acquired in detail satisfactory to the Administrative Agent,

 

(ii)           within 15 days
after such acquisition, cause the applicable Subsidiary (other than any CFC or
a Subsidiary that is held directly or indirectly by a CFC)  of the Company  to duly execute and deliver to the Administrative Agent deeds
of trust, trust deeds, deeds to secure debt, mortgages, Perfection Certificate
Supplements and other security and pledge agreements, as specified by and in
form and substance satisfactory to the Administrative Agent, securing payment
of all the Obligations of such Subsidiary  under
the Loan Documents and constituting Liens on all such Collateral subject
thereto,

 

(iii)          within 30 days
after such acquisition, cause each Subsidiary
(other than any CFC or a Subsidiary that is held directly or
indirectly by a CFC)  of the
Company  to take whatever action
(including the recording of mortgages, the filing of Uniform Commercial Code
financing statements, the giving of notices and the endorsement of notices on
title documents) may be necessary or advisable in the opinion of the
Administrative Agent to vest in the Administrative Agent (or in any representative
of the Administrative Agent designated by it) valid and subsisting Liens on
such property, enforceable against all third parties in accordance with their
terms except as enforceability may be limited by Debtor Relief Laws or by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law)

 

(iv)          within 60 days after
such acquisition, deliver to the Administrative Agent, upon the request of the
Administrative Agent in its sole discretion, a signed copy of a favorable opinion,
addressed to the Administrative Agent and the other Secured Parties, of counsel
for the Loan Parties acceptable to the Administrative Agent as to (A) the
due organization and good standing of such Subsidiary, (B) the due
authorization, execution and delivery by such Subsidiary of such Loan
Documents, (C) the enforceability of such Loan Documents against such
Subsidiary, and (D) as to such other matters as the Administrative Agent
may reasonably request, and

 

(v)           as promptly as
practicable after any acquisition of a real property, deliver, upon the request
of the Administrative Agent in its sole discretion, to the Administrative Agent
with 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 assessment
reports, each in scope, form and substance satisfactory to the Administrative
Agent, provided, however, that to the extent that the Company or
any of its Subsidiaries shall have otherwise received any of the foregoing
items with respect to such real property, such items shall, promptly after the
receipt thereof, be delivered to the Administrative Agent,

 

(c)           Further
Assurances Generally. At any time upon request of the Administrative Agent,
promptly execute and deliver any and all further instruments and documents and
take all such other action as the Administrative Agent may deem necessary or
desirable in obtaining the full benefits of, or (as applicable) in perfecting
and preserving the 

 

76

 

Liens of, such guaranties, deeds of trust, trust deeds, deeds to secure
debt, mortgages, Perfection Certificate Supplements and other security and
pledge agreements.

 

6.13         Compliance with Environmental Laws.  Comply, and cause all lessees and other
Persons operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental Permits;
obtain and renew all Environmental Permits necessary for its operations and
properties; and conduct any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove
and clean up all Hazardous Materials from any of its properties, in accordance
with the requirements of all Environmental Laws; provided, however, that
neither the Company nor any of its Subsidiaries shall be required to undertake
any such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such
circumstances in accordance with GAAP.

 

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

 

6.15         Further Assurances.  Promptly upon request by the Administrative
Agent, or any Lender through the Administrative Agent, (a) correct any
material defect or error that may be discovered in any Loan Document with
respect to the Collateral or the Lien upon or security interests of the Secured
Parties in the Collateral or in the execution, acknowledgment, filing or
recordation thereof, and (b) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such further
acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to (i) carry out more
effectively the purposes of the Loan Documents, (ii) to the fullest extent
permitted by applicable law, subject the Company’s or any of its Subsidiaries’
properties, assets, rights or interests to the Liens now or hereafter intended
to be covered by any of the Collateral Documents, (iii) perfect and
maintain the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and (iv) assure,
convey, grant, assign, transfer, preserve, protect and confirm more effectively
unto the Secured Parties the rights granted or now or hereafter intended to be
granted to the Secured Parties under any Loan Document or under any other
instrument executed in connection with any Loan Document to which any Loan
Party is or is to be a party, and cause each of its Subsidiaries that is not an
Unrestricted Subsidiary to do so.

 

6.16         Compliance
with Terms of Leaseholds.  Make all
payments and otherwise perform all obligations in respect of all leases of real
property to which the Company or any Subsidiary that is not an Unrestricted
Subsidiary is a party, keep such leases in full force and effect and not allow
such leases to lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled, notify the Administrative Agent of any default by any
party with respect to such leases and cooperate with the Administrative Agent
in 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 the
failure to do so, either individually or in the aggregate, could not be
reasonably likely to have a Material Adverse Effect.

 

77

 

6.17         Material Contracts.  Perform and observe all the terms and
provisions of each Material Contract to be performed or observed by it and
maintain each such Material Contract in full force and effect except, in any
case, 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 Minimum
Unrestricted Cash Balance; provided, that if for any reason, the
aggregate amount of Unrestricted Cash at any time shall be less than
$280,000,000 at any other time (an “Activation Event”), the Borrowers
immediately shall notify the Administrative Agent and the Administrative Agent
shall promptly upon receipt of such notice shall give instructions or issue
orders under each Account Control Agreement.

 

ARTICLE VII

NEGATIVE COVENANTS

 

So
long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder (other than inchoate indemnification obligations) shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding
but not Cash Collateralized, the Company shall not, nor shall it permit any
Subsidiary to, directly or indirectly:

 

7.01         Liens. 
Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, or sign
or file or suffer to exist under the Uniform Commercial Code of any
jurisdiction a financing statement that names the Company or any of its
Subsidiaries as debtor, or assign any accounts or other right to receive
income, other than the following:

 

(a)   Liens
pursuant to any Loan Document;

 

(b)   Permitted Encumbrances and other Liens
existing on the date hereof and listed on Schedule 5.08(b) and any
renewals or extensions thereof, provided that (i) the property
covered thereby is not changed, (ii) the amount secured or benefited
thereby is not increased after the occurrence of a Covenant Triggering Event
except as contemplated by Section 7.02(g), (iii) the direct or
any contingent obligor with respect thereto is not changed, and (iv) any
renewal or extension of the obligations secured or benefited thereby after the
occurrence of a Covenant Triggering Event is permitted by Section 7.02(g);

 

(c)   Liens
for taxes (i) not yet due or (ii) which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

 

(d)   carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business (i) which are not overdue for a
period of more than 30 days or (ii) which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;

 

78

 

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

 

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

 

(g)   Liens
constituting encumbrances in the nature of reservations, exceptions,
encroachments, easements, rights of way, covenants running with the land, and
other similar title exceptions or encumbrances affecting any real property; provided
that (i) as of the Closing Date, no such Liens shall exist with respect to
any real property subject to a Mortgage except Permitted Encumbrances and (ii) with
respect to any parcel of real estate, all such Liens do not in the aggregate
materially detract from the value thereof or materially interfere with the use
of such parcel in the ordinary conduct of the Company’s or such Subsidiary’s
business;

 

(h)   Liens
securing judgments for the payment of money not constituting an Event of
Default under Section 8.01(h);

 

(i)    Liens
securing Indebtedness in respect of Capitalized Leases, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets; provided
that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness, (ii) the Indebtedness secured
thereby does not exceed the cost (if a portion of such Indebtedness will be
applied to any improvements to such property, including the lesser of (x) the
cost of such improvements and (y) the estimated fair market value of such
property after completion of such proposed improvements) or fair market value
(or, if a portion of such Indebtedness will be applied to any improvements to
such property, the estimated fair market value of such property upon completion
of proposed improvements), whichever is lower, of the property being acquired
on the date of acquisition and (iii) after the occurrence of a Covenant
Triggering Event, such Indebtedness is permitted under Section 7.02(k);

 

(j)    Liens
on the property of any Unrestricted Subsidiary which individually or in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect;

 

(k)   Liens
on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any other Loan Party or when such Person
becomes a Subsidiary of the Company or any other Loan Party; provided
that such Liens were not created in contemplation of such merger, consolidation
or Investment and do not extend to any assets other than those of the Person
merged into or consolidated with the Company or such Loan Party or acquired
thereby, as the case may be, and, after the occurrence of a Covenant Triggering
Event, the applicable Indebtedness secured by such Lien is permitted under Section 7.02(h) or
7.02(i), as applicable;

 

79

 

(l)    Uniform
Commercial Code financing statements filed for notice purposes with respect to
leased property not owned by the Company or any of its Subsidiaries;

 

(m)  Liens
on Excluded Collateral;

 

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

 

(o)   Permitted
Ohio Financing Facility Liens;

 

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

 

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

 

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

 

(a)   obligations
(contingent or otherwise) existing or arising under (i) the Permitted FX
Facility and (ii) any other Swap Contract, provided with respect to
clause (ii) that (x) such obligations are (or were) entered into by
such Person in the ordinary course of business for the purpose of directly
mitigating risks associated with fluctuations in interest rates or foreign
exchange rates, (y) such Swap Contract does not contain any provision
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party and (z) the aggregate
Swap Termination Obligations of all such Swap Contracts shall not exceed
$20,000,000;

 

(b)   Indebtedness
evidenced by the Senior Notes;

 

80

 

(c)   Indebtedness
under any Permitted Ohio Financing Facility, provided that (i) the
aggregate principal amount of such Permitted Ohio Financing Facility shall not
exceed $27,000,000 at any time outstanding, (ii) immediately before and
after giving pro forma effect to such Permitted Ohio Financing Facility, no
Default shall have occurred and be continuing, and (iii) the Permitted
Ohio Financing shall not result in any Liens on the Collateral except Permitted
Ohio Financing Liens;

 

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

 

(e)   Indebtedness
under the Loan Documents;

 

(f)    Indebtedness
of any Unrestricted Subsidiary to any Person, which Indebtedness, individually
and in the aggregate, could not reasonably be expected to have a Material
Adverse Effect;

 

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

 

(h)   Guaranties
of the Company or any Subsidiary in respect of Indebtedness otherwise permitted
hereunder of the Company or any Loan Party;

 

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

 

(j)    so
long as immediately before and after giving pro forma effect to any such
Indebtedness (whether the incurrence of such Indebtedness gives 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 the Maximum Aggregate
Basket Amount, Indebtedness incurred to finance insurance premiums in the
ordinary course of business;

 

81

 

(k)   so long as
immediately before and after giving pro forma effect to any such Indebtedness
(whether the incurrence of such Indebtedness gives 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 the Maximum Aggregate Basket Amount,
Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and
purchase money obligations for fixed or capital assets within the limitations
set forth in Section 7.01(i);

 

(l)    so long as immediately before and after
giving pro forma effect to any such Indebtedness (whether the incurrence of
such Indebtedness gives 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 the Maximum Aggregate Basket Amount, unsecured Indebtedness not
subject 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 Event
may be prepaid, refinanced, increased, modified, refunded, renewed, extended or
replaced at any time after the occurrence of a Covenant Triggering Event;

 

(m)  so long as immediately before and after giving
pro forma effect to any such Indebtedness (whether the incurrence of such
Indebtedness gives 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 the Maximum Aggregate Basket Amount, Indebtedness of the Company or
any of its Subsidiaries in respect of performance bonds, bid bonds, appeal
bonds, surety bonds and similar obligations provided in the ordinary course of
business to support the obligations of the Company and its Subsidiaries;

 

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

 

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

 

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

 

(q)   so long as immediately before and after
giving pro forma effect to any such guaranty (whether entering into such
guaranty gives 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
the Maximum Aggregate Basket Amount, guaranties in the ordinary 

 

82

 

course of
business of the obligations of suppliers, customers and licensees of the
Company and its Subsidiaries; and

 

(r)    after the occurrence of the initial Covenant
Triggering Event (but in no event after the occurrence of any subsequent
Covenant Triggering Event), so long as immediately after giving effect to such
Indebtedness, the initial Covenant Triggering Event is cured, unsecured
Indebtedness consisting of a convertible notes financing or other public debt
issuance.

 

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

 

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

 

(b)   Investments held by the Company and its
Subsidiaries in the form of Cash Equivalents;

 

(c)   so long as immediately before and after giving
pro forma effect to any such advances (whether the making of such advances
gives 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 the
Maximum Aggregate Basket Amount, advances to officers, directors and employees
of the Company and Subsidiaries for travel, entertainment, relocation and
analogous ordinary business purposes;

 

(d)   (i) Investments by the Company and its
Subsidiaries in their respective Subsidiaries outstanding on date of such
Covenant Triggering Event, (ii) additional Investments by the Company and
its Subsidiaries in Loan Parties, (iii) additional Investments by
Unrestricted Subsidiaries in Loan Parties or other Unrestricted Subsidiaries
and (iv) Investments by any Loan Party in any Unrestricted Subsidiary, provided
that (x) immediately before and after giving pro forma effect to each such
Investment, no Default shall have occurred and be continuing and (y) immediately
before and after giving pro forma effect to any Investments described in
subclause (iv) (whether the making of such Investment gives rise to or
occurs the occurrence of a Covenant Triggering Event), the Aggregate Basket
Amount as of such date is less than or equal to the Maximum Aggregate Basket
Amount;

 

(e)   Investments consisting of extensions of
credit in the nature of accounts receivable or notes receivable arising from
the grant of trade credit in the ordinary course of business, and Investments
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss;

 

(f)    Guaranties permitted by Section 7.02;

 

83

 

(g)   so long as immediately before and after
giving pro forma effect to any such Investment (whether the making of such
Investment gives 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 the Maximum Aggregate Basket Amount, Investments by the Borrowers in
Swap Contracts permitted under Section 7.02(a);

 

(h)   so long as immediately before and after
giving pro forma effect to any such Investment (whether the making of such
Investment gives 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 the Maximum Aggregate Basket Amount, the purchase or other acquisition
of all of the Equity Interests in, or all or substantially all of the property
of, any Person that, upon the consummation thereof, will be wholly-owned
directly by the Company or one or more of the other Loan Parties (including as
a result of a merger or consolidation and the acquisition of any Investments held
by such Person as a result thereof); provided that, with respect to each
purchase or other acquisition made pursuant to this Section 7.03(h):

 

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

 

(ii)           the lines of business of the Person
to be (or the property of which is to be) so purchased or otherwise acquired
shall be permitted pursuant to Section 7.07;

 

(iii)          (A) immediately before and
immediately after giving pro forma effect to any such purchase or other
acquisition, no Default shall have occurred and be continuing and (B) immediately
after giving effect to such purchase or other acquisition, the Company and its
Subsidiaries 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 most
recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or
(b) as though such purchase or other acquisition had been
consummated as of the first day of the fiscal period covered thereby; and

 

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

 

(i)    so long as immediately before and after
giving pro forma effect to any such Investment (whether such Investment gave
rise to or is made after the occurrence of a Covenant Triggering Event) the
Aggregate Basket Amount as of such date is less than or equal to the Maximum
Aggregate Basket Amount, Investments by the Company and its 

 

84

 

Subsidiaries not otherwise
permitted under this Section 7.03; provided that, with
respect to each Investment made pursuant to this Section 7.03(i):

 

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

 

(ii)           (A) immediately before and immediately
after giving pro forma effect to any such purchase or other acquisition, no
Default shall have occurred and be continuing and (B) immediately after
giving effect to such purchase or other acquisition, the Company and its
Subsidiaries 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 most
recently 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 first
day of the fiscal period covered thereby; and

 

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

 

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

 

(a)   any Subsidiary may merge with (i) the
Company, provided that the Company shall be the continuing or surviving
Person, (ii) any other Loan Party, provided that the surviving
Person shall be or shall become a Loan Party or (iii) any one or more
other Subsidiaries, provided that when any wholly-owned Subsidiary is
merging with another Subsidiary, such wholly-owned Subsidiary shall be the
surviving Person;

 

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

 

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

 

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

 

85

 

shall become a Loan Party and (iii) after
the occurrence of any Covenant Triggering Event, the Person surviving such
merger shall be a Loan Party;

 

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

 

(f)    so long as immediately before and after
giving effect to any such merger or consolidation no Default has occurred and
is continuing, any Loan Party that is a Subsidiary of the Company may merge
into or consolidate with any other Person or permit any other Person to merge
into or consolidate with it; provided, however, that in each
case, immediately after giving effect thereto, the surviving Person shall be or
shall become a Loan Party (or, if two Loan Parties merge, one of the Loan
Parties 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 out
property, whether now owned or hereafter acquired, in the ordinary course of
business;

 

(b)   Dispositions of inventory and accounts
receivable in connection with collection, in each case in the ordinary course
of business;

 

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

 

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

 

(e)   Dispositions permitted by Section 7.04;

 

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

 

(g)   any Disposition of the Ohio Sale/Leaseback
Property to the State of Ohio or a public utility or other Governmental
Authority of the State of Ohio pursuant to a Permitted Ohio Sale/Leaseback;

 

(h)   Dispositions of property by any Unrestricted
Subsidiary that could not reasonably be expected individually or in the
aggregate to have a Material Adverse Effect;

 

86

 

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

 

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

 

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

 

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

 

(m)  leases and subleases of real property
permitted by Section 7.01(o);

 

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

 

7.06         Restricted
Payments.  Declare or make, directly
or indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, or issue or sell any Equity Interests or accept any
capital contributions, except that, so long as no Default shall have occurred
and be continuing at the time of any action described below or would result
therefrom:

 

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

 

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

 

(c)   the Company and each Unrestricted Subsidiary
may purchase, redeem or otherwise acquire its Equity Interests with the
proceeds received from the substantially concurrent issue of new Equity
Interests;

 

(d)   any Foreign Subsidiary may issue director’s
qualifying shares or similar Equity Interests to the extent required by
Applicable Law;

 

87

 

(e)   the Company may issue (i) common Equity
Interests and stock options, (ii) Series A Junior Participating
Preferred Stock in accordance with the Rights Agreement (so long as such
issuance would not result in a Change of Control), and (iii) so long as no
Covenant Triggering Event has occurred or would occur as a result thereof, any
other form of Equity Interests;

 

(f)    the Company may redeem or exchange rights
issued pursuant to the Rights Agreement (so long as such issuance would not
result in a Change of Control);

 

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

 

(h)   payments or redemptions of the Senior Notes
and any other Indebtedness consisting of convertible notes to the extent
permitted under Section 7.13;

 

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

 

(j)    the Company may purchase shares of, or make
payments in respect of, its Equity Interests from, to or on behalf of its
directors, employees and consultants by net exercise or otherwise pursuant to
the terms of any employee stock options, restricted stock or incentive stock
plan that has been filed with the SEC; provided, that after the
occurrence of a Covenant Triggering Event, the Company may make such purchases
(other than by net exercise) only if immediately before and after giving pro
forma effect to any such purchase (whether the making of such purchase gives
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 the Maximum
Aggregate Basket Amount.

 

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

 

7.08         Transactions
with Affiliates.  Enter into any
transaction of any kind with any Unrestricted Subsidiary, or, after the
occurrence of a Covenant Triggering Event, enter into any transaction of any
kind with any other Affiliate of the Company or any other Loan Party, whether
or not in the ordinary course of business, other than on fair and reasonable
terms substantially as favorable to the Company or such Subsidiary as would be obtainable
by the Company or such Subsidiary at the time in a comparable arm’s length
transaction with a Person other than an Unrestricted Subsidiary or other
Affiliate, as the case may be; provided that the foregoing restriction
shall not apply to (i) any transactions among Loan Parties, (ii) existing
related party transactions described in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2006 or in the Company’s Definitive Proxy
for its 2007 Annual Meeting of Stockholders, (iii) any Restricted Payment
permitted pursuant to Section 7.06, and (iv) any payments or
other transaction pursuant to any tax sharing agreement between the Company and
any other Person with which the Company files a consolidated tax  return or with which the Company is part of a
consolidated group for tax purposes.

 

88

 

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

 

(b)           Enter
into or permit to exist any Contractual Obligation (other than this Agreement
or any other Loan Document) that limits the ability of any Subsidiary (other
than any Unrestricted Subsidiary) to make Restricted Payments to the Loan
Parties or to otherwise transfer property to or invest in the Loan Parties,
except for (A) any agreement in effect on (1) the Closing Date and
set forth on Schedule 7.09, or (2) at the time any Subsidiary
becomes a Subsidiary of the Company, so long as such agreement was not entered
into solely in contemplation of such Person becoming a Subsidiary of the
Company, (B) any agreement providing for the Disposition of property or
assets, provided that (1) such prohibitions or limitations apply solely to
the property being Disposed and (2) Disposal of such property or assets is
permitted under Section 7.05, or (C) customary non-assignment
provisions 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 or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the FRB) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such
purpose.

 

7.11         Amendments of Organization Documents.  Amend any of its Organization Documents in
any manner that could reasonably be expected to impair the rights and remedies of
the Administrative Agent or any Lender under any Loan Document or the ability
of any Loan Party to perform its obligations under any Loan Document to which
it is a party or that could otherwise reasonably be expected to have a material
adverse effect upon the legality, validity, binding effect or enforceability
against 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 any
time after a Covenant Triggering Event, make any change in accounting policies
or reporting practices, except as required by GAAP.

 

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

 

89

 

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

 

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

 

8.01         Events of Default.  Any of the following shall constitute an
Event 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 of
any Loan or any L/C Obligation or deposit any funds as Cash Collateral in
respect of L/C Obligations, or (ii) pay within three days after the same
becomes due, any interest on any Loan or on any L/C Obligation, or any fee due
hereunder, or (iii) pay within five days after the same becomes due, any
other amount payable hereunder or under any other Loan Document; or

 

(b)   Specific Covenants.  The Borrowers fail to perform or observe any
term, 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 observe
any other covenant or agreement (not specified in Section 8.01(a) or
(b) above) contained in any Loan Document on its part to be
performed or observed and such failure continues for 30 days after the earlier
of (i) the date on which a Responsible Officer of the Company knows or
should have known about such failure and (ii) the date the Administrative
Agent 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 the
Borrowers or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect when made or deemed made; or

 

(e)   Cross-Default.  (i) The occurrence of any event of
default under any Senior Note Document or any other Indebtedness consisting of
a convertible note indenture; (ii) any Loan Party or any Subsidiary
thereof (A) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect
of any Indebtedness or Guaranty (other than Indebtedness hereunder and
Indebtedness under Swap Contracts) having an aggregate principal amount (including
undrawn committed or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement) of more than the
Threshold Amount, or (B) fails to observe or perform any other agreement
or condition relating to any such Indebtedness or Guaranty or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guaranty (or a trustee or agent on 

 

90

 

behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guaranty to become payable or cash
collateral in respect thereof to be demanded; or (iii) there occurs under
any Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to
which a Loan Party or any Subsidiary thereof is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which a Loan Party or any Subsidiary
thereof is an Affected Party (as so defined) and, in either event, the Swap
Termination Obligations owed by such Loan Party or such Subsidiary as a result
thereof is greater than the Threshold Amount; or

 

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

 

(g)   Inability to Pay Debts; Attachment.  (i) Any Loan Party becomes unable or
admits in writing its inability or fails generally to pay its debts as they
become due, or (ii) any writ or warrant of attachment or execution or
similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy, (iii) or the occurrence of any event
described in the foregoing clauses (i) or (ii) with respect to any
Unrestricted Subsidiary resulting in a Material Adverse Effect; or

 

(h)   Judgments.  There is entered against any Loan Party or
any Subsidiary thereof (i) one or more final judgments or orders for the
payment of money in an aggregate amount (as to all such judgments and orders)
exceeding the Threshold Amount (to the extent not covered by independent
third-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 dispute
coverage), or (ii) any one or more non-monetary final judgments that have,
or could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings
are commenced by any creditor upon such judgment or order, or (B) there is
a period of 30 consecutive days during which a stay of enforcement of such
judgment, 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 respect
to a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of the Borrowers under Title IV of
ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of the Threshold Amount, or (ii) the Borrowers or any
ERISA Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of the Threshold Amount; or

 

(j)             Invalidity of Loan Documents.  Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any provision of any Loan Document, or
purports 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 delivery
thereof pursuant to Section 4.01 or 6.12 shall for any
reason (other than pursuant to the terms thereof) cease to create a valid and
perfected first priority Lien (subject to Liens permitted by Section 7.01)
on the Collateral purported to be covered thereby; or

 

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

 

8.02                           Remedies
upon Event of Default.  If any Event
of Default occurs and is continuing, the Administrative Agent shall, at the
request of, or may, with the consent of, the Required Lenders, take any or all
of the following actions:

 

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

 

(b)         declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, 

 

92

 

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

 

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

 

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

 

provided, however, that upon
the occurrence of an actual or deemed entry of an order for relief with respect
to the Borrowers under the Bankruptcy Code of the United States, the obligation
of each Lender to make Loans, any obligation of Bank of America to enter into
Secured Hedge Agreements under the Permitted FX Facility and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrowers to Cash Collateralize the L/C Obligations and
Secured Hedge Agreements under the Permitted FX Facility as aforesaid shall
automatically become effective, in each case without further act of the
Administrative Agent or any Lender.

 

8.03                           Application
of Funds.  After the exercise of
remedies provided for in Section 8.02 (or after the Loans have
automatically become immediately due and payable and the L/C Obligations and
Secured Hedge Agreements under the Permitted FX Facility have automatically
been 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 the
Administrative Agent in the following order:

 

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

 

Second, to payment of that portion of the
Obligations constituting fees, indemnities and other amounts (other than
principal, interest and Letter of Credit Fees) payable to the Lenders and
the L/C Issuer (including fees, charges and disbursements of counsel to the
respective Lenders and the L/C Issuer and
amounts payable under Article III, ratably among them in proportion
to the respective amounts described in this clause Second payable to
them;

 

Third, to payment of that portion of the
Obligations constituting accrued and unpaid Letter of Credit Fees and interest
on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders
and the L/C Issuer in proportion to the respective amounts described in this
clause Third payable to them;

 

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

 

93

 

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

 

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

 

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

 

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

 

ARTICLE IX

ADMINISTRATIVE AGENT

 

9.01                           Appointment
and Authority.  (a)  Each of the
Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act
on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto.  The
provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and the Borrowers shall
not have rights as a third party beneficiary of any of such provisions.

 

(b)                                 The Administrative Agent shall
also act as the “collateral agent”
under the Loan Documents, and each of the Lenders (in its capacities as a
Lender, potential Hedge Bank and potential Cash Management Bank) and the L/C
Issuer hereby irrevocably appoints and authorizes the Administrative Agent to
act 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 the
Loan Parties to secure any of the Obligations, together with such powers and
discretion as are reasonably incidental thereto.  In this connection, the Administrative Agent,
as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact
appointed by the Administrative Agent pursuant to Section 9.05 for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents, or for exercising any rights
and remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Article IX and Article XI
(including Section 10.04(c), as though such

 

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

 

9.02                           Rights
as a Lender.  The Person serving as
the Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity.  Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial advisor
or in any other advisory capacity for and generally engage in any kind of
business with the Company or any Subsidiary or other Affiliate thereof as if
such Person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders.

 

9.03                           Exculpatory
Provisions.  The Administrative Agent
shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents. 
Without limiting the generality of the foregoing, the Administrative
Agent:

 

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

 

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

 

(c)          shall not, except as expressly set forth
herein and in the other Loan Documents, have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrowers or any of its Affiliates that is communicated to or obtained by the
Person serving as the Administrative Agent or any of its Affiliates in any
capacity.

 

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

 

The
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or
in connection with this Agreement or any other Loan Document, (ii) the contents
of any certificate, report or 

 

95

 

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

 

9.04                           Reliance
by Administrative Agent.  The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed
by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person.  The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon.  In
determining compliance with any condition hereunder to the making of a Loan, or
the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, the Administrative Agent may
presume that such condition is satisfactory to such Lender or the L/C Issuer
unless the Administrative Agent shall have received notice to the contrary from
such Lender or the L/C Issuer prior to the making of such Loan or the issuance
of such Letter of Credit.  The Administrative
Agent may consult with legal counsel (who may be counsel for the Borrowers),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

9.05                           Delegation
of Duties.  The Administrative Agent
may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.

 

9.06                           Resignation
of Administrative Agent.  The
Administrative Agent may at any time give notice of its resignation to the
Lenders, the L/C Issuer and the Borrowers. 
Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with the Borrowers, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States.  If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting
the qualifications set forth above; 

 

96

 

provided that if the Administrative Agent shall notify the Borrowers
and the Lenders that no qualifying Person has accepted such appointment, then
such resignation shall nonetheless become effective in accordance with such
notice and (a) the retiring Administrative Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any collateral security held by the Administrative Agent on
behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the
retiring Administrative Agent shall continue to hold such collateral security
until such time as a successor Administrative Agent is appointed) and (b) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender and
the L/C Issuer directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section).  The fees payable
by the Borrowers to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrowers and
such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

 

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

 

9.07                           Non-Reliance
on Administrative Agent and Other Lenders. 
Each Lender and the L/C Issuer acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender or any
of their Related Parties and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement.  Each Lender and the L/C
Issuer also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

97

 

9.08                           No
Other Duties, Etc.  Anything herein
to the contrary notwithstanding, none of the Bookrunners, Arrangers,
Documentation Agents or Syndication Agents listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any
of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, a Lender or the L/C Issuer hereunder.

 

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

 

(a)          to file and prove a claim for the whole
amount 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 file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders, the L/C Issuer and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders, the L/C Issuer and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders, the L/C
Issuer 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 other
property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Lender and the L/C Issuer to make such payments to
the Administrative Agent and, if the Administrative Agent shall consent to the
making of such payments directly to the Lenders and the L/C Issuer, to pay to
the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 10.04.

 

Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender or the L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the L/C Issuer to
authorize the Administrative Agent to vote in respect of the claim of any
Lender or the L/C Issuer or in any such proceeding.

 

9.10                           Collateral
Matters.  The Lenders and the L/C
Issuer irrevocably authorize the Administrative Agent, at its option and in its
discretion,

 

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

 

98

 

and the expiration or termination of all Letters of Credit, (ii) that
Disposed of or to be Disposed of as part of or in connection with any
Disposition 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 property
granted to or held by the Administrative Agent under any Loan Document to the
holder of any Lien on such property that is permitted by Section 7.01(i) or
under any Mortgage with respect to easements or other Liens arising in
connection with the Permitted Ohio Sale/Leaseback and/or the Duke Power
Easement (as defined in the Mortgage).

 

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

 

ARTICLE X

MISCELLANEOUS

 

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

 

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

 

(b)         without
limiting the generality of clause (a) above, waive any condition set forth
in Section 4.02 as to any Credit Extension under a particular
Facility without the written consent of the Required Revolving Lenders or the
applicable Required Term Lenders, as the case may be;

 

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

 

99

 

(d)         postpone any date fixed by this Agreement or any
other Loan Document for  any payment  (excluding
mandatory prepayments) of principal, interest, fees or other amounts due
to the Lenders (or any of them) hereunder or under such other Loan Document
without the written consent of each Lender entitled to such payment;

 

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

 

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

 

(g)         change (i) any provision of this Section 10.01
or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any
consent hereunder (other than the definitions specified in clause (ii) of
this Section 10.01(g)), without the written consent of each Lender
or (ii) the definition of “Required Revolving Lenders” or “Required Term
Lenders” without the written consent of each Lender under the applicable
Facility;

 

(h)         release all or substantially all of the
Collateral in any transaction or series of related transactions, without the
written consent of each Lender;

 

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

 

(j)             waive any condition set forth in Section 6.18
or consent to any amendment of the definitions of “Activation Event,” “Covenant
Triggering Event,” “Maximum Aggregate Basket Amount,” “Minimum Unrestricted
Cash Balance,” “Unrestricted Cash” or “Unrestricted Cash Equivalents” without
the written consent of each Lender;

 

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

 

100

 

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

 

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

 

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

 

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

 

Notices sent by hand or overnight courier service, or mailed by
certified 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 (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient).  Notices delivered
through electronic communications to the extent provided in subsection (b) below
shall be effective as provided in such subsection (b).

 

(b)                                 Electronic Communications.  Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites) pursuant
to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant
to Article II if such Lender or the L/C Issuer, as applicable, has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication.  The Administrative Agent or the Borrowers
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.

 

Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication
is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or
communications posted to an Internet or

 

101

 

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

 

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM.  In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrowers, any Lender, the
L/C Issuer or any other Person for losses, claims, damages, liabilities or
expenses of any kind (whether in tort, contract or otherwise) arising out of
the Borrowers’ or the Administrative Agent’s transmission of Borrower Materials
through the Internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by
a final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to the Borrowers, any
Lender, 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 Administrative
Agent and the L/C Issuer may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the other parties
hereto.  Each other Lender may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the Borrowers, the Administrative Agent and the L/C
Issuer.  In addition, each Lender agrees
to notify the Administrative Agent from time to time to ensure that the
Administrative Agent has on record (i) an effective address, contact name,
telephone number, telecopier number and electronic mail address to which
notices and other communications may be sent and (ii) accurate wire
instructions for such Lender. 
Furthermore, each Public Lender agrees to cause at least one individual
at or on behalf of such Public Lender to at all times have selected the “Private
Side Information” or similar designation on the content declaration screen of the
Platform in order to enable such Public Lender or its delegate, in accordance
with such Public Lender’s compliance procedures and applicable Law, including
United States Federal and state securities Laws, to make reference to Borrower
Materials that are not made available through the “Public Side Information”
portion of the Platform and that may contain material non-public information
with respect to the Borrowers or its securities for purposes of United States
Federal or state securities laws.

 

(e)           The Company as Agent for Notice
for the Borrowers.  Each Borrower
hereby appoints the Company as its agent for delivery and receipt of all
notices required hereunder and other the other Loan Documents.  Each Borrower hereby acknowledges and 

 

102

 

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

 

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

 

10.03       No
Waiver;  Cumulative Remedies.  No failure by any Lender, the L/C Issuer or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder or under any other
Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.  The rights,
remedies, powers and privileges herein provided, and provided under each other
Loan Document, are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.

 

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

 

103

 

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 the
Administrative Agent (and any sub-agent thereof), each Lender and the L/C
Issuer, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all
fees and time charges and disbursements for attorneys who may be employees of
any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee
by 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 of
this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, or, in the case of the
Administrative Agent (and any sub-agent thereof) and its Related Parties only,
the administration of this Agreement and the other Loan Documents, (ii) any
Loan 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 a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by the Company or any of its Subsidiaries, or any
Environmental Liability related in any way to the Company or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrowers or any other Loan Party or any of the Borrowers’ or such Loan Party’s
directors, shareholders or creditors,
and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrowers or any
other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrowers or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction.

 

(c)           Reimbursement by Lenders.  To the extent that the Borrowers for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any
sub-agent thereof), the L/C Issuer or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any 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 the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred
by or asserted against the Administrative Agent (or any such sub-agent) or the
L/C Issuer in its capacity as such, or against any Related Party of any of the
foregoing acting for the 

 

104

 

Administrative
Agent (or any such sub-agent) or L/C Issuer in connection with such
capacity.  The obligations of the Lenders
under this subsection (c) are subject to the provisions of Section 2.12(d).

 

(d)           Waiver of Consequential Damages,
Etc.  To the fullest extent permitted
by applicable law, the Borrowers shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or
the use of the proceeds thereof.  No
Indemnitee referred to in subsection (b) above shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and nonappealable judgment of a court of
competent jurisdiction.

 

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

 

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

 

10.05       Payments
Set Aside.  To the extent that any
payment 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 or
any Lender exercises its right of setoff, and such payment or the proceeds of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent, the L/C Issuer or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to
pay to the Administrative Agent upon demand its applicable share (without
duplication) of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the applicable Overnight Rate from
time to time in effect.  The obligations
of the Lenders and the L/C Issuer under clause (b) of the preceding
sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

10.06       Successors
and Assigns.  (a)  Successors
and Assigns Generally.  The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except
that the Borrowers may 

 

105

 

assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder 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 to
the restrictions of Section 10.06(f) (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

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

 

(i)            Minimum Amounts.

 

(A)          in the case of an assignment of the
entire remaining amount of the assigning Lender’s Commitment under any Facility
and the Loans at the time owing to it under such Facility or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no
minimum amount need be assigned; and

 

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

 

106

 

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

 

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

 

(A)  the consent of the Borrowers (such consent not
to be unreasonably withheld or delayed) shall be required unless (1) an
Event of Default has occurred and is continuing at the time of such assignment
or (2) such assignment is to a Lender, an Affiliate of a Lender or an
Approved Fund;

 

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

 

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

 

(iv)          Assignment and Assumption.  The parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee in the amount of $3,500; provided,
however, that the Administrative Agent may, in its sole discretion,
elect to waive such processing and recordation fee in the case of any
assignment.  The assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

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

 

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

 

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

 

107

 

this Agreement (and, in
the case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
3.01, 3.04, 3.05 and 10.04 with respect to facts and
circumstances 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 of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with Section 10.06(d) (to
the extent such assignment or transfer complies with Section 10.06(d)).

 

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

 

(d)           Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrowers or the Administrative Agent, sell
participations to any Person (other than a natural person or the Company or any
of the Company’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans (including such Lender’s participations in L/C Obligations)
owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrowers, the Administrative Agent, the Lenders
and the L/C Issuer shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 10.01 that
affects such Participant.  Subject to subsection
(e) of this Section, the Borrowers agrees that each Participant shall
be entitled to the benefits of Sections 3.01, 3.04 and 3.05  to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to Section 10.06(b).  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.08  as though it were a Lender, provided such
Participant agrees to be subject to Section 2.13 as though it were
a Lender.

 

(e)           Limitations upon Participant
Rights.  A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04  than the applicable Lender would have 

 

108

 

been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrowers’ prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Borrowers are
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrowers, to comply with Section 3.01(e) as
though it were a Lender.

 

(f)            Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(g)           Electronic Execution of
Assignments.  The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records
Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

 

(h)           [Reserved.]

 

(i)            Resignation as L/C Issuer after Assignment.  Notwithstanding
anything to the contrary contained herein, if at any time Bank of America
assigns all of its Revolving Credit Commitment and Revolving Credit Loans
pursuant 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/C
Issuer, the Borrowers shall be entitled to appoint from among the Lenders a
successor L/C Issuer hereunder; provided, however, that no
failure by the Borrowers to appoint any such successor shall affect the
resignation of Bank of America as L/C Issuer. 
If Bank of America resigns as L/C Issuer, it shall retain all the
rights, powers, privileges and duties of the L/C Issuer hereunder with respect
to all Letters of Credit outstanding as of the effective date of its
resignation 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 fund
risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  Upon the appointment of a successor L/C
Issuer, (a) such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring L/C Issuer and (b) the
successor L/C Issuer shall issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or make
other arrangements satisfactory to Bank of America to effectively assume the
obligations of Bank of America with respect to such Letters of Credit.

 

10.07       Treatment
of Certain Information; Confidentiality. 
Each of the Administrative Agent, the Arranger, the Lenders and the L/C
Issuer agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed 

 

109

 

(a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any
regulatory authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrowers and its obligations, (g) with the
consent of the Borrowers or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, any Lender, the L/C Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other than
the Borrowers.

 

For purposes of this Section, “Information”
means all information received from any Loan Party or any Subsidiary thereof
relating to any Loan Party or any Subsidiary thereof or their respective
businesses, other than any such information that is available to the
Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis
prior to disclosure by any Loan Party or any Subsidiary thereof, provided
that, in the case of information received from a Loan Party or any such
Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as confidential.  Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

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

 

10.08       Right
of Setoff.  If an Event of Default
shall have occurred and be continuing, each Lender, the L/C Issuer and each of
their respective Affiliates is hereby authorized at any time and from time to
time, after obtaining the prior written consent of the Administrative Agent, to
the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender, the L/C Issuer or any such
Affiliate to or for the credit or the account of the Borrowers against any and
all of the obligations of the Borrowers now or hereafter existing under this
Agreement 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 made
any demand under this Agreement or any other Loan 

 

110

 

Document and although such obligations of the Borrowers may be
contingent or unmatured or are owed to a branch or office of such Lender or the
L/C Issuer different from the branch or office holding such deposit or
obligated on such indebtedness.  The
rights of each Lender, the L/C Issuer and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the L/C Issuer or their respective
Affiliates may have.  Each Lender and the
L/C Issuer agrees to notify the Borrowers and the Administrative Agent promptly
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application.

 

10.09       Interest
Rate Limitation.  Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrowers. 
In determining whether the interest contracted for, charged, or received
by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.

 

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

 

10.11       Survival
of Representations and Warranties. 
All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery
hereof and thereof.  Such representations
and warranties have been or will be relied upon by the Administrative Agent and
each Lender, regardless of any investigation made by the Administrative Agent
or any Lender or on their behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default at the time
of any Credit Extension, and shall continue in full force and effect as long as
any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied
or any Letter of Credit shall remain outstanding.

 

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

 

111

 

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

 

10.13       Replacement
of Lenders.  If (i) any Lender
requests compensation under Section 3.04, (ii) the Borrowers
are required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, (iii) any
Lender is a Defaulting Lender or (iv) a Lender refuses to consent to a
proposed amendment, waiver, consent or release with respect to any Loan
Document that requires the consent of each Lender and that has been approved by
at least the Required Lenders, then the Borrowers may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 10.06),
all of its interests, rights and obligations under this Agreement and the
related Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:

 

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

 

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

 

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

 

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

 

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

 

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

 

112

 

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

 

(b)           SUBMISSION TO JURISDICTION.  THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY
SUBMIT, FOR THEMSELVES AND THEIR PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK
SITTING IN MANHATTAN IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT
OF THE SOUTHERN
DISTRICT OF NEW YORK SITTING IN MANHATTAN,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. 
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW.  NOTHING IN THIS AGREEMENT OR IN ANY
OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY
LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWERS OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)           WAIVER OF VENUE.  THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT
THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

 

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

 

10.15       Waiver of Jury Trial. EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS 

 

113

 

AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

10.16       No
Advisory or Fiduciary Responsibility.  In connection with all aspects of
each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
the Borrowers acknowledge and agree that: (i) (A) the arranging and
other services regarding this Agreement provided by the Administrative Agent
and the Arranger are arm’s-length commercial transactions between the Borrowers
and their respective Affiliates, on the one hand, and the Administrative Agent
and the Arranger, on the other hand, (B) the Borrowers have consulted
their own legal, accounting, regulatory and tax advisors to the extent they
have deemed appropriate, and (C) the Borrowers are capable of evaluating,
and understand and accept, the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents; (ii) (A) the
Administrative Agent and the Arranger each is and has been acting solely as a
principal and, except as expressly agreed in writing by the relevant parties,
has not been, is not, and will not be acting as an advisor, agent or fiduciary
for the Borrowers or any of their respective Affiliates, or any other Person
and (B) neither the Administrative Agent nor the Arranger has any
obligation to the Borrowers or any of their respective Affiliates with respect
to the transactions contemplated hereby except those obligations expressly set
forth herein and in the other Loan Documents; and (iii) the Administrative
Agent and the Arranger and their respective Affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of
the Borrowers and their respective Affiliates, and neither the Administrative
Agent nor the Arranger has any obligation to disclose any of such interests to
the Borrowers or any of their respective Affiliates.  To the fullest extent permitted by law,  the Borrowers hereby waive and release any claims that they
may have against the Administrative Agent and the Arranger with respect to any
breach or alleged breach of agency or fiduciary duty in connection with any aspect
of any transaction contemplated hereby.

 

10.17       USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record
information that identifies each Loan Party, which information includes the
name and address of each Loan Party and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify each Loan Party
in accordance with the Act.

 

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

 

114

 

AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

115

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly 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., as
Administrative 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 as
therein defined), among Amylin Pharmaceuticals, Inc., a Delaware
corporation (the “Company”),  and
each of its wholly-owned domestic subsidiaries party thereto (collectively,
with the Company, the “Borrowers”), each lender from time to time party
thereto and Bank of America, N.A., as Administrative Agent, Collateral Agent
and L/C Issuer.

 

The undersigned hereby requests on behalf of the Borrowers (select
one):

 

o  A Borrowing of Loans                                                       o  A conversion or continuation of Loans

 

1.             On                                                               
(a Business Day).

 

2.                                       In
the amount of $                          .

 

3.                                       Class
of Loan requested:

 

[Revolving Loan, Term
Loan]

 

4.                                       Comprised
of                                                   .

 

[Type of Loan
requested:  Base Rate Loan or Eurocurrency
Rate Loan]

 

5.                                       For
Eurocurrency Rate Loans:  with an
Interest Period of                     
months.

 

The Borrowing requested herein complies with the proviso to the first
sentence of Section 2.01(b) of the Agreement.

 

AMYLIN
PHARMACEUTICALS, INC.

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

A-1

EXHIBIT B

 

FORM OF NOTE FOR
TERM LOANS

 

FOR VALUE RECEIVED, the undersigned (the “Borrowers”), hereby jointly
and 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, the
principal amount of                         
DOLLARS ($                    ),
such principal amount being equal to the amount of a Term Loan made by the
Lender to the Borrowers under that certain Credit Agreement, dated as of December [    ],
2007 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement”; the terms defined therein
being used herein as therein defined), among the Borrowers, the Lender, the
other lenders from time to time party thereto and Bank of America, N.A., as Administrative
Agent and L/C Issuer.

 

The Borrowers jointly and severally promise to pay interest on the
unpaid principal amount of each Term Loan from the date of such Term Loan until
such principal amount is paid in full, at such interest rates and at such times
as provided in the Agreement.  All
payments of principal and interest shall be made to the Administrative Agent
for the account of the Lender in Dollars in immediately available funds at the
Administrative Agent’s Office.  If any
amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of
actual payment (and before as well as after judgment) computed at the per annum
rate 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 part
subject to the terms and conditions provided therein.  This Term Note is also secured by the
Collateral.  If one or more of the Events
of Default specified in the Agreement occurs and is continuing, all amounts
then remaining unpaid on this Term Note shall become under certain
circumstances, or may be declared to be, immediately due and payable all as
provided in the Agreement.  Term Loans
made by the Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. The Lender may
also attach schedules to this Term Note and endorse thereon the date, amount
and maturity of its Term Loans and payments with respect thereto.

 

The Borrowers, for themselves and their respective successors and
assigns, hereby waive diligence, presentment, protest and demand and notice of
protest, demand, dishonor and non-payment of this Term Note.

 

 

[Signature Page Follows]

 

B-1

 

THIS TERM NOTE SHALL BE
GOVERNED 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 Note

Signature Page

 

 

TERM LOANS AND PAYMENTS
WITH 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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

EXHIBIT
C

 

FORM OF NOTE FOR
REVOLVING LOANS

 

FOR VALUE RECEIVED, the undersigned (the “Borrowers”), hereby jointly
and 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, the
principal amount of each Revolving Credit Loan from time to time made by the
Lender to the Borrowers under that certain Credit Agreement, dated as of December [    ],
2007 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement”; the terms defined therein
being used herein as therein defined), among the Borrowers, the Lender, the
other lenders from time to time party thereto and Bank of America, N.A., as
Administrative Agent and L/C Issuer.

 

The Borrowers jointly and severally promise to pay interest on the
unpaid principal amount of each Revolving Credit Loan from the date of such
Revolving Credit Loan until such principal amount is paid in full, at such
interest rates and at such times as provided in the Agreement.  All payments of principal and interest shall
be made to the Administrative Agent for the account of the Lender in Dollars in
immediately available funds at the Administrative Agent’s Office.  If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.

 

This Revolving Credit Note is one of the Revolving Credit Notes
referred to in the Agreement, is entitled to the benefits thereof and may be
prepaid in whole or in part subject to the terms and conditions provided
therein.  This Revolving Credit Note is
also secured by the Collateral.  If one
or more of the Events of Default specified in the Agreement occurs and is
continuing, all amounts then remaining unpaid on this Revolving Credit Note
shall become under certain circumstances, or may be declared to be, immediately
due and payable all as provided in the Agreement.  Revolving Credit Loans made by the Lender
shall be evidenced by one or more loan accounts or records maintained by the
Lender in the ordinary course of business. The Lender may also attach schedules
to this Note and endorse thereon the date, amount and maturity of its Revolving
Credit Loans and payments with respect thereto.

 

The Borrowers, for themselves and their respective successors and
assigns, hereby waive diligence, presentment, protest and demand and notice of
protest, demand, dishonor and non-payment of this Revolving Credit Note.

 

 

[Signature Page Follows]

 

C-1

 

THIS NOTE SHALL BE
GOVERNED 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 Note

Signature Page

 

 

REVOLVING LOANS AND
PAYMENTS 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 OF
COMPLIANCE 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 to
time, the “Agreement;”.
the terms defined therein being used herein as therein defined), among Amylin
Pharmaceuticals, 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 party
thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent
and L/C Issuer.

 

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

 

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

 

1.             The
Company has delivered the year-end audited financial statements required by Section 6.01(a) of
the Agreement for the fiscal year of the Company and its Subsidiaries ended as
of the above date, together with the report and opinion of an independent
certified public accountant required by such section.

 

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

 

1.             The
Company has delivered the unaudited financial statements required by Section 6.01(b) of
the Agreement for the fiscal quarter of the Company and its Subsidiaries ended
as of the above date.  Such consolidated
financial statements fairly present the financial condition, results of
operations and cash flows of the Company and its Subsidiaries in accordance
with GAAP as at such date and for such period, subject only to normal year-end
audit adjustments and the absence of footnotes.

 

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

 

3.             A
review of the activities of the Borrowers during such fiscal period has been
made under the supervision of the undersigned with a view to 

 

D-1

 

determining whether during such fiscal period the Borrowers performed
and observed all of their  Obligations
under the Loan Documents, and

 

[select one:]

 

[to the best knowledge of the undersigned, during such
fiscal period each Borrower performed and observed each covenant and condition
of 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, the
following covenants or conditions have not been performed or observed and the
following is a list of each such [Covenant Triggering Event] [Activation
Event]  [Default] and its nature and
status:]

 

4.             Attached
as an exhibit hereto is a true and correct listing of Unrestricted Cash
Equivalents 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 its
Subsidiaries on a consolidated basis, Solvent.

 

 6.            [Use for certificate
delivered in connection with
fiscal year-end financial statements ] Attached as an exhibit hereto
is the insurance summary required under Section 6.02(e) of the
Agreement.

 

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) of
the Agreement.

 

[Signature Page Follows]

 

 

(1) No more than five (5) Business Days before the date of
this certificate.

 

D-2

 

IN
WITNESS WHEREOF, the
undersigned has executed this Certificate on behalf of all the Borrowers as of
                                         ,                            .

 

	
   

  	
  AMYLIN PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

Signature Page

Compliance Certificate

 

EXHIBIT
E

 

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 and
between [the][each](1) Assignor identified in item 1 below ([the][each,
an] “Assignor”) and [the][each](2) Assignee identified in item 2
below ([the][each, an] “Assignee”). 
[It is understood and agreed that the rights and obligations of [the
Assignors][the Assignees](3) hereunder are several and not joint.](4) 
Capitalized terms used but not defined herein shall have the meanings given to
them 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 forth
in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

 

For an agreed consideration, [the][each] Assignor hereby irrevocably
sells and assigns to [the Assignee][the respective Assignees], and [the][each]
Assignee hereby irrevocably purchases and assumes from [the Assignor][the
respective Assignors], subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a Lender][their
respective capacities as Lenders] under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to
the amount and percentage interest identified below of all of such outstanding
rights and obligations of [the Assignor][the respective Assignors] under the
respective facilities identified below (including, without limitation, the
Letters of Credit included in such facilities and the Collateral securing such
facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of [the
Assignor (in its capacity as a Lender)][the respective Assignors (in their
respective capacities as Lenders)] against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice
claims, statutory claims and all other claims at law or in equity related to
the 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 being
referred to herein collectively as [the][an] “Assigned Interest”).  Each such sale and assignment is without
recourse to [the][any] Assignor and, except as expressly provided in this
Assignment and Assumption, without representation or warranty by [the][any]
Assignor.

 

	
  1.

  	
  Assignor[s]:

  	
   

  	
   

  

 

(1) For bracketed language here and elsewhere in
this form relating to the Assignor(s), if the assignment is from a single
Assignor, choose the first bracketed language. 
If the assignment is from multiple Assignors, choose the second
bracketed language.

(2) For bracketed language here and elsewhere in
this form relating to the Assignee(s), if the assignment is to a single
Assignee, choose the first bracketed language. 
If the assignment is to multiple Assignees, choose the second bracketed
language.

(3) Select as appropriate.

(4) Include bracketed language if there are
either multiple Assignors or multiple Assignees.

 

E-1

 

 

2.             Assignee[s]:                                         [for
each Assignee, indicate [Affiliate][Approved Fund] of [identify
Lender](5)]

 

3.             Borrowers:       Amylin Pharmaceuticals, Inc., a
Delaware corporation, and certain of its wholly owned domestic subsidiaries

 

4.             Administrative Agent:  Bank of America, N.A., as the administrative
agent and collateral agent under the

 

Credit Agreement

 

5.             Credit
Agreement:            The Credit
Agreement, dated as of December [    ], 2007, among Amylin
Pharmaceuticals, Inc., a Delaware corporation, each of its wholly owned
domestic subsidiaries party thereto (collectively, the “Borrowers”), the
lenders from time to time party thereto, Bank of America, N.A., as
Administrative 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 as
applicable.

(6) List each
Assignor, as appropriate.

(7) List each
Assignee, as appropriate.

(8) Fill in
the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g. “Revolving Credit
Commitment”, “Term Loan Commitment”, etc.).

(9) Amounts
in this column and in the column immediately to the right to be adjusted by the
counterparties to take into account any payments or prepayments made between
the Trade Date and the Effective Date.

(10) Set
forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all
Lenders thereunder.

 

E-2

 

[7.            Trade Date:                               ](11)

 

Effective Date:                                     ,
20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed
to:

 

	
   

  	
   

  	
  ASSIGNOR

  
	
   

  	
   

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASSIGNEE

  
	
   

  	
   

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

(11) To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of
the 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 the
terms of the Credit Agreement.

(13) To be added to the
extent the consent of the Borrowers and/or other parties (e.g. L/C Issuer) is
required by the terms of the Credit Agreement.

 

E-4

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

AMYLIN CREDIT AGREEMENT

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND
ASSUMPTION

 

1.             Representations
and Warranties.

 

1.1.          Assignor.  [The][Each] Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of [the][the
relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free
and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby, and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any Collateral thereunder, (iii) the financial condition of
the Borrowers, any of the Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrowers, any of the Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

 

1.2.          Assignee.  [The][Each] Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under
the Credit Agreement, (ii) it meets all the requirements to be an assignee
under Section 10.06(b)(iii), (v) and (vi) of
the Credit Agreement (subject to such consents, if any, as may be required
under Section 10.06(b)(iii) of the Credit Agreement), (iii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of [the][the relevant]
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it
is sophisticated with respect to decisions to acquire assets of the type
represented by [the][such] Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire [the][such] Assigned
Interest, is experienced in acquiring assets of such type, (v) it has
received a copy of the Credit Agreement, and has received or has been accorded
the opportunity to receive copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, (vi) it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Assignment and Assumption and
to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such]
Assignee; and (b) agrees that (i) it will, independently and without
reliance upon the Administrative Agent, [the][any] Assignor or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not 

 

E-5

 

taking action under the Loan Documents, and (ii) it
will perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Lender.

 

2.             Payments.  From and after the Effective Date, the
Administrative Agent shall make all payments in respect of [the][each] Assigned
Interest (including payments of principal, interest, fees and other amounts) to
[the][the relevant] Assignor for amounts which have accrued to but excluding
the Effective Date and to [the][the relevant] Assignee for amounts which have
accrued from and after the Effective Date.

 

3.             General
Provisions.  This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed
counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.

 

E-6

EXHIBIT F

 

 

 

PLEDGE AND
SECURITY 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

 

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 AND
SECURITY 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 domestic
subsidiaries identified on the signature pages hereof (collectively, with
the Company, the “Borrowers”) and each Subsidiary of the Company that
hereafter becomes a party hereto from time to time pursuant to Section 6.02
(all such Subsidiaries, together with the Borrowers, hereinafter collectively
referred to as the “Grantors”, and each individually as a “Grantor”)
and BANK OF AMERICA, N.A., as
administrative and collateral agent (in such capacity, the “Administrative
Agent”) 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 to
time party thereto, and the Administrative Agent, and the other Loan Documents
referred to therein, the Lenders, the L/C Issuer and the other Secured Parties
have agreed to make certain credit extensions to or for the benefit of the
Borrowers;

 

WHEREAS,
the obligations of the Lenders to make such Credit Extensions under the Credit
Agreement are conditioned upon, among other things, the execution and delivery
of this Agreement by each Grantor; and

 

WHEREAS,
to obtain such benefits, each Grantor is willing to grant a Lien on the
Collateral of such Grantor in favor of the Administrative Agent for the benefit
of the Secured Parties as collateral security for its Obligations as
hereinafter provided;

 

NOW
THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Grantor hereby
agrees, for the benefit of each Secured Party, as follows:

 

ARTICLE
I

DEFINITIONS

 

1.01                        Credit
Agreement Definitions and Constructions. 
(a)  Capitalized terms used in this Agreement and not otherwise
defined herein have the meanings specified in Section 1.01 of the Credit
Agreement.

 

(b)                                 The
rules of construction specified in Sections 1.02 through 1.06 of the
Credit Agreement also apply to this Agreement.

 

1.02                        UCC
Definitions.  All terms defined in
the UCC and not defined in this Agreement have the meanings specified therein.

 

1.03                        Other
Defined Terms.  As used in this
Agreement, the following terms have the meanings specified below:

 

“Account”
means a right to payment of a monetary obligation, whether or not earned by
performance (and shall include invoices, contracts, rights, accounts
receivable, notes, refunds, indemnities, interest, late charges, fees,
undertakings, and all other obligations and amounts owing to any Grantor from
any Person):  (a) for property that
has 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 of
insurance issued or to be issued; (d) for a secondary obligation incurred
or to be incurred; (e) for energy provided or to be 

 

 

provided; or (f) arising out of the use of a credit or charge card
or information contained on or for use with the card.

 

“Account
Control Agreement” means an account control agreement in substantially the
form of Exhibit C-1 or C-2 to the Perfection Certificate, as
applicable, or otherwise in form and substance reasonably satisfactory to the
Administrative Agent, entered into among a Grantor, the Administrative Agent
and the bank or Securities Intermediary where a Deposit Account or Securities
Account, respectively, of such Grantor is maintained.

 

“Account
Debtor” means any Person who is or who may become obligated to any Grantor
under, with respect to or on account of an Account.

 

“Administrative
Agent” has the meaning specified in the introductory paragraph hereto (and
shall include any successor acting in the capacity as successor administrative
agent and collateral agent for the Secured Parties pursuant to Section 9.06
of the Credit Agreement).

 

“Chattel
Paper” means a record or records that evidence both a monetary obligation
and a security interest in specific goods, a security interest in specific
goods and software used in the goods, a security interest in specific goods and
license of software used in the goods, a lease of specific goods, or a lease of
specific goods and license of software used in the goods.

 

“Collateral”
has the meaning provided in Section 3.01.

 

“Commercial
Tort Claim” means a claim arising in tort with respect to which the
claimant is a Grantor.

 

“Copyright
License” means any written agreement, now or hereafter in effect, granting
any right to any third party under any Copyright now or hereafter owned by any
Grantor or that any Grantor otherwise has the right to license, or granting any
right to any Grantor under any Copyright now or hereafter owned by any third
party, 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) all
copyright rights in any work subject to the copyright laws of the United States
or any other country, whether as author, assignee, transferee or otherwise, and
(b) all registrations and applications for registration of any such
copyright in the United States or any other country, including registrations,
recordings, supplemental registrations and pending applications for
registration in the United States Copyright Office.

 

“Credit
Agreement” has the meaning specified in the recitals hereto.

 

“Deposit
Account” 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, if
any, from time to time representing or evidencing such accounts) maintained
with a bank.

 

“Designated
Event of Default” means an Event of Default described under Sections 8.01(a),
(f) or (g) of the Credit Agreement and, following written notice
thereof 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) of
the UCC.

 

2

 

“Electronic
Chattel Paper” means Chattel Paper evidenced by a record or records
consisting of information stored in an electronic medium.

 

“Entitlement
Holder” means a Person identified in the records of a Securities
Intermediary as the Person having a Security Entitlement against the Securities
Intermediary.  If a person acquires a
Security Entitlement by virtue of Section 8-501(b)(2) or (3) of
the UCC, such person is the Entitlement Holder.

 

“Equipment”
means all machinery, equipment in all its forms (including without limitation
all “Equipment” as defined in the UCC), wherever located, including, without
limitation, all laboratory research equipment, all repair equipment, office
equipment, motor vehicles, furniture and furnishings, all other property
similar to the foregoing (including tools, parts and supplies of every kind and
description), components, parts and accessories installed thereon or affixed
thereto and all parts thereof, and all Fixtures and all accessories, additions,
attachments, improvements, substitutions and replacements thereto and therefor.

 

“Federal
Securities Laws” has the meaning specified in Section 5.03.

 

“Financial
Asset” means:

 

(a)                                  a
Security;

 

(b)                                 an
obligation of a Person or a share, participation or other interest in a Person
or in property or an enterprise of a Person, which is, or is of a type, dealt
with in or traded on financial markets, or which is recognized in any area in
which it is issued or dealt in as a medium for investment; or

 

(c)                                  any
property that is held by a Securities Intermediary for another person in a
Securities Account if the Securities Intermediary has expressly agreed with the
other Person that the property is to be treated as a Financial Asset under Article 8
of the UCC.  As the context requires, the
term Financial Asset shall mean either the interest itself or the means by
which a Person’s claim to it is evidenced, including a certificated or
uncertificated Security, a certificate representing a Security or a Security
Entitlement.

 

“Fixtures”
means all items of Goods, whether now owned or hereafter acquired, of any
Grantor that become so related to particular real property that an interest in
them arises under any real property law applicable thereto.

 

“General
Intangibles” means all “General Intangibles” as defined in the UCC,
including things in action and all other intangible personal property of any
Grantor of every kind and nature (other than Accounts, Chattel Paper, Commercial
Tort Claims, Deposit Accounts, Documents, Goods, Instruments, Investment
Property, Letter-of-Credit Rights, Letters of Credit, and money) now owned or
hereafter acquired by such Grantor, including corporate, limited liability
company, limited partnership or other business records, indemnification claims,
contract rights (including rights under leases, whether entered into as lessor
or lessee, Swap Contracts and other agreements), Payment Intangibles and tax
refund claims.

 

“Goods”
means all things that are movable when a security interest attaches (including (a) Fixtures
and (b) computer programs embedded in goods and any supporting information
provided in connection with a transaction relating to the program if (i) the
program is associated with the goods in such a manner that is customarily
considered 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 to
the payment of a monetary obligation, is not itself a security agreement or
lease, and is of a type that in ordinary course of business is transferred by
delivery with any necessary endorsement or assignment.

 

“Intercompany
Note” means a promissory note evidencing Indebtedness for borrowed money of
the Company or any of its direct or indirect Subsidiaries to and in favor of
any Grantor.

 

“Inventory”
means Goods, other than farm products, which: 
(a) are leased by a Person as lessor; (b) are held by a Person
for sale or lease or to be furnished under a contract of service; (c) are
furnished by a Person under a contract of service; or (d) consist of raw
materials, work in process, or materials used or consumed in a business, and
includes, without limitation, (i) finished goods, returned goods and
materials and supplies of any kind, nature or description which are or might be
used in connection with the manufacture, packing, shipping, advertising,
selling or finishing of any of the foregoing, (ii) all goods in which a
Grantor has an interest in mass or a joint or other interest or right of any
kind (including goods in which a Grantor has an interest or right as
consignee), (iii) all goods which are returned to or repossessed by any
Grantor, and (iv) all accessions thereto, products thereof and documents
therefor.

 

“Investment
Property” means all Securities (whether certificated or uncertificated),
Security Entitlements, Securities Accounts, Financial Assets, commodity
contracts and commodity accounts of each Grantor; provided, however,
that Investment Property shall not include any Securities constituting Pledged
Collateral and identified on Schedules 1.05 and 3.01 to the Perfection
Certificate as such Schedule may be supplemented from time to time.

 

“Joinder
Agreement” means a joinder agreement, in form and substance satisfactory to
the Administrative Agent, entered into by any Subsidiary of the Company from
time to time in accordance with Section 6.12 of the Credit Agreement.

 

“Letter-of-Credit
Right” 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 to
demand payment or performance, but excludes the right of a beneficiary to
demand payment or performance under a letter of credit.

 

“License”
means any Patent License, Trademark License, Copyright License or other license
or sublicense agreement to which any Grantor is a party.

 

“Patent
License” means any written agreement, now or hereafter in effect, granting
to any third party any right to make, use or sell any invention on which a
Patent, now or hereafter owned by any Grantor or that any Grantor otherwise has
the right to license, is in existence, or granting to any Grantor any right to
make, use or sell any invention on which a Patent, now or hereafter owned by
any third party, is in existence, and all rights of any Grantor under any such
agreement.

 

“Patents”
means all of the following now owned or hereafter acquired by any Grantor,  (a) all letters patent of the United
States or the equivalent thereof in any other country, all registrations and
recordings thereof, and all applications for letters patent of the United
States or the equivalent thereof in any other country, including registrations,
recordings and pending applications in the United States Patent and Trademark
Office or any similar offices in any other country, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions
thereof, and the inventions disclosed or claimed therein, including the right
to make, use and/or sell the inventions disclosed or claimed therein.

 

“Payment
Intangible” means a general intangible under which the account debtor’s
principal obligation is a monetary obligation.

 

4

 

“Perfection
Certificate” means a certificate substantially in the form of Exhibit A
completed by the Borrowers on behalf of each Grantor to include the scheduled
information contemplated by Exhibit A with respect to such Grantor,
as such certificate and such schedules may be supplemented from time to time by
any Perfection Certificate Supplement.

 

“Perfection
Certificate Supplement” means a Supplement to the Perfection Certificate
executed by the Borrowers on behalf of each Grantor and delivered to the
Administrative Agent pursuant to Section 4.01(b) to supplement
the scheduled information contemplated by the Perfection Certificate for such
Grantor, including any additional Grantor who becomes a party to this Agreement
by executing a Joinder Agreement.

 

“Permitted
Liens” means Liens permitted by Section 7.01 of the Credit Agreement.

 

“Pledged
Collateral” has the meaning specified in Section 2.01.

 

“Pledged
Debt” has the meaning specified in Section 2.01.

 

“Pledged
Equity” has the meaning specified in Section 2.01.

 

“Pledged
Securities” means any promissory notes (including Intercompany Notes),
stock certificates or instruments, certificates and other documents
representing or evidencing any of the Pledged Debt or Pledged Equity, as the
case may be.

 

“Proceeds”
means the following property:

 

(a)                                  whatever
is acquired upon the sale, lease, license, exchange, or other disposition of
the Collateral;

 

(b)                                 whatever
is collected on, or distributed on account of, the Collateral;

 

(c)                                  rights
arising out of the Collateral;

 

(d)                                 to
the extent of the value of the Collateral, claims arising out of the loss,
nonconformity, or interference with the use of, defects or infringement of
rights in, or damage to, the Collateral; and

 

(e)                                  to
the extent of the value of the Collateral and to the extent payable to the
debtor or the secured party, insurance payable by reason of the loss or
nonconformity of, defects or infringement of rights in, or damage to, the
Collateral.

 

“Securities”
means any obligations of an issuer or any shares, participations or other
interests in an issuer or in property or an enterprise of an issuer which

 

(a)                                  are
represented by a certificate representing a security in bearer or registered
form, or the transfer of which may be registered upon books maintained for that
purpose by or on behalf of the issuer;

 

(b)                                 are
one of a class or series or by its terms is divisible into a class or series of
shares, participations, interests or obligations; and

 

(c)                                  (i) are,
or are of a type, dealt with or traded on securities exchanges or securities
markets or (ii) are a medium for investment and by their terms expressly
provide that they are a security governed by Article 8 of the UCC.

 

5

 

“Securities
Account” shall mean an account to which a Financial Asset is or may be
credited in accordance with an agreement under which the Person maintaining the
account undertakes to treat the Person for whom the account is maintained as
entitled to exercise rights that comprise the Financial Asset.

 

“Security
Entitlements” means the rights and property interests of an Entitlement Holder
with respect to a Financial Asset.

 

“Security
Interest” has the meaning specified in Section 3.01.

 

“Security
Intermediary” means:

 

(a)                                  a
clearing corporation; or

 

(b)                                 a
Person, including a bank or broker, that in the ordinary course of its business
maintains Securities Accounts for others and is acting in that capacity.

 

“Software”
means a computer program and any supporting information provided in connection
with a transaction relating to the program, not including a computer program
that is included in the definition of Goods.

 

“Supporting
Obligation” means a Letter-of-Credit Right or secondary obligation that
supports the payment or performance of an Account, Chattel Paper, Document,
General Intangible, Instrument or Investment Property, including, without
limitation, all security agreements, guaranties, leases and other contracts
securing or otherwise relating to any such Accounts, Chattel Paper, Documents,
General Intangible, Instruments or Investment Property, including Goods
represented by the sale or lease of delivery which gave rise to any of the
foregoing, returned or repossessed merchandise and rights of stoppage in
transit, replevin, reclamation and other rights and remedies of an unpaid
vendor, lien or secured party.

 

“Tangible
Chattel Paper” means Chattel Paper evidenced by a record or records
consisting of information that is inscribed on a tangible medium.

 

“Termination
Date” means the date on which the latest of the following events
occurs:  (i) the payment in full in
cash of the Obligations (or, with respect to Obligations consisting of
outstanding Letters of Credit or Secured Hedge Agreements under the Permitted
FX Facility, Cash Collateralization of such outstanding Letters of Credit and
Secured Hedge Agreements) of all the Loan Parties; (ii) the termination or
expiration of the Availability Period; (iii) the termination, expiration
or Cash Collateralization of all Letters of Credit; (iv) the termination
or Cash Collateralization of the Permitted FX Facility; and (v) the
termination or Cash Collateralization of all Secured Hedge Agreements to which
a Hedge Bank is a party and all Secured Cash Management Agreements to which a
Cash Management Bank is a party.

 

“Trademark
License” means any written agreement, now or hereafter in effect, granting
to any third party any right to use any Trademark now or hereafter owned by any
Grantor or that any Grantor otherwise has the right to license, or granting to
any Grantor any right to use any Trademark now or hereafter owned by any third
party, 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) all
trademarks, 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 like
nature, now existing or hereafter adopted or acquired, all registrations and
recordings 

 

6

 

thereof, and all registration and recording applications filed in
connection therewith, including registrations and registration applications in
the United States Patent and Trademark Office or any similar offices in any
State of the United States or any other country or any political subdivision
thereof, and all extensions or renewals thereof, (b) all goodwill
associated 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 substantially
in the form of Exhibit A to the Perfection Certificate or otherwise in
form and substance reasonably satisfactory to the Administrative Agent, entered
into among such landlord or bailee, as the case may be, such Grantor and the
Administrative Agent, as such agreement may be amended, restated, amended and
restated, supplemented or otherwise modified from time to time.

 

ARTICLE
II

PLEDGED
COLLATERAL

 

2.01                        Pledged
Collateral.  The Collateral pledged
by each Grantor under this Agreement shall include all of such Grantor’s right,
title and interest in, to and under the following Equity Interests and
Indebtedness now owned or hereafter acquired by such Grantor (collectively, the
“Pledged Collateral”):

 

(a)                                  (i) the
shares of capital stock, membership interests, limited partnership interests
and other Equity Interests in any Person owned by such Grantor on the Closing
Date and listed opposite the name of such Grantor on Schedule 1.05 to the
Perfection Certificate, (ii) any other Equity Interests of any Person
obtained in the future by such Grantor and identified on Schedule 1.05 to any
Perfection Certificate Supplement, and (iii) the certificates representing
all such Equity Interests (collectively, the “Pledged Equity”); provided,
however, that the Pledged Equity of any Grantor shall not include (A) more
than 65% of the aggregate issued and outstanding voting Equity Interests of any
CFC owned by such Grantor, (B) the Excluded Collateral, (C) Equity
Securities held pursuant to the Deferred Compensation Plan or (D) any
Equity Interest in any Person which is evidenced by a Security or a Security
Entitlement which is maintained in a Securities Account which is either (1) maintained
with the Administrative Agent or (2) maintained with any other Securities
Intermediary; provided that, to the extent required by Section 4.01(g),
any such other Securities Intermediary shall have entered into an Account
Control Agreement with the Administrative Agent with respect to such Securities
Account.

 

(b)                                 (i) the
promissory notes (including Intercompany Notes) and debt securities of any
other Person owned by such Grantor on the Closing Date and the loans and
advances for money borrowed made by such Grantor to any other Person which are
outstanding on the Closing Date, in each case, which are listed opposite the
name of such Grantor on Schedule 3.01 of the Perfection Certificate, (ii) any
promissory notes (including Intercompany Notes), debt securities, and loans or
advances for money borrowed in the future issued to or owed to such Grantor by
any other Person and identified on Schedule 3.01 to any Perfection Certificate
Supplement, and (iii) the promissory notes (including, Intercompany Notes)
and any other instruments as may hereafter be issued to evidence such loans or
advances for money borrowed (collectively, the “Pledged Debt”); provided,
however, that the Pledged Debt of any Grantor shall not include (A) the
Excluded Collateral, (B) any promissory notes, debt securities, loans or
advances of any Person held pursuant to the Deferred Compensation Plan or (C) any
promissory notes (including Intercompany Notes), debt securities, and loans or
advances of any Person which are evidenced by a Security or Security
Entitlement which is maintained in a Securities Account which is either (1) maintained
with the Administrative Agent or (2) maintained with any other Securities
Intermediary; provided that, to the extent required by Section 4.01(g),
any such other Securities Intermediary shall have entered into an Account
Control Agreement with the Administrative Agent with respect to such Securities
Account.

 

7

 

(c)                                  subject
to Section 2.05, all payments of principal or interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of
the items referred to in clauses (a) and (b) above;

 

(d)                                 subject
to Section 2.05, all rights and privileges of such Grantor with
respect to the securities, instruments and other property referred to in
clauses (a), (b) and (c) above; and

 

(e)                                  all
Proceeds of any of the foregoing.

 

2.02                        Delivery
of the Pledged Collateral.  (a) 
Each Grantor agrees promptly to deliver or cause to be delivered to the
Administrative Agent any and all Pledged Securities representing any Pledged
Equity or Pledged Debt, as the case may be, other than (i) any promissory
notes (other than Intercompany Notes), debt securities, and loans or advances
in an amount less than $500,000 and (ii) any Indebtedness for borrowed
money (A) owed to any Grantor by any other Grantor or (B) owed to any
Grantor by any Subsidiary of the Company other than a Grantor that individually
or in the aggregate is in excess of $5,000,000.

 

(b)                                 Each
Grantor will cause any Indebtedness for borrowed money owed to such Grantor by
any other Grantor or by any other Subsidiary of the Company, in each case, to
be evidenced by a duly executed Intercompany Note to be pledged and delivered
to the Administrative Agent pursuant to the terms hereof, other than any
Indebtedness that is not required to be delivered to Administrative Agent
pursuant to Section 2.02(a).

 

(c)                                  Upon
delivery to the Administrative Agent, any Pledged Securities shall be
accompanied by stock powers, bond powers or other instruments of transfer
reasonably satisfactory to the Administrative Agent duly executed in blank by
the applicable Grantor and such other instruments and documents as the
Administrative Agent may reasonably request.

 

(d)                                 At
any time after the occurrence of an Activation Event, at the request of the
Administrative Agent, with respect to any Pledged Equity owned by any Grantor
that constitutes an uncertificated security of a Subsidiary or Affiliate of
such Grantor, such Grantor will cause the issuer thereof (if, either
individually or together with the Company and its other Affiliates, it controls
such issuer) or will use commercially reasonable efforts to cause such issuer
(if it does not so control such issuer) either (i) to register the
Administrative Agent as the registered owner of such Pledged Equity or (ii) (A) to
acknowledge the security interest of the Administrative Agent in such Pledged
Equity 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 notice
of any other Lien in such Pledged Equity (and has not agreed to accept
instructions from any other Person in respect of such Pledged Equity other than
the 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 Agent
that such issuer will comply with instructions with respect to such Pledged
Equity originated by the Administrative Agent without further consent of such
Grantor, such agreement to be in form and substance reasonably satisfactory to
the Administrative Agent (to the extent not so acknowledged pursuant to Section 2.03).

 

2.03                        Agreements
of Issuers.

 

(a)                                  Each
Grantor which is the issuer of any Pledged Equity owned by any other Grantor,
hereby (i) acknowledges the security interest of the Administrative Agent
in such Pledged Equity granted by such other Grantor hereunder, (ii) confirms
that it has not received notice of any other Lien as of the Closing Date in
such Pledged Equity (and has not agreed to accept instructions from any other
person in respect of such Pledged Equity other than the Administrative Agent) (iii) agrees
that it will comply with the instructions with respect to such Pledged Equity
originated by the Administrative Agent 

 

8

 

without further consent
of such other Grantor and (iv) otherwise agrees that it will be bound by
the terms of this Agreement relating to the Pledged Collateral issued by it.

 

(b)                                 In
the case of each Grantor which is a partner in a partnership, limited liability
company or other entity, such Grantor hereby consents to the extent required by
applicable Organization Documents to the pledge by each other Grantor, pursuant
to the terms hereof, of the Pledged Equity in such partnership, limited
liability company or other entity, and upon the occurrence and during the
continuance of an Event of Default, to the transfer of such Pledged Equity to
the Administrative Agent or its nominee and to the substitution of the
Administrative Agent or its nominee as the substituted partner or member in
such limited partnership, limited liability company or other entity with all
rights, powers and duties of a partner or a general partner or a limited
member, as the case may be.

 

2.04                        Representations,
Warranties and Covenants with respect to Pledged Collateral.  The Grantors represent, warrant and covenant
to and with the Administrative Agent, for the benefit of the Secured Parties as
of the date hereof and as of the date of each Perfection Certificate
Supplement, that:

 

(a)                                  Pledged
Collateral.  Schedules 1.05 and 3.01
of the Perfection Certificate (as supplemented from time to time by any
Perfection Certificate Supplement) accurately and completely set forth for each
Grantor the Pledged Equity and the Pledged Debt of such Grantor.

 

(b)                                 Due
Authorization and Issuance.  All
Pledged Equity and Pledged Debt issued by any Subsidiary of the Company to any
Grantor has been, and to the extent that any Pledged Equity or Pledged Debt is
hereafter issued, such Pledged Equity or Pledged Debt will be, upon such
issuance, duly and validly issued by such issuer.  All such Pledged Equity is fully paid and
nonassessable.  All such Pledged Debt is
the 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 1.05
and 3.01 of the Perfection Certificate (as supplemented from time to time by
any Perfection Certificate Supplement) opposite the name of such Grantor, (ii) holds
the same free and clear of all Liens, other than Liens created by this
Agreement and Permitted Liens, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Pledged Collateral, other than the Security
Interest created by this Agreement and other assignments and transfers
permitted pursuant to the Credit Agreement, and (iv) will defend its title
or interest hereto or therein against any and all Liens (other than the
Security Interest created by this Agreement and other Permitted Liens), however
arising, of all Persons.

 

(d)                                 Transferability
of Pledged Collateral.  Except for
restrictions and limitations imposed by the Loan Documents or securities laws
generally or for consents required and obtained in connection herewith, the
Pledged Collateral is and will continue to be freely transferable and
assignable to the Administrative Agent, and none of the Pledged Collateral is
or will be subject to any option, right of first refusal, shareholders
agreement, provision of any Organization Document or contractual restriction of
any nature that might prohibit, impair, delay or otherwise affect the pledge of
such Pledged Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Administrative Agent of rights and remedies
hereunder.

 

(e)                                  Validity
of Security Interest.  By virtue of
the execution and delivery by each Grantor of this Agreement or a Joinder
Agreement, as the case may be, when all Pledged Securities evidencing any
Pledged Collateral of such Grantor are delivered to the Administrative Agent in
accordance with this Agreement, the Administrative Agent, for the benefit of
itself and the other Secured Parties, will obtain a valid and perfected first
priority lien, subject to Permitted Liens, upon and security interest in all
Pledged Collateral of such Grantor, other than Pledged Collateral not required
to be 

 

9

 

delivered to the
Administrative Agent pursuant to Section 2.02(a) as security
for the payment and performance of the Obligations of such Grantor.

 

(f)                                    Defaults.  Such Grantor is not in default in the payment
of any portion of any mandatory capital contribution, if any, required to be
made under any agreement to which such Grantor is a party relating to the
Pledged Equity pledged by it, and such Grantor is not in violation of any other
provisions of any such agreement to which such Grantor is a party, or otherwise
in default or violation thereunder.  No
Pledged Equity pledged by such Grantor is subject to any defense, offset or
counterclaim, nor have any of the foregoing been asserted or alleged against
such Grantor by any Person with respect thereto, and on and as of the Closing
Date and as of the date of each Perfection Certificate Supplement and Joinder
Agreement, there are no certificates, instruments, documents or other writings
(other than the Organization Documents and certificates (if any) delivered to
the Administrative Agent) which evidence any Pledged Equity of such Grantor.

 

(g)                                 Notices.  Each Grantor agrees to furnish to the
Administrative Agent promptly upon receipt thereof copies of all material
notices, requests and other documents received by such Grantor under or
pursuant to the Pledged Equity and any other contract or agreement related to
the Pledged Equity to which it is a party, and from time to time (i) furnish
to the Administrative Agent such information and reports regarding the Pledged
Equity as the Administrative Agent may reasonably request, and (ii) upon
the reasonable request of the Administrative Agent, make to any other party to
the Pledged Equity or any other contract or agreement related to the Pledged
Equity such demands and requests for information and reports or for action as
the Grantor is entitled to make thereunder.

 

(h)                                 Terminations,
Modifications or Other Actions with respect to Pledged Equity.  At any time after the occurrence and during
the 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 Pledged
Equity or any other contract or agreement included in the Collateral to which
it is a party or consent to or accept any cancellation or termination thereof; (ii) amend
or otherwise modify any such or any such contract or agreement or give any
consent, waiver, or approval thereunder; (iii) waive any default under or
breach of any such Pledged Equity or any such other contract or agreement; or (iv) take
any other action in connection with any such Pledged Equity or any such other
contract or agreement the taking or omission of which could reasonably be
expected to impair the value of the interest or rights of such Grantor
thereunder or that would impair the interest or rights of the Administrative
Agent.

 

(i)                                     Amendments,
Waivers or Other Actions with respect to Pledged Debt.  At any time after the occurrence and during
the continuation of an Event of Default, no Grantor will, without the prior
written consent of the Administrative Agent: 
(i) enter into any agreement amending, supplementing, or waiving any
provision of any Pledged Debt (including any underlying instrument pursuant to
which such Pledged Debt is issued) or compromising or releasing or extending
the time for payment of any obligation of the maker thereof; or (ii) take
or omit to take any action the taking or the omission of which could result in
any impairment or alteration of any obligation of the maker of any Pledged Debt
or other instrument constituting Collateral related to the Pledged Debt.

 

2.05                        Voting
Rights; Dividends and Interest, etc. 
(a)  Unless and until a Designated Event of Default shall have
occurred and be continuing, and thereafter:

 

(i)                                     Each
Grantor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Collateral or any
part thereof for any purpose consistent with the terms of this Agreement, the
Credit Agreement and the other Loan Documents; provided that such rights
and powers shall not be exercised in any manner that could reasonably be
expected to have a Material Adverse Effect.

 

10

 

(ii)                                  The
Administrative Agent shall be deemed without further action or formality to
have granted to each Grantor all necessary consents relating to voting rights
and shall, if necessary, upon written request of a Grantor and at the sole cost
and expense of the Grantors, from time to time execute and deliver (or cause to
be executed and delivered) to such Grantor all such instruments as Grantor may
reasonably request in order to permit such Grantor to exercise the voting and
other rights which it is entitled to exercise pursuant to subparagraph (i) above.

 

(iii)                               Each
Grantor shall be entitled to receive, retain, and to utilize free and clear of
any Lien hereof, any and all dividends, interest, principal and other
distributions paid on or distributed in respect of the Pledged Collateral, but
only if and to the extent that such dividends, interest, principal and other
distributions are not otherwise prohibited by the terms and conditions of the
Credit Agreement, the other Loan Documents and applicable Laws; provided
that any noncash dividends, interest, principal or other distributions that
would constitute Pledged Equity or Pledged Debt, whether resulting from a
subdivision, combination or reclassification of the outstanding Equity
Interests of the issuer of any Pledged Equity or received in exchange for any
Pledged Debt or any part thereof, or in redemption thereof, or as a result of
any merger, consolidation, acquisition or other exchange of assets to which
such issuer may be a party or otherwise, shall be and become part of the
Pledged Collateral, and, if received by any Grantor, shall not be commingled by
such Grantor with any of its other funds or property but shall be held separate
and apart therefrom, shall be held in trust for the benefit of the
Administrative Agent and shall be forthwith delivered to the Administrative
Agent as Pledged Collateral in the same form as so received (with any necessary
endorsement).

 

(b)                                 Upon
the occurrence and during the continuance of a Designated Event of Default, all
rights of any Grantor to dividends, interest, principal or other distributions
that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of
this Section 2.05 shall cease, and all such rights shall thereupon
become vested in the Administrative Agent, which shall have the sole and
exclusive right and authority to receive and retain such dividends, interest,
principal or other distributions.  All
dividends, interest, principal or other distributions received by any Grantor
contrary to the provisions of this Section 2.05(b) shall be
held in trust for the benefit of the Administrative Agent, shall be segregated
from other property or funds of such Grantor and shall be forthwith delivered
to the Administrative Agent in the same form as so received (with any necessary
endorsement).  Any and all money and
other property paid over to or received by the Administrative Agent pursuant to
the provisions of this Section 2.05(b) shall be retained by
the Administrative Agent in an account to be established by the Administrative
Agent upon receipt of such money or other property and shall be applied in
accordance with the provisions of Section 5.02.

 

(c)                                  Upon
the occurrence and during the continuance of a Designated Event of Default, all
rights of any Grantor to exercise the voting and consensual rights and powers
it 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) of
this Section 2.05, shall cease, and all such rights shall thereupon
become vested in the Administrative Agent, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and
powers.  If after the occurrence of a
Designated Event of Default, such Event of Default shall have been waived
pursuant to Section 10.01 of the Credit Agreement, each Grantor will again
have the right to exercise the voting and consensual rights and powers that such
Grantor would otherwise be entitled to exercise pursuant to the terms of paragraph
(a)(i) above and the Administrative Agent shall again be subject to
the obligations under paragraph (a)(ii) of this Section 2.05.

 

2.06                        Registration
in Nominee Name; Denominations.  The
Administrative Agent, on behalf of the Secured Parties, shall have the right to
hold as collateral the Pledged Collateral endorsed or 

 

11

 

assigned in blank or in
favor of the Administrative Agent.  After
the occurrence and during the continuance of an Event of Default, the
Administrative Agent, on behalf of the Secured Parties, shall also have the
right (in its sole and absolute discretion) to hold the Pledged Collateral in
its 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 promptly
give to the Administrative Agent copies of any notices or other communications
received by it with respect to Pledged Securities registered in the name of
such Grantor.  The Administrative Agent
shall at all times have the right to exchange the certificates or instruments
(to the extent permitted by the terms thereof) representing Pledged Securities
for certificates or instruments of smaller or larger denominations for any
purpose consistent with this Agreement.

 

ARTICLE
III

SECURITY
INTERESTS IN PERSONAL PROPERTY

 

3.01                        Security
Interest.  Each Grantor hereby
collaterally assigns and pledges to the Administrative Agent, its successors
and assigns, for the ratable benefit of the Secured Parties, and hereby grants
to the Administrative Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, as security for the payment or performance in
full of the Obligations of such Grantor, a security interest (the “Security
Interest”) in all right, title and interest of such Grantor in, to and
under any and all of the following assets and properties now owned or at any
time hereafter acquired by such Grantor or in which such Grantor now has or at
any time in the future may acquire any right, title or interest (collectively,
the “Collateral”):

 

(a)                                  all
Accounts;

 

(b)                                 all
Chattel Paper;

 

(c)                                  all
cash, Cash Equivalents and Deposit Accounts;

 

(d)                                 all
Documents;

 

(e)                                  all
Equipment, including all Fixtures;

 

(f)                                    all
General Intangibles;

 

(g)                                 all
Instruments;

 

(h)                                 all
Inventory;

 

(i)                                     all
Investment Property;

 

(j)                                     all
Pledged Collateral;

 

(k)                                  all
Supporting Obligations;

 

(l)                                     all
Commercial Tort Claims of such Grantor described in the schedules to the
Perfection Certificate in respect of such Grantor (as such schedule may be
supplemented from time to time pursuant to any Perfection Certificate
Supplement or otherwise);

 

(m)                               all
other Goods;

 

(n)                                 all
books and records pertaining to the Collateral;

 

12

 

(o)                                 all
letter of credit rights;

 

(p)                                 all
other assets, properties and rights of every kind and description and interests
therein, including all moneys, securities and other property, now or hereafter
held or received by, or in transit to, any Grantor, the Administrative Agent or
any other Secured Party, whether for safekeeping, pledge, custody,
transmission, collection or otherwise; and

 

(q)                                 all
Proceeds of any and all of the foregoing;

 

provided, however, that notwithstanding
anything to the contrary in clauses (a) through (q) above:

 

(i)                                     any
General Intangible, Chattel Paper, Instrument or Account which by its terms
prohibits the creation of a security interest therein (whether by assignment or
otherwise) shall be excluded from the Lien of the Security Interest granted
under this Section 3.01, and shall not be included in the
Collateral of such Grantor, except to the extent that Sections 9-406(d), 9-407(a) or
9-408(a) of the UCC are effective to render any such prohibition
ineffective; provided, however, that if any General Intangible,
Chattel Paper, Instrument or Account included in the Collateral contains any
term, restricting or requiring the consent of any Person (other than a Grantor)
obligated thereon to, any exercise of remedies hereunder in respect of, the
Security Interest therein granted under this Section 3.01, then the
enforcement of such Security Interest under this Agreement shall be subject to Section 5.01(c) (but
such provision shall not limit the creation, attachment or perfection of the
Security Interest hereunder);

 

(ii)                                  any
permit, lease, license (including any License) or franchise shall be excluded
from 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 applicable
thereto is effective to prohibit the creation of a Security Interest therein;

 

(iii)                               any
Equipment (including  any Software
incorporated therein) owned by any Grantor on the date hereof or hereafter
acquired that is subject to a Lien securing a purchase money obligation or
Capitalized Lease permitted to be incurred pursuant to the provisions of the
Credit Agreement shall be excluded from the Lien of the Security Interest
granted under this Section 3.01, and shall not be included in the
Collateral, to the extent that the contract or other agreement in which such
Lien is granted (or the documentation providing for such purchase money
obligation or Capitalized Lease) validly prohibits the creation of any other
Lien on such Collateral; and

 

(iv)                              all
Excluded Collateral shall be excluded from the Collateral of such Grantor.

 

With respect
to property described in clauses (i) through (iv) above to the extent
not included in the Collateral of such Grantor (the “Excluded Property”),
such property shall constitute Excluded Property only to the extent and for so
long as the creation of a Lien on such property in favor of the Administrative
Agent is, and remains, validly prohibited, and upon termination of such
prohibition (however occurring), such property shall cease to constitute
Excluded Property.  The Grantors may be
required from time to time at the request of the Administrative Agent to give
written notice to the Administrative Agent identifying in reasonable detail the
Excluded Property (and stating in such notice that such property constitutes
Excluded Property) and to provide the Administrative Agent with such other
information regarding the Excluded Property as the Administrative Agent may
reasonably request.

 

13

 

3.02        Filing Authorization.  (a)  Each Grantor hereby irrevocably
authorizes the Administrative Agent at any time and from time to time to file
in any relevant jurisdiction any initial financing statements (including
fixture filings) with respect to the Collateral or any part thereof and
amendments thereto that contain the information required by Article 9 of
the UCC of each applicable jurisdiction for the filing of any financing
statement or amendment, including (i) if such Grantor is an organization,
the type of organization and any organizational identification number issued to
such Grantor, (ii) in the case of a financing statement filed as a fixture
filing, a sufficient description of the real property to which such Collateral
relates and (iii) a description of collateral that describes such property
in any other manner as the Administrative Agent may reasonably determine is
necessary or advisable to ensure the perfection of the security interest in the
Collateral granted to the Administrative Agent, including describing such
property as “all assets except the Excluded Collateral (as such term is defined
in the Pledge and Security Agreement between debtor and secured party)” or “all
property except the Excluded Collateral (as such term is defined in the Pledge
and Security Agreement between debtor and secured party).”  Each Grantor agrees to provide such
information to the Administrative Agent promptly upon request.

 

(b)           Each Grantor also ratifies its
authorization for the Administrative Agent to file in any relevant jurisdiction
any such initial financing statements or amendments thereto if filed prior to
the date hereof.

 

3.03        Continuing Security Interest; Transfer
of Credit Extensions. 
This Agreement shall create a continuing security interest in the Collateral
of each Grantor and shall remain in full force and effect with respect to each
Grantor until the Termination Date for such Grantor, be binding upon each
Grantor, its successors, transferees and assigns, and inure, together with the
rights and remedies of the Administrative Agent hereunder, to the benefit of
the Administrative Agent and each other Secured Party.  Without limiting the generality of the
foregoing, any Secured Party may assign or otherwise transfer (in whole or in
part) any Commitment or Loan held by it to any other Person, and such other
Person shall thereupon become vested with all the rights and benefits in
respect thereof granted to such Lender under any Loan Document (including this
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 10.06 and Article IX
of the Credit Agreement.

 

3.04        Grantors Remain Liable.  Anything herein to the contrary
notwithstanding

 

(a)           each Grantor shall remain liable
under the contracts and agreements included in the Collateral (including the
Material Contracts) to the extent set forth therein, and shall perform all of
its duties and obligations under such contracts and agreements to the same
extent as if this Agreement had not been executed,

 

(b)           each Grantor will comply in all
material respects with all Laws relating to the ownership and operation of the
Collateral, including all registration requirements under applicable Laws, and
shall pay when due all taxes, fees and assessments imposed on or with respect
to the Collateral, except to the extent the validity thereof is being contested
in good faith by appropriate proceedings for which adequate reserves in
accordance with GAAP have been set aside by such Grantor,

 

(c)           the exercise by the Administrative
Agent of any of its rights hereunder shall not release any Grantor from any of
its duties or obligations under any such contracts or agreements included in
the Collateral, and

 

(d)           neither the Administrative Agent nor
any other Secured Party shall have any obligation or liability under any such
contracts or agreements included in the Collateral by reason of this Agreement,
nor shall the Administrative Agent or any other Secured Party be obligated to
perform any of

 

14

 

the obligations or duties of
any Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.

 

3.05        Security Interest Absolute.  All rights of the Administrative Agent and
the security interests granted to the Administrative Agent hereunder, and all
obligations of each Grantor hereunder, shall be absolute and unconditional,
irrespective of any of the following conditions, occurrences or events:

 

(a)           any lack of validity or
enforceability of any Loan Document;

 

(b)           the failure of any Secured Party to
assert any claim or demand or to enforce any right or remedy against the
Borrowers, any other Grantor or any other Person under the provisions of any
Loan Document or otherwise or to exercise any right or remedy against any other
guarantor of, or collateral securing, any Obligation;

 

(c)           any change in the time, manner or
place of payment of, or in any other term of, all or any of the Obligations or
any other extension, compromise or renewal of any Obligation, including any
increase in the Obligations resulting from the extension of additional credit
to any Grantor or any other obligor or otherwise;

 

(d)           any reduction, limitation, impairment
or termination of any Obligation for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to (and
each 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, or
any 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 of
any Loan Document;

 

(f)            any addition, exchange, release,
surrender or non-perfection of any collateral (including the Collateral), or
any amendment to or waiver or release of or addition to or consent to departure
from any guaranty, for any of the Obligations; or

 

(g)           any other circumstances which might
otherwise constitute a defense available to, or a legal or equitable discharge
of, the Borrowers, any other Grantor or otherwise.

 

3.06        Waiver of Subrogation.  Until the Termination Date, no Grantor shall
exercise any claim or other rights which it may now or hereafter acquire
against any other Grantor that arises from the existence, payment, performance
or enforcement of such Grantor’s Obligations under this Agreement, including
any right of subrogation, reimbursement, exoneration or indemnification, any
right to participate in any claim or remedy against any other Grantor or any
collateral 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 other
Grantor, directly or indirectly, in cash or other property or by setoff or in
any manner, payment or security on account of such claim or other rights.  If any amount shall be paid to any Grantor in
violation of the preceding sentence, such amount shall be deemed to have been
paid for the benefit of the Secured Parties, and shall forthwith be paid to the
Administrative Agent to be credited and applied upon the Obligations, whether
matured or unmatured.  Each Grantor
acknowledges that it will receive direct and indirect benefits for the
financing arrangements contemplated by the Loan Documents and that the
agreement set forth in this Section is knowingly made in contemplation of
such benefits.

 

15

 

3.07        Release;
Termination.

 

(a)           Upon any sale, transfer or other
disposition of any item of Collateral of any Grantor in accordance with Section 7.05
of the Credit Agreement, the Administrative Agent will, at such Grantor’s
expense and without any representations, warranties or recourse of any kind
whatsoever, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence the release of such item of Collateral
from the assignment and security interest granted hereby; provided, however,
that (i) at the time of such request and such release no Default shall
have occurred and be continuing, and (ii) such Grantor shall have
delivered to the Administrative Agent, at least ten Business Days prior to the
date of the proposed release, a written request for release describing the item
of Collateral and the terms of the sale, lease, transfer or other disposition
in reasonable detail, including the price thereof and any expenses in
connection therewith, together with a form of release for execution by the
Administrative Agent (which release shall be in form and substance satisfactory
to the Administrative Agent) and a certificate of such Grantor to the effect
that the transaction is in compliance with the Loan Documents and as to such
other matters as the Administrative Agent (or the Required Lenders through the
Administrative Agent) may reasonably request.

 

(b)           Upon the Termination Date for any
Grantor, the pledge, assignment and security interest granted by such Grantor
hereunder shall terminate and all rights to the Collateral of such Grantor
shall revert to such Grantor.  Upon any
such termination, the Administrative Agent will, at the applicable Grantor’s
expense and without any representations, warranties or recourse of any kind
whatsoever, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination and deliver to such
Grantor all Pledged Securities, Instruments, Tangible Chattel Paper and
negotiable documents representing or evidencing the Collateral of such Grantor
then held by the Administrative Agent.

 

ARTICLE
IV

COVENANTS; REPRESENTATION AND WARRANTIES

 

Each Grantor represents and warrants to the Administrative Agent and
the Secured Parties as of the date hereof and as of the date of each Perfection
Certificate Supplement, and agrees that:

 

4.01        Perfection
of Security Interest.

 

(a)           Perfection Certificate.  The Perfection Certificate (as supplemented
from time to time by Perfection Certificate Supplement delivered pursuant to
subsection (b) of this Section 4.01) has been duly prepared
and completed and the information set forth therein for each Grantor, including
the exact legal name and jurisdiction of organization of such Grantor, is
correct and complete in all material respects.

 

(b)           Perfection Certificate Supplement.  Annually, at the time of delivery of the
Compliance Certificate required to be delivered in connection with the annual
financial statements delivered pursuant to Section 6.01(a) of the
Credit Agreement, the Borrowers shall deliver to the Administrative Agent a
duly completed Perfection Certificate Supplement, dated as of the date of such
Compliance Certificate, to supplement on behalf of each Grantor the scheduled
information about such Grantor contemplated by the Perfection Certificate (or
in lieu of any such Perfection Certificate Supplement, such Compliance
Certificate may instead include a statement confirming that there has been no
material change to the information in the Perfection Certificate, as previously
supplemented by any Perfection Certificate Supplements delivered prior to the
date of such Compliance Certificate, and that the information in the Perfection
Certificate, as so supplemented, remains correct and complete in all material
respects).  At the time any Grantor
becomes a party to this Agreement pursuant to a Joinder Agreement, the
Borrowers shall deliver to the Administrative Agent a duly completed Perfection
Certificate 

 

16

 

Supplement, dated as of
the date of such Joinder Agreement, to supplement on behalf of such Grantor
party to a Joinder Agreement the scheduled information about such Grantor as
contemplated 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 material
portion of the Collateral reasonably requested by the Administrative Agent
containing a description of the Collateral have been prepared by the Grantors
based upon the information provided to the Administrative Agent in the Perfection
Certificate (as supplemented from time to time) and have been delivered to the
Administrative Agent for filing in each governmental office specified in
Schedule 1.04 to the Perfection Certificate, and constitute all the filings,
recordings and registrations that are necessary to publish notice of and
protect the validity of and to establish a valid and perfected security
interest in favor of the Administrative Agent (for the ratable benefit of the
Secured Parties) in all material Collateral or any material portion of the
Collateral in which the Security Interest may be perfected by filing, recording
or registration in the United States (or any political subdivision thereof) and
its territories and possessions, and no further or subsequent filing, re-filing,
recording, rerecording, registration or re-registration is necessary in any
such jurisdiction (except upon expiration of any financing statements under the
Uniform Commercial Code after five years), except as follows:

 

(i)            filings required to be made in or
with the motor vehicle title records of any applicable state in order to
perfect the Security Interest in Collateral consisting of motor vehicles
registered in such state, including any such filings required by subsection (e) of
this Section 4.01; and

 

(ii)           filings with respect to Real Property
Assets excluded from the scope of UCC Article 9 pursuant to UCC Section 9-109.

 

(d)           [Reserved.].

 

(e)           Instruments and Tangible Chattel
Paper.  If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, or if any Grantor shall at any time hold
or acquire any Instruments (other than any Instruments evidencing Indebtedness
for money borrowed comprising part of the Pledged Collateral which has been
delivered to the Administrative Agent pursuant to Section 2.02) or
Tangible Chattel Paper, at the request of the Administrative Agent, such
Grantor shall forthwith endorse, assign and deliver the same to the
Administrative Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Administrative Agent may from time to time
reasonably request.  At any time that no
Event of Default has occurred and is continuing no such request shall be made
by the Administrative Agent with respect to Instruments (other than any Pledged
Collateral) or any Tangible Chattel Paper which individually or in the
aggregate is not in excess of $1,000,000.

 

(f)            Deposit Accounts.  As of the Closing Date, or the date that is
no more than 15 Business Days after the date on which a deposit account is
opened 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 depositary
bank with which such Grantor from time to time opens or maintains a Deposit
Account, in each case to cause the depositary bank to agree to comply at any
time with instructions from the Administrative Agent to such depositary bank
directing the disposition of funds from time to time credited to such Deposit
Account without further consent of such Grantor or any other Person, pursuant
to such Account Control Agreement; provided, however, that any
Grantor shall not be required to deliver an Account Control Agreement in
respect of any Deposit Account that consists solely of Excluded
Collateral.  The Administrative Agent
hereby acknowledges and agrees with each Grantor that the Administrative Agent
shall not give any such instructions pursuant to any Account Control Agreement,

 

17

 

unless an Activation
Event or Designated Event of Default has occurred and is continuing.  No Grantor shall grant control of any Deposit
Account to any Person other than the Administrative Agent.

 

(g)           Investment Property.  As of the Closing Date or the date of any
Joinder Agreement, as the case may be, and, otherwise, within 15 Business Days
of the date that any Securities, other than any Pledged Equity issued by a
Grantor and pledged pursuant to Article II, whether certificated or
uncertificated, or other Investment Property now or hereafter acquired by any
Grantor are held by such Grantor or its nominee through a Securities
Intermediary, such Grantor shall immediately notify the Administrative Agent
thereof and pursuant to an Account Control Agreement, cause such Securities
Intermediary to agree to comply with entitlement orders or other instructions
from the Administrative Agent to such Securities Intermediary as to such
Securities or other Investment Property, in each case without further consent
of any Grantor or such nominee; provided, however, that any
Grantor shall not be required to give notice to Administrative Agent or deliver
an Account Control Agreement in respect of any Securities or other Investment
Property that is subject to the Deferred Compensation Plan or is Excluded
Collateral.  The Administrative Agent
hereby agrees with each of the Grantors that the Administrative Agent shall not
give any such entitlement orders or instructions or directions to any such
issuer or Securities Intermediary pursuant to any Account Control Agreement,
and shall not withhold its consent to the exercise of any withdrawal or dealing
rights by any Grantor, unless an Activation Event or a Designated Event of
Default has occurred and is continuing.

 

(h)           Electronic Chattel Paper and
Transferable Records.  If any Grantor
at any time holds or acquires an interest in any Electronic Chattel Paper or
any “transferable record”, as that term is defined in Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or in Section 16
of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify the Administrative Agent
thereof and, at the request of the Administrative Agent, shall take such action
as the Administrative Agent may reasonably request to vest in the
Administrative Agent control under UCC Section 9-105 of such Electronic
Chattel Paper or control under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, Section 16
of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. 
At any time that no Event of Default has occurred and is continuing the
Administrative Agent shall not deliver any such written request with respect to
Electronic Chattel Paper or “transferable” records of a single obligor and its
Affiliates with an aggregate stated amount not exceeding $1,000,000.  The Administrative Agent agrees with such
Grantor that the Administrative Agent will arrange, pursuant to procedures
reasonably satisfactory to the Administrative Agent and so long as such
procedures will not result in the Administrative Agent’s loss of control, for
the Grantor to make alterations to the Electronic Chattel Paper or transferable
record permitted under UCC Section 9-105 or, as the case may be, Section 201
of the Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing.

 

(i)            Letter-of-Credit Rights.  If any Grantor is at any time a beneficiary
under a letter of credit now or hereafter issued in favor of such Grantor, such
Grantor or the Company, on behalf of such Grantor, shall promptly notify the
Administrative Agent thereof and, at the written request and option of the
Administrative Agent, such Grantor shall, pursuant to an agreement in form and
substance reasonably satisfactory to the Administrative Agent, arrange for the
issuer and any confirmer of such letter of credit to consent to an assignment
to the Administrative Agent of the proceeds of any drawing under such letter of
credit with the Administrative Agent agreeing that the proceeds of any drawing
under such letter of credit are to be paid to the applicable Grantor unless an
Event of Default has occurred and is continuing.  At any time that no Event of Default has
occurred and is continuing the Administrative Agent shall not request that such
Grantor enter into such an agreement with respect to letters of credit issued
for a single account party or its Affiliates with an aggregate stated amount of
less than $1,000,000.

 

18

 

(j)            Commercial Tort Claims.  If any Grantor shall at any time hold or
acquire a Commercial Tort Claim that it intends to pursue, the Grantor, by
itself or through the Company, shall promptly notify the Administrative Agent
thereof by including a summary description of such claim on Schedule 5.01 of
the next Perfection Certificate Supplement delivered to the Administrative
Agent 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 to
cause any landlord from which any Grantor leases real property to enter into a
Waiver Agreement; provided, however, that at any time that no
Event of Default has occurred and is continuing the Administrative Agent shall
not request that such Grantor enter into such a Waiver Agreement with any
landlord other than the landlord(s) from which the Company leases its
headquarters in San Diego, California or unless such Grantor is leasing in
excess 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 to
cause any bailee, warehouseman or processor with control over or with
possession of any Equipment (including Fixtures) and Inventory of such Grantor
to enter into a Waiver Agreement; provided, however, that at any
time no Event of Default has occurred and is continuing the Administrative
Agent shall not request that such Grantor enter into such a Waiver Agreement
with any bailee, warehouseman or processor, housing Collateral valued lower
than $10,000,000.

 

4.02        Representations
and Warranties.

 

(a)           Validity of Security Interest.  The Security Interest granted by each Grantor
constitutes (i) a legal and valid security interest in the Collateral of
such Grantor securing the payment and performance of the Obligations of such
Grantor and (ii) subject to the filings described in Section 4.01(c),
a perfected security interest in the Collateral (other than as provided in such
Section) in which a security interest may be perfected under Article 9 of
the UCC by filing, recording or registering a financing statement or analogous
document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the UCC in such jurisdictions.  The Security Interest is and shall be prior
to any other Lien on any of the Collateral, other than Permitted Liens.

 

(b)           Other Financing Statements.  The Collateral is owned by the Grantors free
and clear of any Lien, other than Permitted Liens.  None of the Grantors has filed or consented
to the filing of (i) any financing statement or analogous document under
the UCC or any other applicable Laws covering any Collateral, other than in
respect of Permitted Liens or (ii) any assignment in which any Grantor
assigns any Collateral or any security agreement or similar instrument covering
any Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Permitted
Liens.

 

4.03        Covenants.  (a)  Change of Name, etc.  Each Grantor agrees to provide at least 30
days prior written notice to the Administrative Agent of any change (i) in
its legal name, (ii) in its identity or type of organization or corporate
structure, (iii) in its Federal Taxpayer Identification Number or
organizational identification number or (iv) in its jurisdiction of
organization.  Each Grantor agrees to
promptly provide the Administrative Agent with certified organizational
documents reflecting any of the changes described in the immediately preceding
sentence, to the extent applicable.  Each
Grantor agrees not to effect or permit any change referred to in the first
sentence of this paragraph (a) unless all filings have been made under the
applicable UCC or otherwise that are required in order for the Administrative
Agent to continue at all times following such change to have a valid, legal and
perfected first priority security interest in all the Collateral subject to
Permitted Liens.

 

19

 

(b)           Maintenance of Records.  Each Grantor agrees to maintain, at its own
cost and expense, such complete and accurate records with respect to the
Collateral owned by it in accordance with reasonably prudent and standard
practices used in industries that are the same as or similar to those in which
such Grantor is engaged, and, at such time or times as the Administrative Agent
may reasonably request in respect of any material portion of any Collateral, to
prepare and deliver to the Administrative Agent a schedule or schedules in form
and detail reasonably satisfactory to the Administrative Agent showing the
identity, amount and location of any and all Collateral specified in any such
request.

 

(c)           Further Assurances.  (i)  Each Grantor shall, at its own
expense, take any and all commercially reasonable actions necessary to defend
title to all material Collateral against all Persons and to defend the Security
Interest of the Administrative Agent in all material Collateral and the
priority thereof against any Lien not expressly permitted to be prior to the
Security Interest pursuant to Section 7.01 of the Credit Agreement.

 

(ii)           If at any time any Grantor shall take
a security interest in any property of an Account Debtor or any other Person to
secure payment and performance of an Account, such Grantor shall promptly
assign such security interest to the Administrative Agent to the extent
permitted by any effective provision of the contracts or arrangements to which
such property is subject.  Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other Person granting the security interest.  Each Grantor shall remain liable to observe
and perform all the conditions and obligations to be observed and performed by
it under each contract, agreement or instrument relating to or consisting part
of the Collateral, all in accordance with the terms and conditions thereof, and
each Grantor jointly and severally agrees to indemnify and hold harmless each Secured
Party from and against any and all liability for such performance (except to
the extent such liability is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Secured Party’s
gross negligence or willful misconduct).

 

(iii)          Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the
Administrative Agent may from time to time reasonably request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith.

 

(d)           Insurance.  The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage
to the Inventory and Equipment in accordance with the requirements set forth in
Section 6.07 of the Credit Agreement. 
Each Grantor irrevocably makes, constitutes and appoints the
Administrative Agent (and all officers, employees or agents designated by the
Administrative Agent) as such Grantor’s true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Collateral
under 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 of
insurance and for making all determinations and decisions with respect thereto.  In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance
required hereby or to pay any premium in whole or part relating thereto, the
Administrative Agent may, without waiving or releasing any obligation or
liability of any Grantor hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Adminstrative Agent
reasonably deems advisable. All sums disbursed by the Administrative Agent in
connection with

 

20

 

this Subsection
4.03(d), including reasonable attorneys’ fees, court costs, expenses and
other charges relating thereto, shall be payable, upon demand, by the Grantors
to the Administrative Agent and shall be additional Obligations secured hereby.

 

(e)           Inspection Rights.  Without in any way limiting or expanding the
rights of any Lender or the Administrative Agent pursuant to Section 6.10
of the Credit Agreement, not more than once per calendar year, the
Administrative Agent and such Persons as the Administrative Agent may
reasonably designate shall have the right, at the Grantors’ cost and expense,
to inspect the Collateral, all records related thereto (and to make extracts
and copies from such records) and the premises upon which any of the Collateral
is located, at reasonable times and intervals during normal business hours upon
reasonable advance notice to the respective Grantor, to discuss the Grantors’
affairs with the officers of the Grantors and their independent accountants and
to verify under reasonable procedures, the validity, amount, quality, quantity,
value, condition and status of, or any other matter relating to, the
Collateral, provided, however, that if an Event of Default has
occurred and is continuing, the Administrative Agent and such Persons as the
Administrative Agent may reasonably designate shall have the right to do any of
the foregoing at any time during regular business hours and upon reasonable
advance notice.  In the case of Accounts
or Collateral in the possession of any third person, at any time that an Event
of Default has occurred and is continuing, by contacting Account Debtors or the
third person possessing such Collateral for the purpose of making such a
verification.  Subject to
Section 10.07 of the Credit Agreement, the Administrative Agent shall have
the right to share any information it gains from such inspection or verification
with any Secured Party.

 

(f)            Payment of Taxes.  At its option, the Administrative Agent may
discharge past due taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the Collateral (other
than Permitted Liens), and may pay for the maintenance and preservation of the
Collateral to the extent any Grantor fails to do so as required by the Credit
Agreement or this Agreement, and the Grantors agree to reimburse the
Administrative Agent on demand for any payment made or any reasonable expense incurred
by the Administrative Agent pursuant to the foregoing authorization and shall
be additional Obligations secured hereby; provided, however, that
nothing in this Section 4.03(f) shall be interpreted as
excusing any Grantor from the performance of, or imposing any obligation on the
Administrative Agent or any Secured Party to cure or perform, any covenants or
other promises of any Grantor with respect to taxes, assessments, charges,
fees, Liens, security interests or other encumbrances and maintenance as set
forth herein or in the other Loan Documents.

 

ARTICLE
V

REMEDIES

 

5.01        Remedies upon Default.  (a)  Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver all or any
item of Collateral to the Administrative Agent on demand, and it is agreed that
the Administrative Agent shall have the right to take any of or all the
following actions at the same or different times:  (i) with or without legal process and
with or without prior notice or demand for performance, to take possession of
the Collateral and without liability for trespass to enter any premises where
the Collateral may be located for the purpose of taking possession of or
removing the Collateral; (ii) enforce compliance with and take any and all
action with respect to the Pledged Collateral and other Collateral to the
fullest extent as though the Administrative Agent were the absolute owner
thereof, including the right to receive distributions and other payments with
respect to the Pledged Collateral and the other Collateral; and
(iii) generally with respect to all Collateral, to exercise any and all
rights afforded to a secured party under the Uniform Commercial Code or other
applicable Law.  Without limiting the
generality of the foregoing, each Grantor agrees that the Administrative Agent
shall have the right to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker’s board or on any
securities exchange, for cash, upon credit or for future delivery as 

 

21

 

the Administrative Agent
shall deem appropriate.  The
Administrative Agent shall be authorized at any such sale of securities (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to Persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale of Collateral the Administrative
Agent shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. 
Each such purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of any Grantor, and each
Grantor hereby waives and releases (to the extent permitted by law) all rights
of redemption, stay, valuation and appraisal that such Grantor now has or may
at any time in the future have under any rule of Law or statute now existing
or hereafter enacted.

 

(b)           The Administrative Agent shall give
the Borrowers 10 days’ written notice (which each Grantor agrees is reasonable
notice within the meaning of Section 9-611 of the UCC or its equivalent in
other jurisdictions) of the Administrative Agent’s intention to make any sale
of Collateral.  Such notice, in the case
of a public sale, shall state the time and place for such sale and, in the case
of a sale at a broker’s board or on a securities exchange, shall state the
board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange.  Any such public sale shall be
held at such time or times within ordinary business hours and at such place or
places as the Administrative Agent may fix and state in the notice (if any) of
such sale.  At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Administrative Agent may (in its sole
and absolute discretion) determine.  The
Administrative Agent shall not be obligated to make any sale of any Collateral
if it shall determine not to do so, regardless of the fact that notice of sale
of such Collateral shall have been given. 
The Administrative Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned.  In case any sale of all or
any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Administrative Agent until the sale
price is paid by the purchaser or purchasers thereof, but the Administrative
Agent shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may be sold again upon like notice.  At any public (or, to the extent permitted by
law, private) sale made pursuant to this Section 5.01, any Secured
Party 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 any
Grantor (all said rights being also hereby waived and released to the extent
permitted by law), the Collateral or any part thereof offered for sale and such
Secured Party may, upon compliance with the terms of sale, hold, retain and dispose
of such property without further accountability to any Grantor therefor.  For purposes hereof, a written agreement to
purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Administrative Agent shall be free to carry out such sale pursuant
to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact
that after the Administrative Agent shall have entered into such an agreement
all Events of Default shall have been remedied and the Obligations paid in
full.  As an alternative to exercising
the power of sale herein conferred upon it, the Administrative Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver.  Any sale
pursuant to the provisions of this Section 5.01 shall be deemed to
conform to the commercially reasonable standards as provided in
Section 9-610(b) of the UCC or its equivalent in other jurisdictions.

 

(c)           Notwithstanding anything to the
contrary contained in this Agreement, if any enforceable term of any promissory
note, contract, agreement, permit, lease, license (including any License) or
other General Intangible included as a part of the Collateral requires the
consent of the Person 

 

22

 

obligated on such promissory
note or any Person (other than the applicable Grantor) obligated on such lease,
contract or agreement, or which has issued such permit or license or other
General Intangible (i) for the creation, attachment or perfection of the
Lien of this Agreement in such Collateral or (ii) for the assignment or
transfer thereof or the creation, attachment or perfection of such Lien not to
give rise to a default, breach, right of recoupment, claim, defense,
termination, right of termination or other remedy thereunder, then the receipt
of any such necessary consent shall be a condition to any exercise of remedies
against such Collateral under this Section 5.01 (but not to the
creation, attachment or perfection of the Lien of this Agreement as provided
herein).

 

5.02        Application of Proceeds.  All cash proceeds received by the
Administrative Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral of any Grantor may, in the
discretion of the Administrative Agent, be held, to the extent permitted under
applicable Law, by the Administrative Agent as additional collateral security
for all or any part of the Obligations of such Grantor, and/or then or at any
time thereafter shall be applied (after payment of any amounts payable to the
Administrative Agent pursuant to Section 10.04 of the Credit Agreement and
Section 4.03(f)) in whole or in part by the Administrative Agent
for the ratable benefit of the Secured Parties against all or any part of the
Obligations of such Grantor in accordance with Section 8.03 of the Credit
Agreement.  Any surplus of such cash or
cash proceeds of any Grantor held by the Administrative Agent and remaining on
the Termination Date for such Grantor shall be paid over to such Grantor or to
whomsoever may be lawfully entitled to receive such surplus.

 

5.03        Securities Act, etc.  In view of the position of the Grantors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time
in effect being called the “Federal Securities Laws”) with respect to
any disposition of the Pledged Collateral or any Investment Property permitted
hereunder.  Each Grantor understands that
compliance with the Federal Securities Laws might very strictly limit the
course of conduct of the Administrative Agent if the Administrative Agent were
to attempt to dispose of all or any part of the Pledged Collateral or any
Investment Property, and might also limit the extent to which or the manner in
which any subsequent transferee of any Pledged Collateral or any Investment
Property could dispose of the same. 
Similarly, there may be other legal restrictions or limitations
affecting the Administrative Agent in any attempt to dispose of all or part of
the Pledged Collateral or any Investment Property under applicable Blue Sky or
other state securities laws or similar laws analogous in purpose or
effect.  Each Grantor recognizes that in
light of such restrictions and limitations the Administrative Agent may, with
respect to any sale of the Pledged Collateral or any Investment Property, limit
the purchasers to those who will agree, among other things, to acquire such
Pledged Collateral or any such Investment Property for their own account, for
investment, and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that in
light of such restrictions and limitations, the Administrative Agent, when
exercising remedies on behalf of the Secured Parties after an Event of Default
has occurred and is continuing, (a) may proceed to make such a sale
whether or not a registration statement for the purpose of registering such
Pledged Collateral or Investment Property or part thereof shall have been filed
under the Federal Securities Laws and (b) may approach and negotiate with
a single potential purchaser to effect such sale.  Each Grantor acknowledges and agrees that any
such sale might result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions.  In the event of any such sale, the
Administrative Agent shall incur no responsibility or liability for selling all
or any part of the Pledged Collateral or Investment Property at a price that
the Administrative Agent, in its sole and absolute discretion, may in good
faith deem reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a single
purchaser were approached.  The
provisions of this Section 5.04 will apply notwithstanding the 

 

23

 

existence of a public or
private market upon which the quotations or sales prices may exceed
substantially the price at which the Administrative Agent sells.

 

ARTICLE
VI

MISCELLANEOUS

 

6.01        Notices.  All notices and other communications provided
for hereunder shall be in writing and mailed, delivered or transmitted by
telecopies to each party hereto at the address set forth in Section 10.02
of the Credit Agreement (with any notice to a Grantor other than the Borrowers
being delivered to such Grantor in care of the Company).  All such notices and other communications
shall be deemed to be given or made at the times provided in Section 10.02
of the Credit Agreement.

 

6.02        Amendments, etc.; Additional Grantors;
Successors and Assigns.

 

(a)           No amendment to or waiver of any
provision of this Agreement nor consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and 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 the
specific instance and for the specific purpose for which given.  This Agreement shall be construed as a
separate agreement with respect to each Grantor and may be amended, modified,
supplemented, waived or released with respect to any Grantor without the
approval of any other Grantor and without affecting the obligations of any
other Grantor hereunder.

 

(b)           Upon execution and delivery by the
Administrative Agent and any Person of a Joinder Agreement, such Person shall
become a Grantor hereunder with the same force and effect as if originally
named as a Grantor herein.  The execution
and delivery of any such Joinder Agreement shall not require the consent of any
other Grantor hereunder.  The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Agreement.

 

(c)           Upon the delivery by the Borrowers of
each Perfection Certificate Supplement certifying supplements to the Schedules
to 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 and
supplement the Schedules to the Perfection Certificate and the Administrative
Agent may attach such schedule supplements to such Schedules, and each
reference to the Schedules to the Perfection Certificate shall mean and be a
reference to such Schedules, as supplemented pursuant to any such Perfection
Certificate Supplement.  For the
avoidance of doubt, the delivery of any Perfection Certificate Supplement shall
not effect any release of the security interest granted by any Grantor
hereunder unless and until such release shall be effective pursuant to Section 3.07.

 

(d)           This Agreement shall be binding upon
each Grantor and its successors, transferees and assigns and shall inure to the
benefit of the Administrative Agent and each other Secured Party and their
respective successors, transferees and permitted assigns; provided, however,
that no Grantor may assign its obligations hereunder without the prior written
consent of the Administrative Agent.

 

6.03        Survival of Agreement.  All covenants, agreements, representations
and warranties made by each Grantor in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and the issuance of
any Letters of Credit, regardless of any investigation made by any Lender or on
its behalf and notwithstanding that the Administrative Agent, the L/C Issuer or
any Lender may have had notice or knowledge of any Default or incorrect
representation or 

 

24

 

warranty at the time any
credit is extended under the Credit Agreement, and shall continue in full force
and effect until the Termination Date for such Grantor or any earlier release
of such Grantor hereunder pursuant to Section 3.07.

 

6.04        Administrative Agent Appointed
Attorney-in-Fact.  Each
Grantor hereby appoints the Administrative Agent the attorney-in-fact of such
Grantor for the purpose, upon the occurrence and during the continuance of an
Event of Default, of carrying out the provisions of this Agreement and taking
any action and executing any instrument that the Administrative Agent may deem
necessary or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest. 
Without limiting the generality of the foregoing, the Administrative Agent
shall have the right, upon the occurrence and during the continuance of an
Event of Default, with full power of substitution either in the Administrative
Agent’s name or in the name of such Grantor, (a) to receive, endorse,
assign and/or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or any part
thereof, (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral, (c) to ask
for, demand, sue for, collect, receive and give acquittance for any and all
moneys due or to become due under and by virtue of any Collateral, (d) to
sign the name of any Grantor on any invoice or bill of lading relating to any
of the Collateral, (e) to send verifications of Accounts to any Account
Debtor, (f) to commence and prosecute any and all suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral, (g) to settle, compromise, compound,
adjust or defend any actions, suits or proceedings relating to all or any of
the 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 with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Administrative Agent were the absolute owner
of the Collateral for all purposes; provided, that nothing herein
contained shall be construed as requiring or obligating the Administrative
Agent to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Administrative Agent, or to present
or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect thereof
or any property covered thereby.  The
Administrative Agent and the other Secured Parties shall be accountable only
for amounts actually received as a result of the exercise of the powers granted
to them herein, and neither they nor their officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

 

6.05        Waivers.  No failure or delay by the Administrative
Agent or any other Secured Party in exercising any right, power or remedy
hereunder 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, or
any abandonment or discontinuance of steps to enforce such a right, power or
remedy, preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.  The
rights, powers and remedies of the Administrative Agent, the L/C Issuer and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights, powers or remedies that they would otherwise
have.  Without limiting the generality of
the foregoing, the making of a Loan or the issuance of a Letter of Credit shall
not be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the L/C Issuer may have had notice or
knowledge of such Default at the time. 
No notice or demand on any Loan Party in any case shall entitle any Loan
Party to any other or further notice or demand in similar or other
circumstances.

 

6.06        Severability.  If any provision of this Agreement is held to
be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement shall not be
affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to 

 

25

 

replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The invalidity
of a provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

6.07        Counterparts, Integration, Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof.  This Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
that, when taken together, bear the signatures of each of the other parties
hereto.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

6.08        Headings.  Article and Section headings used
herein are for the purpose of reference only, are not part of this Agreement
and are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.

 

6.09        GOVERNING LAW; JURISDICTION; ETC.

 

(a)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(b)           SUBMISSION TO JURISDICTION.  EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF SUCH STATE, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW.  NOTHING IN
THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERITES IN THE COURTS OF ANY
JURISDICTION.

 

(c)           WAIVER OF VENUE.  EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, 

 

26

 

THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

 

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02 OF
THE CREDIT AGREEMENT.  NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER 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 HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

6.11        ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES OR BY PRIOR OR CONTEMPORANEONS WRITTEN
AGREEMENTS.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.

 

6.12        Mortgages.  In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of
any Mortgage and the terms of such Mortgage are inconsistent with the terms of
this Agreement, then with respect to such Collateral, the terms of such
Mortgage 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 shall
be controlling in the case of all other Collateral.

 

[Signature Page Follows]

 

27

 

IN WITNESS WHEREOF, the
parties hereto have duly executed this Agreement as of the day and year first
above 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:

  
							

 

 

Signature
page

Pledge
and Security Agreement

 

 

	
  Administrative
  Agent:

  	
  BANK
  OF AMERICA, N.A.,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT A

to Pledge and Security Agreement

 

PERFECTION CERTIFICATE

 

A-1

EXHIBIT G

 

Prepared
by and

Upon
Recording return to:

 

Staci
E. Rosche, Esquire

McGuireWoods
LLP

100
North Tryon Street, Suite 2900

Charlotte,
North Carolina  28202-4011

 

 

OPEN-END MORTGAGE, ASSIGNMENT OF RENTS AND
LEASES,

SECURITY AGREEMENT AND FIXTURE FILING

IN THE MAXIMUM PRINCIPAL AMOUNT OF
$140,000,000

 

(This
Document Serves as a Fixture Filing under Section 9-502 of the Ohio
Uniform Commercial Code.)

 

Mortgagor’s Organizational Identification
Number:  DE-4070998

 

THIS OPEN-END MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, SECURITY
AGREEMENT AND FIXTURE FILING (this “Mortgage”) is made this 21st day of
December, 2007, by AMYLIN OHIO LLC, a Delaware limited liability company whose
address is c/o Amylin Pharmaceuticals, Inc., 9360 Towne Center Drive, Suite 110,
San Diego, California 92121 (“Mortgagor”), for the benefit of BANK OF
AMERICA, N.A., a national banking association whose address is 100 North Tryon
Street, Charlotte, North Carolina 28255 (together with its successors and
assigns, “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 maximum
principal amount of One Hundred Forty Million and No/100 Dollars
($140,000,000.00) (the “Loan”).

 

B.             To induce
Mortgagee to enter into the Credit Agreement and consummate the transactions
contemplated therein, Mortgagor has agreed to execute and deliver this Mortgage
as security for the Obligations (as defined in the Credit Agreeement).

 

1

 

NOW,
THEREFORE, in consideration of the matters set forth above and the sum of Ten
Dollars ($10.00) cash in hand paid to Mortgagor, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Mortgagor agrees as follows:

 

ARTICLE 1

 

Definitions; Granting Clauses;
Secured Indebtedness

 

Section 1.1. 
Amount Secured.  This
Mortgage secures the aggregate principal amount of the Loan plus other
obligations as provided herein and such additional  amounts
as Mortgagee may from time to time advance pursuant to the terms and conditions
of this Mortgage or for the protection of the lien of this Mortgage, together
with interest thereon.

 

Section 1.2. Definitions. 
(a) In addition to other terms defined herein, each of the
following terms shall have the meaning assigned to it, such definitions to be
applicable equally to the singular and the plural forms of such terms and to
all genders:

 

“Borrower”:  Amylin
Pharmaceuticals, Inc., a Delaware corporation, whose address is 9360 Towne
Center Drive, Suite 110, San Diego, California 92121, and its permitted
successors and assigns.

 

“Maturity Date”:  shall
have the meaning set forth in the Credit Agreement.

 

“Mortgagee”: 
Bank of America, N.A., a national banking association, its successors
and assigns, whose place of business is 100 North Tryon Street, Charlotte,
North Carolina 28255.

 

“Mortgagor”:  Amylin Ohio, LLC, a Delaware limited liabilty
company, whose address is c/o Amylin Pharmaceuticals, Inc., 9360 Towne
Center Drive, Suite 110, San Diego, California 92121, and its permitted
successors and assigns.

 

“Swap Contract” means any
agreement, whether or not in writing, relating to any Swap Transaction,
including, unless the context otherwise clearly requires, any form of master
agreement published by the International Swaps and Derivatives Association, Inc.,
or any other master agreement, entered into prior to the date hereof or any
time after the date hereof, between Swap Counterparty and Mortgagor (or its
Affiliate (as defined in the Credit Agreement)), together with any related
schedule and confirmation, as amended, supplemented, superseded or replaced
from time to time.

 

“Swap Counterparty”
means Mortgagee or its Affiliate, in its capacity as counterparty under any
Swap Contract.

 

“Swap Transaction”
means any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond option, note or bill option, interest rate option, forward foreign
exchange transaction, cap transaction, collar transaction, floor transaction,
currency swap transaction, cross-currency rate 

 

2

 

swap transaction, swap
option, currency option, credit swap or default transaction, T-lock, or any
other similar transaction (including any option to enter into the foregoing) or
any combination of the foregoing, entered into prior to the date hereof or
anytime after the date hereof between Swap Counterparty and Mortgagor (or its
Affiliate) so long as a writing, such as a Swap Contract, evidences the parties’
intent that such obligations shall be secured by this Mortgage in connection
with the Credit Agreement.

 

(b)           Any term used or defined in the Ohio
Uniform Commercial Code, as in effect from time to time, and not defined in
this Mortgage has the meaning given to the term in the Ohio Uniform Commercial
Code, 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 Code
differently than in another chapter of the Ohio Uniform Commercial Code, the
term has the meaning specified in Chapter 9.

 

(c)           Capitalized terms used but not
defined in this Mortgage have the respective meanings ascribed to them in the
Credit Agreement, the provisions of which are incorporated herein by this
reference 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 all
right, title and interest of Mortgagor in and to the following:  (a)  the real property
described in Exhibit A which is attached hereto and incorporated
herein by reference (the “Land”) together with: (i) any and all
buildings, structures, improvements, alterations or appurtenances now or
hereafter situated or to be situated on the Land (collectively the “Improvements”);
and (ii) all right, title and interest of Mortgagor, now owned or
hereafter acquired, in and to (1) all streets, roads, alleys, easements,
rights-of-way, licenses, rights of ingress and egress, vehicle
parking rights and public places, existing or proposed, abutting, adjacent,
used in connection with or pertaining to the Land or the Improvements; (2) any
strips or gores between the Land and abutting or adjacent properties; (3) all
options to purchase the Land or the Improvements or any portion thereof or
interest therein, and any greater estate in the Land or the Improvements; and (4) all
water and water rights, timber, crops and mineral interests on or pertaining to
the Land (the Land, Improvements and other rights, titles and interests
referred to in this clause (a) being herein sometimes collectively called
the “Premises”); (b)  all fixtures, equipment, systems, machinery,
furniture, furnishings, appliances, inventory, goods, building and construction
materials, supplies, and articles of personal property, of every kind and
character, tangible and intangible (including software embedded therein), now
owned or hereafter acquired by Mortgagor, which are now or hereafter attached
to or situated in, on or about the Land or the Improvements, or used in or
necessary to the complete and proper planning, development, use, occupancy or
operation thereof, or acquired (whether delivered to the Land or stored
elsewhere) for use or installation in or on the Land or the Improvements, and
all renewals and replacements of, substitutions for and additions to the
foregoing (the properties referred to in this clause (b) being herein
sometimes collectively called the “Accessories,” all of which are hereby
declared to be permanent accessions to the Land); (c) all (i) plans
and specifications for the Improvements; 

 

3

 

(ii) Mortgagor’s
rights, 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 coverage
related thereto, including from an insurance provider meeting the requirements
of the Loan Documents or from or through any state or federal government
sponsored program or entity), Swap Contracts, contracts and agreements for the
design, construction, operation or inspection of the Improvements and other
contracts and general intangibles (including but not limited to payment
intangibles and goodwill but excluding trademarks, patents, trade names,
copyrights or other intellectual property) related to the Premises or the
Accessories or the operation thereof; (iii) deposits and deposit accounts
arising from or related to any transactions related to the Premises or the
Accessories (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 other
Loan Documents for taxes, insurance or otherwise), rebates or refunds of impact
fees or other taxes, assessments or charges, money, accounts (including deposit
accounts), instruments, documents, promissory notes and chattel paper (whether
tangible or electronic) arising from or by virtue of any transactions related
to the Premises or the Accessories and any account or deposit account from
which Mortgagor may from time to time authorize Mortgagee to debit and/or
credit payments due with respect to the Loan or any Swap Contract, all rights
to the payment of money from Mortgagee under any Swap Contract, and all
accounts, deposit accounts and general intangibles, including payment
intangibles, described in any Swap Contract; (iv) permits, licenses,
franchises, certificates, development rights, commitments and rights for
utilities, and other rights and privileges obtained in connection with the
Premises or the Accessories; (v) leases, rents, royalties, bonuses,
issues, profits, revenues and other benefits of the Premises and the
Accessories (without derogation of Article 3 hereof); (vi) as-extracted
collateral produced from or allocated to the Land including, without limitation,
oil, gas and other hydrocarbons and other minerals and all products processed
or obtained therefrom, and the proceeds thereof; and (vii) engineering,
accounting, title, legal, and other technical or business data concerning the
Premises which are in the possession of Mortgagor or in which Mortgagor can
otherwise grant a security interest; and (d) all (i) accounts and
proceeds (cash or non-cash and including payment intangibles) of or arising
from 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 disposition
thereof, proceeds of each policy of insurance (or additional or supplemental
coverage related thereto, including from an insurance provider meeting the requirements
of the Loan Documents or from or through any state or federal government
sponsored program or entity) relating thereto, proceeds of the taking thereof
or of any rights appurtenant thereto, including change of grade of streets,
curb cuts or other rights of access, by condemnation, eminent domain or
transfer in lieu thereof for public or quasi-public use under any law,
and proceeds arising out of any damage thereto; (ii) all letter-of-credit
rights (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) all
commercial tort claims Mortgagor now has or hereafter acquires relating to the
properties, rights, titles and interests referred to in this Section 1.3;
and (iv) other interests of every kind and character which Mortgagor now
has 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 all
property used or useful in connection therewith, including but not limited to
rights of ingress and egress and remainders, reversions and 

 

4

 

reversionary rights or
interests; and if the estate of Mortgagor in any of the property referred to
above in this Section 1.3 is a leasehold estate, this conveyance shall
include, and the lien and security interest created hereby shall encumber and
extend to, all other or additional title, estates, interests or rights which
are now owned or may hereafter be acquired by Mortgagor in or to the property
demised under the lease creating the leasehold estate; provided, however,
the foregoing rights, interests and properties shall not included (X) any
of the Ohio/Sale Leaseback Property (as defined in the Credit Agreement) from
and after the consummation of the Permitted Ohio Sale/Leaseback (as defined in
the Credit Agreement) and (Y) any Excluded Collateral (as defined in the
Credit Agreement).

 

(b)           TO HAVE AND TO HOLD the foregoing
rights, interests and properties, together with all rights, estates, powers,
privileges, hereditaments, easements and appurtenances thereto (herein
collectively called the “Property”) to the Mortgagee and the Mortgagee’s
successors and assigns to secure and enforce the payment and performance of the
following obligations, indebtedness, duties and liabilities and all renewals,
extensions, supplements, increases and modifications thereof in whole or in
part from time to time (collectively, the “Secured Indebtedness”):  (A) the performance and observance by
Borrower and Mortgagor of all covenants and conditions contained in the Credit
Agreement, and any promissory notes given in substitution therefor or in
modification, supplement, increase, renewal or extension thereof, in whole or
in part, in this Mortgage, and in all other instruments securing the Credit
Agreement; 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 such
amounts, owed by Borrower and/or Mortgagor to Mortgagee now or hereafter
incurred or arising pursuant to or permitted by the provisions of the Credit
Agreement, this Mortgage, or any other document now or hereafter evidencing,
governing, guaranteeing, securing or otherwise executed in connection with the
loans made pursuant to the Credit Agreement, including but not limited to any
loan or other credit agreement, letter of credit or reimbursement agreement,
tri-party financing agreement, any Swap Contracts or other agreement between
Mortgagor and Mortgagee, or among Mortgagor, Mortgagee and any other party or
parties, pertaining to the repayment or use of the proceeds of the loans made
pursuant to the Credit Agreement (the Credit Agreement, this Mortgage, any Swap
Contracts and such other documents, as they or any of them may have been or may
be from time to time renewed, extended, supplemented, increased or modified, being
herein 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 law
prohibited from obtaining a lien on real estate.

 

Section 1.4.  Security Interest.  Mortgagor hereby grants to Mortgagee a
security interest in all of the Property which constitutes personal property or
fixtures, all proceeds and products thereof, and all supporting obligations
ancillary to or arising in any way in connection therewith (herein sometimes
collectively called the “Collateral”) to secure the obligations of
Borrower and Mortgagor under the Credit Agreement and Loan Documents and all
other indebtedness and matters defined as Secured Indebtedness in Section 1.5
of this Mortgage.  In addition to its
rights hereunder or otherwise, Mortgagee shall have all of the rights of a
secured party under the Ohio Uniform
Commercial Code, as in effect from time to time, or under the Uniform
Commercial Code in force, from time to time, in any other state to the extent
the same is applicable law.  It is
intended 

 

5

 

that
as to the Collateral this Mortgage shall be effective as a financing statement
filed as a fixture filing from the date of its filing for record in the real
estate records of the county in which the Land is located.  Information concerning the security interest
created by this instrument may be obtained from the Mortgagee as secured party
or the Mortgagor as debtor at the addresses shown herein.

 

ARTICLE 2

 

Representations, Warranties and Covenants

 

Section 2.1.  Mortgagor
represents, warrants, and covenants as follows:

 

(a)  Payment and Performance.  Mortgagor will make (or cause Borrower to
make, as applicable) due and punctual payment of the Secured Indebtedness.  Mortgagor will timely and properly perform
and comply with all of the covenants, agreements, and conditions imposed upon
it by this Mortgage and the other Loan Documents.  Time shall be of the essence in this
Mortgage.

 

(b)  Title and Permitted Encumbrances.  Mortgagor has, in Mortgagor’s own right, and
Mortgagor covenants to maintain, lawful, good and marketable title to the
Property, is lawfully seized and possessed of the Property and every part
thereof, and has the right to convey the same, free and clear of all liens,
charges, claims, security interests, and encumbrances except for (i) the
matters, if any, shown as exceptions in the lender’s policy of title insurance
insuring the lien of this Mortgage, which are Permitted Encumbrances only to
the extent the same are valid and subsisting and affect the Property, (ii) the
liens and security interests evidenced or granted by this Mortgage, (iii) minor
imperfections of title that do not detract from the value or impair the use of
the Property, (iv) liens for taxes not yet due or for taxes that the
Company is contesting in good faith through appropriate proceedings, and the
lien for any assessments not yet due under any school, improvement or special
district bonds issued by any governmental authority where the proceeds are used
to finance public improvements and/or services; (v) covenants, conditions
and restrictions of general applicability to the use and occupancy of the
Property and other contiguous properties that evidence a common plan of
development; (vi) utility, storm drainage, access, landscaping, and other
non-exclusive easements for use of portions of a Property that do not detract
from the value or impair the use of the Property; (vii) mineral, water or
patent rights reserved or granted by a predecessor in interest to the United
States of America or any successor in interest; (viii) any Permitted Ohio
Financing Facility Liens (as defined in the Credit Agreement); (ix) easements,
including exclusive easements and access easements, granted to the State of
Ohio or any governmental agency thereof or utility for the purpose of building,
operating and maintaining an electrical substation and related equipment and
electrical wires (collectively, the “Duke Energy Easements”); and (x) liens
permitted by Section 7.01(d), (f), (h), (i), (l), (n), and (o) of the
Credit Agreement (the matters described in the foregoing clauses (i) through
(x) being herein called the “Permitted Encumbrances”).  Mortgagor, and Mortgagor’s successors and
assigns, will warrant generally and forever defend title to the Property,
subject as aforesaid, to Mortgagee and its successors or substitutes and
assigns, against the claims and demands of all persons claiming or to claim the
same or any part thereof.  Mortgagor will
punctually pay, perform, observe in all material respects and keep all material
covenants, obligations and 

 

6

 

conditions in or pursuant to any Permitted Encumbrance and will not
modify or permit modification of any Permitted Encumbrance without the prior
written consent of Mortgagee, which consent shall not be unreasonably withheld,
conditioned or delayed.  Inclusion of any
matter as a Permitted Encumbrance does not constitute approval or waiver by
Mortgagee of any existing or future violation or other breach thereof by
Mortgagor, by the Property or otherwise. 
If any right or interest of Mortgagee in the Property or any part
thereof shall be endangered or questioned or shall be attacked directly or
indirectly, Mortgagee (whether or not named as party to legal proceedings with
respect thereto), following notice to Mortgagor and after reasonable
opportunity for Mortgagor to cure in accordance with the Loan Documents, is
hereby authorized and empowered to take such steps as in its discretion may be
proper for the defense of any such legal proceedings or the protection of such
right or interest of Mortgagee, including but not limited to the employment of
independent counsel, the prosecution or defense of litigation, and the
compromise or discharge of adverse claims. 
All expenditures so made of every kind and character shall be a demand
obligation (which obligation Mortgagor hereby promises to pay) owing by
Mortgagor to Mortgagee, and the Mortgagee shall be subrogated to all rights of
the person receiving such payment.  Upon
the request of Mortgagor, the lien of this Mortgage shall be subordinated to
the Duke Energy Easements.  Mortgagor
agrees that it shall pay for all legal fees, title insurance endorsement
premiums and other expenses reasonably incurred by Mortgagee in connection with
the 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, all
taxes, assessments and other charges or levies imposed upon or against or with
respect to the Property or the ownership, use, occupancy or enjoyment of any
portion thereof, or any utility service thereto, as the same become due and
payable, including but not limited to all real estate taxes assessed against
the Property or any part thereof, and shall deliver promptly to Mortgagee such
evidence of the payment thereof as Mortgagee may require.

 

(d)  Insurance.  Mortgagor
shall obtain and maintain at Mortgagor’s sole expense: (1) property
insurance with respect to the Premises and all permanently installed fixtures
and improvements against loss or damage by such hazards as are presently
included in an Insurance Services Office (ISO) Special Causes of Loss Form CP
1030 or its equivalent, in an amount not less than 100% of the full replacement
cost, including the cost of debris removal, without deduction for depreciation
and 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) if
and to the extent any portion of the Improvements is, under the Flood Disaster Protection
Act of 1973 (“FDPA”), as it may be amended from time to time, in a
Special Flood Hazard Area, within a Flood Zone designated A or V in a
participating community, a flood insurance policy in an amount required by
Mortgagee, but in no event less than the amount sufficient to meet the
requirements of applicable law and the FDPA, as such requirements may from time
to 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 named
insured and Mortgagee as additional insured with minimum coverage limits of at
least One Million Dollars ($1,000,000.000) combined single limit per occurrence/aggregate;
(4) statutory workers’ 

 

7

 

compensation insurance covering all employees of Mortgagor employed at
the Premises (including employer’s liability insurance, if required by
Mortgagee); (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 liability
insurance, if required by Mortgagee); and (B) commercial general liability
insurance, including products and completed operations coverage with minimum
coverage limits of at least Two Million Dollars ($2,000,000.00) combined single
limit per occurrence/aggregate, and otherwise meeting the same policy requirements
as set forth in (3) above  but with
Mortgagor and Mortgagee as additional insureds; and (6) such other
insurance on the Property and endorsements as may from time to time be required
by Mortgagee and against other insurable hazards or casualties which at the
time are commonly insured against in the case of premises similarly situated,
due regard being given to the height, type, construction, location, use and
occupancy of buildings and improvements. 
All insurance policies shall be issued and maintained by insurers, in
amounts, 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 of
premiums, and not less than thirty (30) days’ prior written notice to Mortgagee
of any other cancellation or any change of coverage.  All insurance companies must be licensed to
do 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 caused
to be maintained, by Mortgagor with respect to the Property, except for general
liability insurance, shall provide that each such policy shall be primary
without right of contribution from any other insurance that may be carried by
Mortgagor or Mortgagee and that all of the provisions thereof, except the
limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured. 
Without limiting the discretion of Mortgagee with respect to required
endorsements to insurance policies, all such policies for loss of or damage to
the Property shall contain a standard “loss payee” endorsement (form #438 BFU or
equivalent), providing for all loss proceeds under such policies to be payable
to Mortgagee, such proceeds to be held for application as provided in the Loan
Documents.  True and complete copies of
the originals of each initial insurance policy (or to the extent permitted by
Mortgagee, such other evidence of insurance acceptable to Mortgagee) shall be
delivered to Mortgagee at the time of execution of this Mortgage, with all
premiums fully paid current, and a report summarizing the insurance coverage shall
be delivered to Mortgagee in accordance with the terms and provisions of the
Credit Agreement.  Mortgagor shall pay
all premiums on policies required hereunder as they become due and payable and
promptly deliver to Mortgagee, upon Mortgagee’s request, evidence satisfactory
to Mortgagee of the timely payment thereof. 
If any loss occurs at any time when Mortgagor has failed to perform
Mortgagor’s covenants and agreements in this paragraph with respect to any
insurance payable because of loss sustained to any part of the Property whether
or not such insurance is required by Mortgagee, Mortgagee shall nevertheless be
entitled to the benefit of all insurance covering the loss and held by or for
Mortgagor, to the same extent as if it had been made payable to Mortgagee.  Upon any foreclosure hereof or transfer of
title to the Property in extinguishment of the whole or any part of the Secured
Indebtedness, all of Mortgagor’s right, title and interest in and to the
insurance policies referred to in this Section (including unearned
premiums) and all proceeds payable thereunder shall thereupon vest in the
purchaser at foreclosure or other such transferee, to the extent permissible
under such policies.  Upon a Default,
Mortgagee shall have the right (but not 

 

8

 

the obligation) to make proof of loss for, settle and adjust any claim
under, and receive the proceeds of, all insurance for loss of or damage to the
Property regardless of whether or not such insurance policies are required by
Mortgagee, and the expenses incurred by Mortgagee in the adjustment and
collection of insurance proceeds shall be a part of the Secured Indebtedness
and 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 the
collection of any of such proceeds or for the obtaining, maintaining or
adequacy of any insurance or for failure to see to the proper application of
any amount paid over to Mortgagor.  Any
such proceeds received by Mortgagee shall, after deduction therefrom of all
reasonable 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 by
Mortgagee) to repair or restoration, either partly or entirely, of the Property
so damaged, or (3) applied to the payment of the Secured Indebtedness in
such order and manner as Mortgagee, in its sole discretion, may elect, whether
or not due.  In any event, the unpaid
portion of the Secured Indebtedness shall remain in full force and effect and
the payment thereof shall not be excused. 
Mortgagor shall at all times comply with the requirements of the insurance
policies required hereunder and of the issuers of such policies and of any
board of fire underwriters or similar body as applicable to or affecting the
Property.

 

(e)  Reserve for Insurance, Taxes and Assessments.  Upon a Default, to secure the payment and
performance of the Secured Indebtedness, but not in lieu of such payment and
performance, Mortgagor, upon written demand by Mortgagee, will deposit with
Mortgagee a sum equal to real estate taxes, assessments and charges (which
charges for the purposes of this paragraph shall include without limitation any
recurring charge which could result in a lien against the Property) against the
Property for the current year and the premiums for such policies of insurance
for the current year, all as estimated by Mortgagee and prorated to the end of
the calendar month following the month during which Mortgagee’s request is
made, and thereafter will deposit with Mortgagee, on each date when an
installment of principal and/or interest is due as set forth in the Credit
Agreement, sufficient funds (as estimated from time to time by Mortgagee) to
permit Mortgagee to pay at least fifteen (15) days prior to the due date
thereof, the next maturing real estate taxes, assessments and charges and
premiums for such policies of insurance. 
Mortgagee shall have the right to rely upon tax information furnished by
applicable taxing authorities in the payment of such taxes or assessments and
shall have no obligation to make any protest of any such taxes or
assessments.  Any excess over the amounts
required for such purposes shall be held by Mortgagee for future use, applied
to any Secured Indebtedness or refunded to Mortgagor, at Mortgagee’s option,
and any deficiency in such funds so deposited shall be made up by Mortgagor
upon demand of Mortgagee.  All such funds
so deposited shall bear no interest, may be comingled with the general funds of
Mortgagee and shall be applied by Mortgagee toward the payment of such taxes,
assessments, charges and premiums when statements therefor are presented to
Mortgagee by Mortgagor (which statements shall be presented by Mortgagor to
Mortgagee a reasonable time before the applicable amount is due).  The conveyance or transfer of Mortgagor’s
interest in the Property for any reason (including without limitation the
foreclosure of a subordinate lien or security interest or a transfer by
operation of law) shall constitute an assignment or transfer of Mortgagor’s
interest in and rights to such funds held by Mortgagee under this paragraph but
subject to the rights of Mortgagee hereunder.

 

9

 

(f)  Condemnation. 
Mortgagor shall notify Mortgagee immediately of any threatened or
pending proceeding for condemnation affecting the Property or arising out of
damage to the Property, and Mortgagor shall, at Mortgagor’s expense, diligently
prosecute any such proceedings.  If a
Default shall have occurred hereunder, Mortgagee shall have the right (but not
the obligation) to participate in any such proceeding and to be represented by
counsel of its own choice.  Mortgagee
shall be entitled to receive all sums which may be awarded or become payable to
Mortgagor for the condemnation of the Property, or any part thereof, for public
or quasi-public use, or by virtue of private sale in lieu thereof, and
any sums which may be awarded or become payable to Mortgagor for injury or
damage to the Property.  Mortgagor shall,
promptly upon request of Mortgagee, execute such additional assignments and
other documents as may be necessary from time to time to permit such
participation and to enable Mortgagee to collect and receipt for any such
sums.  All such sums are hereby assigned
to Mortgagee, and shall, after deduction therefrom of all reasonable expenses
actually incurred by Mortgagee, including attorneys’ fees, be (1) released
to Mortgagor to repair and restore the Property, or (2) if a Default shall
then exist and be continuing, at Mortgagee’s option, applied to the payment of
the Secured Indebtedness in such order and manner as Mortgagee, in its sole
discretion, may elect, whether or not due. 
In any event the unpaid portion of the Secured Indebtedness shall remain
in full force and effect and the payment thereof shall not be excused.  Mortgagee shall not be, under any
circumstances, liable or responsible for failure to collect or to exercise
diligence in the collection of any such sum or for failure to see to the proper
application of any amount paid over to Mortgagor.  Mortgagee is hereby authorized, in the name
of Mortgagor, to execute and deliver valid acquittances for, and to appeal
from, 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 demand
obligation owing by Mortgagor (which Mortgagor hereby promises to pay) to
Mortgagee pursuant to this Mortgage.

 

(g)  Compliance with Legal Requirements.  The Property and the use, operation and
maintenance thereof and all activities thereon do and shall at all times comply
in all material respects with all applicable Legal Requirements (hereinafter
defined).  The Property is not, and shall
not be, dependent on any other property or premises or any interest therein
other than the Property to fulfill any requirement of any Legal
Requirement.  Mortgagor shall not, by act
or omission, permit any building or other improvement not subject to the lien
of this Mortgage to rely on the Property or any interest therein to fulfill any
requirement of any Legal Requirement.  No
improvement upon or use of any part of the Property constitutes a nonconforming
use under any zoning law or similar law or ordinance.  Mortgagor has obtained and shall preserve in
force all requisite zoning, utility, building, health, environmental and operating
permits from the governmental authorities having jurisdiction over the
Property.

 

If Mortgagor receives a notice or claim from any person that the
Property, or any use, activity, operation or maintenance thereof or thereon, is
not in compliance with any Legal Requirement, Mortgagor will promptly furnish a
copy of such notice or claim to Mortgagee. 
As used in this Mortgage:  (i) the
term “Legal Requirement” means any Law (hereinafter defined), agreement,
covenant, restriction, easement or condition (including, without limitation of
the foregoing, any condition or requirement imposed by any insurance or surety
company), as any of the same now 

 

10

 

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 adverse
effect on the Mortgagor’s ordinary use or occupation of the Premises (such
material adverse effect, a “Material Adverse Effect”); and (ii) the
term “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 good
order, repair and operating condition (ordinary wear and tear excepted),
causing all necessary repairs, renewals, replacements, additions and
improvements to be promptly made, and will not allow any of the Property to be
misused, abused or wasted or to deteriorate in any material respect.  Notwithstanding the foregoing, Mortgagor will
not, without the prior written consent of Mortgagee, (i) remove from the
Property any fixtures or personal property encumbered by this Mortgage except
as permitted by the Credit Agreement, or (ii) make any structural
alteration to the Property or any other alteration thereto which materially
impairs the value thereof (except for modifications contemplated by the
Permitted Ohio Sale/Leaseback and the grant of the Duke Energy Easements). If
any act or occurrence of any kind or nature (including any condemnation or any
casualty for which insurance was not obtained or obtainable) shall result in
damage to or loss or destruction of the Property, Mortgagor shall give prompt
notice thereof to Mortgagee and Mortgagor shall promptly, at Mortgagor’s sole
cost and expense and regardless of whether insurance or condemnation proceeds
(if any) shall be available or sufficient for the purpose, secure the Property
as necessary and commence and continue diligently to completion to restore,
repair, replace and rebuild the Property as reasonably necessary for the
conduct 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 failure
to act, acquiesce in the placing of, or allow to remain, any mortgage,
voluntary or involuntary lien, whether statutory, constitutional or
contractual, security interest, encumbrance or charge, or conditional sale or
other title retention document, against or covering the Property, or any part
thereof, other than the Permitted Encumbrances, regardless of whether the same
are expressly or otherwise subordinate to the lien or security interest created
in this Mortgage, and should any of the foregoing become attached hereafter in
any manner to any part of the Property without the prior written consent of
Mortgagee, Mortgagor will cause the same to be promptly discharged and
released.  Mortgagor will not acquire any
fixtures, equipment or other property (including software embedded therein)
forming a part of the Property pursuant to a lease, license, security agreement
or similar agreement, whereby any party has or may obtain the right to repossess
or remove same, without the prior written consent of Mortgagee; provided,
however, that the prohibition on acquisitions in the foregoing sentence
shall not apply unless there has been a Default.  Except for Permitted Encumbrances, if
Mortgagee consents to the voluntary grant by Mortgagor of any mortgage, lien,
security interest, or other encumbrance (hereinafter called “Subordinate
Lien”) covering any of the Premises or if the foregoing prohibition is
determined by a court of competent jurisdiction to be unenforceable as to a
Subordinate Lien, any such Subordinate Lien shall contain express covenants to
the effect that: (1) the Subordinate Lien is unconditionally subordinate
to this Mortgage and all Leases (hereinafter defined); (2) if any action
(whether judicial or pursuant to a 

 

11

 

power of sale) shall be instituted to
foreclose or otherwise enforce the Subordinate Lien, no tenant of any of the
Leases (hereinafter defined) shall be named as a party defendant, and no action
shall be taken that would terminate any occupancy or tenancy without the prior
written consent of Mortgagee; (3) Rents (hereinafter defined), if
collected by or for the holder of the Subordinate Lien, shall be applied first
to the payment of the Secured Indebtedness then due and expenses incurred in
the ownership, operation and maintenance of the Premises in such order as
Mortgagee may determine, prior to being applied to any indebtedness secured by
the Subordinate Lien; (4) written notice of default under the Subordinate
Lien and written notice of the commencement of any action (whether judicial or
pursuant to a power of sale) to foreclose or otherwise enforce the Subordinate
Lien or to seek the appointment of a receiver for all or any part of the
Premises shall be given to Mortgagee with or immediately after the occurrence
of any such default or commencement; and (5) neither the holder of the
Subordinate Lien, nor any purchaser at foreclosure thereunder, nor anyone
claiming by, through or under any of them shall succeed to any of Mortgagor’s
rights hereunder without the prior written consent of Mortgagee.  Mortgagor represents and warrants that no
notices 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 for
record of this Mortgage and that Mortgagor shall promptly provide Mortgagee
with 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 and
in accordance with all material Legal Requirements and will pay all fees or
charges of any kind in connection therewith, except for such fees or charges for
which the non-payment thereof could not reasonably be expected to have a
Material Adverse Effect.  Mortgagor will
keep the Property occupied so as not to impair the insurance carried thereon.  Mortgagor will not use or occupy or conduct
any activity on, or allow the use or occupancy of or the conduct of any
activity on, the Premises in any manner which violates any Legal Requirement or
which constitutes a public or private nuisance or which makes void, voidable or
cancelable, or increases the premium of, any insurance then in force with
respect thereto.  Mortgagor will not
initiate or permit any zoning reclassification of the Premises or seek any
variance under existing zoning ordinances applicable to the Premises or use or
permit the use of the Premises in such a manner which would result in such use
becoming a nonconforming use under applicable zoning ordinances or other Legal
Requirement.  Mortgagor will not impose
any easement, restrictive covenant or encumbrance upon the Premises (except for
Permitted Encumbrances), execute or file any subdivision plat or condominium
declaration affecting the Property or consent to the annexation of the Property
to any municipality, without the prior written consent of Mortgagee.  Mortgagor will use commercially reasonable
efforts to preserve, protect, renew, extend and retain all material rights and
privileges granted for or applicable to the Premises.  Without the prior written consent of
Mortgagee, there shall be no drilling or exploration for or extraction, removal
or production of any mineral, hydrocarbon, gas, natural element, compound or
substance (including sand and gravel) from the surface or subsurface of the
Land regardless of the depth thereof or the method of mining or extraction
thereof.  Mortgagor will cause all
material debts and liabilities of any character (including without limitation
all debts and liabilities for labor, material and equipment (including software
embedded therein) and all material debts and charges for utilities servicing
the Property) incurred in the construction, maintenance, operation and 

 

12

 

development of the Property to be promptly paid, except where such
debts 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, Sections
1445 and 7701 (i.e. Mortgagor is not a non-resident alien, foreign
corporation, foreign partnership, foreign trust or foreign estate as those
terms are defined therein and in any regulations promulgated thereunder).  The Loan is solely for business and/or
investment purposes, and is not intended for personal, family, household or
agricultural purposes.  Mortgagor further
warrants that the proceeds of the Credit Agreement shall be used for commercial
purposes and stipulates that the Loan shall be construed for all purposes as a
commercial loan.  Mortgagor’s exact legal
name is correctly set forth at the end of this Mortgage.  If Mortgagor is not an individual, Mortgagor
is an organization of the type and (if not an unregistered entity) is
incorporated in or organized under the laws of the state specified in the
introductory 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 partnership
structure, unless Mortgagor shall have notified Mortgagee in writing of such
change at least 30 days prior to the effective date of such change, and shall
have first taken all action required by Mortgagee for the purpose of further
perfecting or protecting the lien and security interest of Mortgagee in the
Property.  In addition, Mortgagor shall
not change its limited liability company structure without first obtaining the
prior written consent of Mortgagee. 
Mortgagor’s principal place of business and chief executive office, and
the place where Mortgagor keeps its books and records, including recorded data
of any kind or nature, regardless of the medium of recording including, without
limitation, software, writings, plans, specifications and schematics concerning
the Premises, has for the preceding four months (or, if less, the entire period
of the existence of Mortgagor) been and will continue to be (unless Mortgagor
notifies Mortgagee of any change in writing at least 30 days prior to the date
of such change) the address of Mortgagor set forth at the end of this
Mortgage.  Mortgagor’s organizational
identification number, if any, assigned by the state of incorporation or
organization is correctly set forth on the first page of this
Mortgage.  Mortgagor shall promptly
notify Mortgagee (i) of any change of its organizational identification
number, or (ii) if Mortgagor does not now have an organization
identification number and later obtains one, of such organizational
identification number.

 

(m)  Certain Environmental Matters.  Mortgagor shall comply with the terms and
covenants of that certain Environmental Indemnity Agreement dated of even date
herewith (the “Environmental Agreement”).

 

(n)  Further Assurances. 
Mortgagor will, promptly on request of Mortgagee, (i) correct any
defect, error or omission which may be discovered in the contents, execution or
acknowledgment 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, and
assignments 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 Mortgage
and the 

 

13

 

other Loan Documents, to more fully identify and subject to the liens
and 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 deemed
advisable by Mortgagee to protect the lien or the security interest hereunder
against the rights or interests of third persons; and (iii) provide such
certificates, documents, reports, information, affidavits and other instruments
and do such further acts as may be necessary, desirable or proper in the
reasonable determination of Mortgagee to enable Mortgagee to comply with the
requirements or requests of any agency having jurisdiction over Mortgagee or
any examiners of such agencies with respect to the indebtedness secured hereby,
Mortgagor or the Property.  Mortgagor
shall pay all costs connected with any of the foregoing, which shall be a
demand 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 any
other Loan Document and to the extent not prohibited by applicable law,
Mortgagor will pay, and will reimburse to Mortgagee on demand to the extent
paid by Mortgagee: (i) all appraisal fees, filing, registration and
recording fees, recordation, transfer and other taxes, brokerage fees and
commissions, abstract fees, title search or examination fees, title policy and
endorsement premiums and fees, uniform commercial code search fees, judgment
and 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 by
Mortgagor or Mortgagee in connection with the preparation of the Loan
Documents, the evaluation, closing and funding of the loan evidenced by the
Loan 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, or
the defense of any right or remedy or the enforcement of any obligation of
Mortgagor, hereunder or under any other Loan Document.

 

(p)  Indemnification.

 

(i)  Mortgagor will indemnify and hold harmless Mortgagee from and
against, and reimburse it on demand for, any and all Indemnified Matters
(hereinafter defined).  For purposes of
this paragraph (p), the term “Mortgagee” shall include Mortgagee, and
any persons owned or controlled by, owning or controlling, or under common
control or affiliated with Mortgagee and the directors, officers, partners,
employees, attorneys, agents and representatives of Mortgagee.  Without limitation, the foregoing indemnities
shall apply to each indemnified person with respect to matters which in whole
or in part are caused by or arise out of the negligence of such (and/or any
other) indemnified person.  However, such
indemnities shall not apply to a particular indemnified person to the extent
that the subject of the indemnification is caused by or arises out of the gross
negligence or willful misconduct of that indemnified person.  Any amount to be paid under this paragraph (p) by
Mortgagor to Mortgagee shall be a demand obligation owing by Mortgagor (which
Mortgagor hereby promises to pay) to Mortgagee pursuant to this Mortgage.  

 

14

 

Nothing in this paragraph, elsewhere in this Mortgage or in any other
Loan 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 this
Mortgage, any other Loan Document, any other agreement or any applicable Legal
Requirement.

 

(ii)  As used herein, the term “Indemnified Matters” means
any 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, reasonable
fees and expenses of attorneys and other professional consultants and experts,
and of the investigation and defense of any claim, whether or not such claim is
ultimately defeated, and the settlement of any claim or judgment including all
value paid or given in settlement) of every kind, known or unknown, foreseeable
or unforeseeable, which may be imposed upon, asserted against or incurred or
paid by Mortgagee at any time and from time to time, whenever imposed, asserted
or incurred, because of, resulting from, in connection with, or arising out of
any transaction, act, omission, event or circumstance in any way connected with
the Property or with this Mortgage or any other Loan Document, including but
not limited to any bodily injury or death or property damage occurring in or
upon or in the vicinity of the Property through any cause whatsoever at any
time on or before the Release Date (hereinafter defined) any act performed or
omitted to be performed hereunder or under any other Loan Document, any breach
by Mortgagor of any representation, warranty, covenant, agreement or condition
contained in this Mortgage or in any other Loan Document, any default as
defined herein, any claim under or with respect to any Lease (hereinafter
defined) or arising under the Environmental Agreement.  The term “Release Date” as used herein
means the earlier of the following two dates: (i) the date on which the
indebtedness and obligations secured hereby have been paid and performed in
full and this Mortgage has been released, or (ii) the date on which the
lien of this Mortgage is fully and finally foreclosed or a conveyance by deed
in lieu of such foreclosure is fully and finally effective, and possession of
the Property has been given to the purchaser or grantee free of occupancy and
claims 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 bankruptcy
proceedings or otherwise, the Release Date shall be deemed not to have occurred
until such challenge is rejected, dismissed or withdrawn with prejudice.  The indemnities in this paragraph (p) shall
not terminate upon the Release Date or upon the release, foreclosure or other
termination of this Mortgage but will survive the Release Date, foreclosure of
this Mortgage or conveyance in lieu of foreclosure, the repayment of the
Secured Indebtedness, the termination of any and all Swap Contracts, the
discharge and release of this Mortgage and the other Loan Documents, any
bankruptcy 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 be
paid all income, franchise and other taxes owing by Mortgagor and any stamp,
documentary, recordation and transfer taxes or other taxes (unless such payment
by Mortgagor is prohibited by law) which may be required to be paid with
respect to the Credit Agreement, this Mortgage or 

 

15

 

any other instrument evidencing or securing any of the Secured
Indebtedness.  In the event of the
enactment after this date of any law of any governmental entity applicable to
Mortgagee, the Credit Agreement, the Property or this Mortgage deducting from
the value of property for the purpose of taxation any lien or security interest
thereon, or imposing upon Mortgagee the payment of the whole or any part of the
taxes or assessments or charges or liens herein required to be paid by
Mortgagor, or changing in any way the laws relating to the taxation of
mortgages or security agreements or debts secured by mortgages or security
agreements or the interest of the mortgagee or secured party in the property
covered thereby, or the manner of collection of such taxes, so as to adversely
affect this Mortgage or the Secured Indebtedness or Mortgagee, then, and in any
such 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 the
continuance of a Default hereunder or an Event of Default under the Credit
Agreement, 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 the
properties, rights, titles and interests referred to in Section 1.3 of
this Mortgage now or hereafter issued in favor of Mortgagor, Mortgagor shall
promptly notify Mortgagee thereof and, at the request and option of Mortgagee,
Mortgagor shall, pursuant to an agreement in form and substance satisfactory to
Mortgagee, either (i) arrange for the issuer and any confirmer of such
letter of credit to consent to an assignment to Mortgagee of the proceeds of
any drawing under the letter of credit or (ii) arrange for Mortgagee to
become the transferee beneficiary of the letter of credit, with Mortgagee
agreeing, in each case, that the proceeds of any drawing under the letter of
credit 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 hereunder
or an Event of Default under the Credit Agreement, Mortgagee may obtain an
appraisal of all or any part of the Property prepared in accordance with
written instructions from Mortgagee by a third-party appraiser engaged
directly by Mortgagee.  The appraiser and
appraisal shall be satisfactory to Mortgagee (including satisfaction of applicable
regulatory requirements).  The cost of
any such appraisal shall be borne by Mortgagor, and such cost is due and
payable by Mortgagor on demand and shall be a part of the Secured Indebtedness.

 

Section 2.2.  Performance
by Mortgagee on Mortgagor’s Behalf. 
Mortgagor agrees that, if Mortgagor fails to perform any act or to take
any action under this Mortgage, then Mortgagee may, following notice to
Mortgagor and after a reasonable opportunity to cure in accordance with the
Loan Documents, in Mortgagor’s name or its own name, but shall not be obligated
to, perform or cause to be performed such act or take such action or pay such
money, and any expenses so incurred by Mortgagee and any money so paid by
Mortgagee shall be a demand obligation owing by Mortgagor to Mortgagee (which
obligation Mortgagor hereby promises to pay), shall be a part of the
indebtedness secured hereby, and Mortgagee, upon making such payment, shall be
subrogated to all of the rights of the person, entity or body politic receiving
such payment.  Mortgagee and its
designees shall have the right to enter upon the Property at any time and from
time to time for any such purposes.  No
such payment or performance by 

 

16

 

Mortgagee shall waive or cure any default or waive any right, remedy or
recourse of Mortgagee.  Any such payment
may be made by Mortgagee in reliance on any statement, invoice or claim without
inquiry into the validity or accuracy thereof. 
Each amount due and owing by Mortgagor to Mortgagee pursuant to this
Mortgage 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 due
principal owed under the Credit Agreement but never in excess of the maximum
nonusurious amount permitted by applicable law, which interest shall be payable
to Mortgagee on demand; and all such amounts, together with such interest
thereon, shall automatically and without notice be a part of the indebtedness
secured hereby.

 

Section 2.3.  Absence of
Obligations of Mortgagee with Respect to Property.  Notwithstanding anything in this Mortgage to
the contrary, including, without limitation, the definition of “Property”
and/or the provisions of Article 3 hereof, (i) to the extent
permitted by applicable law, the Property is composed of Mortgagor’s rights,
title and interests therein but not Mortgagor’s obligations, duties or
liabilities pertaining thereto, (ii) Mortgagee neither assumes nor shall
have any obligations, duties or liabilities in connection with any portion of
the items described in the definition of “Property” herein, either prior to or
after obtaining title to such Property, whether by foreclosure sale, the
granting of a deed in lieu of foreclosure or otherwise, and (iii) Mortgagee
may, at any time prior to or after the acquisition of title to any portion of
the Property as above described, advise any party in writing as to the extent
of Mortgagee’s interest therein and/or expressly disaffirm in writing any rights,
interests, obligations, duties and/or liabilities with respect to such Property
or matters related thereto.  Without
limiting the generality of the foregoing, except for the Permitted Ohio
Sale/Leaseback (as defined in the Credit Agreement) it is understood and agreed
that Mortgagee shall have no obligations, duties or liabilities prior to or
after acquisition of title to any portion of the Property, as lessee under any
lease or purchaser or seller under any contract or option unless Mortgagee
elects otherwise by written notification.

 

Section 2.4.          Authorization
to File Financing Statements; Power of Attorney.  Mortgagor hereby authorizes Mortgagee at any
time and from time to time to file any initial financing statements, amendments
thereto and continuation statements as authorized by applicable law, required
by Mortgagee to establish or maintain the validity, perfection and priority of
the security interests granted in this Mortgage.  For purposes of such filings, Mortgagor
agrees to furnish any information requested by Mortgagee promptly upon request
by Mortgagee.  Mortgagor also ratifies
its authorization for Mortgagee to have filed any like initial financing
statements, amendments thereto or continuation statements if filed prior to the
date of this Mortgage.  Mortgagor hereby
irrevocably constitutes and appoints Mortgagee and any officer or agent of
Mortgagee, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of Mortgagor or in Mortgagor’s own name to execute in Mortgagor’s name
any 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, Mortgagor
hereby ratifies all acts said attorneys-in-fact shall lawfully do, have done in
the past or cause to be done in the future by virtue hereof.  This power of attorney is a power coupled
with an interest and shall be irrevocable.

 

17

 

ARTICLE 3

 

Assignment of Rents and
Leases

 

Section 3.1.  Assignment.
Mortgagor hereby assigns to Mortgagee all Rents (hereinafter defined) and all
of 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 terminate
automatically and without further notice upon the occurrence of a Default) to
collect, but not prior to accrual, the Rents under the Leases and, where
applicable, subleases, such Rents to be held in trust for Mortgagee and to
otherwise 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 trust
for Mortgagee.  Upon the revocation of
such license, all Rents shall be paid directly to Mortgagee and not through
Mortgagor, 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 the
appointment of a receiver.  Mortgagor
hereby authorizes and directs the tenants under the Leases to pay Rents to
Mortgagee upon written demand by Mortgagee, without further consent of Mortgagor,
without any obligation of such tenants to determine whether a Default has in
fact occurred and regardless of whether Mortgagee has taken possession of any
portion of the Property, and the tenants may rely upon any written statement
delivered by Mortgagee to the tenants. 
Any such payments to Mortgagee shall constitute payments to Mortgagor
under the Leases, and Mortgagor hereby irrevocably appoints Mortgagee as its
attorney-in-fact, after a Default, to collect Rents with or without suit and
applying the same, less expenses of collection, to any of the obligations
secured hereunder or to expenses of operating and maintaining the Property
(including reasonable reserves for anticipated expenses), at the option of the
Mortgagee, all in such manner as may be determined by Mortgagee, or at the
option of Mortgagee, holding the same as security for the payment of all
Obligations.  The curing of such Default,
unless other Defaults also then exist, shall entitle Mortgagor to recover its
aforesaid license to do any such things which Mortgagor might otherwise do with
respect to the Property and the Leases thereon and to again collect such
Rents.  The powers and rights granted in
this paragraph shall be in addition to the other remedies herein provided for
upon the occurrence of a Default and may be exercised independently of or
concurrently with any of said remedies. 
Nothing in the foregoing shall be construed to impose any obligation
upon Mortgagee to exercise any power or right granted in this paragraph or to
assume any liability under any Lease of any part of the Property and no
liability shall attach to Mortgagee for failure or inability to collect any
Rents under any such Lease.  The
assignment contained in this Section shall become null and void upon the
release of this Mortgage.  As used
herein: (i) “Lease” means each existing or future lease, sublease
(to the extent of Mortgagor’s rights thereunder), or other agreement under the
terms of which any person has or acquires any right to occupy or use the
Property, or any part thereof, or interest therein, and each existing or future
guaranty of payment or performance thereunder, and all extensions, renewals,
modifications and replacements of each such lease, sublease, agreement or
guaranty; and (ii) “Rents” means all of the rents, revenue, income,
profits and proceeds derived and to be derived from the Property or arising
from the use or enjoyment of any portion thereof or from any Lease, including
but not limited to the proceeds from any negotiated lease termination or buyout
of such lease, liquidated damages following default under any such Lease, all
proceeds payable under any 

 

18

 

policy of insurance covering loss of rents resulting from
untenantability caused by damage to any part of the Property, all of
Mortgagor’s rights to recover monetary amounts from any tenant in bankruptcy
including, without limitation, rights of recovery for use and occupancy and
damage claims arising out of Lease defaults, including rejections, under any
applicable Debtor Relief Law (hereinafter defined), together with any sums of
money that may now or at any time hereafter be or become due and payable to
Mortgagor by virtue of any and all royalties, overriding royalties, bonuses,
delay rentals and any other amount of any kind or character arising under any
and all present and all future oil, gas, mineral and mining leases covering the
Property or any part thereof, and all proceeds and other amounts paid or owing
to Mortgagor under or pursuant to any and all contracts and bonds relating to
the construction or renovation of the Property.

 

Section 3.2.  Covenants,
Representations and Warranties Concerning Leases and Rents.  Mortgagor covenants, represents and warrants
that Mortgagor has title to and the right to assign the Leases and Rents to
Mortgagee, and no other assignment of the Leases or Rents has been granted.

 

Section 3.3.  [Reserved].

 

Section 3.4.  No
Liability of Mortgagee.  Mortgagee’s
acceptance of this assignment shall not be deemed to constitute Mortgagee a
“mortgagee in possession,” nor obligate Mortgagee to appear in or defend any
proceeding relating to any Lease or to the Property, or to take any action
hereunder, expend any money, incur any expenses, or perform any obligation or
liability under any Lease, or assume any obligation for any deposit delivered
to Mortgagor by any tenant and not as such delivered to and accepted by
Mortgagee.  Mortgagee shall not be liable
for any injury or damage to person or property in or about the Property, or for
Mortgagee’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 Rents
nor enforcement of Mortgagee’s rights regarding Leases and Rents (including
collection of Rents) nor possession of the Property by Mortgagee nor
Mortgagee’s consent to or approval of any Lease (nor all of the same), shall
render Mortgagee liable on any obligation under or with respect to any Lease or
constitute affirmation of, or any subordination to, any Lease, occupancy, use
or option.

 

If Mortgagee seeks or obtains any judicial relief regarding Rents or
Leases, the same shall in no way prevent the concurrent or subsequent
employment of any other appropriate rights or remedies nor shall same
constitute an election of judicial relief for any foreclosure or any other
purpose.  Mortgagee neither has nor
assumes any obligations as lessor or landlord with respect to any Lease.  The rights of Mortgagee under this Article 3
shall be cumulative of all other rights of Mortgagee under the Loan Documents
or otherwise.

 

19

 

ARTICLE 4

 

Default

 

Section 4.1.  Events of
Default.  The occurrence of any one
of the following shall be a default under this Mortgage (“default” or “Default”):

 

(a)  Failure to Pay Indebtedness.  Any of the Secured Indebtedness is not paid
when due in accordance with the Credit Agreement, regardless of how such amount
may have become due.

 

(b)  Nonperformance of Covenants.  Any covenant, agreement or condition herein
is not fully and timely performed, observed or kept, and such failure continues
for thirty (30) days after the earlier of (i) the date on which a
Responsible Officer (as defined in the Credit Agreement) knows or should have
known about such failure and (ii) the date the Mortgagee delivers notice
thereof to the Mortgagor.

 

(c)  Default Under Other Loan Documents.  The occurrence of an Event of Default under
the Credit Agreement.

 

(d)  Grant of Easement, Etc.  Without the prior written consent of
Mortgagee, 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 zoning
reclassification or variance, unless such action is expressly permitted by the
Loan Documents or does not affect the Property.

 

Section 4.2.  Notice and
Cure.  If any provision of this
Mortgage or any other Loan Document provides for Mortgagee to give to Mortgagor
any notice regarding a default or incipient default, then if Mortgagee shall
fail to give such notice to Mortgagor as provided, the sole and exclusive
remedy of Mortgagor for such failure shall be to seek appropriate equitable
relief to enforce the agreement to give such notice and to have any
acceleration of the maturity of the Loan and the Secured Indebtedness postponed
or revoked and foreclosure proceedings in connection therewith delayed or
terminated pending or upon the curing of such default in the manner and during
the period of time permitted by such agreement, if any, and Mortgagor shall
have no right to damages or any other type of relief not herein specifically
set out against Mortgagee, all of which damages or other relief are hereby
waived by Mortgagor.  Nothing herein or
in any other Loan Document shall operate or be construed to add on or make
cumulative any cure or grace periods specified in any of the Loan Documents.

 

ARTICLE 5

 

Remedies

 

Section 5.1.  Certain
Remedies.  If a Default shall occur,
Mortgagee may (but shall have no obligation to) exercise any one or more of the
following remedies, without notice (unless notice is required by applicable
statute):

 

20

 

(a)  Acceleration. 
Subject to the Credit Agreement, Mortgagee may at any time and from time
to time declare any or all of the Secured Indebtedness immediately due and
payable and may terminate any and all Swap Contracts.  Upon any such declaration, such Secured
Indebtedness shall thereupon be immediately due and payable, and such Swap
Contracts shall immediately terminate, without presentment, demand, protest,
notice of protest, notice of acceleration or of intention to accelerate or any
other notice or declaration of any kind, all of which are hereby expressly
waived by Mortgagor.  Without limitation
of 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 and
payable, without presentment, demand, protest, notice of protest, declaration
or notice of acceleration or intention to accelerate, or any other notice,
declaration or act of any kind, all of which are hereby expressly waived by
Mortgagor.

 

(b)  Enforcement of Assignment of Rents.  In addition to the rights of Mortgagee under Article 3
hereof, prior or subsequent to taking possession of any portion of the Property
or taking any action with respect to such possession, Mortgagee may: (1) collect
and/or sue for the Rents in Mortgagee’s own name, give receipts and releases
therefor, and after deducting all expenses of collection, including attorneys’
fees and expenses, apply the net proceeds thereof to the Secured Indebtedness
in such manner and order as Mortgagee may elect; and (2) require Mortgagor
to transfer all security deposits and records thereof to Mortgagee together
with original counterparts of the Leases.

 

(c)  Foreclosure. Upon
failure to pay the Secured Indebtedness in full at any stated or accelerated
maturity, the Mortgagee may foreclose the lien of this Mortgage and sell, as an
entirety or in separate lots or parcels, the Property, under the judgment or
decree of a court or courts of competent jurisdiction.  Mortgagee shall take action either by such
proceedings or by the exercise of its powers with respect to entry or taking
possession, or both, as the Mortgagee may determine.  Mortgagee, at its option, is authorized to
foreclose this Mortgage subject to the rights of any tenants of the Property
and the failure to make any such tenants parties defendant to any such
foreclosure proceedings and to foreclose their rights will not be, nor be
asserted by Mortgagor to be, a defense to any proceedings instituted by
Mortgagee to collect the sums secured hereby or to collect any deficiency
remaining unpaid after the foreclosure sale of the Property.

 

(d) 
Purchase by Mortgagee.  Upon any
such foreclosure sale, Mortgagee may bid for and purchase the Premises and,
upon compliance with the terms of sale, may hold, retain and possess and
dispose of such property in its own absolute right without further
accountability.  Upon any such
foreclosure sale, Mortgagee may, if permitted by law, after allowing for the
proportion of the total purchase price required to be paid in cash and for the
costs and expenses of the sale, compensation and other charges, in paying the
purchase price apply any portion of or all sums due to Mortgagee under the
Credit Agreement, this Mortgage or any other instrument securing the Credit
Agreement, in lieu of cash, to the amount which shall, upon distribution of the
net proceeds of such sale, be payable thereon.

 

21

 

(e)  Uniform Commercial Code.  Without limitation of Mortgagee’s rights of
enforcement with respect to the Collateral or any part thereof in accordance
with the procedures for foreclosure of real estate, Mortgagee may exercise its
rights of enforcement with respect to the Collateral or any part thereof under
the Ohio Uniform Commercial Code, as in effect from time to time (or under the
Uniform Commercial Code in force, from time to time, in any other state to the
extent the same is applicable law), and in conjunction with, in addition to or
in substitution for those rights and remedies: (1)  Mortgagee may enter
upon Mortgagor’s premises to take possession of, assemble and collect the
Collateral or, to the extent and for those items of the Collateral permitted
under applicable law, to render it unusable; (2) Mortgagee may require
Mortgagor to assemble the Collateral and make it available at a place Mortgagee
designates which is mutually convenient to allow Mortgagee to take possession
or dispose of the Collateral; (3) written notice mailed to Mortgagor as
provided herein at least five (5) days prior to the date of public sale of
the Collateral or prior to the date after which private sale of the Collateral
will be made shall constitute reasonable notice; provided that, if Mortgagee
fails to comply with this clause (3) in any respect, its liability for
such failure shall be limited to the liability (if any) imposed on it as a
matter of law under the Ohio Uniform Commercial Code, as in effect from time to
time (or under the Uniform Commercial Code, in force from time to time, in any
other state to the extent the same is applicable law); (4) any sale made
pursuant to the provisions of this paragraph shall be deemed to have been a
public sale conducted in a commercially reasonable manner if held
contemporaneously with and upon the same notice as required for the sale of the
Property 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 other
Property may, at the option of Mortgagee, be sold as a whole; (6) it shall
not be necessary that Mortgagee take possession of the Collateral or any part
thereof prior to the time that any sale pursuant to the provisions of this Section is
conducted and it shall not be necessary that the Collateral or any part thereof
be present at the location of such sale; (7) with respect to application
of proceeds from disposition of the Collateral under Section 5.2 hereof,
the costs and expenses incident to disposition shall include the reasonable
expenses of retaking, holding, preparing for sale or lease, selling, leasing
and the like and the reasonable attorneys’ fees and legal expenses (including,
without limitation, the allocated costs for in-house legal services) incurred by
Mortgagee; (8) any and all statements of fact or other recitals made in
any bill of sale or assignment or other instrument evidencing any foreclosure
sale hereunder as to nonpayment of the Secured Indebtedness or as to the
occurrence of any default, or as to Mortgagee having declared all of such
indebtedness to be due and payable, or as to notice of time, place and terms of
sale and of the properties to be sold having been duly given, or as to any
other act or thing having been duly done by Mortgagee, shall be taken as prima
facie evidence of the truth of the facts so stated and recited; (9) Mortgagee
may appoint or delegate any one or more persons as agent to perform any act or
acts necessary or incident to any sale held by Mortgagee, including the sending
of notices and the conduct of the sale, but in the name and on behalf of
Mortgagee; (10) Mortgagee may comply with any applicable state or federal
law or regulatory requirements in connection with a disposition of the
Collateral, and such compliance will not be considered to affect adversely the
commercial reasonableness of any sale of the Collateral; (11) Mortgagee may
sell the Collateral without giving any warranties as to the Collateral, and
specifically disclaim all warranties including, without limitation, warranties
relating to title, possession, quiet enjoyment and the like, and all warranties
of quality, merchantability and fitness for a specific purpose, and this
procedure will 

 

22

 

not be considered to affect adversely the commercial reasonableness of
any sale of the Collateral; (12) Mortgagor acknowledges that a private sale of
the 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 to
Mortgagor for such loss.

 

(f)  Lawsuits. 
Mortgagee may proceed by a suit or suits in equity or at law, whether
for collection of the indebtedness secured hereby, the specific performance of
any covenant or agreement herein contained or in aid of the execution of any
power herein granted, or for any foreclosure hereunder or for the sale of the
Property under the judgment or decree of any court or courts of competent
jurisdiction.

 

(g)  Entry on Property. 
Mortgagee is authorized, subsequent to the institution of any
foreclosure proceedings, to the fullest extent permitted by applicable law, to
enter upon the Property, or any part thereof. 
In connection with any action taken by Mortgagee pursuant to this
Section, Mortgagee shall not be obligated to perform or discharge any
obligation, duty or liability of Mortgagor arising under any lease or other
agreement relating to the Property or arising under any Permitted Encumbrance
or otherwise arising.

 

(h)  [Reserved].

 

(i)  Termination of Commitment to Lend.  Mortgagee may terminate any commitment or
obligation to lend or disburse funds in accordance with the provisions of the
Credit Agreement.

 

(j)  Other Rights and Remedies.  Mortgagee may exercise any and all other
rights and remedies which Mortgagee may have under the Loan Documents, or at
law or in equity or otherwise.

 

Section 5.2.  Proceeds of
Foreclosure.  The proceeds of any
sale in foreclosure of the liens and security interests evidenced hereby shall
be applied in accordance with the requirements of applicable laws and to the
extent consistent therewith, FIRST, to the payment of all necessary
costs and expenses incident to such foreclosure sale, including but not limited
to all attorneys’ fees and legal expenses, advertising costs, auctioneer’s
fees, costs of title rundowns and lien searches, inspection fees, appraisal
costs, fees for professional services, environmental assessment and remediation
fees, all court costs and charges of every character, and to the payment of the
other Secured Indebtedness, including specifically without limitation the
principal, accrued interest and attorneys’ fees due and unpaid on the Loan and
the amounts due and unpaid and owed to Mortgagee under this Mortgage and the
amounts due and unpaid and owed to Mortgagee (or its Affiliates) under any Swap
Contracts, the order and manner of application to the items in this clause FIRST
to be in Mortgagee’s sole discretion; and SECOND, the remainder, if any
there shall be, shall be paid to Mortgagor, or to Mortgagor’s heirs, devisees,
representatives, successors or assigns, or such other persons (including the
holder or beneficiary of any inferior lien) as may be entitled thereto by law;
provided, however, that if Mortgagee is uncertain which person or persons are
so entitled, Mortgagee may interplead such remainder in any court of competent
jurisdiction, and the amount of any attorneys’ fees, court costs and 

 

23

 

expenses incurred in such action shall be a part of the Secured
Indebtedness and shall be reimbursable (without limitation) from such
remainder.

 

Section 5.3.  Mortgagee
as Purchaser.  Mortgagee shall have
the right to become the purchaser at any sale by any receiver or public officer
or at any public sale, and Mortgagee shall have the right to credit upon the
amount of Mortgagee’s successful bid, to the extent necessary to satisfy such
bid, all or any part of the Secured Indebtedness in such manner and order as
Mortgagee may elect.

 

Section 5.4.  Remedies
Cumulative.  All rights and remedies
provided for herein and in any other Loan Document are cumulative of each other
and of any and all other rights and remedies existing at law or in equity, and
Mortgagee shall, in addition to the rights and remedies provided herein or in
any other Loan Document, be entitled to avail itself of all such other rights
and remedies as may now or hereafter exist at law or in equity for the collection
of the Secured Indebtedness and the enforcement of the covenants herein and the
foreclosure of the liens and security interests evidenced hereby, and the
resort to any right or remedy provided for hereunder or under any such other
Loan Document or provided for by law or in equity shall not prevent the
concurrent or subsequent employment of any other appropriate right or rights or
remedy or remedies.

 

Section 5.5.  Discretion
as to Security.  Mortgagee may resort
to any security given by this Mortgage or to any other security now existing or
hereafter given to secure the payment of the Secured Indebtedness, in whole or
in part, and in such portions and in such order as may seem best to Mortgagee
in its sole and uncontrolled discretion, and any such action shall not in
anywise be considered as a waiver of any of the rights, benefits, liens or
security interests evidenced by this Mortgage.

 

Section 5.6.  Mortgagor’s
Waiver of Certain Rights.  To the
full extent Mortgagor may do so, Mortgagor agrees that Mortgagor will not at
any time insist upon, plead, claim or take the benefit or advantage of any law
now or hereafter in force providing for any appraisement, valuation, stay,
extension or redemption, homestead, moratorium, reinstatement, marshaling or
forbearance, and Mortgagor, for Mortgagor, Mortgagor’s heirs, devisees,
representatives, successors and assigns, and for any and all persons ever
claiming any interest in the Property, to the extent permitted by applicable
law, hereby waives and releases all rights of redemption, valuation,
appraisement, stay of execution, notice of intention to mature or declare due
the whole of the Secured Indebtedness, notice of election to mature or declare
due the whole of the Secured Indebtedness and all rights to a marshaling of
assets of Mortgagor, including the Property, or to a sale in inverse order of
alienation in the event of foreclosure of the liens and/or security interests
hereby created.  Mortgagor shall not have
or assert any right under any statute or rule of law pertaining to the
marshaling of assets, sale in inverse order of alienation, the exemption of
homestead, the administration of estates of decedents, or other matters
whatsoever to defeat, reduce or affect the right of Mortgagee under the terms
of this Mortgage to a sale of the Property for the collection of the Secured
Indebtedness without any prior or different resort for collection, or the right
of Mortgagee under the terms of this Mortgage to the payment of the Secured
Indebtedness out of the proceeds of sale of the Property in preference to every
other claimant 

 

24

 

whatsoever.  Mortgagor waives any
right or remedy which Mortgagor may have or be able to assert pursuant to any
provision of Ohio law pertaining to the rights and remedies of sureties.  If any law referred to in this Section and
now in force, of which Mortgagor or Mortgagor’s heirs, devisees,
representatives, successors or assigns or any other persons claiming any
interest in the Property might take advantage despite this Section, shall
hereafter be repealed or cease to be in force, such law shall not thereafter be
deemed to preclude the application of this Section.

 

Section 5.7.  Delivery of
Possession After Foreclosure.  In the
event there is a foreclosure sale hereunder and at the time of such sale,
Mortgagor or Mortgagor’s heirs, devisees, representatives, or successors as
owners of the Property are occupying or using the Property, or any part
thereof, each and all shall immediately become the tenant of the purchaser at
such sale, which tenancy shall be a tenancy from day to day, terminable at the
will of purchaser, at a reasonable rental per day based upon the value of the
property occupied, such rental to be due daily to the purchaser; and to the
extent permitted by applicable law, the purchaser at such sale shall,
notwithstanding any language herein apparently to the contrary, have the sole
option to demand immediate possession following the sale or to permit the
occupants to remain as tenants at will. 
After such foreclosure, any Leases to tenants or subtenants that are
subject to this Mortgage (either by their date, their express terms, or by
agreement of the tenant or subtenant) and which tenants or subtenants are third
parties unrelated to Mortgagor, its subsidiaries or affiliates, shall, at the
sole option of Mortgagee or any purchaser at such sale, either (i) continue
in full force and effect, and the tenant(s) or subtenant(s) thereunder
will, upon request, attorn to and acknowledge in writing to the purchaser or
purchasers at such sale or sales as landlord thereunder, or (ii) upon
notice to such effect from Mortgagee, or any purchaser or purchasers, terminate
within thirty (30) days from the date of sale. 
In the event the tenant fails to surrender possession of the Property
upon demand, the purchaser shall be entitled to institute and maintain a
summary action for possession of the Property (such as an action for forcible
detainer) in any court having jurisdiction.

 

ARTICLE 6

 

Miscellaneous

 

Section 6.1.  Scope of
Mortgage.  This Mortgage is a
mortgage of both real and personal property, a security agreement, an
assignment of rents and leases, a financing statement and a collateral
assignment, and also covers proceeds and fixtures.

 

Section 6.2.  Effective
as a Financing Statement.  This
Mortgage shall be effective as a financing statement filed as a fixture filing
with respect to all fixtures included within the Property and is to be filed
for record in the real estate records of each county where any part of the
Property (including said fixtures) is situated. 
This Mortgage shall also be effective as a financing statement covering
as-extracted collateral (including oil and gas), accounts and general
intangibles under the Ohio Uniform Commercial Code, as in effect from time to
time, and the Uniform Commercial Code, as in effect from time to time, in any
other state where the Property is situated which will be financed at the
wellhead or minehead of the wells or mines located on the Property and is to be
filed for record in the real estate records of each county where any part of
the Property is situated.  This Mortgage
shall also be effective as a financing statement 

 

25

 

covering any other Property and may be filed in any other appropriate
filing or recording office.  The mailing
address of Mortgagor and the Mortgagee are set forth at the end of this
Mortgage.  A carbon, photographic or
other reproduction of this Mortgage or of any financing statement relating to
this Mortgage shall be sufficient as a financing statement for any of the
purposes referred to in this Section.

 

Section 6.3.  Notice to
Account Debtors.  In addition to the
rights granted elsewhere in this Mortgage, Mortgagee may at any time notify the
account debtors or obligors of any accounts, chattel paper, general
intangibles, negotiable instruments or other evidences of indebtedness included
in the Collateral to pay Mortgagee directly.

 

Section 6.4.  Waiver by
Mortgagee.  Mortgagee may at any time
and from time to time by a specific writing intended for the purpose: (a) waive
compliance by Mortgagor with any covenant herein made by Mortgagor to the
extent and in the manner specified in such writing; (b) consent to
Mortgagor’s doing any act which hereunder Mortgagor is prohibited from doing,
or to Mortgagor’s failing to do any act which hereunder Mortgagor is required
to do, to the extent and in the manner specified in such writing; (c) release
any part of the Property or any interest therein from the lien and security
interest of this Mortgage; or (d) release any party liable, either
directly or indirectly, for the Secured Indebtedness or for any covenant herein
or in any other Loan Document, without impairing or releasing the liability of
any other party.  No such act shall in
any way affect the rights or powers of Mortgagee hereunder except to the extent
specifically agreed to by Mortgagee in such writing.

 

Section 6.5.  No
Impairment of Security.  The lien,
security interest and other security rights of Mortgagee hereunder or under any
other Loan Document shall not be impaired by any indulgence, moratorium or
release granted by Mortgagee including, but not limited to, any renewal,
extension or modification which Mortgagee may grant with respect to any Secured
Indebtedness, 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 granted
to any endorser, guarantor or surety of any Secured Indebtedness.  The taking of additional security by
Mortgagee shall not release or impair the lien, security interest or other
security rights of Mortgagee hereunder or affect the liability of Mortgagor or
of any endorser, guarantor or surety, or improve the right of any junior
lienholder in the Property (without implying hereby Mortgagee’s consent to any
junior lien).

 

Section 6.6.  [Reserved].

 

Section 6.7.  [Reserved].

 

Section 6.8.  Place of Payment.  All Secured Indebtedness which may be owing
hereunder at any time by Mortgagor shall be payable at the place designated in
the Credit Agreement (or if no such designation is made, at the address of
Mortgagee indicated at the end of this Mortgage).

 

Section 6.9.  Subrogation
to Existing Liens; Vendor’s Lien.  To
the extent that proceeds of the Loan are used to pay indebtedness secured by
any outstanding lien, security interest, charge or 

 

26

 

prior encumbrance against the Property, such proceeds have been
advanced by Mortgagee at Mortgagor’s request, and Mortgagee shall be subrogated
to any and all rights, security interests and liens owned by any owner or
holder of such outstanding liens, security interests, charges or encumbrances,
however remote, irrespective of whether said liens, security interests, charges
or encumbrances are released, and all of the same are recognized as valid and
subsisting and are renewed and continued and merged herein to secure the
Secured Indebtedness, but the terms and provisions of this Mortgage shall
govern and control the manner and terms of enforcement of the liens, security
interests, charges and encumbrances to which Mortgagee is subrogated hereunder.  It is expressly understood that, in
consideration of the payment of such indebtedness by Mortgagee, Mortgagor
hereby waives and releases all demands and causes of action for offsets and
payments in connection with the said indebtedness.  If all or any portion of the proceeds of the
Loan or of any other secured indebtedness has been advanced for the purpose of
paying the purchase price for all or a part of the Property, no vendor’s lien
is waived; and Mortgagee shall have, and is hereby granted, a vendor’s lien on
the Property as cumulative additional security for the Secured
Indebtedness.  Mortgagee may foreclose
under this Mortgage or under the vendor’s lien without waiving the other or may
foreclose under both.

 

Section 6.10.  [Reserved].

 

Section 6.11.  [Reserved].

 

Section 6.12.  Releases.  If all of the Secured Indebtedness be paid as
the same becomes due and payable and all of the covenants, warranties,
undertakings and agreements made in this Mortgage are kept and performed, and
all Swap Contracts and all obligations, if any, of Mortgagee for further
advances have been terminated, then, and in that event only, all rights under
this Mortgage shall terminate (except to the extent expressly provided herein
with respect to indemnifications, representations and warranties and other
rights which are to continue following the release hereof) and the Property
shall become wholly clear of the liens, security interests, conveyances and
assignments evidenced hereby, and such liens and security interests shall be
released by Mortgagee in due form at Mortgagor’s cost.  Without limitation, all provisions herein for
indemnity of Mortgagee shall survive discharge of the Secured Indebtedness, the
termination of any and all Swap Contracts and any foreclosure, release or
termination of this Mortgage.

 

Section 6.13.  Notices.  All notices, requests, consents, demands and
other communications required or which any party desires to give hereunder or
under any other Loan Document shall be in writing and given as provided in the
Credit Agreement.

 

Section 6.14.  Invalidity
of Certain Provisions.  A
determination that any provision of this Mortgage is unenforceable or invalid
shall not affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Mortgage to any
person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to other persons
or circumstances.

 

27

 

Section 6.15.  Gender;
Titles; Construction.  Within this
Mortgage, words of any gender shall be held and construed to include any other
gender, and words in the singular number shall be held and construed to include
the plural, unless the context otherwise requires.  Titles appearing at the beginning of any
subdivisions hereof are for convenience only, do not constitute any part of
such subdivisions, and shall be disregarded in construing the language
contained in such subdivisions.  The use
of the words “herein,” “hereof,” “hereunder” and other
similar compounds of the word “here” shall refer to this entire Mortgage
and not to any particular Article, Section, paragraph or provision.  The term “person” and words importing
persons as used in this Mortgage shall include firms, associations,
partnerships (including limited partnerships), joint ventures, trusts,
corporations, limited liability companies and other legal entities, including
public or governmental bodies, agencies or instrumentalities, as well as natural
persons.

 

Section 6.16.  Reporting
Compliance.  Mortgagor agrees to
comply with any and all reporting requirements applicable to the transaction
evidenced by the Credit Agreement and secured by this Mortgage which are set
forth in any law, statute, ordinance, rule, regulation, order or determination
of any governmental authority, including but not limited to The International
Investment Survey Act of 1976, The Agricultural Foreign Investment Disclosure
Act of 1978, The Foreign Investment in Real Property Tax Act of 1980 and the
Tax Reform Act of 1984 and further agrees upon request of Mortgagee to furnish
Mortgagee 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) the
granting or denial of such approval or consent and the exercise of such
judgment shall be within the reasonable discretion of Mortgagee (provided,
however, that following a Default hereunder or an Event of Default under
the Credit Agreement, the granting or denial of any such approval or consent
and the exercise of such judgment shall be within the sole discretion of
Mortgagee, and Mortgagee shall not, for any reason or to any extent, be
required to grant such approval or consent or exercise such judgment in any
particular manner, regardless of the reasonableness of either the request or
Mortgagee’s judgment), and (b) no approval or consent of Mortgagee shall
be deemed to have been given except by a specific writing intended for the
purpose and executed by an authorized representative of Mortgagee.

 

Section 6.18.  Mortgagor.  Unless the context clearly indicates
otherwise, as used in this Mortgage, “Grantor” means the Mortgagors
named in Section 1.1 hereof or any of them.  The obligations of Mortgagor hereunder shall
be 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 the
person or persons signing for it, represent and warrant to Mortgagee that this
instrument is executed, acknowledged and delivered by Mortgagor’s duly
authorized representatives.  If Mortgagor
is an individual, no power of attorney granted by Mortgagor herein shall
terminate on Mortgagor’s disability.

 

Section 6.19.  Execution;
Recording.  This Mortgage has been
executed in several counterparts, all of which are identical, and all of which
counterparts together shall constitute one and the same instrument.  The date or dates reflected in the
acknowledgments hereto indicate the 

 

28

 

date or dates of actual execution of this Mortgage, but such execution
is as of the date shown on the first page hereof, and for purposes of
identification and reference the date of this Mortgage shall be deemed to be
the date reflected on the first page hereof.  Mortgagor will cause this Mortgage and all
amendments and supplements thereto and substitutions therefor and all financing
statements and continuation statements relating thereto to be recorded, filed,
re-recorded and refiled in such manner and in such places as Mortgagee
shall reasonably request and will pay all such recording, filing, re-recording
and refiling taxes, fees and other charges.

 

Section 6.20.  Successors
and 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 inure
to the benefit of Mortgagee and shall constitute covenants running with the
Land.  All references in this Mortgage to
Mortgagor shall be deemed to include all such heirs, devisees, representatives,
successors and assigns of Mortgagor.

 

Section 6.21.  Modification
or Termination.  The Loan Documents
may only be modified or terminated by a written instrument or instruments
intended for that purpose and executed by the party against which enforcement
of the modification or termination is asserted. 
Any alleged modification or termination which is not so documented shall
not be effective as to any party.

 

Section 6.22.  No
Partnership, Etc..  The relationship
between Mortgagee and Mortgagor is solely that of lender and borrower.  Mortgagee has no fiduciary or other special relationship
with Mortgagor.  Nothing contained in the
Loan Documents is intended to create any partnership, joint venture,
association or special relationship between Mortgagor and Mortgagee or in any
way make Mortgagee a co-principal with Mortgagor with reference to the
Property. All agreed contractual duties between or among Mortgagee and
Mortgagor are set forth herein and in the other Loan Documents and any
additional implied covenants or duties are hereby disclaimed.  Any inferences to the contrary of any of the
foregoing are hereby expressly negated.

 

Section 6.23.  Applicable
Law.

 

(a)   THIS MORTGAGE, AND ITS
VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY AND CONSTRUED,
INTERPRETED AND ENFORCED IN ACCORDANCE WITH AND PURSUANT TO THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND
APPLICABLE UNITED STATES FEDERAL LAW, EXCEPT THAT AT ALL TIMES THE PROVISIONS
OF THIS MORTGAGE PROVIDING FOR THE CREATION, PERFECTION AND ENFORCEMENT OF THE
LIEN CREATED PURSUANT TO THIS MORTGAGE SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAWS OF THE STATE OF OHIO, IT BEING UNDERSTOOD THAT, TO THE
FULLEST EXTENT PERMITTED BY THE LAWS OF THE STATE OF OHIO, THE LAWS OF THE
STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND THE INDEBTEDNESS EVIDENCED THEREBY.

 

(b)   Mortgagor hereby irrevocably
submits generally and unconditionally for itself and in respect of its property
to the non exclusive jurisdiction of any New York or Ohio state court, or 

 

29

 

any United States federal court, sitting in the county where the Land
is 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 Secured
Indebtedness.  Mortgagor hereby
irrevocably waives, to the fullest extent permitted by law, any objection that
Mortgagor may now or hereafter have to the laying of venue in any such court
and any claim that any such court is an inconvenient forum.  Mortgagor hereby agrees and consents that, in
addition to any methods of service of process provided for under applicable
law, all service of process in any such suit, action or proceeding in any Ohio
state court, or any United States federal court, may be made by certified or
registered mail, return receipt requested, directed to Mortgagor at its address
stated at the end of this Mortgage, or at a subsequent address of Mortgagor of
which Mortgagee received actual notice from Mortgagor in accordance with this
Mortgage.  Nothing herein shall affect
the right of Mortgagee to serve process in any manner permitted by law or limit
the right of Mortgagee to bring proceedings against Mortgagor in any other
court or jurisdiction.

 

Section 6.24.  Execution
Under Seal.  Mortgagor agrees that
this instrument is executed under seal. 
If Mortgagor is a corporation, the designation (“SEAL”) on this
instrument shall be as effective as the affixing of Mortgagor’s corporate seal
physically to this instrument.

 

Section 6.25.  Entire
Agreement.  The Loan Documents
constitute the entire understanding and agreement between Mortgagor and
Mortgagee with respect to the transactions arising in connection with the
Secured Indebtedness and supersede all prior written or oral understandings and
agreements between Mortgagor and Mortgagee with respect to the matters
addressed in the Loan Documents. 
Mortgagor hereby acknowledges that, except as incorporated in writing in
the Loan Documents, there are not, and were not, and no persons are or were
authorized by Mortgagee to make, any representations, understandings,
stipulations, agreements or promises, oral or written, with respect to the
matters addressed in the Loan Documents.

 

Section 6.26.  Greater Estate.  In the event that Mortgagor is the owner of a
leasehold estate with respect to any portion of the Property and, prior to the
satisfaction of the indebtedness and the cancellation of this Mortgage of
record, Mortgagor obtains a fee estate in such portion of the Property, then,
such fee estate shall automatically, and without further action of any kind on
the part of Mortgagor, be and become subject to the security lien of this
Mortgage.

 

Section 6.27.  [Reserved].

 

Section 6.28.  Certain
Obligations Secured.  The Secured
Indebtedness may include interest which is deferred, accrued or capitalized.

 

Section 6.29.        State
Specific Provisions.

 

(a)   OPEN-END MORTGAGE MAXIMUM
PRINCIPAL AMOUNT.  This Mortgage is
an open-end mortgage made pursuant to Section 5301.232 of the Ohio Revised
Code, and shall secure the payment of all loan advances included within the
term “Debt”, regardless of the time such advances are made.  The making of such advances is obligatory on
the part of the Mortgagee subject to the terms and conditions provided for in
the Loan Documents.  The 

 

30

 

maximum amount of unpaid loan indebtedness, exclusive of interest
thereon, which may be outstanding at any time and secured hereby shall be the
maximum principal amount stated on the cover page of this Mortgage.  As permitted and provided in Section 5301.233
of the Ohio Revised Code, this Mortgage shall also secure unpaid balances of
advances made with respect to the Property for the payment of taxes, assessments,
insurance premiums, or costs incurred for the protection of the Property and
other costs which Mortgagee is authorized by this Mortgage to pay on
Mortgagor’s, plus interest thereon, regardless of the time when such advances
are made.

 

(b)   OHIO REMEDIES.  Without limitation to the other terms and
provisions of this Mortgage, Mortgagee may, at its option, do all things
provided or permitted to be done by a mortgagee under Section 1311.14 of
the Ohio Revised Code and any amendment thereto, for the protection of
Mortgagee’s interest in the Property.

 

(c)   CONFLICTING PROVISIONS.  The provisions of this Section are
intended to supplement, and not limit, the other provisions of this Mortgage; provided,
however, that in the event the provisions of this Section contradict
any other provision of this Mortgage, the provisions of this Section shall
govern.

 

31

 

IN WITNESS WHEREOF, Mortgagor has executed this instrument under seal
as 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) whose
name(s) is/are subscribed to the within instrument and acknowledged that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the
person upon behalf of which the individual(s) acted, executed the
instrument.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
  My
  commission expires:                 

  

 

32

 

EXHIBIT A

 

LAND

 

All those certain pieces or parcels of land, together with the
improvements thereon and appurtenances thereunto belonging, lying, situate and
being 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 of
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:

 

Beginning at a point found by measuring from the southeast corner of
aforementioned Section 10, said point being in the centerline intersection
of Princeton-Glendale Road and Port Union Road, along the southerly line of
said 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 North
07° 24’ 30” West, 199.68 feet; thence along a 200.00 foot radius curve to the
right an arc length of 50.39 feet, a chord bearing of North 00° 11’ 24” West, a
chord 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 236.74
feet, a chord bearing of North 26° 52’ 56” West, a chord distance of 233.16
feet; thence North 60° 47’ 34” West, 280.76 feet; thence along a 200.00 foot
radius curve to the left an arc length of 28.48 feet, a chord bearing of North
64° 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 point
of beginning; thence from the point of beginning thus found along a 68.00 foot
radius curve to the left an arc length of 64.18 feet, a chord bearing of South
84° 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 South
29° 12’ 26” West, 732.11 feet; thence North 68° 57’ 07” West, 279.03 feet to
the point of beginning, containing 475,239.60 square feet or 10.910 acres of
land and being subject to all easements, conditions, restrictions and
right-of-ways of record, including the Declaration of Protective Covenants,
Agreements, Easement, Charges and Liens recorded in Book 6533, Page 1960
of the Official Records of Butler County, Ohio.

 

Together with appurtenant easements from drainage and utilities per
Plat Envelope 3248, Pages A & B and also shown in Deed Book 899, Page 551
of the records of the Recorder of Butler County, Ohio.

 

The Plat of Survey from which the above description is prepared is
recorded in Volume 3248, Pages A & B of the Butler County, Ohio
Records.

 

33

 

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 4
of 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 in
Easement Agreement recorded July 24, 2000 in Official Record Book 6496, Page 139
by and between Board of County Commissioners Butler County, Ohio and Industrial
Developments 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 Center
as recorded in Plat Envelope 3248, Page A-B of the Butler County records
and being further described as follows:

Beginning at the Southwest corner of aforementioned Lot #4, said point
being 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” iron
pin; thence South 51° 07’ 31” East 93.39 feet to a found 5/8” iron pin; thence
South 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 South
03° 47’ 11” West, 276.69 feet to a point in the Northerly right-of-way line of
Port 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 a
curve to the right having a radius of 30.00 feet, through a central angle of
90° 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-way
line 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 radius
of 170.00 feet, through a central angle of 14° 26’ 13” an arc length of 42.83
feet, a chord bearing of North 00° 11’ 24” West, a chord distance of 42.72
feet; thence North 07° 01’ 43” East, 159.76 feet; thence along a curve to the
left, having a radius of 230.00 feet, through a central angle of 67° 49’ 17” an
arc length of 272.25 feet, a chord bearing of North 26° 52’ 56” West, a chord
distance of 256.63 feet to a point in the Northerly right-of-way line of Trade
Port 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 230.00
feet, through a central angle of 08° 09’ 33” an arc length of 32.75 feet, a
chord bearing of North 64° 52’ 20” West, a chord distance of 32.73 feet; thence
North 68° 57’ 07” West, 73.07 feet to the point of beginning containing
703,769.90 square feet or 16.156 acres of land and being subject to all
easements and right-of-ways of record.

 

34

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:                        Credit
Agreement

 

Ladies and Gentlemen:

 

We have acted
as counsel to Amylin Pharmaceuticals, Inc., a Delaware corporation (the “Company”), Amylin Ohio LLC, a
Delaware limited liability company (“Amylin Ohio”),
and Amylin Investments LLC, a Delaware limited liability company (“Amylin Investments” and together
with Amylin Ohio and  the Company,
collectively, the “Borrowers”), in connection
with the execution and delivery of the Credit Agreement, dated as of December 21,
2007 (the “Credit Agreement”), by and
among the Company, Amylin Ohio, Amylin Investments, Bank of America, N.A., as
Administrative 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 furnished
to you at the request and on behalf of the Company pursuant to Section 4.01(a)(vii) of
the Credit Agreement.  All capitalized
terms not otherwise defined herein shall have the meanings given to them in the
Credit Agreement.  For purposes of the
opinions expressed herein, we have examined the following documents, each dated
as of the date hereof (collectively, the documents referred to in (a) through
(d) below being the “Transaction Documents”):

 

(a)           the Credit Agreement and
the Notes;

 

(b)           the Pledge and Security
Agreement, by and among the Borrowers and the Administrative Agent for the
benefit of the Secured Parties;

 

(c)           the Deposit Account
Control Agreements and Securities Account Control Agreements listed on Exhibit B hereto;

 

(d)           the Mortgage listed on Exhibit B
hereto; and

 

(e)           unfiled copies of financing
statements on Form UCC-1 provided to us by you or your counsel and
attached hereto as Exhibit C
naming each Borrower, respectively, as debtor and the Administrative Agent as
secured party (the “Delaware Financing Statements”).

 

In addition, we have examined the following
documents:

 

 

101 CALIFORNIA STREET, 5TH
FLOOR, SAN FRANCISCO, CA 94111-5800  T:
(415) 693-2000  F: (415) 693-2222  WWW.COOLEY.COM

 

 

 

(i)            Amended and Restated
Certificate of Incorporation of the Company, filed on January 25, 1992 and
amended 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 of
the State of Delaware on December 19, 2007;

 

(ii)           Bylaws of the Company
certified to us by an officer of the Company to be in full force and effect as
of the date hereof;

 

(iii)          Resolutions of the
Finance Committee of the Board of Directors of the Company relating to the
Transaction Documents and the transactions contemplated thereby adopted by
written consent on December 19, 2007 and resolutions of the Board of
Directors of the Company relating to the delegation of authority to the Finance
Committee adopted at a meeting held on May 16-17, 2006;

 

(iv)           Certificate of Formation
of Amylin Ohio, filed on December 5, 2005, and certified by the Secretary
of State of the State of Delaware on December 19, 2007;

 

(v)            Limited Liability
Company Agreement of Amylin Ohio certified to us by the Sole Manager of Amylin
Ohio to be in full force and effect as of the date hereof;

 

(vi)           Resolutions of the sole
member and the sole manager of Amylin Ohio relating to the Transaction
Documents and the transactions contemplated thereby adopted by written consent on
December 20, 2007;

 

(vii)         Certificate of Formation
of Amylin Investments, dated as of April 13, 2007, and certified by the
Secretary of State of the State of Delaware on December 19, 2007;

 

(viii)        Limited Liability
Company Agreement of Amylin Investments certified to us by the Sole Manager of
Amylin Investments to be in full force and effect as of the date hereof;

 

(ix)          Resolutions of the sole
member and the sole manager of Amylin Investments relating to the Transaction
Documents and the transactions contemplated thereby adopted by written consent
on December 20, 2007;

 

(x)            copies of the Material
Agreements (as defined below) listed on Schedule A
hereto;

 

(xi)          Certificate of Good
Standing issued by the Secretary of State of Delaware stating that the Company
is a domestic corporation in good standing in such state, dated as of December 19,
2007;

 

(xii)         Certificate of Good
Standing issued by the Secretary of State of Delaware stating that Amylin Ohio
is a domestic limited liability company in good standing in such state, dated
as of December 19, 2007; and

 

2

 

(xiii)        Certificate of Good
Standing issued by the Secretary of State of Delaware stating that Amylin
Investments is a domestic limited liability company in good standing in such
state, dated as of December 19, 2007;

 

(xiv)         such other certificates
of status issued by the states set forth on Schedule B
hereto, stating that a Borrower is entitled to transact intrastate business in
and 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 have
examined and relied upon the representations and warranties as to factual
matters contained in and made pursuant to the Transaction Documents by the
various parties and upon originals or copies certified to our satisfaction of
such records, documents, certificates, opinions, memoranda and other
instruments as in our judgment are necessary or appropriate to enable us to
render the opinions expressed below.

 

As to certain factual matters, we have relied
upon certificates of officers of each of the Borrowers and have not sought
independently 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 solely
upon (i) an inquiry of attorneys currently within this firm who represent
the Borrowers in this transaction, (ii) receipt of certificates executed
by an officer of each of the Borrowers covering such matters or items, and (iii) such
other investigation, if any, that we specifically set forth herein.  In addition, with regard to our opinions in
paragraphs 4 and 5 below with respect to orders, judgments, or decrees that are
binding upon the Borrowers or their respective properties and our opinion in paragraph
7 below with respect to pending or overtly threatened litigation, we also have
checked the records of this firm to ascertain that we are not acting as counsel
of record for the Borrowers with respect to any of the foregoing.  We have made no further investigation.

 

In rendering the opinions expressed below, we
have assumed, without investigation:

 

(a)           the genuineness and
authenticity of all signatures on original documents (except that such
assumption is not made, as to the Borrowers, with respect to the signatures of
the person(s) executing the Transaction Documents on behalf of the
Borrowers);

 

(b)           the authenticity of all
documents submitted to us as originals;

 

(c)           the conformity to
originals of all documents submitted to us as copies;

 

(d)           the accuracy,
completeness and authenticity of certificates of public officials;

 

(e)           the due incorporation or
formation, valid existence, good standing in the jurisdiction of incorporation
or formation and the corporate, limited liability company or similar power to
enter into and perform the Transaction Documents in accordance with their
respective 

 

3

 

terms, of all Persons
party to any Transaction Document (except that such assumption is not made as
to the Borrowers);

 

(f)            the due authorization,
execution and delivery of all documents (except that such assumption is not
made with respect to the due authorization, execution and delivery of the
Transaction Documents by the Borrowers), in each case where the authorization,
execution and delivery thereof by such parties are prerequisites to the
effectiveness of such documents;

 

(g)           the legal capacity of
all individuals executing and delivering documents to so execute and deliver;

 

(h)           compliance by Lenders or
Bank 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 the
transactions contemplated by the Transaction Documents because of the nature of
such Person’s business;

 

(i)            the Transaction
Documents are valid and binding obligations, enforceable in accordance with
their respective terms against all parties thereto (except that such assumption
is not made with respect to the Borrowers); and

 

(j)            there are no extrinsic
agreements or understandings among the parties to the Transaction Documents or
the Material Agreements that would modify or interpret the terms of the
Transaction Documents or such Material Agreements or the respective rights or
obligations of the parties thereunder.

 

Our opinion is expressed only (i) with
respect to the federal laws of the United States of America and the internal
laws of the State of New York, (ii) for the purposes of our opinion in
paragraphs 1 and 2 below, the General Corporation Law of the State of Delaware
and the Delaware Limited Liability Company Act, and (iii) for the purposes
of our opinion in paragraph 10 below, the relevant provisions of Revised Article 9
of the Delaware Uniform Commercial Code (“DEUCC”) as
reflected in unofficial compilations.  We
did not review the official version of the DEUCC or any decisions interpreting
the DEUCC.  We did not obtain special
rulings of authorities administering the DEUCC or any opinion of counsel in
Delaware.  Our opinions with respect to the Mortgage are
subject to Section 6.23(a) of the Mortgage which specify the
applicable governing law for such documents, and we have assumed that a court
would give effect to this provision.  We
express no opinion as to the provisions of the Mortgage providing for the
creation, perfection or enforcement of the liens created pursuant to the
Mortgage, and we understand that you are relying on the opinion of Dinsmore &
Shohl LLP with respect thereto.  We
note that the parties to one of the Account Control Agreements have designated
the laws of the State of Pennsylvania as the laws governing such Account
Control Agreement.  Our opinion in
paragraph 3 below as to the validity, binding effect and enforceability of the
such Account Control Agreement and our opinions in paragraphs 10 and 11 below
are premised upon the result that would obtain if the securities intermediary’s
jurisdiction was the State of New York and such Account Control Agreement was
governed by the laws of the State of New York (notwithstanding the actual
designation in such Account Control Agreements of the laws of the State of
Pennsylvania) to the interpretation and enforcement of such Account Control 

 

4

 

Agreement.  We do not express any opinion
herein covering any other laws, and except as provided herein with respect to
the laws of the State of New York, we express no opinion as to whether the laws
of any particular jurisdiction apply and no opinion to the extent that the laws
of any other jurisdiction are applicable to the subject matter hereof.  For purposes of this Opinion, “NYUCC” means the New York Uniform
Commercial Code as in effect in the State of New York on the date hereof.

 

We are not rendering any opinion as to any
law, rule or regulation relating to antitrust, banking, insurance, the
regulation of insurers or insurance-related companies, land use, safety, the
regulation of pharmaceutical companies or pharmaceutical products,
environmental, pension, employee benefit, fraudulent conveyance, tax or the
legality of investments for regulated entities. We express no opinion as to any
local law.  Furthermore, we express no
opinion with respect to compliance with: antifraud laws, rules or
regulations; laws, rules or regulations relating to securities or the
offer and sale thereof; state securities or blue sky laws, rules or
regulations; the Investment Company Act of 1940, as amended (the “Investment Company Act”), except as
expressly set forth in paragraph 12 below; or laws, rules or regulations
that place limitations on corporate distributions.

 

With regard to our opinion in paragraph 1
below with regard to (i) the valid existence and good standing of each
Borrower as a domestic corporation or limited liability company, as the case
may be, in the State of Delaware and (ii) the qualification to do business
as a foreign corporation or foreign limited liability company, as the case may
be, and good  standing of each Borrower in the
jurisdictions set forth opposite the name of such Borrower on Schedule B hereto, we have based our opinion solely upon our
review of the Good Standing Certificates. 
We have made no further investigation.

With regard to our opinions in paragraph 3
below concerning the validity, binding nature and enforceability of each
Borrower’s obligations under the Transaction Documents:

 

(i)            This opinion is subject
to, and may be limited by, applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance, debtor and creditor, and similar laws which
relate to or affect creditors’ rights generally.  This opinion is also subject to, and may be
limited by, general principles of equity and the exercise of judicial
discretion (regardless of whether such validity or enforceability is considered
in a proceeding in equity or at law), including the possible unavailability of
specific performance, injunctive relief or any other equitable remedy and
concepts of materiality, reasonableness, conscionability, good faith and fair
dealing.

 

(ii)           No opinion is expressed
as to the enforceability of any provision of any Transaction Document:

 

(1)          under which any party
waives any rights, defenses or offsets afforded to it under law, constitutional
provision, or as a matter of public policy, or by which any party waives any
right afforded to it by applicable law after a default, including, without
limitation, any waiver of a right to cause a marshaling of assets or to a trial
by jury;

 

5

 

(2)          under which any party
may be obligated to pay legal and other professional fees incurred by or on behalf
of another party or the cost of collection following a default, to the extent a
court may conclude that such fees or costs are unreasonable;

 

(3)          under which the
provisions of any Transaction Document are severable in the event a provision
that is determined by a court to be an essential part of the agreed exchange is
determined to be invalid or unenforceable;

 

(4)          specifying that the
provisions of any Transaction Document may be waived only in writing, to the
extent that an oral agreement or an implied agreement by trade practice or
course of conduct has been created that modifies any provision of such
Transaction Document;

 

(5)          under which a party’s
waiver of any breach of any provision of an agreement is not to be construed as
a waiver by such party of any prior breach of such provision or of any other
provision of any agreement;

 

(6)          purporting to give any
party the right to accelerate obligations or exercise remedies without notice;

 

(7)          specifying that the
liability of any indemnitor or guarantor shall not be affected by actions or
failures to act on the part of the beneficiaries of the indemnity or guaranty
or by amendments or waivers of provisions of documents creating and governing
the indemnified or guaranteed obligations if such actions, failures to act,
amendments or waivers change the essential nature of the terms and conditions
of the indemnified or guaranteed obligations;

 

(8)          regarding any provision
requiring indemnification, contribution or exculpation to the extent the same
may be violative of public policy or purports to require indemnification or
contribution for a party’s own willful misconduct or gross negligence (or if no
standard of gross negligence has been agreed upon, for a party’s own
negligence);

 

(9)          providing for a right or
remedy which may be held to be arbitrary or unconscionable, a penalty or
otherwise in violation of public policy;

 

(10)        restricting (or, in the
case of remedies, purporting to assure) the availability of legal or equitable
remedies or defenses;

 

(11)        imposing penalties,
forfeitures, higher rates of interest and/or late payments in the event of a
default or upon a delinquency in payment or otherwise;

 

(12)        regarding “choice of
forum” or “submission to jurisdiction” provisions; or

 

(13)        purporting to assign or
grant a lien upon or security interest in or to any contract, right, agreement
or other property right or the proceeds thereof (other than assignments or
security interests in accounts, general intangibles, chattel paper or
promissory 

 

6

 

notes to the extent provided by Sections
9-406(d), 9-407 and 9-408 of the NYUCC), which by its terms or under applicable
law, rule or regulation is not so assignable or under which the grant of
such a lien or security interest is prohibited.

 

(iii)          Our opinions herein,
insofar as they relate to the enforceability of the choice of law provisions of
the Transaction Documents designating the law of the State of New York as the
law applicable to the construction and interpretation of the Transaction
Documents, are predicated upon Section 5-1401 of the New York General
Obligations Law which permits contracting parties to specify that the law of
the State of New York is applicable if the requirements of such Section are
satisfied, and are limited to such choice of law provisions being enforced by a
New York court.

 

(iv)           We have assumed that the
Lenders, Administrative Agent and other Secured Parties will act fairly, in
good faith and in a commercially reasonable and prudent manner in exercising
their respective rights and will not trespass or commit any breach of peace in
any taking of possession of any of the Collateral.

 

(v)            Any provisions of the
Transaction Documents that purport to permit any Person to sell or otherwise
dispose of any Collateral or exercise any rights with respect thereto otherwise
than in accordance with applicable law may not be enforceable.  The exercise of remedies by the
Administrative Agent, Lenders and other Secured Parties under the Transaction
Documents will generally be subject to compliance with, and the limitations
imposed by, the NYUCC and DEUCC relating to the exercise of remedies by a
secured creditor including, without limitation, the procedural requirements of Section 9-601
et seq. of the NYUCC and DEUCC relating to the exercise of remedies by a
lender.  Any provisions of the
Transaction Documents that prohibit transfers to the extent they may include
transfers described in Section 9-401 and 9-408 of the NYUCC may not be
enforceable.  We also call your attention
to the fact that the right of a secured party to enforce a security interest in
proceeds is limited under Section 9-315 of the NYUCC.  Insofar as the Transaction Documents purport
to create a security interest in after-acquired property, we advise you that
such security interest will be subject to Sections 547 and 552 of Title 11 of
the United States Code.

 

(vi)           We express no opinion as
to the enforceability of any provision of the Transaction Documents that
purports to permit the Administrative Agent or any Lender to act as any party’s
agent or attorney-in-fact after the occurrence and during the continuance of an
event of default.

 

(vii)         We express no opinion as
to the enforceability of any provision in the Transaction Documents to the
extent any Borrower agrees to or is otherwise required to cause a Person other
than itself or its wholly-owned subsidiary to take or refrain from taking any
action.

 

With regard to our opinion in paragraph 4
below, we have relied solely upon (1) a list supplied to us by the
Borrowers of written agreements, contracts, undertakings, indentures or
instruments (the “Material Agreements”) to
which any Borrower is a party, a copy of which is attached hereto as Schedule A, and (2) an examination of the Material
Agreements in the form provided to us by the Borrowers.  We have made no further investigation.  Further, with regard to our 

 

7

 

opinion in paragraph 4 below concerning the
Material Agreements, we express no opinion as to (1) financial covenants
or similar provisions therein requiring financial calculations or
determinations to ascertain compliance, (2) provisions therein relating to
the occurrence of a “material adverse event” or words of similar import, or (3) any
statement or writing that may constitute parol evidence bearing on
interpretation or construction.  We have
assumed that each Material Agreement would be governed or interpreted under New
York law even in cases where New York law is not the governing law of such
Material Agreement.

 

Our opinions regarding the validity and
perfection of security interests are subject to our assumptions that (x) the
Collateral 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 which
it has granted a security interest (and we do not express any opinion herein as
to any of such rights or title), and (z) the applicable Borrower has
received “value” (as defined in Section 1-201(44) of the NYUCC and for
purposes of NYUCC Section 9-203(b)(1)) in exchange for granting a security
interest in the Collateral.  In addition,
our opinions regarding the validity and perfection of security interests are
subject to the following:

 

(i)            We have assumed that all
information included in the Delaware Financing Statements regarding the name
and mailing address of the Administrative Agent is complete and accurate;

 

(ii)           We express no opinion as
to the accuracy or sufficiency of the description of the Collateral in the Transaction
Documents or the Delaware Financing Statements; and

 

(iii)          We express no opinion as
to any real property, fixtures or any property or transactions excluded from
coverage under or of a type not subject to, Article 8 or Article 9 of
the NYUCC or DEUCC, including, without limitation, pursuant to Section 9-109
thereof.

 

(iv)           With regard to our opinion in paragraph 10
below, we have assumed that (a) the jurisdiction of each depository bank
listed 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 Control
Agreements listed on Exhibit B hereto
constitute “deposit accounts” as defined in Section 9102(a)(29) of the
NYUCC.

 

(v)            With
regard to our opinion in paragraph 11 below, we have assumed that (a) each
securities intermediary listed on Exhibit B
is a securities intermediary within the meaning of Section 8102(a)(14) of
the NYUCC, (b) the jurisdiction of each such securities intermediary,
within the meaning of Section 9305(a)(3) and Section 8110(e) of
the NYUCC is the State of New York, and (c) the Securities Accounts
covered by the Securities Account Control Agreements listed on Exhibit B hereto constitute
“securities accounts” as defined in Section 8501 of the NYUCC.

 

(vi)           For
purposes of our opinion, we have assumed at the time of the Closing (i) the
due recording of the Mortgage in the official records of Butler County, Ohio as
required by law for perfection of the security interest contemplated in the
Mortgage, (ii) all recording and related taxes will be paid, and (iii) that
the applicable Borrowers have rights in the real and 

 

8

 

personal property
collateral in which they purport to create a security interest under the
Mortgage.

 

On the basis
of the foregoing, in reliance thereon, and subject to the qualifications and
exceptions herein contained, we are of the opinion that:

 

1.             Each Borrower has been
duly formed and is validly existing and in good standing under the laws of the
State of Delaware.  Each Borrower is duly
qualified to do business as a foreign corporation or a foreign limited
liability company, as the case may be, and is in good  standing
under the laws of  the states identified next to the
same of such Borrower on Schedule B
hereof.

 

2.             The execution and
delivery by each Borrower of and performance of its obligations under the
Transaction Documents to which it is a party have been duly authorized by all
necessary corporate or limited liability company action, as the case may be, on
the part of such Borrower, and the Transaction Documents to which it is a party
have been duly executed and delivered by such Borrower.  Each Borrower has the requisite corporate or
limited liability company power, as the case may be, to enter into and perform
its obligations under the Transaction Documents to which it is a party.

 

3.             Each of the Transaction
Documents to which any Borrower is a party constitutes the legal, valid and
binding obligation of each such Borrower enforceable against such Borrower in
accordance with its terms.

 

4.             Each Borrower’s
execution and delivery of and performance as of the date hereof of its
obligations under the Transaction Documents to which it is a party do not
violate, or constitute a default under, (a) any provision of such
Borrower’s Organizational Documents, (b) any material term or provision of any
Material Agreement to which such Borrower is a party or (c) any order,
writ, judgment, injunction, decree, determination or award which has been
entered 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 adversely
affect the Company and its subsidiaries taken as a whole.

 

5.             The execution and
delivery by the Borrowers of, and performance as of the date hereof of their
respective obligations under, the Transaction Documents to which such Borrowers
are a party do not violate or contravene any New York state or federal statute
or regulation which is applicable generally to borrowers in commercial
transactions of the nature contemplated by the Transaction Documents, in each case to the extent the
violation of which would materially and adversely affect the Company and its
subsidiaries, taken as a whole.  We
express no opinion as to any provisions of the Mortgage which by their terms
are governed by the laws of the State of Ohio.

 

6.             All orders, consents,
permits or approvals of any New York state or federal governmental authority
which are applicable generally to borrowers in commercial transactions of the
nature contemplated by the Transaction Documents and required for the execution
and delivery by the Borrowers of, and performance by the Borrowers of their
respective obligations under, the Transaction Documents to which the Borrowers
are party, have been obtained,

 

9

 

except for filings,
recordings or registrations that are required to perfect the Administrative
Agent’s security interests in property identified as Collateral under the
Transaction Documents.

 

7.             To our knowledge, there
are no actions, suits or proceedings pending or threatened against any Borrower
before any court, arbitrator or governmental agency that questions the
legality, validity or enforceability of the Loan Documents.

 

8.             With regard to the
personal property Collateral identified and described in the Pledge and
Security Agreement, the Pledge and Security Agreement is sufficient to create a
security interest under the NYUCC in such Collateral in favor of the
Administrative Agent, to the extent a security interest can be created therein
under Article 9 of the NYUCC.

 

9.             The Delaware Financing
Statements to be filed by the Administrative Agent or its counsel with the
filing office of the Secretary of State of the State of Delaware are in form
sufficient for filing with such filing office. 
Upon the due filing of the Delaware Financing Statements with the filing
office of the Secretary of State of the State of Delaware, the security
interest of the Administrative Agent in the Collateral identified and described
in the Pledge and Security Agreement, to the extent identified and described in
the Delaware Financing Statements, will be perfected to the extent that a
security interest in such Collateral can be perfected under the DEUCC by the
filing of a UCC-1 financing statement in such filing office.

 

10.          The
Administrative Agent will have a perfected security interest in the Deposit Accounts identified in the Deposit Account Control
Agreements listed on Exhibit B
hereto upon the execution by the parties thereto of such Deposit Account
Control Agreements.

 

11.          The
Administrative Agent will have a perfected security interest in the Securities Accounts identified in the Securities Account Control
Agreements listed on Exhibit B
hereto upon the execution by the parties thereto of such Securities Account
Control 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 the
matters expressly set forth in this letter, and no opinion is implied or may be
inferred beyond the matters expressly stated. 
This opinion speaks only as to law and facts in effect or existing as of
the date hereof, and we undertake no obligation or responsibility to update or
supplement this letter to reflect any facts or circumstances that may hereafter
come to our attention or any changes in law that may hereafter occur.

 

10

 

Our opinion in
this letter is rendered solely for the benefit of Bank of America, in its
capacity as Administrative Agent and L/C Issuer and each of the Lenders in
connection with the transactions described above and may be relied upon only by
such Persons, their respective successors, transferees and assigns, including
participants.

 

Very truly yours,

 

Cooley Godward Kronish LLP

 

 

Gian-Michele a Marca

 

11

 

EXHIBIT A

 

LENDERS

 

Banc
of America Leasing & Capital, LLC

Silicon
Valley Bank

RBS
Asset Finance, Inc.

Comerica
Bank

BMO
Capital Markets Financing, Inc.

First
Bank

Union
Bank of California, N.A.

Bank
of America, N.A.

 

 

EXHIBIT B

 

DEPOSIT ACCOUNT CONTROL AGREEMENTS,

SECURITIES ACCOUNT CONTROL AGREEMENTS AND
MORTGAGE

 

Deposit Account Control Agreement dated as of December 21,
2007, among the Company, Amylin Ohio LLC (collectively, the “Company”), Bank of
America, N.A. as lender and the Administrative Agent.

 

Control
Agreement dated as of December 21, 2007, among the Company, Mellon Bank
and the Administrative Agent.

 

Uncertificated Securities Control Agreement dated as of December 21,
2007 among the Company, the Administrative Agent, Merrill Lynch Funds for
Institutions Series and State Street Bank and Trust Company through its
service provider, Boston Financial Data Services, Inc.

 

Account
Control Agreement With Activation dated as of December 21, 2007, among the
Company, the Administrative Agent and Brown Brothers Harriman & Co.

 

Account
Control Agreement dated as of December 21, 2007 among Amylin Ohio, the
Administrative Agent and Fifth Third
Bank.

 

Account
Control Agreement dated as of December 21, 2007 among the Company, the
Administrative Agent and First Bank.

 

Open-End Mortgage, Assignment of Rents and Leases, Security Agreement
and Fixture Filing dated as of December 21, 2007 by Amylin Ohio for the
benefit of the Administrative Agent.

 

 

EXHIBIT C

 

DELAWARE FINANCING STATEMENTS

 

 

SCHEDULE A

 

MATERIAL AGREEMENTS

 

Registration Rights Agreement, dated September 19, 2002, between
the Company and Eli Lilly and Company;

 

Rights Agreement, dated June 17, 2002, between the Company and
American 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 and
certain of its directors and officers;

 

1991 Stock Option Plan, as amended (the “1991
Plan”);

 

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 the
1991 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 the
Company and Farview Management Co., L.P.;

 

Patent and Technology License Agreement, Consulting Agreement and
Nonstatutory Stock Option Agreement, dated October 1, 1996, between the
Company and Dr. John Eng;

 

Directors’ Deferred Compensation Plan;

 

Directors’ Plan Stock Option Agreement, as amended;

 

Special Form of Incentive Stock Option Agreement under the 1991
Plan;

 

Stock Option Agreement, dated March 25, 1998, between Company and
Joseph C. Cook, Jr.;

 

Development and License Agreement, dated May 15, 2000, between the
Company and Alkermes Controlled Therapeutics II, Inc.;

 

2001 Equity Incentive Plan, as amended;

 

Collaboration Agreement, dated September 19, 2002, between the
Company and Eli Lilly and Company (“Eli Lilly”);

 

U.S. Co-Promotion Agreement, dated September 19, 2002, between the
Company and Eli Lilly;

 

Milestone Conversion Agreement, dated September 19, 2002, between
the Company and Eli Lilly;

 

Stock Purchase Agreement, dated September 19, 2002, between the
Company and Eli Lilly;

 

Security Agreement, dated June 20, 2003, between the Company and
Eli 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, as
amended;

 

Manufacturing Agreement, dated May 12, 2003, between the Company
and UCB S.A.;

 

Exenatide Manufacturing Agreement, dated October 21, 2003, between
the 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 the
Company and Baxter Pharmaceutical Solutions LLC;

 

Commercial Supply Agreement, dated October 7, 2004, between the
Company and CP Pharmaceuticals Ltd.;

 

Commercial Supply Agreement, dated March 2, 2005, between the
Company and Baxter Pharmaceutical Solutions LLC;

 

Summary Description of Company’s Named Executive Officer Oral At-Will
Employment 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 between
Company, Morgan Stanley & Co. Incorporated, Goldman, Sachs &
Co., Bear Stearns & Co. and Lehman Brothers Inc.;

 

Commercial Supply Agreement, dated June 28, 2005, between Company
and Bachem, Inc.;

 

Employment Succession Agreement, dated June 1, 2006, between
Company and Daniel M. Bradbury;

 

Commercial Supply Agreement, dated October 12, 2006, between
Company 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 and
Daniel M. Bradbury;

 

Amended and Restated Officer Change in Control Severance Benefit Plan;

 

Indenture, dated April 6, 2004, between Company and J.P. Morgan
Stanley & Co. Incorporated and Goldman, Sachs & Co.;

 

Form of 2.50% Convertible Senior Note due 2011;

 

Registration Rights Agreement, dated April 6, 2004, between
Company and J.P. Morgan Stanley & Co. Incorporated and Goldman, Sachs &
Co.;

 

Indenture, dated June 8, 2007, between Company and The Bank of New
York Trust Company, N.A.;

 

Form of 3.00% Convertible Senior Note due 2014;

 

Registration Rights Agreement, dated June 8, 2007, between Company
and 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

 

 

Bank
of America, N.A.

1000
North Tryon Street

Charlotte,
North Carolina  28255

 

Ladies
and Gentlemen:

 

We have acted as local Ohio counsel to Amylin Ohio LLC (“Borrower”), a
Delaware limited liability company,
in connection with the closing of a $140,000,000.00 loan (the “Loan”) from Bank
of America, N.A. (“Lender”), secured by certain real property (the “Real
Property”) located in Butler County, Ohio, and related personal property (the “Personal
Property;” the Real Property and the Personal Property being hereinafter
collectively referred to as the “Property”).

 

The opinions set forth herein are limited to the laws of the State of
Ohio and applicable federal laws.

 

In connection with the Loan, we have examined the following documents
(the “Loan Documents”), executed by Borrower:

 

(a)                                  Open-End
Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing
(the “Mortgage”);

 

(b)                                 Environmental Indemnification and Release Agreement (the “Environmental
Agreement”);

 

We
have not made or undertaken to make any investigation as to factual matters or
as to the accuracy or completeness of any representation, warranty, data or any
other information, whether written or oral, that may have been made by or on
behalf of the parties to the Credit Agreement (as such term is defined in the
Mortgage) or otherwise (but have no actual knowledge of the inaccuracy or
incompleteness of any of the same), and we assume, in giving this opinion, that
none of such information, if any, contains any untrue statement of a material
fact 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 “our
knowledge” and similar language herein, the relevant knowledge is limited to
the actual knowledge (without any inquiry or investigation except as expressly
set forth in this opinion) of the lawyers within our firm who have worked on
the transaction described in the Credit Agreement on behalf of the Borrower.

 

 

We
have not made any investigation of and do not express an opinion as to any
matters of title to the Property or any other property (whether real, personal
or mixed) or as to any title matters relating to the existence or priority of
any liens, charges or other encumbrances with respect to the Property or other
property.  We do not express any opinion
as to whether the legal description of the Property satisfy current, local requirements
for conveyances upon foreclosure of such Property.  We also do not express any opinion as to the
accuracy of the descriptions of the Property or property described in the Loan
Documents.

 

For
purposes of this opinion, we have, with your permission, assumed without
independent investigation that:

 

(i)                                     the documents
submitted to us as originals are authentic and the documents submitted to us as
copies conform to the original documents;

 

(ii)                                  the Mortgage
has been duly authorized, executed and delivered by each of the parties
thereto;

 

(iii)                               the persons who
executed, acknowledged and delivered the Mortgage were duly authorized;

 

(iv)                              Borrower has
been duly organized in the State of Delaware, is validly existing under the
laws of the State of Delaware, and is in good standing under the laws of the
State of Delaware;

 

(v)                                 all signatures
on the Loan Documents are genuine and all documents submitted to us as
certified, conformed or photostatic copies are authentic;

 

(vi)                              the Mortgage
will be properly and duly recorded and all applicable recording fees and
charges imposed thereon will be paid;

 

(vii)                           the Borrower
has an interest in the Property in which the Borrower grants the Mortgage;

 

(viii)                        all parties to
the Credit Agreement will enforce their respective rights thereunder in
circumstances and in a manner which are commercially reasonable; and

 

(ix)                                Ohio law and
New York law are the same in all relevant respects.

 

Each
of the Loan Documents is dated as of December 21, 2007.

 

On the basis of the foregoing, in reliance
thereon, and subject to the qualifications and exceptions herein contained, we
are of the opinion that:

 

1.             Borrower is qualified to do
business in State of Ohio.

 

 

2.             The execution and delivery by
Borrower of the Loan Documents, to our knowledge, do not (a) violate any
constitution, statute, regulation, rule, order or law known to us to which
Borrower or the Property is subject, (b) constitute a breach or default
under any other written agreements known to us to which Borrower is a party or
by which Borrower or the Property is bound, or (c) violate any judicial or
administrative decree, writ, judgment or order known to us to which Borrower or
the Property is subject.

 

3.             Except as set
forth below, no consent, authorization or approval of any agency or authority
of the State of Ohio or filing, registration or qualification with any
governmental authority of the State of Ohio (other than the recording of the
Mortgage in the appropriate recording office) is required for the execution,
delivery, performance and enforcement of any of the Loan Documents.  The execution, delivery, performance and
enforcement of the Mortgage will not conflict with or constitute a breach or
violation of the applicable laws of the State of Ohio.  O.R.C. § 1703.03 requires all foreign
corporations to obtain a license from the Ohio Secretary of State in order to
do business within Ohio and to bring a lawsuit in Ohio.  Similar statutes exist with respect to
limited liability companies (See O.R.C. § 1705.54), limited partnerships (See
O.R.C. § 1782.49), limited liability partnerships (See O.R.C. § 1775.64) and
business trusts (See O.R.C. § 1746.04). What constitutes doing business is
largely a factual determination. 
However, the failure of a foreign entity to qualify to do business in
Ohio will not affect the validity of any contract with such entity.  Rather, the entity is merely prevented from
bringing legal action in a court in Ohio and may have exposure for some nominal
monetary penalties.  Please note that in
at 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 foreign
corporation was prohibited from bringing a crossclaim in a foreclosure action
to protect its right to receive distribution in the foreclosure proceeding;
however, the same court ultimately would not exclude that corporation from the
distribution of the mortgage foreclosure proceeds since to do so would have the
effect of invalidating its mortgage contract with the debtor.  Further, if the Lender is not a United States
citizen or is not domiciled in the United States of America (“U.S.”), O.R.C. §
5301.254 (Nonresident Alien Registration Act) may require that informational
returns be filed with the Secretary of State of Ohio.  O.R.C. § 5301.254 requires any person who is
not a U.S. citizen and who is not domiciled in the U.S. to file such an
informational return if that person acquires, directly or indirectly, an
interest in real property in Ohio.

 

4.             The Loan Documents are valid and
enforceable against Borrower in accordance with their respective terms, except
to the extent that such enforceability is limited by laws generally affecting
the enforcement of creditors’ rights, which laws will not materially prevent
the realization by Lender of the benefits intended by the Loan Documents,
provided that the Mortgage should be re-recorded within twenty-one (21) years
after the original recording thereof if the Loan is still outstanding at that
time.

 

5.             The recording of the Mortgage in
the real property records of the County of Butler will provide a perfected
interest in the Real Property and the Personal Property, including fixtures, in
favor of Lender.

 

 

6.             To
our knowledge, there is no litigation or other proceeding pending before any
court or administrative agency against Borrower or the Property, which, if
adversely determined, would have a material adverse effect on the Property or
the financial condition of Borrower.

 

Our
opinions expressed above are subject to the following qualifications:

 

(a)                   Any opinion
as to perfection of the Lender’s security interest in any of the Property or
any other property is subject to the assumption that the Lender has not waived,
subordinated or agreed with any third party to any modification of the
perfection of any of such security interest.

 

(b)                   No opinion
is expressed with regard to whether the Lender will be entitled to collect any
pre-payment penalty in connection with an acceleration of the Loan.

 

(c)                   This
opinion letter is strictly limited to those matters expressly addressed
herein.  We express no opinion as to any
matter not specifically stated to be and numbered above as an opinion.  Except as otherwise expressly stated in the
foregoing opinions and without limiting the generality of the foregoing, we
express no opinion with respect to (i) securities laws or regulations; (ii) banking
laws or regulations; (iii) pension and employee benefit laws and
regulations; (iv) antitrust laws and unfair competition laws and
regulations; (v) tax laws and regulations, environmental, zoning, land use
or subdivision laws or regulations; (vi) patent, copyright, trademark and
other intellectual property laws and regulations; (vii) health and safety
laws and regulations; (viii) labor laws and regulations; (ix) federal
and state statutes of general application to the extent they provide for
criminal prosecution; and (x) building codes.

 

(d)                   The opinions
set forth herein are subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws affecting the
rights and remedies of creditors generally, including, without limitation, the
following:

 

(i)            the federal
Bankruptcy 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 on
ipso facto and anti-assignment clauses, and the coverage of pre-petition
security agreements applicable to property acquired after a petition is filed;

 

(ii)           all other federal
and state bankruptcy, insolvency, reorganization, receivership, moratorium,
arrangement and assignment for the benefit of creditors laws that affect the
rights and remedies of creditors generally (not just creditors and specific
types of debtors);

 

(iii)          all other federal
bankruptcy, insolvency, reorganization, receivership, moratorium, arrangement
and assignment for the benefit of creditors laws that have reference to or
affect generally only creditors of specific types of 

 

 

debtors
and state laws of like character affecting generally only creditors of
financial institutions;

 

(iv)          federal and state
fraudulent transfer and conveyance laws; and

 

(v)           judicially developed
doctrines relevant to any of the foregoing laws, such as substantive
consolidation of entities.

 

(e)           In addition, the opinions set forth
herein are subject to the effect of general principles of equity, whether
applied by a court of law or equity, including, without limitation, such
principles:

 

(i)            governing the
availability of specific performance, injunctive relief or other equitable
remedies that generally place the award of such remedies, subject to certain
guidelines, in the discretion of the court to which application for such relief
is made;

 

(ii)           affording equitable
defenses (e.g., waiver, laches and estoppel) against a party seeking
enforcement;

 

(iii)          requiring good
faith, fair dealing and reasonableness in the performance and enforcement of an
instrument by the party seeking enforcement or limiting or affecting the
enforcement of provisions of an instrument which purport to require waiver of
the obligations of good faith, fair dealing, diligence and reasonableness;

 

(iv)          requiring
consideration of the materiality of (1) a party’s breach and (2) the
consequences of the breach to the party seeking enforcement;

 

(v)           requiring
consideration of the impracticability or impossibility of performance at the
time of attempted enforcement; and

 

(vi)          affording defenses
based upon the unconscionability of the enforcing party’s conduct after the
parties have entered into the instrument.

 

(f)            The opinions set forth herein are
subject to the effect of generally applicable rules of law that:

 

(i)            provide that forum
selection clauses in an instrument are not necessarily binding on the court(s) in
the forum selected;

 

(ii)           limit the
availability of a remedy under certain circumstances where another remedy has
been selected;

 

(iii)          limit the right of
a creditor to use force or cause a breach of the peace in enforcing rights;

 

 

(iv)          relate to the sale
or disposition of collateral or the requirements of a commercially reasonable
sale;

 

(v)           limit the
enforceability of provisions releasing, exculpating or exempting a party from,
or requiring indemnification of a party for, liability for its own action or
inaction, to the extent the action or inaction involves negligence,
recklessness, willful misconduct or unlawful conduct;

 

(vi)          may, where less than
all of an instrument may be unenforceable, limit the enforceability of the
balance of the instrument to circumstances in which the enforceable portion is
not an essential part of the agreed exchange or limit the ability to reform the
unenforceable portion;

 

(vii)         govern and afford
judicial discretion regarding the determination of damages and entitlements to
attorneys’ fees and other costs;

 

(viii)        may, in the absence
of a waiver or consent, discharge a guarantor to the extent that (1) action
by a creditor impairs the value of collateral securing guaranteed debt to the
detriment of the guarantor or (2) the guaranteed debt is materially
modified; and

 

(ix)           may permit a party
which has materially failed to render or offer performance required by an
instrument to cure that failure unless (1) permitting a cure would
unreasonably hinder the aggrieved party from making substitute arrangements for
performance or (2) it was important in the circumstances to the aggrieved
party that performance occur by the date stated in the instrument.

 

(g)           Except to the extent expressly
provided herein, we express no opinion as to the effect of the compliance
or non-compliance of the Lender with any state or
federal laws or regulations applicable because of its legal or regulatory
status or the nature of its business or its participation in the transactions
contemplated by the Credit Agreement.

 

(h)           We express no opinion as to the
validity, binding effect or enforceability of any provision in the Loan
Documents that purports to: (i) permit the Lender
or 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, the
applicable federal laws of the U.S., and other applicable state and local laws;
(ii) impose on, or waive for the benefit of the Lender’s
standards for the care of the Property or any other property in the possession
of the Lender; (iii) limit the ability of the Lender
or any other person to transfer voluntarily or involuntarily (by way of sale,
creation of a security interest, attachment, levy, garnishment or other
judicial process) its right, title or interest in or to any of the Property or
any other property; (iv) waive, or consent to waiver of, any rights of a
debtor or duties owing to it, existing as a matter of law, except to the extent
that such debtor may so waive or consent as a matter of law; (v) provide
for 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 Lender
in 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 to
interests in or claims in or under any policy of insurance.

 

(i)            We express no opinion with respect
to provisions in the Loan Documents (i) permitting the unilateral or ex
parte appointment of a receiver; (ii) prohibiting oral modifications to
the agreement; (iii) waiving statutes of limitations, trial by jury,
notices in connection with the exercise of remedies or the marshalling of
assets; (iv) to the effect that the failure to exercise, or a delay in
exercising, a right or remedy will not operate as a waiver of such right or
remedy; (v) appointing a third party as an attorney-in-fact to act on
behalf of the Lender; (vi) providing for attorney’s fees; or (vii) providing
for remedies for the enforcement of security interests in property that
conflict with the provisions of O.R.C. § 1309.607, the provisions of which may
not be waived or varied.

 

(j)            The opinions set forth
herein with respect to the Mortgage are solely based upon and limited to the
terms and provisions of the Mortgage without reference to or incorporation of
any terms or provisions of any of the other documents, and we express no
opinion with respect to any terms or provisions of any of the other documents
that replace or supersede terms or provisions of the Mortgage or the effect
that any such replacing or superseding terms or provisions of such other
documents may have upon the Mortgage.

 

(k)           We have assumed that
the Lender at all times will act equitably and in good faith in a commercially
reasonable manner and in compliance with the applicable laws and regulations.

 

(l)            We express no opinion as to
the creation or perfection of any liens on or security interests in any
property (i) the nature of which would require a filing under a federal or
other specialized registry such as may be required under the federal Copyright
Act, the Lanham Act or the like; (ii) which is or may be comprised of “deposit
accounts” or “mobile goods” under the UCC; (iii) which is brought into a
state subject to a security interest perfected under the laws of another
jurisdiction as to which perfection is not re-perfected on a timely basis; (iv) following
any change of name or identity of the Borrower made after the date of this
letter; or (v) which consists of personal property, accounts, contract
rights, certificated or uncertificated securities, security entitlements,
securities accounts, commodity contracts, commodity accounts, chattel paper,
documents, instruments, general intangibles or other intangible personal
property or motor vehicles, minerals (including oil and gas), consumer goods,
farm products, crops, timber to be cut or the like or accounts arising from the
sale thereof.

 

(m)          We express no opinion
as to the value of any property owned or possessed by any party to the Credit
Agreement.

 

(n)           We have assumed that the Loan
Documents will not be terminated, released and/or amended in a manner that
might jeopardize their effectiveness.

 

We
are admitted to practice in the State of Ohio, and the foregoing opinions are
limited to the laws of the State of Ohio (but expressly excluding any statutes,
ordinances, 

 

 

administrative
decisions, rules or regulations of any political subdivision of the State
of Ohio except to the extent expressly provided herein).  We shall have no continuing obligations to
inform you of changes in law or fact subsequent to the date hereof or of facts
of which we become aware after the date hereof. 
References to the “O.R.C.” refer to the Ohio Revised Code as in effect
on the date of this opinion letter.

 

This opinion letter is provided to you for the
exclusive use solely of yourself and your participants and assigns in
connection with the Loan and may not be relied upon by any other person or for
any other purpose without our prior written consent.

 

Very
truly yours,

 

	
   

  	
   

  	
  Dinsmore &
  Shohl LLP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Steven
  H. Schreiber

  
						

 

EXHIBIT I

 

FORM OF

COVENANT
TRIGGERING 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 to
time, the “Agreement;”
the terms defined therein being used herein as therein defined), among Amylin
Pharmaceuticals, 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 party
thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent
and L/C Issuer.

 

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

 

1.             The
aggregate amount of Unrestricted Cash as of [DATE] (the “Measurement Date”)
was $                              ,
resulting in a Covenant Triggering Event.

 

2.             The
amounts of Indebtedness and Investments set forth on Schedule 1 hereto are true
and correct as of the Measurement Date.

 

3.             To
the best knowledge of the undersigned, as of the date hereof, no Default has
occurred and is continuing.

 

4.             The
Borrowers 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 all
Unrestricted Cash (including the amount on deposit or value of Cash Equivalents
in 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, the
undersigned has executed this Certificate as of                                         ,
                   .

 

AMYLIN
PHARMACEUTICALS, INC.

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

Signature Page

Covenant Triggering Event Certificate

 

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):

  	
   

  	
  $

  	
   

  	
   

  

 

(1) Attach list setting
forth all Indebtedness included in this calculation, including effective date,
principal amount, obligor(s), lender(s) and maturity date.

(2) Attached list setting forth all
Investments included in this calculation, including amount actually invested
and any maturity date(s).

 

 

	
  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)

  	
   

  	
  $

  	
   

  	
   

  
					

 

(3) Attached list setting
forth each Disposition included in this calculation, including date,
description of property and proceeds.

(4) Attached list setting
forth each Restricted Payment included in this calculation, including date,
description of payment, payee, payor and amount.

 

 

SCHEDULE 2

 

Unrestricted
Cash

 

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.

  

 

1

 

	
   

  	
  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.

  

 

2

 

	
   

  	
  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.

  

 

3

 

	
  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.

  

 

4

 

EXHIBIT
A

Investment
Policy for Amylin Pharmaceuticals, Inc

Approved
List 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 approved
only 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 & mortgage
obligations

Includes putable,
callable, and floating-rate obligations

 

III.                                 Corporate
debt obligations

·                  Includes
variable-rate demand notes

·                  Includes
putable, callable, and floating-rate obligations

·                  Includes
Eurodollar and Yankee debt obligations

Corporate
debt obligations must be rated “Strong” (A-1 / A S&P) or “Superior” (P-1 /
A Moodys)

 

IV.                                Bank
debt and deposit obligations

·                  Includes
variable-rate demand notes

·                  Includes
putable, callable, and floating-rate obligations

·                  Includes Eurodollar
and Yankee debt obligations

Limited
to $5MM for banks with minimum capital of $5B or greater

Limited
to $10MM for banks with minimum capital of $10B or greater

Limited to 5% of
portfolio for banks with minimum capital of $20B or greater

 

V.                                    SEC-registered money
market funds

·                  Maintain a net asset value of $1.00/share

·                  90% of a fund or greater will be invested in
securities as designated within this policy.

 

VI.                                Repurchase agreements

·                  Fully
collateralized by any of the securities approved under this policy

·                  Collateral
may not have maturities in excess of 24 months

 

5

 

VII.                            Taxable and tax-exempt auction rate debt
and preferred securities

·                  Rated
Long Term “High Quality” (Aa Moody’s) or “Very Strong” (AA S&P)

·                  Rated
Short Term “Strong” (A-1 S&P) or “Superior” (P-1 Moodys)

 

VIII.                        Asset-backed securities

·                  Rated
Long Term “High Quality” (Aa Moody’s) or “Very Strong” (AA S&P)

·                  Rated
Short Term “Strong” (A-1 S&P) or “Superior” (P-1 Moodys)

 

IX.                                Asset-backed
commercial paper

·                  Rated
Long Term “High Quality” (Aa Moody’s) or “Very Strong” (AA S&P)

·                  Rated
Short Term “Strong” (A-1 S&P) or “Superior” (P-1 Moodys)

 

X.                                    Taxable
and Tax Exempt Municipal Debt Obligations

·                  Rated
A or higher by Moody’s
or Standard & Poor’s

·                  MIG2
or VMIG2 by Moody’s and SP1 or higher by Standard & Poor’s

·                  P1
by Moody’s and A1 or higher by Standard & Poor’s

 

PROHIBITED
INVESTMENTS:

 

·                  Equities,
equity funds

 

6

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